Key Issues in International Commerce

Question:

• Identify the advantages and disadvantages of taking your small business online by performing a SWOT analysis. Include 2-4 items in each category.

• Because the Internet connects computers all over the world, any business that engages in e-Commerce instantly becomes an international business. The key issues that any company faces when it conducts international commerce include trust, culture, language, government, and infrastructure. Explain how you would address each of these issues.

• Businesses that operate on the Web must comply with the same laws and regulations that govern the operations of all businesses, but they face 2 additional complicating factors as they try to comply with the law. First, the Web extends a company’s reach beyond traditional boundaries. Second, the Web increases the speed and efficiency of business communications. Explain how you would overcome these complicating factors that come with e-Commerce in order to comply with the law.

• Law enforcement agencies have difficulty combating many types of online crime. Describe 2 online crimes prevalent in e-Commerce and what you would do to prevent these crimes.

The innovations and advancements in technology has given rise to an era of online retailing and Electronic or e-commerce which is helping business houses to reach a greater number of customers easily and successfully. When it comes to fashion in clothing it’s no secret that online store are a huge hit. According to researches online sales of apparel are the fastest growing segment with 20% sales each year. The sales are expected to reach $ 48.6 billion this year according to eMarketer (Staff, 2013).

Our Company JSB Apparels which is located at Jersey Shore Boardwalk is a young fashion brand which wants to broaden its scale and target the American market through e-commerce tactics by opening its new online store (The Business of Fashion, 2013). Hence the most important part is assessing the e-commerce market and positioning the brand in the market (Laudon & Traver, 2012).

An analysis of the market is done to understand the advantages and disadvantages the online store could face in the e-commerce sector.

Strengths-

JSB Apparels are already a locally established clothing store which is trying to have a national and global reach

There is no need to employ a large number staff for maintain the store as every activity will be taking place online

It will be able to reach its customers directly bypassing wholesales hence will capture the entire profit margin of 20-30 percent

It is cost effective as apart from designing the website, less cost is incurred while marketing and advertising products online

Weakness-

There is lack of brand recognition and it’s very difficult to let the world know of the availability

People are not able to touch, feel the product and might not feel to inclined to buy the products

The brand might not gain much advantage in competition with much more popular and experienced brands

Opportunities-

The brand is exposed to a large scale of people who were previously unaware of the store and this in turn might also increase the sales in the physical store

Compliance with regulations in E-commerce

It’s easy to offer attractive deals, make easy advertising changes to pull customers

Its formal yet easy to communicate with the customers and there is option of easy return, cancellation and changes and the customer service is mandatory and efficient

Introduce new innovations, designs and broaden the reach everyday

Threats-

There is an increasing amount of cyber crimes which makes the whole process doubtful and very mush security oriented

There is a larger competition as there are little barriers in competing

Issues related to product qualities is a constant worry

Well established online stores might try to buy the site.

The internet marketing and the e-commerce scenario is a worldwide phenomenon. The Web offers a number of opportunities for taking a brand in the international market by eliminating the barriers of time and space. But there are few issues like trust, language, culture, government or legal and infrastructural barriers which must be dealt with when marketing ones business internationally. The idea is to identify and address the issues in finding a solution that will help the company to overcome the barriers and provide the best of experience to the customers irrespective of the differences (Kamel, 2008).

Trust- the most difficult challenges faced by online stores is gaining trust of potential and new customers. Everyone appreciates the convenience but they hesitate to buy stuffs from unknown brands. They are doubtful of the quality and cost that will be incurred while shipping hence it is of utmost importance that the company is perceived as trustworthy (Eha, 2014).

This issue could be mitigated by incorporating certain features to the website like high quality images and detailed descriptions of products, shipping address, customer reviews and testimonials, verified signs from McAfee Secure or VeriSign and instant replies to customer queries which will make the customers believe.

Cultural- there is a cultural difference in all the countries, the types of clothes, the cuts and designs, seasons vary and so do the ways people shop, the offers, festivities and celebrations call for shopping spurs. The websites must adjust themselves in such a manner that a particular market is left out and sales opportunities are missed. Survey of the market and redesigning the website and offers according to cultural grounds is a must (Siebel, 2001).

Language- research has shown that people are more oriented to buy from a website in their native language even if they can converse in English. The websites should provide a localized feel and hence translating the sites according to the place would be effective in crossing this barrier.

Government/Legal- the local standards, government regulations and legal issues are great barriers that are to be covered by the web stores. Recognition of electronic contracts, consumer protection jurisdiction, and dispute resolution are matters that are too handled primarily. The store must follow the industry standards set by the government. Often there are barriers to running a site, the amount of business it will be able to do, the laws and regulations play a vital role in deciding the amount of business the company will be successful of doing. Hence it is required to take advice from solicitors and professionals and abide by or undertake all the regulatory norms and principles to avoid any kind of legal issues and resolve discrepancies.

Preventing Cyber Crime in E-commerce

Infrastructural- the limited bandwidth, technical issues related to language and input methods, connection costs and support infrastructure are costly and tedious. There are a number of loopholes in the system which might lead to internet crimes and threats should be resolved first. The maintenance of the infrastructure, the technological limitations and databases and the Customer relationship management is crucial to bypass the infrastructural barriers by providing an easy access to products and information under one roof.

The web stores are governed by the same laws that define the physical businesses. But two additional factors exist which must comply with the legal requirements (Schneider & Perry, 2000).

Unlike the legal boundaries like passport and visa the e-commerce are free to attract customers and continue business in the international market. In some countries specific products are illegal to be sold. It also gives rise to some issues like two companies with same name or ambiguous source of the company might lead to issues. Hence it is important that the companies.

Hence the companies are governed by contracts, and copyright control. Our company will comply with the national standards by issuing such a copyright and contracts issued that it will abide by the laws.

The speed and efficiency has lead to number adverse effects such as offering large number of discounts, name changing and stealing. But the positive side to it is that it’s easy to identify and notice any kind of violations of law and hence the easier it is to rectify it (Kelly & Rowland, 2000).

One of the most crucial factors that must kept in mind and given importance to be the increasing number of online crimes which affects the e-commerce business (Edition.cnn.com, 2015). The owners must be aware of the loopholes and symptoms and take necessary precautions to stops these. Two greatest online crimes are

It is the practice of using an internet domain name in order to make profit using the trademark or goodwill of another company. Some cyber squatters also pit up derogatory remarks. It is done in bad faith and companies must resolve issues by incorporating Uniform domain Name Resolution Policy. Anticybersquatting Consumer Protection Act (1999) under The Lanham (Trademark) Act (15 U.S.C) provides the protection required to protect individuals with trademarked names against cyber squatting. Our company must avail of these laws and register the trademark under a legal domain name in order to prevent such acts of crime.

It is the most common practice where hackers tap into the system and derive important and hidden information for unfaithful uses. In the e-commerce sector hackers crack the codes and derive the information like account details or messes up the online payment process and transfer the money elsewhere, it is prevalent and harms a company’s image and it loses sales.

The prevention methods are to use a secure platform and connection with strong passwords. Sensitive data should not be stored and address and card verification system is a must (Schiff, 2015). Also setting up of alerts, providing tracking numbers and monitoring the site regularly are ways to prevent the crime of hacking.

References

Edition.cnn.com,. (2015). Cyber crime poses threat to e-commerce – CNN.com. Retrieved 2 July 2015, from https://edition.cnn.com/2009/TECH/12/13/cybercrime.2009.review/

Eha, B. (2014). How to Get Customers to Trust Your Ecommerce Business (Infographic). Entrepreneur. Retrieved 2 July 2015, from https://www.entrepreneur.com/article/231437

Kamel, M. (2008). International E-Commerce. Concepts, Methodologies, Tools, And Applications, 16-30. doi:10.4018/978-1-59904-943-4.ch003

Kelly, E., & Rowland, H. (2000). Ethical and online privacy issues in electronic commerce. Business Horizons, 43(3), 3-12. doi:10.1016/s0007-6813(00)89195-8

Laudon, K., & Traver, C. (2012). E-commerce. Boston, MA: Pearson.

Schiff, J. (2015). 15 Ways to Protect Your Ecommerce Site From Hacking and Fraud. CIO. Retrieved 2 July 2015, from https://www.cio.com/article/2384809/e-commerce/15-ways-to-protect-your-ecommerce-site-from-hacking-and-fraud.html

Schneider, G., & Perry, J. (2000). Electronic commerce. Cambridge, Mass.: Course Technology.

Siebel, T. (2001). Taking care of ebusiness. New York: Currency/Doubleday.

Staff, E. (2013). What’s Fashionable in Apparel E-Commerce. Entrepreneur. Retrieved 2 July 2015, from https://www.entrepreneur.com/article/227936

The Business of Fashion,. (2013). The Basics | Part 9 — E-Commerce. Retrieved 2 July 2015, from https://www.businessoffashion.com/articles/basics/the-basics-part-9-e-commerce