Chapter 4 “e-Environment”

Exercises
Self-assessment questions
1. Why is environmental scanning necessary?
It is necessary at a macro-level to understand new constraints on conducting business such as
legal and technical constraints. These may also present opportunities. On a micro-level it is
important to be responsive to customers’ needs and competitors’ actions.

2. Give an example how each of the macro-environment factors may directly drive the
content and services provided by a website.
• Social – localized content for different cultures
• Legal – privacy statement
• Economic – funding and awards may be possible from governmental sources
• Political – same as above
• Technological – the incorporation of personalization.

3. Summarize the social factors that govern consumer access to the Internet. How can
companies overcome these influences once people venture online?
• Cost of access technology
• Cost of online access per minute
• Peer pressure
• Security fears
• Perception of need for online access
Companies should clearly communicate the benefits of online trading and make reassurances
about the threats.

4. What actions can e-commerce managers take to safeguard consumer privacy and
security?
Privacy statements should explain the actions taken to the customers. Firewalls should be
maintained to minimize the risk of unauthorized access to customer data. The relevant data
protection act should be followed.

5. What are the general legal constraints that a company acts under in any country?
• Consumer data protection and privacy laws
• Copy promoting goods
• Sales of goods/returns
• Trademark law
• Intellectual property law
• Disability and discrimination.
6. How do governments attempt to control the use of the Internet?
They control through policies to promote its use and through monitoring messages through
ISPs.

7. Summarize adoption patterns across the continents.

Refer to a source such as the International Telecommunications Union (www.itu.int) for the
latest statistics.

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 8. How should innovation be managed?
It should be managed by frequent review of new opportunities, achieving balance between
adopting all new technologies and conservative non-adoption and careful selection of
technologies that will achieve competitive advantage.

Examination questions

1. Explain the different layers of governance of the Internet.

Dyson (1998) describes different layers of jurisdiction or governance. These are as follows:
• Physical space comprising individual countries where their own laws such as those
governing taxation, privacy and trading and advertising standards hold.
• ISPs – the connection between the physical world and virtual world.
• Domains name control (www.icann.net) and communities.
• Agencies such as TRUSTe (www.truste.org) which promote good practice.

2. Summarize the macro-environment variables a company needs to monitor.

These are referred to as the Social, Legal, Economic, Political and Technological (SLEPT)
factors in this chapter:
• Social – social trends in levels of access and what is acceptable ethical use
• Legal – legal constraints
• Economic – changes to economy affecting viability of service
• Political – government incentives or restrictions
• Technological – new technologies to enhance service.

2. Explain the purpose of environmental scanning.

Environmental scanning and analysis
It is the process of continuously monitoring the environment and events and responding
Accordingly
4. Give three examples of how websites can use techniques to protect the user’s privacy.
• Cookies linked to an individual machine
• Firewalls to prevent unauthorized access to databases
• Access control through user names and passwords.

5. What are the three key factors which affect consumer adoption of the Internet?
• Cost of access device
• Cost of online access
• Privacy perceptions
• Benefits perceptions.

6. Explain the significance of the diffusion–adoption concept to the adoption of new

technologies to:

(a) Consumers purchasing technological innovations. Managers should review the percentage
of user base who can use/access their site using a particular technology, for example, Flash

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 plug in.
(b) Businesses deploying technological innovations. Managers need to review the competitive
advantage possible through early adoption of an innovation.

7. What action should an e-commerce manager take to ensure compliance with ethical and
legal standards of their site?
Review data protection requirements in different countries.

Case Study 4.1 The implications of globalization for consumer attitudes

Question
Q. Based on this article and your experiences, debate the statement: ‘Site localization is
essential for each country for an e-commerce offering to be successful in that country’.

A good example to illustrate this case is Durex (www.durex.com), which offers varying degree
of localization according to the size of the market. A further example is Dell where localization
is mainly based on language.

The answer can start by describing what needs to be localized:

Local contact points (minimum)
Language
Style of content and images
Legal constraints on promotions.
Arguments for localization are as follows:
Differing cultures require different copy and content to appeal to them
Reduces negative impressions from dealing with a multi-national company
Shows local support is available.

Arguments against localization are as follows:

Simple cost
It follows that localization should be driven by the importance of the market and the perception
of foreign cultures in the market. Some markets such as Scandinavia may be more comfortable
with English compared to others such as France.

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