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E-Environment

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The E-Environment

SLEPT analysis

Before creating business plans or when evaluating existing ones it is important to 'scan' the external environment. This takes the form of a SLEPT analysis, i.e. an investigation of the Social, Legal, Economic, Political, and Technological influences on a business. In addition it is also important to be aware of the actions of your competitors. These forces are continually in a state of change.
Social factors relate to pattern of behaviour, tastes, and lifestyles. A major component of this is a change in consumer behaviour resulting from changes in fashions and styles. Social factors include the influence of consumer perception in determining usage of the internet for different activities. The age structure of the population also alters over time (currently we have an ageing population). An understanding of social change gives business a better feel for the future market situation.
Legal changes as well as ethical and taxation determine the method by which products can be promoted and sold online. Laws are continually being updated in a wide range of areas, e.g. consumer protection legislation, environmental legislation, health & safety and employment law, etc.
Businesses need to take a pro-active approach and be ahead of these changes, rather than hurriedly making alterations to products and processes in a reactive way. Governments, in behalf of society, seek to safeguard individuals rights to privacy.
Economic changes are closely related to social ones. The economy goes through a series of fluctuations associated with general booms and slumps in economic activity. In a boom nearly all businesses benefit and in a slump most lose out. The variation in ecomomic performance in different countries and regions affect spending patterns and international trade. Other economic changes that affect business include changes in the interest rate, wage rates, and the rate of inflation (i.e. general level of increase in prices). Businesses will be more encouraged to expand and take risks when economic conditions are right, e.g. low interest rates and rising demand.
Political changes relate to changes in government influence and have an important role in determining the future adoption and control of the internet and the rules by which it is governed. In recent years these changes have been particularly significant because as members of the European Union we have to adopt directives and regulations created by the EU which then become part of UK law. Political changes are closely tied up with legal changes.
Changes in technology have also become particularly significant in the post-millennium world. This is particularly true in terms of modern communication technologies. They offer new opportunities to the way products can be marketed. The creation of databases and electronic communications have enabled vast quantities of information to be shared and quickly distributed in a modern company enabling vast cost reductions, and often improvements in service.

A manager of a sell-side e-commerce web site must consider all the social, legal and ethical issues to avoid damaging relationships with the users of his or her site or which may leave the company facing prosecution.

Having an understanding of social change will give a business a better feel for the future market situation. The main social factor that affects business is demography which is the study of the population size, age structure, labour preferences, geographic distribution and ethnic distribution. Income distribution and employment/unemployment rate must also be monitored as well as social-cultural aspects. Businesses are part of society and therefore in order to meet high demands and needs of customers, they must be aware of all social trends that determine customer behaviour.

Businesses must always ensure that data collection is; ▪ Fairly and lawfully processed ▪ Processed for limited purpose ▪ Adequate, relevant and not excessive ▪ Accurate ▪ Not kept longer than necessary ▪ Processed in accordance with data subject’s rights ▪ Secure ▪ Not transferred to countries without adequate protection

Ethical issues that can occur in the field of e-commerce are, web tracking where e-businesses draw information on how visitors use a site through log files. Companies can track individual’s movements through tracking software and cookie analysis. Cookies can raise many privacy concerns and the tracking history is stored on the PC’s hard disk, and any time you revisit a website, the computer knows it. Privacy is another ethical issue. Most electronic payment systems know the identity of the buyer, therefore it is necessary to protect the identity of the buyer using it. Mason (1986) usefully summarized ethical issues concerned with personal information ownership into four areas: • Privacy : what information is held about the individual ? • Accuracy: Is it correct? • Property : Who owns it and how can ownership be transferred? • Accessibility : Who is allowed to access this information, and under which condition Fletcher (2001) provides an alternative perspective, raising these issues of concern for both individual and marketer: • Transparency : who is collecting and what information? • Security : how is information protected once collected by a company? • Liability : who is responsible if data is abused

Legal issues in e-commerce are concerned with internet fraud, copyright and domain names.

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