Chapter 12, Globalization

Outline
12.1 Introduction
12.2 Regulating the Internet on an International Level
12.2.1 Accounting for Legal and Cultural Differences
12.2.2 International Internet Regulations
12.3 Creating an e-Business with International Capabilities
12.3.1 Choosing an International Market
12.3.2 Obtaining a Local Internet Address
12.3.3 Internationalization and Localization
12.3.4 Partnering and Hiring
12.3.5 Payment Systems
12.3.6 Distribution
12.3.7 Legal and Taxation Systems
12.3.8 Promotions
12.4 Canada
12.5 Mexico, Central and South America
12.6 Europe

 2001 Prentice Hall, Inc. All rights reserved.

 Chapter 12, Globalization
Outline
12.7 Africa
12.8 Middle East
12.9 Asia
12.10 Australia
12.11 Future of Global e-Business

 2001 Prentice Hall, Inc. All rights reserved.

 12.1 Introduction
• Faster international communication speeds
• Unprecedented ability to conduct business
globally
• Larger customer bases
• International laws
• Cultural differences

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 12.2 Regulating the Internet on a
National Level
• Poses challenges to a world composed of different
cultures, attitudes, languages, codes of conduct
and government authorities
• Users can be exposed to products, services or
information that are considered offensive or that
are illegal in their countries of residence
• Application of national laws to cyberspace

 2001 Prentice Hall, Inc. All rights reserved.

 12.2.1 Accounting for Legal and Cultural
Differences
• Government regulation
– Affects the growth of the Internet
– Has the potential to cause major problems as the volume of
international e-business transactions increases
• International organizations must decide when
national governments can apply or create laws that
will affect parties and transactions that fall
partially or completely outside their jurisdiction

 2001 Prentice Hall, Inc. All rights reserved.

 12.2.2 International Internet Regulations
• Businesses and legal experts are calling for the
creation of worldwide e-commerce laws and
standards
• Address cybercrimes such as copyright
infringement, cybersquatting, cyber terrorism,
fraud, hacking and computer viruses
• World Intellectual Property Organization (WIPO)
– A United Nations’ organization that created an international
forum for regulating Internet issues
• The Organization for Economic Cooperation and
Development

– A forum for 29 member countries to communicate ideas,

share experiences and develop policy
 2001 Prentice Hall, Inc. All rights reserved.
 12.2.2 International Internet Regulations
• European Union Directive on Data Protection
– An agreement among its members on the regulations that
apply to information exchange
– Mandates that personal information be kept current and used
in a lawful manner for its designated purpose
• Extensive international regulation may conflict
with national laws and impede the growth of e-
business

 2001 Prentice Hall, Inc. All rights reserved.

 12.2.2 International Internet Regulations
• Internet Content Summit (2000)
– “Self-regulation of Internet Content”
– Report favors self-rating and filtering over third-party
regulation
– Suggests that Web content providers rate their sites, that
filters for possibly offensive content be made available and
that a network of national hotlines be established so that
Internet users can register complaints about site content

 2001 Prentice Hall, Inc. All rights reserved.

 12.3 Creating an e-Business with Global
Capabilities
• Opportunity for expansion
• An ambitious and expensive investment that does
not guarantee increased revenue
• Potential global businesses must review expected
revenues vs. expected cost
• Linguistic and cultural barriers

 2001 Prentice Hall, Inc. All rights reserved.

 12.3.1 Choosing an International Market
• Focus time and money in one or two key markets
initially
• Research competitors and visitors in foreign
markets
• When choosing an international market consider:
– The number of people online
– Internet usage growth rates
– Per capita income
– The consumers’ expectations of your business

 2001 Prentice Hall, Inc. All rights reserved.

 12.3.1 Choosing an International Market

Type of information found at Global Reach’s

Web site. (Courtesy of Global Reach.)

 2001 Prentice Hall, Inc. All rights reserved.

 12.3.2 Obtaining a Local Internet
Address
• .com domain name is the most universally
recognized address on the Web
• Domain-name registration in foreign countries is
often complex
• May require owning a trademark or incorporating
your business in the foreign country
• Organizations offering domain name registration
services:
– Internet Assigned Numbers Authority (IANA)
– NetNames

 2001 Prentice Hall, Inc. All rights reserved.

 12.3.3 Internationalization and
Localization
• Internationalization
– Restructuring the software used by your e-business so that it
can process foreign languages, currencies, date formats and
other variations involved in conducting business globally
• Localization
– Includes the translation and cultural adaptation of your site’s
content and presentation
• Online translation services
– Enterprise Translation Server
– Alis Technologies
– Logos
– AltaVista’s Babelfish

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 12.3.3 Internationalization and
Localization
• Online translators are not 100 percent reliable
• Consider the context of the message in a foreign
culture
• Translate META tags and text within graphic
images
• Adaptation of site layout to accommodate
translations
• Color scheme and logo translation
• Conversion rates

 2001 Prentice Hall, Inc. All rights reserved.

 12.3.3 Internationalization and
Localization
• Consider downloading capabilities in foreign
markets
• Global content
– Refers to information and design that requires translation,
but is essentially the same for all cultures
• Regional content
– Product and marketing information that is usually written
once in English and then adapted for various markets
• Local content
– Material on specific regional pages that appears only on that
Web site, such as regional promotions, pricing, delivery and
store or office locations

 2001 Prentice Hall, Inc. All rights reserved.

 12.3.3 Internationalization and
Localization

eBay’s Chinatown site uses a red background signifying celebrationand good

luck. (These materials have been reproduced with the permission of eBay Inc.
COPYRIGHT EBAY INC. All Rights Reserved.
 2001 Prentice Hall, Inc. All rights reserved.
 12.3.3 Internationalization and
Localization

Logos Dictionary query page with sample query. (Courtesy of Logos

Group, Italy.)
 2001 Prentice Hall, Inc. All rights reserved.
 12.3.3 Internationalization and
Localization

Logos query results page with sample query result. (Courtesy of Logos
Group, Italy.)
 2001 Prentice Hall, Inc. All rights reserved.
 12.3.3 Internationalization and
Localization

Aquarius.net translator search. (Courtesy of

Language Networks, BV.)
 2001 Prentice Hall, Inc. All rights reserved.
 12.3.3 Internationalization and
Localization

Various America Online icons. (AOL screenshots copyright © 2000 America

Online Inc. Used with permission.)

 2001 Prentice Hall, Inc. All rights reserved.

 12.3.3 Internationalization and
Localization

First Tuesday provides jobs in the European Information

Technology market. (Courtesy of First Tuesday, LTD.)
 2001 Prentice Hall, Inc. All rights reserved.
 12.3.4 Partnering and Hiring
• Choosing a local partner in a foreign market offers
several benefits
– Physical presence in the target country
– A recognized brand
– Extensive knowledge of the target market
– Localized content and customer service

 2001 Prentice Hall, Inc. All rights reserved.

 12.3.5 Payment Systems
• Offer alternatives to credit-card payment
– In many countries, credit cards are far less common than in
the United States
– In Europe, cash-on-delivery is a common form of payment
• Giros
– Wire transfers between bank accounts
• Direct Debit
– e-Payment service from an American company called
EuroDebit
– Enables electronic debits from European customers’ bank
accounts to be sent to merchants’ bank accounts for a small
fee

 2001 Prentice Hall, Inc. All rights reserved.

 12.3.6 Distribution
• Shipping from a local distribution center
• National postal services
– British Post Office
– Deutsche Post
• International shipping and handling companies
– UPS
– Federal Express
– The United States Postal Service
• Businesses must consider the additional time
needed for packages to pass through customs

 2001 Prentice Hall, Inc. All rights reserved.

 12.3.7 Legal and Taxation Systems
• Laws may vary by country, state or region
• Companies that wish to buy or sell products in the
global market must obey both the export laws of
their own country and the import laws of the
country in which they wish to do business
• Government restrictions on international trade
• International tax law resources
– Taxware International, Inc.
– myCustoms
– World Tariff
– Vastera
– ClearCross

 2001 Prentice Hall, Inc. All rights reserved.

 12.3.8 Promotions
• Investigate the interpretation of your company and
product names in the language or languages in
which you are advertising
• Research acceptable marketing tactics
• Choose an appropriate medium for reaching target
audience
• Evaluate the success of your campaign
– MMXI
– NetValue
– ACNielsen

 2001 Prentice Hall, Inc. All rights reserved.

 12.4 Canada
• Increased amount of time spent online
• Addressing the French and English speaking
populations
• U.S. and Canadian presence
– eToys
– Sympatico-Lycos portal
– America Online
– HomeGrocer.com
– Petopia.com
– Book4golf.com
• Ahead of U.S. in the development of wireless
technology

 2001 Prentice Hall, Inc. All rights reserved.

 12.5 Mexico and Central and South
America
• Fastest growth rate of Internet usage in the world
• Will generate opportunities for entrepreneurs and
workers during the coming years
• Relatively high cost of computer equipment
• High cost of communication media
• Free access is a growing trend
• Access through the school systems is on the rise

 2001 Prentice Hall, Inc. All rights reserved.

 12.6 Europe
• Hailed by many as the next Internet and e-
commerce frontier
• Much of the needed infrastructure is in place
• Many European countries have taken steps to
make their national stock exchanges more e-
business friendly
• High cost-per-minute of local phone calls in most
parts of Europe
• Markets should be strategically chosen within
Europe, and one or more localized Web sites
should be created to service these regions
 2001 Prentice Hall, Inc. All rights reserved.
 12.7 Africa
• Internet access in Africa is rising, but its growth is
challenged by regulation and limited infrastructure
• African Information Society Initiative
– Created in 1996
– Adopted to build national communication standards
– Reduce the number of regulations limiting the development
of communications
– Increase accessibility, particularly in rural areas
– Provide human resources in the development and
implementation of Internet access

 2001 Prentice Hall, Inc. All rights reserved.

 12.7 Africa

Africa Online Ghana Site. (Courtesy of Africa Online, Inc.)

 2001 Prentice Hall, Inc. All rights reserved.

 12.8 Middle East
• Countries such as Egypt, Kuwait, Israel, Jordan
and the United Arab Emirates have already begun
growing their Web presence
• Iran and Saudi Arabia are extending full Internet
capabilities to government institutions and
educational facilities
• Libya, Syria and Iraq have yet to establish Internet
access
• Most Internet access in the Middle East is
government regulated

 2001 Prentice Hall, Inc. All rights reserved.

 12.9 Asia
• Internet access in China is limited
• Most Chinese and Japanese citizens do not own
credit cards, reducing the number of online
transactions
• Internet taxation is carefully monitored in China
• Fewer Japanese Internet users than American
users
• Wireless technology is advanced
• High levels of Internet regulation

 2001 Prentice Hall, Inc. All rights reserved.

 12.10 Australia
• Internet presents an opportunity for national
communication
• Currently among the most connected nations in
the world
• Australia’s Internet presence is largely designed to
accommodate the farming industry
• Connection costs are high in rural areas

 2001 Prentice Hall, Inc. All rights reserved.

 12.10 Australia

Australia’s InFARMation. (Courtesy of InFARMation.com.au.)

 2001 Prentice Hall, Inc. All rights reserved.

 12.11 Future of Global e-Commerce
• The Internet was initially an American medium
• The vast majority of Web sites catered to English-
speaking audiences
• E-businesses that do not accommodate
international users exclude as many as half their
potential visitors
• Using the Internet, businesses can communicate
quickly and efficiently with suppliers and
customers anywhere in the world

 2001 Prentice Hall, Inc. All rights reserved.