Question

 

1. Discuss the following statement with reference to how an organization should react to the Internet. ‘Is the Internet a typhoon force or a light breeze’. Can these forces fundamentally alter your business model?’.

2. Suggest how an organization can evaluate the impact of the Internet on its business. Moreover, examine this in terms of the current pandemic and lockdowns.

3. What are the main barriers to adoption of e-commerce by consumers and suggest how a company could counter these forces.

Answer 1

1:-

This statement is useful in that it indicates the impact of the Internet will vary according to the type of business that an organization is in. Students should look at a range of industries from those where the impact is high, for example, media and information services to low, for example, retailer. The ES test in Chapter 8 (p435) can be used for consumer industries. Examples can be taken from those that have reacted, for example, easyJet or General Electric in comparison to those that have not. The analogy may also be apt since the Internet phenomenon may be transitory. This can also be considered.

2:-

Situation analysis should concentrate on the micro- environment (Figure 2.1) including demand for online services from customers. Services should be considered across the buying cycle from pre-purchase (supplier and product selection), purchase and post-purchase support. Demand levels can be assessed by reviewing figures of percentage of customers with access and those who are prepared to use it for information gathering and purchase. Competitor activity can also be benchmarked. Macro-environment SLEPT factors should also be reviewed, but they are not the main thrust of the question.

Assessment of whether the impact is transitory or permanent can be done through developing projections of the online revenue and promotion contribution.

3:-

Security fears fraudulent use of credit cards.

Privacy fears personal data held by companies or criminals.

Cost of access devices and online costs.

Lack of perceived need.

Education and reassurance via the web site and offline communications can counter these.