Digital Business: Trends, Challenges, and Collaborative Relationships

This report explores the trends and challenges in digital business, with a focus on the fashion industry. It discusses the importance of personalization, SWOT analysis, and collaborative relationships. It also compares and contrasts digital business with e-commerce.

Digital business

Abstract
In this competitive era, every company wants to stay ahead in the competition and for
that the digital technology plays an important role in the success of a company. The entire
report will shed a light upon different digital business used by the company in order to sustain
the brand image. For that different trend will be discussed such that personalization is the
current trend that most of the fashion stores are used to attract customer through virtual
platform. For the same, swot analysis is performed that helps to examine the strength of a
company in the context of digital technology. On the other side, different challenges are also
used by the company in order to implement the business and determine the importance of
collaborative relationship and difference between e-commerce and digital business.

Table of Contents
INTRODUCTION......................................................................................................................4
Presenting the importance of new collaborative relationship and strategic alliance.............4
Comparing and contrasting digital business and e-commerce...............................................6
CONCLUSION..........................................................................................................................7
REFERENCES...........................................................................................................................9

INTRODUCTION
Digital business use technology in order to create new values in a business models as
well as internal capabilities. The main aim of this report is to develop understanding about
digital business and its impact upon the business performance. The chosen firm for this study
is ASOS which is one of the fashion store which is deal in fashion industry. For that the study
will critically analyze the key trend and advantages or disadvantages of managing virtual
business in an environment. Further the study will perform SWOT and evaluate the merging
digital business model along with challenges associated with information security threats.
Also, report will critically evaluate the new collaborative relationship and strategic alliance
through digital technology. Lastly, study will compare and contrast the digital business and e-
commerce along with different principles.
LO1
Define virtual business and global environment
The use of technology has resulted in bringing various changes in way of doing business. the
technological tools and applications are applied within business operations. With this
products and services are sold in unique way to customers. basically a virtual business means
doing business that is buying and selling of product on Internet. In this there is no physical
existence of business. it is completely different from bricks and mortar model. In this a
physical address is given and there is no administration staff. However employees can work
from anywhere by using their laptop mobile phones etc. There are many virtual businesses
emerging in market (Schwertner, 2017). They are attracting large number of customers through
Internet. the concept of interacting with customers has changed. Also, Internet has provided
ease in doing business and also less cost is incurred. Here, an example can be taken is of use
of digital technology in marketing and promotion of product. With that new customers are
being easily attracted.
Key trends and pros and cons of virtual context
in virtual business, there are various trends which is emerging. it is highly impacted on
business operations in positive way. the trends are described as below
Chatbots- The use of social media as enabled virtual business too use chat box to interact
with customers. With that their needs are identified.

Ad management business- Use of social media for business has created certain difficulties to
manage operations. so ad management business allows to manage ad on social media.
SEO business- this is also al concept in digital marketing. It allows in making search easy for
business and its website.
Apart from the trends there are some advantages and disadvantages of virtual businesses. it is
as follows
Advantage
The main advantage is it required less cost to do business via Internet. hence it helps in
generatinghuge revenue
Also the start up costs is less as business is done online.
Virtual business helps in reaching wide range of customers at global level
Disadvantage
In this there is no direct communication with customers. so it is difficult to gain trust of
buyers.
there is need to maintain IT infra structure so it requires huge funds. along with that, there
occurs network errors due to which customer experiences hampered
There is high risk of security and privacy issues of steal of confidential data and info of
customers.
How technology is used and its impact
By analyzing the case study it is found that all are virtual business that is done on Internet.
Thus, ASOS is also business of clothing products sold to customers. Hence company has use
technology in effective way. they are able to attract a lot of customers at global level. Also,
personal website is created by which customers can browse products they need. besides that,
complementary items can be found as well. Website has enabled in gaining value of product.
in this way they are able to generate whose profits. Moreover, by using social sites that is
Facebook Instagram etcASOS has created awareness about the product in market. So in this
way company is able to Janet leads in the market.

LO 2
Define situation and SWOT and compare and contrast
Every business operating internal and external environment. they need to analyze the
situation so that the factors can be identified which impact on its operations. However in
internal environment, situation is analyzed about strength and weakness an opportunities for
growth. for this there are various models available that can be applied.
Situational analysis- It is a model in which both internal and external factors exist. so in order
to identify factors market research is done. In addition, Porter 5 force analysis is also
included in it. Moreover, VRIO analysis is done in situation analysis. This enables in
evaluating situation in effective way.
SWOT analysis- It is a framework which helps in analyzing the current situation of business.
in this only internal factors are analyzed data strength weakness opportunities and threats.
does it gives insight about what needs to be improved and what threats may occur in future.
So, on basis of that strategy is developed.
Comparison - In this it is found that both models help in evaluating current situation.
Furthermore, opportunities for growth is identified along with both internal and external
factors. Therefore, a complete situational analysis is done.
But on other hand, in situation analysis there are different models applied that is VRIO,
portal 5 force, etc. to evaluate business current situation. But in SWOT there is only four
things done. Therefore, only brief info is obtain about business. In situational analysis various
other things are also identified.
Apply situation to one business
Hence, SWOT analysis ofASOS is done.
Strength
The customers can easily search for it additional item to get personalized look.
It provides variety of personalized items for both men and women.
also there is personalized experience for customers to buy product.

The customers can easily track their orders through app.
The product are offered at low price as compared to competitor
Weakness
Due to low brand awareness customers are not aware about personalized items offered by
company.
There is high competition in market.
Opportunities
ASOS can grow and entering new markets such as India Turkey etc
The company can use social media to create brand awareness in the market.
It can use AE VR technology in order to improve customer experience.
They can provide new products and services to people that is highly fashionable.
Threats
ASOS revenue may be impacted due tocovid 19 that has resulted in decline in global
economic growth.
High rise in competition due to entry of new companies in the market
High cost required in order to maintain the advance IT infrastructure (Dellermann, Fliaste.
and Kolloch, 2017).
LO 3
Define emerging business models
Basically there are two types of business model that is bricks and motor and virtual model.
But a digital business model create value that is based on customer benefit with help of
digital technology. the purpose is to create value for which the customer are willing to pay.
The use of Internet has shifted way of doing business. besides that there are various new
business models that has emerged in the market (Xu, and Koivumäki, 2019). Also, there are
many businesses which are applied these models to operate. it is as follows

Freemium model- In this model customer receive services for free. The onboarding process is
managed via sales. the principle is competence standardization. it requires customer to
convert to paid version.
Marketplace model- In this both buyers and suppliers come on one platform. the value is
generated my bringing those to do business
Define information security threat and ethics
There is need to maintain security of data and info. This is because it highly impact on
business operation. The information security means to secure and product confidential data.
there are many types of security breaches which occurs (Bock. and Wiener, 2017). It leads to
stealing of data. For example, phishing, virus attacks etc.
Challenges for security threats and ethics
There are several challenges in this. so it is necessary to find out those challenges and
develop strategy to overcome it. Is also enable in maintaining security of data and info. The
challenges which occur in it are as follows
Cyber crime- It is a normal challenge which occur in it. Here, unauthorized access is gained
in order to access information. it is done for financial purpose. However there are several
types of cyber crime such as phishing, hacking, etc.
Computer virus- This is a virus which enters in computer system and multiplies itself. it
highly disrupt the files and data.
Unauthorized access- this is a challenge in which hackers get unauthorized access of
information. they use combination of passwords and user Id to gain access. It also
highly disrupt computer system and its security (Dellermann, Fliaster, A. and Kolloch,
2017).
Critical analysis of business model and challenges for information security
it can be critiqued that freemium marketplace model allow customers to by products. the
model is more effective than other ones. in this it provides value to customers. besides that,
these both models are innovative as well. Thus, ASOS is also a market place model.

Besides that, it is stated hacking is most difficult challenging information security as it
easily occurs in freemium model. but virus attacks can be prevented through firewalls End
antivirus software installed within system.
ASOS is a marketplace model hence there is challenge of unauthorized access in it. in this
hackers can easily access transaction process. So it is highly difficult for ASOS to overcome
this challenge. Also, it will impact on value generated from it. so the company needs to
ensure that all it ethics are followed. Therefore, company can install high security software
and application within system. For example, they can use VPN.
Presenting the importance of new collaborative relationship and strategic alliance
New collaborative relationship in digital is all about using digital technology for
collaboration which is different from traditional collaboration such that it connects a broader
network of participants which helps to grow the business. In the same way, digital
collaboration tools are also allow employees to use their capability and perform the work
with flexibility in order to tackle the problems. On the other side, strategic alliance are the
agreement between two or more companies in order to run in single manner in order to meet
the define objectives (Park and Mithas, 2020). There are many ways trough which strategic
alliance are performed such that joint venture, equity strategic alliance etc. This in turn helps
to innovate and continually create new products within an industry.
Through collaborative relationship, business will generate new opportunities in order
to sustain the brand image of a firm. Whereas, a strategic alliance promote business to
develop their unit in another country that assist to stay ahead in the competitive era. Also,
Bican and Brem,(2020)share their experience and stated that through strategic alliance,
company often develop products and jointly develop new information system by sharing
technical and managerial expertise. This in turn also assist to focused upon cultural and
marketing the product so that it will not receive any less attention. Hence, it is examine that
by complying with digital technology, companies trying to attain new opportunities which in
turn promote a business towards further level of success. For example, Uber collaborate with
Spotify and this in turn helps a business to establish the brand image which in turn improve
the overall brand image of a firm. In addition to this, it is also analyzed that these new
strategy allow a business to focus on the core business while outsourcing its growth which is
not possible in other options.

In the context of Asos, company also uses range of digital technology that helps to
sustain the brand image. For example, it has partnered with HoloMe in order to trial with an
augmented reality catwalk for its fashion application. Such that Asos is trialing this digital
technology in order to attract range of customers that further allow users to view model on
their smartphones which provide them a feeling that they are in front of them. Hence, it is
analyzed that different companies uses range of digital technology for collaboration and
strategic alliance that assist to take a business at further level of success (Rangaswami and
et.al.,2020).
Secondary data also reveals that it uses sustainability platform that helps to keep the
business competitive and it also has spent two decades in order to pool data and also maintain
the brand image of a business at further level. Recently company also launches digital
assistant in order to help the customers to find their right size of clothes. This in turn improve
the brand image of a company and also develop artificial intelligent in order to help the
customers to determine the right size of garments for them while hopping online. Hence,
these advance technology assist the firm to collaborate quickly and attract the range of
customers towards it. In addition to this, there are many challenges face by the company
during collaboration and this may also affect the overall brand image which somehow leads
to affect the overall brand image as well (Hacioglu, 2020). On the other side, through
strategic alliance by using the advance digital platform, Asos will also maintain the brand
image and takes a business at further level of success as well in the term of personalization.
Comparing and contrasting digital business and e-commerce
Digital business uses advance technology in order to create new value of business
models as well as generate the better customer experience that support core operations. In this
competitive era, every business wants to convert their business into digital one because it
develop an ability of an organization to rapidly convert or move into new markets. While on
the other side, e-commerce is all about buying and selling of goods and services in order to
transmitting fund and data through internet mode. These business transactions can be
business to business or business to consumer, consumer to consumer or consumer to business
(Härting, Kaim and Horsch, 2020). Through this way, company may easily enhance the range
of customers and increase the profit margin as well.
The major difference between digital business and e-commerce business are as
mentioned below:

Basis of
comparison
e-commerce Digital business
Meaning It is buying and selling of products
through internet
It is all about run a business through
internet.
Limitation It is limited to monetary transaction only It is not limited to any monetary
transaction
Used for This type is used for commercial
transaction only
It is only used for the business
transaction
Network used
for the
company
Internet is used for this type of business Internet, intranet and extranet are used
for this type of business
There are different principles of using digital business and these are as mentioned
below:
 User friendliness:the website should be easy to navigate that helps the digital
business to reach various pages and products in order to buy the products easily.
Through this, company easily get in touch with customer in order to provide better
experience.
 Unique design elements:In this modern era of digitalization, there are many rivals
which helps to make the business more attractive and through effective designs
element, it attract the customers and shift their focus towards attractive design.
 Know the target audience:before implementing the digital business, company should
determine their target market so that website will be designed accordingly. These
target audience will help to examine the buying pattern and also enhance the user
experience as well.
 Effective product description:The digital business will help to analyze or influence
the buyer’s purchasing verdict (Principle of e-commerce,2020). Through effective
product description, company is able to let know their customers about any products
so that customer will easily reach to the target users.

 Consistent branding:an effective digital business will assist to sustain the brand
image of a firm, for that effective photographs and key element are used that helps to
meet the define aim.
Asos is also uses the digital business because it is deal in online business and for that
different digital platform are used. Such that social media in which Facebook, twitter and
Instagram are used that helps to let people know about the new customers and attract the
users as well. Moreover, through social media, company is also able to sustain the brand
customer relationship with their users that take a business at further level (Guggenberger and
et.al.,2020). On the other side, it is also analyzed that company uses augmented reality which
in turn takes a business at further level of success. Also, this in turn improve the overall brand
image and increase the sales as well.
In addition to this, it is also reflected that having an online presence is another digital
business strategy that is used by Asos that assist to sustain the brand image. Also, online
presence helps to take a business at further level of success and attract range of customers at
global environment and this in turn assist to increase the performance as well as productivity
of a company.
CONCLUSION
By summing up above report it has been concluded that with the help of virtual
business company trying to improve the overall brand image. Also using advance technology
at business will help to creates positive impact upon business such that it increase the
customer attention towards a brand and this in turn improve the brand image as well. Further
the study concluded that in this digital environment, company always attract the customer by
offering products online and different models and theories are also applied which in turn
increase its efficiency as well. Moreover, the study also concluded some challenges for
information security threats and ethics that may affect the business. Asos also uses different
strategic alliance which in turn helps the business to sustain another brand image at different
country. There is a huge difference between digital business and e-commerce but their main
motive is to increase the brand image.

REFERENCES
Books and Journals
Bican, P.M. and Brem, A., 2020. Digital Business Model, Digital Transformation, Digital
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Bock, M. and Wiener, M., 2017. Towards a Taxonomy of Digital Business Models-
Conceptual Dimensions and Empirical Illustrations. In ICIS
Dellermann, D., Fliaster, A. and Kolloch, M., 2017. Innovation risk in digital business
models: the German energy sector. Journal of Business Strategy.
Guggenberger, T. and et.al.,2020. Towards a Unifying Understanding of Digital Business
Models. In PACIS (p. 70).
Hacioglu, U., 2020. Digital Business Strategies in Blockchain Ecosystems. Springer
International Publishing, DOI. 10. pp.978-3.
Härting, R.C., Kaim, R. and Horsch, F., 2020. Potentials of Digital Business Models for the
European Agriculture Sector. In Agents and Multi-Agent Systems: Technologies and
Applications 2020 (pp. 27-36). Springer, Singapore.
Park, Y. and Mithas, S., 2020. Organized Complexity of Digital Business Strategy: A
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Xu, Y. and Koivumäki, T., 2019. Digital business model effectuation: An agile
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Online
Principle of e-commerce. 2020. [Online]. Available through:
<https://www.devsaran.com/blog/top-10-e-commerce-design-principles-successful-
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