PEST Embedded SWOT Analysis on China's E-Commerce Industry Development Strategy

PEST Embedded SWOT Analysis on China's E-Commerce Industry Development Strategy

Jingkun Zhao (School of Traffic and Transportation, Beijing Jiaotong University, Beijing, China), Honglu Liu (School of Traffic and Transportation, Beijing Jiaotong University, Beijing, China) and Wanxin Xue (Management College, Beijing Union University, Beijing, China)
Copyright: © 2019 |Pages: 14
DOI: 10.4018/JECO.2019040105
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This article investigates how e-commerce industry in China can achieve high levels of development under such circumstances. In order to better explore the development strategies of China's e-commerce industry, researchers have already introduced PEST analysis or SWOT analysis, however past studies concentrated exclusively on the main ‘net effects' of these analysis. Because of the complex reality in which the phenomena of e-commerce industry, PEST embedded SWOT analysis can provide a more accurate understanding of how e-commerce industry in China can maintain the healthy and stable development. Applying this theory, the article seeks to determine all the possible factors that build strong development of e-commerce industry in China. To address the question of this research, the study employs PEST embedded SWOT analysis which proposes industry analysis framework of the development strategy of China's e-commerce industry. Future research can consider other possible combinations and explore how the impact of these factors on development strategy of China's e-commerce industry.
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The level of industrial development is the most important part of the national competitive advantage system (Caves & Michael, 1980). In recent years, accompanied by Internet, cloud computing, big data and network as the representative of the information technology rapid development, under the multiple factors driving, business scholar has proposed that electronic commerce produces a commercial form sharing business information, maintaining business contacts and conducting business through remote communications network(Zwass, 1998).Electronic commerce in China is deeply penetrated into social, economic, political, cultural and other fields. So, e-commerce, in addition to electronic trading products, contains a deeper business process restructuring and strategic alliance formation (Lynda, Clyde, Ravi, Franz, & Andrew, 1996).

It becomes an inevitable choice of a business intending to open up domestic and foreign markets, also new channels of individual consumers, government departments to stimulate domestic demand. Yifang (2011) suggests the main problems of China's e-commerce industry development, employs qualitative and quantitative analysis, and puts forward a more appropriate development model. Lihongxia (2015) develops a selection model about E-commerce industry development path by constructing a constrained path selection model and the extends path selection model, extracts seven industries related to e-commerce and reveals the relationship between e-commerce industry and other industries.

Liuning (2011) presents the concept of mobile e-commerce industry value chain based on the basic theory of industrial chain, value chain, mobile e-commerce and so on, analyzes the types of mobile e-commerce industry value chain and the entity and its role in mobile business operation status, and finally summarizes the mobile e-commerce model type and applicable condition common. Brookes & Wahhaj (2001) use MULTIMOD model to estimate the impact of B2B e-commerce on the United States, Japan, Germany and France. Goldmanis et al. (2009) study on the adoption of e-commerce impact on supplier market structure. What is more, Chengying (2011) employs the SCP of industry economics analysis method. A positivist survey methodology is used to our country electronic commerce industry market structure, market behavior, market performance empirical analysis, and then some suggestions on the development of the industry are given.

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