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The Top Ten Issues in E-Strategy

By Francisco Cunningham,2014-01-05 09:48
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The Top Ten Issues in E-Strategy

     The Top Ten Issues in E-Strategy

     工商管理 >> 电子商务 >> 论文正文?The Top Ten Issues in

    E-Strategy

     The Top Ten Issues in E-Strategy

     作者;网友投稿 发布时间;2004-8-31

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     The Top Ten Issues in E-Strategy

     Introduction

     The Internet is changing the way customers, suppliers, and companies interact to conduct business, communicate, and collaborate. It also changes the way we interact, learn, communicate and negotiate. At the same time, new consumer patterns are emerging due to the Internet and e-commerce. An increasing number of enterprises are using the Internet in order to get higher added value to their business and keep their competitiveness in the global market. More and more companies are trying to use the Internet to develop e-Strategies.

     Let’s look at the definition of e-strategies at first:

     E-Strategy prioritizes business initiatives and defines key performance indicators for developing e-business systems.[1]

     E-Strategy is “the use of Web-based applications and services to

    select and segment customers, develop and execute marketing campaigns, and distribute leads to the right sales channels.”1

     E-Strategy “provides the broad framework for the transformation” from a business to an e-business. It provides vision, goals and objectives, and the map upon which a company can performs the transformation.1

     All in all, e-Strategy is the use of the Internet, automated systems and email to develop methods for carrying out strategic initiatives and developing new markets or more business opportunities. 1

     There are lots of important issues in building a successful e-Strategy. In this paper I will choose the following top ten issues to discuss:

     1. Privacy

     2. Security

     3. Tax

     4. Fraud

     5. Globalization & Localization

     6. Bricks-and-Clicks

     7. Customer Relationship Management & Personalization

     8. Value chain

     9. Legal issue

     10. Internet marketing Strategy

     1. Privacy

     The issue of privacy is one of the most debated and hottest topics in the online environment and e-strategy today. Privacy not only affects

    consumers’ online confidence and trust, but also may cause potential legal and ethical problems. If consumers are not satisfied with e-privacy and businesses’ online practices, it is hard to imagine that e-commerce

    will have a prosperous future.

     In fact, according to a recent poll... Americans said they were more concerned about a loss of personal privacy online than they were about health care and crime. And according to research conducted for The DMA by Wirthlin Worldwide, nearly 60 percent of shoppers said legislation would be needed to make businesses observe good privacy policies. [2]

     The Internet industry is built on trust between businesses and their customers and privacy is the number one ingredient in trust. Unless they effectively address the issue of privacy, Internet companies will lose the trust, and the business, of their customers.[3]

     The World Wide Web is an enormous easily accessible source of information and databases that provides easy access to a number of people, companies, agencies and many other sources. This brings about concerns about privacy on the Internet. Consumer privacy has received substantial attention as we move into the new age of online business environment. The growth of the Internet has developed many new concerns for the future about protecting the privacy of the consumers.

     New technologies, increasing data collection, changing market trends and the new global market place for e-commerce are contributing

    to the increasingly important role of information in the global economy. As such information particularly has become a valuable commodity that can bring jobs, businesses and customer services. Hence, these factors have created a mounting pressure to collect, hold, process and use personal data, more than before. These factors also have reduced the level of privacy and consumer confidence is lacking in such environment.[4]

     In some cases, the companies’ failure to disclose the basic

    technology and data-gather characteristics of their websites has become the focus of major concerns. The users feel that the website providers are being “sneaky” in gathering the data behind the scenes without informing

    them of what is going on. For the companies involved, this suggestion that they are involved in such practices of surveillance and unauthorized purposes can create a serious reputation issue and discourage web users from visiting their sites. For future solutions to these concerns regarding marketing and privacy issues, several technical strategies have been developed to help prevent or guard against not knowing or identifying websites and users called data magnets. They include cookies, web beacons (or web bugs, which are inserted in the software code of websites and commercial emails to track visits and movements and build profiles), data aggregation (collection of personal email addresses and transmission of third party sales or marketing), personalization and software downloads and data sharing between community sites. All these

    strategies have given rise to the protection of privacy issues for the future of e-commerce. We must determine at what level or beyond to proceed on this course for the protection of consumer privacy in our new world of online technology. As online users, we need to look for the “privacy policy” of the online services. Most Internet Service Providers (ISP) has adopted privacy policies that they post on their web sites and other user documentation. When you surf the web, look for the privacy policies posted on the web sites you visit. Also, look for the privacy “seal” such as TRUSTe or BBBOnline. If you are not satisfied with the policy, or if there is no policy or seal logo posted, you should avoid using the site.

     Consumers have several choices that are available to them in helping to protect their own privacy when using or conducting on-line activity. They can choose to opt-out of subscriber or data gathering information segments while on-line. Many websites will offer domain registration or semi-private activities or services that you can click on to accept or decline giving any additional information or continuing to proceeds through the offered services during a transaction or use of the website. The customer or consumer can choose to leave or back out of the site.

     The future is uncertain as to the laws and governmental legislation concerning the privacy and the Internet. There is great debate in several states now concerning the issues of privacy on the World Wide Web. Some states have already adopted laws and are trying to pass legislation

    to adapt to the new technology of the Internet and web users. Such states include Utah, where they have passed laws concerning digital signature laws. This law created opportunities for banks and other institutions to act as the repositories of digital signatures allowing individuals and businesses to send and receive confidential information over the web, as well as conduct binding contractual business transactions.

     2. Security

     The growth of e-commerce has created the potential for new risks and abuses. Customers routinely buy products, trade investments, and bank online using personal information such as credit card, Social Security, and account numbers. A December 1999 study by Meridien Research found that online credit card fraud cost merchants more than $400 million per year. Meridien estimates this could rise to $60 billion annually by 2005. [5]

     After nearly a millennium of paper-based, pen-signed commercial transactions, e-commerce is revolutionizing the pace of business and generating enormous convenience, cost savings and productivity gains. Moving to an electronic transactions model offers spectacular cost benefits, especially in the financial industry. However, it does raise concerns about security, which must be soundly addressed to assure corporate immunity to some of the hazards that are inherent in

e-commerce. [6]

     Most businesses have good intentions for information security, but e-commerce businesses face the huge challenge of protecting themselves from threats ranging from viruses and Trojan horses to web page defacing, distributed denial of services, and even disgruntled employees.[7] Security needs to be a core business competency for e-strategy, and it is a prime enabler of e-business and you cannot have e-commerce without security.

     Concerns over the security of online transactions prevent many from engaging in e-commerce. The tradeoff between performance and security is becoming easier to swallow as security technology becomes increasingly integrated with enterprise systems.[8] There are several techniques to secure e-commerce website, such as PKI, encryption, digital signature, and public key. [9] Some strategies of security are as follows:7

     Profiling the assets and identifying who needs access, then determining what level or tier of security is appropriate

     Identifying the level of risk that the company is willing to take and managing the security strategy based on the risk assessment

     Actively governing the strategy with effective policies and procedures that reflect the company's business strategy and accommodate external drivers such as international standards and e-business guidelines

     Revisiting the strategy as technology and business environment dynamics evolve.

     3. Tax

     E-commerce creates some challenges to tax systems that were designed with a traditional retail model. There are several key reasons why e-commerce raises tax issues.

     The first one is location. Existing tax systems tend to determine tax consequences based on where the taxpayer is physically located. The e-commerce model enables businesses to operate with very few physical locations. An online vendor can easily sell to customers throughout the world from a single physical location.

     The second reason is Nature of Products. E-commerce allows for some types of products, such as newspapers and music CDs, to be delivered in digitized (intangible) form, rather than in tangible form. Digitized products raise issues at the state level as to whether sales tax applies and in which state income is generated for state income tax purposes.

     Thirdly, the Internet has allowed for New Marketing Techniques of selling and buying goods and services. For example, individuals can offer their unwanted items to a worldwide group of potential buyers via auction sites, such as E-Bay. When buyers interact directly with a foreign manufacturer, rather than a domestic retailer, the excise tax may go

uncollected.

     Fourthly, Some of the New Assets created by commercial use of the Internet are domain names (URLs) and web sites. For income tax purposes, issues exist as to how to treat the costs of creating or acquiring such assets, as well as the characterization of any gain or loss generated upon disposition of the asset. Sellers of such assets may face uncertainty in the law as to how to characterize the gain or loss generated from the disposition (capital or ordinary).

     Fifthly, The Remote Workforce of an Internet company may be scattered throughout a state or country, rather than working in a single work location together. This can raise issues as to whether the presence of the employee in a particular state creates tax obligations for the employer in that state.

     At last, because of the Nature of Transactions, the Internet allows for paperless transactions and the potential for the use of electronic cash. This raises administrative concerns for the Internal Revenue Service as to whether transactions were properly reported, whether an audit trail exists, and whether new reporting rules are needed. [10]

     For the past several years, for not taxing the Internet, even though online sales still account for only about 1 percent of all retail purchases in the United States, a recent University of Tennessee study argued that states lost US$13 billion in tax revenue to online sales in 2000. [11]

    Vendors selling goods and services online should be treated similarly to “Main Street” vendors selling the same goods and services. With many state governments facing record budget deficits, pressure to levy sales tax online is likely to increase. [12]

     In order to tax e-commerce correctly, several strategies can be adopted as follows:[13]

     1. The tax rules should clearly specify when the tax is to be paid, how it is to be paid, and how the amount to be paid is to be determined. Lack of certainty in the tax system reduces the confidence taxpayers.

     2. A tax should be due at a time that is most convenient for the taxpayer.

     3. The costs to collect a tax should be kept to a minimum for both the government and taxpayers.

     4. The tax law should be simple so that taxpayers can understand the rules and comply with them correctly and in a cost-efficient manner.

     5. The effect of the tax law on a taxpayer’s decisions as to how to carry out a particular transaction or whether to engage in a transaction should be kept to a minimum.

     6. The tax system should not impede or reduce the productive capacity of the economy.

     7. Taxpayers should know that a tax exists and how and when it is imposed upon them and others.

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