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Chapter 12

E-Commerce Strategy and LegalIssues

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Chapter 12 Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 1

Learning Objectives

1. Describe the strategic planning process2. Describe the purpose and content of a

business plan in e-commerce

3. Describe the need for justifying ECinvestments4. Explain privacy, free speech, and defamation

and their challenges

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E-Commerce Strategy

strategy A broad-based formula for how a businessis going to accomplish its mission, what itsgoals should be, and what plans andpolicies will be needed to carry out thosegoalse-commerce strategy (e-strategy)

The formulation and execution of a vision ofhow a new or existing company intends todo business electronically

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E-Commerce Strategy

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E-Commerce Strategic Planning

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E-Commerce Strategic Planning

strategy initiationInitial phase in which theorganization examinesitself and itsenvironmentstrategy formulationDevelopment ofstrategies to exploitopportunities andmanage threats in the

business environment inlight of corporatestrengths andweaknesses

strategy implementationDevelopment of detailed,short-term plans forcarrying out the projectsagreed in strategy

strategy assessmentContinuous evaluation ofprogress toward theorganizations strategicgoals, resulting incorrective action and, ifnecessary, strategyreformulation

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E-Commerce Strategy Outputs

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Justification & Cost-Benefit Analysis

Companies need to justify their ECinvestments as part of strategyformulation

Compete for funding with other businessprojectsGovernance requires formal evaluation

of all spending proposalsEstablish benefits for later evaluation ofsuccess

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Difficulties in Justifying EC

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Determining EC Success

Product CharacteristicsDigital products have quick and cheap fulfillmentPriceProduct customisation

Industry CharacteristicsThe need for intermediariesCan you say Oligopoly?

Seller CharacteristicsInterest in competing on lower margins at highervolumes

Consumer CharacteristicsServicing impulse, patient and analytical buyers

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Legal and Regulatory Issues

privacyThe right to be left alone and free ofunreasonable personal intrusionsintellectual propertyCreations of the mind, such as

inventions, literary and artistic works,and symbols, names, images, anddesigns, used in commerce

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Interpretation of the Law

Free Speech Online versus ChildProtectionPolitical Spam versus Political Fund-Raising

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Personal and Property Rights

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Intellectual Property Law

copyright An exclusive right of the author or creator ofa book, movie, musical composition, orother artistic property to print, copy, sell,license, distribute, transform to anothermedium, translate, record, perform, orotherwise use.infringementUse of the work without permission orcontracting for payment of a royalty.

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Intellectual Property Law

digital rights management (DRM) An umbrella term for any of severalarrangements that allow a vendor ofcontent in electronic form to control thematerial and restrict its usage.fair use

The legal use of copyrighted material fornoncommercial purposes without payingroyalties or getting permission.

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Intellectual Property Law

patent A document that grants the holderexclusive rights to an invention for afixed number of years.trademark

A symbol used by businesses to identify

their goods and services; governmentregistration of the trademark confersexclusive legal right to its use.

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Privacy, Free Speech, andDefamation

opt outBusiness practice that gives consumersthe opportunity to refuse sharinginformation about themselves.opt in

Agreement that requires computer usersto take specific steps to allow thecollection of personal information.

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Free Speech

Web Site RegistrationCookies

Spyware and Similar MethodsRFIDs Threat to PrivacyPrivacy of Employees

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Privacy Protection

Notice or awarenessChoice or consent

Access or participationIntegrity or securityEnforcement or redress

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USA PATRIOT Act 2001

U niting and S trengthening A merica byP roviding A ppropriate T ools to Interceptand O bstruct T errorism Act

Passed in October 2001, in the aftermathof the September 11 terrorist attacksIts intent is to give law enforcement

agencies broader range in their efforts toprotect the public

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Summary

1. The strategic planning process.2. The need for EC justification.

3. Privacy, free speech, and defamationand their challenges.

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