E-environment

E-ENVIRONMENT

UNIT - 7

BBA 6th SemesterPRIME COLLEGE

NAYABAZAR, KATHMANDU

NEPAL

© Hem Sagar Pokhrel

INTRODUCTION

Every business organization is a part of the business environment, within which it operates.

No entity can function in isolation because there are many factors that closely or distantly surrounds the business, which is known as a business environment.

It is broadly classified into two categories, i.e. microenvironment, and macro environment.

The former affects the working of a particular business only, to which they relate to, while the latter affects the functioning of all the business entities.

E-Environment can be defined as the use and promote Information and Communication Technology(ICT) as an instrument for environment and sustainable use of resources.

It includes the implementation of ICT based systems to store, access, manage and disseminate the environmental data and information.

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MACRO-ENVIRONMENT VS

MICRO-ENVIRONMENT

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Fig: E-Environment

MICRO ENVIRONMENT

Micro environment refers to the environment which is in direct contact with the business organization and can affect the routine activities of business straight away.

It is associated with a small area in which the firm functions. It is also known by the name Internal Environment or Task Environment.

Micro environment is a collection of all the forces that are close to the firm. These forces are very particular for the said business only.

They can influence the performance and day to day operations of the company, but for a short term only.

Its elements include suppliers, competitors, marketing intermediaries, customers and the firm itself.

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ELEMENTS OF MICRO-ENVIRONMENT

Suppliers are the ones who provide inputs to the business like raw material, equipment and so on.

Competitors are the rivals, which compete with the firm in the market and resources as well.

Marketing intermediaries may include wholesalers, distributors, and retailers that make a link between the firm and the customers.

Customers / Consumers are the ones who purchase the goods for their own consumption. They are considered as the king of business.

The firm itself is an aggregate of a number of elements like owners like shareholders or investors, employees and the board of directors.

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MACRO ENVIRONMENT

The general environment within the economy that influences the working, performance, decision making and strategy of all business groups at the same time is known as Macro Environment.

It is dynamic in nature. Therefore it keeps on changing.

It constitutes those outside forces that are not under the control of the firm but have a powerful impact on the firm’s functioning.

That is why, it is also termed as an external environment which consists of individuals, groups, organizations, agencies and others with which the firm deals during the course of its business.

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MACRO ENVIRONMENT

• The study of Macro Environment is known as PESTLE Analysis.

• PESTLE stands for the variables that exist in the environment,

• Population & Demographic,

• Economic,

• Socio-Cultural,

• Technological,

• Legal & Political,

• Environmental

• These variables, consider both economic and non-economic factors like social concerns, government policies, family structure, population size, inflation, GDP aspects, income distribution, ethnic mix, political stability, taxes, and duties, etc.

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BASIS FOR COMPARISON MICRO (INTERNAL) ENVIRONMENT MACRO (EXTERNAL) ENVIRONMENT

Meaning Micro environment is defined as the nearby environment, under which the firm operates.

Macro environment refers to the general environment, that can affect the working of all business enterprises.

Alternatively known as Internal Environment External Environment

Elements COSMIC, i.e. Competitors, Organization itself, Suppliers, Market, Intermediaries and Customers.

PESTLE, i.e. Population & Demographic, Economic, Socio-Cultural, Technological, Legal & Political and Environmental.

Nature of elements Specific General

Are these factors controllable? Yes No

Influence Directly and Regularly Indirectly and Distantly

MICRO & MACRO ENVIRONMENT | COMPARISION

MACRO & MICRO ENVIRONMENT | KEY DIFFERENCES

Micro environment is the environment which is in immediate contact with the firm. The environment which is not specific to a particular firm but can influence the working of all the business groups is known as Macro Environment.

Micro Environment is also known as internal environment of business, whereas Macro Environment is the external environment.

The factors of the micro environment affect the particular business only, but the macro environmental factors affect all the business entities.

The micro environmental factors are controllable by the business. However, the macroeconomic variables are uncontrollable.

The elements of the micro environment affect directly and regularly to the firm which is just opposite in the case of the macro environment.

The study of the micro environment is described as COSMIC analysis. Conversely, PESTLE Analysis is a study of the macro environment.

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SLEPT ANALYSIS

SLEPT analysis is a framework to assess an organization's external environmental influence on it. It considers five factors affecting the macro-environment - Social, Legal, Economic, Political and Technological (hence the mnemonic SLEPT)

The outcome of SLEPT analysis is an overall picture of the macro environment to identify threats and opportunities that can be used in SWOT analysis. SWOT further adds on the internal factors affecting the organization.

SLEPT helps to identify and hence take advantage by maximizing opportunities and minimizing threats.

It gives an understanding of the broad and long term trends and makes the firm in a better position for strategic decision making.

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MACRO ENVIRONMENT

12 Often these factors are known as the PEST factors, but we use SLEPT since it is useful to stress the

importance of the law in influencing internet marketing practices.

SLEPT ANALYSIS

Social Factors: Includes health consciousness, education level, population growth rate,sex distribution, social classes etc.

Legal Factors: Includes laws such as anti-trust law, discrimination law, intellectual propertylaws, consumer protection laws, employment laws, regulatory mechanism etc.

Economic Factors: Includes growth rates, inflation rates, interest rates, exchange rates,fiscal policies, monetary policies, credit availability etc.

Political Factors: includes government policies and intervention in the economy such ascorruption level, government stability, trade control, competition regulation, involvementin Trade Unions, consumer protection laws, employment laws etc.

Technological Factors: includes technological aspects such as R&D activity, technologyincentives, rate of technological change, infrastructure level, access to technology etc.

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FACTORS GOVERNING E-COMMERCE SERVICE ADOPTION | SOCIAL FACTORS

It is useful for e-business managers to understand the different factors that affect howmany people actively use the Internet. If these are understood for customers in a targetmarket, action can be taken to overcome some of these barriers.

For example, marketing communications can be used to reduce fears about the valueproposition, ease of use and security.

Chaffey et al. (2009) suggest that the following factors are important in governing adoptionof any e-commerce services

1. Cost of access

2. Value Proposition

3. Ease of use

4. Security

5. Fear of the unknown

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SOCIAL FACTORS1. Cost of access

Includes:

Cost of home computers(for those who do not already own the one)

Cost of using an ISPs to connect to internet

Cost of using media to connect(Telephone or cable charges)

Free access will certainly increase adoption and charges

2. Value Proposition

Customers need to perceive a need to be online – what can the Internet offer thatother media cannot?

Examples of value propositions include access to more supplier information andpossibly lower prices.

In 2000, company advertisements started to refer to ‘Internet prices’.

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SOCIAL FACTORS3. Ease of use.

This includes the ease of first connecting to the Internet using the ISP and the ease of usingthe web once connected.

4. Security.

While this is only, in reality, a problem for those who shop online, the perception generatedby news stories may be that if you are connected to the Internet then your personal detailsand credit card details may not be secure.

It will probably take many years for this fear to diminish as using the Internet slowlybecomes established as a standard way of purchasing goods.

5. Fear of the unknown.

Many will simply have a general fear of the technology and the new media, which is notsurprising since much of the news about the Internet non-adopters will have heard willconcern pornography, fraud and privacy infringements.

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SOCIAL FACTORSAn attempt has been made to quantify the magnitude of barriers to access in a UKgovernment-sponsored survey (Booz Allen Hamilton, 2002) of different countries.

Barriers for individuals noted by the survey included:

No perceived benefit

Lack of trust

Security problems

Lack of skills

Cost.

There is a strong correlation between Internet use and PC penetration. Countries such asSweden have encouraged home use most actively through government initiatives, in thiscase the ‘PC REFORM’ programme. This appears to exert more influence than reduction inlower costs of access, since in leading countries such as Sweden and Australia, cost isrelatively high

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SOCIAL FACTORS

To fully understand online customer propensity to use online service we also need toconsider the user’s access location, access device and ‘webographics’, which can helptarget certain types of customers and are an important constraint on site design.

‘Webographics’ is a term coined by Grossnickle and Raskin (2001). According to theseauthors webographics includes:

Usage location (in most countries, many users access either from home or from work, withhome being the more popular choice)

Access device (browser and computer platform including mobile devices)

Connection speed – broadband versus dial-up connections

ISP Experience level

Usage type

Usage level.

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LEGAL FACTORS

Introduction of new technologies and changes in their popularity tend to be frequent tooand need to be assessed.

Governmental and legal changes tend to happen over longer timescales. The trick formanagers is to identify those factors which are important in the context of e-commercewhich are critical to competitiveness and service delivery and monitor these.

Legal factors are most important issues for the e-commerce manager to address. The sixmost important legal issues for managers to assess are

1. Data Protection and Privacy Law

2. Disability and Discriminating Law

3. Brand and Trademark Protection

4. Intellectual Property Rights

5. Contract Law

6. Online Advertising Law

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LEGAL FACTORS

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LEGAL FACTORS

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ETHICAL FACTORS

Ethical standards are personal or business practices or behavior which are generallyconsidered acceptable by society. ( i.e. acceptable ethics can be described as moral orjust and unethical practices can be described as immoral or unjust.

Ethical issues and the associated laws developed to control the ethical approach toInternet marketing constitute an important consideration of the Internet businessenvironment for marketers.

Privacy of consumers is a key ethical issue on which we will concentrate since many lawshave been enacted and it affects all types of organization regardless of whether theyhave a transactional e-commerce service.

A further ethical issue for which laws have been enacted in many countries is providingan accessible level of Internet services for disabled users.

Another important ethical factor we have to consider is managing commerce anddistance selling products. 22

ETHICAL FACTORSINFORMATION GOVERNED BY ETHICS AND LEGISLATIONS

Effective e-commerce requires a delicate balance to be struck between the benefits theindividual customer will gain to their online experience through providing personalinformation and the amount and type of information that they are prepared forcompanies to hold about them.

The main information types used by the Internet marketer which are governed by ethicsand legislation are

1. Contact information.

2. Profile information.

3. Platform usage information.

4. Behavioral information (on a single site).

5. Behavioral information (across multiple sites).23

ETHICAL FACTORSINFORMATION GOVERNED BY ETHICS AND LEGISLATIONS

1. CONTACTINFORMATION: name, postal address, e-mail address and, for B2B companies, web site address.

2. PROFILE INFORMATION: information about a customer’s characteristics that can be used for segmentation.They include age, sex and social group for consumers, and company characteristics and individual role forbusiness customers.

3. PLATFORM USAGE INFORMATION: Through web analytics systems it is possible to collect information ontype of computer, browser and screen resolution used by site users. Many Internet users will not realize thattheir visits are tracked on virtually all sites, but the important point to know is that it is not possible toidentify an individual unless they have agreed to give information through a web form.

4. BEHAVIORAL INFORMATION (ON A SINGLE SITE): This is purchase history, but also includes the whole buyingprocess. Web analytics can be used to assess the web and e-mail content accessed by individuals.

5. BEHAVIORAL INFORMATION (ACROSS MULTIPLE SITES): This can potentially show how a user accessesmultiple sites and responds to ads across sites. Typically these data are collected and used using ananonymous profile based on cookie or IP addresses which is not related to an individual.

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Table alongside summarizes how

these different types of customer

information are collected and

used through technology. The

main issue to be considered by

the marketer is disclosure of the

types of information collection

and tracking data used.

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Note: Malware- Malicious software or toolbars, typically downloaded via the Internet, which acts as a ‘trojanhorse’ by executing other unwanted activites such as keylogging of user passwords or viruses which may collect e-mail addresses.

Ethical issues concerned with personal information ownership have been usefully summarized by Mason (1986)

into four areas:

1. Privacy – what information is held about the individual?

2. Accuracy – is it correct?

3. Property – who owns it and how can ownership be transferred?

4. Accessibility – who is allowed to access this information, and under which conditions?

Fletcher (2001) provides an alternative perspective, raising these issues of concern for both the individual and the

marketer:

1. Transparency – who is collecting what information and how do they disclose the collection of data and how

it will be used?

2. Security – how is information protected once it has been collected by a company?

3. Liability – who is responsible if data are abused?

According to UK Data Protection Act 1984, 1998 (DPA) which is typical of what has evolved in many countries to

help protect personal information, any company that holds personal data on computers or on file about customers

or employees must be registered with the data protection registrar (although there are some exceptions which may

exclude small businesses). This process is known as notification.

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“Data Controller” in figure alongside are person who collects personal information, store, disseminate, use , edit those data from “Data Subjects”. On doing so, they must follow some personal data protection guidelines that are defined under UK Personal Data Protection Act 1998 described on next slide.

Fig: Information flows that need to be understood for compliance with data protection

EIGHT PRINCIPLES FOR PERSONAL DATA PROTECTIONUK DATA PROTECTION ACT 1998

1. Fairly and lawfully processed. ‘Personal data shall be processed fairly and lawfully and, in particular, shall not beprocessed unless – at least one of the conditions in Schedule 2 is met; and in the case of sensitive personal data, atleast one of the conditions in Schedule 3 is also met.’

2. Processed for limited purposes. ‘Personal data shall be obtained only for one or more specified and lawful purposes,and shall not be further processed in any manner incompatible with that purpose or those purposes.’

3. Adequate, relevant and not excessive. ‘Personal data shall be adequate, relevant and not excessive in relation to thepurpose or purposes for which they are processed.’

4. Accurate. ‘Personal data shall be accurate and, where necessary, kept up to date.’

5. Not kept longer than necessary. ‘Personal data processed for any purpose or purposes shall not be kept for longerthan is necessary for that purpose or those purposes.’

6. Processed in accordance with the data subject’s rights. ‘Personal data shall be processed in accordance with therights of data subjects under this Act.’

7. Secure. ‘Appropriate technical and organizational measures shall be taken against unauthorised or unlawfulprocessing of personal data and against accidental loss or destruction of, or damage to, personal data.’

8. Not transferred to countries without adequate protection. ‘Personal data shall not be transferred to a country orterritory unless that country or territory ensures an adequate level of protection of the rights and freedoms of datasubjects in relation to the processing of personal data.’ 28

ECONIOMICS AND COMPETITIVE FACTORS

• E-economy is the dynamic system of interactions between a nation’s citizens, the businesses and government that capitalize upon online technology to achieve a social or economic good.

• The economic health and competitive environment in different countries will determine the e-commerce potential of each.

• A review of how different governments have tried to improve the health of their e-economies is presented in the sections later in this chapter on political factors and e-government. Knowledge of different economic conditions is also part of budgeting for revenue from different countries. In China there is regulation of foreign ownership of Internet portals and ISPs which could hamper development. User access to certain content is also restricted.

• In Asia and the Middle East, governments frequently cite protection of morality and local values as reasons for censorship. Countries where Internet access is mostly or totally controlled by the authorities include Azerbaijan, Belarus, Burma, China, Cuba, Iran, Iraq, Kazakhstan, Kyrgyzstan, Libya, North Korea, Saudi Arabia, Sierra Leone, Sudan, Syria, Tajikistan, Tunisia, Turkmenistan, Uzbekistan and Vietnam.

• Managers developing e-commerce strategies in multinational companies will initially target the countries that are most developed in the use of the technology.

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ECONIOMICS AND COMPETITIVE FACTORS

A comprehensive framework for assessing an ‘e-economy’ has been developed by Booz Allen Hamilton (2002).

The framework is based upon four layers of environment, readiness, uptake and use, and impact, and three major stakeholder groups: citizens, businesses and government, as shown in figure alongside.

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Fig: A framework describing the e-economy

E-COMMERCE AND GLOBALIZATION

Globalization refers to the move towards international trading in a single global marketplace and also to blurring of social and cultural differences between countries.

Some perceive it as ‘Westernization’ or even ‘Americanization’. As we know that larger organizations such as easyJet and Cisco, electronic communications gives the opportunity for increasing the reach of the company to achieve sales around the world.

Quelch and Klein (1996) point out some of the obvious consequences for organizations that wish to compete in the global marketplace; they say a company must have:

a 24-hour order taking and customer service response capability;

regulatory and customs-handling experience to ship internationally;

in-depth understanding of foreign marketing environments to assess the advantages of its own products and services.

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E-COMMERCE AND GLOBALIZATION Language and cultural understanding may also present a problem and a smaller or medium sized company is

unlikely to possess the resources to develop a multi-language version of its site or employ staff with sufficient language skills.

Tailoring e-commerce services for individual countries or regions is referred to as localization. A web site may need to support customers from a range of countries with:

different product needs;

language differences;

cultural differences.

This may arise additional needs and may necessary to be vary:

The language that content is provided in.

Tone and style of copy.

Site design – certain colors or images may be unsuitable or less effective in some countries.

Range of product offerings and Product pricing.

Promotional offers used to encourage acquisition of customer e-mail address. This may be affected by local data protection, taxation and trading laws.

Local contact points etc.

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Localization will address all these issues. It may be that products will be similar in different countries and localization will simply involve providing a local-language version of a web site.

However, in order to be effective, this often needs more than translation, since different promotion concepts may be needed for different countries.

An example of a business-to-consumer site with extensive localization is Durex (www.durex.com) and a business-to-business site is 3M (www.3m.com). Durex localizes content for many countries since language and the way in which sexual issues can be discussed will vary greatly between different countries. 3M, however, only localizes content in local language for some countries such as France, Germany and Spain.

Consider large multinational companies such as 3M, Ford and GlaxoSmithKline for which localization is a significant strategic issue for e-commerce.

The decision on the level of localization will need to be taken on a regional or country basis to prioritize different countries according to the size of the market and the importance of having localization. Since the cost of localization is high it may only generate a return on investment for the largest markets.

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Singh and Pereira (2005) provide an evaluation framework for the level of localization:

1. Standardized web sites (not localized). A single site serves all customer segments (domestic and international).

2. Semi-localized web sites. A single site serves all customers; however, there will be contact information about foreign subsidiaries available for international customers. Many sites fall into this category.

3. Localized web sites. Country-specific web sites with language translation for international customers, wherever relevant. 3M (www.3m.com) has adapted the web sites for many countries to local language versions. It initially focused on the major web sites. Localization Tailoring of web site information for individual countries or regions.

4. Highly-localized web sites. Country-specific web sites with language translation; they also include other localization efforts in terms of time, date, postcode, currency formats, etc. Dell (www.dell.com) provides highly localized web sites.

5. Culturally customized web sites. Web sites reflecting complete ‘immersion’ in the culture of target customer segments; as such, targeting a particular country may mean providing multiple web sites for that country depending on the dominant cultures present. Durex (www.durex.com) is a good example of a culturally customized web site.

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POLITICAL FACTORS

The political environment is shaped by the interplay of government agencies, public opinion, consumer pressure groups such as CAUCE (the Coalition against Unsolicited E-mail), www.cauce.org, and industry-backed organizations such as TRUSTe (www.truste.org) that promote best practice amongst companies.

The political environment is one of the drivers for establishing the laws to ensure privacy and to achieve taxation.

Political action enacted through government agencies to control the adoption of the Internet can include:

promoting the benefits of adopting the Internet for consumers and business to improve a country’s economic prosperity;

enacting legislation to protect privacy or control taxation;

providing organizations with guidelines and assistance for compliance with legislation

setting up international bodies to coordinate the Internet such as ICANN (the Internet Corporation for Assigned Names and Numbers, www.icann.com) and other independent organizations controlling Internet technology. 35

POLITICAL FACTORS Political involvement in many of these activities is intended to improve the economic competitiveness of

countries or groups of countries.

Quayle (2002) summarizes six strands of the UK government strategy for e-commerce which are intended to increase industry competitiveness:

1. Establish a brand in e-commerce both domestically and internationally.

2. Transform existing businesses.

3. Foster e-commerce creation and growth.

4. Expand the e-commerce talent pool (skills).

5. Provide leadership in international e-commerce policy development.

6. Government online should be a priority.

These goals are typical for many countries and specific targets are set for the proportion of people and businesses that have access, including public access points for those who cannot currently afford the technology.

Managers who are aware of these initiatives can tap into sources of funding for development or free training to support their online initiatives. Alternatively, there may be incentives such as tax breaks for business or consumer adoption of the Internet and technology companies can also take advantage of these.

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E-GOVERNMENT

Electronic governance or e-governance is the application of information and communication technology (ICT) for delivering government services, exchange of information communication transactions, integration of various stand-alone systems and services between government-to-customer (G2C), government-to-business (G2B), government-to-government (G2G) as well as back office processes and interactions within the entire government framework.

It is the use of information and communications technologies (ICT) to transform the traditional government by making it accessible, transparent, effective and accountable.

E-government does not mean putting more computers on the desks of government officials and is more than just a government website on the Internet. In a simple way ‘e-governance’ is viewed in the perspective of two major shifts in socio-economic arena –governance and information revolution. It uses electronic means to support and stimulate good governance. The emergence of ICTs along with a strong wave of globalization, and has a profound impact in the development of e-governance notion. 37

E-GOVERNMENT | NEPAL’S SCENARIO

The introduction of e-governance in Nepal has not a long history. One of the key functions of developing the e-governance is introducing IT Policy in 2000 in Nepal .

The IT Policy specifies its broader objectives as:

To make information technology accessible to the general public and increase employment through this means,

To build a knowledge-based society, and

To establish knowledge-based industries.

In addition a number of legal instruments created to develop IT sector for augmenting e-governance in Nepal. Some of them are among:

IT Policy, 2000 | Electronic Transaction and Digital Signature Act (ETADSA), 2057 (2000) | Copyright Act, 2059 (2000) | Telecommunications Policy, 1999 | Telecommunication Act, 1997 | Telecommunication Regulations 1997 | National Communication Policy, 1992 | National Strategy Paper on ICT (National Planning Commission) etc.

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E-GOVERNMENT | NEPAL’S SCENARIO

Some of the important institutions created towards ICT sector are among Ministry of Science and Technology (MoST), High Level Commission for Information Technology (HLCIT), and Nepal Telecom Authority(NTA).

In addition to these governmental entities, a number of private organizations which offer tele-services including telephone, and internet services. There are more than 40 Internet Service Providers (ISPs) and around 10 VSATs (Very Small Aperture Terminal) operating.

According to the United Nation survey for world e-Government leaders, the Republic of Korea stands on the top of the EGDI Ranking where as Nepal is at 165 th position.

Ongoing e-government projects of Nepal government includes National Portal, Inland Revenue Department (e-VAT, e-PAN, e-Filling, e-TDS), Office of Company Registrar, Department of Foreign Employment, Machine Readable Passport, Government Accounting System (FCGO) , Personal Information System (MOGA) (pis.gov.np), Public Service Commission etc.

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TECHNOLOGY INNOVATION AND TECHNOLOGY ASSESSMENT

One of the great challenges of managing e-commerce is the need to be able to assess which new technological innovations can be applied to give competitive advantage.

Includes technological aspects such as Research and Development(R&D) activity, technology incentives, rate of technological change, infrastructure level, access to technology etc.

I’m often asked what is ‘the next big thing’ or to predict changes in e-commerce over the next 5 years. The truth is no one can predict the future, there are lots of examples of companies that have misunderstood the market for products.

LET’S SEE SOME

‘This “telephone” has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.’ - Western Union internal memo, 1876

‘Who the hell wants to hear actors talk?’ H. M. Warner, Warner Brothers, 1927 ‘I think there is a world market for maybe five computers.’ - Thomas Watson, chairman of IBM, 1943

‘There is no reason for any individual to have a computer in their home’. - Ken Olson (President of Digital Equipment Corporation) at the Convention of the World Future Society in Boston in 1977 40


The business manager may have read several articles in the trade and press which have highlighted the issue and then faces a difficult decision as to whether to:

ignore the use of the technique, perhaps because it is felt to be too expensive or untried, or the manager simply doesn’t believe the benefits will outweigh the costs;

enthusiastically adopt the technique without a detailed evaluation since the hype alone convinces the manager that the technique should be adopted;

evaluate the technique and then take a decision whether to adopt it according to the evaluation.

Depending on the attitude of the manager, this technology adoption behavior can be summarized as:

1. Cautious, ‘wait-and-see’ approach.

2. Risk-taking, early-adopter approach.

3. Intermediate approach.

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Rogers (1983) defined the technology adoption behavior using bell curve graph. This diffusion–adoption process classified those trialing new technology products as innovators, early adopters, early majority, late majority, or laggards.

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The above figure can be used in two main ways as an analytical tool to help business managers. First, it can be used to understand the stage customers have reached in adoption of a technology, or any product. For example, the Internet is now a well established tool and in many developed countries we are into the late majority phase of adoption with larger numbers of users of services. This suggests it is essential to use this medium for marketing purposes. But if we look at 3G or mobile services, it can be seen that we are in the innovator phase, so investment now may be wasted since it is not clear how many will adopt these services.

Fig: Roger’s bell curve | diffusion–adoption process of technology innovation


Second, managers can look at adoption of a new technique by other businesses – from an organizational perspective. For example, an online supermarket could look at how many other e-tailers have adopted personalization to evaluate whether it is worthwhile adopting the technique.

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An alternative graphic representation of diffusion of innovation has been specifically developed by technology analyst Gartner(2005) for assessing the maturity, adoption and business application of specific technologies is hype cycle.

Hype cycle is graphic representation of the maturity, adoption and business application of specific technologies.


Trott (1998) looks at this organizational perspective to technology adoption. He identifies different requirements that are necessary within an organization to be able to respond effectively to technological change or innovation.

These are:

Growth orientation – a long-term rather than short-term vision

Vigilance – the capability of environment scanning

Commitment to technology – willingness to invest in technology

Acceptance of risk – willingness to take managed risks

Cross-functional cooperation – capability for collaboration across functional areas

Receptivity – the ability to respond to externally developed technology

Slack – allowing time to investigate new technological opportunities

Adaptability – a readiness to accept change

Diverse range of skills – technical and business skills and experience. The pro44

CONTENTS THAT MIGHT HELP YOU TOTACKLE VERY SHORT QUESTIONS..

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TIMELINE OF WEB SITES INDICATING INNOVATION IN BUSINESS MODEL OR MARKETING COMMUNICATIONS APPROACH

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FIG: RELATION BETWEEN INTRANET, EXTRANET & INTERNET

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FIGURE: SUMMARY AND EXAMPLES OF TRANSACTION ALTERNATIVES BETWEEN BUSINESSES, CONSUMERS AND GOVERNMENTAL ORGANIZATIONS

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Buy-side e-commerce

E-commerce transactions between a purchasing organization and its suppliers.

Sell-side e-commerce

E-commerce transactions between a supplier organization and its customers.

Buy-side e-commerce refers to transactions to procure resources needed by an organization from its suppliers.

Sell-side e-commerce refers to transactions involved with selling products to an organization’s customers.

So e-commerce transactions between organizations can be considered from two perspectives: sell-side from the perspective of the selling organization and buy-side from the perspective of the buying organization.

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Fig: The distinction between buy-side and sell-side e-commerce

CONSUMER BARRIERS TO ADOPTION OF THE INTERNET IN NEPAL INCLUDED(BUT NOT LIMITED TO):

No perceived benefit

Lack of trust

Security problems

Lack of skills / Digital Divide / Digital Literacy

Cost / Affordability

Inadequate infrastructure

Poor mobile Internet coverage or network access

Unreliable electricity supply

lack of relevant local-language content may also limit use.

lack of incentives: Internet service providers are unlikely to reach rural areas without clear incentives like government support or high profit margins. Advertisers are not interested in reaching such markets as well.

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E-COMMERCE RELATED KEYWORDS COLLECTIONS NOT ONLY FOR VERY SHORT QUESTIONS.. WILL HELP YOU TO USE KEYWORDS WISELY WHILE ANSWERING SHORT & LONG QUESTIONS AS WELL. THIS LIST IS SUPPOSED TO HELP YOU IN IMPROVING YOUR ANSWERING STANDARD.

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Social network

A site that facilitates peer to-peer communication within a group or between individuals through providing facilities to develop user-generated content (UGC) and to exchange messages and comments between different users.

Virtual worldsAn electronic environment which simulates interactions between online characters known as avatars. Also known as Massively Multiplayer Online Roleplaying Games (MMORPG)

Blog Personal online diary, journal or news source compiled by one person, an internal team or external guest authors. Postings are usually in different categories. Typically comments can be added to each blog posting to help create interactivity and feedback.

Rich media Digital assets such as ads are not static images, but provide animation, audio or interactivity as a game or form to be completed.

Mobile commerce (m-commerce) Electronic transactions and communications conducted using mobile devices such as laptops, PDAs and mobile phones, and typically with a wireless connection.

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Electronic business (e-business)

All electronically mediated information exchanges, both within an organization and with external stakeholders supporting the range of business processes.

Information and communication technology (ICT or IT)

The software applications, computer hardware and networks used to create e-business systems.

Digital marketing

This has a similar meaning to ‘electronic marketing’ – both describe the management and execution of marketing using electronic media such as the web, e-mail, interactive TV and wireless media in conjunction with digital data about customers’ characterstics and behaviour.

Feed or RSS feed Blog,

News or other content is published by an XML standard and syndicated for other sites or read by users in RSS reader services such as Google Reader, personalized home pages or e-mail systems. RSS stands for ‘really simple syndication’.

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Podcasts

Individuals and organizations post online media (audio and video) which can be viewed in the appropriate players (including the iPod which first sparked the growth in this technique). The latest podcast updates can be automatically delivered by really simple syndication(RSS).

Multi-channel marketing

Customer communications and product distribution are supported by a combination of digital and traditional channels at different points in the buying cycle .

Multi-channel marketing strategy

Defines how different marketing channels should integrate and support each other in terms of their proposition development and communications based on their relative merits for the customer and the company.

Customer journey

A description of modern multi-channel buyer behaviour as consumers use different media to select suppliers, make purchases and gain customer support.

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Customer-centric marketing

An approach to marketing based on detailed knowledge of customer behaviour within the target audience which seeks to fulfil the individual needs and wants of customers.

Customer insight

Knowledge about customers’ needs, characteristics, preferences and behaviours based on analysis of qualitative and quantitative data. Specific insights can be used to inform marketing tactics directed at groups of customers with shared characteristics.

Web 2.0 concept

A collection of web services that facilitate interaction of web users with sites to create usergenerated content and encourage behaviors such as community or social network participation, mashups, content rating, use of widgets and tagging.

Web 3.0 concept

Next-generation web incorporating high-speed connectivity, complex cross-community interactions, full range of digital media (text, voice, video) and an intelligent or semantic web where automated applications can access data from different online services to assist searchers perform complex tasks of supplier selection.

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Supply chain management (SCM)

The coordination of all supply activities of an organization from its suppliers and partners to its customers.

Value chain

A model for analysis of how supply chain activities can add value to products and services delivered to the customer

E-government

The application of e-commerce technologies to government and public services for citizens and businesses.

Soft lock-in

Customers or suppliers continue to use online services because of the switching costs. This means that a customer or supplier continues to use a service since they find the service valuable and they have also invested a lot of time in learning the service or integrating it with their systems and there are some costs in switching.

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Brochureware

Brochureware describes a web site in which a company has migrated its existing paper-based promotional literature on to the Internet without recognizing the differences required by this medium.

Total cost of ownership (TCO)

TCO refers to the total cost for a company operating a computer system or other investment. This includes not only the purchase or leasing cost, but also the cost of all the services needed to maintain the system and support the end-user.

Stage models

Used to review how advanced a company is in its use of information and communications technology (ICT) to support different processes.

Online value proposition (OVP)

A statement of the benefits of online services reinforces the core proposition and differentiates from an organization’s offline offering and those of competitors.

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Destination site

Typically a retailer or manufacturer site with sales and service information. Intermediaries such as media sites may be destination sites for some.

Online intermediaries

Web sites which help connect web users with content they are seeking on destination sites. Include new online intermediaries such as search engines and shopping comparison sites and traditional brokers, directories and newspaper and magazine publishers that now have an online presence.

Aggregators

An alternative term for price comparison sites. Aggregators include product, price and service information comparing competitors within a sector such as financial services, retail or travel. Their revenue models commonly include affiliate revenues (CPA), pay per click advertising (CPC) and display advertising (CPM).

Affiliate

A company promoting a merchant typically through a commission based arrangement either direct or through an affiliate network.

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Online value proposition (OVP)

A statement of the benefits of e-commerce service that ideally should not be available in competitor offerings or offline offerings.

Disintermediation

The removal of intermediaries such as distributors or brokers that formerly linked a company to its customers.

Electronic marketplace

A virtual marketplace such as the Internet in which no direct contact occurs between buyers and sellers. While traditional marketplaces have a physical location, an Internet-based market has no physical presence –it is a virtual marketplace.

Infomediary

A business whose main source of revenue derives from capturing consumer information and developing detailed profiles of individual customers for use by third parties.

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Metamediaries Intermediaries providing information to assist with selection and discussion about different products and services.

Search engines, spiders and robots

Automatic tools known as ‘spiders’ or ‘robots’ index registered sites. Users search this by typing keywords and are presented with a list of pages.

Directories or catalogues Structured listings of registered sites in different categories.

CPA (cost per acquisition) The cost to the advertiser (or the revenue received by the publisher) for each outcome such as a lead or sale generated after a click to a third-party site.

Digital rights management (DRM) The use of different technologies to protect the distribution of digital services or content such as software, music, movies or other digital data.

E-economy The dynamic system of interactions between a nation’s citizens, the businesses and government that capitalize upon online technology to achieve a social or economic good.

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Bricks and mortar:A traditional organization with limited online presence.

Clicks and mortar:A business combining an online and offline presence.

Churn rate The proportion of customers (typically subscribers) that no longer purchase a company’s products in a time period.

Internet The Internet refers to the physical network that links computers across the globe. It consists of the infrastructure of network servers and communication links between them that are used to hold and transport information between the client computers and web servers.

Internet service provider (ISP) A provider providing home or business users with a connection to access the Internet. They can also host web-based applications.

Backbones High-speed communications links used to enable Internet communications across a country and internationally.

Hosting provider A service provider that manages the server used to host an organization web site and its connection to the Internet backbones.

Content management system (CMS) Software used to manage creation, editing and review of web-based content. Eg. PrestaShop, OSCommerce, Magento

Firewall A specialized software application mounted on a server at the point where the company is connected to the Internet. Its purpose is to prevent unauthorized access into the company from outsiders.

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Web browsers Browsers such as Mozilla Firefox or Microsoft Internet Explorer provide an easy method of accessing and viewing information stored as web documents on different servers.

Web servers Store and

Web analytics system Information on visitor volumes, sources and pages visited are analysed through web analytics systems present the web pages accessed by web browsers.

Uniform (universal) resource locator (URL) A web address used to locate a web page on a web server.

Domain name registration The process of reserving a unique web address that can be used to refer to the company web site.

Wiki A collaborative interactive web service which enables users to modify content contributed by others.

Microblogging Publishing of short posts through services such as Twitter.com and Tumblr.com.

Bandwidth Indicates the speed at which data are transferred using a particular network medium. It is measured in bits per second (bps).

Cloud computing The use of distributed storage and processing on servers connected by the Internet, typically provided as software or data storage as a subscription service provided by other companies.62

Electronic data interchange (EDI) The exchange, using digital media, of structured business information, particularly for sales transactions such as purchase orders and invoices between buyers and sellers.

Financial EDI Aspect of electronic payment mechanism involving transfer of funds from the bank of a buyer to the bank of a seller.

Electronic funds transfer (EFT) Automated digital transmission of money between organizations and banks. Internet EDI Use of EDI data standards delivered across non-proprietary IP networks.

Value-added network (VAN) A secure wide-area network that uses proprietary rather than Internet technology.

Virtual private networks (VPN) A secure, encrypted (tunnelled) connection between two points using the Internet, typically created by ISPs for organizations wanting to conduct secure Internet trading.

Mobile commerce or m-commerce Electronic transactions and communications conducted using mobile devices such as laptops, PDAs and mobile phones, and typically with a wireless connection.

Wi-Fi (‘wireless fidelity’) A high-speed wireless local-area network enabling wireless access to the Internet for mobile, office and home users.

Bluetooth A wireless standard for transmission of data between devices over short ranges (less than 100 m).63

Identity theft The misappropriation of the identity of another person without their knowledge or consent.

Opt-in A customer proactively agrees or consents to receive further communications.

Opt-out A customer declines the offer to receive further information.

Cookies It is important for e-commerce managers to understand the privacy implications of using cookies to identify returning visitors. Cookies are small text files stored on an end-user’s computer to enable web sites to identify and track them.

Viral marketing In an online context, ‘Forward to a friend’ e-mail used to transmit a promotional message from one person to another. ‘Online word of mouth. It’s one of the widespread business practice.

Pay-per-click (PPC) search marketing A company pays for text adverts to be displayed on the search engine results pages when a specific key phrase is entered by the search users. It is so called because the marketer pays for each time the hypertext link in the ad is clicked on.

Intellectual property rights (IPR) Protect the intangible property created by corporations or individuals that is protected under copyright, trade secret and patent laws.

Trademark A trademark is a unique word or phrase that distinguishes your company. The mark can be registered as plain or designed text, artwork or a combination. In theory, colours, smells and sounds can also be trademarks.

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