Digital Business: Key Trends, Emerging Models, Collaborative Relationships, and E-commerce Principles Used by Tesco

This report discusses the key trends and advantages of digital technology, new and emerging digital business models, impact of new collaborative relationships and strategic alliances of Tesco, and e-commerce principles used by Tesco. It sheds light on the benefits of digital technology, such as increased efficiency and productivity, better customer engagement, and increased revenue. The report also presents new and emerging digital business models, such as freemium, marketplace model, and e-commerce used by Tesco. It describes the impact of new collaborative relationships and strategic alliances of Tesco and presents e-commerce principles used by Tesco.

DIGITAL BUSINESS

TABLE OF CONTENTS.
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Presenting Key trends and advantages of digital technology and implications for managing
virtual business in the global environment. ................................................................................3
Advantages of digital technology:...............................................................................................4
Benefits to organization:..............................................................................................................4
2. Presenting new and emerging digital business models in the context of key business issues
such as cyber security and ethics.................................................................................................5
3. Describing impact of new collaborative relationships and Strategic alliances of Tesco .......7
4. Presenting e-commerce principles used by Tesco..................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
Digital business can be define as technological model used to transform company
services and product as well as modifying the business. In simple words, it enhances internal
values of organization. There are range of benefits of digital business such as creating attention
or attracting range of customers in the firm, increase sales and profit, building innovative
services and improve the experience of people that contribute in enhancing overall growth of
organization. The present report is based on Tesco, a British multinational that deal in grocers
and general merchandize having headquarter at Welwyn Garden UK. Furthermore, the study will
discuss on key trends such as digital security, customer centric vision and artificial intelligence
and how they are helpful in development of firm. In addition to this, report will shed light on
new business and the way E -commerce strategies will benefit the organization.
MAIN BODY
1. Presenting Key trends and advantages of digital technology and implications for managing
virtual business in the global environment.
There are range of business key trends that help organization to grow and expand their
business such as data analytical, customer data platform, digital security and artificial
intelligences will be discussed in detail below:
 Data analytical: It is the process of examining the data relating to customer issues and
market risk. This operation allow Tesco in collecting information relating to customer
taste and preference and what are the new ideas other companies are using to make
appropriate strategies for benefits of organisation. Therefore, it helps firm in managing
their risk that contributes in protecting Tesco from external threats and lead in overall
expansion of business (Ismail and et.al., 2017).
 Customer data platform: It is a type of software that contain information relating to the
customer through making use of various digital platform. This application gives Tesco
complete view of consumer from other digital source. Such as it provides behavioural
data of people living in society likewise how many customers has visited the official
website or on other social sites and what issues they have faced relating to the company
services. Beside this it also provides transactional information like client purchase and
return on the e-commerce. Lastly, it also gives organization demographic data that
include information relating to audience name, address and age.

 Digital security: It is process that use various tool such as antivirus, and biometrics to
protect the company identity, data and other personnel information of employees. This
process helps Tesco in reducing the various online threats such as hacking, false
information regarding company on their social website that can degrade the brand name
of organization. Thus, it helps company in building safe environment for their
employee’s ad customer (Kotane and et.al., 2019).
Advantages of digital technology:
 Increase the efficiency and productivity: Digital technology has improved the
overall enhancement of Tesco such as digital marketing helped company to reach the
global market and attract large customer that contributed in increasing sales of firm
and profitability. This has also reduced the operational cost of company as it helps
Tesco in promoting the business online with low cost and on most of the website it is
free. Thus, it allowed company to cover the local as well as international market that
increased the overall revenue of firm (Marttinen and et.al., 2019).
 Better customer engagement: Digital technology has allowed Tesco to collect
information regarding customer taste and preference data and analyse them that result
in understanding the demands of clients. Digital marketing has also helped
organization in improving the engagement as they allow firm to know their feedback
that result in building strong relation with consumer.
 Increase Revenue: Digital technology allows firm to grow their profit such as digital
promotion that contribute in increasing the sales of their product. This process has
reduced advertisement cost of the company as most of the marketing websites are free
of cost. Along with this has helped company in making new product thus, result in
increasing more profit for Tesco.
Benefits to organization:
 More customer centric focus: Digital technology has benefited Tesco in enhancing
their customer. With help of digital marketing that has contribute in increasing the
overall sales. Along with this it helped firm in making customer approach strategies
by giving data relating to consumer taste and preferences. Therefor it befitted
organization in reaching large customer.

 Reduce the operational cost: Digital technology has reduced the cost of
organization as it helped firm in advertising their product globally that resulted in
increasing the brand image of firm. It has given a new platform to firm so that they
can sell their product and service instead of opening physical store which cost more
compare to online.
 Improved decision- making: This technology has improved the decision -making
with help of tools like analytical data provide organization with customer preference,
market research, employees performance and many others. With this information
Tesco can work on pinpoints area and can make strategies to fulfil the loop holes.
Therefore, it benefited organization in making appropriate strategies that contributed
in development of firm (Pryanikov and Chugunov, 2017).
2. Presenting new and emerging digital business models in the context of key business issues
such as cyber security and ethics.
Digital business model can be defined as process of creating customer values with help of
various technologies. Therefore, this model helps companies to sustain in the external and
internal environment of business by providing innovative ideas to firm (11 digital business
model., 2021). There are many digital business models such as freemium, marketplace model
and e-commerce used by Tesco which are discussed in details below:
 Free-model: The ideas behind this model is to offer companies free promotional services
so that they can sell their product to customer. Tesco is using this services by providing
various advertisement on their official website and social sites to their audience. This free
ad model help organization in reaching maximum number of audience and large market.
Along with this, Tesco maintained their transparency value as they allow their customer
to know what type of product and services they are providing through advertisement.
Beside this the company also focus on cyber security as they provide digital security to
their customer such as safeguarding their personnel information such as name and
address, Thus, it builds strong relation with them and increase brand image (Cristofaro,
2020).
 E-commerce model: This is the most famous model used by the companies as they allow
firm to sell their product via an online shop and social sites. It is the best business model
as it allows customer to buy almost everything on just one click. This model provides

various platform to companies such as official website, social sites like Instagram and
Facebook. Tesco is currently using all this official website to promote their product and
services. They also use hashtag on Instagram as well as providing various festival offer
and discount to attract large customer. Moreover, this model allowed Tesco in covering
global market and increase sales of organization that contribute in enhancing profitable of
firm(Fauzi and et.al., 2020).Furthermore, the organization has maintained the values such
as commitment to customer and trust by engaging with customer through online
marketing as it allow company to make product according to need of buyer that has
contributed building relation with them. At the same time organization maintained their
customer privacy for instances, the company official website always ask for client
permission regarding their consumption of data as soon as they login on website of Tesco
(Luz Martín‐Peña and et.al., 2018).
 Marketplace model: The two-sided market place is very common strategy of the digital
technology. In this model companies can use third party to trade their product and
services this model help small business to collaborate with large firm and increase their
brand name and revenue (Täuscher and Laudien., 2018). The organization have to
carefully use this model as it can be threat to company such as if there is no seller
company won't be able to attract customer that will result in losing the potential
consumer. However, Tesco can collaborate with small and medium firm so to increase
their online selling or increasing their product range. Moreover, this model can help
organization in increasing their diversity in international market as well as can improve
their quality of product which will result in customer satisfaction (Ballestar and et.al.,
2018). Furthermore, Tesco also maintain their ethical issues by following legal laws of
other firms and country they are operating in so that there is no interference of
government and firm can work smoothly. In addition to this, organization also keep eye
on the cyber security of their stakeholders. For instance, they safeguard the personnel
information of their investors and business partner as well as they keep transparency in
trading process so that there are no conflicts regarding the norms of organization. Thus, it
builds trust between the company and stakeholders and Tesco (Teece and Linden., 2017).

3. Describing impact of new collaborative relationships and Strategic alliances of Tesco
Currently, Tesco has used the digital technology such as online marketing to increase
their relationships with the customers and supplier. Likewise, social sites platform such as
Facebook, Instragram and twitter has helped firm in attracting wide range of people towards the
organisation for its overall growth. In addition to this, the company has introduced new online
interactive platform to boost their business and interact with the customer and distributors. This
step has contributed in expanding the super market chain of firm and enhancing the overall
business (Kipkosgei and et.al., 2020).
1. Pros: This strategy has allowed the firm in communicating with their suppliers that has
contributed in sharing the innovative ideas that has resulted in satisfying the customer.
Thus, increased the sales of organization. Furthermore, it has reduced the operational cost
of the firm because online collaboration has allowed firm to cover the large market place
without investing in any resources thereby attract large audience(Avendano and Cho,
2020).
2. Cons: The company can face challenge such as security as there are chances of fraud and
any negative comment on the website of firm that can harm the brand image and
adversely affect profitability of organization. Along with this, the negative content on the
website of company also affect the sales of organization (Dowell and et.al., 2020).
On the other, Tesco has decided to plan strategic alliance with French retail Carrefour,
that is a general retailer merchandiser in Europe. They both have decided to cut down their
operational cost by lowering product prices. Furthermore, they both have decided to expand their
business by using the online market i.,e social networking sites like LinkedIn, official website
and Facebook as that will allow them to expand their business and attract the potential buyer
(O'Dwyer and Gilmore, 2018).
Pros
1. By working together and investing in the innovative production and increasing their
expertise in the manufacturing department thus Tesco is able to serve quality services to
customer. Thus, it contributes in improving the brand image and profitability of firm.
2. Furthermore, the organization can analyse and track the customer insight such their
relative taste and preferences and the amount of purchase per month by consumer, market
competition and external and internal environment threat (Gundolf and et.al., 2018).

3. In addition to this, it has helped organization in improving their services, rationalizing
their range in items, identifying the loop holes in pricing strategies that has contributed in
increasing the market share of Tesco.
Cons
1. Tesco has faced conflicts with related French retail Carrefour related to the ownership
such as regarding the product, trade market and patent. Along with this, it has lead
company in lawsuits and litigation that has result in decreasing the brand name of the
firm (Kuznetsova and Drahan, 2020). Thus, it has affect the sales and revenue of the firm.
2. Furthermore, it can encourage the good employees to cross over because the other partner
may able to pay more that has result in mistreatment of agreement, by the opposite
partner and reduction in subordinate has affect the business function of Tesco. Moreover,
it may also clash the culture of Tesco cause each companies has difference in working
structure. This may affect the relationship between the partners thus affect the ends goals
of Tesco (Elia and et.al., 2019).
4. Presenting e-commerce principles used by Tesco
Nowday's, E-commerce has become the integral part of the life and online shopping is
gaining popularity in the society by each passing days. The retailer shopper such as Tesco has
also shifted over the online business so that they can reach the large number of customer in
limited time frame to achieve the set objective. The principle of E- commerce has allowed the
Tesco to generate maximum revenue. There are many principles such as user-friendly, unique
design elements that has been abided by the Tesco while promoting the business in e- commerce
that are discussed in detail below:
 Content: This is one of the most important aspect of the online business as effectiveness
of the site almost depend on the content because it provides the important information to
the customer regarding company. Tesco provide their details regarding special offer and
innovative product on their website (Hollebeek and Macky, 2019). This principle has
allowed company in increasing their sales. Along with this, it has allowed Tesco to build
trust with the consumer and enhance the brand image. Thus, it allows the organization to
connect with the targeted audience and potential buyer. Moreover, it has allowed Tesco
in promoting their business and covering large area of market.

 Design and usability: This principle mainly focus on the attractive and organized official
website. It allows the company to make the convenient and appealing e-commerce site so
that the first time visitor will be interested in buying the product. Moreover, Tesco has
followed this principle of web design such as they have added the 24 hours customer
complaint section. Such as where client can complaint about their issues regarding the
quality of product. Further, for attracting more consumer Tesco has added the section of
best-selling where purchaser can see the most demanded product of the organization.
Beside this the firm has also added the search column as it help the visitor to look for the
particular product or services that they need to purchase. Thus, company added this
option so that they do not loose customer by making them search for their product on the
multitude categories. Instead of that they allow them to browse their item directly by just
writing the name on the search section and providing them relevant search result. Hence,
the attractive website has allowed the firm to attract more customer that has contributed
in increasing the sales and the profitability of the firm (Top 10 e-commerce Design
Principles for a Successful Website, 2020).
 Be locale- sensitive: This is another principle of e-commerce that is mainly related to the
local context as they are the essential part of the commerce. The aim of this idea is to
focus on the culture difference such as culture reference, components sizing, iconography
and gestures. Tesco is using this principle so that it can cover local market along with
international market. Company on its official website has focus on the iconography such
as shopping cart icon, that may be different in different countries. This allows the firm to
connect more with the local people of the different country. Furthermore, the company
also do small gesture on their official website such as give discount offers on the big
festival such as Christmas and Halloween that contribute in attracting the customer and
resulted in growing the business efficiently. Moreover, this principle allow the firm to
connect with large audience and know their preference and demands so that it can make
products according to their needs and satisfy customer. Thus, it helps organization in
enhancing their overall business and work smoothly.
 Effective product Description: Tesco has provided complete detail of their products and
services on the official website as well as on social sites that are used by company such
as Instagram and Facebook. It plays important role in enhancing the purchase verdict of

the organization as well as the growth of the firm. This principle allows the firm to make
product description very attractive by using the appealing fonts, descriptive text, videos
and images. So, all this factors attract the buyer as they can relate to their buying needs
(Allard and Griffin, 2017). Moreover, it has benefit the firm by increasing the ROI in the
long run and lead in overall development of Tesco.
CONCLUSION
From the above report it can be concluded that digital business plays the vital role in
enhancing the overall business of the organization. and has given the new platform for the firm
to expand their networks. Moreover, it has benefited the organization in terms of attracting large
customer by building innovative products and services, enhancing profitability of firm. The study
has also depicted about the new emerging business such as free-model, marketplace and e-
commerce that offer inexpensive platform to organization so that they can promote their business
and increase the diversity of the firm. Further, these models has increase the sales and growth of
the company.
Moreover, the report has also summarized about the key trends of technology and their
advantages for the firm such as it has reduced the cost of the firm and improved the decision-
making skills of the organization. Lastly, the report has shed light on the positive and negative
impact of collaborative relationship and strategic alliance on firm. As well as, it helps in
understanding the way e- commerce principle helped organization in generating large revenue
and enhanced overall development such as content and effective product description.

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