Digital Business: Merits, Demerits, and Emerging Models

This document provides an overview of digital business, including its merits and demerits. It discusses emerging digital business models and their impact on business issues like cyber security and ethics. It also explores how companies can utilize new collaborative relationships and strategic alliances through digital technology. The case study of O2, a telecommunication company, is used to illustrate the application of digital business models.

DIGITAL BUSINESS

Executive Summery
Digital business is the type of business where the technology is used to carry out business
operations and services. Digital business is one of the emerging business trend which helps
businesses to gain large number of customer base across the globe. Consumers can get get to the
services from anywhere at anytime which helps in increasing customer satisfaction. The digital
business also helpful in increasing the productivity and profitability of the business, there various
new, emerging digital business models used by the business to provide quality and value added
services to their customers. The main focus of digital business is to satisfy the needs and wants
of their customers as it is mainly customer centric process focusing on their customers.

Table of Contents
Executive Summery.........................................................................................................................2
Introduction......................................................................................................................................4
Task 1...............................................................................................................................................4
1. Explain digital business along with its merits and demerits...............................................4
1.1 Definition of digital business............................................................................................4
1.2 Merits of digital business..................................................................................................5
1.3 Demerits of digital business.............................................................................................5
1.4 Application of using digital business with merits and demerits applied..........................6
Task 2...............................................................................................................................................6

2. Discuss emerging digital business models in respect to business issues like cyber security
and ethics................................................................................................................................6
2.1 Define new emerging digital business models.................................................................6
2.2 Discuss new, emerging digital business models...............................................................6
2.3 Discuss how organisation can use these new emerging business models........................7
Task 3...............................................................................................................................................8
3. Discuss the impact of new collaborative relationship and strategic alliances through digital
technology..............................................................................................................................8
3.1 Define new collaborative relationship and strategic alliance...........................................8
3.2 Merits & Demerits of new collaborative relationship and strategic alliance through digital
technology..............................................................................................................................8
3.3 Discuss how company can use new collaborative relationship and strategic alliance
through digital technology......................................................................................................9
Task 4.............................................................................................................................................10
4 Evaluate how e-commerce principles could be used by the company..............................10
4.1 Definition of E-commerce..............................................................................................10
4.2 Discuss the principle of e-commerce:............................................................................10
4.3 Applying e-commerce principle to the chosen company...............................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................13
Introduction
Digital business the type business which uses technology to carry out their operations and
services also to gain competitive advantage externally. With growing use of technology, the
demand for the digital business is also increasing, this type of business enables smooth flow of
business operations using technology and innovation to provide value added services enhancing
their productivity and performance. In this report O2 company is taken as the base company, it is
second largest telecommunication company owned by Telefonica in the united kingdom with
almost 27 million subscriber. O2 was founded in 1985 by John Carrington. This report covers an
overview of digital business along with its merits and demerits applied to the respective firm also
proper evaluation of rising digital business models in respect to key business issues like cyber

security and ethics. In addition to this various impacts of new collaborative relationship and
strategic alliances through digital technology and also how e-commerce principle could be
business entities is also highlighted in this report.
Task 1
1. Explain digital business along with its merits and demerits
1.1 Definition of digital business
Digital business is define as the type of business which uses technology to provide
services and to carry out business operations also to create and provide values to its customers.
The digital business plays an important role in transforming business and contributing new ways
of interact with customers directly (Beynon-Davies, 2020). The digital technology allows
business operations to be carried out from anywhere at anytime globally and also allows in
enhancing their brand image using digital platform. The emerging trend of digital businesses
have challenged the already existing offline business and created a huge competition for
commerce business. One of the important factor behind the growth of digital business is use of
innovation and their consumer centric view. The use of technology and innovation under digital
business works an a positive force to carry out various business operations and activities also
connecting both business and consumer with each other enhancing their performance and
productivity.
1.2 Merits of digital business
The digital business allows business and its potential customers to connect, interact with
each other effectively, it includes use of technology and innovations to smoothly carry out their
business operations and activities using online platforms. The merits of digital business are
discussed below:
A Huge marketplace: The digital business helps in targeting large number of customers
from all over the globe (Boczkowski and Anderson, 2017). Business can reach large number of
customers base in shorter time and it also makes it easy for the customer to buy their products
and services from anywhere at anytime.
Increased productivity: Another advantages of digital business is increased or better
productivity, using advanced technology and innovations to carry out business activities helps in

improving the productivity of the businesses and motivated employees to work towards
achieving goals.
Enhance customers satisfaction: The digital business helps in enhancing customer
satisfaction by accessing all the services from anytime at anywhere. Digital business focuses
providing best services to its customers.
1.3 Demerits of digital business
Just like the merits there are some demerits of digital business. Some of the demerits of
digital business are highlighted below:
Reliability on technology: One of the main disadvantage of digital business is its
reliability on technology, the digital business involves use of technology with it no business
operations can be carried out.
Safety and security: While doing business digitally one of the biggest risk any business
or customer can face is the threat of safety and security on online platforms, there are chance of
cyber crimes while doing business online.
Increasing competition: With growing trend of digital businesses almost each business
are going online or digital, and because of this the competition in the market is increasing for the
digital businesses.
1.4 Application of using digital business with merits and demerits applied
In case of O2 company the application of using digital business can be useful for their
business in enhancing their productivity and cater large customer base in the marketplace, use of
digital business allows business to have global market access from anywhere at any time, one of
the biggest advantage that company can have of using digital business is that they can interact
and communicate with their potential customers about their product and services using online
platform from anywhere and at anytime and can provide quality services accordingly (Bradshaw,
2017). It will also increase their brand image and gain competitive advantage in the globally
digital market. Company can expand their telecommunication services more effectively in the
untouched markets areas with more advance technology and innovations and can gain more
consumers base also can increase their productivity.

Task 2
2. Discuss emerging digital business models in respect to business issues like cyber security and
ethics
2.1 Define new emerging digital business models
A digital business model is defines as the type of model that investing in digital
technologies in order to improve and enhance the performance and activities of organisation.
With emerging use of technology the demand for the digital business model is increasing
effectively, in order to cope up with the increasing competition in the digital era companies are
adopting new and innovative digital business models. It is type of business framework which
allows business to innovate, create as well as value added services in order to enhance their
productivity and profitability. The important factors of emerging business models are consumers
experience, rivalry, strategy, content and innovation. The main focus of emerging business
model is the process of creating value added services for the customers.
2.2 Discuss new, emerging digital business models
The development of digital business model is one of the important thing to be done by business
in order to enhance there productivity and also to gain competitive advantage in the digital
growing era (Chaffey and Ellis-Chadwick, 2019). There are number of emerging digital business
model used by the digital business to enhance their performance. These emerging digital
business models are used according to the functioning of the business, some business uses model
which are providing services for free of cost while some are on the subscription basis, these all
help in carrying out their activities smoothly and effectively. some of the emerging digital
business models are discussed below:
Freemium model: This model is based on the principle of complete standardization, this
model allows customer to use their part of services for free of cost (Chaffey and Smith, 2017).
The freemium model functions to provide on boarding services with as little marketing effort as
much as possible.
Open source model: The another type of digital business model is open source model,
unlike freemium model this model is free to access for the user and also allows outside
programmers to contribute to it. The biggest advantage of this type of model is that because of its

free access it spreads really quickly, sustainable business model can be develop on this type of
business models.
Subscription- based model: The subscription based models relies on the subscription, it
is one of the mostly used type of emerging digital business model. Use of this model helps in
digital business to gain loyal customer base and also continuous flow of revenue for the
businesses. But in order to get continuous subscription digital business needs to continuously
offer creative and innovative content to its customers.
E-commerce model: Another type of business model is the E-commerce business
model, it is one of the most growing digital business model, this model has proved that digital
business is not only about connecting computers and providing computers but it can be purchase
and sell of physical goods also, one of the great example of this digital business model is
Amazon. Now almost all the companies are using this business model to carry out their business
activities using online platforms.
On demand model: This type of digital business model has consumer to have assess
according to their own demand and pace. This type of model allows digital business model to
offer their services according to they demand and schedule. The on demand digital business
model charges through subscription or fees for each transaction.
2.3 Discuss how organisation can use these new emerging business models
The O2 Company is an telecommunication company providing telephone service and
fixed line services along with home broadband services to its customer (Coyle, 2017). Company
is well positioned to modernised and introduce a range of services like including 5G products
and services. This new launch can enables company to not only provide necessary basis for new
services but also allows company to work efficiently at lower cost. To effectively carry out their
business activities more effectively company can modify their digital business model, but with
increasing trend of digital business companies are also facing business issues like cyber
securities and ethics. In order to effectively deal with these issues company can change their
business models to on demand model or subscription based model, proper steps needs to be taken
by the company in order to deal with these issues (Heavin and Power, 2018). Safety and security
of the customer’s needs to be ensured while using digital business models as these model will
help company to gain loyal customer base and will also help in enhancing their performance
more effectively.

Task 3
3. Discuss the impact of new collaborative relationship and strategic alliances through digital
technology
3.1 Define new collaborative relationship and strategic alliance.
New collaborative relationship: The new collaborative relationship is defined as the
kind of relationship formed when two or more people decides to collaboratively share resources
like knowledge or information, people in the organisation. The new collaborative relationship in
the organisation can be sharing of common goals and objectives by the partners which can be
long term or short term. The new collaborative relationship can be to achieve new goals or to
achieve any other plan in the organisation.
Strategic alliance: The strategic alliance is defines as the mutual agreement between two
business entities to complete a project which is beneficial for both. Under this while company
performing independently takes up the project to increase their productivity. In simple terms the
strategic alliance is a mutual agreement between two or more companies to share their required
resources or information to achieve objectives beneficial for both.
3.2 Merits & Demerits of new collaborative relationship and strategic alliance through digital
technology.
Merits & Demerits of new collaborative relationship
Merits of new collaborative relationship
Division of work: The collaborative relationship helps division of work as work can be
divided between two or more people at the work, also responsibilities can be divided equally in
order to reduce the workload (Kache and Seuring, 2017).
Enhance employee motivation: Another advantage of new collaborative relationship is
that it helps in enhancing employees motivations by building team working and by achieving
goals together.
Demerits of new collaborative relationship
Lack of trust: one of the biggest disadvantage of new collaborative relationship is lack
of trust, joint or team work on the same project can sometime can lead to lack of trust among the
team members.

Leads to conflicts: The new collaborative relationship are not always successful,
sometimes the team work can leads conflicts among them also (Key, 2017).
Merits & Demerits of strategic alliance
Merits of strategic alliance
Competitive advantage: One of the biggest advantage of strategic alliance is that it helps
businesses to gain competitive advantage through mutual agreements and also through its
partners resources.
Low manufacturing cost: Another advantage of strategic alliance is that it helps
business entities by lowering their production and manufacturing cost through development of
advance technology.
Demerits of strategic alliance
Conflicts in ownership claims: The biggest demerits of strategic alliance is the chances
of conflicts in the ownership, when two partners joins together there are high chances of conflicts
between them regarding the ownership.
Delays in implementation: Improper coordination between the partners under strategic
alliance can lead to delay in the implementation of strategies, which will directly effect their
services.
3.3 Discuss how company can use new collaborative relationship and strategic alliance through
digital technology.
The O2 company is an well established telecommunication services provider, using
technology to enhance their customer services. From the above discussion, in order top smoothly
carry out their activities more effectively in the organisation company can use new collaborative
relationship, this will help company to divide their important project between two or more
peoples that it can be done more easily and effectively, dividing work also enhance team
working and developing team morale (Kim and Kim, 2017). Company can motivate their team
members to effectively work with each other. Dividing responsibility among the team members
enhance their morale, which will automatically improve their performance. The use of new
collaborative relationship can be a positive step for the company to effectively carry out their
various activities of telecommunication to be carried out easily and effectively. Company is
already well established telecommunication service provider company, use of strategic alliance
can be little difficult for the company to be followed as there can be chances of conflict for

ownership claim an also there can be chances of delay in implementation of strategies, as
because of high competition there can be delay in the coordination between the partners which
can lead to delay in the implementation of strategies and activities in the organisation. Delay in
the implementations can lead to poor performance of the partners and company. So it is
suggested that company can use new collaborative relationship to continue to enhance their
productivity and profitability, and also to increase their sale.
Task 4
4 Evaluate how e-commerce principles could be used by the company
4.1 Definition of E-commerce
E-commerce refers to the buying and selling of products and services through an online platform
and it also includes transmitting of funds and data. It uses internet for providing the services and
it is also known as internet commerce (Lee, 2017). They are conducted on digital devices such as
smart phones, computers and so on which help the user to easily access the sites. E-commerce
operates in various types of market such as business to business, business to customer, customer
to customer and customer to business.
4.2 Discuss the principle of e-commerce:
E-commerce plays a vital role in this digitalisation world where a user can easily purchase or sell
commodities over the internet. There are various principles on which e-commerce are working
and customer has the ease to use which are mentioned below-
Optimised interface: E-commerce should be optimised for customer so that they can easily
access to the site. The site must be optimised for both mobile and computer so that customer can
use the site and also has the option to transfer to the desktop. The interface should be user
friendly and allows the customer to reach the desired product in 3-clicks. 3 click rule is the
designing of website in such a way that user must be able to find the product which they are
looking for in the website.
Payment: E-commerce sites have an option of payment in which the user can easily pay for their
order (Rowles and Brown, 2017). The customer has various types of methods for payments such
as credit card, debit card, net banking or with the help of third party applications. E-commerce
sites has also an option of payment via offline method in which the delivery executive will

collect the amount. Digital payment methods allows contactless payments which can be done on
all digital devices.
Delivery: The customer can purchase any product from the e-commerce sites and they
organisation will delivery the order at the respective place. E-commerce sites also allows express
deliveries which enables customers to receive their order within the same day or have the options
of two day delivery. The firm make sure that customers are able to receive the right order and in
a stipulated time. They also enables contactless deliveries in which the delivery execute will
leave the order at a place that is mentioned by the user and then it will be collected afterwards.
Real-time information: Real time information provided by e-commerce sites allows the user to
track their product right from when they order. It gives information about the order and the
expected date which the order will be delivered (Thite, 2018). The user can easily detect the
place from where the order is arriving and it also includes the number of days that it will take to
deliver.
Chatbots: Chatbots are the automated messengers which is provided by the e-commerce sites for
the user to send messages and enquiries. The chatbots detects the message and finds the products
and services and then revert back according to the user. These chatbots also allows to
communicate in person if the user wants.
4.3 Applying e-commerce principle to the chosen company
In case of 02 company, the company can use e-commerce principles like payments,
delivery, real time information, chatbots in order to directly interact with their customers, and
satisfy their needs. The real time information e-commerce principle will allow company to have
accurate information at the real time, information can be related to the competitive market or
about changing taste and preferences of the customers or it can be about marketplace. Having
real time information helps in taking accurate business decision (Sacolick, 2017). Also the
chatbots e-commerce principle helps business in having direct interaction with customers, direct
interaction with customers can help in knowing their needs and preferences directly and also
helps in building customer loyalty and brand image (Ting and Gray, 2019). This can also help in
enhancing performance of the individual and organisation. Another e-commerce principle which
can help company to enhance their performance and productivity is optimised interface, it allows
customer to each access to the site, this principle allows customers to have direct access to the

companies site using mobile and any digital platforms, it will increase the brand image of the
company among targeted customers.
Conclusion
From the above discussion it can be concluded that digital business is one of the growing
business in today's era, it allows business to carry out their activities and business operations
using technologies and innovation. Digital business allows business to focus on the customers
and satisfying their needs and wants effectively and efficiently in order to gain competitive
advantage. In the above report provides the overview of digital business along with its merits and
demerits in case of the chosen company also the critical evaluation of new, emerging digital
business model in respect to business issues like cyber security and ethics of the organisation and
also various type of emerging digital business models are also highlighted in the above report. In
addition to this the impact of new collaborative relationship and strategic alliance through digital
technology along with it merits & demerits also how the e-commerce principles could be used by
the company.
References
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