Global Ecommerce and Web 2'0

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Global E-commerce and Web 2.0
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Todays Class

• Global e-commerce
• Web 2.0 and user-generated content
• Social networking
• Blogs
• Wikis
• Syndicated services

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Global Players

• The Internet can have a major impact on 3
  categories of businesses
• Existing MNEs with operations in several
  countries
• Local businesses that plan to expand their
  operations internationally
• Virtual businesses with operations primarily on
  the Internet
• The majority of companies involved
  internationally have consisted of existing
  multinationals
• Several dotcoms have tried, but most have failed
• Local businesses have found it equally difficult
  to expand internationally using e-commerce

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MNEs

• The dominance of MNEs is expected given their
• International presence and infrastructure (and
  experience)
• International business partners
• Global brand names
• Financial and other resources
• Clear benefits in terms of lower coordination and
  transaction costs

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Global B2C

• B2C is extremely challenging internationally,
  especially for foreign firms (e.g., non-local
  firms)
• In general, firms face the same problems as
  domestic B2C such as physical service, security,
  and product suitability
• The criteria for successful B2C are very similar
  across a number of countries
• The relative importance of each criterion will
  differ significantly depending on the market
• Some of the differences are due to culture, but a
  lot are also due to the local infrastructure
• Global B2C also brings about a large number of
  additional challenges

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Challenges of Global B2C

• Higher distribution and logistics costs
• Unsuitable infrastructure including IT, payment
  mechanisms, and distribution
• Availability and efficiency of physical retail
  sector
• Cultural and language differences
• Trade barriers (import tariffs, etc.)
• Local taxation systems
• Lack of brand recognition (established local
  competitor)
• Privacy of customer information
• Foreignnessand many more

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Product Types and Countries
Videos
Music/CDs
Books
Sports equipment
Taylor Nelson Sofres Interactive
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Product Types and Countries
Furniture/ household furnishings
Electronics/ Electrical Goods
PC Hardware
PC Software
Taylor Nelson Sofres Interactive
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Product Types and Countries
Holidays/Leisure travel
Business travel
Tickets
Toiletries/cosmetics
Taylor Nelson Sofres Interactive
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The Dot-Coms

• Even successful dot-coms like Amazon have had
  difficulties competing internationally (most have
  failed)
• Services are often designed for home market and
  dont necessarily translate to foreign markets
• Local copy-cats have often established a presence
  before the dot-com could expand internationally
  (facilitated by low entry barriers)
• Most underestimated the challenges of
  international expansion (primarily due to a lack
  of managerial skills)
• The strategies have varied from wholly-owned
  ventures to joint ventures to strategic
  partnerships to acquisitions
• Some dot-coms have used all of the above

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AmazonLimited Expansion
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Much Broader Coverage for Yahoo
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What is Web 2.0?

• The Web 2.0 revolution puts people first
• Web 2.0 is about allowing people to manipulate
  data, not just retrieve data
• Web 2.0 is about doing stuff on the Web that
  can't done in any other medium
• Web 2.0 is about connections
• Web 2.0 takes broadband and Moore's Law for
  granted
• Web 2.0 is about data abstraction

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Web 2.0The Main Technologies and Activities

• Social networking
• Blogs
• Wikis
• Subscription services (RSS)

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Social Networking Addiction?
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Social Networking

• Social networking has evolved rapidly in the last
  few years to become one of the more popular
  on-line activities
• Sites such Myspace, Facebook, and Friendster are
  some of the most often visited on the Internet
• Social networking is built on the idea that
  social relationships have a structure
• Individuals are connected to each other directly
  or indirectly
• Popularized by notions such as six degrees of
  separation
• The Internet provides the ideal medium for
  connecting people
• Globally available
• Asynchronous
• Inexpensive
• Public

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MyspaceThe Dominant Property
http//au.myspace.com/
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YouTube
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Social Networking Sites

• Sites come in a variety of forms and are usually
  built around a community of interest
• Facebookcollege students
• LinkedInprofessionals
• Xangablogs
• Classmates.comhigh school graduates
• StudyBreakershigh school students
• Photobucketimages
• YouTubevideos
• Mobile technology is the next evolution with
  software such as
• Dodgeballconnects friends based on physical
  proximity
• Morcaconnects people by interest

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Social Networking Sites
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Social Networking Brands
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Social Network Analysis (SNA)

• SNA is the study of how individuals and groups
  communicate and relate to each other
• Highly relevant for organizationsboth internally
  and externally
• Network characteristics include
• Centralized, decentralized, distributed
• Hierarchical or horizontal
• Accessible or inaccessible
• Intensive or extensive
• Finite
• and many more
• Changing patterns in networks show how they form,
  grow, and wane
• Can predict evolution over time

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Social NetworksPatterns
Onion pattern
Butterfly pattern
Nexus pattern
Source Fisher, 2006
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Solar System Model
Source Morris, 2006
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The Impact of Social NetworkingThe Good Side

• Research suggests that
• The Internet helps build social capital
• The Internet supports social networks
• E-mail does not replace phone or face-to-face,
  but complements them
• E-mail is better for larger networks
• Internet users have larger social networks
• The Internet helps in connecting distant friends
  and relatives
• Real-world friendships are enhanced rather than
  replaced by the Internet (for teens)

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The Impact of Social NetworkingThe Bad Side

• Safety and privacy
• MySpace has dealt with several child predators
• YouTube has had several highly disturbing videos
  put on-line
• A student was expelled from a US university
  because of material he placed on the Facebook
  site
• And the list goes on and is growing rapidly
• The revenue problem
• Most social networking sites have a lot of
  problems making money
• Need to convert relationships into revenue
  sources
• Most sites are faddish and rely primarily on
  young users
• Difficult to determine why some sites are more
  popular than others

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The Emergence of Blogs

• Blogs (web Logs) have rapidly emerged as the
  primary mechanism to distribute user-generated
  content
• Used in both the commercial and non-commercial
  worlds
• Growth in the number of blogs and volume of
  information have been phenomenal
• Organizations must be careful about their use
• Potentially powerful marketing tool (but can be
  equally damaging)
• The Blogosphere includes all blogs from personal
  journals to serious journalism
• Top blogs can have millions of readers and be
  linked to thousands of other blogs

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Growth in Blogs
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Daily Increases in Blogs
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Volume of Posts per day
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Wikis

• Wikis have emerged as powerful collaboration
  tools within business (Intranets) and on the Web
• Enable collaborative Web sites where individuals
  can add and edit content dynamically
• Self-policing model whereby inaccurate content
  gets corrected by individual users
• User-friendly model that is easily accessible to
  all (even users with limited computer skills)
• Can be open to all (Wikepedia) or highly
  restricted (requires log on to read, add, or edit
  content)
• Most Wikis have change logs to monitor changes
  that have been made to content

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Wiki Use and Challenges

• Wikis are increasingly used in business as
  collaborative tools and for knowledge management
  purposes
• Especially powerful for project-based work that
  includes a number of individuals in different
  locations
• A large number of Wikis are available on the
  Internet for both public consumption and by
  specific interest groups
• The challenges focus on control over the quality
  and accuracy of content
• Large Wikis (Wikepedia) have a lot of users to
  police content yet errors are often found
• Most Wikis have registered users (with more
  functionalities for editing) to make policing
  more effective
• Along with Blogs, Wikis have become the major
  delivery mechanism for user-generated content

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The Biggest Wiki of Them All
www.wikipedia.org/
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Wikepedia in Australia
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Wikepedia Globally
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Syndication ServicesRSS

• Syndication services have become extremely
  popular to publish frequently updated content
• Used primarily for news, blogs, and podcasts
  (audio)
• Gives users the ability to get updated content
  automatically (checks and downloads)
• The primary technology is called RSS (Really
  Simple Syndication)
• The number of people using podcasts has grown
  dramatically with an estimated 10 million users
  in the US alone
• iTunes is one of the primary intermediaries for
  podcasts with hundreds of different podcasts
  available
• User-created podcasts (non-commercial) have grown
  in popularity recently adding further interaction
  to the Web 2.0 family

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Podcast Sites
www.podcast.net
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