Economic and competitive factors in E-environment

The economic health and competitive environment in different countries will determine the e-commerce potential of each. Managers developing e-commerce strategies in multinational companies will initially target the countries that are most developed in the use of the tech­nology. A comprehensive framework for assessing an ‘e-economy’ has been developed by Booz Allen Hamilton (2002). The report authors define the e-economy as

the dynamic system of interactions between a nation’s citizens, the businesses and government that capitalize upon online technology to achieve a social or economic good.

The framework is based upon four layers of environment, readiness, uptake and use, and impact, and three major stakeholder groups: citizens, businesses and government, as shown in Figure 4.11.

A review of how different governments have tried to improve the health of their e-economies is presented in the sections later in this chapter on political factors and e-government.

Knowledge of different economic conditions is also part of budgeting for revenue from different countries. In China there is regulation of foreign ownership of Internet portals and ISPs which could hamper development. User access to certain content is also restricted.

The trend towards globalization can arguably insulate a company to some extent from fluc­tuations in regional markets, but is, of course, no protection from a global recession. Managers can also study e-commerce in these leading countries to help predict future e-commerce trends in their own country.

We saw earlier in this chapter that there are wide variations in the level of use of the Internet in different continents and countries, particularly for consumer use.

Source: Dave Chaffey (2010), E-Business and E-Commerce Management: Strategy, Implementation and Practice, Prentice Hall (4th Edition).