18 – Global E-Marketing and EDI

Introduction

Cultural differences can complicate, delay, and even derail international discussions. In a perfect world, effective negotiators would arrive at the table with extensive knowledge and familiarity with their counterparts’ cultures and negotiating orientations. Still, the pace and constraints of global business make this highly unlikely. As a result, a framework that focuses on essential features of the international negotiation setting and process can be a valuable tool for negotiators and scholars in detecting potential sources of dispute. The Negotiation Orientations Framework is likely the most complete technique for comparing country-cultural differences in negotiations.

18.1 International Perspectives

Speaking solely English is not necessarily a disadvantage in international business. Being multilingual, on the other hand, is a great advantage. Observations from aisatsu (挨拶) (a Japanese word that refers to greetings or formal expressions of politeness and respect.) involving the president of a prominent Japanese industrial distributor and the marketing vice president of an American machinery manufacturer are enlightening. In Japan, the two corporations were attempting to establish an agreement on a long-term relationship.

Business cards were handed over, and formal introductions were made. Although the president spoke and understood English, one of his three subordinates served as the Japanese president’s interpreter. The president motioned for everyone to take their seats. The interpreter sat on a stool between the two senior executives. The prevailing mood among the parties was pleasant but polite. Tea and a Japanese orange drink were available.

The Japanese president completely controlled the interaction, questioning the Americans through an interpreter. Each speaker received the attention of all participants in turn. Following the initial questions for all Americans, the Japanese president concentrated on creating a conversation with the American vice president. During this interaction, an intriguing pattern of nonverbal behaviours emerged. In Japanese, the Japanese president would ask a question. The interpreter then translated the question for the American vice president. The American’s attention (gaze direction) was directed at the interpreter while he spoke.

On the other hand, the Japanese president was staring at the Americans. As a result, the Japanese president could watch the American’s facial expressions and nonverbal replies carefully and unobtrusively. When the American president spoke, the Japanese president had double the reaction time. Because he spoke English, he could articulate his comments during the translation process.

Face-to-face talks are a common occurrence in international trade.

In international business, such strategies are nearly always carried out through face-to-face conversations with foreign company partners and customers. Sales of goods and services, distribution channel management, contracting for marketing research and advertising services, licensing and franchise agreements, and strategy alliances all require managers from various cultures to sit down and talk with one another to exchange ideas and express needs and preferences.

Executives must also engage with foreign government representatives, who may approve various marketing initiatives or be the ultimate consumers of goods and services. Government personnel may also be joint venture partners and, in some situations, suppliers in many countries.

For example, NBC, the International Olympic Committee, and Chinese government officials negotiated the television broadcast rights for the 2008 Summer Olympics in Beijing, China.

Some agreements can become rather complex, involving multiple countries, businesses, and cultures.

Examples include European and North American discussions overtaxing the Internet, ongoing interactions about global environmental issues, and the ongoing WTO negotiations that began in Doha, Qatar, in 2001. All of these efforts necessitate a new type of business diplomacy.

According to one expert on foreign joint ventures, drafting the initial agreement is a critical part of all international economic agreements. The seeds of success or failure are frequently sown at the bargaining table vis-à-vis (face-to-face) when not only financial and legal matters are agreed upon, but perhaps more crucially, a cooperative atmosphere is developed. Indeed, the legal terms and structure of multinational company ventures virtually always change over time, most commonly through negotiation. However, the environment of face-to-face cooperation at the negotiation table must be maintained, or the enterprise will fail.

18.2 The Influence of Culture on Negotiation Behaviour

The primary goal of this section is to highlight the extent to which cultural differences in negotiation techniques can cause issues in international commercial negotiations. The information in this part is based on two decades of comprehensive research on the subject, in which the negotiation styles of over 1,000 businesspeople from 16 nations (19 cultures) were studied. Japan, Korea, Taiwan, China (Tianjin, Guangzhou, and Hong Kong), the Philippines, Russia, Norway, the Czech Republic, Germany, France, the United Kingdom, Spain, Brazil, Mexico, Canada (English-speaking and French-speaking), and the United States were among the countries analysed. The countries were picked because they are America’s most vital trading partners now and in the future.

Two key insights emerge from a comprehensive examination of various civilizations. The first is that regional generalisations are frequently incorrect. For example, Japanese and Korean negotiation approaches are strikingly similar in some aspects yet diametrically opposed in others. The second takeaway from this research is that Japan is an uncommon place. The Japanese are at or near the bottom of the scale on practically every dimension of negotiation style. On occasion, Americans are on the receiving end. However, most of the time, Americans fall somewhere in the middle. The facts supplied in this part will demonstrate this to the reader. On the other hand, the Japanese approach is distinctive, even unique.

18.2.1 Managers and Negotiators: Implications

The following four steps lead to more efficient and productive international business negotiations:

1. Choosing an appropriate negotiating team
2. Preliminary management, including training, preparation, and negotiating setting manipulation
3. management of the negotiating process, i.e., what happens at the negotiating table
4. suitable procedures and techniques for follow-up

18.2.2 Customer-Interest Negotiations

The following criteria are used to choose successful negotiators:

1. Maturity
2. Emotional stability
3. Knowledge breadth
4. Optimism
5. Flexibility
6. Empathy
7. Stamina
8. Willingness to rely on teamwork
9. Listening
10. Power at headquarters

To ensure that negotiations result in beneficial outcomes for all parties, the negotiator must first describe the problem and what each client desires. It is critical to distinguish between issues, stances, interests, and settlement choices while setting negotiation goals.

• An issue is a topic or question about which two sides disagree. Problems are commonly used to describe matters. “How can wetlands be conserved while allowing some industrial or residential development near a stream or marsh?” for example. Substantive issues (concerning money, time, or compensation), procedural issues (concerning how a disagreement is handled), or psychological issues (related to the effect of a proposed action).
• Positions are assertions made by a client regarding how a problem can or should be handled or resolved or a recommendation for a specific solution. A disputant chooses a viewpoint because it fulfils a particular interest or matches a set of demands.
• Interests are specified demands, conditions, or gains that a party must meet for an agreement to be deemed satisfactory. They can refer to specific procedural considerations or psychological demands.
• Settlement options are potential solutions that suit the needs of one or more customers. The presence of alternatives suggests that there are multiple ways to satisfy interests.

The negotiator must choose a basic negotiation strategy. There are numerous ways to negotiate, but the most prominent are positional and interest-based bargaining. There are multiple reasons for choosing to negotiate. The following are some of the most common reasons:

• Obtain information about issues, interests, and positions of other customers;
• Educate all sides about a particular view of an issue or concern;
• Ventilate emotions about issues or people;
• Change perceptions;
• Mobilize public support;
• Buy time;
• Bring about a desired change in a relationship;
• Develop new procedures for dealing with problems;
• Make substantive gains

18.3 Cultural Distinctions

Cultural differences produce four types of challenges in international business negotiations:

1. Language
2. Nonverbal Behaviour
3. Values
4. Processes of thought and decision-making

The order is significant; the issues lower on the list are more dangerous since they are more subtle. Two negotiators, for example, would immediately detect if one spoke Japanese and the other German. The answer may be as simple as hiring an interpreter or conversing in a common third language or as complicated as learning a language. The problem is evident, regardless of the solution. Nonverbal cultural differences, on the other hand, are virtually always hidden beneath our consciousness. In a face-to-face negotiation, players give off and take in much information nonverbally.

According to some experts, this information is more significant than spoken information. Almost all of this signalling occurs below our awareness levels. When nonverbal signals from foreign parties differ, negotiators are more likely to misinterpret them without even realising it. For example, when a French client repeatedly interrupts, Americans feel uneasy without realising why. As a result, interpersonal conflict frequently taints corporate connections, remains unrecognised, and continues untreated. This section discusses these distinctions, beginning with language and nonverbal behaviours.

18.3.1 Language and Nonverbal Behavioural Differences

Americans are near the bottom of the list of language skills; however, Australians claim they are much worse. However, it should be noted that American undergrads have recently begun to see the light and are flocking to language classes and study abroad programmes. Unfortunately, the United States’ foreign language instruction resources are insufficient to meet the rising demand. In contrast, the Czechs are suddenly giving up a hard-won competitive advantage: young Czechs will no longer take Russian. It’s easy to see why, but the outcome will be a generation of Czechs who won’t be able to take advantage of their geographical advantage because they won’t communicate with their neighbours to the east.

The Japanese executive’s language advantages were evident in the description of the aisatsu that opened the chapter. However, the most typical criticism from American managers is that foreign clients and partners engage in side talks in their own languages. At best, it is regarded as unfriendly, and American negotiators are frequently inclined to infer something nefarious to the content of foreign talk—”They’re conspiring or disclosing secrets.”

18.3.2 Value Disparities

Values held dearly by the majority of Americans, such as objectivity, competitiveness, and equality, appear to produce misunderstandings and negative feelings in international business talks commonly.

Objectivity: “Americans base their decisions on the bottom line and cold, hard facts.” “Americans don’t choose sides.” “It’s economics and performance that matter, not people.” “Business is business,” they say. Such statements accurately reflect American perceptions about the value of objectivity.

Getting to Yes, the most essential book on the subject of negotiation, is highly recommended for American and international readers. The latter will learn about talks and, perhaps more importantly, how Americans perceive negotiations. The writers emphasise the importance of “separating the people from the problem,” stating that “every negotiator has two kinds of interests: in the substance and the relationship.” This suggestion may be helpful in the United States or Germany, but it is nonsense in much of the world. Personalities and substance are not separate issues in most parts of the world, particularly in relationship-oriented cultures, and cannot be made so.

Consider how prevalent nepotism is in Chinese or Hispanic societies. According to experts, enterprises in the expanding “Chinese Commonwealth” do not grow beyond the confines and bonds of strict family control. By nature, things work the same way in Spain, Mexico, and the Philippines. Similarly, negotiators from such countries will not only take things personally but will also be influenced by negotiation outcomes. What happens to them at the negotiation table will affect the business relationship regardless of the economics involved.

Competitiveness and Equality: Simulated negotiations can be considered experimental economics in which the economic outcomes roughly reflect the ideals of each participating cultural group. Our studies utilised an introductory simulation to illustrate the core of business discussions with competitive and cooperative features. At least 40 businesses from each culture negotiated the pricing of three products in the identical buyer-seller game. Depending on the terms of the agreement, the “negotiating pie” could be expanded through collaboration (as much as $10,400 in joint earnings) before being divided between the buyer and seller.

18.3.3 Distinctions in the Thinking and Decision-Making Process

When confronted with a complex negotiation assignment, most Westerners (note the generalisation here) break it down into smaller tasks. For example, prices, delivery, warranty, and service contracts can be handled one at a time, with the final agreement being the sum of the more minor contracts. In Asia, however, a different strategy is more commonly used, in which all topics are discussed at once, in no apparent order, and compromises on all matters are made at the end of the session. The Western sequential strategy and the Eastern holistic approach do not complement each other.

In that instance, American executives frequently report significant challenges in gauging progress in Japan. After all, in America, half the battle is won when half the concerns are resolved. But nothing seems to settle in Japan. Then, surprise, you’re finished. Frequently, Americans make unneeded concessions just before the Japanese announce agreements. For example, one American department store buyer who was in Japan to purchase six different consumer products for his chain lamented that the negotiations for his first acquisition took a whole week. In the United States, such a transaction would occur in the late afternoon.

Based on his calculations, he expected to be in Japan for six weeks to complete his purchases. He pondered upping his buying pricing to speed things through more quickly. However, the Japanese promptly agreed on the other five products in three days before he could compromise. By his admission, this particular businessman was fortunate in his initial meeting with Japanese bargainers.

18.4 Defining the Dimensions of the Negotiation Orientations Framework

Below are refinements to the specification of the framework’s dimensions. Precise definitions serve as the foundation for appropriate measurement and the mechanism for comparing and synthesizing subsequent research findings.

18.4.1 Negotiation Fundamentals: Distributive vs. Integrative

The Basic Concept of Negotiation refers to each party’s perspective on the bargaining process. According to R.E. Walton and Robert B. McKersie, a bipolar continuum with distributive bargaining and integrative problem solving as endpoints is consistent.

The premise behind distributive negotiating methods is that one party benefits at the expense of the other. Negotiators who fit this profile believe that there will be one winner and one loser, that their interests will directly conflict with those of the other party, that they will seek to meet only their own goals or interests to maximise the benefit to their side, and that they will focus on the need for the other party to concede. According to popular perception, what is suitable for the other party must be bad for us.

The assumption underlying integrative bargaining strategies is that there is an opportunity for both parties to benefit from a negotiated agreement because they place different values on the issues being negotiated and can find practical trade-offs by conceding less critical issues to gain on more important ones. Integrative negotiation entails collaboration to increase the pie and competition to split the pie between the two parties. Negotiators who fit this profile believe in win-win solutions, use a problem-solving approach to develop solutions that increase the size of the rewards available to everyone, and try to understand the underlying issues and their relative importance to both parties to capitalise on the different interests of both parties and find practical trade-offs.

18.4.2 The Most Important Type of Issue: Task vs. Relationship

The most crucial topic refers to the subjects that negotiators discuss most. Although negotiators may be concerned with the task and the relationship during a negotiation, they are more likely to prioritise one.

Task: Negotiators who use a task frame focus on specific concerns related to the project and consider these issues outside of the relationship. Negotiators who believe that task concerns are more essential prefer concentrating the entire negotiation on the deal at hand rather than the people involved in the conversations.

Relationship: Negotiators with a relationship framework see task-related concerns as inextricably linked to the relationship. They devote time to activities that foster trust and friendship among members, believing that this lays the groundwork for addressing task issues! Negotiators who say that the relationship is the most critical aspect of the negotiation tend to focus the entire negotiation on the people involved in the conversations rather than the contract being negotiated.

18.4.3 Negotiator Selection: Capabilities vs. Status

The criteria used to select negotiating team members are referred to as the Selection of Negotiators. Achievement-oriented people evaluate and relate to others based on what they have accomplished. In contrast, status-oriented people assess and relate to others based on who they are.

People with an achievement-based perspective believe that negotiating team members should be chosen because they have specific job-related skills or expertise that will be useful during the negotiations. Education, technical or scientific knowledge, legal training, vocational achievement, negotiating experience, or language proficiency are all examples of relevant skills or competence.

People with a status-based perspective believe that negotiation team members should be chosen based on who they are and who they know. Relevant variables include family history, prominent connections, seniority, age, and gender. Negotiators from status-based cultures may be senior, high-ranking officials with significant influence in their companies and high regard in the community.

18.4.4 Individual Aspirations’ Influence: Individualist vs. Collectivist

Individual Aspirations Influence refers to negotiators’ emphasis on achieving personal goals and the need for individual recognition.

According to Harry C. Triandis, individualists consider themselves loosely connected to and independent of others. They are primarily driven by their own preferences, desires, and rights and prioritise their personal ambitions. Individualist negotiators can thus be defined as being emotionally independent of the organisation to which they belong and striving to achieve outcomes in their best interests.

Collectivist: According to Triandis, collectivists consider themselves as being inextricably related to and pans of groups of coworkers or a firm, such as 3D. They prioritise the collective’s objectives. As a result, we might characterise collectivist negotiators as strongly identifying with and loyal to their organisations; as a result, they may seek to accomplish outcomes that are in the organisation’s best interests and may do so with no expectation of personal recognition or reward. The negotiating team may bear joint accountability and get joint recognition for acts taken or decisions made.

18.4.5 Internal Decision-Making Process: Majority vs. Independent Rule

Internal Deliberation: This process relates to how a negotiation team makes choices. Jeanne M. Brett outlines a variety of decision-making behaviours in which one person on the team can make the decision, or a substantial proportion of the team’s members must agree on a specific decision.

Leaders or other influential negotiation team members may make decisions alone without consulting the rest of the team.

The majority rule states that decision-making authority is entrusted to the entire team. The team leader solicits feedback and support from team members and listens to their suggestions.

Time Orientation: Monochronic vs. Polychronic: The value that negotiators place on time is their orientation toward time. Edward T. Hall and Mildred Reed Hall defined two culturally derived time concepts critical in international business.

Monochronic: People with a monochronic time orientation pay attention to and manage tasks one at a time, plan and arrange their activities, and set and adhere to agendas. Monochronic negotiators think that concerns in a negotiation should be effectively resolved within the period provided. They consider time to be money.

Polychronic: People with a polychronic time orientation manage multiple tasks concurrently rather than sequentially. Polychronic people do not anticipate human activities to run like clockwork. As a result, scheduling is approximate rather than precise, and delays are not associated with the negative associations found in monochronic societies. Negotiators from polychronic cultures believe that getting to know their counterparts and developing connections is more important than sticking to a schedule. The actual time spent discussing and resolving issues is insignificant.

18.4.6 Risk-Taking Attitude: Risk Averse vs. Risk Tolerant

This component refers to the willingness of negotiators to take risks.

Risk-averse: Risk-averse negotiators are cautious about moving forward with proposals that may contain unknowns and/or contingencies. They will take precautions to avoid the possibility of failing to reach an agreement, and as a result, they may be more willing to make concessions.

Risk Tolerance: Risk-tolerant negotiators believe an appropriate degree of risk should be taken in a negotiation. They are more concerned with mitigating danger than with avoiding it entirely. Risk-averse negotiators are willing to proceed with proposals that may contain unknowns and contingencies. Risk-averse negotiators are more likely to take the risk of failing to reach an agreement. They accept the risk of leaving the table without a settlement and, as a result, are less likely to make compromises.

18.4.7 Trust Basis: External to the Parties vs. Internal to the Relationship

Trust is one party’s conviction that the other side will follow through on agreed-upon actions. It is the foundation upon which both parties to a negotiation can work together in all countries. However, negotiators from some countries trust that the other party will fulfil its obligations because there is a signed contract and the sanction of law to back it up. In contrast, negotiators from other countries trust that the other party will fulfil its obligations because of their relationship.

External to the Parties: Negotiators who hold this perspective have faith in the other party because a contract has been negotiated and agreed to, which can be disputed and enforced. The legal system and government institutions provide an appropriate, dependable, and practical foundation for commercial dealings. A partner will follow the terms of the contract because the legal system will penalise them if they do not. A deal is a deal if it is written down. In this context, a reliable partner follows the law.

Internal to the Relationship: Negotiators with this frame trust the other party because they have invested in a long-term relationship and think the other side is dedicated to it. What matters is the relationship between the parties; the contract only reflects the link between the persons who drafted it. A reliable partner works hard to keep the partnership going, possibly by revising an existing contract to reflect new events.

18.4.8 Protocol Issues: Formal vs. Informal

Concern with Protocol stems from the value placed on standards governing appropriate self-presentation and social behaviour.

Formal: Negotiators that value protocol will follow tight and precise standards that regulate personal and professional behaviour, negotiation methods, and hospitality provided to negotiators from the other side. Dress regulations, title usage, and seating arrangements are acceptable behaviour rules. Negotiators believe that there is a narrow range of appropriate behaviours, and the team has broad agreement about what constitutes appropriate action.

Informal: Negotiators less concerned with protocol follow a much smaller, more loosely defined set of rules. Team members may believe that there are multiple ways to behave appropriately in a given situation and even have opposing views on what is appropriate.

18.4.9 Communication Style: High Context vs. Low Context

This dimension refers to how much people rely on verbal utterances to convey their central message. Two culturally derived communication techniques are critical in international business.

Low Context: Low-context communicators feel that clarity is essential for effective communication and that direct requests are the most effective technique for achieving their objectives. It is the communicator’s responsibility to ensure that the other party understands what is being said. Low-context communicators are less likely to pick up on hints, especially if the parties are unfamiliar with each other. To be blunt, frank conversation is the best method to overcome disagreements. It is possible to criticise someone without causing them to take offence.

High Context: High-context communicators believe straightforward requests are the least successful technique for achieving their objectives. Directness is frequently regarded as unpleasant and offensive, so high-context communicators are courteous, use qualifying words, and listen carefully. High-context communicators often conceal their genuine feelings to keep a relationship harmonious. It is quite difficult to criticise someone without causing them to take offence. Importantly, people are inextricably linked to the message, which implies that achieving an agreement with someone is entirely contingent on that person.

18.4.10 Persuasion Types: Factual-Inductive vs. Affective

This dimension refers to the types of evidence negotiators use to construct persuasive arguments. We reviewed a lot of literature on philosophy, culture, and argumentation and mapped all the different kinds of convincing arguments into a two-dimensional space with factual-inductive and emotional ends.

Factual-inductive negotiators focus their arguments on empirical facts and use linear logic (if-then statements) to persuade the opposing party.

Scientific evidence, professional standards, expert opinion, costs, market value, and other complex data are examples of proof used to support convincing arguments. Furthermore, factual-inductive negotiators feel that giving their best arguments first makes the most robust case.

Affective negotiators may base their arguments on abstract theory, values, status and connection references, and compassion appeals. Moral standards, equal treatment, tradition, and reciprocity are evidence used to support persuasive arguments. Affective negotiators develop their arguments in a roundabout way. They may begin with peripheral arguments and present their best arguments after the other party responds.

18.4.10 Agreement Form: Explicit Contract vs. Implicit Agreement

This dimension relates to the parties’ preferred method of agreement: formal written contracts or informal oral agreements. Formal written contracts explicitly outline intended partner actions, the extent to which both parties to the agreement will cooperate and conform to each other’s expectations, and the consequences that one party can extract if the other party fails to execute.

Contract Explicit: This attitude of mind favours and expects written, legally enforceable contracts from negotiators. A written contract formalises the agreement and specifies what each party has agreed to do. As a result, negotiators think that written agreements provide the consistency necessary for their organisation to make investments while minimising economic risk.

Implicit Agreement: Negotiators who hold this position prefer wide or imprecise language in a contract because they believe that definitive contract conditions are too strict to allow for developing a healthy working relationship. Negotiators may think predicting and documenting every imaginable situation is impossible, especially when dealing with new partnerships. They may also argue that contracts prevent the parties from pursuing unexpected or uncommon possibilities for growth and success. Negotiators consider the contract as a rough guideline, not to avoid responsibility, but because the relationship, not the contract, is the most important.

18.5 Global E-Commerce and EDI

Global E-Marketing is an abbreviation meaning ‘electronic marketing.’ Unlike traditional marketing, E-Marketing employs marketing tactics and concepts through the electronic medium of the Internet. In essence, e-marketing connects the technological and graphical parts of internet tools, allowing for design, advertising, brand development, promotion, and sales.

18.5.1 Advantages of Global E-Marketing

• Global reach and access to a diverse demographic. A website can reach everybody in the globe who has an internet connection; you are only a search or a button click away from any online user. This enables you to compete on a global scale and test new markets that you may not be able to reach through traditional means.
• It can be less expensive than standard marketing methods. Traditional methods, such as television, print, and radio, would broadcast a message in a specific time slot, assuming that the correct target audience was paying attention. Expensive post-campaign surveys would provide the marketer with evidence of campaign traction and apparent income improvements. E-marketing enables you to track the results, instantly discover where waste has occurred, and learn which marketing channels give the most outstanding results to the market.
• A website is a shopping location open 24 hours a day, seven days a week. With a website and an online shopping engine, your business may continue to operate even when your store or office is closed. The website also lets you communicate with customers in-depth about your product lines, allowing them to be fully educated on the benefits of your products even before meeting your staff in person.
• Website content may be fun and interactive. Unlike the printed word or television, you can establish a two-way connection with your customers. This might be as simple as a quick email answer or as complicated as a regularly maintained blog or microblog.
• Convenient access to information and the capacity to make purchases. It may be less expensive to update and re-skin your online storefront than to re-paint or re-house your physical storefronts, and the same is true for establishing international versions.

18.5.2 Factors Influencing Strategy Development

The following sections describe some of the aspects that influence the development of a worldwide e-marketing strategy:

• Regulation diversity: Online rules such as privacy laws, taxation, and commerce directly impact online providers and shape usage behaviour in a given country. The type of competition that emerges in a specific country or region is determined by the legal framework in place. For example, Customers in Italy are required by bank regulations to open accounts in person, pushing internet banking firms to establish an offline presence.
• Infrastructure: Telecommunications and Internet infrastructures vary significantly between countries. Perhaps two factors are critical in strategy formulation. First, installed international bandwidth limits the speed at which information moves between a foreign website and a local buyer. Second, there are significant differences between nations regarding the percentage of people accessing the Internet via a PC, a TV set, or a mobile phone.
• Geographical distance: Although the world has shrunk due to globalisation and the internet, distance remains a concern. When executing international orders for tangible goods, it is difficult to overestimate the importance of smooth and cost-effective distribution operations. The ability to deliver physical things on schedule is not the only difficulty for online marketers; processing and replenishing product returns can be a nightmare, especially given vastly disparate cross-national rules and customer preferences regarding return policies.
• Language: If English were the only language in the world, life would be straightforward. Too many e-businesses have disregarded the golden rule of marketing, which states that marketing operations should always be conducted in the client’s language. Buyers prefer to buy items and services in their native language, mainly if the purchasing process necessitates comprehending contractual conditions.
• User Demographics: While the global internet population continually expands, it is not homogeneous. For example, women account for only 10% of internet users in most Latin American nations, whereas they account for nearly 50% in the United States and Europe. Companies wanting to sell healthcare goods and services online may struggle to expand sales in nations with few female web surfers, as women make most family healthcare decisions. Similarly, in certain countries, most internet users live in major metropolitan regions, which significantly simplifies distribution operations.
• Buyer behaviour: Everyone’s tastes and preferences are unique. These are particularly noticeable in the case of “cultural products” such as food, wine, and entertainment. Even consumer durables exhibit significant cross-national variance in taste. Regarding goods selection and stocking, businesses must consider customer likes and preferences. Each country’s portals with online retailers offer distinct selections at great prices.
• Payment systems: Payment methods and customs vary considerably from country to country, but credit cards are used to pay for an increasing percentage of e-marketing transactions. Consumers and businesses must embrace the existence of numerous currencies on the Internet and try to use them as a tool for price discrimination. They should also monitor currency swings because the time lag between order and payment exposes them to exchange rate risk.

18.5.3 Development of an Electronic Data Interchange Strategy

For nearly 25 years, electronic data interchange (EDI) was the norm for exchanging commercial transactions, purchase orders, invoices, shipping alerts, and electronic cash transfers. In the last ten years, EDI has evolved with modern technologies, particularly the pervasiveness of the Internet. Because of these technical improvements, EDI is now nearly as simple as email and no longer a viable corporate alternative. EDI, on the other hand, is a business requirement.

One of the primary issues facing IT and business decision-makers in charge of managing supply chains and the operations of their trade partners is how to enable more effective collaboration with business partners with different regulatory requirements. Concerns are also raised about those corporate partners’ varied degrees of technological knowledge, communications protocols, data standards, and information systems.

This complexity is exacerbated by a scarcity of EDI or business-to-business (B2B) process expertise and the technologies required for successful B2B collaboration. The fact that most businesses are looking for crucial performance improvements and administrative savings makes this scarcity even more challenging. Businesses are also attempting to keep up with the increasing demand for accommodating new global partners, automating more interactions, and managing legacy EDI systems. The growing number of data types, standards, and protocols complicates matters further.

To meet these challenges, businesses require a secure, agile, flexible, and global B2B integration platform. When combined with real-time business process visibility to achieve the highest level of B2B collaboration, the EDI platform can accommodate resource limitations by offloading responsibilities from your IT personnel.

Electronic trading necessitates collaboration among organisations, which must agree on the format of electronic messages and collectively commit to investing in the necessary technical and organisational changes. EDI differs from many other information technologies in that it cannot be implemented in isolation by organisations. In practice, this necessitates negotiations among businesses with little history of collaboration. Early adopters of electronic trading emphasised its potential as a strategic information technology to achieve a competitive advantage. However, current EDI terminology increasingly portrays it as a “partnership” between trading partners. EDI implementations have symbolic significance to user firms since they result from stronger ties and demonstrate their commitment to a long-term relationship, but they are not always economically justifiable.

1. Companies must address the following needs when they establish long-term EDI strategies to scale up to major B2B and EDI projects with multiple clients and partners:
2. How to deal with the challenges of serving growing global markets due to supplier diversity, the impact of trade legislation and financing, and the complexity of supply chain delivery. Companies must respond to all clients and manage all partners efficiently and cost-effectively.
3. How to combine on-premise systems with cloud-based solutions.
4. How to integrate with business partners who also use cloud-based systems and applications.

Business decision-makers in charge of the success of B2B integration discovered a scarcity of B2B process specialists and technologies. Businesses seeking administrative savings and critical performance improvements face additional challenges in obtaining the resources required to meet these new requirements. Businesses must also manage older EDI systems, dealing with increasing data kinds, standards, and protocols.

On the other hand, adopting an EDI linkage differs dramatically from adopting innovative internal technology in that EDI causes changes in the exchange relationship between the participating enterprises, which have ramifications for both the channel’s internal economy and polity. Establishing a sophisticated computer link between organisations demonstrates a substantial commitment to the relationship. Discrete transactions are merged to form a long-term, complicated relational trade. This necessitates paying attention to the efficiency effects of the technology and the impact it will have on the parties’ business relationship.

The relative advantage of EDI over traditional exchange systems includes not just lower transaction costs for channel members but also increased service to channel clients in the output market. The downstream channel member gains a competitive advantage due to EDI’s ability to respond quickly to consumer requests. The prospect of gaining a competitive edge substantially impacts the possibility of adopting new technology in highly competitive output markets.

The formalisation of communication within the channel is a critical feature of EDI. It improves inter-organisational communications’ speed, accuracy, and completeness by formalising communication processes and procedures. This has significant consequences for channel commitment because timely and meaningful information exchange has been linked to improved outcomes compared to comparator levels. Furthermore, the ability of channel members to comprehend each other’s goals and coordinate their efforts to attain those goals has been connected to the increase in the quality of information flows between channel members.

If provided by channel members using EDI technology, channel buyer satisfaction results from both cost savings and an improved ability to serve their customers. The opportunities for differentiation afforded by EDI can be viewed as those afforded by a technological innovation that allows the firm deploying the EDI to provide a higher level of service than previously experienced in the industry. The innovation’s uniqueness enables the company to differentiate itself through superior service, increasing the likelihood of channel commitment and source loyalty. This differentiation should increase its share of the linked buyer’s business.

Insurance industry systems have been developed specifically to serve the strategic goals of specific insurance companies. Aetna, for example, provides its agents with a fully integrated proprietary system comprising a back-office agency management system and an electronics interface to the company’s mainframe via its GEMINI system. Although this technique dramatically raises the expenses of the target firm’s initial adoption, it also makes adopting subsequent interfaces prohibitively expensive.

On the other end of the spectrum, insurance companies like Maryland Casualty enjoy simplifying EDI deployment by adapting to whatever technology the agents have and utilising the industry’s public value-added network. The solution is typically a stand-alone PC that decouples the internal agency system from the EDI and its external interactions. As a result, the agency’s internal computer procedures and databases are not fully integrated with the flexible (and modular) strategy. This method decreases the costs of first adoption significantly but leaves the source firm vulnerable to the target firm’s easy adoption of further links.