Digital Business Strategy and Analysis

The provided assignment is a detailed report on digital business strategy and analysis. It covers various aspects of digital business, including its definition, importance, types, and characteristics. The report also delves into the role of external and internal analysis in shaping digital business strategy. Furthermore, it highlights the significance of competitive analysis in gaining a competitive edge in the market. The report is based on a range of sources, including books and journals, which provide valuable insights into digital business strategy.

Digital Business

Table of Contents
INTRODUCTION...........................................................................................................................3
Digital business......................................................................................................................3
Digital business verses Traditional business..........................................................................3
Factors that have facilitated the uptake of digital business....................................................4
MAIN BODY...................................................................................................................................5
Digital business activity.........................................................................................................5
Mode of operation..................................................................................................................5
Market Segmentation..............................................................................................................6
Key factors for the growth of digital business........................................................................6
CONCLUSION................................................................................................................................9
REFRENCES.................................................................................................................................11

INTRODUCTION
Digital business is a form of business that uses digital media such as internet to
communicate about the product or services to the customer. It has changed the operations as well
as enhance the reach of the business. For the better understanding of the report ASOS plc
company has been taken which is a British online fashion and cosmetic retailer. The company
was founded in 2000 in London, mainly aimed at young adults. They basically sell clothes,
shoes, Accessories, beauty and so on via its online platform. This report makes the discussion
about digital business and how digital business is different from traditional business. Moreover,
factors that facilitate the growth of digital business and mode of business operations.
Furthermore, respective report carries market segment as well as external factor that affect the
growth of business.
Digital business
When all the activities of the business are carried out with the help of electronic media
such as laptop is known digital business (Mithas, Tafti and Mitchell, 2013). It basically helps the
business to eliminate various cost such as maintenance of best or rent of the building along with
that it has expanded the reached of business by not only keeping it confined to to geographical
region. In the context to ASOS, which was founded in 2000 in London. The company sells over
850 brands as well as its own range of clothing and accessories and ships to over 200 countries
from fulfilment centres in the UK, US and Europe. Within UK it has approx 4386 worldwide
according to statistics 2018. ASOS' headquarters are in Camden Town, at Greater London house.
The customer care department is based in Leavesden, near Watford in South-west Hertfordshire.
The website of a business asos.com and asosplc.com. Furthermore, ASOS Plc defined itself as a
digital business as it is don't operate its business traditional but then also it has given competition
not only to other digital business but to traditional business as well.
Digital business verses Traditional business
Traditional business: It refer to exchange of goods and services through the brick and
mortar or physical stores. Here, the owner of the business deals with those people which are
under its mile radius coverage.
Digital business: It refer to the usage of technology to serve the customer, perform core
operations of the business and make long term experience with the customer. Such as ASOS

deals with their customer via online platform and send the essential notification to the customer
regarding the delivery of their good.
Basis Traditional business Digital business
Similarity The purpose of traditional business is
to engage the customer and main long
term relationship with them by
catering their demand (Matt, Hess
and Benlian, 2015).
Digital business purpose is quite
similar to traditional media even they
want to satisfy the demand of
customer and engage the traffic of
potential customer towards their site.
Difference Analytics or tracking can not be
performed in traditional business.
Due to which they don't get the result
at real time which finally slower
down the progress of business
Digital business can make the use of
various analytics such as google
analytics to check its performance at
real time. Accordingly, business can
immediate changes in its business to
decrease the bounce rate (Schmidt and
Cohen, 2013).
Factors that have facilitated the uptake of digital business
Internal or SWOT analysis is used to identify the factor that can help the digital business
to enhance the performance of business are stated below:
Strength : The main strength of ASOS is that it is recruited highly skilled work force
through successful training and learning programs. The company has recognised globally
because of its e-commerce business. They have strengthen their Strong brand portfolio, strong
free cash flow and they has to presented good performance in new markets which can help to
take the advantage of their economies of scale to give best dealing to the customer.
Weakness: As ASOS is not proper financial planning about to current assets and liquidity
and apply new technologies for upgrade business. For this they need more investment and also
for research & development. As compare top other companies ASOS have high attrition rate in
their work force.

Opportunity: ASOS can get the advantage of lower inflation rate, new taxation policy
can impact on business activities and provide new opportunity. The company has followed new
trends in the consumer behaviour which can open up new market for the ASOS.
Threat: With the increase of digitalisation many companies are perform their business
from both brick and mortar outlet as well as through online platform (Westerman, Bonnet and
McAfee, 2014). This has increased the competition and entry of new entrant. Along with that the
regulations of government can hamper the growth of business. New Environment regulations
under Paris agreement could be a threat to definite existing product categories.
MAIN BODY
Digital business activity
Digital business includes the creation of online business activity that emphasise on the
generation of revenue from the various digital channel (Holliman and Rowley, 2014). Business
which perform its operation through digital media can make the use of various digital marketing
tools or technology such as SEO, SEM, social media, email marketing and so on to promote their
promote and increase the conversion rate to conduct the business activity smoothly. In context to
ASOS, it does not compromise while making the use of digital technology to promote their
product. They have huge content in search engine along with that they have designed their online
catalogue and patter of their website systematically. They are well aware that most of the people
spend lot of time in social media such as Facebook, Instagram etc. due to which they have even
utilised this platform to showcase the brand to the customer and generate revenue for the
company. Additionally, selected company has made the use of email marketing to notify their
customer regarding offers and fresh arrivals as well as it provide the opportunity to the customer
to tract their order. Thus, company have utilised various digital marketing technology to build
long term relationship with their existing as well as potential customer by building strong
relationship with them.
Mode of operation
ASOS has adopted market place model to provide wide range of goods and services to
the customers. Market place model is model which involve various supplier to sell their products
and services from the common platform. Like, along with ASOS there are various electronic
commerce site such as eBay that helps to meet various supplier and buyer to conduct the process

of selling goods and services through online platform. They have their in house centre known as
Cloud tail through which it fulfil the order of customer. Respective company basically perform
its operations by taking the inventory from drop shipper and finally deliver it to the prospects.
Moreover, they practice the data driven on which they keep the record of their customer's data to
identify their interest. They even adopt the latest technology to operate its short term as well as
long term objective.
Market Segmentation
Market segment refer to dividing diverse population on the basis of similar subset such as
on the basis of age, status, geographical region and so on. ASOS basically cater large audience
who so ever are keen for internet shopping their target customer are the people of all ages.
Therefore, various types of segmentation some of them are defined below:
Geographical segmentation: Within geographical segmentation the market is divided
based on geographical region such as nation, state, region, climate and so on (Chaffey, 2015).
ASOS has widespread its business in more than hundred countries in developed as well as
developing country.
Demographic segmentation: It is a kind of segmentation based on various variables such
as age, gender, family size, marital status, occupation of people and so on. ASOS cover all age
group as well as category such as males, female as well as kids whether they are student,
professional or employee.
Psycho-graphic segmentation: It describe the segmentation based on personality,
attitude, interest, lifestyle, self image and opinion of an individual. Above mentioned company
cater to all social classes whether it is lower, middle or upper class people and include wide rage
of product based on the lifestyle and purchasing power of customer.
Key factors for the growth of digital business
Business environment: Business environment basically refer to the surrounding of the
business that affect the growth as well as operations of business. There are two types of business
operation which are stated below (El Sawy and Pereira, 2013):
Micro environment: It include competitor, supplier, customer as well as intermediated
that directly affect the growth of business. Thus, it usually affect the day to day activity of the
business. For instance, if the ASOS faces high bargaining power of supplier then they profit

margin will decrease and affect its revenue which company will compensate by lowering down
the remuneration.
Macro environment: It has wider affect in comparison of micro as it include Pestle
analysis that influences the performance as well as growth opportunity of business. Herein,
ASOS which is a multinational company consider this external analyse such as political stability,
lifestyle of people and so on before diversifying its business.
Unique Selling Proposition: USP differentiate the product from its competitor by not
letting the product to get substituted. ASOS is a online seller which can provide efficient
customer service for its e-commerce site. Thus, it has generated USP in its various products and
sells over 850brands as well as its own range of clothing and accessories. In innovative ways to
display merchandise to customer and interactive ways to shop including customer created looks,
company edited fashion trends and the ASOS market place. This has increased their customer
base as customer get wide options of product which helps them to make vital decision by
distinguishing on the basis of price, attribute, brand, review and so. Therefore, respective
company should maintain their USP as it act as a key factor for the long term growth of the
business.
Porters five factor: It is the external analysis that include the five factor that affect the
growth of digital business (Bharadwaj and et. al., 2013).
Competitive rivalry: ASOS perform its business globally due to which they have face
strong competition like it fight against its tough competitor Topshop due to which company
expand is reach as the stores of Topshop are substitute for ASOS's online service. Along with
that the substitution or switching cost of ASOS is low which mean consumer can transfer from
one retailer to other.
Bargaining power of buyer: As customer has wide options in e commerce site due to
which the bargaining power of buyer is high. Thus, company should keep on bringing innovation
to maintain its place.
Bargaining power of supplier: As ASOS is well known company perform its operations
worldwide due to which even supplier want to work with them because of their diversify
operation. Thus, supplier are not in state to bargain.

Threat of new substituted: Threat to substitution is high due to neck to neck competition
and low switching cost. Therefore, company must maintain its penetration strategy in order to
expand.
Threat of new entrant : With increase of digitalisation company are perform business in
online platform as there are various advantage associated with it. Thus, company should take
precaution against threat of new entrant.
Competition matrix: It is used by business because it has strong implications to make
the better comparison with the competitor by identifying the strength, weakness and gap which
needs to be filled by company (Bharadwaj and et. al., 2013) . It is basically prepared either in
form of chart or table which include various competitors and rating is given based on various
factors or attribute of product to identify the areas where business can work. For long term
growth prospective business should follow it effectively. For example, if ASOS prepares it for its
competitor Ebay then it will prepare in following manner:
Factor ASOS Topshop
Low price 4 5
Quality 5 4
Unique features 4 5
Rapid delivery 4 3
This table depicts the area where business can enhance its performance such as it should
add more unique features and can lower down its price for operation in remote area. Along with
that respective table denotes that ASOS provide quality product and makes faster delivery in
comparison to its competitor.
External factor: To analyse the external factor PESTEL analysis is done to identify the
opportunity or threat for company to attain long term sustainable growth.
Political factor: It include factors like tax policy, government or political stability, labour
law, trade restrictions and so that that positively or negatively affect the operations of the
business. ASOS product overseas due to which they may faces the issues of risk of military
invasion. For instance, ASOS can closely analyse different factors before entering or investing in

new market like political stability, legal framework and trade regulations & tariffs connected to
consumer services.
Economical factor: It include various factors like interest rate, exchange rate, disposable
income, economic growth and so on. Thus, it plays a vital role and leaves direct impact in the
progress of organisation. In context to ASOS, which perform its business in both developed and
developing country. In developed country due to economic stability ASOS experiences huge
success but on contrary in developing or remote area respective company has to bear huge risk.
Still the company operates there because it is a growth opportunity for the company. Moreover,
it consider some points before constructing like efficiency of financial markets, infrastructure
quality in retail industry and exchange rate & stability of host country.
Social factor: Social factor include belief, age distribution, attitude and health
consciousness that directly affect the operations of business. ASOS perform as a online retailer
company. ASOS has basically adopted gender roles and test several concepts to cater to and
support United Kingdom society. They are mainly targeted to youth and provide product at
reasonable prices due to which it has increased the buying habits of people through online
platform. Additionally, with the increase level of education, they can leverage it to expand its
presence in UK.
Technological factor: It refer to innovation that helps the business in identifying new
ways of manufacturing goods or service, distribution channel as well as ways to communicate
with the potential customer of the company (Woodard, and et. al., 2013). ASOS has always
adopted latest technology or innovation to overpower their competitors. For instance, company
has made investment in information technology to fight against new entrant and achieve the goal
of organisation. Therefore, company should not only maintain but enhances its technology with
the passage of time to gain advantage over its competitors.
Environmental factor: It refer to the ethical way of doing the business by taking
desirable actions to safeguard the interest of environment and achieve long term sustainable
development. Herein, ASOS makes various strategy for the favour of environment like it has
increased low carbon lifestyle popularity and eliminate the use of plastic bags to achieve the
objective of business through sustainable growth.
Legal factor: Legal factor include laws related to employee, consumer right, product
labelling, product safety and so on thus organisation must abide by uniform laws, rules and

regulation to perform its operations worldwide. Respective company follow rules and regulation
of various country to perform its business worldwide and access the opportunity to diversify its
business like they follow the regulations related to environment protection. Therefore, this gives
advantage to company by achieving its objective at macro and remote level.
CONCLUSION
From the above report it has been concluded that digital business plays an efficient role to
expand the reach of business and gain the result at real time. It not only provide customised
services to the customer even the customer gets facility to track their order. Thus, it has enhanced
the transparency and ease of doing business. Moreover, company can make the use of external
and internal analysis along with that they can make competitive analysis to overpower their
competitor and gain long term growth opportunity.

REFRENCES
Books and Journal
Bharadwaj, A. and et. al., 2013. Digital business strategy: toward a next generation of insights.
MIS quarterly. pp.471-482.
Bharadwaj, A., and et. al., 2013. Visions and voices on emerging challenges in digital business
strategy. MIS quarterly. 37(2). pp.14-001.
Chaffey, D., 2015. Digital business and e-commerce management. London: Pearson Education
Limited.
El Sawy, O. A. and Pereira, F., 2013. Digital business models: review and synthesis. In Business
Modelling in the Dynamic Digital Space (pp. 13-20). Springer, Berlin, Heidelberg.
Holliman, G. and Rowley, J., 2014. Business to business digital content marketing: marketers’
perceptions of best practice. Journal of research in interactive marketing. 8(4). pp.269-
293.
Matt, C., Hess, T. and Benlian, A., 2015. Digital transformation strategies. Business &
Information Systems Engineering. 57(5). pp.339-343.
Mithas, S., Tafti, A. and Mitchell, W., 2013. How a firm's competitive environment and digital
strategic posture influence digital business strategy. MIS quarterly, pp.511-536.
Schmidt, E. and Cohen, J., 2013. The new digital age: Reshaping the future of people, nations
and business. Hachette UK.
Westerman, G., Bonnet, D. and McAfee, A., 2014. Leading digital: Turning technology into
business transformation. Harvard Business Press.
Woodard, C. J. And et. al., 2013. Design capital and design moves: The logic of digital business
strategy. Mis Quarterly. pp.537-564.