Impact of Digital Business on Global Environment and Key Trends

This document discusses the impact of digital business on the global environment and key trends in the industry. It explores the advantages and disadvantages of digital technology, as well as its implications. The document also covers different digital business models and their key issues, and highlights the importance of strategic alliances and collaborative relationships in the digital era. Additionally, it discusses the usage of e-commerce principles in business.

Digital Business

Table of Contents
Table of Contents...........................................................................................................................1
INTRODUCTION...........................................................................................................................2
MAIN BODY...................................................................................................................................2
Impact of virtual business on the global environment and the key trends and advantages of
digital technology...................................................................................................................2
Discuss Digital business models and their key business issues.............................................5
Impact of strategic alliances and collaborative relationships through the digital technology6
The usage of e-commerce principles in business...................................................................7
CONCLUSION................................................................................................................................9
References:.....................................................................................................................................11
Books and Journals...............................................................................................................11
1

INTRODUCTION
Digital businesses are those businesses that incorporate technology in their customer experience,
business model and internal management that can support the core values of the company.
Digital business go through a digital transformation that makes the workings of the company
digital and technology based (Aithal, P.S. and Aithal, S., 2019.). It will help the company in
improving their services as well as their management with the help of technology. In context to
Amazon, it is an American Multinational technology based company. It comes under one of the
big five companies of US and are focused on cloud computing, e-commerce, digital streaming or
artificial intelligence. The company is considered to be as one of the world’s most valuable brand
and one of the most influential cultural and economical forces of the world. In this report the
impact that technology based businesses have on global environment is discussed. Also the
advantages and disadvantages of digital businesses will be provided. The collaborative
relationship and strategic alliance in digital business through technology are also given.
MAIN BODY
Impact of virtual business on the global environment and the key trends and advantages of digital
technology
Digital businesses are those businesses that have incorporated technology in their workings and
are now digitally transformed technology based businesses (Ancarani and et. al., 2018.). The
key trends that are in the digital businesses are huge and companies are making efforts to keep
up with these changes in order to make sure that they are ahead of competitors. Some of the key
trends are given below:
 The digitally active culture- As their is a huge demand of products and services of the
business through online channels it is important for the businesses to make sure that they are
available on online platform in order to serve their customers well. The customers want 24/7
support facilities from the businesses and it is only possible through technology.
 Contact less solutions and digital payments- as the pandemic has made people take as
much as possible contact less services it is important for the company to provide solutions to the
customers where they can take contact less solutions and can make payment digitally (Andersson
and et. al., 2018.). In context to Amazon, they, make sure that they provide payment option other
than cash on delivery also they ensure that the delivery of products and services are contact less.
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The advantages of digital technology has been discussed in context with amazon-
 Communication speeds- Digital technology has made communication process much more
faster and efficient. The people can contact the company as and when needed. Their is no
specific time for contact and customers can avail product and services according to their
time schedule. In case of amazon they have 24/7 helpline numbers available for the
customer services.
 Versatility or Variety- as compared to traditional methods of management of company,
digital businesses are much more versatile and efficient (Beynon-Davies, P., 2020.). The
digital technology enable the business to contact with their targeted audience as and when
needed and also are using less channels as well as less time to convey their messages to
potential customers. In context to amazon, they have a large variety of products and services
on the website of the company which can be ordered by customers anytime.
 Global Reach- With the help of technology the companies nowadays have global reach.
The digital businesses has a wider reach to the potential audience also the customers have an
access to the products of the company anytime and anywhere. It will make sure that the
business can reach to their targeted audience and convey their messages in effective and
efficient manner. In case of Amazon, the website of the company is available in all over the
world which means the company have access to all the markets of the world and has a big
market share in the industry as well.
Disadvantages of digital business in context to Amazon:
Dependability on the technology: after the concept of digital business implemented by
many companies, the more business involves technology the more they become dependent on it.
It is important for the businesses to understand that technology has its own limitations and
certain consequences have to be faced by the businesses (Bonnet, D. and Westerman, G., 2021.).
In context to Amazon, the business is fully digitized and are immensely dependent on technology
but issues related to server breakdown or network issues are still there and the business have to
deal with these limitations.
Security and privacy issues: Customers nowadays expect personalized experience from
the businesses that are digitally active. Customers wants those products and services in the
recommendation list that they are actually looking for but most of the customers does not wants
to share their personal information ion return to that personalized experience (Brock and et. al.,
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2019.). The business needs to make sure that their customers are willing to give their personal
information to them and the business must use only that much information that is required by the
business. In context to Amazon, they make sure that they inform the user about access to
information and take permission for the access. Also the company make sure that limited people
have access to the information of the users and no chances of information leak is there.
Implications of digital business in the global environment-
 High competition- Their is a high level of competition in the market regarding digital
businesses and the most important factor of high level of competition in the market is the
attractiveness of the industry, high margins, wider reach and popularity of digital platforms. It is
important for the companies to establish their unique identity in the market in order to attract
potential customers (Bustinza and et. al., 2018.). In context to amazon, in order to provide more
than normal services the company launched Amazon Prime which is new in the market and are
providing much more benefits to the customers.
 Higher innovation- The companies in digital business ave to make sure that they are
continuously making changes in their management and style in order to keep people engage in
the offerings of the company. It is also important for the company to make sure that they are
providing unique facilities and offerings to the customers in order to stay ahead of the
competition. In case of amazon, they make sure that they involve latest technology in their
workings in order to stay ahead of the competition.
 Target market- The technology used by the businesses helps the business to reach to
their target market or target audience without involving much cost (Choudary, S.P., 2018.). The
company can enter any new market to provide the product and services offered by the company
to the potential customers. In context to Amazon, in order to capture a whole new market the
company launched Amazon Prime which provide two day delivery services to the customer and
was become so popular that it surpassed 100 million subscribers worldwide.
Discuss Digital business models and their key business issues
Digital business model helps the company to involve digital technology in their system
effectively and efficiently. These are the models that are used by the companies in the internal as
well as external management in order to make sure that working in order to develop their
business and face off disruptions and digitalization (Chowdhry and et. al., 2020.). The company
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will have competitors advantage if they have latest and suitable digital business models and will
also make sure that they are having advantage in the market from the prospective of the
customers as well. In context to amazon, the company uses different business models for their
different units in order to make sure that they have the best models and they are developing and
running towards success.
 Freemium model- in this type of model the company firstly provide services at free of
cost and ten charges amount from customers once the free offer period is used by the
customers. It will help the customer to make sure that they take only those services which
they actually want or like. On the other hand this business model will help the companies
in attracting large amour of customers towards the services that are provided y te
company which will enhance the reach of the offerings of the company (Fernández-
Rovira and et. al., 2021.). It will be easier for the company to encourage people to use
this service as it is free of cost and will also help in showcasing the best specifications of
the services to the customer. In case of amazon, the company is providing free fire TV
stick with every TataSky set up box and after one month they will start charging money
from customers.
 Free model- In this type of model the company provides the services to the customers
for free of cost. This model helps the company to attract lots of customers and will help
the company to spread brand awareness in the target market. As the services that are
provided free of costs are likely to be more popular then other services which includes
cost, in this model it is important for the companies to make sure that they have their
main focus on the marketing activities as they only have advertisement source for income
from this model.
 Subscription based model- This is the model were the customers have to pay a certain
amount of price to the company in order to use their services (Hinterhuber and et. al.,
2021.). Subscription opens a lot of other features and specification that are provided by
the company through its services. But in this model the company needs to make sure that
they are providing services which are valuable to for the customers as customers will not
waste their money on something which does not have any value. In context to Amazon,
the company introduced Amazon Prime which requires subscription to use and the
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benefit that the subscription is providing is two day delivery, no delivery charges,
attractive offers, etc.
Impact of strategic alliances and collaborative relationships through the digital technology
Collaborative relationship refers to the involvement of two parties in a contract which
states that the companies are having a collaboration and both the companies can use each others
resources as and when needed. Also they agree to share the profits and the losses of each other
(Lederer and et. al., 2018, April.).
On the other hand, Strategic alliance comprises multiple collaborations that can make a
relationship between both the parties. It is similar to collaborative relationship.
Advantages-
 Sharing of losses: When it comes to the collaboration and strategic alliance both the
parties agrees to share the profits as well as losses. It will increase the risk taking
capacities of the companies as they can bear the losses in sharing and can take risk of
double amount.
 Financial benefits- The company ca use each other resources which make sure that the
companies are not spending additionally on the resources that are not owned by them but
by the their parties (Popkova and et. al., 2019, May.). It make the expenses of the
company less as they are sharing their resources and are getting competitors advantage as
well.
 Help to grow network- It will help both the company to built network as they are now
familiar with the networks of each other and they are now able to make deals with each
other networks. The involvement of both the parties helps them in making contacts and
will ensure that they have the power of networking.
Disadvantages-
 Conflicts in working style- Sometimes involvement of others in the management of the
company can create conflicts in the alliance (Reck and et. al., 2019.). As both the
companies have different management style which they find suitable for their business
but it is not always possible that the working style of the company suits to the other party
as well. The companies need to understand the view point of each other and the reason
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why a specific model is beneficial for the company. It will help them in getting use to
with the working styles of each other.
 Lack of trust among staff- When the two companies comes for an alliance or for a
collaboration, their is always lack of trust in the staff of the companies as they are not use
to working with them and in order to built trust that process will take some time (Reis
and et. al., 2018, March.). It is necessary for the companies management to make sure
that the staff of the company is working properly and without any trust issues or conflicts.
 Clashes in work culture- Every company has their own and unique work culture that is
beneficial and comfortable for the employees of that company. It is important for the
companies to understand each others work culture and work accordingly as changes in
work culture may affect the productivity and performance of the employees. It will create
a problematic situation for the company (Ross and et. al., 2019.). It will also create
unwanted interruptions in the management and workings of the company. It will also
hinder the growth and success f the company.
The usage of e-commerce principles in business
The variety of ways in which the business can use e-commerce principles are discussed below in
context with Amazon-
 User friendly- The platforms that the company is going to use must be user friendly.
The company must ensure that the website and other channels that the company is
providing to the users are easy to use and does not include lots of formalities or any other
interruptions that can make it hard for the user to use the website. The easy access of the
offerings of the company can enable the user to buy the products and services that are
offered by the company (Tahvanainen, S. and Luoma, E., 2018.). Easy and user friendly
website will attract all age groups and will increase the reach of the company. In context
to Amazon the company makes sure that their websites are easy to use and proper
instruction for usage of website are provided to the customers.
 Unique design elements- The company must ensure that they have some unique
features in their websites which can attract large amount of customers. If the company
have same designs then it will not help the company in creating curiosity in the customers
and the customers will not visit o the website of the company. In context to Amazon, the
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company makes sure that they have continuous innovation in its services and websites so
that they can attract diverse population.
 Security is the center- The major focus of the companies should be on the security of
the details of the customers. As in order to provide personalized experiences to the
customers the websites of the company uses personal information of the user which is
also known as cookies. The company must make sure that the information they obtained
from the customers are in safe hands and are not misused by anyone (Tekic, Z. and
Koroteev, D., 2019.). In context to Amazon, the website of the company first take
permission from the users to obtain their personal information and after obtaining the
information the company makes sure that only limited amount of members of the
company have access to that information and also only for work purpose.
 Upgraded Technology- The technology of the company needs upgradation from time to
time. The environment of e-commerce is dynamic and the technology they are using is
also continuously changing. The company must make sure that they are coping with the
changes in the technology effectively in order to make sure that company is using latest
technology and providing better experience to their customers. Upgraded technology also
helps the company in having competitors advantage in the market as it is not possible for
each and very company to make frequent changes in their technological systems. In
context to Amazon, they make sure that they are providing the best in class services to
their customers and are engaging the customers with the website of the company with the
help of technology.
 Check on target audience- It is the most important factor that the company have to
analyse carefully. The company must ensure that they are having the right target audience
and they are making effective effort for that target audience (Villela and et. al., 2018,
August.). It is important for the company to know their target market and customers in
order to move towards the gals and the objectives of the company. It will help the
company in having focus on the target market only. In context to Amazon, the company
make sure that they know their target audience so that their will be no wastage of the
efforts of the company and the message of the company reaches to the right target
audience.
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 Have effective and encouraging products descriptions- The company must make sure
that they have correct and effective product description as it can provide information
about the offerings of the company an also make sure that the description is encouraging
the people to buy the products of the company. If the product description provided by the
company is not correct then it will not only be difficult for the company to retain
customers but it will also ruin the reputation of the company (Yablonsky, S. ed., 2018.).
In context to Amazon, they make sure that they are providing correct and effective
description of the products with the help of professionals and are encouraging people to
buy the products with the help of specifications of the product.
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CONCLUSION
From the above report it is concluded that it is important for the digital businesses to make sure
that they are having the right set of resources and technology in order to capture the market. Also
digital businesses are getting more and more popular which is very beneficial for the growth of
the company. The digital platforms are providing a market place for the offerings of the company
which can help the company in expansion as well as in having wider reach. The digital business
can reach to their potential customers as and when needed without any restrictions. The
experience that the customers are having with digital platforms are also enhanced.
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References:
Books and Journals
Aithal, P.S. and Aithal, S., 2019. Management of ICCT underlying Technologies used for Digital
Service Innovation. International Journal of Management, Technology, and Social
Sciences (IJMTS), 4(2), pp.110-136.
Ancarani and et. al., 2018. Successful digital transformations need a focus on the individual.
In Digitalisierung im Einkauf (pp. 11-26). Springer Gabler, Wiesbaden.
Andersson and et. al., 2018. Managing digital transformation. SSE Institute for Research,
Stockholm School of Economics.
Beynon-Davies, P., 2020. Business information systems. Red Globe Press.
Bonnet, D. and Westerman, G., 2021. The New Elements of Digital Transformation. MIT Sloan
Management Review, 62(2), pp.82-89.
Brock and et. al., 2019. Demystifying AI: What digital transformation leaders can teach you
about realistic artificial intelligence. California Management Review, 61(4), pp.110-134.
Bustinza and et. al., 2018. An organizational change framework for digital servitization:
evidence from the Veneto region. Strategic Change, 27(2), pp.111-119.
Choudary, S.P., 2018. The architecture of digital labour platforms: Policy recommendations on
platform design for worker well-being. ILO Future of work Research paper series, 3.
Chowdhry and et. al., 2020. The Evolution of Business in the Cyber Age: Digital Transformation,
Threats, and Security. CRC Press.
Fernández-Rovira and et. al., 2021. The digital transformation of business. Towards the
datafication of the relationship with customers. Technological Forecasting and Social
Change, 162, p.120339.
Hinterhuber and et. al., 2021. DIGITAL transformation, the HOLY GRAIL and the disruption of
business models. Business Horizons.
Lederer and et. al., 2018, April. Digital transformation, smart factories, and virtual design:
Contributions of subject orientation. In Proceedings of the 10th International
Conference on Subject-Oriented Business Process Management (pp. 1-10).
Popkova and et. al., 2019, May. Technological Revolution in the 21 st Century: Digital Society
vs. Artificial Intelligence. In Institute of Scientific Communications Conference (pp.
339-345). Springer, Cham.
Reck and et. al., 2019. Four profiles of successful digital executives. MIT Sloan Management
Review, 60(3), pp.1-7.
Reis and et. al., 2018, March. Digital transformation: a literature review and guidelines for future
research. In World conference on information systems and technologies (pp. 411-421).
Springer, Cham.
Ross and et. al., 2019. Creating digital offerings customers will buy. MIT Sloan Management
Review, 61(1), pp.64-69.
Tahvanainen, S. and Luoma, E., 2018. Examining the competencies of the chief digital officer.
Tekic, Z. and Koroteev, D., 2019. From disruptively digital to proudly analog: A holistic
typology of digital transformation strategies. Business Horizons, 62(6), pp.683-693.
Villela and et. al., 2018, August. Towards ubiquitous RE: A perspective on requirements
engineering in the era of digital transformation. In 2018 IEEE 26th International
Requirements Engineering Conference (RE) (pp. 205-216). IEEE.
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Yablonsky, S. ed., 2018. Multi-Sided Platforms (MSPs) and Sharing Strategies in the Digital
Economy: Emerging Research and Opportunities: Emerging Research and
Opportunities. IGI Global.
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