External Influences on Business Activity

By : Ain Atiya Azmi binti NazmiALS Business, 2016

Technology•The use of high-technology machines and

processes based on information technology (IT).

•EXAMPLE:-word processing-databases-pagemaker

Computer-aided design (CAD) Used to design cars, house plans, etc.. By

architectural and manufacturing firms

Saves on expensive designer salaries as work is quicker

Collaborated with CAM to add flexibility to products (mass customisation)

Computer-aided Manufacturing (CAM)•A manufacturing approach of using

computers to control the entire production process.

•Operate robotic equipment that replaces many labour-intensive production systems

•Improved accuracy, less scope of human error

Potential Limitations of Technology•COST - substantial capital cost, labour

training, redundancy pay

•LABOUR RELATIONS – loss of job security, damage to motivation levels, trade union actions

•RELIABILITY – breakdown halts production process

•DATA PROTECTION – the right to hold data on staff and customers is controlled by national laws (The Data Protection Act)

•MANAGEMENT – some managers are not computer literate, requires a great deal of management skills

Data Protection Act• They must make sure the information is:

• used fairly and lawfully• used for limited, specifically stated purposes• used in a way that is adequate, relevant and not excessive• accurate• kept for no longer than is absolutely necessary• handled according to people’s data protection rights• kept safe and secure• not transferred outside the European Economic Area

without adequate protection

•There is stronger legal protection for more sensitive information, such as:

•ethnic background•political opinions•religious beliefs•health•sexual health•criminal records

CASE STUDY : GOOGLE’S ANTITRUST PRACTICES

FOUNDERS

HISTORY•Began in January 1996 as a research project

by Larry Page and Sergey Brin when they were both PhD students at Stanford University in Stanford, California

•Originating from a misspelling of the word "googol",the number one followed by one hundred zeros, which was picked to signify that the search engine was intended to provide large quantities of information.

The largest search engine in the world

Why the EU Hit Google With Its Antitrust Stick

•Google faces 3 charges from the EU commissioner:

1. Favoring its own comparison shopping service in its general search result.

•In 2006, Foundem, a shopping comparison site had been vanished from Google’s search listings. The banishment lasted for 3 years.

•In December 2008, Foundem won an award from The Gadget Show as the UK's best price comparison site. In October 2009 Which? ranked it third for flight searches, and it provides on-site shopping searches for Future Publishing, IPC and Bauer.

•Until December 2009, when Google re-listed the site – after repeated lobbying from the company – it was almost invisible on Google, while continuing to rank highly in searches on Yahoo and Microsoft's Bing.

•Foundem filed a complaint to the EU in February, arguing that Google routinely gives preference to its own price-comparison service - Google Shopping - in organic search results.

•Google’s response:

•Google "de-indexed" Foundem because much of its content – about 87% – was copied from other sites, which it says leads to automatic downgrading in its search results.

•Google’s algorithms disadvantage duplicate sites.

•2. Abusing its dominance on its Android mobile operating system

•About 80% of smart mobile devices in Europe and in the world run on Android,

the mobile operating system developed by Google.

• The Commission said it believed Google had broken the law by:

• 1. Requiring manufacturers to pre-install Google Search and Google's Chrome browser and requiring them to set Google Search as the default search service.

• 2. Preventing manufacturers from selling smartphones running on competing operating systems based on the Android open source code.

• 3. Giving financial incentives to manufacturers and mobile network operators on condition that they exclusively pre-install Google Search on their devices.

Most used browser, Chrome

Largest email provider, Gmail

•Google's behavior denies consumers a wider choice of mobile apps and services and stands in the way of innovation by other players, in breach of EU antitrust rules.

•Android revenue makes up more than half of Google’s profit. The European Union could fine Google up to 10% of the company's annual global sales, translating into a $7 billion fine.

•Google’s response:

Google has said that it has a robust and open app store, called Google Play, in which Android customers can download any number of applications that compete with Google's core apps.

• But those apps have fallen out of vogue in favor of free apps delivered direct to customers' phones from Google.

•3. Restricting third-party websites from displaying search advertisements from Google's competitors through its "AdSense for Search" platform

•Google places ads on third party websites such as online retailers, through AdSense. The Commission says that Google is signing deals that require third parties not to source ads from Google's competitors, reserve the most prominent space on customers' websites for Google ads, and requiring third parties to obtain Google's approval before making any change to display of competing ads.

• So far the Commission has sent so-called "statements of objection" to Google but has not yet charged the company. If Google is found guilty, it could face fines of up to 10 percent of its global turnover per case.

• And Margrethe Vestager, the EU commissioner for competition said that the separate charges are unlikely to be combined into one case, so Google could face numerous challenges.

• "I think it's hard to say if this will end with one case or the second or the third, because what we see is a quite common pattern between them, quite different Google cases, that they seem to pursue a strategy of remaining dominant in search," Vestager told CNBC in a TV interview.

The End. Thank you.