Digital Business: Advantages, Disadvantages, and Models

This report provides an overview of digital business and its advantages and disadvantages. It discusses new emerging business models and their application to ASOS Plc. It also evaluates the impact of collaborative relationships and strategic alliances through digital technology. Case study on ASOS Plc.

DIGITAL BUSINESS
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EXECUTIVE SUMMARY
The present report is based upon concept of conducting a business by going digital for
successful achievement of its objectives. Digital business means selling of company's product via
online platform such as internet or mobile application (Akhmetshin and et. al., 2020). The report
talks about various advantages and disadvantages of digital business along with various models
that can be used by companies to achieve business growth and high sales. E-commerce is another
way though which businesses can cater more market so to have global reach. The concept of
digital business and e-commerce is being studied for ASOS Plc who is a multinational retailer
firm deals in cosmetic and fashion items.
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Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION ..........................................................................................................................5
TASK 1: Provide an overview of digital business with its advantages and disadvantages applied
to your chosen organisation.............................................................................................................5
Definition of Digital Business:....................................................................................................5
Advantages of Digital Business: ................................................................................................5
Disadvantages of Digital Business:.............................................................................................6
Application to using digital business with advantages and disadvantages applied to your
chosen organisation.....................................................................................................................7
TASK 2: Critically evaluate new and emerging digital business models in the context of key
business issues such as cyber security and ethics in your organisation...........................................8
Defining new, emerging digital business models.......................................................................8
Discussion on new, emerging digital business models...............................................................8
Apply how your chosen organisation is using / could use any of these new, emerging
business models...........................................................................................................................9
Key Business issues:...................................................................................................................9
TASK 3: Evaluate the impact of new collaborative relationships and strategic alliances through
digital technology for your chosen organisation............................................................................10
Definition of new collaborative relationship and definition of strategic alliance/s..................10
Advantages and disadvantages of new collaborative relationships and strategic alliances
through digital technology........................................................................................................10
Application to your chosen organisation on how they use or could use new collaborative
relationships and strategic alliances through digital technology...............................................11
TASK 4: Discuss how e-commerce principles could be used by your chosen organisation.........12
Define e-commerce:..................................................................................................................12
Discuss what are e-commerce principles..................................................................................12
Apply e-commerce principles to your chosen organisation:.....................................................12
CONCLUSION .............................................................................................................................13
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REFERENCES..............................................................................................................................14
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INTRODUCTION
Digital business refers to a process or method of conducting business activities through a
way of digital platform or technology that allows firm to achieve its objectives. Digital business
covers market at global level without much requirement of establishment expenses. Mostly now
a days firms are approaching digital business in order to cater more and more market along with
getting competitive advantage in industry (Almunawar, Anshari and Lim, 2021). The present
report discusses digital business that is adopted by ASOS Plc which is UK based cosmetic and
fashion retailer that offers its products at multinational level. The report includes discussion of
advantages and disadvantages of digital business, model in context to key issues such as cyber
security and ethics at ASOS plc. It also covers various new collaborative relationships and
strategic alliances through digital technology along with discussion on certain e-commerce
principles that are used by ASOS Plc.
TASK 1: Provide an overview of digital business with its advantages and
disadvantages applied to your chosen organisation.
Definition of Digital Business:
Digital business refers to a process or method of conducting business activities through a
way of digital platform or technology that allows firm to achieve its objectives. It comprises of
both market that is physical as well as digital platform for having sale and having high revenues
(Aversa and et. al., 2020). The business involves active involvement of internet services and use
of mobile or computer to operate as well as place order. Digital business is most spread via
social media or digital marketing tools.
Advantages of Digital Business:
Digital business is very much beneficial for corporate firms that helps them to increase
their sales along with generation of higher revenues. The several advantages of digital business is
mentioned below: Access to global market: The digital business allows a firm to supply its products and
services via digital platform that can have easy access to global market and cane make its
sales (Barmuta and et. al., 2020). Entering into global market though digital business
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requires only small amount of investment such as on developing a website or a mobile
application. Increases productivity and efficiency: Having manual work is little time taking and
tough to manage which can be easily done by digital business method. This also benefits
firms to minimise communication barrier or delayed in working (Broekhuizen and et. al.,
2020). Digital business provides real time settlement or process related to delivery of
products and services that increases efficiency of delivering greater values. This also
helps firm to bring greater productivity in their final output of goods. Competitive advantage: Any forward step by companies in respect to conducting global
business helps them to have competitive advantage in industry at global level (Chowdhry
and et. al., 2020). This brings an organised structure for the firm that allows to have
tough competition with rival businesses and again advantage over them. Higher customer satisfaction: A real time settlement and regular updates about company
as well as its product motivates customers to get in touch with company on regular basis
via social media, email or short messaging services (Garzella and et. al., 2021). This
increases the level of satisfaction of firms customers who ultimately benefits them by
making high brand value and increased sales for business.
 Innovation: Digital business opens a gate of brining innovation into business by
promoting, improving or displaying company's products and features in more attractive
form to customer as well as market. Digital businesses brings use of updates or latest
technology that is backed by innovation in it.
Disadvantages of Digital Business:
There is no technology that does not bears any drawback or disadvantages in it.
Disadvantages are those which proves negative for the firm and demands for high concentration
by businesses. The various disadvantages of digital business is mentioned below: High dependency on technology: Digital business is highly depended on technological
use due to which digitalisation is possible (Martínez-Caro and et. al., 2020). There is a
chances of technical issue or server problem due to which sometimes the process
becomes slow which creates a problem for company to have smooth functioning of its
business.
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 Fear of loss of security: Digital technology always brings a fear of loss in data of
company' security or customers information that is a matter of primary concern for all
digital businesses (Met, Uysal and Orç, 2020). Any kind of theft or loss makes bad image
in front of customers and market that does not allows company to enjoy high profits and
sustainable competitive advantage.
 Involves high training and skills: Working on technology is not much easy because it
requires proper and complete knowledge of such technology along with adequate skill
required to perform on such task (Özoğlu and Topal, 2020). Regular raining is necessary
in order to stay updated with latest technology and current market trends which forces
company to spend more on providing training to its employees.
Application to using digital business with advantages and disadvantages applied to your chosen
organisation.
ASOS Plc applies the concept of digital business for making sale of its cosmetic and
fashion products through displaying over its website access of which customers can place their
order with company. The various advantages and disadvantages of digital business to ASOS Plc
are mentioned below:
Advantages of digital business to ASOS Plc: Reduces marketing cost: Digital business does not requires must expenses on marketing
because its digitalisation feature itself presents marketing. Digital business of ASOS Plc
involves social media upon which youth spends their major time and attracts more and
more customers and place order for ASOS products. Automated integrated system: Digital business allows companies to have automated
integrated system that gives order information directly to production and supply chain
department which processes the order further. Digital platform on the other hand provides
regular updates to customers who places an order which gives high satisfaction to buyers
and retains them for long time.
Disadvantages of Digital Business to ASOS Plc: Physical interaction: This does not allow ASOS Plc to have physical interaction with
customers due to which it becomes tough for them to know about consumers preferences
and their demands that they wishes to be added in such product.
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 Less profit margin: Today many businesses are going digital which offers similar
products at low prices to gain more customers attention. Digital business forces ASOS
Plc to set prices of its products as low as possible so can have high sales.
TASK 2: Critically evaluate new and emerging digital business models in the
context of key business issues such as cyber security and ethics in your
organisation.
Defining new, emerging digital business models.
The term business models refers to a form that adds solve value in form of creativity
developed according to benefits and preferences of customers by applying some digital
technology in its processes (Rashid and Ratten, 2020). Digital business model is a framework by
adopting which companies generates their profits and high sales through a mobile application or
internet website.
Discussion on new, emerging digital business models.
The various new or emerging business models which are used to have digital business by
a company are mentioned below: Freemium business model: The digital business model includes offering of some basic
features or services to its customers via internet at free cost (Ruel, Rowlands and Njoku,
2020). This is done in order to attract more customers and build strong relationship with
them so that they can be retained for long term. Subscription model: This includes taking subscription on payment of certain money
other than order amount (Singer and Baumgarten, 2020). This provides various benefits
to customers such as premium treatment, extra add on services, etc. The subscription is
done for monthly, quarterly or for yearly made on one time payment. Under this
customers enjoys services little prior to general public. Bundling model: This model of digital business offers one or more addition to the same
product in a form of bundle (Taifa, 2020). The bundle products offered under this model
costs less then compared to individual prices that motivates customers to place their order
for such bundled product.
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 Hybrid business model: This model means use of both physical as well as digital
platform in order to have high sales in market by company. Digital platform such as
cloud services or through software's are used for sales.
Apply how your chosen organisation is using / could use any of these new, emerging business
models.
ASOS Plc applies hybrid business model in its business in order to have high market
sales, competitive advantage along with greater generation of revenues in market. Hybrid
business model includes sale of products by both ways that is traditional sales and digital way of
selling products and services. Customers here makes a digital contract with company by making
a certain amount of payment as fixed by company for the purpose of delivering demanded
services by company's customers. Hybrid business model acts as a game changer for other
businesses in industry because it involves two way sales in market that is through physical
outlets as well as through company's website or mobile application. ASOS plc applies hybrid
business model in a way that it makes its sales through its physical outlets as well as displaying
more than 800 brands of cosmetic and fashion products on its portal through its website.
Key Business issues:
The various key business issues and ethics in organisation are mentioned below: Privacy: This means keeping customers information and company's data safe from
public. This can be hacked by any person who can further misuse it. Digital business
companies experiences issue of privacy due to different hacking software's through which
rival firms can destroy privacy of firm.
 Access to unauthorised sites: There are some websites for which access is unauthorised
due to which a customer or company cannot use information from that website. There is a
possibility of hacking such websites which are illegal to access.
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TASK 3: Evaluate the impact of new collaborative relationships and strategic
alliances through digital technology for your chosen organisation.
Definition of new collaborative relationship and definition of strategic alliance/s.
The term new collaboration refers to a conduct of business by a combination of two or
more firms who deals in identical product or business having a common goal in market or
industry (Wi, ßotzkiSand, kuhl and Wichmann, 2021). In respect to digital business collaborative
relationship means developing legal relation with another firm who is either interested or is
already doing business digitally.
The term strategic alliance denotes to a combination of two or more companies who
bears same objective and agrees mutually to conduct a common project but by retaining their
individual independence. This allows companies to join hands in their expertise area so that their
combine effort can bring effective result.
Advantages and disadvantages of new collaborative relationships and strategic alliances through
digital technology.
The various advantages of new collaborative relationships and strategic alliance through
digital technology are mentioned below:
 Reach to new market: Through strategic alliance or collaboration both or all the digital
business firms can display their products on each others digital platform which will help
collaborative firms in having new market or more customers. This will allow all to
increase their sales and generate handsome revenues.
 Sharing of knowledge and expertise: Strategic alliance or collaboration helps
businesses to share their knowledge with each other along with use of their expertise.
This helps companies to have better experienced insights which they can add in their
product and can offer more superior item to their customers.
 Reduces Competition: The major advantage of collaboration or strategic alliances is that
it reduces competition as two or more firms come together and works on common project
so there is no chance of having competition among them.
The various disadvantages of new collaboration and strategic alliances are mentioned
below:
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 Loss of working method: Through collaboration or strategic alliance the companies can
know the working and operating method of collaborative firm of which they can take
advantage in their firm and offer same services to market.
 Rise of conflicts: There can be a rise in conflicts of various forms such as due to
different working culture, different marketing policies, communication barrier, etc. which
can bring inefficiency in workings and ultimately effects the results.
 Decision making: Strategic alliance or collaboration can give rise in more than one
decision that can be in a way that all the companies to have decision making power with
them or wants to have their view as final decision. This will break co-ordination among
all them and then will give rise to loss of productivity.
Application to your chosen organisation on how they use or could use new collaborative
relationships and strategic alliances through digital technology.
ASOS Plc can gain several advantages from new collaboration or strategic alliance
through digital technology as this will enhance company's sales and revenue in market. It will
help ASOS Plc in developing and maintaining the necessary skills to bring personalization in its
offerings. Strategic alliance supports ASOS plc n sharing of know;edge, experience and skills
through which they can indulge best knowledge and high level of experience in its products so
that can generate more values for its customers. Strategic alliance will bring less competition for
firm in market along with an opportunity of getting high competitive advantage in industry
because fashion and cosmetic products are easily available in market with identical features that
acts as a tough competition for ASOS Plc.
The strategic alliance for ASOS plc will bring an option of having sustainable market
position by bringing innovation with such collaboration. With the help of digital technology
ASOS Plc can allow its managers to bring some personalisation in its offerings through systemic
movement in digital retail business industry. ASOS Plc has a great opportunity in attaining its
vision and objective through strategic alliance. ASOS plc can join its hands with its rival firms
such as Nike, H&M and several others which will bring many benefits to ASOS plc in increasing
its sale, market size and revenue.
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TASK 4: Discuss how e-commerce principles could be used by your chosen
organisation.
Define e-commerce:
The term e-commerce comprises of doing business or trade via use of digital platform
and not selling or buying of products and services through any physical store. The sale and buy
can be done through access of internet website or by installing mobile application. E-commerce
involves placing of order online but getting a physical delivery of such product. It also involves
various services such as banking services, entertainment or other utilities.
Discuss what are e-commerce principles.
The various e-commerce principles are mentioned below: Principle of making easy payment: The principle for e-commerce says that a company
should have easy payment options and policies for the sale of its products and services so
that customers does not feels uncomfortable while making payment (Zare, Shakeri and
Mahmoudi, 2020).. Tough or rigid payment option will not allow customers to place their
order easily or for next time due to payment issue. There should also be an option of
making payment via different modes such as through banking, debit or credit card, cash
on delivery or via third party payment app. Principle of enhancing page loading speed: The principle says that a company should
maintain enough effectiveness that the page takes very less time in loading or giving
search results so that the customers did not wait for long in order to place their order to
search for desired product.
 Principle of blog sales: This principle says that e-commerce businesses must use
blogging in order to enhance its sales to greater ratio. Blogging helps companies to
provide full information about their company as well as product which can satisfy and
attract customers to place order with them.
Apply e-commerce principles to your chosen organisation:
ASOS Plc takes immense care of all e-commerce principles so to have effective business
with long term sustainability in market. The principles allows ASOS Plc to have various
payment options such as payment through debit or credit cards, via payment apps such as Paytm,
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google pay or other with an alternative option of cash on delivery. It does not allows customers
to feels discomfort or irritation while placing an order rather it attracts them to place next order
with company only because of its easy payment options. On the other hand ASOS Plc takes care
of effectiveness in its page loading time which takes very less time or does not allows customers
to wait for loading its sales page. Company has maintained its operations in way that presents
quick search results to its customers so that they it can save buyers time in placing an order.
CONCLUSION
From the above report it can be concluded that digital business or e-commerce plays a
very beneficial role in development of company's sales and profits. Going for digital business
brings very advantages to the firm such as gaining competitive advantage, wide market, huge
customers, etc. There is a presence of option in getting collaborate or having strategic alliance
with other firms to deliver more expertise and value added product with several benefits. Digital
business brings various advantages to the firm but is also backed by several drawbacks which
hinders business profits and performances. There are various business models which can be
applied in companies to have high customer segment or sales so that business can attain high
competitive advantage in industry. E-commerce is another way of increasing business which
involves sale and purchase of goods and services through online platform without opening or
going to physical store.
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REFERENCES
Books and Journals
Akhmetshin and et. al., 2020. Digital Transformation of Business (Basic Re-Engineering). Talent
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Marketplace. International Journal of Hyperconnectivity and the Internet of Things
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Aversa and et. al., 2020. Customer complementarity in the digital space: Exploring Amazon’s
business model diversification. Long Range Planning, p.101985.
Barmuta and et. al., 2020. Problems of business processes transformation in the context of
building digital economy. Entrepreneurship and Sustainability Issues. 8(1). p.945.
Broekhuizen and et. al., 2020. Introduction to the special issue–Digital business models: A multi-
disciplinary and multi-stakeholder perspective.
Chowdhry and et. al., 2020. The Evolution of Business in the Cyber Age: Digital Transformation,
Threats, and Security. CRC Press.
Garzella, and et. al., 2021. Business model innovation in SMEs: the role of boundaries in the
digital era. Technology Analysis & Strategic Management. 33(1). pp.31-43.
Martínez-Caro and et. al., 2020. Digital technologies and firm performance: The role of digital
organisational culture. Technological Forecasting and Social Change. 154(C).
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Digital Business Strategies in Blockchain Ecosystems (pp. 317-341). Springer, Cham.
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Springer, Cham.
Rashid, S. and Ratten, V., 2020. A dynamic capabilities approach for the survival of Pakistani
family-owned business in the digital world. Journal of Family Business Management.
Ruel, H., Rowlands, H. and Njoku, E., 2020. Digital business strategizing: the role of leadership
and organizational learning. Competitiveness Review: An International Business
Journal.
Singer, P. and Baumgarten, S., 2020. Die Rolle der Preisdarstellung im eCommerce. In
Preiskommunikation (pp. 325-338). Springer Gabler, Wiesbaden.
Taifa, I.W., 2020. Domestic supply chain for UK apparel manufacturing as a digital business: A
computer simulation approach.
Wißotzki, M., Sandkuhl, K. and Wichmann, J., 2021. Digital innovation and transformation:
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Springer, Cham.
Zare, M., Shakeri, H. and Mahmoudi, R., 2020. Ecommerce: An Efficient Digital Marketing
Data Mining Framework to Predict Customer Performance. Journal of the International
Academy for Case Studies. 26(5). pp.1-8.
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