Digital Business: ASOS Plc and the Impact of External Factors

This article explores the concept of digital business and its impact on ASOS Plc, a British online cosmetic and fashion retailer. It discusses their mode of operation, market segment, mission and vision, and key factors responsible for their growth. It also examines the impact of external factors on their digital business operations.

Digital Business

Table of Contents
Introduction......................................................................................................................................3
Digital business...........................................................................................................................3
Digital business & traditional business models:.........................................................................4
Factors which facilitated to intake digital businesses: ...............................................................5
Main Body.......................................................................................................................................5
About ASOS Plc:........................................................................................................................5
Mode of operation:......................................................................................................................5
Market segment:..........................................................................................................................6
Mission & Vision:.......................................................................................................................6
Key factors responsible for growth of ASOS Plc:......................................................................7
Impact of external factors of digital business operations on ASOS Plc:....................................8
Conclusion ......................................................................................................................................9
References......................................................................................................................................11

Introduction
Digital business is defined as usage of technology for creation of new values within
business models, customer experience along with internal capabilities which are liable for
supporting their core business (Chaffey, Hemphill and Edmundson-Bird, 2015). It denotes
formulation of new business designs through blurring of digital & physical worlds. For
understanding the concept of digital business, ASOS Plc is taken into the consideration. They are
British online cosmetic and fashion retailers who emphasise on young adults. This report
comprises of key issues related with key issues of digital business, modes of operation,
description of business, factors behind growth of the business and external factors.
Digital business
This term comprises of both traditional players as well as digital-only brands who are
altering their businesses through the utilisation of digital technologies. Basically, digital business
is liable for creation of competitive edges depending upon unique combination of both physical
& digital resources. ASOS Plc deals within clothing industry as well as online shopping and their
products comprises of accessories, shoes, clothes and beauty. They are making use of digital
business and this acted as strongest factor which made them a step ahead from their competitors
like Arcadia who are present within the market from longer time frame as they (rivals) still make
use of traditional methods of sales (Darics, 2015).
Digital business & traditional business models:
A form of creation of values depending on development of benefits to customer through
the usage of digital technologies is referred to as digital business model. This aims at generation
of relevant affirmative edge for which consumers opt to pay. When the emphasis is on
transaction of services and products which involves all those activities for exchange is referred to
as traditional business model. This involves a manual process where goods can be physically
inspected before they are being purchased (El Sawy and Pereira, 2013). The distinction between
both of them has been illustrated below:

 Overhead cost: The digital business have low start-up and overhead costs in comparison
to traditional business models who possess brick-and-motor stores. By eliminating needs
for utilities, staff and rent, firms like ASOS Plc improvises their profitability. The web
costs associated with marketing and development are not being obviated in case of
traditional business models.
 Significance of consumer convenience: The growth of online retailers like ASOS Plc
makes it difficult for firms such as Arcadia to compete with customers who look for
having convenient shopping experience. There exists customers who still opt for having a
live experience as well as examine products (Kohli and Melville, 2019). This denotes that
all the businesses do not opt for digital business models.
 Reputation to customers: Brick-and-motor stores tend to provide their customers with
confidence that businesses are genuine. Through, the traditional business models, the
individual have the option to walk within and look at the inventory acts as a biggest
factor which keeps up customers to go for traditional businesses. This also denotes that it
will be time consuming for digital business models to develop their brand image within
the market.
Factors which facilitated to intake digital businesses:
To acknowledge this, an instance can be taken like Arcadia is operating within the market
from decades but in 2017 their profit dropped to £124.1m as compared to previous year which
was £215.2m. The sales decreased by around £1.9 billion which is a huge number and reason
behind this was online shopping (The rise and fall of Philip Green’s Arcadia Group, 2019). This
denotes that it is a high time for firms like Arcadia to opt for digital business to remain active
within the market and render effective services to their existent customers. There was the
constant drop within the brick-and-motor business due to the emerging technologies and this
acted as a strong point for ASOS Plc to deliver their services via this. At present they are
strongly present within the market of UK and have an affirmative brand image.
Main Body
About ASOS Plc:
The firm who has redefined cosmetic as well as fashion retailing via their online
marketing brand, is ASOS Plc. Their core values comprises of democracy, positivity, creativity

and people first which acts as a guiding principle & has lead to creation of remarkable growth
trend (Rayburn and Hoch, 2012). The management of ASOS Plc believes within a world where
each individual have complete freedom to be what they are without any kind of judgement. It
renders multi-platform and unique experience which resonates with the people who utilise this as
it is formulated for them. Here, a place is provided where individuals can develop their own
style. They have collaborated with suppliers, governmental, non-governmental and brands for
addressing specified social as well as environmental challenges for supporting & moving
towards industry-wide and long lasting change (Remane and et. al, 2017). Management of ASOS
Plc has also acknowledged the significance of decoupling carbon emissions which are being
created by the business growth and also minimise the waste through reusing materials rather then
depending on virgin materials.
Mode of operation:
ASOS Plc has started their business like a local brand but at present through the
appropriate utilisation of digital mediums they have reached a huge number customers. At
present, there international sales comprises of more that 50% of their total revenue which is
being attained. Their outsourcing strategies emphasise on three major areas, they includes ethical
trading, animal welfare and sustainable sourcing (Schmidt and Cohen, 2013). Within their
ethical trade programme, they identify visibility of their supply chain, social impacts are
addressed and supply chain is being monitored. In 2018, they have set up the programme third
party brands for transformation via collaboration for driving systematic shift within the way
brands approach sustainability as well as ethical trade. Their primary mode of operation is digital
services or providing the products via the usage of online medium. At present scenario, people
are more addicted to the online services which acts as a strong point for ASOS Plc to gain high
profitability and acquire more number of customers in comparison to strong players like Arcadia
present within the market.
Market segment:
ASOS Plc is aiming at world's leading online fashion specialist by emphasising on
customers who are in between 16 to 25 years. They provide them with thousands of products
through the utilisation of website. The brand have introduced themselves as customer obsessed
which denotes that they prioritize their customers by providing them products as per their
anticipations which enables ASOS Plc to provide fashionable and trendy items. Along with this,

management provides them customer service support for 24*7 and it is also provided within 6
different languages which denotes that they are open to attract the customers who do not have
knowledge of any English (as this is usually used within UK. Along with this, they furnish their
customers with trustable and fast shipping options (Sousa and Rocha, 2019).
Mission & Vision:
ASOS mission statement is “to be the irreplaceable fashion online-address present within
the world and keep their leading position all the time within fast changing global business
world”. They want to be the world's number-one destination for the fashion lovers and their main
components includes global reach along with distinguished services and quality. For this, ASOS
Plc has been continuously refining as well as optimizing their online platforms for making sure
that they reach maximum number of customers.
The Vision statement of ASOS includes “creation of ever-mounting demand for their
brands fashionable and trendy designs through the assistance of their unique business model. The
vision aims at supporting evolution of sustainable competitive position of the brand by keeping
demand of brand higher by monitoring the taste of their targeted group (Westerman, Bonnet, and
McAfee, 2014).
Both vision and mission statements of ASOS Plc assist brand to work harder for catching
as well be ahead in terms of global trends through their creative & insprative designs which are
delivered through incomparable online experiences which is being offered to their customers.
Their rationale is to give individuals the confidence that they can be what they desire to be and
this is exactly done by the ASOS Plc by rendering unique fashion for both women and men.
Apart from all this, they have provided 7-country specific websites which comprises of
Germany, Spain, Australia, UK, Italy, US and France. They also have their own Magazines
which acts as a point of interaction in between services rendered by ASOS Plc and their
customers. Management of ASOS Plc possess enhanced customer proposition, efficacious
international strategies and improvised cost structure.
Key factors responsible for growth of ASOS Plc:
Customers around the globe are continuously shifting in terms of how, when & what they
have to buy for keeping pace with market which acts as a crucial part for every organisation and
acts as a strong factor behind success (Chaffey, Hemphill and Edmundson-Bird, 2015). ASOS is
one of the online pure player in UK which is beating the trend which includes (bankruptcies,

store closures and many others). They have boosted up their sales by 32% which implies that
they are effectively carrying out their services and have created strong impact on their customers.
The key factors behind the growth of ASOS Plc have been illustrated below:
 Embracing the new: This is the major driving area for ASOS Plc as they are committed
to provide their customers with latest trends but they also offered new products. As per
data from retail analytics firm, they are offer their customers with 2500 to 7000 new
items each week (Darics, 2015). They takes time for full assortment before the trends are
being dropped within one go. ASOS Plc have solidified their position within the market
as a fast-fashion trend authority (5 reasons why ASOS continues to be successful, 2019).
The top five brands with which ASOS is delivering their offers are Nike, Under Armour,
Nike Running, Reebok and Adidas.
 It is not about being cheaper: Unlike other fast fashion retailers, ASOS Plc do not
emphasise on being cheaper rather they provide their services at distinct price points.
They also focus on offering stand-out which cannot be found somewhere else. The prices
which are being mentioned on exclusive products are higher as compared to their rest of
assortment. This can be understood by taking an example, exclusive athleisure products
with Eliesse, Nike and Puma.
 Strategical discounting: ASOS Plc have build up stronger system for this in which they
do not lump their discounted products together but a separate section is present within
their website named 'outlet'. This implies that sale shoppers exactly know within the
website where they have to go but here also they furnish their new products. Apart from
this, ASOS Plc offers their customers with promotional discounts on other items which
are present outside the outlet section through email discount codes. ASOS's UK
sportswear were offered at an average discount of 37%.
 Solid Core: ASOS is trend driven which acts as a backbone of fashion sales acts as a
core item which acts as 8% of their all offerings. Their wardrobe staples comprises of
own-brand black & blue denim for women and men, Tommy Hilfigher, Nike along with
blouses and own-brand shirts. Furthermore, ASOS Maternity lines and Curve offers wide
range of core pieces which are continuously sold.

Impact of external factors of digital business operations on ASOS Plc:
For formulation of strategies, it is crucial to look for external factors which may create
influence on the ways in which services are being delivered by an organisation (El Sawy and
Pereira, 2013). This will lead them to efficaciously manoeuvre the competition by which they
can have the maximised options for enhancing chances of profitability as well as sustainability.
The factors which creates an impact on digital business of ASOS Plc have been specified below:
 Political factors: The chances of endurance of firm are different and risks vary from
sudden alterations which takes place when crucial decisions are formulated by
government. It is crucial that ASOS Plc takes into consideration the probable political
risks like the levels of taxation which might restrict firm to make higher profits, trade
barriers which will prevent them from exports, laws which are enforced by country in
context of what can be done and what are not allowed to do.
 Cultural factors: Each country have their own culture which comprises of set of beliefs
and values that are being possessed by them. This denotes that ASOS Plc have to take
into account the society in which they are delivering their services so that their values are
not hampered (Kohli and Melville, 2019). Apart from this, ASOS Plc can consider the
class distribution as in case if majority of population belongs to a lower class then it will
be difficult for them to promote their premium product and have to depend on the niche
market.
 Technological factors: Technology is rapidly changing both in terms of price structure
as well as competitive landscape. This denotes that it becomes crucial to bring
consistently innovations (Darics, 2015). For an instance if their comes a new technology
which is gaining popularity within the industry then ASOS Plc must monitor the
popularity levels along with how quickly it is being growing. This will lead to them to
develop their own innovative substitute or have something to match with that.
 Environmental factors: In case if ASOS Plc contributes within the endangerment of
species then they will have to face consequences from law even public might boycott the
services that are being delivered by them. This means that ASOS Plc must analyse the
environmental standards which are required while operating within the market. The firm
is careful about the waste which is left and ensures that it is recycled and can be utilised
to have effective outcome (Rayburn and Hoch, 2012).

Conclusion
From above it can be concluded that, digital business refers to the formulation of new
business designs that are not only responsible for connecting people and business but also drives
efficiency along with revenue. It further assists within elimination of barriers which exists within
the industry and aids within formulation of new value chain & business opportunities. It is
understood that ASOS Plc through the utilisation of digital business renders their customers with
a seamless integration among physical and digital that is liable for blending the boundaries which
prevails in between these two. ASOS Plc is rendering their services through digital or online
mode which enables them to reach to maximum number of customers and their target segment is
young individuals. The firm provides their customers with products which are in trend along
with the one which they have in their imagination. Along with this, endless products are being
given at different prices. It leads them to remain competitive within the market and set a
benchmark. Through this, ASOS Plc can have high profits the reason behind this is that it will
enable them to give their customers with the options in product along with their prices. So
customer can choose as per their convenience. But there also lies some factors such as evolution
of technology, environmental aspects, political concerns and cultural beliefs of individual which
may create a significant impact on the way in which services are being delivered. By
acknowledging these factors, ASOS Plc will be able to sustain within the market as they have
considered all the major aspects which prevails within the market of specified country.

References
Books & Journals
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Rayburn, D. and Hoch, M., 2012. The business of streaming and digital media. Routledge.
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Schmidt, E. and Cohen, J., 2013. The new digital age: Reshaping the future of people, nations
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business transformation. Harvard Business Press.
Online
The rise and fall of Philip Green’s Arcadia Group. 2019. [Online]. Available through:
<https://theconversation.com/the-rise-and-fall-of-philip-greens-arcadia-group-118627>.
5 reasons why ASOS continues to be successful. 2019. [Online]. Available through:
<https://fashionunited.uk/news/business/5-reasons-why-asos-continues-to-be-
successful/2017081825534>.