E-commerce:Adding A New Dimension To Business

Ecommerce is changing the traditionally accepted economic practices and making competition even fiercer than it has ever been in the past. As the internet opens up larger markets to take advantage of, more and more flexible competitors are entering the market, all offering better priced value propositions in order to steal market share.The business parameters have changed and so have the risks & payoffs.

E-commerce is becoming critical in three dimensions: C2C business interactions, intra-business interactions and B2B interactions. In C2B dimension, e-commerce is enabling the customers to have an increasing say in what products are made, how products are made and how services are delivered.E-commerce is also a catalyst for dramatic changes in internal organizational functioning as evidenced by the rapid proliferation of intranets.

Some common applications related to electronic commerce are the following:

Email
Enterprise content management
Instant messaging
Newsgroups
Online shopping and order tracking
Online banking
Online office suites
Domestic and international payment systems
Shopping cart software
Teleconferencing
Electronic tickets

Over the last 30 years, the definition of Electronic Commerce has changed. Initially, in the late 1970′s, Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) were used as the basic technology to facilitate electronic commercial transactions. This was what electronic commerce originally meant, the use of technological innovations like EDIs and EFTs in doing commercial businesses electronically. EDIs and EFTs allowed businesses to electronic sending of commercial documents such as purchase orders or invoices.

In 1979, an English inventor named Michael Aldrich invented online shopping. He did this by connecting a customized 26-inch color domestic television to a computer with real time transaction processing system through a domestic telephone line.

During the 1980′s, forms of electronic commerce such as credit cards, Automated Teller machines (ATM) and telephone banking grew and were accepted. The Airline Reservation System typified by Savre in the USA and Travicom in the United Kingdom was also considered another form of e-commerce. Curiously, online shopping has been present even before IBM, Microsoft, Apple Inc. and the Internet. In the mid-1980′s, CompuServe, one of the first popular networking services for home PC users, which provide tools like e-mail, message boards and chat rooms, added a service called Electronic Mall. In the Electronic Mall, users could purchase items directly form 110 online dealers. While this service did not succeed, we know it today as one of the first examples of e-commerce.

In the year 1990, at the European Organization for Nuclear research (CERN), Tim Berners-Lee, a researcher, proposed hypertext-based web information that a user can explore using s simple interface called a browser. The researcher called it the World Wide Web. Furthermore, in the year 1991, Web-based e-commerce emerged and became more alive due to the lifting of the ban on commercial business operating over the Internet by the National Science Foundation. In 1993, Marc Andreesen introduced the first widely distributed web browser called Mosaic at the National Center for Supercomputing Applications (NCSA). In 1994, Netscape 1.0′s release included Secure Socket Layer (SSL), an important security protocol that encrypts messages in an online transaction, which includes both the sending and receiving side. One of the functions of SSL is to ensure encryption of personal information such as names, addresses and credit card numbers as they pass over the Internet.

The first third-party services for processing online credit card sales began to appear in the years 1994 and 1995. Two of the most popular among these third-party services were First Virtual and CyberCash. Also in 1995, a company called Verisign began developing digital IDs, or certificates, that verified the identity of online businesses. Before long, Verisign shifted its focus from verifying the identity of online businesses to certifying that the e-commerce servers of a particular web site were properly encrypted and secure.

 

With the globalization, flood gates have opened for the companies who bring in rich experience and heritage in form of technological advanced products across the borders.With rising in purchasing power ,more people are lured by the big brands and extensive products.With passage of time, comfort is playing the main role. With more and more people flocking to the malls and outlets, problems like parking is inevitable. Here comes E-commerce for rescue. With websites like ebay, amazon for online shopping, makemytrip, cleartrip for buying tickets, booking taxis/hotels, people can now buy anything form anywhere.

Ecommerce has given banking industry a new domain. With core banking solutions,people can now transfer or receive funds from any part of the world. Gone are the days when a father in New Delhi wanted to deposit his son’s college fees in Orissa has to go physically to Orissa and deposit the fees. With EFT,he can do so with the click.Gone are the days when a guy in America could not send his girlfrind a box of chocolates on Valentine’s day. With ecommerce, he can win her love.

Websites like makemytrip.com has revolutionize the whole travel industry. Who would have though of booking tickets online for the flight as per wish. Who would have though that one can not only book online tickets but also taxi and hotels .Yes, this is possible and only through e-commerce.

With e-commerce students can now purchase books online thereby averting the physical copy.This is having a huge impact on environment,only in positive way.With less papers,means less cutting of trees.

In the below section some of the most popular sites practicising e-comerce across the globe have been analyzed vis-a vise.We will see how e-commerce have boosted their business practise.

A company that has emerged unscathed from the recent dot-com bust with profits soaring to almost 400% and revenues doubling in the past one year. It has transformed auctions that were limited to garage sales and flea markets into highly evolved e-market places. Selling just about anything, from antiques and jewelry to computers, automobiles and even auto insurance, it has 29.7 million registered users today.

Adopting an amazing and unique culture, where buyers and sellers of all items are allowed to post their comments online, where credit-card payment facilities are secure and easy, the company projects a trustworthy and reliable image.

Apart from bidding, certain high quality goods can be sold at prices fixed by the seller. This site also offers

professional services for all kinds of business needs. A widespread global reach makes its easy for a buyer in Hong Kong to bid and buy a product from a seller in Paris while the regional sites in North America are able to offer hard to ship merchandise.

Person-to-person trading and a barter economy have established the company on a secure B2B and B2C platform. Other companies like Yahoo! and Excite have been quick to catch on and incorporate auctions into their sites. Priceline.com, a site that offers airline tickets on discount has begun experimenting quite successfully with this business model.

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To summarize, their business model can be elucidated thus:

•          Automation of traditional methods of selling unique items

•          Reliability in mode of payments

•          Customer friendly company

•          Professional services in addition to just plain selling of goods

•          Global reach

•          Regional diversification

•          Successful advertising

 

Naukri.com is a job site operating in India founded by Sanjeev Bikhchandani in March 1997. This website brings a prospective job hunter close to the recruiter. With naukri.com a job seeker can post his/her resume online and can get the job interviews scheduled from the prospective company if the candidate’s skills match with that of the job description.

There are many a time when the resume of the candidate is not a professional one and he primarily looses the opportunity on this basis.Naukri.com also provides services in which a candidate, as per his job skills , can request for a crafted resume developed by a professional buy paying the required fees on-line.

Thus, with e-commerce,the candidate can not only get a professionally crafted resume at home but also saves a lot of time & cost which could have gone in way otherwise.

Their revenue model:-

Major

–        Job listing and Employer Branding/ Visibility

–        Resume Database Access

Others:- Job Seeker Services, Google Ad sense, Advertising other than for jobs, Mobile

revenues, Resume short listing and screening

The customer is King here! Amazon pampers their customers, tracks their tastes and uses this information to create a unique customer experience. This e-tailer cultivates relationships that lead to customers liking and trusting them. This kind of service surpasses the most brilliant technology in use today. Amazon brought in the world of successful one-to-one marketing, a personal touch from another era.

Recently though, they have suffered heavy losses, proving that any successful e-business strategy will survive provided it is based on a solid brick and mortar foundation, a la Barnes and Noble, another famous online bookseller. Although barnesandnoble.com and Barnes the Noble Ltd. are run separately, a customer tends to associate trust and comfort in a known and established brand.

To summarize, exemplary customer service, successful online advertising and special discounted offers made Amazon and books synonymous terms today.

PayPal is an business allowing payments and money transfers to be made through the Internet. Online money transfers serve as electronic alternatives to traditional paper methods such as checks and money orders.

A PayPal account can be funded with an electronic debit from a bank account or by a credit card. The recipient of a PayPal transfer can either request a check from PayPal, establish their own PayPal deposit account or request a transfer to their bank account.

PayPal performs payment processing for online vendors, auction sites, and other commercial users, for which it charges a fee. It may also charge a fee for receiving money, proportional to the amount received. The fees depend on the currency used, the payment option used, the country of the sender, the country of the recipient, the amount sent and the recipient’s account type. In addition, eBay purchases made by credit card through PayPal may incur extra fees if the buyer and seller use different currencies.

Electronic commerce is associated with IT as an enabler, facilitator, and even inhibitor of business activities both within and among all types of organizations .

It is thus creating enormous interest in the world of IT, banking and finance as well as many other industries. There is little doubt that growth in this area will continue as more organizations join in the fun, establishing and cultivating business relationships, performing business transactions, distributing knowledge, and implementing competitive strategy.  Corporate  life, particularly in America, is being transformed by the Internet. Banks and financial firms are currently operating in such a new business environment, and they are responding to the changes in myriad ways.

Banks and financial firms are sailing into new water that holds both promises and dangers. On one hand they have the know-how specific to banking and financial, and for the large players, they enjoy the trust of their customers. But they are burdened with legacy systems consisting of their management structures, reward systems and computer systems. They would certainly have to prepare themselves properly for the cut and thrust of life in the brave new world. 

According to a research, the internet penetration in India was around 5mn in 2000 and is 63 mn in 2009.It is estimated that it will be around 80mn by 2012.Also the increase in broad band connections was around 20% in December 2009 as compared to December 2008.

The Internet as a technological platform is to financial transaction what money as a common medium of exchange is to the economy. To get an idea of the convenience made possible by e-banking, just consider the role of money in economic transactions.  Some features of the convenience of e-banking are already here while more aspects can be expected.

As customers we are witnessing these features before our nose as banks adopt the Internet infrastructure and business practices of e-commerce. Many of us have direct experience with electronic banking, for example Internet bank and e-brokerage, and have seen the disappearance of some branches of our familiar banks. The beauty of Internet banking lies in its low cost, convenience and availability. The commercial use of the 128-bit encryption opens the way for secure on-line financial transaction. The integrated technology enables banks and financial companies to offer services with the following qualities: 24-hour, seven-days-a-week availability, convenience, fast delivery, customer focus and personal service. Banks can reduce the time taken to approve mortgage application from weeks to hours.  Brokerage practices have been transformed too. Witness the reduction in the size of average transaction, substantial reductions in fees, use of decimals in prices quoted in New York Stock Exchange, and increased competition between different stock exchanges. With the Internet, individual investors have a very cheap and convenient means to access information about the performance of firms listed on the stock exchange.

While technology offers new opportunities to banks, it also brings new challenge – non-banks have begun to integrate financial functions into their online offerings, and the competition among banks has intensified because of increased reach and transparency of online offerings. Below we look at three ways banks have responded to the new challenges by continuing the past practices of using IT, and by learning to adopt e-commerce ideas from their counterparts in the non-bank sectors.

By learning from how firms make use of IT, especially the Internet, e-banking researchers have put forward some interesting ideas which are essentially derived from practice of e-commerce.  Here we go through briefly two proposals, namely to create a kind of portal of financial services, and to bundle information products just like publishers bundle their electronic magazines or academic journals.

Until recently, it is expensive to design a flexible investment portfolio that is tailored to the needs of individual investors. Only big institutional investors can afford the fees to have securities selected specially for them. With e-commerce technology it is possible to design and deliver the benefits of flexible and tailor made investment to smaller accounts at much lower costs.

The proposal involves two parts. First, the creation of periodically updated  indices covering a wider spectrum of asset classes than is currently available.  Second, the creation of financial instruments to track these indices, which will allow investors and small businesses to diversify and hedge their portfolios to a much larger extent than is possible with today’s investment vehicles. The aim is to use financial engineering methods and techniques to build an investment portfolio that is optimal for an investor, given his personal circumstances and preferences. Based on the features of an internal portal, there is exclusive access to an integrated set of proprietary products and services as well as links to partners that offer complementary financial services and access to any other financial products available through the Internet.

Another interesting idea from e-commerce is bundling. Companies have been exploring the potential of using the Internet technology to bundle related products to be sold to their customers as a bundle, something like package tour or one-stop shopping.There are also examples of bundling of information products, e.g. music , electronic magazines and journals. Their experiences strongly suggest that banks can provide  a more personalized service by creative bundling of existing financial products . In order to have the range of products to be included in the bundle, three approaches are possible. One is through consolidating by merger or acquisition. Another approach is by alliance. The third approach is by acting as an intermediary for others which is examined in next sub-section. Mergers and acquisitions are well known for their value destroying tendencies.  Thus, banks may rely more heavily on alliances—which are inherently more flexible and can more easily be changed—as an alternative to outright consolidation .

The banking and financial industry is especially suited to bundling because their products and services are essentially informational in nature and can be digitized. “The more digital the product, the more easily it can be customized. For digital products,there are innumerable options for customers to choose from and customerization improves the fit between what the customer wants and what the firm can offer profitably. (Wind 2001: p43)” Moreover, with low production, distribution, and marginal costs, bundling can make sense (Bakos and Brynjolfsson 1999).  Such ideas are very much in line with the observation of Herring and Litan (2003) that banks can only survive by being more client-focused and by customizing their services to client needs, rather than price-cutting.

 

Credit card is one of the few remarkable innovations introduced successfully by banks in the last five decades, and it is currently being used extensively in B2C electronic commerce. But it is an expensive means of payment for e-commerce and many on-line shoppers will prefer other forms of paying their purchase . So will many on-line retailers who have to cough up set up and transaction costs and 2-3% of every payment. Moreover credit cards are not suitable for person-to-person trade on the Internet. Such inadequacy shows up in on-line auction. The American government has expressed misgivings about the reliance on credit cards for e-commerce. In short, e-commerce has created a demand for low cost facility for micro payments and flexible payment .

New ways of on-line payments are appearing in the market, such as deduction from a pre-paid account, electronic billing services, direct transfer out of bank accounts. An interesting one is provided by X.com and which allows account holders to email money to each other . These are also value adders that enable more transactions in the internet commerce market. Typical enablers are payment service providers, clearing houses, and trust guarantors. Banks are increasingly building payment infrastructure with various security mechanisms (SSL, SET etc.) because there is tremendous potential for profit as more and more payments will pass through the Internet. The challenge for banks is to offer a payments back-bone system that will be open enough to support multiple payment instruments (credit cards, debit cards, direct debit to accounts, e-checks, digital money etc.) and scalable enough to allow for a stable service regardless of the workload.

E-commerce is changing the business dimensions and at a very rapid pace.It is not only giving a competitive edge but also a powerful tool in globalizing  a company. Financial firms of today can earn a fair living by adopting the practices of electronic commerce pioneered by themselves or by others. Retail firms can achieve economies of scale through e-commerce. Companies can now serve their customers in a more professional way. Very interestingly, providing value to customers does not always require the use of sophisticated IT based systems. Economists have theorized that e-commerce ought to lead to intensified price competition, as it increases consumers’ ability to gather information about products and prices. Research by four economists at the University of Chicago has found that the growth of online shopping has also affected industry structure in two areas that have seen significant growth in e-commerce, bookshops and travel agencies. With years to come the scope of e-commerce is only increasing.

 

Altinkemer, K (2001), Bundling e-banking services, Communications of the ACM, vol.44, no.6 (June), p. 45 – 47

Altinkemer, K. and S. Bandyopadhyay. (2000) The effect of the Internet on the music industry. Journal of Organizational Computing and Electronic Commerce 10, 3 (May), 209–224.

Applegate, L M et al (1996) Electronic commerce: building blocks of new business opportunity J. of Organizational Computing and Electronic Commerce, vol.6, no.1, p.1-10

Bakos, Y. and Brynjolfsson, E. (1999) Bundling information goods: Pricing, profits and efficiency. Management Science 45, 12 (Dec.), p.1613–1630.

Bolton, P,  Freixas, X and Shapiro, J.  (2004) Conflicts of interest, information provision, and competition in banking NBER Working Paper Series  No; 10571

Buhl, H. U, Kundisch, D, Andreas Leinfelder, A and  Steck, W (2001) Strategies for the Financial Services Industry in the Internet Age,  in: Werthner, H., Lectures in E-Commerce, Springer, 2001, S.27-46.

Chen, T-J (2003) E-Commerce to Protect the Network Relationships: The Case of Taiwan’s PC Industry The Information Society vol. 19, p.59-67

Source: ArticlesBase.com

Globalization of E-commerce in Business

  

  

TABLE OF CONTENTS

 1.0 Introduction

2.0 Literature and theories 3.0 Globalization of E-Commerce in Business 4.0 Research Methodology, Data Collection and Analysis 5.0 Future Research 6.0 Conclusion 7.0 References

  

1.0    Introduction

This paper examines how globalization of e-commerce is impacting business in general. With the increase of internet-based technologies, it has been the reason for recent stimulus globalization. In this Information Age, Internet commerce is a powerful tool in the economic growth of developing countries. While there are indications of ecommerce patronage among large firms in developing countries, there seems to be little and negligible use of the Internet for commerce among small and medium sized firms. E-commerce ensures better business in the SMEs and sustainable development of economics for developing countries. However, this is based on strong political will and good governance with a responsible and supportive private sector within an effective policy framework. As we know the complete definition of E-commerce is the use of electronic communications and digital information processing technology in business transactions to create, transform, and redefine relationships for value creation between or among organizations, and between organizations and individuals. E-commerce allows companies to increase their sales in domestic and foreign operations and the flexibility afforded by the technology also provides less costly opportunities to locate operations strategically. E-commerce not only reduces communication costs, but also increases flexibility in locating activities. Research point indicates that internet technology has led to an increase in international trade (Freund and Weinhold, 2002, 2004). This is the evidence of how it suggests profits from foreign operations have also increased in recent years (Hilsenrath, 2005). In the emerging global economy, e-commerce has increasingly become a necessary component of business strategy being a strong catalyst for economic development. Integration of information and communications technology (ICT) in business has evolved the relationships within organizations and those between and among organizations and individuals. The controversial current social and economic trends are globalization and the widespread adoption of information and communication technologies (ICTs). Many argue that these two trends are closely associated, each driving the other forward, and both being driven by other common forces, such as trade liberalization, deregulation, migration, and the expansion of capitalism and democracy (c.f., Held et al., 1999). Pohjola (2002) argues that the twin forces of globalization and the ICT revolution are combining to create the so-called New Economy, marked by higher rates of economic and productivity growth. “Technology is both driven by and a driver of globalization, as both forces continually reinforce one another” cited by (Bradley et al., 1993).Specifically,the use of ICT for ecommerce in business has enhanced productivity, encouraged greater customer participation, and enabled mass customization, besides reducing costs.Prior to development in the Internet and Web-based technologies, the distinctions between traditional markets and the global electronic marketplace-such as business capital size, among others-are gradually being narrowed down. Strategic positioning is the ability of a company to determine emerging opportunities and utilize the necessary human capital skills (such as intellectual resources) to make the most of these opportunities through an e-business strategy which is simple, workable and practicable within the context of a global information and new economic environment. Together with the appropriate strategy and policy approach with e-commerce enables small and medium scale enterprises to compete with large capital-rich businesses. On another plane, developing countries are given increased access to the global marketplace, where they compete with and complement of the more developed economies. Most of the developing countries are already participating in e-commerce, either as sellers or buyers. However, to facilitate e-commerce growth in these countries based on globalization phenomenal, the relatively under-developed information infrastructure must be improved. Significantly, economic trend of the past decade is the growing use of the Internet for conducting business. Many firms are being driven toward greater adoption of e-commerce by pressure to compete at the global level. The Internet and e-commerce are part of the process of globalization. Globalization is generally regarded as the increasing interconnectedness of the world through flows of information, capital, and people facilitated by trade and political openness as well as information technology (IT). “Beyond this, however, the nature and impacts of globalization are highly contested” cited by (Held et al., 1999). Convergence theorists regard globalization as a universal process of homogenization in which countries tend toward a common way of producing and organizing economic life with resulting common social outcomes (Bell, 1973; Ohmae, 1990, 1995). Divergence theorists argue that national diversity in the pursuit of differing social and economic outcomes will prevail and prevent convergence from taking place (Berger & Dore, 1996; Boyer, 1996; Hirst & Thompson, 1996;Wade, 1996). Transformation theorists regard globalization as an uneven process involving elements of both convergence and divergence, in which countries around the world are experiencing a process of profound change as they try to adapt to a more interconnected but uncertain world (Giddens, 1991, 2000). Globalization is being intensified by the spread of the Internet, linking businesses and individuals around the world into a common electronic network. There is great excitement about the Internet’s potential for removing geographical obstacles to economic growth and for achieving global integration in developing as well as in industrialized countries. A related concern is that uneven diffusion of e-commerce and the Internet is creating a “digital divide” and exacerbating the gap between rich and poor countries referred by Norris, 2001. Therefore, we are interested broadly in understanding the extent to which the Internet and e-commerce are diffusing among different countries, and the nature of their impacts on the globalization debate. However, in this article, we focus more narrowly on identifying the key factors shaping e-commerce diffusion globally in business. This paper examines that global forces such as competition and global production networks are common influences across different countries. Global forces are varied and uneven due to national characteristics such as information infrastructure, business innovation/entrepreneurship and consumer preferences and national policies that create different market and telecommunications regimes—variously driving, facilitating or inhibiting adoption (Boyer, 1996; Wade, 1996;Dedrick & Kraemer, 1998). With reference to International Data Corp (IDC) that estimates the value of global e-commerce in 2000 at US$ 350.38 billion. This is projected to climb to as high as US.14 trillion by 2004. IDC also predicts an increase in Asia’s percentage share in worldwide e-commerce revenue from 5% in 2000 to 10% in 2004 (See Figure 1 – Worldwide E-Commerce Revenue, 2000-2004). Asia-Pacific e-commerce revenues are projected to increase from .8 billion at year-end of 2001 to 8.5 billion by the end of 2004. Overall, this research makes several contribution, data collection primarily had been done in this paper to analyze on how globalization of e-commerce will benefits business moving forward in the future.

 

 

A review of principal and current literature on e-commerce is to explore the conceptual relationships of how globalization can give an impact to business electronically. Empirically, E‐Commerce generally refers to the use of the internet for buying and selling activities including advertising, invitation to treat negotiation and conclusion of contracts (Rodgers, Yen and Chou, 2002; Chen and McQueen, 2008; Simpson and Docherty, 2004). E‐Commerce adoption globally was first studied from the information systems perspective rather than the business perspective. The early studies identified critical success and failure factors on implementation of information systems studies on e‐commerce adoption in business with specific geographic focus became popular in the last decade. Studies was conducted on worldwide firms such as Cisco Systems, Dell Computer and General Electric report impressive payoffs by making the Internet a key element in their strategies and business models, and by transforming their “brick-and-mortar” operations into e-commerce organizations. Cisco Systems and Dell Computer report in excess of 250% return on invested capital and over USD 650,000 in revenue per employee from their e-commerce operations. They had generated the highest gross profit margin in their respective industries. From a survey finding of over 400 information technology managers worldwide, relative to larger firms, smaller businesses who make effective use of Internet opportunities may also find that they are more innovative, faster in responding to environmental demands, and better able to quickly change or adapt business models to gain competitive advantage (Engler 1999). As a result, traditional firms, especially small organizations, are under increasing pressure to follow suit, and to achieve the often-cited benefits of e-commerce. Electronic commerce or e-commerce describes the use of electronic means and platforms to conduct a company’s business quoted by Kotler, 2003. Electronic commerce, also known as e-commerce, is more specific than e-business, it means that in addition to providing information to visitors about the company, its history, policies, products, and job opportunities, the company or site offers to transact or facilitate the selling of products and services online cited by Kotler 2003. Ecommerce is the process of buying and selling goods and services electronically with computerized business transactions using the Internet, networks, and other digital technologies referred by Laudon and Laudon, 2005. E-commerce (EC) builds on the structures of traditional commerce by adding the flexibility offered by electronic networks. Existing research points out that EC can offer readily discerned benefits in comparison to traditional environments through reduced transaction costs and search costs, more competitive product prices (Bakos 1991) and improved transaction efficiency (Srinivasan, Kekre and Mukhopadhyay 1994; Lee and Clark 1996). In the e-commerce research literature, greater levels of e-commerce adoption have been linked with improved organizational performance (Kraemer, Gibbs and Dedrick, 2002). Companies that adopt internet technology in various activities are aware of this benefit and hope to improve competitive advantage, communication, and products and services when they adopt e-commerce (Berrill, Goode and Hart, 2004). Diffusions of Innovation theory (Rogers, 1995) has been used as a basis for exploring e-commerce adoption in multiple studies. Diffusion is defined as the process by which an innovation is communicated through certain channels over time (Rogers, 1995). In relation to e-commerce adoption, the adoption of and the success in e-commerce has been tied to organizations‟ risk acceptance and tolerance of uncertainty (Featherman and Pavlou, 2003; Gibbs, Kraemer and Dedrick, 2003) It is important for businesses moving to the business to-business e-Commerce sector to evaluate all aspects of their organization and performance. Based on business need,the factors which will determine successful transformation, and then direct strategy and resources towards those factors.

 

(1) The diffusion of innovation .

(2) The Technology-Organization-Environment Model

(3) Institutional theory

(4) Resource-based theory

 

 

Globalization of the buying behavior refer to organizations which are are open to suppliers from outside the local country.This type of organization are willing to consider foreign suppliers for the goods and services required for their business. Globalization of buying behavior could be highly global in which almost all the requirements of a particular category of goods and services which are sourced from abroad. It cannot be global at all with all services and goods being procured from within the home country as well as various other intermediate possibilities. There are few factors impacting globalization of e-commerce in business. In countries national environment perspective, we investigate each element and how it determines e-commerce diffusion across countries globally:-

With reference to (Table 1 –Demographic Overview and Urbanization)) and Table 2 (Population) below cited by W. Koenig, R.T. Wigand and R. Beck (2003); what we can summarized is that the German age distribution leans toward an aging population (Table 1) below. The number of inhabitants in Germany, and Europe, will continue to decrease until 2010, whereas in the U.S the population is increasing. In terms of consumer buying and the growth of the Web economy, the proportion of the relevant age group of 15-49 year olds, will decline quoted by [Zerdick et al., 2001]. Prior to (Table 2 – Forecast of Population Changes to 2010) as below, Table 2 shows that Germany’s population will decline in this decade to approximately 78 million inhabitants. A lower population base means fewer consumers and, together with the aging phenomenon, fewer employees in the working age range. As a consequence, the use of e-commerce services and consumption may increase in Germany as well-educated people retire and are likely to experience physical difficulties in moving around.

 

“Germany is deeply integrated in the global economy” cited from W. Koenig, R.T. Wigand, and R. Beck (2003). In recent years, however, the conditions for national political actions changed fundamentally due to globalization of markets, and will continue to change. For e-commerce, these changes imply that an open market exists for firms to hire employees. However, firms face legal requirements because of the formal representation of employees, typically through unions. German unions take on a considerably stronger role in a firm’s well being compared to the U.S. Economic output in the U.S is growing rapidly, in spite of the lower economic output in Europe, led to a higher GDP in the U.S. in 1998. Germany was not able to pick up based on upward trend like the U.S. New consumer and investment indices predict a decline for 2001 and the first half of 2002. Refer to (Table 7-Average GDP growth 19915- 2001 for Germany) as above shows the average growth in GDP each year from 1995 to 2001.

 

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Two major threats to global ecommerce. One is to impose legal and regulatory frameworks before gaining a full understanding of the issues and needs involved. Cross border business-to consumer transactions represent a brand new form of trade; the old ways of regulating trade will not work on the Internet. Innovative solutions ranging from international treaties to online dispute resolution may be able to meet the goals of regulation— mitigating the risks to buyers and sellers. Global e-commerce faces many barriers including language, currency, and cultural differences; overseas shipping costs; and national brand identification. If nothing is done, the tendency will be for e-commerce to only happen into local zones, with consumers visiting only sites in their own country or a small number of countries with which they feel comfortable. In order to realize fully the benefits of global e-commerce, governments must help where necessary to reduce the risks of cross border transactions, but it will take time to determine when and where government action can be used effectively.

Empowering consumers and sellers—especially small enterprises—by expanding market access should be the main goal of any government action (or forbearance of action) regarding global e-commerceA larger market lower the marginal costs associated with running Internet based businesses, allowing the companies to spread their fixed costs over more customers, which lowers prices. E-commerce will become more efficient and less costly by gaining global economies of scale. Greater market access also gives small entrepreneurial ventures a better chance at success. Low cost access to global markets is especially important for ventures in developing nations, which can use the power of global e-commerce to “leapfrog” their economic development efforts and sell to an array of wealthier consumers. Second, a global Internet provides consumers with global choice. Automated buyer agents that seek out the best price on a given item are increasing in popularity and promise to bring tremendous efficiency to the pricing of goods and services on the Internet. Expanding from national to international, will encourage competition and reduce prices. Greater market access gives all of these businesses in whatever country they happen to be located, a better chance at success, and gives consumers of all nations a broader choice of goods and services. Finally, as the infrastructure and systems to facilitate global e-commerce develop, access will also be increased in a more important market: the marketplace of ideas.

 

Practice of protecting domestic producers through the use of seemingly unrelated regulations is an old one, but the growth of global e-commerce presents the opportunity to take it to a new level. The complexities of the technology, the legal issues involved, and the innovative business relationships between companies that conduct and facilitate ecommerce all lend themselves to regulations protecting domestic industries not only from foreign competitors, but from electronic commerce itself. As global e-commerce grows, the WTO will see more disputes about regulations aimed at the Internet and designed to give advantage to domestic industries. Examples include requiring Web sites to be delivered in the country’s native language, requiring transactions to occur in the country’s currency, requiring certain licenses or certifications to operate or use electronic equipment within the country, or requiring the use of nonstandard security protocol. The fear of the local government that a country is being left behind in the new world economy. The initial lead that the United States holds in e-commerce will create political controversies in other countries that are ripe for the use of nationalism as a tool to gain competitive advantage, or at least slow the incursion of foreign e-commerce to allow domestic industries to catch up: an electronic version of the McDonald’s controversy in France. Countries that use such tactics might gain in the short run, but over the long run they will limit their standard of living and hinder global e-commerce.

 

In the off-line world, activities engaged in by citizens of one country don’t normally affect the

citizens of another country unless those activities are specifically aimed at them (such as sending international mail). An online business based in one country cannot be expected to comply with the laws of other countries—such as privacy regulations or marketing restrictions—merely because their Web site is accessible in other countries. On the other hand, if the Internet seller targets its goods or services to citizens of another country, that seller should be prepared to comply with the laws of that country. Targeting must subject a seller to the targeted country’s jurisdiction in order to prevent companies from relocating offshore to avoid local laws, a situation that would encourage the rise of cyber-havens. A government cannot exercise authority in another country when “reach out”, but it can exercise authority if someone in another country “reaches in” to consumers in its jurisdiction.

 

Given the wide variety of objectionable material available on the Internet, it is no surprise that some governments may seek to keep their citizens from accessing some content. These issues go to the very heart of national sovereignty. In the United States, where the constitutional guarantee of free speech has become ingrained in the culture, public sentiment is likely to come down on the side of more freedom, but the United States cannot impose that sentiment on other sovereign nations. Policies for global e-commerce should not be used as bargaining levers for these non-economic disputes over freedom and human rights; if Internet technology is made to bear responsibility for intractable social and political disagreements, it will not succeed. The first is that such controls must apply only to cultural, social, and political content, not trade. Nations that are signatories to the WTO have agreed to a set of principles to facilitate international trade and to a process for resolving disputes. Claims of cultural or political infringement should not be used as a back door method of discrimination against imports. If a country restricts global e-commerce on grounds A government cannot “reach out” and exercise authority in another country, but it can exercise authority if someone in another country “reaches in” to consumers in its jurisdiction. The second condition is that all content controls must be implemented domestically. In keeping with Principle above, governments cannot “reach out” to shut down Internet operators that reside outside of their jurisdiction. Governments must control content through laws and regulations that apply to their own citizens, such as requiring Internet Service Providers to filter certain content or punishing individual users for downloading prohibited content. Of course, exercising control over every citizen’s Internet behavior, while technically possible requires control over the technology and communications infrastructure that only a few governments are likely to exercise.10 Inherent in the spread of Internet technology and the attendant economic benefits is a realization that the more time citizens spend in cyberspace, the less control their governments will have over them. This is why expansion of global e-commerce must be balanced with respect for sovereignty; if a government feels that the trade-off between commerce and social stability is not in its interest, the former is more likely to be rejected.

 

The Internet lends itself to creative solutions to policy problems precisely because software is a powerful tool to give people the ability to manage their own transactions. Many technological solutions are being developed to facilitate an efficient and trusted environment for both buyers and sellers. This consumer-empowering technology, when fully implemented, may help alleviate the desire for strict government controls on data privacy practices and facilitate easier negotiation between nations with different privacy regimes. Technology promises other solutions as well, in areas from language translation to content control to dispute resolution Policymakers should turn to technology whenever possible and, more importantly, they should think in terms of what technology could do in the future rather than what it can do now. In order to facilitate the growth of global ecommerce,

 

:

• stay within the current international trade framework;

• make the moratorium on tariffs for electronic transmissions permanent;

• treat digitally delivered products as intangible goods;

• eliminate tariffs on small-value transactions;

• work with third parties seeking to provide solutions;

• promote consumer education efforts; and

• draft and enact global treaties governing criminal activity on the Internet.

 

:

1. legal environment,

2. supporting industries,

3. enterprise information,

4. technical support,

5. education

6. international co-operation

 

 

I had been adopting primary and secondary market research data to reinforce the statement of The approach adopted is based on empirical research and analysis about the ongoing and foreseeable influence of various factors on e-commerce diffusion.

 

Primary research data were collected through a structure questionnaire via online survey tool to answer the research questions. The objective is to determine the people acceptance on buying or selling behavior and pattern if they could accept e-commerce as the way that could contribute to business prior to globalization. The online survey was only sent to different age group level and different gender as we could analyzed through the pattern of acceptance based on various level. Total 72 responses sizes were received with each responses received was screened through for errors, incomplete and view only responses. However, 60 responses were considered complete and effective for data analysis. Respondent can be analyzed from the . Total out of the total respondents 60% were males and 40% were females. Among the respondents only 1.7% were under 18 years old, 5% from 18 to 24 years old range, 56.7% informed that their age is belong to 25-34 age group, 35% is from 35-54 years old and finally 1.7% is from age above 55 years old. In term of working status, 3.3% is student, 3.3% is self-employed, 5% has their own business, 85% is working in Professional or Corporate bodies and 3.3% is not working. Regarding usage of internet everyday, 98.3% uses internet everyday and 1.7% is not based on total responses of 58 persons. Based on hours of internet login per-day with total responses of 57 persons, (3.5% login < 1 hour; 36.8% between 1-4 hours; 19.3% login < 6 hours and 40.4% states that they login >12 hours). In term of type of connection, (1.8% uses Cable/LAN; 15.8% is on ADSL/DSL; 14% uses Fiber optic (Unifi); 1.8% is on dial-up and majority with 66.7% respondents uses broadband/mobile/wireless internet).In term of location of login to the internet ( 43.6% login thru home; 50.9% login thru work or office; 3.6% login in hotspot area and 1.8% states they login thru internet café with total responses to this question is 55 persons). Prior to years of login to the internet ( 8.8% only uses internet service since 1-5 years; 36.8% is from 5 – 10 years and 54.4% uses internet more than 10 years with total responses of 57 persons). Total of 96.4% of respondents heard of e-commerce with 3.6% never at all (Total response is 56 persons). In term of visiting to e-commerce website with total response of 56 person: 89.3% states they had before and 10.7% indicates never. Buying or selling thru websites with total responses of 54 persons, 83.3% responded YES and 16.7% had answered NO. Those who responded YES with total response of 48 person, 29.2% say that they had buy or sell one week ago, 25% states one month ago, 35.4% indicates half a year ago and 10.4% states one year ago. Another questions about if they have an option to buy from local store or website (Total response is 55 person : 63.6% responded – Yes; 36.4% states – NO). 50% will still buy thru online/website and 50% thru local store even the price remain the same. Total of 83.6%  says that they trust e-commerce website with only 16.4% indicates no (Total response is 55 persons). In terms of motivation of buy and sell thru e-commerce website, total respondent of 56 persons; 7.1% believe that detail and sufficient product information motivates them; 7.1% sates privacy and security; 48.2% response is because of convenience and save time; 1.8% is due to customer review availability; 5.4% is because of promotion and advertisement; 8.9% is due to product price and quality comparison and 21.4% response is due to variety of global product). The main focus is on the response if e-commerce will be the way to move forward in doing business globally, (Total response of 56 person: 96.4% responded YES and 3.6% say NO).  In term of how they got to know e-commerce (Total response of 56 person: 8.9% is thru email/newsletter; 14.3% from friend; 48.2% is thru search engine; 25% is through social network and 3.6% is from newspaper or magazines. How will they rate browsing experience with total respondent of 56 person: 1.8% rate worst; 1.8% indicate bad; 26.8% stays neutral, 69.6% responded good. Finally, in term of rating experience of buying and selling through website with total response of 51 persons, 2% say worst, 19.6% remain neutral and 78.4% rate good. Prior to all the result of data collected and analyzed, the statistical result shown clearly indicates majority of the people agreed and even had experienced with trust to e-commerce that it is the way which will impact in business prior to globalization. 

Secondary research data is use based on detailed case studies by scholars and experts in 10 countries to explore which factors in the framework appear to be playing a role at this early stage of e-commerce in each country. I compared the results of these case studies across the countries on each of the factors and found that some factors were important influences on adoption across countries and some were not. Identifying the commonalities and differences among the countries, determined which factors were barriers and drivers to ecommerce, and assessed whether these findings pointed to convergence or divergence in the factors shaping diffusion and, ultimately, suggested convergence or divergence in ecommerce outcomes. This article presents as well the results from this cross-case analysis based on secondary research. (). Sources cited by IDC (2002), ITU (2001). The 10 countries in the study—Brazil, China, Denmark, France, Germany, Mexico, Japan, Singapore, Taiwan, and the United States were selected to include developed, newly industrializing, and developing nations, and to represent each major region of the world. Two types of data related to the countries are discussed in the article: (1) qualitative data, or findings, from the in-depth case studies prepared by scholars and experts in each country, and (2) statistical data compiled from the cases and secondary sources (IDC, ITU, UNDP, OECD) that enable cross-country comparison. () illustrates this relationship between e-commerce sales as percent of GDP and 8 J. GIBBS ET AL. GDP per capita, with our 10 countries of focus in boldface type. The United States and Japan stand out as leaders in both e-commerce and GDP per capita. China, Brazil, and Mexico are lagging behind, while the other five countries fall somewhere in the middle. Furthermore, some countries such as Singapore, Taiwan, the United States, and Japan fall “above” the line, meaning that their e-commerce sales are higher than would be expected based on GDP alone. Other countries, namely, Denmark and France, fall “below” the line, meaning that their e-commerce sales are lower than would be predicted by the country’s wealth. Wealth alone does not provide a complete explanation of national differences in e-commerce adoption based on the data collected and analyzed. The initial findings from the cross-case analysis suggest that other factors do have an important impact on e-commerce adoption, especially factors of the global environment and national environment and, to a lesser extent, national policy.

 

Looking into the future research, we will need to get the academic experts to develop a common research protocol, conduct country and international analyses, and share findings at annual meetings, forum, comparison of research data and how Globalization of e-commerce will have an effect to either the growth or decline in business. Research protocol was developed to achieve multiple objectives on our findings. Initial objective was to develop a team culture to facilitate knowledge development and sharing of ideas. Second, a common survey instrument had need to be developed that to diverse the economies impact to Asia, Americas and Europe.Moreover, it had to be translated into multiple languages, independently checked and piloted in each country. Third, we had to collect secondary data that was comparable across countries with which to better understand their socio-economic environments and e-commerce diffusion over time, as a way of providing perspective for our cross-sectional survey. Finally, to complement both the Global E-Commerce survey, the secondary research data  is needed as to obtain a granular understanding of the Internet and e-commerce within each country. Individual country case studies is needed for each country, including specific industries and/or firms to see how EC evolved in business globally. These case studies usually were written by local academics experts.Development of several partnerships to carry out this work is necessary. First was our partnership with the academic experts in each country who signed on for the four-year effort. Second was a partnership with the International Data Corporation (IDC) of Framingham, MA. This International bodies will govern to develop the survey questionnaire, secure translations into multiple languages, check the questionnaire translations with their in-country staff, oversee conduct of the survey by the international survey firm, market probe and review the survey results. IDC should bee chosen for future research because it has experience working in many countries, conducts its own surveys in several countries, and has experts in e-commerce in each of the countries in this study. Partnership with Empirica, GMBH in Germany is also needed from the aspect of Europe nation for data and analysis related to projects sponsored by the European Commission’s Information Society Technologies (IST) Directorate General. This European nation bodies will help to provided additional data useful for special firm-level, cross country analyses that complemented the basic Globalization of Ecommerce analyses that covers a wider aspect mainly the impact to business.

 

In conclusion to this research that I had embarked, this paper has found useful way of organizing the key factors influencing e-commerce diffusion which will need to be by more quantitative analyses in the future, primary and secondary data is needed to conclude of how e-commerce could impact the business growth globally. There is specific factors shaping the e-commerce that vary considerably. For Global e-commerce especially (business-to-business) model competitive forces are the greatest driver of adoption. Global competition and participation in global production networks create strong pressure to adopt e-commerce. Global competitive pressure is driving greater convergence in business practices through global integration of production networks and supply chains. Countries which are more open to such forces whether through international trade, trade liberalization, or foreign investment will more likely move toward higher e-commerce diffusion. As for Business-to-Commerce) model diffusion seems to be less affected by global forces and more affected by variables specific to the national and local environment, such as consumer preferences, retail structure, and local language and cultural factors. Findings from this research states that consumer preference for valuable content and concerns for security and privacy are the most significant factors. Prior to the converging around the world, country preferences for local content, culture and language  really differ significantly thus shaping e-commerce adoption across globally. This paper examines that the preliminary explanation for this difference is that B2B is driven by MNCs (Multi National companies) that “push” e-commerce to their global suppliers, customers, and their own subsidiaries. This will create the pressures on local companies to adopt e-commerce to stay competitive. Business practices become more standardized across borders in practice. Business education and imitation of best practices reinforce this convergence; as new innovation occurs in theory or practice in order to be competitive. In term of all consumers who really desire on convenience and enjoy low prices, consumer preferences and values, national culture, and distribution systems differ markedly across countries and define differences in local consumer markets. This distinction between B2B and B2C e-commerce as a global phenomenon has important implications. Theoretically, it gives support to the transformational perspective, which sees globalization as involving elements of both convergence and divergence. A country’s position in the global economy is largely dependent on location, labor cost, or other endowments, so that the impacts of B2B e-commerce may be limited Although Internet-based e-commerce is still in its infancy stage, this preliminary research indicates that its diffusion is an uneven process across countries and industries: certain countries and industries are driving the process while others lag behind. Moreover, despite the presence of global forces shaping diffusion, local differences in the factors influencing e-commerce diffusion are evident between countries, suggesting that the diffusion process is indeed shaped by national environments and policy rather than taking a universal trajectory. These findings imply that though Globalization of e-commerce in business is the way to move forward in future but it is not the factors of growth in economy or business performance of the  country. It has never been the same approach to adopt the diffusion of e-commerce across all countries in the world. There is so many elements and factors need to be taken into consideration. Therefore, more study is needed across all countries continuously over a period of 5 years to observe how e-commerce could shape the country economy and how it impact business performance in different industries of the country. This research also imply that future studies should focus on modeling the survey quantitatively to cross-reference check on empirical research done as to compare their relationship across all countries in the world.

 

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