Digital Business & New Technologies

This document discusses the impact of digital technology on businesses and the challenges they face. It explores the opportunities and strategies for success in the digital sphere, with a focus on the retail sector. The document also provides strategic recommendations for improving effectiveness in meeting challenges posed by digital disruption.

Digital Business & New
Technologies
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Table of Contents
Main Body.......................................................................................................................................3
P1 Summary of CW1..............................................................................................................3
P2 Conclusion based on summary..........................................................................................4
P3 Apply conclusion to a specific sector................................................................................5
P4 Strategic recommendations that could be applied to an organisation in retail sector which
would improve its effectiveness in meeting challenges posed by digital disruption.............6
References .......................................................................................................................................7
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Main Body
P1 Summary of CW1
Global business environment is increasingly shifting towards making use of digital
technology. Technology is proving a major game changer for the businesses. The report
mentioned, was based on “Digital business and new technologies” in the context of social media
platform “Instagram”. Instagram is a digital media platform for sharing photos and networking.
The report focused on how technology and its uses are changing the face, shape and sizes of the
businesses. It also discussed common obstacles faced by businesses
More and more businesses are digitalising themselves to increase their scope and market.
Many companies like Instagram operates only in digital sphere (Weill and Woerner, 2018). They
require less initial capital investment and less physical infrastructure to their disposal. They
require high end computer hardware and software. Good hardware is required for handling large
operations and storing bulk data with good speed. Their business itself is based on a software
such as “Instagram”. They use other software for performing different business operations like
SAP software as accounting tool. Digital companies make good use of informational technology
and networking to boost their business as well as for promoting other businesses they are
advertising for.
Digital technology is proving blessing for business ecosystem and in turn, it is the duty of
business ecosystem to protect environmental and social ecosystem. Digital technology is based
on intelligent use of artificial intelligence to provide more efficient services to the users. Users of
digital platforms are also regarded as its customers.
Digital technology is boundary less and is thus, providing new and easier ways for
companies to promote their business and attract new customers. Those companies which are not
able to use new technologies in their favour are lagging behind in competition (Scuotto and et.al.,
2017). Companies place their advertisements with digital platforms and are charged according to
the number of users of that platform. This charge is revenue for platforms such as “Instagram”
which have very large number of active users.
In spite of having so many advantages, it faces a lot of challenges as well. Companies
find it difficult to change their traditional ways of operations and keeping pace with new
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technological developments. Customers also have their share of issues. Many customers are wary
of making online purchase and payments. They are also afraid of the security of their data. Data
security is a major concern for businesses dealing in digital space.
P2 Conclusion based on summary
Innovations in information technology is helping businesses in becoming more automated
and advanced. Dependence on physical infrastructure is reducing and is paving way for digital
businesses (Leischnig, Woelfl and Ivens, 2016). Digital businesses are less time consuming and
more progressive in nature.
Technology is bringing new and advanced ways for businesses to operate and promote
themselves. Utilization of new technologies in all segments of business are changing business
environment. Use of artificial intelligence has provided more flexibility and convenience to
business organisations. Business environment is increasingly becoming more inclusive and
boundary less. Digital technology is removing border lines and opening new markets for
companies all over the world. With use of high end computer hardware and software, companies
are increasing their network and customer base. Promotion strategies have changed and
companies now have more ways to contact their target customers. Digital media platforms like
social media platforms provide such exposure and chance to connect with their global customers.
The digital technology is ever improving and companies associated with it also needs to
constantly update themselves to stay relevant with times. They constantly update their
technology and roll out new features to attract new customers while retaining old customers.
Digital technologies constantly concentrate on their core apparatuses, drivers and other required
materials, to minimize the occurrences of complexities in their business.
New technological innovations are supporting new business models and providing new
and open opportunity to anyone to enter a market with a business idea (Kraus and et.al., 2018).
Few digital tools help companies identify market requirements as well as determining costing,
demand, pricing, etc. It helps management in making more efficient decisions.
Just like every other aspects technology also comes with some challenges. One of the
major challenge for business is how to ascertain and reach their targeted customer base without
increasing their marketing cost. They also have to take care of the large amount of data of their
customers from breach. Data breach is a major concern for both businesses as well as customers.
Many customers do not do online business only because they are worried about their data breach.
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Many customers do not do not trusts online businesses and only trusts products where they can
have physical contacts. It is difficult for digital businesses to get those customers onboard.
P3 Apply conclusion to a specific sector
Digital sphere is now a good medium for operating as well as promoting business.
Businesses in digital sphere has ever increasing scope of operations (Ismagilova and et.al.,
2017). Earlier a market place was referred as a physically existing place where buyer and seller
would come together and negotiate on business deals. Price and other terms and conditions
related to the business transactions were agreed between two parties and then goods and services
were sold. In that case, buyers and sellers used to be limited, so was the reach of the market.
Companies dealing in such physical markets were also having limited scope of growth. For
example, retail markets. Physical stores had limited numbers of buyers and their scope was not
far reaching.
With the advent of digital technology, conventional definition of market has lost its
meaning. Now market does not need to have a physical existence and anywhere a buyer and
seller enters into a transaction is called a market. This has increased the scope for retailers a lot.
Digital technology has given business like digital intermediaries which acts as intermediaries
between buyers and sellers. Now, a person sitting in any part of the world can buy from a seller
selling anywhere in the world through digital platforms. They agree on terms and conditions
mutually and price is paid online. Goods/services are then delivered to the buyer. This has
increased their customer reach manifolds.
Physical Retail business has very less elasticity and is often at the receiving end in case of
unfortunate incidents either due to the natural reasons or man made reasons (Dornberger, 2018).
Online retail businesses are free from such casualties to some extent as they don't need to
maintain large stock ready for display and disposal at their place. They only need to maintain
warehouse from where they can deliver goods to any customer at agreed time.
Digital sphere also allows retailers to innovate in their customer interactions and delivery
process. It also allows innovators to reach their retail customers in a more efficient manner.
Customer satisfaction process can be ensured via digital feedbacks which helps in devising better
strategies to grow business.
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P4 Strategic recommendations that could be applied to an organisation in retail sector which
would improve its effectiveness in meeting challenges posed by digital disruption
Whenever an organisation operates in digital sphere, it faces many challenges such as
disruptions in logistics and supply chain, vendor and inventory management, uncertainty of
customers, etc. (Chaffey, Edmundson-Bird and Hemphill, 2019). Tesco is a British groceries and
general merchandise retailer. It has physical stores in many parts of the world and its online
business is called Tesco Direct. Company has a separate process for online business. Few
recommendations that could be applied by Tesco to improve its effectiveness in meeting
challenges posed by digital disruptions are as below:
Inventory Management – For online business, company maintains separate warehouses
and clearing facility. Many a times, inventory management system is not proper in place and the
products are either lying around wasted or out of stock. There shall be robust system for
inventory management ensure regular uninterrupted supply.
Data handling – Biggest problem company faces in digital sphere is data security.
Customer data is always plagued by breaches. This reduces customer confidence and they tend to
avoid dealing with company online. Company should tighten its data safety policies and ensure
customers that their data is safe.
Ally: It is also a solution that can b used by external seller bringing up the required
capabilities to deal with discrepancies present in organisation. This is a type of outsourcing
where TESCO can take advantages of specialisation of other organisations.
Analyse: TESCO can work towards analysing the strategies of other competitors such as
Morrisons or Sainsbury's. But waiting too long can also result into more damage so there has to
be a quick respond to competitors strategies.
Nurturing a digital mindset: TESCO can focus on promoting a digital culture for
achievement of digital transformation that consist of practices, culture, workforce and operations.
Execution is relied on direction of leadership and development of clear communication.
Measurement of success: It is critical for TESCO that they have to measure timely
success by analysing their growth and revenue that is driven by digital technology. For example
of store is observing a 10 percent traffic that is driven by digital platforms then it is a sign of
growth and recovery from digital disruption.
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References
Books and Journal
Chaffey, D., Edmundson-Bird, D. and Hemphill, T., 2019. Digital business and e-commerce
management. Pearson UK.
Dornberger, R. ed., 2018. Business information systems and technology 4.0: new trends in the
age of digital change (Vol. 141). Springer.
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.
Kraus, S. and et.al., 2018. Digital entrepreneurship: a research agenda on new business models
for the twenty-first century. International Journal of Entrepreneurial Behavior &
Research.
Leischnig, A., Woelfl, S. and Ivens, B., 2016. When does digital business strategy matter to
market performance?.
Scuotto, V. and et.al., 2017. Shifting intra‐and inter‐organizational innovation processes towards
digital business: an empirical analysis of SMEs. Creativity and Innovation Management.
26(3). pp.247-255.
Weill, P. and Woerner, S.L., 2018. Is your company ready for a digital future? MIT Sloan
Management Review. 59(2). pp.21-25.
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