Digital Business: Advantages, Disadvantages, and Impact on Netflix

This report discusses the concept of digital business and its advantages and disadvantages. It focuses on the impact of digital business on Netflix, including new business models and collaborative relationships. The report also explores the application of digital business principles in the context of Netflix.

DIGITAL BUSINESS

Table of Contents
ABSTRACT.....................................................................................................................................3
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
P1 Digital business along with advantages and disadvantages in relation to Netflix............4
P2 Evaluation of new and emerging digital business models................................................6
P3 Evaluating the impact of new collaborative relationships and strategic alliances which is
through the digital technology................................................................................................7
P4 E-commerce principles used by Netflix............................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

ABSTRACT
Digital business refers to the creation of new business design which is there by using the
digital and physical world. This is the one in which there are many of the solution regarding the
awareness and to reach out the target customer. Aim of this report is to understand the digital
business and their advantages and disadvantage which are there able to provide different benefits
to the business. In this, it has provided the understanding about the digital business which have
different advantages and disadvantage. In this, understanding regarding the digital business was
provided.
It has defined there that new and emerging digital business model which was able to
provide better understanding about the business issues that was regarding the cyber issues and
their securities and there was also some explanation about the ethics of related organisation.
There was some of the understanding about the collaboration relationship which is
regarding the strategic alliances in the digital technology regarding the chosen organisation. This
was able to provide the advantages and disadvantage of the collaborative relationship. There was
also the understanding about the application which was there to use for the collaborative
relationships.
There were also some explanation which was regarding the e-commerce and their
principles which was able to provide better understanding about the news, magazines and other
publication which is regarding the chosen organisation.

INTRODUCTION
Digital business refers to creation of new business design which is by blurring the digital
and physical worlds. This can help the business to grow rapidly in the new market. This is
having the ability to get the small business into a better and also helps in to expansion of the
business. In this report chosen organisation is “Netflix”. This is an American company which is
over the top content platform which is having the production company in Los Gatos, California.
It offers online streaming as an entertainment. The aim of the report is to understand the
importance and different ways which are there can help the business unit to grow with rapid
speed. In this report there is discussion about the advantages and disadvantages which is there
applied in the chosen organisation, new and emerging digital business models, new collaborative
relationships along with strategic alliances, the e-commerce principles could be used in the
chosen organisation (Goldfarb 2019).
MAIN BODY
P1 Digital business along with advantages and disadvantages in relation to Netflix
Digital business is the one in which there is use of the technology which is there to create
the values of the business models, internal capabilities along with customer experiences which
helps in to support the core operations. This includes the both digital brands along with those
who are traditional business players and are trying to transform the business with technology.
There are some of the common elements which are there in the digital business. From the
industry experts, there are different views on the definition of the digital business. Netflix is
using the digital platform which is expanding its business in fast manner. It can say that digital
business is the one which is able to offer the new value chain and different opportunity which
can;t be offer by the traditional business. According to the view of McKinsey, digital seems to
less but having broad things.
There are many advantages and disadvantage of digital business which si having the
effect on the company so much and can change the whole scenario of the brand within less
period of time (Etter 2019).
Advantage
Enhanced data collection- one of the big advantage of going digital is that there is very
easy way to collect the data which is of their customer. There is easy to handle such data along

with ease in using or getting access of the data at any time from anywhere. It also helps in
analysing the data along with optimizing it to use for the better in the business. It is the system
which helps in gathering the correct information at higher level.
Data driven customer insights- This is the one which is able to help the business to
understand better your customer. This helps the business to get the high level of satisfaction to
the customer (Xue 2018). This can also helps in to create the right business strategy which is
there best for r the Netflix. Netflix uses the strategy to better understand the demand and interest
of their customer and able to satisfy their customer in better way.
Increased profits- According to the report of SAP Centre for business insights & Oxford
Economics, there are about 80% of the business which have switched to the digital
transformation has reported profits in their businesses. It also helps in increase the market share
of the business. In context to Netflix, it is able to capture the high market share in all over the
world and became one of the most popular online entertainment source. Due to high access to
customer within time, there are able to capture huge customer base in minimum time which
creates the high profit (Bolton 2019).
Disadvantage
Data security- One of the threat of the digital business is related with the security of the
data of the business which is either related with the business or with their customer. Netflix is
investing more in the protection of data to safe the information. High level of theft of data is
there which needs more investment in its security.
Social disconnect- digital business increasing the chances to get disconnect with being
social with the society. This c4reates the isolation from the real life. Netflix is very adaptive in
nature due to offering different content and many options, people get adaptive and like to watch
continuously this content which is able to create the isolation from the real world.
Job insecurity- This is one of big disadvantage for the people as the job opportunity.
Digital business is able to replace the employee with the computer and can create the lack of
human job opportunity which creates the low wages economy.
Application to using digital business
There are different application which are there in the chosen organisation as the digital
business. There are some of the advantages are like getting large level of customer base in less
time. There are also some of the advantages that due to having the online there data can be used

from anywhere at any time which gives the access to continue monitor the business. To apply
such digital application there in the Netflix helps in get the high customer base along with large
market share in the market. Netflix is able to use the many of the application in their business
which gives them the high profit (Shepherd 2020).
P2 Evaluation of new and emerging digital business models
New, emerging digital business models are the one which is being used by the new
business to get digital in relation to apply such models in their organisation to get easy and high
profit in less time. These are the models which helps highly in maintain and helps in to
understand the customer need which is there can help in to get the better customer experiences.
There are some of the new and emerging digital business models which can be used by
the organisation to develop their business. Some of the models are like open-sources, free,
subscription, on-demand, peer-to-peer, E-commerce, ad-supported, hidden revenue etc. Some of
them are discussed below in context to the Netflix which is using such models in their business
(Oliveira 2020).
Open source model- This is the model in which business make software free to access.
This is the owe which helps in spreading the business quickly to the people or population which
are there as the customer. This open sources model has used by the Netflix in the initial stage but
in the limited time period and there was need to have the subscription there for to watch the rest
of the part which creates the excitement in the customer to watch is full and this motivates the
customer to get the subscription (Ghezzi, 2020).
Subscription based model- This is the one trend model in current time which is used by
many of the digital platforms like Netflix, Spotify or Amazon Prime. These all are using this
model which is very powerful in the current time. This help in to identify the loyal costumer base
of the your customer which are there for your business and are contribution in the growth of the
business. Here, Netflix is using this model and able to get high number of loyal customer base
there in the business. This model also helps in built a sustainable revenue over time. They are
creating their original content which makes the customer to subscribe (Polezharova 2020).
Hidden revenue generation model- This is the one in which business is able to make
money which is by using of their services. In this model the profit is directly proportional to the
time of use of the services. Netflix should use this model to more expand their profit which is by
hidden revenue generation model in which there are large number of customer base are there

who are using the site to access to the entertainment. There are many of company which are
using this model for earning more profit. Netflix is having the huge customer base there in their
business which is there can help in getting better profit along with more market share in the
market.
Netflix is using subscription model in such a way that it is able to maintain the high
customer base for their business which is able to retain their loyal customer. Netflix is using such
model in which gives the high profit tot he business along with this it is also able to get on the
top in demand as the digital business (Kang 2016). Subscription method is there which is able to
make the demand more high which is due to having better quality of content in their collection.
Along with this, there are due to having their original content, there is high demand of the
subscription there. There are different category of the subscription there which is able to make
the customer better as per their requirement. This different category is able to get the better
chance of having good deal and also attracts the high level of attractiveness towards the business.
Netflix is able to get the better business by using the digital technology which can help in growth
of the business in the future with larger demand (Lim, 2019).
P3 Evaluating the impact of new collaborative relationships and strategic alliances which is
through the digital technology
Collaborative relationship refers to the partnerships which rely on the participation of at
least two of the parties who are agree to share their resources like knowledge, people and finance
etc. Collaborative relationship stablish when two or more people works on a common goal
together. Different people having different point of view and this collaborative relationship is
able to help them out as the solution to work (Strategic Alliance, (2020)).
Strategic alliance refers to an arrangement which is between two of the companies which
is there to have mutually beneficial project to retain their independence. This is the agreement
which is less complex in relation to joint venture. In this, two business pool their resources
combine to create a separate business entity. Strategic alliances are mostly temporary to attain a
goal (Chiu 2019).
There is some of the example of digital alliances which is there by the Netflix with Telos
Bharti Airtel Ltd and DTH television operator Videocon and with Vodafone India.
Advantage of collaborative relationship

Provides better decision of labour- This is the one in which due to collaboration there is
high benefit. Due to collaborative relationship, there are many task that can be done by using the
right person and in collaborative relationship there are many people that can help to lead better
support. Due to collaboration, task can be done easily and in little time due to use of different
technology and many people. In an organisation breaking up the responsibility in different sub
section allows one to get the better and less work which helps in give the best performance.
Improves the delivery time- This is the one which is best advantage of collaborative
relationship. In this, workers are able to focus on their strength in each and every project. This
helps in improving the quality of the work. This also helps in reduce the corporates cost and
helps in improving the delivery time.
Resolve the language and cultural differences- Due to modern technology there is less
chances to understand different language which can help to resolve the cultural difference and
reduces the chances. (Javed 2020).
Disadvantage of collaborative relationship
Conflict in working style- Due to the collaborative there is chances of the conflict with in
the worker which is able to have the negative effect on the business functions. There is also
chances of conflict within the organisation which is in relation to take the decision or in the
proper functioning of the business.
Chance of high cost- Due to the collaborative relationship there is chance of high cost of
the production or functioning of the business which is due to having small company and due to
collaboration there is huge manpower in business.
Reduce the personal interaction- Due to using the digital technology there is high
chance of getting many things online. There is less interaction within the employee which are
having different social issues and reduce in the better relationship with in the employees.
Lack of trust among team members- There is due to collaboration there is less period of
time or the specific work which is there due to delay in the work leads to slow down the work of
team. This is not acceptable for the company and may leads to create the trust issues with in the
workers or team members (Cornia 2016).
Advantage of Strategic alliances
Allows parties to reach the goal faster- Due to the strategic alliances, there is chance of
getting better work and due to different digital technology. There is high chances of getting

better work in specified period of time. When two or more companies work together there is high
chance of better productivity and helps in achieve the goal.
Expands customer base- Due to strategic alliances of two or more companies its
automatically increases the customer base which is due to having the customer of two of the
companies. This helps to get high customer base of the both company and help to get high
business.
Greater level of innovation- Due to alliance there are many workers which are having
different ideas which allows therm to get the better result there int eh company and lead to
innovation. Different technology helps to get great innnovation for the other company and lead
to create something new for the company.
Disadvantage of Strategic alliances
Chances of crash of culture- There is chance of clash in the culture of the companies
which is due to having different culture of companies when the alliance there is interaction of
different culture there which are there sometimes less chance to get overcome from it.
Chances of delay in implementation- due to alliance with different company there is
chances of delay in the implementation. There is need of honest communication which is
necessary part of the alliance which failure creates the delay in implementation.
In reference to Netflix, there are chances of using the collaborative relationship which
can help in get better business to them. There are many advantages which can be taken by the
Netflix to get better deal along with huge customer base. Collaboration is also able to help to get
better reputation and creates high level of awareness to company that can help in future to get
better deal for the business (Mohapatra 2018).
P4 E-commerce principles used by Netflix
E-commerce is also known as the electronic commerce which refers to the buying and
selling of products or services using internet. It acquire the four of the main market segment
which are in e-commerce such as business to business, business to consumer, consumer to
consumer and consumer to business. E-commerce is the one that conducted over tablets,
smartphones, or computer or any electronic device which is having the access of internet (Netflix
and the Use of Ecommerce Essay, (2010)).
There are the different e-commerce principles that can help to get better deal with their
customer. Some of the principles are discussed further.

User Friendliness- There is ned to have the better access to websites which can help in
getting better navigation in the search processes. This can help in getting better reach to the
pages which are desired by the customer. This help them to get easy access to their desired
content.
Know the target audience- There is need to add search column in website which can
help in getting better deal with the target audience. There is high need to know the target
audience in relation to get better customer base.
Effective product description- This is one of the best principle which is very effective
due to having the ability to get the better description of the product which helps in better
understanding to the product to the customer (Aydin 2019). This can be highly effective in
attracting huge customer base.
Efficient call to action- There should be always access and allow the call which can help
customer to get better understanding and helps in resolving differrent issues. There should
always any of the team need to be there who can resolve the issues of the customer when
accessing their business.
Emphasize on security- Each and every customer wants to get the better security of their
confidential and secure data which is having the business to themselves. There is need to manage
data to high security. So, no one can access form outside rather than authorised person and there
should not be any misconduct of the business (Vargas 2016).
Netflix is also using the e-commerce principles. In this, they are using this as the security
purpose. Company is using this as for to secure the data of the customer. There is also use of the
online payment which is there use for buying the subscription. There is also use of the payment
gateway which is there use by the Netflix to in procedure to payment. And thus there are many
uses of the e-commerce used in the business which is there use in the digital business (Chung
2018).
CONCLUSION
From the above report, it can be concluded that digital business are there growing very
fast and to get the higher profit there is need to have the better business. In this report there is
discussion about the advantage and disadvantage of digital business. There is also discussion
about the new and emerging digital business models along with this there is some information
about the impact of new collaboration relationship and strategic alliances in which company is

able to get the advantage through the using the e-commerce. This is able to get the connection in
between the commerce along with using the different models which are there can helps in getting
more business and due to this are able to earn more profit which is using the digital business.

REFERENCES
Books and Journals
Goldfarb 2019. Digital economics. Journal of Economic Literature, 57(1), pp.3-43.
Etter 2019. Sharing economy, sharing responsibility? Corporate social responsibility in the
digital age. Journal of Business Ethics, 159(4), pp.935-942.
Bolton 2019. Harnessing digital disruption with marketing simulations. Journal of Marketing
Education, 41(1), pp.15-31.
Shepherd 2020. Priorities for science to overcome hurdles thwarting the full promise of the
‘digital agriculture’revolution. Journal of the Science of Food and Agriculture, 100(14),
pp.5083-5092.
Polezharova 2020. E-Commerce Taxation in Russia: Problems and Approaches. Journal of Tax
Reform, 6(2), pp.104-123.
Kang 2016. A new business model for E-commerce: T-commerce and its implications on
financial institutions. Journal of Global Business and Trade, 12(1), pp.37-42.
Chiu 2019. E-commerce brand: The effect of perceived brand leadership on consumers’
satisfaction and repurchase intention on e-commerce websites. Asia Pacific Journal of
Marketing and Logistics.
Javed 2020. Prospects and Problems for E-commerce in Pakistan. Asian Journal of Economics,
Finance and Management, pp.131-139.
Cornia 2016. Private sector media and digital news. Reuters Institute for the Study of
Journalism.
Mohapatra 2018. Empirical research on the adoption and diffusion of e-commerce portals.
International Journal of Business Innovation and Research, 15(2), pp.137-151.
Aydin 2019. Examining social commerce intentions through the uses and gratifications theory.
International Journal of E-Business Research (IJEBR), 15(2), pp.44-70.
Vargas 2016. Towards the development of the framework for inter sensing enterprise
architecture. Journal of Intelligent Manufacturing, 27(1), pp.55-72.
Chung 2018. A Library As a Publishing Platform-on collaborative relationship between libraries
and publishers. Journal of Korean Library and Information Science Society, 49(4),
pp.21-51.
Oliveira 2020. Evaluating collaborative consumption platforms from a consumer perspective.
Journal of Cleaner Production, 273, p.123018.
Xue 2018. Analyzing collaborative relationships among industrialized construction technology
innovation organizations: A combined SNA and SEM approach. Journal of Cleaner
Production, 173, pp.265-277.
Lim, 2019. A state-of-the-art survey of Digital Twin: techniques, engineering product lifecycle
management and business innovation perspectives. Journal of Intelligent
Manufacturing, pp.1-25.
Ghezzi, 2020. Agile business model innovation in digital entrepreneurship: Lean startup
approaches. Journal of business research, 110, pp.519-537.
Netflix and the Use of Ecommerce Essay, (2010) [Online] Available through;
<https://www.bartleby.com/essay/Netflix-and-the-Use-of-Ecommerce-F389T4KTC>

Strategic Alliance, (2020), [Online] Available through;
<https://www.investopedia.com/terms/s/strategicalliance.asp#:~:text=A%20strategic%20alliance
%20is%20an,create%20a%20separate%20business%20entity.>