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Summary Chapter 4 "Key Issues in The Digital Environment"

Source: Dave Chaffey; Tanya Hempfill; David Edmundson-Bird, 2019, Digital Business and E-Commerce Management, 7th Edition.

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Aziz Putra Akbar
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539 views2 pages

Summary Chapter 4 "Key Issues in The Digital Environment"

Source: Dave Chaffey; Tanya Hempfill; David Edmundson-Bird, 2019, Digital Business and E-Commerce Management, 7th Edition.

Uploaded by

Aziz Putra Akbar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Summary of Chapter 4

“Key Issues in the Digital Environment”


by: M. Aziz Putra Akbar (425436)

Towards the end of Part 1 “Introduction to Digital Business”, Chapter 4 underlies the
issues in Digital Environment, especially the macro environment. As explained at the
beginning of the chapter, organizations in general involve in 2 types of environments: micro
and macro. Micro environment includes all the elements within organizations that may
predispose the organization itself. Such elements include suppliers, customers, competitors,
intermediaries, etc. On the other hand, macro environments are those factors that exist
externally and usually beyond the organization capabilities to control it, yet they need to
adapt and adjust to it. There are 5 factors (SLEPT): Social, Legal, Economic, Political, and
Technology. In addition, there are cultural aspects that management should also pay attention
to. The factors are described as follows:
● Social Factors. Social factors can be deemed as an important factor determining
the fact that this drives the consumer behaviors and leads to the sales of goods.
Citizens of different countries may be varied based on their culture,
demographics, social lifestyles, domestic structures, wealth, and religion. These
are the determinants of the social aspects that management should analyze.
● Legal and Ethical Factors. As digital business started to emerge, many countries
have developed the law to adopt such business practices. However some other
countries still not yet equipped with laws especially in regards to data protection
and privacy law, disability and discrimination law, brand and trademark
protection, intellectual property rights, contract law, and online advertising law.
● Economic factors. This factor is the economic situation of a country or area where
digital business operates in. The factors are measured by the market growth and
employment, inflation rate, interest rates, monetary and fiscal policy, and foreign
exchange rates.
● Political factors. The political situation includes some areas that need to be
analyzed: the leadership or government, government policies, tax laws, and
internet governance.
● Technology factors. As technology never stops advancing, including innovation
on the technology infrastructure like devices, hardware, and software, these
factors should also be considered when understanding the macro-environment.
● Cultural Factors. In the olden days, people went to the Blockbuster cinemas or
took photos using the Kodak camera and films. This habit and behaviour has
become quite a cultural phenomenon and trend during that period of time.
However, nowadays people just surf blockbuster movies on Netflix and take
pictures using their personal mobile phones. There has been some cultural changes
and there may be more changes upcoming.
There are various factors that may affect customers behaviour when it comes to doing
transactions online. Credit card data theft incidents, nonexisting online stores, uncertainty
about the products, and lost orders are just some of fears that may slow down the growth of
people shifting to digital business. In addition, understanding customers e-commerce buying

Reference: Dave Chaffey; Tanya Hempfill; David Edmundson-Bird, 2019, Digital Business and E-
Commerce Management, 7th Edition.
behaviour also would mean to identify how customers utilized the existence of online
services and their webographics. There are 12 general motivations of internet users using
their internet.
Privacy and trust is nothing less but important in digital business macro-environment.
Customers' privacy should be protected from both cyber-dependent crimes and cyber-enabled
crimes. Personal data may possess information that is supposedly classified as it may be
misused and threatens one’s personal life. Therefore, such crime acts like phishing (email
scams to gain personal information), identity theft (misuse of information), and hacking
(shutting down of devices) must be eradicated.
Even though there are some risks associated with digital business, online transactions
could lead to a generally safer, greener, and more friendly environment. This is evidenced by
the fewer-vehicle gas emissions from customers mobilization, lower inventory requirements,
fewer printed materials, less disposal packagings, less waste, and digitalisation of products.
Another issue in the digital environment is about tax. Impose tax for traditional goods
and services was easier because physical stores, transactions, and transfer of ownership could
be physically seen. In digital business, it can be quite challenging. Therefore new tax
jurisdiction has been legalised to encounter the problems.
Economic and competitive factors are something that also need to take into account.
These factors underlie the globalisation and localisation aspects, especially when it comes to
shipping products, different product needs, language and culture differences, etc. An example
is when deciding which websites should be applied: standardized, semi-localised, localised,
highly localised, or culturally customized. The whole idea is to maintain the competitiveness
of the business.
The appearance of digital business also affects other entities in a wider scope such as
how it has brought some implications to the international business-to-business trade,
government transformation, and the ongoing technology innovation.

Reference: Dave Chaffey; Tanya Hempfill; David Edmundson-Bird, 2019, Digital Business and E-
Commerce Management, 7th Edition.

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