Chapter 12 Globalization Outline 12 1 Introduction 12

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 12. 8 12. 9 12. 10 12. 11 Africa Middle East Asia Australia 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 2001 Prentice Hall, Inc. All rights reserved.

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 ebusiness 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) – Net. Names 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 Alta. Vista’s Babelfish 2001 Prentice Hall, Inc. All rights reserved.

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 e. Bay’s Chinatown site uses a red background signifying celebrationand good luck. (These materials have been reproduced with the permission of e. Bay 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 Euro. Debit – 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. my. Customs World Tariff Vastera Clear. Cross 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 – Net. Value – 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 – – – e. Toys Sympatico-Lycos portal America Online Home. Grocer. com Petopia. com Book 4 golf. 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 ecommerce frontier • Much of the needed infrastructure is in place • Many European countries have taken steps to make their national stock exchanges more ebusiness 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 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’s In. FARMation. (Courtesy of In. FARMation. 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 Englishspeaking 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.