How e-commerce effect on MNC

1. E-commerce
And The MNC
Iqra Tariq
Sana Aslam

2. E-commerce
E-commerce (electronic commerce or EC) is the
buying and selling of goods and services, or the
transmitting of funds or data, over an electronic
network, primarily the internet. These business
transactions occur either as business-to-business,
business-to-consumer, consumer-to-consumer or
consumer-to-business. The terms e-commerce and
e-business are often used interchangeably. The
term e-tail is also sometimes used in reference to
transactional processes for online shopping.
E-commerce

3. Brief History of E-Commerce
 1970s
 E- commerce meant the facilitation of commercial
transactions electronically, using technology such as
Electronic Data Interchange (EDI) and Electronic Funds
Transfer (EFT), allowing businesses to send commercial
documents like purchase orders or invoices electronically.
 1980s
 The growth and acceptance of credit cards
 Automated teller machines (ATM)
 Telephone banking
 Airline reservation system

4.  1990s
 The Internet commercialized and users flocked
to participate in the form of dot-coms, or
Internet start-ups
 Innovative applications ranging from online
direct sales to e-learning experiences
 2000s
 Many European and American business
companies offered their services through the
World Wide Web.
 Since then, People began to associate a word “e-
commerce”

5. What is the Internet?
 The largest network of networks in
the world.
 Uses TCP/IP protocols and packet
switching .
From Dr. Vinton Cerf,
Co-Creator of TCP/IP

6. Brief History of the Internet
 1968 - DARPA (Defense Advanced Research
Projects Agency) contracts with BBN (Bolt,
Beranek & Newman) to create ARPAnet
 1970 - First five nodes:
 UCLA
 Stanford
 UC Santa Barbara
 U of Utah, and
 BBN
 1974 - TCP specification by Vint Cerf
 1984 – On January 1, the Internet with
its 1000 hosts converts en masse to using
TCP/IP for its messaging

7. History

8. A Brief Summary of the
Evolution of the Internet
Memex
Conceived
1945
WWW
Created
1989
Mosaic
Created
1993
A
Mathematical
Theory of
Communication
1948
Packet
Switching
Invented
1964
Silicon
Chip
1958
First Vast
Computer
Network
Envisioned
1962
ARPANET
1969
TCP/IP
Created
1972
Internet
Named
and
Goes
TCP/IP
1984
Hypertext
Invented
1965
Age of
ecommerce
Begins
1995
1945 1995

9. E-commerce:
Definition, Types, and
Importance
E-commerce:
Use of the Internet to buy or sell products and
services.
B2C:
Business-to-Consumer transactions.
B2B:
Business-to-Business online transactions.
C2C:
Consumer-to-Consumer business transactions.
C2B:
Consumer-to-Business online transactions.

10. B2C:
Example
Amazon.com is perhaps the best known of
the B2C sites
• It pioneered the concept of branding
• It pioneered the use of wallets
• It pioneered the development of a
structure to house additional businesses
Business-to-Consumer transactions.
Business 2 customer

11. B2B:
Business-to-Business online transactions.
Example
Wholesale & B2B Ecommerce Websites
HEROweb builds successful business-to-business
portals. Our wholesale clients love the eye-
catching designs of a Hero Web site, and even
more the ease-of-use that our Mighty Merchant™
shopping and content platform affords. HEROweb
makes it simple to keep track of wholesale
accounts and pricing strategies. If your online
wholesale business deserves the best, you deserve
HEROweb.
Business2
business

12. C2C:
Consumer-to-Consumer business transactions.
Example of a C2C organization is Carsales.com.
Carsales.com is a website that allows unknown parties
to purchase motor vehicles from one another over the
internet. This website offers various search engine
options, and a range of payment methods. This website
is run by over 200 people nation wide and their aim is
to offer the most useful and helpful service as possible
and to lower the cost of motor vehicle advertising in
Australia.
Consumer2
consumer

13. C2B:
Consumer-to-Business online transactions.
EXAMPLE:
Mr. Leta, an Ethiopian, needs to travel India for
his personal case. He requires a flight on the
first day of January and he is willing to pay
Br 500 only. Here this requisition will display
in C2Bwebs. In addition, the Ethiopian Air
Lines can be interested to take him to New
Delhi, even the normal trip costs more than
Br 500 rather than of flying with empty seats.
Consumer2
business

14. Internet and E-commerce
Structure
• Internet plays more and more important
role in our life. Now it is used not only as
means of obtaining information and
sending e-mail messages, it became a
significant tool in doing business, in e-
commerce particularly.
• At web sites of most companies selling
any products.
• Provide information
• Participant can be registered or licensed
the websites.
• Buyers or seller interaction.

15. Internet and E-commerce
Structure(Count,)
 Transaction Incubation:
Process of setting up a relationship between the
participant and the website.
 Transaction Negotiation:
Facilitation of the purchase decision.
 Transaction Formation:
Process where purchase is finalized.
 Transaction Management:
Management of various activities linked to
transactions.

16. E-commerce and
Globalization:
 Globalization is the integration of
economies throughout the world,
enabled by technological progress.
 Helps the companies to reach
customers worldwide.
 Develop competitive advantage to
success in various.
 Barriers are reduced
 Becoming more effective cost.

17. E-commerce and
Globalization (Count,):
 Born-Global Firms
Companies that operate globally from the day they are founded
Several reasons account for the growth of e-commerce:
 Extremely cheap hardware computers:
E-commerce hardware are the commodities that can be
acquired for very little.
 Cheap software:
relay on open source software to develop services. E.g. Linux.
 Access to talent worldwide:
• now access to the vast pool of programmer available in different
countries.
• Previously programmers available only to larger multinationals
• Many smaller companies can easily tap into these employees.

18.  Cheaper internet worldwide:
 Increased availability
 Decreased price
 Broadband
Broadband:
is a combination of digital technologies that allows rapid transmission
of data and other digital services, often simultaneously.
More targeted marketing:
Google helps to made it easier and efficient to target potential
buyers.
 easier and cheaper to say in touch with employees
worldwide:
large number of tools available for companies to keep their worldwide
employees in touch with each other.
Broadband

19. Global E-commerce
Opportunities And Threats
Opportunities:
 Reach customer on a global scale
 24 hours browsing and 7 days a week
 Less expensive or effective
 Allow company to streamline its operations to become more profitable
 Inventory management
 Better communication
 Coordination with supplier

20. Global E-commerce
Opportunities And Threats
Threats:
 legal and regulatory changes
 Low barriers to entry are a constant threat in ecommerce
 People can sell items via Face book or eBay without setting
up their own websites
 Differences across cultures and language
 Multinational is selling products, returns and shipping can also
be very complex
 Different regulation and tax system in place
 Expensive worldwide shipping

21. Key cross-cultural and global E-
commerce issues
e-commerce and internet global level
presents companies with unique issues
and challenges.
Issues:
 cross- cultural e-commerce adoption and
diffusion
 cross- cultural consumers trust in E-
commerce
 cross- cultural web design

22. Cross- cultural e-commerce
adoption and diffusion
There are 2 important components to go to
global with e-commerce
o E-Commerce Adoption
Degree to which companies and individuals are willing to accept
new technologies inherent in e-commerce
o E-Commerce Diffusion
Degree to which e-commerce is spreading in different societies

23. E-Commerce Adoption
 Research shows that e-commerce adoption and
diffusion is dependent on the internet
infrastructure and the availability of internet
services at affordable price.
 Locate their services where the internet is
readily available.

24. Perceived Usefulness
Perception that the use of a B2C site will
enhance the shopping experience
Perceived Ease of Use
Belief that use of a B2C website is free of
effort
To understand better e-commerce adoption, it is
important to understand the
Technology Adoption Model (TAM) developed by
DAVIS
Cross- cultural e-commerce
adoption and diffusion (Count,)

25. E-Commerce Adoption

26. Web entrepreneurs should target countries based on
two factors
First, attractive markets for e-commerce are those markets
with inefficiencies, such as those found in many formerly
state- controlled markets. In this markets, e-commerce
shopping allows buyers to get quality and cheaper prices
because they are free from state control.
Second, target markets should have attractive demographic
characteristics. These include location with an internet
population of at least 5% , a high literacy rate countries that
participate in at least one free trade agreement, and a
government with a viable legal system.

27. Cross- cultural consumers trust in
E-commerce:
Consumer Trust in E-Commerce
Willingness of an online consumer to depend on others, assuming
that the other party will deliver as promised.
Consumer trust in e-commerce is seen as a critical factor
influencing consumer adoption of e-commerce.
Internet involves significant uncertainty.
• Internet purchases involves high risk
• Comfort with uncertainty
• launching global e-commerce activities to understand
environment
• MNC design systems to built trust

28. What can MNC`s do to built trust?
Answer is Yes
o Trustworthy website and cyber security
o More secure internet
o Designed appropriately trust
o Built loyalty
o Interact customers
o Discuss problems
o Tailored cultural preference
o Engaging multichannel integration (both
physical and online web stores)

29. Cross- cultural web design
• Companies are expanding their customer basis
across national and cultural boundaries
• Cross - cultural design is designing technology for
different
• cultures, languages, and economic standings
• Ensuring usability and user experience across
cultural boundaries
Standardized Website
Company's Website around the world are fairly
similar in layout and design
Localized Website
Website design and layout are adapted to fit
local culture

30. Cross- cultural web design
Should MNC`s localize or standardize their websites?
It dependent on the nature of product being sold,
consumer and other factors.
some products don’t require much adaptation for
local culture.
If adaptation is needed, how should MNCs
approach website adaptation?
Adaptation needs to go beyond mere machine
translated version for websites.
Through this translation other issues like color,
icon, webpage layout, date formats, fonts and so
others

31.  User experience attributes are culturally
bound
 Culture influences human product interaction
 Example of using existing theories Hofstede’s
five cultural dimensions
 Power distance
 Individualism vs. collectivism
 Masculinity vs. feminity
 Uncertainty avoidance
 Long vs. short term time orientation
Culture & User Experience

32. Building a successful
e-commerce strategy
Important aspects to built a successful
e- commerce strategy
 Contribute to profit and competitive advantage
 start at basic strategies for multinational operation
 build on sound

33. Important aspects to built a successful
e- commerce strategy (Count,)
Important key aspects
 E-commerce strategy start with top management
 only possible through dynamic and strong leadership coming from
the top
 Strong believe in the benefit of e-commerce approach
 E-commerce involves strong resources and time commitment
 Leaders should have expertise and vision to objectively assess the
company's position.

34. Trends and potential
solution of e-commerce
Speed:
 customers wants be able to perform any transaction
with speed
 in multinational consumer and supplier wants be able
to engage in transaction are efficiently
 Time is money, especially for an ecommerce site.
 Any delay on the web lowers results
 For example, in 2006, the average online shopper
expected WebPages to load in eight seconds or less;
by 2010, that number was down to 2 seconds or
less.

35. Trends and potential solution
of e-commerce (Count,)
Self service:
 2nd trend is the ability to customers to be
able to get self service at any time
 Mostly service provide at 7 days 24 hours a
day
 Ability to have access the real time
information
 Make purchase and solve problems
 Frequently asked questions (FAQ)

36. Trends and potential solution
of e-commerce (Count,)
Customer service:
 Provision of superior customer service
 Multinational using e-commerce operation to provide
better customer services
 Multinational becomes intertwined with other business
 Listen on social media (78% of customers believe)
 Track all customer interactions.
 create a support center for customers (90% of customers)
 Provide online chat (77% of customers)
 Focus on timely responses (84% of customers)

37. Trends and potential solution
of e-commerce (Count,)
Integration of various channel:
 MNCs facing pressure to integrate
various channel which they operate
 Consistent policies between both offline
and online operations
 Customers frustrated when offered
product not sale in store
 Products you are selling via different
channels are sufficiently differentiated to
account for price differences.

38. In addition,
 Make significant financial investment
 Significant efforts and resources
 Investment include
I. financial resources for an I.T
department
II. Resources for upgrading
multinational`s information system
 Appropriate data management

39. Data management:
Experts suggests:
Track important data:
 For multinational collect appropriate
from customers visit
 comprehensive knowledge about the
customer is necessary in advance
 Real-time reporting

40. Data management (Count):
Enter accurate data:
 Every step to ensure that collect data is accurate
 Data compared with other outside source of data
 Use data entry screens.
 Use controlled vocabulary
 Data checking
 Check for data completeness
 Ensure data create better understanding for
previous purchase and future preferences

41. Data management (Count):
Maintaindataatthelowestlevelpossible
 Multinationalsensuresdatacollectedatlowest
possiblelevels
 Dataaggregationispossible
 Breakingdownthedataisnotpossible
 Datastoring

42. Online habits of the over 55s
Going online daily Researching products online Shopping online
 France 73% 51% 34%
 Spain 71% 46% 27%
 UK 70% 53% 46%
 Germany 65% 43% 32%
 US 66% 42% 25%

43. Cyber and e-commerce
security
Cyber Security
Challenges and other vulnerabilities of
the Internet

44. History:
A Short History of Cybersecurity for CNI/CII
 Birth of CNI: Early proposals appeared around 15 to 20
years ago, during the mid-1990s, after birth of commercial
internet
 International discussions from G8, OECD and EU around
10 to 15 years ago with main focus upon physical CNI
protection & less on cyber.
 Early CNI/CII Plans: More detailed National CNI/CII Plans
started to be prepared and published from around 5 to 7
years ago
 Cyber security for CNI: Orchestrated cyber attacks on CNI
for Estonia, Georgia and others from 2007 onwards led to
major work on cyber CNI.
 Major National Investment programmers for Cyber security
for CNI is now in place for USA, UK, Canada, Europe & Far
East as previously discussed
 Significant Cyber Focus now for CNI in ALL major economic
sectors such as Defense, Finance, Energy, Utilities,
Transport, IT, Comms & Healthcare.

45. E-commerce security
Degree to which individuals feel that
their private information is safe in
the hands of companies collecting
such information
“You can’t just open a website and expect
people to flood in. If you really want to
succeed you have to create traffic.”
-Paul Graham, YC

46. Reasons why cyber security is
important
Rapid growth of viruses and worms
 computers are now more connected
and computer worms and viruses are
rapidly copied
 Viruses comes from
e-mails, and files
 It cause slow your computer or lost
data

47. Reasons why cyber security is
important (Count,)
Hacking
 Choose ecommerce web hosting service
provider wisely
 Keep Data Encrypted
 Insist on Strong Passwords
 Hackers can damage the data
 Ability to manipulate

48. Reasons why cyber security is
important (Count,)
Spam
 Spam is the term used for unsolicited
e-mail sent by marketers and
individuals who typically have
purchased an e-mail mailing list.
 Reduce employee productivity
 Slow down network traffic

49. Reasons why cyber security is
important (Count,)
Phishing
 Scam websites
steal identity
steal data
steal funds
 Request to submit your secret
information

50. Reasons why cyber security is
important (Count,)
Computer attacks and identity theft
 theft of personal information in order
to commit fraud
 happen through your email account
 online purchases or other situations
where you give out sensitive
information such as your credit card
information or your social
insurance number.

51. Type of identity theft fraud Percent
Government documents or
benefits fraud
38.7%
Credit card fraud 17.4
Phone or utilities fraud 12.5
Bank fraud (2) 8.2
Attempted identity theft 4.8
Employment-related fraud 4.8
Loan fraud 4.4
Other identity theft 21.8

52. What can multinational do to
minimize threats to e-commerce
security???
 At national level UK and Japan
setting up computer security
 Taiwan and South Korea increased
the punishment of cyber crime
 US and Germany have been acting in
addressing cyber security issues in a
proactive manners

53. In addition,
Take appropriate measures for internet
security
 Confidentiality
 Availability
 Integrity
 authentication

55. Thank
You