MODULE 2 – WEEK 8

IMPACTS THAT THE INTERNET AND E-COMMERCE ON INTERNATIONAL BUSINESS

Eric Akpo

Submitted to the University of Liverpool

22 June 2013 (1165 WORDS)
(Pearson Education Inc. (Prentice Hall), 2010) defines ‘e-commerce’ as “digitally enabled
commercial transactions between and among organizations and individuals”. The
website, www.businessdictionary.com, defines ‘internet’ as “a means of connecting a
computer to any other computer anywhere in the world via dedicated routers and
servers”, (WebFinance Inc., 2013). A computer is a digital machine which is capable of
manipulating digits, (Universitetet i Oslos, 2013). The internet therefore, is what gives
the digital enablement for commercial transactions that are classified as electronic
commerce a.k.a ‘ecommerce’. E-commerce is often misplaced for e-business but they
differ in the sense that e-business is inter-organization and does not involve an
exchange in value. Where e-business goes beyond the boundaries of the organization
and then involves a transmittance of value then it is no longer e-business but
ecommerce.

Pearson Education Inc. (Prentice Hall), (2010), highlights eight (8) unique features of
ecommerce technology as follows;
1. Ubiquity: Global availability at all times.
2. Global Reach: its market size pottential is equivalent to the worlds online
population.
3. Universal Standards: the standards of the internet and specifically of conducting
e-commerce are shared by actors and users globally.
4. Richness: Rich and complex content can be delivered without compromise.
5. Interactivity: There is two-way communication between actors
6. Information Density: Increasing amounts of quality information available to all
actors at cheaper rates and more effectively delivered.

7. Personalization and Customization: Allows for delivery to specific targets

(persons, group or groups, regions, previous customers etc.) and also allows for
flexibility in design to suit specific needs.
8. Social Technology: Makes compilation and collection of user content possible plus
access to social networking.

E-commerce provides a global marketspace for MNCs, this means that via the
internet, the market place for global companies is extended beyond traditional
boundaries and limitations of geography and time are eliminated, Pearson
Education Inc. (Prentice Hall),( 2010).

The successes or otherwise of a an e-commerce venture of global company is largely

dependent upon the e-readiness of its destination or host country. SHENKAR & LUO,
(2008) suggest that e-readiness is the extent of necessary (relevant to electronic
transactions) infrastructure development in the host or target country, note that this
is not limited to technical infrastructure but also extends to government’s regulatory
laws and development of technical ability among its populations as in skilled
personnel which can be achieved via investment in IT education etc. Another aspect
of e-readiness as identified by the authors SHENKAR & LUO, (2008) is the “wired”
government referred to in Adeyemo, (2011) as e-government or e-gov. He says,” e-
gov refers to the use of internet technology as a platform for exchanging
information, providing services, interacting or transacting with citizens, businesses,
other arms of government” etc. Such governments according to SHENKAR & LUO,
(2008) helps to develop IT compliant individuals or citizens who would be conversant
if not very knowlegeable with electronic transactions. An e-ready government would
ensure that transactions such as approvals, taxation, regulation control and other
revenue and regulatory issues and handled via a network which would guarantee
transparency, efficiency and hence ‘facilitate the working of firms’ especially as it
affects (SMIEs) that is, Small to Medium Scale Enterprises. Statistics show that apart
from United States which is 2nd and Canada ranking 9th , mostly european countries
dwell among the top 10 on the e-business readines rankings as at 2006 as sourced
from Economic Intelligence Unit (2006) and referenced in SHENKAR & LUO, (2008).
Majority of those in the bottom 10 of this ranking were from the developing
countries and African region.

Cross-Border e-commerce can be classified into B2B, B2C or C2C forms, meaning
Business to Business (B2B) (eg. PerfectCommerce and Quadram), Business to
Customer (B2C) (eg. Wines.com and 1800flowers.com) and Customer to Customer
(C2C) (eg. VelvetBazaar, OldandSold and olx.com) respectively, SHENKAR & LUO,
(2008) and Pearson Education Inc. (Prentice Hall),( 2010).

The impact of e-commerce on international business may have been over estimated
at the emergence of the Internet based on the general assumption that a firm’s
availability on the internet gives it a global status because its activities can be viewed
and accessed the world over, but it was acknowledged by others that the Internet
won’t mystically grant or guarantee oversee success but can ease the process of
going global. In more recent times, a much clearer view has been upheld as the
Internet and of course e-commerce are making much more impact on global trade
though the growth is incremental, (SHENKAR & LUO, 2008). Larger companies via e-
commerce gain a great deal as it presents an opportunity for rapid global
dissemination of products but they stand a danger of quicker and easier immitation
from competitors. The authors further note that there is evidence that e-commerce
may directly promote collusion citing the legal issue invlving Sony and Philips in
Germany when they attempted to halt online sale of their products by Primus online
as the later’s offers were less expensive.

E-commerce hold a lot of prospects for SMIEs and Intermediaries as well and has
made it difficult to identify the true origin of a product or service. Tranfer of
knowledge with e-commerce is easier and less expensive as immigration barriers are
broken. E-commerce however requires a balance of globalization and localization.
 Website are seen to be more functional when adated to local languages however,
some local websites find it hard to thrive as some may take to websites of other
countries for trust and reliability. Taxation may be an obstacle to free flow of goods
and services but in the interim however control of the flow of goods and services via
e-commerce is a little difficult to achieve as monitoring is not an easy act, SHENKAR
& LUO, (2008).

Nigeria ranks very low on global rankings of e-readiness, having only moved from no.
62 to 61 in 2009. The government in recent times has adopted e-payment platforms
for government revenue collections as a measure to improve its e-readiness for
better electronic based commerce, Nwachukwu, (2009). Adeyemo, (2011) notes
that even with astronomical growth measures in communication technology in
Nigeria, the e-readiness ranking remains very low. He notes further that Nigeria’s
web measure index grew from 0.143 in 2004 to 0.2241 in 2008 but that the growth
does not match the improvement recorded in infrastructure.
REFERENCES
Adeyemo, A. (2011, January). E-Government Implementation in Nigeria: An Assessment of Nigeria's
Global E-gov Ranking. Journal of Internet and Information Systems, 2(1), 11-19.

Nwachukwu, I. (2009, December 23). Govt policy drives Nigeria’s e-readiness ranking . Retrieved June
22, 2013, from BusinessDay Online:
http://www.businessdayonline.com/ARCHIVE/index.php?option=com_content&view=article&i
d=6994:govt-policy-drives-nigerias-e-readiness-ranking-&catid=42:economic-
watch&Itemid=513

Pearson Education Inc. (Prentice Hall). (2010). questions.pdf. Retrieved June 22, 2013, from The
University of West Indies: http://www2.sta.uwi.edu/~anikov/comp6350/questions.pdf

SHENKAR, O., & LUO, Y. (2008). International Business. CA: Sage.

Universitetet i Oslos. (2013). Analogue_digital.rtfd - Analogue_digital.pdf. Retrieved June 22nd, 2013,

from Universitetet i Oslos: http://folk.uio.no/larsgu/cmm1108/files/Analog_Digital.pdf

WebFinance Inc. (2013). Internet. Retrieved June 22nd, 2013, from BusinessDictionary.com:
http://www.businessdictionary.com/definition/internet.html