Overview of Digital Business: Advantages, Disadvantages, and Impact of Collaborative Relationships and Strategic Alliances

This report provides an overview of digital business, including its advantages and disadvantages. It also discusses the emergence of new digital business models and the impact of collaborative relationships and strategic alliances with the help of digital technology, using eBay as a case study. Additionally, it explores the e-commerce principles utilized by eBay.

DIGITAL BUSINESS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Overview of digital business along with advantages and disadvantages of the business.......3
2. New and emerging digital business models in context of key issues of business...................5
3. Impact of new collaborative relationship and strategic alliance with help of digital
technology ..................................................................................................................................6
4. E-commerce principles utilized by eBay................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Digital businesses utilize the advanced technology in order to create new value in
business models, consumer experiences internal abilities that support its mid-point operations. It
includes both the new start-up businesses while the traditional businesses which modify their
working through starting their work on new and advanced digital platform. It is basically usage
of technology in efficient manner which enables the people, sales team, customer service
department, marketing team, etc. to connect more appropriately with their current and future
consumers (Effah, J., 2019).
Ebay is a multinational e-commerce organization based in California which provides
services in C2C i.e. consumer to consumer and B2B i.e. business to business sales through their
website (Sánchez‐López, J.M., 2018).
This report will describe the thoughts in detail related to the overview of digital business
along with its advantages and disadvantages, emergence of digital business models and the
impact of collaborative relationships and strategic alliances with the help of this technology
within eBay. Apart from this, the study will also highlight the concept of e-commerce principles
used by eBay.
MAIN BODY
1. Overview of digital business along with advantages and disadvantages of the business
Digital business is being defined as the creation of the new business which is designed by
blurring the digital and physical world. This makes the use of the technology in order to create
the business models to improve the customer experience and internal capabilities for the support
of the core operations. In the current competitive world the major preference is being given to
the use of the technology and because of this reason the concept of digital business is at peak.
This term involves both the digital that is the brands and the traditional companies which are
transforming their business into the digital business that is want to implement the latest
technology within their business. This will assist the companies in managing the business as per
the latest technological changes and this will affect the working of the company (Geliskhanov
Islam, Yudina Tamara and Babkin Alexander, 2018).
The eBay is also a e- commerce business which facilitate consumer to consumer and the
business to consumer sales. The company was founded in the year 1995 by Pierre Omidyar and

is headquartered in California. The website of eBay involves an online auction and shopping site
wherein people can sell and buy a variety of the product and services all over the world. This
website is free to be used by any person but the sellers over the website need to pay some fees to
use for the listing items which company is selling over eBay.
There are many different businesses which makes use of the digital business and this will
result in many good aspect and some negative impact as well over the business. This is
pertaining to the fact that there are many advantages and drawbacks relating to the use of digital
business. Hence, eBay as well faces many of the benefits and limitation which affect the working
and operations of the digital business. The advantages and disadvantages of digital business
faced by eBay are as follows-
Advantages
 The major benefit which eBay faces is that this eliminates the need of the physical store
and this allows the business to increase their consumer base. This is pertaining to the fact
that when the company will be providing all the services online then there will not be any
need of opening a physical store (Advantages and disadvantages of online businesses,
2021). This is beneficial for both the eBay and the seller who are selling on this platform.
The reason underlying this fact is that eBay is a website and the seller over eBay does not
need any physical store and can sell online with help of eBay only.
 In addition to this another benefit of using the digital business is that many different types
of cost will be saved. The reason pertaining to the fact is that when the business is being
conducted online then rent will not be given, maintenance cost, different types of bills
etc. will be saved by the business. Hence, this will increase the profitability of the
company and the business will be increased to a great extent.
 Furthermore, another benefit of using this digital business concept is that this help the
business to be in touch with the consumer in good and effective manner. The major
reason underlying this fact is that in this modern world the consumer are attracted
towards the use of internet and with the current pandemic the interest of consumer has
increased for the online shopping. Hence, this is a benefit to the company that they will
have a large consumer base and this will increase the profitability of the company.
Disadvantages

 Along the above benefits the major drawback of the digital business for eBay is that there
are many consumer who still want the personal touch at the time of shopping. Hence, this
digital business of eBay will not be good for the consumer who wants the personal touch
and this can affect the sales of the company (Wirtz, 2019).
 In addition to this another drawback of this business is that there are chances of high
fraud and theft in the form of online scandals and high risk of dealing with online
shopping. This is pertaining to the fact that when the online shopping is being undertaken
then there are chances that the many of the people faces some issues at time of the online
payment and their data can be misused.
2. New and emerging digital business models in context of key issues of business
The digital business model is defined as a form of creating the value based on the
development of the consumer benefits with the help of the use of digital technologies. The major
purpose of the use of digital business model within the management of the business is to generate
some of the significant benefits for which the consumers are willing to pay. There are many of
the issues and challenges which eBay is facing because of the digital business and this affects the
working and profitability of the business. The major issue which eBay is facing because of the
digital business is the issue relating to ethical working.
The ethical issues which are being faced by eBay is that they might be in dilemma that
what are right working and what is not. In addition to this the management of the privacy and the
protection of the personal data of the consumers. In addition to this another ethical issue can be
that the technology can be misused for any other purpose by some of the people. Hence, these
are the major ethical issue which eBay can face because of the working as digital business.
Hence, for this the new trend of storing the consumer data with the help of the cloud computing
is very essential and popular now- a- days. Thus, this will assist eBay in storing the data relating
to the consumer in proper and clear manner. Hence, this will result in the proper management
and storing of the data and because of this the data will not be misused and will be kept safe and
secure (Shkarlet and et.al., 2020).
This also involves the use of the principle that is design for privacy, security and the
integrity of the data relating to the consumers. This is an opportunity for eBay as they can apply
this principle and then work in accordance to this for the management of the ethical working.
This is a principle which majorly focus on the management of the privacy and the security of the

data so that the business can be managed in effective and efficient manner. This involves taking
care of the whole process that is from where the data is being collected and how it is managed
and being used by the company for taking effective business decisions (Hacioglu, 2020).
Along with the ethical issue the another major issue faced by eBay is the cyber security
issue. The major reason for this issue is that the digital business is completely based on the use of
technology and this can cause many of the problem. The major reason pertaining to the fact is
that there are many people who can misuse the technology for their personal purpose and this can
affect the goodwill of the company and the need and requirement of the consumers. The cyber
security is being defined as the body of technology or the process which are designed to protect
the network and can also be referred to as the information technology security. Hence, for eBay
to be successful it is very essential for them to make use of the digital business model for the
management of the security issue by the company.
With the help of the digital business model the use of the latest technology is being
undertaken for the management of cyber security in effective and efficient manner. All the data
and the website links are being secured by the high level and technologically advance password
system. This is being used by eBay in order to ensure that no other person can have access to the
use of any of the secured link or the website. In addition to this when the consumer order the
product then also at that time a one time password is being sent in order to ensure that the
transaction is being secured and no other person is being using and no other person is having
access.
3. Impact of new collaborative relationship and strategic alliance with help of digital technology
In the current competitive world, the competition is very high and intense and because of
this management of the business is too tough. This is particularly because of the reason that
when the company operates in the external environment and there are many different changes
which are taking place. Hence, for the management of the competition the most essential aspect
is the making of new collaborative relationships and strategic alliances with help of the
technology. The strategic alliance is defined as the expanding the business within the new
market in order to improve the working capacity of the company and to gain a competitive
advantage over the other competitors (Ištvanić, Crnjac Milić and Krpić, 2017).
The new collaboration or the strategic alliance is being undertaken with the help of the
digital technology. The reason underlying this fact is that hen the company will collaborate with

the different types of the technology that are used within the effective working of the company.
The major reason underlying this fact is that when eBay will ensure that they are making use of
the effective technology then this will attract majority of the consumers (Schneider and Imai,
2017). Moreover, this is because of the reason that use of technology makes it much easier for
the consumer to buy and sell the product and services. In addition to this eBay will be making
use of the latest technology then this will increase the goodwill and market share of eBay within
the highly competitive working environment.
The major impact of use of new collaborative relationship and strategic alliance with help
of digital technology is positive over the company. The major reason pertaining to the fact is that
when the company will be using the latest technology then this will improve the operational
efficiency of the company. This is pertaining to the reason that when eBay will be analysing the
use of digital technology then this will improve the goodwill and market share of the company.
The major fact underlying this reason is that use of the latest technology will be liked by the
consumer and because of this the goodwill of the company will increase to a great extent
(Jabłoński and Jabłoński, 2020).
In addition to this, another positive impact of the collaboration and strategic alliance is
that this will increase the base of the consumers. This is pertaining to the fact that when eBay
will collaborate with any new company or the new technology then this will increase the interest
of the consumer and they will be liking to buy the product and services of the company.
On the other side, the major negative impact of the collaboration and strategic alliance is
that the cost of the company will increase. This is pertaining to the fact that when the company
will collaborate with other company or the technology then this will result in increase in the cost
of the company (Dornberger and Schwaferts, 2021). The underlying reason for this is that when
the company will be using this strategic alliance then they have to maintain the technology and
for this the cost of the technology will be increased.
4. E-commerce principles utilized by eBay
The competition within the e-commerce industry is intensified day by day, so in order to
attract more potential consumers towards the business and sustain the amount of existing
customers, eBay also have to take certain measures and design their principles according to the
fulfilment of company desired outcome or goals. Ebay focuses on improving the user
experiences for audience who visited their website in order to maximize the traffic into the

company's online store (Kolbe, L.M., 2017). Below describes are the principle or ways through
which eBay creates their image in the world of e-commerce business across the world: User friendly layout: People search and visit the website with an intension to easily able
to search their desired product and able to easily visualize hundreds of commodities with
key information related to the products available to them. User friendly layout helps the
people to view products easily on the website of eBay and filter the results to find their
appropriate product that suit their needs and requirements without any unwanted
distractions. The eBay utilizes minimalistic design principle in order to attract more
consumers towards their business. In website, the background colour of every product
and page is highly important and thus eBay uses white background for both pages and
product which also help the consumers to read the details and instructions in easy
manner. Product photography: Product images is the best way to attract and engage with their
website is the best possible way that eBay has. It is highly important to post high quality
images on the website due to increased competition within the market space. With the
help of utilizing high quality products the consumers can easily able to see colour
contrast of images (Akinwale, A.O., 2020). Ebay utilizes showing products in action is
the latest trend through which the organization run their business effectively as the
actions allows the consumers to visualize themselves using or wearing product. Due to
this feature, the consumers are able to connect emotionally with the product and thus
purchase it. Product description: eBay utilizes short and descriptive information which provide
details about the product which is relevant and necessary for the consumer to make
decision regarding their purchase. The company puts information in bullet points which
helps the customers to read them easily and compare the features of the product with
other websites. Online stores of eBay show comparison table at the bottom of product
pages so that consumer can compare similar products. Call to action button: This option has different emphasis on the website of eBay. This is
because the ultimate aim of the organization is to sell their products and this particular
action helps with that goal only. The calls to actions should be short and precise which

gives enhanced experience to customers. Ebay try different colours and fonts in order to
attract their consumers attention. Ensure payment security: eBay is efficient enough to build trust within their consumers
with the usage of effective practices which secure the personal or financial data of them
in order to get breach by others. The SSL certificate has been setup by the eBay on their
website in order to encrypt the personal data exchanged between the customers device
and the website server. The trust worthy payment options has been used by eBay and
something that people are familiar with like PayPal, Real Ex, World Pay, etc. The
website also offers cash on delivery options for products offered by them. Mobile supportive design: The eBay utilizes mobile supportive applications or e-
commerce theme while engaging with online platform activities. The company ensures
that the mobile version are easy to utilize and able to provide best experience to their
consumers. The company ensures the pop-up of full screen advertisements because they
irritate the consumers while purchasing their desired item from the company. Website loading time duration: Nobody like slow loading website pages because it
diminishes the value of the brand in front of their potential consumers. Ebay ensures that
their online website are easily able to load all the necessary information in efficient
manner so that they are able to make their purchase as good experience for them
(Glukhov, V.V., 2017). Slow loading pages always lead towards the loss of sales which is
not at all the goal of any business organization and thus for eBay as well.
 Customer reviews: eBay provides customer review option in order to guide other
customers to make their decision with the help of taking feedback from other users who
have purchased that product and used them in their life. Using independent review
website, eBay is able to create trust factor among consumers and for this the organization
ensures that each and every individual is able to review the feedbacks in clear and proper
manner.
CONCLUSION
From the above report it has been concluded that creating an e-commerce business
efficient the companies have to adopt various measures regarding make effective business
organization in context of digital business along with its advantages and disadvantages within
eBay. The study explained the digital business models which give thoughts related to various

issues related to cyber security and ethics that has been faced by eBay while operating their
business activities. The impact of new collaboration and strategic alliances through digital
technology along with e-commerce principles utilized by eBay.

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Online
Advantages and disadvantages of online businesses. 2021. [Online]. Available through:
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