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E-commerce
And The MNC
Iqra Tariq
Sana Aslam
E-commerce
E-commerce (electronic commerce or EC) is the
buying and selling of goods and services, or the
transmitting of funds or data, over an electronic
network, primarily the internet. These business
transactions occur either as business-to-business,
business-to-consumer, consumer-to-consumer or
consumer-to-business. The terms e-commerce and
e-business are often used interchangeably. The
term e-tail is also sometimes used in reference to
transactional processes for online shopping.
E-commerce
Brief History of E-Commerce
1970s
E- commerce meant the facilitation of commercial
transactions electronically, using technology such as
Electronic Data Interchange (EDI) and Electronic Funds
Transfer (EFT), allowing businesses to send commercial
documents like purchase orders or invoices electronically.
1980s
The growth and acceptance of credit cards
Automated teller machines (ATM)
Telephone banking
Airline reservation system
1990s
The Internet commercialized and users flocked to participate in the form of dot-coms, or Internet start-ups
Innovative applications ranging from online direct sales to e-learning experiences
2000s
Many European and American business companies offered their services through the World Wide Web.
Since then, People began to associate a word “e -commerce”
What is the Internet?
The largest network of networks in
the world.
Uses TCP/IP protocols and packet
switching .
From Dr. Vinton Cerf,
Co-Creator of TCP/IP
Brief History of the Internet
1968 - DARPA (Defense Advanced Research
Projects Agency) contracts with BBN (Bolt,
Beranek & Newman) to create ARPAnet
1970 - First five nodes:
UCLA
Stanford
UC Santa Barbara
U of Utah, and
BBN
1974 - TCP specification by Vint Cerf
1984 – On January 1, the Internet with its 1000 hosts converts en masse to using TCP/IP for its messaging
History
A Brief Summary of the
Evolution of the Internet
Memex
Conceived
1945
WWW
Created
1989
Mosaic
Created
1993
A
Mathematical
Theory of
Communication
1948
Packet
Switching
Invented
1964
Silicon
Chip
1958
First Vast
Computer
Network
Envisioned
1962
ARPANET
1969
TCP/IP
Created
1972
Internet
Named
and
Goes
TCP/IP
1984
Hypertext
Invented
1965
Age of
ecommerce
Begins
1995
1945 1995
E-commerce:
Definition, Types, and
ImportanceE-commerce:
Use of the Internet to buy or sell products and
services.
B2C:
Business-to-Consumer transactions.
B2B:
Business-to-Business online transactions.
C2C:
Consumer-to-Consumer business transactions.
C2B:
Consumer-to-Business online transactions.
B2C:
Example
Amazon.com is perhaps the best known of
the B2C sites
• It pioneered the concept of branding
• It pioneered the use of wallets
• It pioneered the development of a
structure to house additional businesses
Business-to-Consumer transactions.
Business 2 customer
B2B:Business-to-Business online transactions.
Example
Wholesale & B2B Ecommerce Websites
HEROweb builds successful business-to-business portals. Our wholesale clients love the eye-catching designs of a Hero Web site, and even more the ease-of-use that our Mighty Merchant™ shopping and content platform affords. HEROweb makes it simple to keep track of wholesale accounts and pricing strategies. If your online wholesale business deserves the best, you deserve HEROweb.
Bu
siness 2
bu
siness
C2C:
Consumer-to-Consumer business transactions.
Example of a C2C organization is Carsales.com.
Carsales.com is a website that allows unknown parties
to purchase motor vehicles from one another over the
internet. This website offers various search engine
options, and a range of payment methods. This website
is run by over 200 people nation wide and their aim is
to offer the most useful and helpful service as possible
and to lower the cost of motor vehicle advertising in
Australia. Con
sum
er 2
con
sum
er
C2B:Consumer-to-Business online transactions.
EXAMPLE:
Mr. Leta, an Ethiopian, needs to travel India for
his personal case. He requires a flight on the
first day of January and he is willing to pay
Br 500 only. Here this requisition will display
in C2Bwebs. In addition, the Ethiopian Air
Lines can be interested to take him to New
Delhi, even the normal trip costs more than
Br 500 rather than of flying with empty seats.C
on
sum
er 2
bu
siness
Internet and E-commerce
Structure
• Internet plays more and more important role in our life. Now it is used not only as means of obtaining information and sending e-mail messages, it became a significant tool in doing business, in e-commerce particularly.
• At web sites of most companies selling any products.
• Provide information
• Participant can be registered or licensed the websites.
• Buyers or seller interaction.
Internet and E-commerce
Structure(Count,)
Transaction Incubation:
Process of setting up a relationship between the participant and the website.
Transaction Negotiation:
Facilitation of the purchase decision.
Transaction Formation:
Process where purchase is finalized.
Transaction Management:
Management of various activities linked to transactions.
E-commerce and
Globalization:
Globalization is the integration of
economies throughout the world,
enabled by technological progress.
Helps the companies to reach
customers worldwide.
Develop competitive advantage to
success in various.
Barriers are reduced
Becoming more effective cost.
E-commerce and
Globalization (Count,): Born-Global Firms
Companies that operate globally from the day they are founded
Several reasons account for the growth of e -commerce:
Extremely cheap hardware computers:
E-commerce hardware are the commodities that can be acquired for very little.
Cheap software:
relay on open source software to develop services. E.g. Linux.
Access to talent worldwide:
• now access to the vast pool of programmer available in different countries.
• Previously programmers available only to larger multinationals
• Many smaller companies can easily tap into these employees .
Cheaper internet worldwide :
Increased availability
Decreased price
Broadband
Broadband :is a combination of digital technologies that allows rapid transmission
of data and other digital services, often simultaneously.
More targeted marketing:
Google helps to made it easier and efficient to target potential buyers.
easier and cheaper to say in touch with employees worldwide:
large number of tools available for companies to keep their worldwide employees in touch with each other. B
ro
ad
ba
nd
Global E-commerce
Opportunities And Threats
Opportunities:
Reach customer on a global scale
24 hours browsing and 7 days a week
Less expensive or effective
Allow company to streamline its operations to become more profitable
Inventory management
Better communication
Coordination with supplier
Global E-commerce
Opportunities And Threats
Threats:
legal and regulatory changes
Low barriers to entry are a constant threat in ecommerce
People can sell items via Face book or eBay without setting
up their own websites
Differences across cultures and language
Multinational is selling products, returns and shipping can also
be very complex
Different regulation and tax system in place
Expensive worldwide shipping
Key cross-cultural and global E-
commerce issues
e-commerce and internet global level
presents companies with unique issues
and challenges.
Issues:
cross- cultural e-commerce adoption and
diffusion
cross- cultural consumers trust in E-
commerce
cross- cultural web design
Cross- cultural e-commerce
adoption and diffusion
There are 2 important components to go to global with e-commerce
o E-Commerce Adoption
Degree to which companies and individuals are willing to accept
new technologies inherent in e-commerce
o E-Commerce Diffusion
Degree to which e-commerce is spreading in different societies
E-Commerce Adoption
Research shows that e-commerce adoption and
diffusion is dependent on the internet
infrastructure and the availability of internet
services at affordable price.
Locate their services where the internet is
readily available.
Perceived Usefulness
Perception that the use of a B2C site will
enhance the shopping experience
Perceived Ease of Use
Belief that use of a B2C website is free of
effort
To understand better e-commerce adoption, it is
important to understand the
Technology Adoption Model (TAM) developed by
DAVIS
Cross- cultural e-commerce
adoption and diffusion (Count,)
E-Commerce Adoption
Web entrepreneurs should target countries based on
two factors
First, attractive markets for e-commerce are those markets
with inefficiencies, such as those found in many formerly
state- controlled markets. In this markets, e-commerce
shopping allows buyers to get quality and cheaper prices
because they are free from state control.
Second, target markets should have attractive demographic
characteristics. These include location with an internet
population of at least 5% , a high literacy rate countries that
participate in at least one free trade agreement, and a
government with a viable legal system.
Cross- cultural consumers trust in
E-commerce:
Consumer Trust in E-Commerce
Willingness of an online consumer to depend on others, assuming
that the other party will deliver as promised.
Consumer trust in e-commerce is seen as a critical factor
influencing consumer adoption of e-commerce.
Internet involves significant uncertainty.
• Internet purchases involves high risk
• Comfort with uncertainty
• launching global e-commerce activities to understand
environment
• MNC design systems to built trust
What can MNC`s do to built trust?
Answer is Yes
o Trustworthy website and cyber security
o More secure internet
o Designed appropriately trust
o Built loyalty
o Interact customers
o Discuss problems
o Tailored cultural preference
o Engaging multichannel integration (both physical and online web stores)
Cross- cultural web design
• Companies are expanding their customer basis
across national and cultural boundaries
• Cross - cultural design is designing technology for
different
• cultures, languages, and economic standings
• Ensuring usability and user experience across
cultural boundaries
Standardized Website
Company's Website around the world are fairly
similar in layout and design
Localized Website
Website design and layout are adapted to fit
local culture
Cross- cultural web design
Should MNC`s localize or standardize their websites?
It dependent on the nature of product being sold, consumer and other factors.
some products don’t require much adaptation for local culture.
If adaptation is needed, how should MNCs approach website adaptation?
Adaptation needs to go beyond mere machine translated version for websites.
Through this translation other issues like color, icon, webpage layout, date formats, fonts and so others
User experience attributes are culturally bound
Culture influences human product interaction
Example of using existing theories Hofstede’s five cultural dimensions
Power distance
Individualism vs. collectivism
Masculinity vs. feminity
Uncertainty avoidance
Long vs. short term time orientation
Culture & User Experience
Building a successful
e-commerce strategy
Important aspects to built a successful
e- commerce strategy
Contribute to profit and competitive advantage
start at basic strategies for multinational operation
build on sound
Important aspects to built a successful e- commerce strategy (Count,)
Important key aspects
E-commerce strategy start with top management
only possible through dynamic and strong leadership coming from
the top
Strong believe in the benefit of e-commerce approach
E-commerce involves strong resources and time commitment
Leaders should have expertise and vision to objectively assess the
company's position.
Trends and potential
solution of e-commerce
Speed:
customers wants be able to perform any transaction
with speed
in multinational consumer and supplier wants be able
to engage in transaction are efficiently
Time is money, especially for an ecommerce site.
Any delay on the web lowers results
For example, in 2006, the average online shopper
expected WebPages to load in eight seconds or less;
by 2010, that number was down to 2 seconds or
less.
Trends and potential solution
of e-commerce (Count,)
Self service:
2nd trend is the ability to customers to be
able to get self service at any time
Mostly service provide at 7 days 24 hours a
day
Ability to have access the real time
information
Make purchase and solve problems
Frequently asked questions (FAQ)
Trends and potential solution
of e-commerce (Count,)
Customer service:
Provision of superior customer service
Multinational using e-commerce operation to provide
better customer services
Multinational becomes intertwined with other business
Listen on social media (78% of customers believe)
Track all customer interactions.
create a support center for customers (90% of customers)
Provide online chat (77% of customers)
Focus on timely responses (84% of customers)
Trends and potential solution
of e-commerce (Count,)
Integration of various channel:
MNCs facing pressure to integrate various channel which they operate
Consistent policies between both offline and online operations
Customers frustrated when offered product not sale in store
Products you are selling via different channels are sufficiently differentiated to account for price differences.
In addition,
Make significant financial investment
Significant efforts and resources
Investment include
I. financial resources for an I.T
department
II. Resources for upgrading
multinational`s information system
Appropriate data management
Data management:
Experts suggests:
Track important data:
For multinational collect appropriate
from customers visit
comprehensive knowledge about the
customer is necessary in advance
Real-time reporting
Data management (Count):
Enter accurate data:
Every step to ensure that collect data is accurate
Data compared with other outside source of data
Use data entry screens.
Use controlled vocabulary
Data checking
Check for data completeness
Ensure data create better understanding for previous purchase and future preferences
Data management (Count):
Maintain data at the lowest level possible
Multinationals ensures data collected at lowest
possible levels
Data aggregation is possible
Breaking down the data is not possible
Data storing
Online habits of the over 55s
Going online daily Researching products online Shopping online
France 73% 51% 34%
Spain 71% 46% 27%
UK 70% 53% 46%
Germany 65% 43% 32%
US 66% 42% 25%
Cyber and e-commerce
security
Cyber Security
Challenges and other vulnerabilities of
the Internet
History:
A Short History of Cybersecurity for CNI/CII
Birth of CNI: Early proposals appeared around 15 to 20 years ago, during the mid-1990s, after birth of commercial internet
International discussions from G8, OECD and EU around 10 to 15 years ago with main focus upon physical CNI protection & less on cyber.
Early CNI/CII Plans: More detailed National CNI/CII Plans started to be prepared and published from around 5 to 7 years ago
Cyber security for CNI: Orchestrated cyber attacks on CNI for Estonia, Georgia and others from 2007 onwards led to major work on cyber CNI.
Major National Investment programmers for Cyber security for CNI is now in place for USA, UK, Canada, Europe & Far East as previously discussed
Significant Cyber Focus now for CNI in ALL major economic sectors such as Defense, Finance, Energy, Utilities, Transport, IT, Comms & Healthcare.
E-commerce security
Degree to which individuals feel that
their private information is safe in
the hands of companies collecting
such information
“You can’t just open a website and expect
people to flood in. If you really want to
succeed you have to create traffic.”
-Paul Graham, YC
Reasons why cyber security is
important
Rapid growth of viruses and worms
computers are now more connected
and computer worms and viruses are
rapidly copied
Viruses comes from
e-mails, and files
It cause slow your computer or lost
data
Reasons why cyber security is
important (Count,)
Hacking
Choose ecommerce web hosting service
provider wisely
Keep Data Encrypted
Insist on Strong Passwords
Hackers can damage the data
Ability to manipulate
Reasons why cyber security is
important (Count,)
Spam
Spam is the term used for unsolicited
e-mail sent by marketers and
individuals who typically have
purchased an e-mail mailing list.
Reduce employee productivity
Slow down network traffic
Reasons why cyber security is
important (Count,)
Phishing
Scam websites
steal identity
steal data
steal funds
Request to submit your secret
information
Reasons why cyber security is
important (Count,)
Computer attacks and identity theft
theft of personal information in order
to commit fraud
happen through your email account
online purchases or other situations
where you give out sensitive
information such as your credit card
information or your social
insurance number.
Type of identity theft fraud Percent
Government documents or
benefits fraud38.7%
Credit card fraud 17.4
Phone or utilities fraud 12.5
Bank fraud (2) 8.2
Attempted identity theft 4.8
Employment-related fraud 4.8
Loan fraud 4.4
Other identity theft 21.8
What can multinational do to
minimize threats to e-commerce
security???
At national level UK and Japan
setting up computer security
Taiwan and South Korea increased
the punishment of cyber crime
US and Germany have been acting in
addressing cyber security issues in a
proactive manners
In addition,
Take appropriate measures for internet
security
Confidentiality
Availability
Integrity
authentication
Thank
You
