Digital Business: Advantages, Trends, and Models - ASOS Case Study

This report discusses the advantages and trends of digital business, using ASOS as a case study. It covers the benefits of digitalization, emerging trends such as 5G and customer data platforms, and e-commerce principles. The report also explores the new emerging business models and the impact of collaborative and strategic alliances on ASOS.

LEVEL 5 DIGITAL
BUSINESS ASOS

EXECUTIVE SUMMARY
Digital business is a new way of conducting business activities to improvise business
processes and customer experiences. Businesses are reinventing themselves to get success in the
digital marketplace. In the first part of this report, various benefits of digital business have been
identified such as growing ability of businesses to develop rapidly, new market entrance,
forming global partnerships, accessing new audiences and enhancing brand reputation. Also,
there are many emerging trends in digital business segment such usage of 5G network and
customer data platforms. The various benefits derived by ASOS due to being digitalized and
trends implemented in the company related to digital technology has been discussed in this
report.
In the last part of this report, various e-commerce principles as well as the business
models have been discussed which entails how website should be designed to ensure smooth
browsing, buying, selling and making payment for the purchases and how ASOS is following
these principles in carrying out their online business activities to guarantee success in the market.

TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................2
TABLE OF CONTENTS..............................................................................................................3
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
1. Overview of Key trends and advantages of digital technology towards managing business. 4
1.1 Definition of digital / virtual business.........................................................................4
1.2 Advantages of digital or virtual business.....................................................................5
1.3 Key trends in digital or virtual business......................................................................6
1.4 Advantages and key trends with reference to digital business for ASOS...................6
2. Presenting the new emerging business model.........................................................................7
3. Describing the impact of new collaborative and strategic alliance of ASOS.........................9
4. E-commerce principles and its application within ASOS.....................................................10
4.1 Definition of e-commerce..........................................................................................10
4.2 Principles of e-commerce..........................................................................................11
4.3 Application of e-commerce principles to ASOS.......................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
The present report aims to highlight the importance of digitalization in business segment
and how currently businesses are securing success in the market with the help of digital
technology will be discussed in this report (Ismagilova and et.al., 2017). For the purpose of
discussing the advantages, trends, ethics, models, development of collaborative relationships and
strategic alliances and e-commerce principles, ASOS as an example of digital business will be
selected to highlight various success factors that it has obtained due to being digitalized.
ASOS is an online retailer of fashion and cosmetic products. It is based in London,
England, United Kingdom. Its target market largely comprises young adults since 2000. It has
more than 850 brands displayed over its website along with many of its own clothing and
accessories that it ships to around 196 countries of the world.
Under various research conducted, it has been identified that digital transformation of
businesses has recorded a CAGR of 18.5% from past five years (Bican and Brem, 2020). Digital
business has gained much importance since the outbreak of COVID – 19, as business can be
easily operated from the comfort of home, that is what the requirement of market post emergence
of pandemic in the year 2019.
The present report is based on discussion pertaining to advantages of digital business and
emerging trends of this industry. Further, various models of business that emerging as a result of
issues such as cybersecurity and ethics will be discussed. Also, collaborative relationships and
strategic alliances that are emerging with the help of digital technology will be discussed. At last,
various e-commerce principles that is being followed by digital businesses such as ASOS will be
discussed in this report.
MAIN BODY
1. Overview of Key trends and advantages of digital technology towards managing business
1.1 Definition of digital / virtual business
Digital businesses are those who adopted digital technologies to enhance innovation, create
better and higher value for customers along with improvising processes of the business. With the
help of such digital technology, businesses used to reinvent their business models and also

undertake to transform customer experiences and their products and services (Remane and et.al.,
2017).
Digital business is the new and modified way in which organisation think and use
technology where they move it from their supporting player to a leading player in the field of
innovation, market growth and revenue generation (Zott and Amit, 2017).
1.2 Advantages of digital or virtual business
With the help of digitalization of businesses, companies are able to work in an innovative and
faster way in the highly competitive marketplace. In this way businesses get benefited from
digital technologies due to the following advantages it derived through it:
 Higher productivity and efficiency: Digital technologies if applied in the course of
business results in delivering better productivity and efficiency as it helps in speeding up
business processes and operations (Aversa, Hervas-Drane and Evenou, 2019). Use of
business intelligence software and tools such as data analytics are common in digital
businesses which results in speedy and accurate collection and analysis of data.
 Higher resiliency: Digital culture allows for quickly adapting and recovering from worse
economic conditions such as COVID – 19 where they existence and performance are not
affected due the implementation of lock down and social distancing maintenance.
 Digital presence: Such business models are helpful in gaining larger marker share and
exposing business to a larger world with the help of growing online presence (Schallmo
and Daniel, 2018). Companies are able to market their product in a customized manner to
establish competitive edge for themselves.
 Lower costs as whole: Digital business are not required to incur costs such as employing
labour, building offices and physical outlets and many more other expenses can be easily
avoided in such pattern of doing business. Accordingly, overall cost of the business gets
reduced and profit can be enhanced.

1.3 Key trends in digital or virtual business
Huge profits are made by digital businesses nowadays which results in disruption of all
industries across the globe.
Everything has become possible with the introduction of 5G: The next level in terms of speed
has been provided with the introduction of the fastest network 5G which has facilitated remote
working and digital collaboration (Gil-Gomez and et.al., 2020). Accordingly, more profit
generation can be possible due to less investment, whether it is educational institution or private
or governmental organisation all are carrying out their respective businesses with the help 5G
internet usage.
Cybersecurity practices: Robust practices with regard to cybersecurity is being considered as the
top priorities of digital businesses due to several cyber-attacks experienced by many companies
in present time. So, there are many cybersecurity measures emerging nowadays.
Customer data platform: Customer centric model has made it compulsory for businesses to
obtain as many data as possible. With the help of CDPs, difficulties arising in terms of collecting
and managing customer related data has become possible. CDPs performs the task of gathering
data from various sources, organize and tag it and accordingly, transform it in a usable form
(Vendrell‐Herrero and et.al., 2018). It also facilitates data analytics along with revolutionizing
and empowering digitalization in business segment.
1.4 Advantages and key trends with reference to digital business for ASOS
There are several advantages for ASOS due to their digital model of carrying out business
activities as it has introduced many trends that are emerging in the digital business industry.
Some of these are as follows:
Customer centric culture: ASOS's first and the foremost success factor is its culture which has
been built around provision of better customer experience. It has a policy of free shipping and
return policy for international customers (Wirtz, 2019). Also, it has a customer support platform
which helps the company in responding its customer's queries at a fastest possible way on
various social networking sites.

Large customer reach: With the help of its website ASOS.com, ASOS has become a global e-
commerce company as it have 60% of its customer from abroad. Also, the company is enjoying a
tag of the fastest response time ever in an international retail business.
Some trends that can be seen through the digital strategies of ASOS are as follows:
Content marketing strategy: The company is offering its high-quality content through ASOS
Magazine where a customer can order hard copy of the same from its website (Parida, Sjödin and
Reim, 2019). By offering print glossy, company is ensuring brand engagement as it is able to
keep its brand on top of the mind of the customers.
Shopping experience: For better and enhanced shopping experience, ASOS has increased the
size of its product images on their website by 250%. Also, the company has added the feature
such as “catwalk” for many of the women's wear. With this, product fit and representation has
become possible.
2. Presenting the new emerging business model
It is the business model that help the organization in attracting the large customer that contributes
in the value of the company. In simple words, it can be defined as model that strength the digital
technology of the firm for improving the overall development of the organization. Moreover, this
models help the company in maintaining the sustainability in the competitive market by
providing the innovative ideas (Ukko and et.al., 2019). There are many business models such as
freemium, ad-supportive model and e- commerce that are used by the ASOS and it is discussed
in details below:
 E-commerce model:
The electronic business model is one of the famous business model as it allows the company
and individual to sell their product and services on the internet (Luz Martín‐Peña and et.al.,
2018). Moreover, it is one of the very cost effective model as it can be operated on the
computers, laptop, tablets and mobile phone. Along, with this it allows the customer to purchase
the product on one click. Generally, this model provides the company to promote and sell their
items on various site such as official website of the firm and social site likewise Instagram,
Facebook, YouTube and twitter. Presently, the company is using this sites to share their content
as well as provide the use full information for the customer such as discount offers, sales and

festival off to attract the targeted customer. Moreover, this model has allowed Asos in increasing
their sales by allowing organization to expand their business globally. Thus, resulted in
enhancing the overall profitability.
However, there are certain disadvantage that company can face such as phishing attack
that is basically use by the hackers to steal the sensitive data of the company that can harm the
brand image of the firm in the market. Furthermore, it will have a negative impact on the
targeted customer as well as revenue of the organization.
In addition, to this the company is following ethic such as by marinating the privacy of the
customer documents and personnel details (Larjovuori, Bordi and Heikkilä-Tammi., 2018).For
instance, the firm application and official website ask for the consumer permission regarding
their consumption of data as soon as they login in the official website of Asos.
 Ad- support model:
This is one of the most common model used by the various companies in order to expand
their business. The another name of this model is free – model as it allows the
organization with free promotional services. Asos is advertising their product and
services on the various social sites so that it can expand their business and overall
increase the sales of the organization. Moreover, the company can face the disadvantages
of cyber security such as third- party and supply chain that can be defined as third party
attack where the cybercriminal damages the intellectual property of the firm.
Furthermore, the data of the company can be linked by the criminal through directly and
indirectly process (11 digital business models., 2021). In addition, to this the company is
also maintaining the ethic such as honesty the organization has maintained the
transparency with the customer regarding the product as every detail is mentioned in the
advertisement that is available on the company official sites.
 Market place model: This model can be defined as the two-sided strategy used by the
business while using the digital technology. Generally, in this model the company use the
third party for selling their product and services online. This will allow the company to
collaborate with the other small and medium size firm so that it can manage the
operational cost as well as explore the new area of the market (Namugenyi, Nimmagadda
and Reiners., 2019). Furthermore, this model can be improving the diversity of the
organization in the international market as well as enhance the quality of the product.

 In addition, to this it can be big threat for the company in the relation of the cyber
security. So for that the company is protecting the data of their stakeholders and partners
with help of the security software. Thus, it builds the trust between the stakeholders and
organization. Asos is also following the ethics such as organization is following the
business and government law of the other countries so that there is no interference while
conducting the business. Moreover, the firm has maintained the tanspernacy between in
the trading process so that there is no issue relating the norms of the company (Senyo,
Liu and Effah., 2019).
3. Describing the impact of new collaborative and strategic alliance of ASOS
Collaborative relationship is a type of arrangement between two parties in order to
accomplish the desired goals. In simple words, it can be defined as the partnership between the
two individual that agree to share their finance, resources and common objective. Moreover, the
company has collaborated with famous brand such as Crayola, Glaad and Vfiles for designing
the new collection in order to attract more customer. On the hand, strategic alliance can be
defined as type of agreement between the two company for creating business strategy in order to
sustain the business in the competitive market (Anatolievna and Anatolievna., 2018). In addition,
to this the company has announced the joint venture with Nordstrom in order to cover the large
area of the market as well as improving the brand image of the firm.
Advantages of strategic alliance
 The digital technology has allowed the firm in creating innovative product that has
resulted in satisfying the customer as well as increasing the sale of the organization.
Moreover, the online strategic allowances have allowed firm in promoting their product
on various platform such as social sites (Teece., 2019). Furthermore, this has helped
company in reducing the marketplace competition.
 With the help of the strategic alliance has been the great benefit for the Asos as it helped
in gaining the competitive advantages through using the new technology and resources of
the partner. That has helped the firm in providing the great quality of services to the
customer and expanding the business more efficiently and rapidly.
Disadvantage:
 The major disadvantage the company can face is conflicts between the partners that can
lead Asos in law suits and litigation that can adversely affect the firm reputation. As well

as organization can lose their potential and future customer (Bogers and et.al., 2019).
Moreover, there can be clash between the culture of firm as every company has their own
structure of working. This may result in damaging the partnership of the firm.
Advantages of collaborative relationships:
 The company has the advantage of financial and human capital benefits such as company
can invest in big project so to boost the domestic sale as well as the firm can reduce the
high operational cost. Moreover, the company will have improvement in the human
capital due to cross over the skill employees that can help company in creating innovative
ideas. Thus, helps in overall development of the firm (Bloomberg., 2018).
 The online collaboration allows the company to reach the target audience. With the right
tools such as data analytical tool the company can know the taste and preferences of the
customer. Thus, it hep company in making according to the needs of the audience and
helps in interacting with them. In addition, to this it allows the organization to easily
communicate with the key client, stakeholders and suppliers that help in building the
strong relationship with them.
Disadvantages:
 The major disadvantage that company face is cyber-attack as such linking of intellectual
property of the firm. This may harm the brand image of the firm and hinder the overall
performance of the organization in the competitive environment. Furthermore, the
negative comment on the official website of the company can affect the sale of the firm
(Schallmo, Williams and Boardman., 2020).
 The another disadvantage the company can have is the online collaboration required huge
budget because many of the online platform force the firm for purchasing the licences
and paid promotion. That can negatively affect the pricing structure of the firm.
4. E-commerce principles and its application within ASOS
4.1 Definition of e-commerce
E-commerce can be defined as a conduction of business transaction through electronic
devices over the internet. It involves buying and selling of products and services through
computers, smartphones and tablets. It is actually a substitute of brick and mortar stores (Wirtz,
2019).

4.2 Principles of e-commerce
To generate higher revenue and build high-quality and authentic website, there are many
principles that surrounded the e-commerce platform, such as the following:
 User friendliness: The e-commerce website should be easy to operate which allows users
to access various pages and products in order to make purchases (Zott and Amit, 2017).
Enough details and appropriate picture of the product must be provided to the visitors, so
that they can make an informed decision.
 Emphasis on security: Customers always need assurance that their financial and personal
details would not be shared with any outsider and remain safe in the hand of website
operators. Sales target gets highly affected with the provision of safe and secure payment
facilities.
 Know You Target customers: Knowing customers well and designing website
accordingly is necessary to serve better in the market. With the help of provision of
additional services, business can achieve trust of their customers (Aversa, Hervas-Drane
and Evenou, 2019). Also, buying patterns must be studied well to understand their
priorities, so that they can feel easy while browsing through the e-commerce website.
 Minimalistic layout: Minimalism in terms of maintaining the simplest design by
removing all the redundant elements from website is necessary. In this way users can be
directed easily towards the way they are intended to be.
4.3 Application of e-commerce principles to ASOS
There are various principles that e-commerce business such as ASOS largely used to get
successful in the marketplace. Such principles are greatly useful in achieving competitive edge
over the competitors. Some of these principles are as follows:
Content utility: ASOS follows the principle of providing sufficient amount of information for
ensuring attraction of new visitors and arousing motivation in them, so that they can be retained
for longer in browsing and making purchases from the company's website (Schallmo and Daniel,

2018). Content utility principle is all about providing quality content which have high level of
relevancy.
Purpose: ASOS has a clear and defined purpose and through this they are able to maintain their
unique brand identity. ASOS has the philosophy of following principles such as minimalism and
convenience to ensure easier purchase by their customers (Ismagilova and et.al., 2017). They do
this by understanding their customers’ expectations and intentions.
Simplicity: ASOS's website is quite simple to browse as it contains simple headings, requires less
time to search and include clear information about each product that has been displayed over the
website.
CONCLUSION
From the above report it can be concluded that digital business allows the organization to expand
their business and allow the firm to make innovative product and services through help of the
various technology. Moreover, it plays crucial role in enhancing the overall performance of the
business such as it helps in attracting the large customer by fulfilling their needs and demands.
The study has summarized about the key trends that are used by the firm and their advantages
such as it helps in improving the decision making of the company as well as help in reducing the
operational cost. Furthermore, the report has also depicted on the business model used by the
firm such as free-model and E- commerce in order to increase the sales of the firm as well as
increase the diversity of the organization.
In addition, to this the report has also analysed the e- commerce principle used by the firm in
order to generate the profitability by attracting the large audience. Lastly, the study has thrown
light on the advantages and disadvantage of the collaborative relationship and strategic alliances.

REFERENCES
Books and Journals
Anatolievna, A. L. and Anatolievna, S. I., 2018. Strategic management of competitive
agribusiness organizations model. International Journal of Advanced Studies. 8(2).
pp.9-21.
Aversa, P., Hervas-Drane, A. and Evenou, M., 2019. Business model responses to digital
piracy. California Management Review, 61(2), pp.30-58.
Bican, P. M. and Brem, A., 2020. Digital Business Model, Digital Transformation, Digital
Entrepreneurship: Is There A Sustainable “Digital”?. Sustainability, 12(13), p.5239.
Bloomberg, J., 2018. Digitization, digitalization, and digital transformation: confuse them at
your peril. Forbes. Retrieved on August. 28. p.2019.
Bogers, M. and et.al., 2019. Strategic management of open innovation: A dynamic capabilities
perspective. California Management Review. 62(1). pp.77-94.
Gil-Gomez, H., and et.al., 2020. Customer relationship management: digital transformation and
sustainable business model innovation. Economic research-Ekonomska istraživanja, 33(1),
pp.2733-2750.
Ismagilova, L. A., and et.al., 2017. Digital business model and smart economy sectoral
development trajectories substantiation. In Internet of Things, Smart Spaces, and Next
Generation Networks and Systems (pp. 13-28). Springer, Cham.
Larjovuori, R. L., Bordi, L. and Heikkilä-Tammi, K., 2018, October. Leadership in the digital
business transformation. In Proceedings of the 22nd international academic mindtrek
conference (pp. 212-221).
Luz Martín‐Peña, M. and et.al., 2018. The digitalization and servitization of manufacturing: A
review on digital business models. Strategic Change. 27(2),.pp.91-99.
Namugenyi, C., Nimmagadda, S. L. and Reiners, T., 2019. Design of a SWOT analysis model
and its evaluation in diverse digital business ecosystem contexts. Procedia Computer
Science. 159.pp.1145-1154.
Parida, V., Sjödin, D. and Reim, W., 2019. Reviewing literature on digitalization, business
model innovation, and sustainable industry: Past achievements and future promises.

Remane, G., and et.al., 2017. Discovering digital business models in traditional
industries. Journal of Business Strategy.
Schallmo, A. and Daniel, R., 2018. Digital Transformation Now! Guiding the Successful
Digitalization of YourBusiness Model. Springer Science+ Business Media, LLC.
Schallmo, D., Williams, C. A. and Boardman, L., 2020. Digital transformation of business
models—best practice, enablers, and roadmap. Digital Disruptive Innovation, pp.119-
138.
Senyo, P. K., Liu, K. and Effah, J., 2019. Digital business ecosystem: Literature review and a
framework for future research. International Journal of Information
Management. 47.pp.52-64.
Teece, D. J., 2019. A capability theory of the firm: an economics and (strategic) management
perspective. New Zealand Economic Papers. 53(1). pp.1-43.
Ukko and et.al.,2019. Sustainability strategy as a moderator in the relationship between digital
business strategy and financial performance. Journal of Cleaner Production. 236.
p.117626.
Vendrell‐Herrero, F., and et.al., 2018. Digital business models: Taxonomy and future research
avenues. Strategic Change, 27(2), pp.87-90.
Wirtz, B. W., 2019. B2C Digital Business Models: Connection. In Digital Business Models (pp.
137-152). Springer, Cham.
Wirtz, B. W., 2019. Digital Business Model Innovation. In Digital Business Models (pp. 175-
206). Springer, Cham.
Zott, C. and Amit, R., 2017. Business model innovation: How to create value in a digital
world. NIM Marketing Intelligence Review, 9(1), p.18.
Online
11 digital business models., 2021. [Online]. Available through
<https://morethandigital.info/en/11-digital-business-models-you-should-know-incl-
examples/ >.