Chapter 4

E-environment

Nusrat Jahan
 Contents

● E-environment.
● Environmental Scanning
● SLEPT factors (macro-environmental factors of e-business).
● Social factors of E-environment.
● Legal and ethical factors of e-Environment.
● Economic factors of e-Environment.
● Political factors of e-Environment.
● Technological factors of e-Environment.
E-environment

All organizations operate within an environment that influences the way

in which they conduct business.
● E-environment consists of:
○ (1) Micro-environment: Competitors, suppliers,
intermediaries, customers. (Will focus more on later chapters).
○ (2) Macro-environment: SLEPT factors mentioned in the
following slides. In this chapter we will focus on macro
environments only.
Environmental Scanning

● Environmental Scanning: The process of continuously monitoring the

environment (i.e. its factors) and events and responding accordingly.
● Environmental scanning involves reviewing external sources and factors
that impact the internal operations of a business.
● "Environmental scanning" in e-business refers to the process of actively
monitoring and analyzing the external factors, including technological
trends, market conditions, competitor activity, legal regulations, and
social changes, that could impact an online business, allowing them to
identify potential opportunities and threats to make informed strategic
decisions.
Environmental Scanning

Purpose:
● To stay ahead of the curve by understanding the evolving
digital landscape
● Proactively adapting business strategies to capitalize on new
opportunities
● Mitigate potential risks.
Environmental Scanning
Factors to scan:

● Technological trends: New software, hardware, emerging technologies like AI,

blockchain, and their potential impact on the e-commerce industry.
● Market dynamics: Customer behavior, buying patterns, market size,
demographics, and emerging consumer trends.
● Competition: Analysis of competitor websites, pricing strategies, marketing
tactics, and new entrants in the market.
● Legal and regulatory environment: Data privacy laws, online advertising
regulations, intellectual property rights, and other relevant legal considerations
● Social and economic factors: Public opinion, economic conditions, social

trends that may influence online purchasing behavior

Environmental Scanning
Environmental Scanning
Common tools for environmental scanning in e-business:

● SWOT Analysis:
Identifying a company's Strengths, Weaknesses, Opportunities, and Threats to
develop strategic direction
● PESTEL Analysis:
Examining Political, Economic, Social, Technological, Environmental, and Legal
factors affecting the business
● Trend analysis:
Identifying emerging trends and patterns in the market to predict future
developments
● Competitor analysis:
Monitoring competitor activities and strategies to assess their impact on the
market
● Social media monitoring:
SLEPT factors (macro-environmental
factors of e-business)
SLEPT factors (macro-environmental factors
of e-business)
SLEPT stands for Social, Legal, Economic, Political and Technological factors. They are the
macro-environmental factors of e-business.

Breakdown of SLEPT factors:

● Social factors:
○ Consumer attitudes towards online shopping
○ Digital literacy levels in the target market
○ Cultural norms and expectations related to online transactions
○ Demographics and population trends
● Legal factors:
○ Data privacy regulations
○ Intellectual property laws
○ Consumer protection regulations
○ Online contract laws
SLEPT factors (macro-environmental factors
of e-business)
● Economic factors:
○ Economic stability and growth
○ Disposable income levels
○ Currency exchange rates
○ Interest rates and credit availability
● Political factors:
○ Government policies regarding e-commerce
○ Political stability and regulations
○ International trade agreements
● Technological factors:
○ Internet infrastructure and bandwidth availability
○ E-commerce platforms and technologies
○ Mobile technology adoption
○ Cybersecurity threats and solutions
Social factors of E-environment
"Social factors of an E-environment" refer to the societal aspects that influence the development,
adoption, and usage of electronic technologies, including factors like demographics, cultural norms,
access to technology, digital literacy levels, social inequalities, and community dynamics within a
digital space.
Social factors:
● Demographics:
Age, gender, income level, education level, geographic location - these factors determine how
people interact with technology and what digital needs they have.
● Digital literacy:
The level of knowledge and skills individuals possess in using digital tools, which impacts their
ability to navigate the online world effectively.
● Cultural norms and values:
Societal beliefs and attitudes towards technology can influence adoption rates and how
people use digital platforms.
Social factors of E-environment
● Social networks and communities:
The online communities people participate in, including their social connections and
interactions within those spaces.
● Social inequalities:
Unequal access to technology due to factors like economic disparities or geographic
limitations can create a digital divide.
● Privacy concerns:
Individuals' anxieties about personal information being shared online and the level of trust they
place in digital platforms.
● Cyberbullying and online harassment:
The potential for negative social interactions online, impacting user experiences and
engagement.
● Information access and credibility:
The ability to access reliable information online and the challenges of navigating
misinformation.
● Social impact of technology:
How digital tools influence social interactions, including the potential for increased isolation or
connection depending on usage patterns.
Social factors of E-environment
Examples of how social factors impact E-environment:
● Elderly population and digital access:
If a community has a large elderly population with limited digital
literacy, designing user-friendly interfaces becomes crucial for effective
online engagement.
● Cultural considerations in online marketing:
Tailoring marketing strategies to align with cultural values and language
preferences in different regions.
● Social media activism:
Online platforms enabling individuals to organize and advocate for
social causes, influencing public opinion and policy
Legal and ethical factors of e-
Environment.
The legal and ethical factors within an "e-environment" primarily
revolve around data privacy, consumer protection, intellectual property
rights, cyber security, jurisdictional challenges, and the environmental
impact of digital activities, requiring businesses to navigate complex
issues related to data collection, usage, and storage, while also
considering the ethical implications of their online actions across
different geographical boundaries.
Legal and ethical factors of e-
Environment.
Key Legal Factors:
● Data Privacy Laws:
Regulations like GDPR (General Data Protection Regulation)
mandate how companies can collect, store, and use personal data,
requiring transparency and user consent.
● Intellectual Property Rights (IPR):
Protecting digital content like software, music, and designs through
copyrights, patents, and trademarks becomes crucial in an e-
environment.
● Cybersecurity Laws:
Legal requirements to implement robust security measures to
safeguard sensitive data from cyber threats like hacking and data
breaches.
Legal and ethical factors of e-
Environment.

● Jurisdictional Issues:
Determining which laws apply when conducting business across
borders online, particularly in cases of disputes or legal violations.
● Consumer Protection Laws:
Regulations safeguarding consumers from misleading advertising,
unfair terms and conditions, and issues related to online
transactions.
Legal and ethical factors of e-
Environment.
● Ethical issues include the need to safeguard consumer
privacy and security of personal information.
● Privacy issues include collection and dissemination of
customer information, cookies and the use of direct e-mail.
 Legal and ethical factors of e-
Environment.
Ethical issues of E-environment:

● (1) Web tracking:

○ Every time someone visits the web, the website system retains some trails of the
users that can be refer later, this trails are normal call logs. These logs contains all
the records pertains to what the users perform in the site. Logs as records mean,
they can be retrieve or save for later use. Companies track individual’s movement
through tracking software and cookie analysis. Programs such as cookies raise a
batch of privacy concerns. The tracking history is stored on your PC’s hard disk,
and any time you revisit a website, the computer knows it. Many smart end users
install programs such as Cookie cutters, Spam Butcher, etc which can provide
users some control over the cookies. The battle between computer end users and
web trackers is always going on with a range of application programs.
 Legal and ethical factors of e-
Environment.
Ethical issues of E-environment:

● (2) Online Privacy

○ Most Electronic Payment Systems knows the identity of the buyer. So it is
necessary to protect the identity of a buyer who uses Electronic Payment
System.
○ A privacy issue related to the employees of a company is tracking.
Monitoring systems are installed in many companies to monitor e-mail and
other web activities in order to identify employees who extensively use
business hours for non-business activities. The e-commerce activities
performed by a buyer can be tracked by organizations. These activities of
monitoring customers raise ethical issues on how secure and anonymous
information are being handled by the e-commerce providers.
Legal and ethical factors of e-
Environment.
● (3) Web Spoofing
○ Web spoofing is an electronic deception relates to the Internet. It occurs
when the attacker sets up a fake website which almost totally same with
the original website in order to lure consumers to give their credit card
number or other personal information. For example is the attacker setup
a site called www.amazonn.com using addition of later ‘n’ at the end,
which many users sometimes type by mistake. Users might find
themselves in a situation that they do not notice they are using a bogus
web-site and give their credit card details or other information.
Legal and ethical factors of e-
Environment.
● (4) Cybersquatting
○ Cybersquatting is an activity in which a person or firm register, purchase
and uses the existing domain name belong to the well-known
organization for the purpose of infringing its trademarks. This type of
person or firm, called cybersquatters usually infringed the trademarks to
extort the payment from original trademark’s owner. The extortion of
payment occur when they offers the prices far greater than they had
purchased the organization’s domain name upon. Some cyber-squatters
put up offensive remarks about the person or company which the
domain is meant to represent in an effort to encourage the subject to re-
buy their domain from them.
Legal and ethical factors of e-
Environment.
● (5) Privacy Invasion
○ The privacy invasion occurs when the personal details belong to consumers are
exposed to the unauthorized party. These can be seen in the following ways:
■ The personal information of consumers being transmitted may be
intercepted by anyone other than the person whom it is intended for.
Protecting the privacy of communication is a great challenge, due to the very
nature of the online medium, an open network of digital telecommunications.
It is technically and economically impossible to patch all the holes through
which unauthorized intruders may gain access.
■ Malicious programs delivered quietly via web pages could reveal credit card
numbers, usernames, and passwords that are frequently stored in special
files called cookies.
Legal and ethical factors of e-
Environment.
● (6) Email Spamming & phishing
○ E-mail spamming involved unsolicited commercial e-mail sent or broadcast
unwanted advertisement or correspondence over the Internet. The use of
email spammers is meant to lure consumers to enter their personal
information on a fake website using e-mail, forged to look like it is from
an authorized organization such as bank. The content of e-mail often directs
the consumers to the fake website in order to lure them to fill their personal
information such as credit card or bank account’s details. This technique is
called phishing. And these illegal processes easily compromise the user's
right and expose them to danger..
Legal and ethical factors of e-
Environment.
● (7) Intellectual Property Theft and Copyright Trolls
○ The basic cut-and-paste allows anyone with Internet access to directly copy
the original works of another. Text, photos, music, artwork and ideas
routinely move from the creators to the copiers, with no permission for use
granted or sought. The victim of this theft only has recourse if he's registered
a copyright and then wants to spend the time and trouble to write demand
letters and threaten lawsuits.
○ At the other end of the ethical spectrum, "copyright trolls" buy the rights
to movies, books and music, threaten mass lawsuits against thousands of
people found to be downloading the material and demand a quick settlement
from each of them.
■ (copyright trolls: copyright holders who use the threat of litigation to
Legal and ethical factors of e-
Environment.
● The main information types used by the internet marketer
which are governed by ethics and legislation are:
○ (1) Contact information.
○ (2) Profile information.
○ (3) Platform usage information.
○ (4) Behavioral information (on a single site).
○ (5) Behavioral information (across multiple sites).
 Legal and ethical factors of e-
Environment.
Ethical issues concerned with personal information ownership have been usefully
summarized by Mason (1986) 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 conditions?
Fletcher (2001) provides an alternative perspective, raising these issues of concern for both
the individual and the marketer:
● Transparency – who is collecting what information and how do they disclose the
collection of data and how it will be used?
● Security – how is information protected once it has been collected by a company?
● Liability – who is responsible if data are abused?
 Legal and ethical factors of e-
Environment.
8 principles for personal data protection:
● The guidelines on the eight data protection principles are produced by legal requirements of the 1998 UK Data
Protection Act. These principles state that personal data should be:
● (1) Fairly and lawfully processed.
○ Clear details in communications such as on a web site or direct mail of how a ‘data subject’ can contact
the data controller or a representative. Before data processing ‘the data subject has given his consent’ or
the processing must be necessary either for a ‘contract to which the data subject is a party’ or because
it is required by other laws.
○ Sensitive personal data require particular care, these include:
■ the racial or ethnic origin of the data subject;
■ political opinions;
■ religious beliefs or other beliefs of a similar nature;
■ membership of a trade union;
■ physical or mental health or condition;
■ sexual life;
Legal and ethical factors of e-
Environment.
● (2) Processed for limited purposes.
○ In full: ‘Personal data shall be obtained only for one or more specified and lawful purposes, and
shall not be further processed in any manner incompatible with that purpose or those purposes.’
This implies that the organization must make it clear why and how the data will be processed at
the point of collection. For example, an organization has to explain how your data will be used if
you provide your details on a website when entering a prize draw. You would also have to agree
(give consent) for further communications from the company. Important issues are:
■ Whether future communications will be sent to the individual (explicit consent
is required for this in online channels,which is clarified by the related Privacy
and Electronic Communications Regulation Act);
■ Whether the data will be passed on to third parties (again explicit consent is
required);
■ How long the data will be kept for.
Legal and ethical factors of e-
Environment.
Legal and ethical factors of e-
Environment.
● (3) Adequate, relevant and not excessive.
○ In full: ‘Personal data shall be adequate, relevant and not excessive in
relation to the purpose or purposes for which they are processed.’
● (4) Accurate.
○ In full: ‘Personal data shall be accurate and, where necessary, kept up to
date.’
○ It is clearly also in the interest of an organization in an ongoing
relationship with a partner that the data is kept accurate and up-to-date.
The guidelines on the Act suggest that additional steps should be taken
to check data are accurate. Inaccurate data is defined in the guidelines
Legal and ethical factors of e-
Environment.
● (5) Not kept longer than necessary.
○ In full: ‘Personal data processed for any purpose or purposes shall not be
kept for longer than is necessary for that purpose or those purposes.’
○ If a relationship between the organization and the data subject ends,
then data should be deleted. This will be clear in some instances, for
example when an employee leaves a company their personal data
should be deleted. With a consumer who has purchased products from a
company this is less clear since frequency of purchase will vary, for
example, a car manufacturer could justifiably hold data for several
years.
Legal and ethical factors of e-
Environment.
● (6) Processed in accordance with the data subject’s rights.
○ In full: ‘Personal data shall be processed in accordance with the
rights of data subjects under. this Act.’ 4 data subject rights are:
■ the right to be informed about the collection and the use of
their personal data.
■ the right to access personal data and supplementary
information.
■ the right to have inaccurate personal data rectified, or
completed if it is incomplete.
■ the right to erasure (to be forgotten) in certain circumstances.
Legal and ethical factors of e-
Environment.
● (7) Secure.
○ In full: ‘Appropriate technical and organizational measures shall
be taken against unauthorized or unlawful processing of
personal data and against accidental loss or destruction of, or
damage to, personal data.’
● (8) Not transferred to countries without adequate
protection.
○ This principle prevents export of data to countries that do not
have sound data processing laws. If the transfer is required in
Economic factors of e-Environment.

● The economic health and competitive environment in

different countries will determine the e-commerce
potential of each. Managers developing e-commerce
strategies in multinational companies will initially target
the countries that are most developed in the use of the
technology.
Economic factors of e-Environment.
● Globalization:
● The increase of international trading and shared social and cultural Values.
● A global company must have:
● a 24-hour order taking and customer service response capability;
● regulatory and customs-handling experience to ship internationally;
● in-depth understanding of foreign marketing environments to assess the
advantages of its own products and services.
● Localization:
○ Tailoring of web site information for individual countries or regions.
○ Localized website may need to support customers from a range of countries with:
■ different product needs;
■ language differences;
■ cultural differences.
Political factors of e-Environment.
● The political environment is shaped by the interplay of government
agencies, public opinion, consumer pressure groups such as CAUCE (the
Coalition against Unsolicited E-mail), www.cauce.org, and industry-
backed organizations such as TRUSTe (www.truste.org) that promote
best practice amongst companies.
● The political environment is one of the drivers for establishing the laws
to ensure privacy and to achieve taxation.
Political factors of e-Environment.
● Political action enacted through government agencies to control the adoption of
the Internet can include:
○ Promoting the benefits of adopting the Internet for consumers and business
to improve a country’s economic prosperity;
○ Imposing legislation to protect privacy or control taxation, as described in
previous sections;
○ Providing organizations with guidelines and assistance for compliance with
legislation setting up international bodies to coordinate the Internet such as
ICANN (the Internet Corporation for Assigned Names and Numbers,
www.icann.com) and other independent organizations controlling Internet
technology.
Technological factors of e-Environment.
● One of the great challenges of managing e-commerce is the need to
be able to assess which new technological innovations can be
applied to give competitive advantage.
 Technological factors of e-Environment.
Approaches to identifying emerging technology:
● (1) Technology networking. This involves individuals monitoring trends
through their personal network and then sharing them through an infrastructure
and process that supports information sharing.
● (2) Crowdsourcing. Crowdsourcing facilitates access to a marketplace of ideas
from customers, partners or inventors for organizations looking to solve specific
problems.
○ Crowdsourcing: Utilizing a network of customers or other partners to gain
insights for new product or process innovations.
Technological factors of e-Environment.
● (3) Technology hunting.
○ This is a structured review of new technology through reviewing the
capabilities of start-up companies. For example, British Telecom
undertakes a structured review of up to 1,000 start-ups to assess
relevance for improving their own capabilities which may ultimately
be reduced to five companies that will enter into a formal
arrangement with each year.
Thank you.