288 33 Powerpoint Slides Chapter 19 Global e Business

Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi

Chapter 18: Global E-businessChapter 18: Global E-business

International BusinessInternational Business

Rakesh Mohan Joshi Rakesh Mohan Joshi

Professor & Chairperson, IIFT New DelhiProfessor & Chairperson, IIFT New Delhi

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Chapter 18: Global E-businessChapter 18: Global E-business

GLOBAL E-BUSINESSGLOBAL E-BUSINESS

Chapter 19


Chapter 18: Global E-Chapter 18: Global E-businessbusiness

Learning ObjectivesLearning Objectives

To elucidate the conceptual framework of To elucidate the conceptual framework of e-businesse-business

To examine e-business technology and To examine e-business technology and environment environment

To explain various e-business models and To explain various e-business models and strategic optionsstrategic options

To discuss global e-marketing and e-To discuss global e-marketing and e-servicesservices

To explicate electronic processing of To explicate electronic processing of international trade documentsinternational trade documents

To evaluate policy framework for global e-To evaluate policy framework for global e-business business



Growing Significance of E-businessGrowing Significance of E-business

The breakthroughs in ICT have The breakthroughs in ICT have

revolutionized relationships within and revolutionized relationships within and

between organisations and individuals. between organisations and individuals.

Companies are progressively integrating ICT Companies are progressively integrating ICT

in their traditional ways of doing businesses in their traditional ways of doing businesses

and moving towards E-business to achieve and moving towards E-business to achieve

and sustain competitiveness.and sustain competitiveness.



E-businessE-business

Integration of ICT with business processes. Integration of ICT with business processes.

Although the extent and scope of such Although the extent and scope of such

integration and applications varies widely, it integration and applications varies widely, it

contributes to enhanced efficiency in contributes to enhanced efficiency in

managing businesses.managing businesses.



Reasons for Companies Making Online Reasons for Companies Making Online PresencePresence

Expand global market reachExpand global market reach Creating world-wide virtual presence Creating world-wide virtual presence Improving business visibility Improving business visibility Increasing responsiveness to customers Increasing responsiveness to customers

and business partnersand business partners Reduction in business costsReduction in business costs Nurturing and strengthening relationships Nurturing and strengthening relationships

with customers and business partnerswith customers and business partners



Factors Contributing to the Growth of E-Factors Contributing to the Growth of E-businessbusiness

Advent of the Internet and world-wide webAdvent of the Internet and world-wide web Cost savings through integrating business Cost savings through integrating business

processes with network-based technology processes with network-based technology Growing use of the Internet as marketing Growing use of the Internet as marketing

channel channel Opportunities to enhance supply-chain Opportunities to enhance supply-chain

efficiency and cost-effectiveness efficiency and cost-effectiveness Improved customer service in the form of Improved customer service in the form of

round-the-clock online access to the round-the-clock online access to the companycompany



E-commerceE-commerce

Buying and selling of goods or services Buying and selling of goods or services

through a computer-mediated network. through a computer-mediated network.

It includes all forms of business transactions It includes all forms of business transactions

in which the transacting parties interact in which the transacting parties interact

electronically over digital networks rather electronically over digital networks rather

than by physical exchanges or physical than by physical exchanges or physical

contact. contact.



E-businessE-business

Integration of ICT with business processes so Integration of ICT with business processes so

as to enhance an organization’s competitive as to enhance an organization’s competitive

strength. E-business encompasses a broad strength. E-business encompasses a broad

frame of business activities rather than frame of business activities rather than

merely buying and selling merely buying and selling



Primary ProcessesPrimary Processes usually enhanced by usually enhanced by E-businessE-business

Production processes: Production processes: Include procurement, Include procurement, ordering and replenishment of stocks; processing ordering and replenishment of stocks; processing of payments; electronic links with suppliers; and of payments; electronic links with suppliers; and production-control processes, among othersproduction-control processes, among others

Customer-focussed processes: Customer-focussed processes: Include Include promotional and marketing efforts, selling over promotional and marketing efforts, selling over the Internet, processing of customers’ purchase the Internet, processing of customers’ purchase orders and payments, and customer support, orders and payments, and customer support, among othersamong others

Internal management processes:Internal management processes: Include Include employee services, training, internal information-employee services, training, internal information-sharing, video-conferencing, and recruiting. sharing, video-conferencing, and recruiting.



M-businessM-business

The conduct of business activities through use of The conduct of business activities through use of

wireless technology, such as mobile phones, wireless technology, such as mobile phones,

personal digital assistant (PDA), and telematics. personal digital assistant (PDA), and telematics.

M-business facilitates interaction among business M-business facilitates interaction among business

stakeholders with the worldwide web, irrespective stakeholders with the worldwide web, irrespective

of location-specific context. It also enables business of location-specific context. It also enables business

communication through mobile devices and text communication through mobile devices and text

applications such as SMS, using e-mail, and through applications such as SMS, using e-mail, and through

the web. the web.



E-enabled Business Process E-enabled Business Process Transformations and ChallengesTransformations and Challenges

Physical marketplace to virtual market spacePhysical marketplace to virtual market space

Physical products to digital products Physical products to digital products

Mass production of standardized products to Mass production of standardized products to

mass customizationmass customization

Fixed pricing to dynamic pricingFixed pricing to dynamic pricing

Mass marketing techniques to customized Mass marketing techniques to customized

marketingmarketing

Hierarchal organizations to network organizationsHierarchal organizations to network organizations



Electronic Data Interchange (EDI)Electronic Data Interchange (EDI)

The exchange of information through The exchange of information through computers between organizations in a computers between organizations in a standard, computer-processable, and standard, computer-processable, and universally accepted format using universally accepted format using proprietary networks. proprietary networks.

Major components required to send and Major components required to send and receive EDI messages include:receive EDI messages include: EDI standardsEDI standardsEDI softwareEDI software Third party networks for communication Third party networks for communication



InternetInternet

A ‘network of networks’ or ‘interconnected A ‘network of networks’ or ‘interconnected

computer networks’ comprising of millions of computer networks’ comprising of millions of

small domestic, business, academic, and small domestic, business, academic, and

government networks linked by copper-government networks linked by copper-

wires, optical fibre cables, or wireless wires, optical fibre cables, or wireless

connections. connections.



ExtranetExtranet

An internet-based network between a An internet-based network between a

business enterprises and its suppliers, business enterprises and its suppliers,

distributors, and business partners which is distributors, and business partners which is

not open to general public. not open to general public.



IntranetIntranet

An internal private network used to link An internal private network used to link

various divisions of a business around the various divisions of a business around the

world into a unified communication network world into a unified communication network

using the same types of software, hardware, using the same types of software, hardware,

and connections as the Internet. and connections as the Internet.



E-readinessE-readiness

A measure of the quality of a country’s ICT A measure of the quality of a country’s ICT

infrastructure and the ability of its infrastructure and the ability of its

consumers, businesses, and government to consumers, businesses, and government to

use it to their benefit.use it to their benefit.

It provides a broad framework to assess the It provides a broad framework to assess the

world’s largest economies on their abilities world’s largest economies on their abilities

to absorb the technology and use it for to absorb the technology and use it for

economic and social benefits.economic and social benefits.



E-business ApplicationsE-business Applications

E-auctionsE-auctions

E-bankingE-banking

E-directoriesE-directories

E-manufacturingE-manufacturing

E-business ResearchE-business Research

E-governanceE-governance



E-Business ModelsE-Business Models

Business to Business (B-to-B)Business to Business (B-to-B) Involves intra-firm Involves intra-firm

transactions using an electronic network. transactions using an electronic network.

Business to Consumers (B-to-C)Business to Consumers (B-to-C) Used for Used for

purchasing products and information, mainly purchasing products and information, mainly

personal finances and investments, with the use of personal finances and investments, with the use of

online banking and investment tools. online banking and investment tools.



Consumers to Business (C-to-B) Consumers to Business (C-to-B) It allows It allows

individuals, especially professionals, such as individuals, especially professionals, such as

lawyers and accountants, to offer their services lawyers and accountants, to offer their services

to businesses.to businesses.

Consumers to Consumers (C-to-C) Consumers to Consumers (C-to-C) It involves It involves

horizontal interaction between consumers, who horizontal interaction between consumers, who

generally share their experiences with the generally share their experiences with the

product by way of chat rooms. product by way of chat rooms.



Business to Government (B2G)/ Government to Business to Government (B2G)/ Government to

Business (G2B)Business (G2B) Application of e-business between Application of e-business between

government agencies with businesses often used for government agencies with businesses often used for

public procurement, regulatory procedures and public procurement, regulatory procedures and

approvals, and other government-related operations approvals, and other government-related operations

using ICT tools. using ICT tools.



Citizens to Government Citizens to Government

(C2G)/Government to Citizens (G2C)(C2G)/Government to Citizens (G2C)

Generally used to disseminate to its citizens a Generally used to disseminate to its citizens a

variety of government information, such as general variety of government information, such as general

rules and regulations, directly concerned with the rules and regulations, directly concerned with the

citizens and other information of public departments. citizens and other information of public departments.



Alternative e-Business Strategies Alternative e-Business Strategies Brick and MortarBrick and Mortar

Tangible physical assets. such as a Tangible physical assets. such as a manufacturing unit or building, or a manufacturing unit or building, or a storage facility. storage facility.

Pure ClickPure Click

The entire marketing transactions are The entire marketing transactions are carried out online with little physical carried out online with little physical presence. Also known as ‘dotcoms’ or presence. Also known as ‘dotcoms’ or ‘pure-plays’. ‘pure-plays’.

Brick and ClickBrick and Click

Marketing activities and transactions are Marketing activities and transactions are conducted, both online and offline. conducted, both online and offline.



Global E-marketingGlobal E-marketing

Conduct of marketing transactions, such as Conduct of marketing transactions, such as

buying, selling, distributing or delivering buying, selling, distributing or delivering

goods or services using electronic methods goods or services using electronic methods

across the world. across the world.



Impact of ICT on Consumer Purchase Impact of ICT on Consumer Purchase Decision ProcessDecision Process

Problem recognition: Problem recognition: User specific User specific

customised communication strategy rather customised communication strategy rather

than mass communication.than mass communication.

Information search: Information search: International scan by International scan by

customers over internet. customers over internet.

Evaluation of Alternatives: Evaluation of Alternatives: Greatly Greatly

influenced by virtual communities over influenced by virtual communities over

internet. internet.



Purchase decision: Purchase decision: Induced by Induced by

interesting websites, competitive prices and interesting websites, competitive prices and

superior purchasing experience.superior purchasing experience.

Post-purchase behaviour: Post-purchase behaviour: Emphasis on Emphasis on

ICT to promptly response to customer ICT to promptly response to customer

queries. queries.



Emergence of Reverse MarketingEmergence of Reverse Marketing

Reverse PromotionReverse Promotion

Reverse advertisingReverse advertising

Reverse pricingReverse pricing

Reverse product designReverse product design

Reverse segmentation Reverse segmentation



Global E-servicesGlobal E-services

The ICT has revolutionised the ways services The ICT has revolutionised the ways services

are offered breaking the geographical are offered breaking the geographical

boundaries. With digitization, the Internet, boundaries. With digitization, the Internet,

and high-speed data networks, all kinds of and high-speed data networks, all kinds of

knowledge- related work can now be done knowledge- related work can now be done

almost anywhere in the world. almost anywhere in the world.



Various IT-enabled Services (ITeS)Various IT-enabled Services (ITeS)

Finance and accounting (F&A) services Finance and accounting (F&A) services

Customer interaction services Customer interaction services

Human resource administration services Human resource administration services

Other-vertical specific and niche services Other-vertical specific and niche services



Electronic Processing of Electronic Processing of International Trade DocumentsInternational Trade Documents

The introduction of electronic processing of The introduction of electronic processing of

export documentation not only reduces the export documentation not only reduces the

transaction time and cost but also reduce transaction time and cost but also reduce

discretionary approach by the officials discretionary approach by the officials

concerned. Effective electronic and concerned. Effective electronic and

automated trade documentation systems automated trade documentation systems

enhance transaction speed and make enhance transaction speed and make

regulatory system more transparent and regulatory system more transparent and

predictable. predictable.



Electronic Trade Documentation SystemElectronic Trade Documentation System

The manual ways of trade documentation The manual ways of trade documentation

and its processing are being transformed and its processing are being transformed

into paperless means by way of introduction into paperless means by way of introduction

of the Electronic Data Interchange (EDI) of the Electronic Data Interchange (EDI)

trade system. Besides, trade procedures are trade system. Besides, trade procedures are

also being streamlined and automated so also being streamlined and automated so

that a single form could be used for all trade that a single form could be used for all trade

documentation requirements. documentation requirements.



Singapore’s Electronic Trade Documentation Singapore’s Electronic Trade Documentation SystemSystem

TradeNet:TradeNet: It is an EDI system that allows It is an EDI system that allows computer-to-computer exchange of inter-computer-to-computer exchange of inter-company business documents in an company business documents in an established format between connected established format between connected members of the Singapore trading members of the Singapore trading community. It links multiple parties involved community. It links multiple parties involved in international trade transactions, including in international trade transactions, including various government institutions, to a single various government institutions, to a single point of transaction for most trade point of transaction for most trade documentation tasks. documentation tasks.



TradeXchange:TradeXchange: It is the world’s first It is the world’s first

nation-wide electronic trade documentation nation-wide electronic trade documentation

system that offers a single point of data system that offers a single point of data

entry to achieve a number of completed entry to achieve a number of completed

transactions with the government. It’s a transactions with the government. It’s a

multi-agency initiative that processes 100 multi-agency initiative that processes 100

per cent of all trade declarations and per cent of all trade declarations and

integrates the requirements of all integrates the requirements of all

controlling units in Singapore.controlling units in Singapore.



Electronic Trade Documentation System in Electronic Trade Documentation System in IndiaIndia

India’s Ministry of Commerce launched a India’s Ministry of Commerce launched a coordinated EC/EDI implementation project coordinated EC/EDI implementation project involving a number of government agencies.involving a number of government agencies.

For electronic filing and processing of For electronic filing and processing of documents, the Indian Customs and Central documents, the Indian Customs and Central Excise Electronic Commerce/Electronic data Excise Electronic Commerce/Electronic data interchange (EC/EDI) gateway has been interchange (EC/EDI) gateway has been created, popularly known as ICEGATE. created, popularly known as ICEGATE.



System Components of EDISystem Components of EDI

Indian Customs EDI System (ICES)Indian Customs EDI System (ICES)

Message Exchange Servers (MES)Message Exchange Servers (MES)

ICEGATE (Indian Customs and Central ICEGATE (Indian Customs and Central

Excise Gateway) & ICENET (Indian Excise Gateway) & ICENET (Indian

Customs and Central Excise Network)Customs and Central Excise Network)



Policy Framework for Global E-Policy Framework for Global E-businessbusiness

From a policy perspective, electronic From a policy perspective, electronic delivery of goods is the most challenging delivery of goods is the most challenging aspect as such trade is rising rapidly aspect as such trade is rising rapidly without any global regulatory framework without any global regulatory framework and hardly any national or international and hardly any national or international legislation.legislation.The Second Ministerial Declaration of the The Second Ministerial Declaration of the WTO at Geneva adopted a declaration on WTO at Geneva adopted a declaration on global electronic commerce on May 20, global electronic commerce on May 20, 1998, aimed to establish a comprehensive 1998, aimed to establish a comprehensive work program to examine all trade-work program to examine all trade-related issues arising from E-commerce. related issues arising from E-commerce.

288 33 Powerpoint Slides Chapter 19 Global e Business

Documents

global ebusiness copyright

ebusiness technology

business visibility

business partnerscopyright

business advent

business partnersreduction

business costsnurturing

various ebusiness models