0. Chapter 11 EC Strategy and Implementation: Justification, Globalization, SMEs, and Regulatory and Ethical Issues

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LEARNING OBJECTIVES
Describe the strategic planning process.
Describe the purpose and content of a business plan in e-commerce.
Describe EC strategy implementation including the use of metrics.
Describe the need for justifying EC investments, how it is done, and how metrics are used to determine justification.
Understand the difficulties in measuring and justifying EC investments.
Evaluate the issues involved in global EC.
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LEARNING OBJECTIVES
Analyze the impact of EC on SMEs.
Understand the foundations for legal and ethical issues in EC.
Explain privacy, free speech, and defamation and their challenges.
Discuss the challenges caused by spam, splogs, and pop-ups.
Describe the importance of green EC and the major issues of concern.
Describe the anticipated future of EC.
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3. STRATEGY, PLANNING, AND IMPLEMENTATION OF E-COMMERCE
A broad-based formula for how a business is going to accomplish its mission, what its goals should be, and what plans and policies will be needed to carry out those goals.
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4. STRATEGY, PLANNING, AND IMPLEMENTATION OF E-COMMERCE
STRATEGY AND THE WEB ENVIRONMENT
Porter’s Competitive Forces Model and Strategies
Threat of entry of new competitors
Bargaining power of suppliers
Bargaining power of customers or buyers
Threat of substitute products or services
Rivalry among existing firms in the industry
e-commerce strategy (e-strategy)
The formulation and execution of a vision of how a new or existing company intends to do business electronically.
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7. STRATEGY, PLANNING, AND IMPLEMENTATION OF E-COMMERCE
strategy initiation
The initial phase of strategic planning in which the organization examines itself and its environment.
Specific outcomes:
value proposition
The benefit that a company’s products or services are provided to a company and its customers.
Core competencies
Forecasts
Competitor (industry) analysis
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8. STRATEGY, PLANNING, AND IMPLEMENTATION OF E-COMMERCE
strategy formulation
The development of strategies to exploit opportunities and manage threats in the business environment in light of corporate strengths and weaknesses.
Specific activities and outcomes:
Business opportunities
Cost-benefit analysis
Risk analysis, assessment, and management
Business plan
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9. STRATEGY, PLANNING, AND IMPLEMENTATION OF E-COMMERCE
strategy implementation
The development of detailed, short-term plans for carrying out the projects agreed on in strategy formulation.
Specific activities and outcomes:
Project planning
Resource allocation
Project management
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10. STRATEGY, PLANNING, AND IMPLEMENTATION OF E-COMMERCE
strategy assessment
The continuous evaluation of progress toward the organization’s strategic goals, resulting in corrective action and, if necessary, strategy reformulation.
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11. STRATEGY, PLANNING, AND IMPLEMENTATION OF E-COMMERCE
BUSINESS PLANNING IN E-COMMERCE
business plan
A written document that identifies a company’s goals and outlines how the company intends to achieve the goals and at what cost.
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13. STRATEGY, PLANNING, AND IMPLEMENTATION OF E-COMMERCE
business case
A business plan for a new initiative or large, new project inside an existing organization.
E-COMMERCE STRATEGY: CONCEPTS AND OVERVIEW
Strategy in the Web 2.0 Environment and in Social Networking
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15. JUSTIFICATION AND COST-BENEFIT ANALYSIS
Companies need to justify their EC investments as part of strategy formulation in order to achieve the optimal level of investment
OTHER REASONS WHY EC JUSTIFICATION IS NEEDED
EC is not necessarily the solution to all problems
Formal evaluation of requests for funding mandated
Need to assess the success of EC projects after completion
Success of EC projects assessed in order to pay bonuses
Pressure from top management
Large amount of money
Weak business conditions exist
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16. JUSTIFICATION AND COST-BENEFIT ANALYSIS
EC INVESTMENT CATEGORIES AND BENEFITS
HOW IS AN EC INVESTMENT JUSTIFIED?
cost-benefit analysis
A comparison of the costs of a project against the benefits.
WHAT NEEDS TO BE JUSTIFIED? WHEN SHOULD JUSTIFICATION TAKE PLACE?
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17. JUSTIFICATION AND COST-BENEFIT ANALYSIS
USING METRICS IN EC JUSTIFICATION
metric
A specific, measurable standard against which actual performance is compared.
key performance indicators (KPIs)
The quantitative expression of critically important metrics.
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DIFFICULTIES IN MEASURING AND JUSTIFYING E-COMMERCE INVESTMENTS AND SUCCESS
THE EC JUSTIFICATION PROCESS
DIFFICULTIES IN MEASURING PRODUCTIVITY AND PERFORMANCE GAINS
Data and Analysis Issues
EC Productivity Gains May Be Offset by Losses in Other Areas
Incorrectly Defining What Is Measured
Other Difficulties
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DIFFICULTIES IN MEASURING AND JUSTIFYING E-COMMERCE INVESTMENTS AND SUCCESS
DETERMINING E-COMMERCE SUCCESS
Product Characteristics
Industry Characteristics
Seller Characteristics
Consumer Characteristics
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GLOBAL E-COMMERCE
BENEFITS AND EXTENT OF OPERATIONS
The major advantage of EC is the ability to do business at any time, from anywhere, and at a reasonable cost
BARRIERS TO GLOBAL EC
Cultural Issues and Language Translation
Machine Translation of Web Pages
Administrative and Legal Issues
Geographic Issues and Localization
Economic and Financial Issues
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GLOBAL E-COMMERCE
BREAKING DOWN THE BARRIERS TO GLOBAL EC
Be strategic
Know your audience
Localize
Think globally, act consistently
Value the human touch
Clarify, document, explain
Offer services that reduce barriers
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23. E-COMMERCE IN SMALL AND MEDIUM-SIZED ENTERPRISES
Some of the first companies to take advantage of Web-based electronic commerce were SMEs
SMEs consider the Internet to be a valuable business tool
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26. INTELLECTUAL PROPERTY AND OTHER REGULATORY ISSUES
LAWS ARE SUBJECT TO INTERPRETATION
PERSONAL AND PROPERTY RIGHTS
civil litigation
An adversarial proceeding in which a party (the plaintiff) sues another party (the defendant) to get compensation for a wrong committed by the defendant.
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27. INTELLECTUAL PROPERTY AND OTHER REGULATORY ISSUES
regulatory compliance
Systems or departments in an organization whose job is to ensure that personnel are aware of and take steps to comply with relevant laws, standards, policies, and regulations.
compliance data
All data belonging or pertaining to an enterprise included in the law, which can be used for the purpose of implementing or validating compliance.
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28. INTELLECTUAL PROPERTY AND OTHER REGULATORY ISSUES
Creations of the mind, such as inventions, literary and artistic works, and symbols, names, images, and designs, used in commerce.
copyright
An exclusive right of the author or creator of a book, movie, musical composition, or other artistic property to print, copy, sell, license, distribute, transform to another medium, translate, record, perform, or otherwise use.
infringement
Use of the work without permission or contracting for payment of a royalty.
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29. INTELLECTUAL PROPERTY AND OTHER REGULATORY ISSUES
digital rights management (DRM)
An umbrella term for any of several arrangements that allow a vendor of content in electronic form to control the material and restrict its usage.
fair use
The use of copyrighted material for noncommercial
purposes.
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30. INTELLECTUAL PROPERTY AND OTHER REGULATORY ISSUES
patent
A document that grants the holder exclusive rights to an invention for a fixed number of years.
trademark
A symbol used by businesses to identify their goods and services; government registration of the trademark confers exclusive legal right to its use.
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ETHICS IN E-COMMERCE
ethics
The branch of philosophy that deals with what is considered to be right and wrong.
privacy
The right to be left alone and free of unreasonable personal intrusions.
ETHICAL PRINCIPALS AND GUIDELINES
Example: Who Owns User-Generated Content at Facebook?
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ETHICS IN E-COMMERCE
business ethics
A form of applied ethics that examines ethical principles and moral or ethical problems that arise in a business environment.
EC ETHICAL ISSUES
Nonwork-Related Use of the Internet
Codes of Ethics
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33. PRIVACY, VIOLATION AND PROTECTION, AND THE CONFLICT WITH FREE SPEECH
PRIVACY RIGHTS AND PROTECTION
opt-out
Business practice that gives consumers the opportunity to refuse sharing information about themselves.
opt-in
Agreement that requires computer users to take specific steps to allow the collection of personal information.
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34. PRIVACY, VIOLATION AND PROTECTION, AND THE CONFLICT WITH FREE SPEECH
FREE SPEECH ONLINE VERSUS PRIVACY PROTECTION
Free Speech Online Versus Child Protection Debate
Children’s Internet Protection Act (CIPA)
U.S. law that mandates the use of filtering technologies in schools and libraries that receive certain types of federal funding.
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35. PRIVACY, VIOLATION AND PROTECTION, AND THE CONFLICT WITH FREE SPEECH
THE PRICE OF PROTECTING AN INDIVIDUAL’S PRIVACY
Example: Sheriff Sues Craigslist to Curb Prostitution
HOW INFORMATION ABOUT INDIVIDUALS IS COLLECTED
Web Site Registration
Cookies
RFID’s Threat to Privacy
Privacy of Employees
darknets
Private online community that is only open to those who belong to it.
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36. PRIVACY, VIOLATION AND PROTECTION, AND THE CONFLICT WITH FREE SPEECH
PRIVACY ISSUES IN WEB 2.0 TOOLS AND SOCIAL NETWORKS
Presence, Location, and Privacy
Free Speech via Wikis and Social Networks
PRIVACY PROTECTION USING ETHICAL PRINCIPLES
Platform for Privacy Preferences Project (P3P)
A protocol allowing Web sites to declare their intended use of information they collect about browsing users.
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37. PRIVACY, VIOLATION AND PROTECTION, AND THE CONFLICT WITH FREE SPEECH
USA PATRIOT Act
Uniting and Strengthening America by Providing Appropriate Tools to Intercept and Obstruct Terrorism Act passed in October 2001, in the aftermath of the September 11 terrorist attacks. Its intent is to give law enforcement agencies broader range in their efforts to protect the public.
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EC AND GREEN COMPUTING
green computing
The study and practice of ecofriendly computing resources; is now a key concern of businesses in all industries—not just environmental organizations.
green IT
Green IT begins with manufacturers producing environmentally friendly products and encouraging IT departments to consider more friendly options like virtualization, power management, and proper recycling habits.
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EC AND GREEN COMPUTING
How to Operate Greener Businesses, Data Centers, and Supply Chains
Global Green Regulations
Electronic Product Environmental Assessment Tool (EPEAT)
A searchable database of computer hardware that meets a strict set of environmental criteria.
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40. THE FUTURE OF ELECTRONIC COMMERCE
INTEGRATING THE MARKETPLACE WITH THE MARKETSPACE
SOCIAL NETWORKS
FUTURE TRENDS
Security concern
Lack of Net neutrality
Copyright complaints
Choppy connectivity
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MANAGERIAL ISSUES
What is the strategic value of EC to the organization?
Who determines EC strategy?
What are the benefits and risks of EC?
What metrics should we use?
How do we measure the value of EC investment?
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MANAGERIAL ISSUES
How can we go global?
Can we learn to love smallness?
What legal and ethical issues should be of major concern to an EC enterprise?
What are the most critical ethical issues?
How shall we approach EC green computing?
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