Question 1)
E-commerce sites require to shift their focus from local consumers as the use of Internet grows rapidly in markets throughout Europe, Asia, and Latin America. Companies that want to succeed on Web can’t ignore the global shift. Developing sound strategy is critical for ensuring that global E-commerce effort leads to Web sites which are applicable to the consumers and businesses the company wants to reach, whether those customers are in Cleveland, Singapore, or Frankfurt.
First step in developing global E-commerce strategy is to find out which global markets make the most sense for selling products or services online. One approach is to target regions and countries in which company already has online customers. Companies can track country domains from which present users of U.S.-centric site are visiting, and established global companies can look to their overseas offices to help decide the languages and countries to target for their Web sites.
Once the company chooses which global markets it wants to reach with its Web site, it should adapt the existing U.S.-centric site to another language and culture—a process known as localisation. Localisation needs companies to have deep understanding of country, its people, and market that mean either building physical presence in the country or forming partnerships so that detailed knowledge can be gathered. Companies should be prepared to take painstaking steps to make sure that E-commerce customers have local experience even though they’re shopping at the Web site of an American company.
Some of the steps involved in localisation need recognising and conforming to nuances, subtleties, and tastes of local cultures, as well as supporting basic trade laws and technological capabilities such as each country’s currency, local connection speeds, payment preferences, laws, taxes, and tariffs. For instance, when Dell Computer launched an e-commerce site to sell PCs to consumers in Japan, it made the mistake of surrounding most of the site’s content with black borders, a negative sign in Japanese culture. Japanese Web shoppers took one look at the site and fled. Support for Asian languages is difficult because Asian alphabets are more complex and not all Web development tools are capable of handling them. As a result, many companies choose to tackle Asian markets last. In addition, great care must be taken to choose icons which are applicable to country. For instance, the use of mailboxes and shopping carts may not be familiar to global consumers. Users in European countries do not take their mail from large, tubular receptacles, nor do many of them shop in stores large enough for wheeled carts.
One of the most significant and most difficult decisions in company’s global Web strategy is whether Web content must be generated and updated centrally or locally. Companies which expand through international partnerships may be tempted to hand control to the new international entities to take the greatest advantage of the expertise of employees in the new markets. But turning over too much control can lead to a muddle of country-specific sites with no consistency and a scattered corporate message. A mixed model of control may be best. Decisions about corporate identity, brand representation, and the technology used for the Web sites are made centrally to minimise Web development and support effort as well as to present a consistent corporate and brand message. But a local authority decides on content and services best tailored for given markets.
Companies should also be aware that consumers outside United States will access sites with various devices and modify their site design accordingly. In Europe, like, closed-system iDTV’s (interactive digital televisions) are becoming a popular way to access online content, with iDTVs projected to reach 80 million European households by 2005. These devices have better resolution and more screen space than PC monitors U.S. consumers use to access the Internet. Hence users of iDTVs expect more ambitious graphics.
A new group of software and service vendors has emerged to address Web globalisation issues. The group includes companies like Idiom, GlobalSight, and Uniscape.com. Their software can integrate with popular E-commerce and Web content management software from vendors such as Vignette, BroadVision, and Interwoven. The multilingual Web site management software can work especially well for global sites with central management.
On the Web, finally the only way to fight global companies is to be global company. Successful firms operate with portfolio of storefronts designed for each target market, with shared sourcing and infrastructure to support the network of stores, and with local marketing and business development teams to take advantage of local opportunities. Service providers continue to emerge to solve the cross-border logistics, payments, and customer service needs of these pan-European retailers.
QUESTIONS
(a) What are the main steps that Holiday Resort Company in Mauritius must take to develop an online business model?
(b) Assume the Holiday Resort Company in Mauritius is considering three business models –
(i) developing its own on-line business model or
(ii) tie-up with another leading international hotel chain like Marriott or Best Western,
(iii) tie-up with another leading travel agency primarily operating through on-line mode. If you are asked to design control systems for web site content, what factors do you consider for the above three different business models? Under what business model you would recommend central or local or mixed control system?
(c) Which approach is better to gain deep understanding of a country, its people, and the market—form a partnership with a company in the country or hire a software vendor familiar with Web globalization issues. Why?
(d) Determine five applications of e-commerce and e-business commonly used in organisations, and discuss each with appropriate examples.