Diplomarbeit

DRIVERS AND INHIBITORS FOR DIFFUSION OF
ELECTRONIC COMMERCE WITH REFERENCE TO GERMANY

This report is submitted in partial fulfilment of the requirement for the degree of Master of
International Business Analysis at University College Northampton U.K. with Honour in
Marketing and Entrepreneurship Field

 by Yanhui Zhang.

CONTENTS

Chapter 1. Introduction ... 1
Importance of the Study ... 3
Research Objectives ...  4
Limitations of the Study ... 5
Organisation of the Study ...  6

Chapter 2. Literature Review ... 7
2.1 A Framework for Review ... 7
2.2 Justification of Framework ... 9
2.2.1 Research Rationales ... 9
2.2.2 National Environments ... 13
2.2.2.1 Driving factors for Diffusion of Electronic Commerce ... 14
2.2.2.2 Inhibitors for Diffusion of Electronic Commerce. ... 20
2.2.3 National Policies ... 24
2.3 Key Lessons from the Literature Review ... 25

Chapter 3. Research Methodology ... 31
3.1 Research Philosophy ... 31
3.2 Research Approach ... 33
3.3 Research Strategy ... 34
3.4 Research Methods ... 35
3.5 Research Conduct ... 36
3.6 Data Analysis ... 39
3.7 Validity and Reliability of the Study ... 41

Chapter 4. Presentation of Results ... 43
4.1 Practical Implications of Electronic Commerce in Germany ... 43
4.1.1 National Environment ... 48
Demographics and Human Resource ... 48
Information Infrastructure and Technologies ... 54
Economy ... 59
4.2 National Policies ... 63
4.3 Questionnaires ... 68
Purpose of the Research and Firms Classification ... 68
Selection of Variables ... 69
Design of the Questionnaires ... 71
SPSS Commandos ... 72
General Formulas ... 74
Data Analysis ... 75
Research Analysis ... 76

Chapter 5. Discussion ... 79

Chapter 6. Findings ... 81

Chapter 7. Personal Reflections ... 84

Reference  ... 87

LIST OF TABLES
Table 1.1 E-commerce infrastructure and B2B products comparison in 2002  ... 17
Table 4.1 Internet usage and online shopping 1998-2003  ... 45
Table 4.2 Proportion of selected age groups in Germany  ... 49
Table 4.3 Internet user by age in % of total population in Germany  ... 50
Table 4.4 Number of households with forecast in 2004 and 2010  ... 51
Table 4.5 Percent of single households with forecast in 2004 and 2010  ... 51
Table 4.6 Average income and expenditure per household and month 2003  ... 52
Table 4.7 Population density 2003  ... 53
Table 4.8 Telecommunication infrastructure in 2002  ... 55
Table 4.9 Penetration of PCs  ... 57
Table 4.10 E-commerce revenue in 2002  ... 57
Table 4.11 M-commerce sales in selected European countries in 2002 ($ millions)  ... 58
Table 4.12 Firms Classification  ... 68
Table 4.13 Number of Firms after Classification  ... 68

LIST OF FIGURES
Figure 4.1 Internet sales and intensity in Germany 2002 (%)  ... 46
Figure 4.2 Order through Internet and intensity 2002 (%)  ... 46
Figure 4.3 Age structure: 2001  ... 48
Figure 4.4 Development of prices for long distance and international calls, 1996-2002  ... 55
Figure 4.5 Dial-up Internet connection per minute 1999-2002  ... 56
Figure 4.6 Sector distribution of GDP, 2002  ... 59
Figure 4.7 Significance of the Web for marketing activities in selected German firms  ... 62

CHAPTER ONE INTRODUCTION

Information services and products today constitute one of the world’s largest economic sectors. Computers and the networks that connect them have become a dominant force in virtually all aspects of society throughout the industrialized world. Institutions and individuals alike are flocking to the Internet - particularly to the World Wide Web - in record numbers, making it the fastest-growing medium in human history (Baptista, 2000). First made available to the public in 1992, the Web is used today by 205 countries and regions and its user number is expanding at approximately 30 percent per year (OECD, 2002).

Technological improvement as well as the declining prices for the access of this technology has led to the explosive growth of Internet during the last few years. The electronic commerce (e-commerce), as one of the most important applications of the Internet technology, is undoubtedly bringing countries together to create a global network economy with expectation of reducing transition costs, increasing market transparency and making business more efficient.

However, e-commerce is unevenly diffused in different countries. New growth theory (Ohmae (1996); Solomon & Bamossy (2002) insists that national characteristics such as industry structure, information infrastructure, financial systems and national policies, influence technology diffusion and innovation outcomes unevenly. E-commerce via Internet is said to have no national borders, however, individuals and companies in different countries response differently to it. Hence, understanding adoption drivers and inhibitors of e-commerce diffusion is becoming increasingly important.

Despite the substantial social and economic implications of e-commerce, there is a lack of empirical assessment on diffusion and impacts of ecommerce. Especially at the level of individual country, there is still no systematic research done on the exact success factors for diffusion of e-commerce or the social and economic impacts of e-commerce affected by different national contexts. In order to overcome this lack of research, this dissertation, based on many interrelated case studies, chooses Germany, to identify typical key influential drivers and inhibitors for diffusion of ecommerce. 

The dissertation tends to connect theories with empirical data achieved in this area. It is designed to supplement, not duplicate, existing initiatives addressing domestic electronic commerce issues in Germany. By focusing on analysing these key factors within international and national frameworks, the dissertation is calculated to deliver maximum practical impacts. It provides practical aspects to analyse the virtual markets in different countries and helps business leaders to do e-commerce more efficiently. Furthermore, this dissertation pertains to the digital divide of ecommerce users and thus also provides factual foundation for key policy initiatives to enable e-commerce for certain firms or individuals and establish security policies. In this scenario, the research directed towards identifying key drivers and inhibitors of e-commerce diffusion could guide for both business leaders and policy makers to better assess the opportunities of e-commerce activities within concrete national frameworks.

IMPORTANCE OF THE STUDY

Electronic commerce over the Internet is a new way of conducting business. The promise of significant economic growth places e-commerce high on many public and private sectors. The key reason of this growth is its significant impact on business costs and efficiency (Martin, 2000). With the rapid improvements of communication technologies, the application of e-commerce is becoming simpler, which implies a wide and fast adoption of e-commerce in the near future. With the expansion of e-commerce, subtle impacts are observed in almost all the countries.

Because of its geographical hub position and diversified service sector in Europe, e-commerce development is of strategic importance for Germany. Based on my business management studying at the Johannes Gutenberg University Mainz and life in Germany for more than four years, I have noticed the rapid changing from the traditional trading channels to ecommerce by German companies and enormous impacts of the newest trading way in the B2B and B2C area. The success story of Germany in ecommerce also demonstrates a good way for other countries to survive and succeed in the electronic century. Therefore, there is interest in understanding the factors that drive e-commerce diffusion in Germany. This research will try to advance study outcomes and identify exactly the influential factors that impact the diffusion of e-commerce, one of the newest trading tools in Germany. The audience will gain a good understanding, what factors are essential, how these factors function, and what should be taken into consideration by developing e-commerce services in this country.

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