Global E-Commerce Back to Table of Contents

The Impact of E-Commerce on International Trade Chapter 4 Global E-Commerce Section 4-1 Going Global Section 4-2 The Impact of E-Commerce on International Trade 2

Section 4-1 Why It’s Important Companies engaged in the global market enjoy the potential for increased revenues, but also face greater challenges in certain areas of their business. Ensuring respect for the various cultures involved is essential to success in the global arena. Section 4-1 3

Section 4-1 Key Terms globalization culture machine translation human translation Web globalists Section 4-1 4

The Global Marketplace Our connection to the global community is continual and instantaneous.   The Internet, along with all of its technological advances, plugs you into business, political, and cultural news from just about anywhere at any time. Section 4-1 5

Challenges of Global E-Commerce In the e-business world, globalization specifically refers to the process of adapting a business Web site to meet the needs of users in various countries. globalization enhancing connectivity and interdependence among the world’s markets and businesses Section 4-1 6

Challenges of Global E-Commerce As you think about expanding your business into a new country, you’ll also want to consider culture. culture a way of life that includes behaviors, beliefs, values, and generally accepted symbols for a group of people; culture can describe a religion, race, gender, or geographic region Section 4-1 7

Challenges of Global E-Commerce To prepare a Web site that does business globally, be aware of the following issues: Content Design Navigation Section 4-1 8

Challenges of Global E-Commerce E-commerce companies need to offer potential customers a selection of languages to increase their chances of selling their products and services. Section 4-1 9

Challenges of Global E-Commerce You can use machine translation or human translation to prepare your Web site for audiences who speak different languages. machine translation translating English text into another language using a software application human translation the use of a multilingual person to change one language into another Section 4-1 10

Challenges of Global E-Commerce Web globalists help companies to determine whether online selling in a global market will be profitable based on both their product and service lines and their organizational structure. Web globalists consultants who advise companies on how to design their Web sites and market and sell their products effectively to international audiences Section 4-1 11

Challenges of Global E-Commerce To conduct business globally, you not only have to deal with customers who speak a foreign language, you also have to use communications systems based in that language. Section 4-1 12

Challenges of Global E-Commerce Present the pricing of your products in local currencies and factor currency fluctuations into your e-business’s pricing structure. ¥ £ $ Global e-commerce success is dependent on the accuracy of foreign-currency conversions. Section 4-1 13

Section 4-1 Review 1. What is culture? How does culture impact the way businesses market and sell their products and services online? Describe two ways to translate Web site content into another language. Which factors should be considered when having a Web site translated? 2. Section 4.1 Review Culture describes a way of life that includes behaviors, beliefs, values, and generally accepted symbols for a group of people. As cultures differ greatly around the world, businesses must carefully consider the standards of each market before they attempt to sell their products and services worldwide. Sensitivity to local cultures ensures that a Web site’s wording or graphics do not offend potential customers. Translation is accomplished using either a translating machine or person who is trained in this skill. Machine translation is far less accurate and often fails to take slang or regional usage into account. When a business is conducting Web site translation, it must ensure that product descriptions are conveyed accurately, marketing lingo and word choices are appropriate, and the use of humor is effective and not offensive. Section 4-1 14

Section 4-1 Review 3. How can dealing with customers who speak a foreign language affect your ability to communicate with them over the Internet? Why is it important for companies doing business globally to become familiar with international regulations and import restrictions? 4. Section 4-1 Review They might also use servers, software applications, and character sets based in that language and that have to be translated. Many countries and regions have specific business rules and regulations for those doing business locally. Before a company embarks on trying to sell its products or services, it should be aware of tax laws as well as rules and regulations dictating the types of products that can be sold and packaging that can be used. Section 4-1 15

Section 4-2 Why It’s Important As businesses seek to sell goods in the global market, it is essential they be aware of the rules and regulations unique to this segment of e-commerce. Section 4-2 16

Section 4-2 Key Terms protectionists imports tariffs quotas export free trade online dispute resolution Section 4-2 17

Business Without Boundaries E-commerce has changed the boundaries of traditional commerce and impacted competition among companies. Section 4-2 18

Advantages and Disadvantages of Globalization Removing Geographic Barriers Advantages and Disadvantages of Globalization increased competition for all businesses expanded shopping alternatives to the online buyer greater opportunities for small firms to compete with large firms cross-cultural issues when marketing products to specific audience Section 4-2 19

The Changing Competitive Landscape Removing Geographic Barriers The Changing Competitive Landscape reduced need for intermediaries increased efficiency and larger markets lower costs consumers are in a stronger position to set prices greater competition among businesses online price competition affects bricks-and-mortar prices and profits Section 4-2 20

Removing Geographic Barriers As economies increasingly engage in international e-commerce, governments and individuals are examining their policies and positions on international trade. Section 4-2 21

Removing Geographic Barriers Protectionists believe that protecting U.S. jobs supports a more vibrant domestic economy. protectionists those who favor government protection for domestic producers Section 4-2 22

Removing Geographic Barriers To provide a competitive advantage to domestic producers, many governments impose tariffs on imports. tarrifs taxes or fees that various governments place on selected imported products imports goods that are manufactured in one country then shipped into another country for sale Section 4-2 23

Removing Geographic Barriers To provide a competitive advantage to domestic producers, many governments set quotas on imports. quotas prescribed quantities or maximum amounts of imports allowed into a country Section 4-2 24

Removing Geographic Barriers Many countries prefer domestic companies to produce enough products to meet local demand and then export the excess to foreign countries. export product sold in a country other than the one in which it was produced Section 4-2 25

Removing Geographic Barriers The World Trade Organization (WTO) is designed to monitor trade and help resolve disputes among its member countries. free trade trade among countries without barriers such as tariffs or quotas The main goal of the WTO is to promote global free trade. Section 4-2 26

Removing Geographic Barriers The world economy is becoming an information and communications technology (ICT)–based economy.   In developing nations, limited communications infrastructure to support Internet connectivity remains a barrier to growth. Section 4-2 27

Removing Geographic Barriers learn about national regulations. Before launching into a new international market… learn about regional regulations. learn about import restrictions. Section 4-2 28

Removing Geographic Barriers One of the main challenges facing international e-commerce is online dispute resolution (ODR). online dispute resolution (ODR) the process of resolving cross-border disputes in the electronic-business environment Section 4-2 29

Section 4-2 Review 1. How do the import and export of goods differ? What is the World Trade Organization, and what is its main goal? What potential barriers exist for developing countries’ entry into e-commerce? What is a protectionist? How might a protectionist in the U.S. feel about importing lumber from Canada and why? 2. 3. Section 4-2 Review Importing is the purchase or trade of goods by one country that are produced by another country. Exporting is the sale or trade of goods produced within a country to foreign nations. The World Trade Organization (WTO) is designed to monitor trade and help resolve disputes among its member countries. The main goal of the WTO is to promote global free trade. Limited communication infrastructures, inadequate funding, and unskilled workforces are the most common barriers to e-commerce development in developing countries. A protectionist favors government protection for domestic producers. A protectionist in the U.S. would be against importing lumber from Canada because it could take business away from U.S. lumber companies. 4. Section 4-2 30

Customizable Slide 31

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