bs3912 week 4 1 managing e-business & high tech. (4) l last week – the challenges for managers...
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BS3912 Week 4 1
Managing e-Business & High Tech. (4)
Last week – the challenges for managers(Chaffey, Chapter 10 – Change Management)» Identify the changes needed» Develop Outline Plan» Impacts on the organization structure and on individuals
This Week» The Macro-environment (Chaffey Ch.4)
Social, Legal, Ethical, Political & Technological factors
» Main activity – assignment workshop– Extra brainstorming of assignment ideas
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Activity 1 – SLEPT factors
Imagine you are manager of a B2C operation, and list Social, Legal & Ethical issues you need to consider
Include avoidance of negative effects:» Risk of prosecution» Actions that annoy prospective customers or website users» Reduction of potential market
What Political and Technology aspects need to be considered?
http://www.leichtmanresearch.com/press/111510release.html contains information about spread of broadband technology
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Pre-requisites for e-Commerce
Companies are online Potential Customers have Internet Access
» Ideally with broadband service – not the issue it was» Coverage demographics are significant
Customers trust online services» Information provision» Honesty of vendors» Technical integrity
Customers find services usable» Easy to get information» Rapid ordering» Systems “remember” you
Trust built with:Easy e-mail and
Phone accessGood pre-sales adviceAfter sales serviceDistance selling regulations
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Growth of Internet
According to Internet indicators for 2009 at http://www.itu.int/ITU-D/ict/statistics/ UK was at 83%, Japan & USA at 78% and Netherlands at 90%
But are averages useful in this context?
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Source: ITU (www.itu.int/ITU-D/ict/statistics ) for 2008
Global variation in PCs and Internet Access
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2010 Internet Coverage
Source: ITU (www.itu.int/ITU-D/ict/statistics )
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The Global Marketplace is Patchy
2004 2009 Broadb 2004 2009 Broadb
Netherlands 62 90 36 Germany 43 79 30
Denmark 60 87 38 NZ 53 80 23
Sweden 75 91 32 Japan 50 78 25
Finland 63 82 29 Australia 65 74 24
Switzerland 47 81 35 Iceland 77 93 33
Korea 66 82 35 Italy 50 49 21
Canada 62 80 31 Spain 33 63 22
USA 63 78 26 France 41 72 32
UK 63 84 30 Source: ITU website
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Chaffey (2007) Figure 4.6 Source: DTI (2004), Fig 7.3a
Percentage of businesses that order online
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How do we generate Trust? Generally based on favourable experiences
» Our own and others’» Highly usable sites get user onside quickly» Can be destroyed by a single disaster
Enhanced by known safety factors» Virus checkers (often run by ISPs on incoming data)» Encryption» Ability to detect Adware, block pop-ups
Openness» Physical address of operator included in site» Clear privacy policy with easy junk opt-out» Collect feedback» Human contact – phone, e-mail
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Buying offline after researching online
Chaffey (2007) Figure 4.4 Source: BrandNewWorld: AOL UK / Anne Molen (Cranfield) / Henley Centre, 2004
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Chaffey (2007) Figure 4.5
Developing experience with Internet
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Chaffey (2007) Figure 4.9 Source: © 2005 Adapted from Economist Intelligence Unit data
E-Commerce Leaders and Laggards
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Legal Factors
Customs and rules vary across countries (even within EU)» Belgium limits “sales” to specific times of year» Germany prohibits “brand X” comparisons» “BOGOF” illegal in some countries» Products may be banned Can present problems if you sell into these markets
But many rules are more nearly universal» Liability for damage done by faulty product» Prohibition of misrepresentation» Proper use of Personal Data
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E-Commerce – Sparrow’s eight areas
Marketing your e-commerce business Forming an electronic contract Making and accepting payment Authenticating contracts concluded over the Internet E-mail risks Protecting Intellectual Property Advertising on the Internet Data protection
Derived from Chaffey (2007) slides
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Ethical Concerns
Will we increase social exclusion?» On-line marketplace tends to be fairly well-heeled …
... it also gets the lowest prices» Dependence on e-Government can starve lower
socio-economic groups of information» Poorer countries may find it hard to join global economy,
and be exploited by those who control infrastructure Global trading can undo regulatory efforts, for example
» Trans-border gambling» Online promotion of tobacco products
Opportunities for dubious practices such as buying up domain names and holding them to ransom
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UK Internet User Demographics
Chaffey (2007) Figure 4.3 Source: eMori Technology Tracker – http://www.mori.com/ (technology link removed)
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Political Factors
Taxation» European countries now collect VAT on imports to the EU
Even pure intellectual property like downloads» Private imports within EU at VAT rate of source or
customer» EU Services are taxed on location of supplier
(Ireland has exploited this successfully)» US doesn’t yet tax inter-state transactions
Restrictions on Freedom» UK has Regulation of Investigatory Powers Act
(means ISPs have to provide interception capability, encryption keys must be produced on demand)
» Many countries censor Internet activities
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Technical Factors
How to create delight
Use cookies to remember the user
Attractive site with appropriate use of images
Clear navigation Search facility Focus on security
Clear and open privacy policy Everything works Rapid response to e-mail Customer-centric organization
How to turn users off
Fill the user’s machine with cookies
Overuse graphics, making response time slow
Pop-ups Search giving false results Fruitless warnings about mixing
secure and non-secure content Misuse of information provided Form-filling with input ignored Spam Site organized for convenience
of vendor
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Globalization and e-Commerce Globalization is concept of a single global marketplace
» Not merely selling abroad, but competing as an equal with companies local to your export markets
Needs technical infrastructure, but however good that is, SLEPT factors can constrain trade» Language (especially important for services)» Social sensitivities with respect to promotion and packaging » Ethical concerns
Depends on reliable financial systems» Reasonably stable exchange rates» Affordable international transactions (e.g. Credit Cards)
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Most innovations happen like this…
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Gartner hype cycle
Chaffey (2007) Figure 4.11 Source: Gartner (2005) Gartner’s Hype Cycle Special Report 2005
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SLEPT Summary
LegalSocial
EthicalTechnology
Political
Economic factors
Customer expectations
Available technology
Regulation, taxes, DPA, CMA, RIP, TDA, Trading StandardsPreference ServicesDDA Financial probity
Social Exclusion
Common CarrierService ubiquity
Privacy, opt-out
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Chaffey (2007) Figure 4.8 A framework describing the e-economySource: Booz Allen Hamilton (2002). International E-Economy: Benchmarking The World’s Most Effective Policy
for the E-Economy. Report published 19 November, London. © Crown copyright 2002
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Assignment 1: Due 9 May
Assignment takes the form of an initial business proposal for one of the following: » a start up e-business company, » introduction of a high-technology product or » introduction of e-business to an existing company
Register your choice to avoid duplication You will need to come up with a suitable innovation:
» Write enough to explain what is proposed» Analyse the opportunity, risks and capital requirement» May consult banks’ business plan pro-formas
Tests your ability to analyse the business-case, not the quality of the innovative idea itself
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Examples from Previous Years
Developments Tablet PCs in Fire prevention Restaurant ordering on-line Touch-screen kiosks Crop sprayer B2C Server consolidation Roadwork maps: on-line service
to minimize disruption & waste Document Management system
in Local Government Storage integration Analysis of Thos Cook on-line
commerce, with new proposal New info system for schools
Start Up Surgeons-Net: software to
assist hospital surgeons Customized T-shirts justifying
premium price Cricket equipment B2C Marine incident emergency
service B2C Online optician IBP Photo albums
New Services Homelink Library service Cross-border trading Contact Centre Bus pass printing Info terminal for enhancing
service in health-food store
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Assignment 2: Due 6 June 2011 You need to prepare and write a detailed plan for
deploying the change you proposed, into the same existing or start up e‑business company» Will include Critical Path Analysis
Assessment criteria concentrate on your understanding of the issues involved in managing high-technology ventures, and the logic and clarity of your analysis
If you are not around to hand in the assignment in person, please submit over the Learning Network, or make sure you use recorded delivery and that the package is postmarked on or before the due date
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Marking Scheme
Assignment 1(5 elements: equal weight) Executive Summary Introduction Market analysis and/or
SWOT Costings Analysis
Assignment 2 (5 elements: equal weight) Executive Summary Introduction and update to
part 1 Deployment planning Completeness of coverage Analysis
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Initial Business Proposal
Around 2000 words Determine NEW product or service Decide on Start-up Company or Existing Company
» B2B or B2C?» e-Government» Consider Intermediary Rôle
– DISintermediation / REintermediation– COUNTERmediaries / CYBERmediaries
» Other applications of technology to develop Explain What you propose (in order to get capital) Analyse Environment (Macro & Micro) PEST & SWOT Detail Capital Requirements
Some examples in Chaffey Chapter 2
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Funding Requirements
Identify each business PROCESS needed to start & run your idea / business
Make maximum use of high tech to minimize costs List
» Fixed capital costs (premises, equipment, stock)» Working capital, to cover costs of people and inputs» Ongoing costs (electricity, phone, wages) etc
Quantify how long before sales generate revenue Quantify revenue needed to break even Quantify profits needed to repay debts etc