The growth, integration, and sophistication of ICT are changing our society and economy. The emergence of the Internet as a general communication channel has opened the opportunity for e-Commerce to expand worldwide. E-Commerce is now viewed by researchers and practitioners as providing the future direction in which organizations must move.Diffusion of the Internet has led to significant shifts in the methodology of operating business globally. Therefore, it is both an interesting and challenging issue to address, explore, and conceptualize proliferation of e-Commerce and also adoption and cultural resistance and evolution for global consumers.
This analysis will use four different class reading to discuss the topic, global e-commerce.The readings are “Getting Paid For Your Sales-by Dagmar Grieder”, “Educator Insights: International Marketing Blunders Revisited-Some Lessons for Managers-by Tevfik Dalgic & Ruud Heijblom”, “Information ICTs and Small Enterprise: Findings from Botswana-by Richard Duncombe & Richard Heeks”, and “Trade Wars: The Exaggerated Impact of Trade in Economic Debate-by Richard B. Freeman”. The analysis will be discussed from four different directions, the knowledge of export sales, the blunder of getting into international business, the relationship between international business and consumers in ICTs environment, and the impact from global economy.
E-Commerce Overview An overall revolutionary wave of e-commerce has taken the world into a new extraordinary different decade. Business models across the world also continue to change drastically with the advent of e-Commerce and this change is not just restricted to USA. Other countries are also contributing to the growth of e-Commerce. For example, the United Kingdom has the biggest e-commerce market in the world when measured by the amount spent per capita, even higher than the USA.
The Internet economy in UK is likely to grow by 10% between 2010 to 2015.This has led to changing dynamics for the advertising industry Among emerging economies, China's e-Commerce presence continues to expand. With 384 million internet users, China's online shopping sales rose to $36. 6 billion in 2009 and one of the reasons behind the huge growth has been the improved trust level for shoppers.
The Chinese retailers have been able to help consumers feel more comfortable shopping online. There are the other three reasons, which could explain the high growth of China’s e-Commerce. Firstly, the nation paid much attention to the information technology infrastructure.Secondly, many universities and institutes have applied to the research on e-commerce, and conferences on e-commerce have been taken place all over the country.
Thirdly, e-commerce applications have been overwhelmingly spread out by enterprises and websites. In a word, the e-Commerce has shown the powerful strength to influence the modern life style, and changed the way of doing business right now. The Knowledge of Exports Finance Export financing enables businesses to bring their products all over the world.There are a lot of benefits to a business selling overseas, but there can also be a lot of financial risk involved as well. It is important to fully understand the risks and the government regulations before selling overseas.
If done right though it can be a very profitable venture, and can sometimes bring a business more profit than selling in the United States. Dagmar Grieder is a former banking executive with BankOne and earlier with NationsBank and its predecessor banks with over thirty years of domestic and international banking experience.She answers the most of frequently asked question in the reading, “Getting Paid for Your Export Sales”. The reading starts from discussing about the risk of doing business in foreign country, and what tools could protect your business to decrease the risk.
When you deal with a buyer in a foreign country you will have to consider Political Risk in addition to Credit Risk and ask yourself questions such as "How stable is the buyer's country economically as well as politically? What are its hard currency reserves, its foreign debt? In order to address the question above, a letter of credit is a useful tool to solve the problem.Letter of credit is an important component in the international trading business. What is a letter of credit? A letter of Credit is a contract in which its issuer (the buyer's bank) substitutes its own credit for that of its customer (the Applicant) and engages with the seller of the goods (the Beneficiary ) to make payment against stipulated documents (the shipping documents). “Do some research before you commit your self.
” The reading provides a lot of basic information about export finance, and many sources of help.All the detail and knowledge is hard to evaluate one by one here. This reading is just a start point. It is a start point to explore and understand the exporting business. Not only the letter of credit is an important component in the international business, but also all other tools could be used to decrease the risk of international business. If we could familiar with the function in the environment, we could play the game well and make a fortune.
The Blunder of Getting into International Business Many types of blunders result from ignorance of cultural and other macro-environmental variables.If international marketers are misinformed about the cultural characteristics of foreign markets or lack sufficient information regarding macro-environmental factors, they may stumble into blunders unintentionally. Whenever managers rely too heavily on past experience in the home market for guidance abroad, errors proving fatal to the international venture often result. The reading lists an amount of example to explain several mistake could happen in the international business. For example, the case 6 is about a U.
S. –Turkish Joint Venture for Producing the Yellow pages.In the cases, the company did not aware of the typographical errors. As the result of the errors, the company is no longer in the yellow pages business in Turkey, and the errors also results a prominent business man of Bolu being the subject of jokes for some time thereafter.
The cases presented in the reading reveal numerous problems common to international marketing. The framework for analyzing international marketing blunders and their possible causes in the reading structures the reasons and factors in the international marketing blunders.The framework is formed by macro-environmental factors and cause that relate to firms’ international business strategies. Some of the macro-environmental factors related to blunders can be traced to misinformation. Sometimes, through failure to understand local culture, traditions, customs, and values of the host markets, the marketing decisions of international firms turn out wrong.
Many misinformation blunders take place during translations. Some of the blunders related to international business strategy may be caused by off-target marketing.These represent selection of wrong markets or wrong modes of entry into foreign markets, as well as unrealistic or inappropriate marketing objectives. There are a list of suggestion could be the great reference while getting into the international business. 1. Don’t be over confidence or over optimistic about the potential of your product.
2. Don’t overlook the importance of learning international market. 3. Avoid Ethnocentrism. 4.
Avoid the self-reference criterion. 5. Do you homework properly. 6.
Seek relationships, not transactions, in the international marketing. 7. Avoid the pushy businessman approach.The International Business and Consumers in ICTs Environment To understand the information and communication technology, the reading took a broader, more critical and more systemic approach that had three main components. Information is the key to understanding ICTs.
Information and communication technologies may be defined as ‘electronic means of capturing, processing, storing, and disseminating information’. ICTs are not the only ‘technology’ that handles information. ICTs are based on digital information held as 1s and 0s, and comprise computer hardware, software and networks.Information systems are more than just technology and information.
In building up a systemic model of ICTs, two separate elements have already been identified: the technology itself, and the information on which it operates. The interesting part of this reading is the conclusion. Due to the diverse nature of the enterprise surveyed suggests the need for a differentiated development approach. One obvious differentiation would be between the needs of service, manufacturing exports, and non-exporting manufacturing enterprises.
Certainly, those exporting and those not have a very different information systems profile, and very different information needs. In this reading, there are five different enterprise categories emerged from the survey: 1. Non-ICT users: Enterprises that make no use of computers and have no immediate access to telecommunication services. 2. Non-IT users: Enterprises that make no use of computers but have access to, and make regular use of, telecommunication services; primarily telephone and fax, but with increasing use of mobile communications. 3.
Non-networked ICT users:Enterprises with one or more computers on their premises, but with no network connections; they will have access to telecommunication services. 4. Networked ICT users: Enterprises with stand-alone computer(s) that lack internal networking, but which have an external e-mail/Internet connection. 5. Intensive ICT users: Enterprises using two or more internally-networked computers that also have e-mail/Internet connectivity.
With the differentiation above, we could easily know how the ICTs is adopted and used in the enterprises. The survey even reveals more about the statistic data.Although, all the data were draw from the enterprise in Botswana, however, those data still could be a good reference while studying the ICTs environment. * More than 70 percent of the non-ICT/non-IT users had fewer than five employees, while a similar percentage of medium-sized enterprises (30-99 employees) fell into the networked/intensive ICT user categories * More than half of the non-exporting manufacturers were non-ICT/non-IT users, while 80 percent of manufacturing exporters and service enterprises were networked/intensive ICT users.The Impact from Global Economy “Trade Wars: The Exaggerated Impact of Trade in Economic Debate” is not mainly focus on the battle between US and EU over GM-foods or bananas or steel or aircraft, but to the battle among economists, policy makers and activists over trade and globalization in the modern economic world. The impact from global economy is affected by labour standard, immigration, and capital mobility.
At the heart of the trade wars is the belief that changes in trade arrangements has huge impacts on economies and on labour markets and worker well-being.Adherents to WC-style globalization believe that developing countries can only grow through exports and openness. They fear that LDC trade with advanced countries is so fragile that it must be protected from global labour standards. Opponents believe that good labour standards are so fragile that they must be protected from a race to the bottom, in which bad standards drive out good standards.
Except the labour standards, capital mobility and immigration are two other major factors affecting the global economy.In the reading, which has made the statement that immigration has more important impacts on the labour market than trade is meaningless in some models, like Heckscher-Ohlin trade model. The reading also makes the conclusion that international capital markets place normal citizens in poor countries at risk without assuring them of compensating benefits. And the global financial powers rarely consider schemes designed to improve risk management, be it a Tobin tax to reduce the volatility of capital or an international bankruptcy court.
The author proposed questions at the end: Why have proponents and opponents of trade WC style exaggerated claims about the effects of trade? Have the exaggerated claims done any harm? The answer is that there was still a cost to the exaggerated argument in the trade wars. The cost is that debate focused on trade issues and adding labour standards to trade treaties rather than on the more problematic capital flows. By learning the issue of global economy impact, we could more familiar and confident to face the challenge from this flattened world.Conclusion To cross into the international e-Commerce market, there are a lot of issue that firms’ leader need to learn and understand. From the core business itself to all the regulations, business environment, and potential impact from this flatten world, several issues needed to be consider and set up the contingency plan prior starting a business. If we could familiar with all the function and possible situation, we would have the ability to cope with the potential obstacle, and affecting factors.
From small business start-up’s point of view, this analysis only provides initial and basic information and knowledge about the international market entry and market management for those people who intent to enter the international e-Commerce business. With the growing of the business, more knowledge of all the barriers, regulations, and functions needed to be learned and understand so as to complete a business.