Digital Business: Advantages, Disadvantages, Models, and Collaborative Alliances

This report discusses the concept of digital business, its advantages and disadvantages, different digital business models, and the impact of collaborative alliances on eBay. It also highlights e-commerce principles in the context of eBay. The advantages of digital business include increased efficiency and productivity, innovation, improved teamwork and communication, and higher customer share and sales. However, there are also disadvantages such as increased dependency on technology, security and privacy issues, and heightened competition. The report further explores digital business models like the freemium model, on-demand model, subscription model, and e-commerce model. It also discusses the impact of strategic alliances and collaborative relationships on eBay, including the advantages of speed of entry, increased sales, innovation, and enhanced distribution channels. Lastly, the report touches upon e-commerce principles and their relevance to eBay.

DIGITAL BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Digital business and its advantages and disadvantages...............................................................3
Digital business model and their implementation........................................................................5
Impact of collaborative relationship and strategic alliances on eBay..........................................7
E-commerce principles................................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES................................................................................................................................1

INTRODUCTION
Digitalisation or operation of business through digital mode is one of the recent trend of
business operation. Digitalisation of business on the one side raise the appearance of the
company on global level but at the same side it also help the company to accomplish its objective
in the form of raising sales and profit percentage (Martinez, 2019). This report will study about
the concept of digital business and its associated advantages and disadvantages in the contrast of
eBay which is one of the biggest e-commerce company that deals in variety of products and
services. New and emerging digital business models, concept of collaborative and strategic
alliances and their impacts through digital technology are also being discussed in this report.
Lastly e-commerce and its principles are also being highlighted in the contrast of eBay.
MAIN BODY
Digital business and its advantages and disadvantages
Digital business:
Digital business refers to that business that is being operated digitally. This means the
business which operates its operation digitally and virtually will all be categorized under the
category of digital business (Antikainen, Uusitalo and Kivikytö-Reponen, 2018). In simple
words, it would be right to said that the business that has digital appearance or which perform its
business activities including selling of its products or availing its services at digital platform then
it will be considered as digital business.
Advantages:
There are many advantages associated with operation of business digitally. Out of those some
advantages are:
Raises efficiency and productivity:
It is one of the most important advantage that a company can grab by implementing
digitalization in the workplace. Along with running of operation of company digitalization or
digital touch helps the company in terms of raising their efficiency and productivity. By
widening the product line or appearance along with better supply of products and services will
become very easy through the concept of digital business (Boyko and Frolova, 2020). Similarly,

it also raises the productivity of eBay because through its digital appearance its sales as well as
productivity has directly raised.
Brings innovation:
Digital business is always directly associated with innovation. Through digital business
innovation can be easy to brought up by the company. eBay as it is dealing in many digital
business but the idea behind such innovation is brought up by the digitalization of its business.
Raise teamwork and communication:
Digitalization and digital touch to the business of the company always raised the team-
spirit along with enhancing the level of communication. With the implementation of
digitalization in eBay it becomes very easy for it, to operate the business operation of the
different branches along with maintaining greater degree of co-ordination between its branches.
Similarly, infusing digital technology in workplace also help the eBay in building and raising
team-spirit or teamwork in its working operation.
Improve working condition:
Digitalization of business by the company including eBay has raised and improvised its
working condition. Since, before this all the working and the operation of the business is being
performed in physical form which involves fixed shifts and tight office schedule. But with the
involvement of digitalization in the working of the company the working condition got changed
in the company (Pardo, 2018). Digital touch has brings more flexibility in the business and its
operation. Now employees don't feel work pressure because they can handle their work from any
place and anywhere.
Raise customer share and sales percentage:
It is one of the biggest advantage of inculcating digitalisation in the working operation of
the company. Since, digital platform has wider scope and coverage so through inducing digital
touch in the working of the eBay its sales as well as customer's share has raised substantially.
Disadvantages:
Raise dependency on technology:
It is one of the biggest disadvantage of the digitalization and digital business. Since it
involves the use of technology so it raises the dependency of the company towards the
technology. As eBay is a high user of digital business so on the one side it raises its efficiency
but at the same side it also raises its dependency towards the technology.

Security and privacy issue:
It is also a major issue and disadvantage associated with digital business. Use of
technology and digitalization of business has a serious issue of security and privacy. Since while
interacting through customers by eBay a lot of private and personal information is being shared.
However, a small error may lead to generalization of information which results in making the
private information public (Baines, Grinevich and Karatas-Ozkan, 2019). This will not only
affect the concerned person but the image of the company as a whole is being equally affected.
Raise competition:
As on the one hand it broadens up its coverage but at the same time due to raising
coverage at global level the global competition has also being raised. eBay as being competing in
the home country but along with digitalization of business the global competition or the strength
of the competition has been raised.
Digital business model and their implementation
Key business issue:
Cyber security:
It is one of the biggest issue concerned with digital business and digitalization of
business. As per the concept of cyber security computers, servers or software of the companies is
being hacked and attacked by some individual with unlawful or wrong intention.
Ethical issues:
It is also a major issue concerned with digital business. Since it is very essential that the
business ethics have to be followed and implemented by every company in their workplace. But
along with the concept of digitalization this has emerged as an issue (Gunduz and Das, 2020).
Implication of ethical consideration in the workplace is now becoming very difficult to be
followed by the company.
Digital business model:
There are many digital business models which could be applicable in different business. Out of
those some are:
Freemium model:
It is one of the best model of digital business. As per this model companies allow its
customer to avail some services at free of cost while charge specific payment for availing the

premium services or special services (Chen and et.al., 2018). This is one of the best model which
help the companies to operate their business along with taking care of the business ethics. This
model is usually more famous among those companies who have categories of services in terms
of basic and special. For example: Spotify is one of the famous company that avail a large
category of music for its customers. Spotify usually allow its customers to listen the basic and
normal song free of cost while it charges among for listening premium or new released songs.
On demand model:
As per this model the services are being availed by the company on demand of the
customers. As per this model the services or the product is being delivered to the customers on
their demand. This model on the one hand take care of the following of business ethics of the
company while on the other hand by having a strong security background it also stops and
prevent the occurrence of cyber security. For example: this model is mainly used by Uber which
avail its services to the customers on their demand.
Subscription model:
As per this model services are being availed by the company to its consumers on the basis
of taking subscription of the company. This means that the companies who adopt this model of
digital business will operate its business and avail its services on the basis of subscription.
Customers have to pay a specified amount for taking the subscription of the services (Schneider
and Imai, 2020). For example: Netflex. It uses this model in its business wherein it avails its
entertainment services to its customers on the basis of taking subscription of its services.
E-commerce model:
As per this model the business avails its product and services over the internet. In simple
words, buying and selling of goods over the mode of internet is concerned with e-commerce
mode (Tian and et.al., 2018). It is further categorised into different types:
Business to business (B2B):
Under this type the business sell its goods and services to another business. Usually the buyer
itself the end user but sometime that buyer will again sell that products to the ultimate
consumers.
Business to customer (B2C):
As per this type of model the business will directly sell its products to the consumers. In this
model there is direct interaction between the buyer and the seller.

Consumer to business (C2B):
As per this case consumer will sell the product to the business. Under this mode customer will
act as a supplier of raw material or goods. After buying the products the business will again sell
it to the ultimate and its final consumers (Types of Ecommerce Business Models: Traditional and
Innovate New Ones to Consider, 2021).
Companies can perform their business by adopting any of these model in their working
operation. However, it is to be noted that while following these models business code of ethics
has to be strongly kept in touch by every company. This model is mainly adopted by the e-
commerce companies including amazon, eBay and various others.
eBay usually uses E-commerce business model for performing its digital business
operation. Through this model it sale its products and avail its services to its customers over the
internet. This means that by using the internet anyone can order anything from it official website.
However, it is to be noted that subscription model is also an emerging model for eBay
whereby it can by providing subscription services to its customers can continue its business. This
is emerging and best model because it will help it to raise customer attraction towards it in
addition of raising its sales and profit shares.
Impact of collaborative relationship and strategic alliances on eBay
Strategic alliance:
It refers to an agreement where two companies will remain separate entities but pulled
their resources and expertise together to achieve a common objective and pursue a common
project.
It is one of the best way of doing the business in comparison of joint venture and any
other mode because in this mode business don't have to combine their business instead of that
they make alliance with each other and carry on their operation along with achievement of
common goal (Elia, Petruzzelli and Piscitello, 2019). This method is being performed from
pastime to the world of digitalization also. This means that when alliances will be made through
the indication of technological touch then it will be known as strategic alliances through digital
technology.
Advantages:

There are many advantages associated with strategic alliances through digital technology that the
company including eBay can grab. Out of them some are
Raise the speed of entry
The biggest advantage that can be grabbed from strategic alliances is to enter into new
market without facing too much entry barriers. This means that through strategic alliances eBay
can enter into any market and explore the market through making strategic alliances with the
existing company of the market.
Raise sales
It is also the best method by which sales of the company can be raised. Through strategic
alliances companies can get the chance to deal with other companies that ultimately help them to
raise their sales percentage and grow profit share.
Bring innovation
Since strategic alliances enables the companies to capture new market a long with
enabling a chance to work with other companies so this will help them to bring innovation in the
business of the company. As when eBay will make strategic alliances with other companies then
it will help it to bring innovation in its way of working along with grabbing more customer's
share.
Enhances distribution channel
As strategic alliances helps the companies to share their resources so this will again help
it to get the chance to raise their distribution network. Thus, eBay by inculcating strategic
alliances can raise its business success along with raising distribution network.
Collaborative alliances:
It refers to working of the company in collaboration with each other. Under this form of
relationship two parties means companies agree to work together for the accomplishment of the
common objective. Under this form both the parties share resources and knowledge with each
other. It is the best form of doing the business in which companies instead of competing with
each other, work for the achievement of the common goal. Involvement of digital technology
helps this relationship to be more flexible and transparent with each other (Kamenarac, 2019).
This involvement of digitalization in this relationship make the working faster and raise the
chances of getting success.
Advantages:

Implementation of collaborative relationship also helps the companies including eBay. The
advantages are:
Expansion of business:
Collaboration of the business help the eBay in terms of expansion of its business share
and working across different places. It gives leverage to business in terms of saving the cost of
operation or set up. Through collaboration of business access to different countries quite made
easy.
Reduce risk:
Collaborative relationship helps the eBay in terms of reducing the intensity of risk that
may usually occur when the company will move its business to different country. It is common
that when companies will move to other countries then risk involve acceptance, trade barriers,
financial risk usually occur. But this relationship help the eBay to get overcome of it.
Raise business image:
This relationship helps the company to raise its image in the country where it is planning such
collaboration. In addition, of raising the own image, the opposite company's from which it is
collaborating its business is also raised.
However apart from these advantages of strategic and collaborative alliances, eBay can
also face certain adverse impact in the form of affecting its business. Due to having such
relationship company may face issue of co-ordination, communication, and various other. As
two different companies will never be same so while performing business together they face the
issue of lack of co-ordination which sometime raise the problem of conflicts. Likewise, due to
involvement of digital interference in these relationship companies may also face the problem of
miss-communication or situation of wrong communication is also common. This may sometime
result in wrong understanding of message which ultimately lead to non achievement of
objectives too.
E-commerce principles
There are various principles concerned with e-commerce which every company have to
implement in their workplace while dealing in e-commerce business. Out of those principles
some are:
User friendly:

As per this principle the operation of the e-commerce website of the company should be
user or customer friendly. If the companies will not take care of this principle then it become
very difficult for them to hold their customers. Thus, eBay also have to be careful regarding this
principle because if the company's operating website will be too complex then it become very
difficult for it to grab its current customers.
Adequate security:
Implication of this principle is very important to be followed by e-commerce company
including e-bay. If there is no security arrangement regarding the e-commerce website of the
company then no customer would like to be associated with the company. So adequate security
measures are required to be taken by every company who are concerned with e-commerce
business. This will also help the company to minimise the issue regarding cyber security.
Analysation of target audience:
Running of business through e-commerce will be of no use until it will be not as per the
audience or customers. This means that while operating the business through e-commerce it is
very important that the website should be as per analysis of the target audience. If it will not be
made as per the audience then no customer would show interest towards the company or its
products.
Involvement of search option:
This is one of the important principle which every e-commerce company including e-bay
have to kept while designing its website. Because if search option will not be available then no
customer would be able to get interact with the company. Search option will make the website
more efficient because through this option customers will be able to explore whatever is being
required by them.
Efficient action:
It is also an important principle which is required to be implemented by every company.
Since through digital transaction no physical connection between the company and the customer
take place. So, it is very essential that the company adopt this principle in their operation. This
principle will enable the company to be responsive towards their customers because under this
practice company will respond quickly regarding customer's feedback or issues. Similarly, this
principle also enables the customer's to feel comfort because of the responsiveness of the
company. Thus, eBay also have to adopt and implement this principle in its workplace because

through this principle its business will be able to achieve its objective along with raising and
maintaining customer's satisfaction.
Involvement of unique element:
This is also an important principle which will separate the company from each other. This
principle also give competitive advantage to the company. Since there are lot of company which
operate their business through e-commerce website or through digitally but making the company
unique in terms of its features over its website will give it competitive advantage. Thus, through
the execution of this principle eBay will make become market leader along with meeting tough
competition. Option of filter, sorting, discount sections and various other are such option will
make the website unique and differentiated for eBay.
Responsive technology:
It is very essential that the website of the company should be responsive. Adding of too
much complexion including HTML coding, big images, and various other will at the one hand
raise the appearance of the website but at the same side it makes the running speed of the website
slow (Top 10 e-commerce Design Principles for a Successful Website, 2020). Thus, eBay also
have to carefully analyse and implement this principle in its website so that it will not run slow
and customer's experience regarding the use of website can be raised.
CONCLUSION
From the above report it would be concluded that implication of digitalization and
adoption of digital business will help the company not only to raise its sales but it also helps it to
expand the presence of business along with giving it global presence. In the same way adoption
and accordingly implementation of digital models will also help the company to perform its
business activity along with resolving the issue concerned with ethical consideration and cyber
security. In addition, of that execution of concept of collaborative and strategic alliances also
help the company to perform its business operation along with raising its digital and wider
presence. Following of e-commerce principle also help the company in the successful
performing its e-commerce or digital transactions.

REFERENCES
Books and journals
Antikainen, M., Uusitalo, T. and Kivikytö-Reponen, P., 2018. Digitalisation as an enabler of
circular economy. Procedia CIRP. 73. pp.45-49.
Baines, L., Grinevich, V. and Karatas-Ozkan, M., 2019. Digitalisation and the role of the board.
In Research handbook on boards of directors. Edward Elgar Publishing.
Boyko, T.S. and Frolova, N.S., 2020, March. Key Competence Development Under Global
Economy Digitalisation. In International Scientific Conference" Far East Con"(ISCFEC
2020) (pp. 1537-1541). Atlantis Press.
Chen, and et.al., 2018. Analysis of freemium business model considering network externalities
and consumer uncertainty. Journal of systems science and systems engineering. 27(1).
pp.78-105.
Elia, S., Petruzzelli, A.M. and Piscitello, L., 2019. The impact of cultural diversity on innovation
performance of MNC subsidiaries in strategic alliances. Journal of Business
Research. 98. pp.204-213.
Gunduz, M.Z. and Das, R., 2020. Cyber-security on smart grid: Threats and potential
solutions. Computer networks. 169. p.107094.
Kamenarac, O., 2019. Collaborative relationship.
Martinez, F., 2019. Process excellence the key for digitalisation. Business Process Management
Journal.
Schneider, R. and Imai, J., 2020. User-based Valuation of Digital Subscription Business
Models. International Journal of Real Options and Strategy, 8, pp.1-26.
Tian, and et.al., 2018. Marketplace, reseller, or hybrid: strategic analysis of an emerging E‐
commerce model. Production and Operations Management. 27(8). pp.1595-1610.
Online references
Pardo, D., 2018. 8 advantages of digitalization of business. [Online]. Available through
<https://ehorus.com/digitalization-of-business/>
Top 10 e-commerce Design Principles for a Successful Website., 2020. [Online]. Available
through <https://www.devsaran.com/blog/top-10-e-commerce-design-principles-
successful-website>
Types of Ecommerce Business Models: Traditional and Innovate New Ones to Consider., 2021.
[Online]. Available through <https://www.bigcommerce.com/articles/ecommerce/types-
of-business-models/#ecommerce-frequently-asked-questions>
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