INTERNATIONAL EBUSINESS ISSUES

KIP BECKER, PH.D.KIP BECKER, PH.D.

EMAIL; GoGlobal@bu.eduEMAIL; GoGlobal@bu.edu

High Income OECD

14%HighIncomeOECD

Internet UsersStill a Global Enclave

United states

High-incomeOECD ecl. USLatin Americanand CaribeanEast Asia andthe PacificEatern Europeand the CISArab States

Sub-SaharanAfricaSouth Asia

Internet user population

88%

HighIncomeOECD in1998

Internet user population

79%High IncomeOECD in2000

                                                         

       

Internet users % of population (2000)

TOP 5 INTERNET USERS?

BRTIAIN US ARGENTINACHINA

SWEDEN HONG KONG CANADA

FRANCE SINGAPORE AUSTRALIA

SOUTH KOREA RUSSIA GERMANY

                                             

Which nations are highest in IT spending Which nations are highest in IT spending per GPDper GPD

US ITALYSPAIN GERMANYSWEDEN NEW ZEALANDFRANCE AUSTRALIA

TOP 4 ?

COST OF USE INTERNATIONALLY – ACCESS COST AND USAGE

RANK THE FOLLOWING: COST & USE

US NEW ZEALAND

JAPAN SWITZERLAND

ICELAND GERMANY

FINDLAND PORTUGAL

ITALY NORWAY

•Fewer 2 percent of 1 billion people have regular access to a phone line• Less than 1 percent have a PC•Government statistics: Only one in 2,000 has ever used a cellphone•More than 40 percent are illiterate•One in four lives in abject poverty.

INDIAINDIAIMPORTANT DIGITAL DIVIDE IMPORTANT DIGITAL DIVIDE

ISSUESISSUES

WHAT NEW WHAT NEW PRICING SCHEMES PRICING SCHEMES

ARE ARE INTERNATIONALLY INTERNATIONALLY

AVAILABLE TO AVAILABLE TO THE WEB?THE WEB?

Pricing on the Internet

• Price DiscoveryPrice Discovery– Electronic marketplaces enable new types of price

discovery• Web-based auctions at Onsale.com and eBay.com

• Intermediaries such as Priceline (www.priceline.com) and best buy for comparison shopping

• Agents such as Kasbah (kasbah.com)

The ability to customize products

The ability to price

discriminate

THE THE (TFA)(TFA)TELE-TELE-

FLOWER FLOWER AUCTIONAUCTION

THE DFA•11,000 SELLERS

•3,500 FLOWER TYPES

•5,000 BUYERS

•120 AUCTION GROUPS

THE DUTCH FLOWER THE DUTCH FLOWER GROWERSGROWERS

INTERNATIONAL Winners & Losers in EC

Proprietary network owners

Midsize manufacturers

Technology suppliers

Online dedicated companies

Conventional retailers that use online extensively

Providers of diversified Internet services

Advertisement and target marketing companies

Security payment Providers

Firms moving into new international markets/languages

Most wholesalers, especially small ones

Brokers

Salespeople

Non-differentiated manufacturers and non-value added chain members

• DEVELOPED NATIONS PROBLEMS PROBLEM :Japanese prefer to pay cash– SOFTBANK Venture with 7-eleven,Yahoo!Japan and

Tohan (book distributor)– Order CDs on web pick up/pay @7Eleven

• DEVELOPING NATIONS LACK INFRASTUREShared use of computing, Cafes, Rented computer/cell phones

• Cultural design and locaton specific sites

• NIKE.COM AND NIKEBOOTBALL.COM

OVERCOMINGOVERCOMINGGEOPOLITICAL/CULTURAL GEOPOLITICAL/CULTURAL

PERSPECTIVESPERSPECTIVES

                                                         

       

WHAT ARE SOME PROBLEMS ENCOUNTERED WITH WEB GLOBALIZATION?

COST OF USE GLOBALLY

HOW DO WE KNOW WHO WE ARE DEALING WITH ?

WHAT ARE WE WILLING TO GIVE UP ?WHAT ARE WE WILLING TO GIVE UP ?

HOW DO WE KNOW WHAT IS TRUE ?HOW DO WE KNOW WHAT IS TRUE ?

HOW DO WE KEEP UP WITH

THE FAST PACE OF THE WEB?

•WOULD YOU CONSIDER IT A LEGITIMATE GOVERNMENT ROLE?

KOREAN GOVERNMENT DESIGNES AN INTERESTING

APPROACH

E-MALLS FOR ARTISIANS

THINK GLOBAL ACT THINK GLOBAL ACT LOCALLOCAL

• LANGUAGE• INFRASTRUCTURE• LAWS

– JOHN MASHALL LAW SCHOOL– CYBERSPACE LAW CENTER

• JURISDICTION• TAX ISSUES• ETHICAL ISSUES• CULTURE/RELIGION

– (wine.com Japanese shipping example)

– Bokus.com largest online bookstore in Scandinavia (note language issue)

• Legal Issues • Market Access Issues • Financial Issues • Consumer Money/Credit

Barriers to Global ECommerce WHAT ARE SOME OF THE

Important IssuesImportant Issues Identification of buyers and

sellers Trust Security ( for example,

viruses) Cultural diversity International agreements

(multi-lateral agreements) Role of government Purchasing in local currencies Language and translation

TRANSLATION SOFTWARE

• IDIOM TECHNOLOGIES– TRACKS ALL SITES – REDUCES THE COST OF MAINTAINING

XLANGUAGE SITES

• LERNOUT & HAUSPIE– VARIETY OF USEFUL TRANSLATION SERVICES– ROUTINE CAN USE AUTOMATED SOFTWARE

• 4,00,000 VS 400 TO 600 WORDS PER MINUTE– GENERALLY ”LOCALIZATION” OVER TRANSLATION IT

CONSIDERS MULTIPE ELEMENTS OF LOCAL ENVIRONMENT (E.G. business, cultural,local dialect variations)

Check out altaVista’s translation site BABLE FISH

Source: Global Search

WHILE DECREASING 70% SITES STILL ENGLISHWHILE DECREASING 70% SITES STILL ENGLISHBUT CONSIDER USERS: 43%43% ENGLISH 57%57% NON-ENGLISH

THINK GLOBALLY-ACT THINK GLOBALLY-ACT LOCALLYLOCALLY

• LANGUAGE TRANSLATION

– More likely to buy if in own language– 370 million English native language of 6 billion – 80% of current content is in English– 40% current users do not read English– % of users: US 48% - European 29%- Asian 24%– Data Corporation predicts by 2003

• 2/3 users outside US - 60% of use and 48% of E-sales will involve at least one non-US party

• Check out Global Reach - international consulting firm

site

SITE

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