Bullet 3: Stakeholder Groups

Bullet 3: Stakeholder Groups

1. Customers

   • Greater choice is available
     • This is in terms of both the products and services themselves, and also how they are purchased and consumed
   • They have a greater buying power
     • Porter's 5 Forces
     • They can easily compare prices which makes them more price sensitive
       • Price Comparison Websites like gocompare.com for insurance and trivago.com for travel
     • Consumers have a great “voice” – their ability to share (via social media for example) and complain is now more powerful
   • Lower transaction costs and a higher price transparency
     • Customers have traditionally incurred transaction costs – e.g. lack of knowledge about choice, price, searching for availability
     • E-commerce significantly reduces these, thereby making the market more efficient
   • Need for greater protection
     • Increasingly widespread adoption of e-commerce has required new consumer protection legislation
       • Distance Selling Regulations
         • These are the rules that apply if you are buying products or services, without face-to-face contact and when the consumer has not had the opportunity to examine the products or service before purchase
     • Increasing concerns over data security as digital transactions become normal
       • TalkTalk Hack of 2015
         • TalkTalk’s online system was hacked and over 156,000 customers had their personal details accessed and 15,000 bank account numbers and sort codes were stolen.
         • The exponential growth in digital transactions places a significantly higher burden of protection on firms that process and hold customer data. The costs of failing to protect customer data are substantial – potentially they destroy a business’ brand and goodwill.

2. Employees

   • E-Commerce requires employees to have different skills
     • = creating the need for more training and different recruitment methods
   • Concern over the skill gap being created which is that firms don't have the digital skills required
   • Working conditions change as the business culture changes
     • Several high-profile exposes have highlighted concerns about working conditions in e-commerce operations.

3. Suppliers

   • Greater need for integration of the supply chain
     • E-commerce systems are increasingly more sophisticated and tightly integrated with other business processes and IT systems.
       • Suppliers need to be able support such systems if they are to supply their key customers.
   • Some suppliers can now use e-commerce to transact directly with customers
     • Disintermediation
       • It involves a general move to more direct distribution channels. E-commerce makes it much easier, for example, for brands to sell to and develop direct customer relationships rather than rely solely on retail and other distribution channels.
   • Reduced Bargaining Power
     • Porter's 5 Forces
     • Suppliers are one part of the demand and supply equation. In the same way that consumers can use price comparison sites to find the best price, the B2B market also has greater price transparency
       • UK Government Tending website helps businesses find and compare suppliers

4. Local Community

   • Can cause redundancies which increases levels of unemployment
   • Can cause skill advancements and encourages people to learn and innovate new ideas

5. Shareholders

   • They would see it as a growing futuristic opportunity, which will inevitably lead to more success and profits

6. Government

   • Job losses = higher levels of unemployment
     • In both developed and emerging economies, e-commerce is a key driver of increased employment, business investment and exports.
   • Higher sales = More tax
     • By its nature, e-commerce enables transactions to cross borders easily, raising concerns about whether taxes paid are fair.
       • Tax Avoidance: Facebook, Amazon and Google
         • Facebook paid £4327 of corporation tax; and the average UK worker tax payment was £5393. This is because they moved their profits to Ireland which has lower tax rates

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