Importance of Personalization in Digital Business: A Case Study of Birchbox

This report discusses the importance of personalization in digital business, focusing on the case study of Birchbox. It covers trends, benefits, and limitations of managing virtual business, the importance of technology, SWOT analysis, situational analysis for Birchbox, emerging digital business models, challenges linked with information security threats and ethics, and the difference between digital business and e-commerce.

Digital Business

Table of Contents
INTRODUCTION................................................................................................................................3
Briefly explain trends, benefits, limitations, of managing virtual business in global environment
.........................................................................................................................................................3
Make comparison between contrast situation, SWOT analysis. Conduct a situational analysis for
Birch Box ........................................................................................................................................5
Reflects importance of collaborative relationships/ strategic alliances through digital technology
.........................................................................................................................................................8
Discuss difference between digital business/ e-commerce. Analyse principles of e-commerce
with benefits ....................................................................................................................................9
CONCLUSION...................................................................................................................................11
REFERENCES...................................................................................................................................12
Books & Journal:...........................................................................................................................12

INTRODUCTION
In market sector, business is wider and broader & is expanding at rapid scale. With wide
use of internet, technology and digital tools have been used at larger scale. Digital business refers
to executing business activities electronically through use of social media platform or tool
(Ananyin, 2018). This report gives a brief knowledge about importance of personalization used in
digital business. Birchbox, a retailer and make up company headquartered in U.S. Firm deals in
online subscription services and is expanding their business through focusing on personalization.
This report comprises of advantage & disadvantages of managing virtual business, importance of
technology, SWOT Analysis & situation analysis, emerging digital business models & challenges
linked with information security threats & ethics, importance of collaborative leadership & strategic
alliance and digital business & e-commerce with principles.
Briefly explain trends, benefits, limitations, of managing virtual business in global environment
Global environment refers to environment with uncontrollable that affects influence of
decision making. Managing virtual business is important as due to changing period of time, it has
become to execute business activities, operation's functions virtually. A virtual business refers to
type of business in which all the operations and activities are being carried out via using internet.
In reference of selected organisation, they also carry out their functions through using their
application & websites. There are various trends in in virtual business which are to be considered &
are explained below-
Key trends-
 Increase for reason of virtual work- It is most emerging key trend in which reason for
doing work virtually is increasing at rapid scale mostly from 2019 after the arise of
pandemic situation. People are willingly and keen to work at own place (Chan, 2019).
 Contract virtually working- This is also key trend of managing virtual business in which
employers hire freelancers or employees on contract basis in which work is carried out
remotely on a specified time interval.
Advantages of MVB-
 Low overhead costs- It is to be viewed as most gained benefit when virtual business is
carried out. When enterprise run their activities via internet they do not have to worry
about leasing office, furniture, electricity bills etc.
 Satisfied employees- It is often seen that they when employees work remotely or virtually
they are more satisfied and retain in company for longer period of time due to more

flexibility hours.
Disadvantages-
 Lack of camaraderie- When work is done virtually it is not easy to communicate in proper
way. It is often seen that when team works at workplace physically more effective
communication is being produced. It also motivates employees to communicate in
appropriate manner & improve ability to collaborate with others.
 Risk to reputation- It is another disadvantage of managing virtual business in which there
is high risk to reputation as because customers not easily trust company who does not exist
physically. Thus, it is crucial to be aware about this drawback (Gray, 2019).
Importance of technology and it impacts on businesses
 Technology in business as become essential to use because without which which it is
difficult to survive in this competitive market. It is necessary to use technology so that it
gives a competitive advantage in business field.
 Improve communication- In business, when technology is used in it help in improving
communication as through using social medial tools & other way of communication such as
e-mails, text messages, smart devices, social media applications etc. (Gu, 2017).
 Effective decision making- It is another reason of importance of technology as through
using it enterprise assist in making appropriate decisions. This is done via analysis of errors,
problems by using different tools within firm.
Impact-
 Help to increase competency level- Through use technology it affects the business as
increases competition level of enterprise within a same industry. With adaption of internet
& using of tools assist firm to implement strategy.
 Enhance productivity- This is another impacts on business as focusing on new
methodologies of technologies assist in increasing productivity at higher scale. Further
more, when higher productivity is produced, effectiveness of work also increases at higher
scale.

Make comparison between contrast situation, SWOT analysis. Conduct a situational analysis for
Birch Box
In marketing, personalization refers to process of meeting up with individual requirements
or demands through using data analytics. With changing period of time, it has become essential to
focus on personalization so that positive relationship is built between both the parties. Birchbox
focuses on this personalization as it help them to increase user experience in positive manner.
Situational analysis refers to combination of both internal/ external environment used by enterprise
to examine customers, environment, competitors. So, to carry out this Porter Five Forces model is
being used by chosen corporation.
Porter Fiver Force analysis
It is model which us used by entity to identify threats, environment, competitors and which
occurs problems at both inside or outside firm. It comprises of several components which are
described below-
 Bargaining power of Suppliers- It is competitive force in which supplier bargaining
power is known. In relevance of chosen entity, bargaining power of supplier because there
care many vendors which provide more better options to do business.
 Bargaining power of buyers- In this, power of buyer is moderate because there are large
number of buyers and users who are ready to purchase products & subscription of chosen
firm (Gubela, 2019).
 Threat of new entry- In this retailing sector of cosmetics, threat of new entry is low
because it time consuming process for new entries which are new to target customers in
market. In reference of selected firm, they do easily execute their services online.
 Industry rivalry- In industry of cosmetics, intensity of competition is relatively high. It is
examined that it is necessary for Birchbox to implement strategies so that it is easy to deal
with competitors in effective way. Degree of competitor is high when customer expectations
are changeable & rising, etc.
 Threat of substitutes- In this competitive force which shape industry. Substitute refers to
replacement of products by other. In reference of selected firm, threat of substitute is
flexible as they use personalization and target audience easily.

SWOT Analysis
It is tool which is used by entity to identify internal capability of firm by accessing to
strength, weakness, threat and opportunities. In relevance of selected company, they use this tool &
is further explained as follows-
Strength
 Main strength of Birchbox is that it run
its services online target their customers
through focusing on personalization
which makes them different from
competitors (Hussain, 2020).
Weakness
 As they are moving towards technology
in advanced, due to lack of financial
resources they are facing difficulty in
expanding their business.
Opportunity
 Due to advanced use of technology, they
have opportunity of accessing to more
customers.
Threats
 Main threat is that they due to excess of
resources, environmental practitioners in
local communities might impact upon
negatively on business.
Through analysing of difference between both analysis, it is stated that internal & external
environment are essential to be focused so that market situations are examined in most effective
way. It is duty of manager to assures that both are required use in most correct way.
Examine emerging digital business models & challenges linked with credentials security threats/
ethics. Do critical analysis with given scenario
In enterprise, is essential to use marketing strategies, models, so that goals & objectives
are achieved in proper manner. So, there are several kinds of emerging digital business models
which are discussed as follows-
 Open source model- It is a type of model in which it is developed by community
developers & that allow access to software. But it is not free, many companies charge some
amount subscription fees for their open source software. These are most adopted digital
business models (Ismagilova, 2017).
Benefits
 Provide access- Through using this digital business model, it is easier for companies to
access to software & use it according to the users.
 Cost effectiveness- Using this model is cost effectiveness as because any individual can use

this & moderate amount of subscription is charged for additional options.
Disadvantages-
 Vulnerable to malicious user- In this model, every individual does not have good
intentions of its usage. There are many users who took advantage of these open source.
 Not user friendly on all devices- It is also drawback of using this model as in this it is
not necessary that it works on every on every devices. Thus, it depicts that open source
might not be user friendly.
Free model-
It is too digital emerging business model which makes it easier for user top use products or
services in free and then monetization is being done after large range of people have used product or
service. Through this, it is easy for both customers as well as organisations to achieve their
objectives. For example- Google & Facebook uses this type of free models (Murphy, 2019).
Advantages-
 Increases image of firm- Through using of this free model, entity is able to enhance their
goodwill in market & which leads to brand awareness at global scale to large users.
 Enhance productivity- Using of this free model assist in increasing of productivity as
because work efficiency is improved (Nazarko, 2017).
Disadvantages-
 Uncertain situations- Main drawback of this model is that it impacts it might get impacted
by uncertain events such as customers change behaviour, market trends, etc.
Challenges with information security threats and ethics are-
 Customer virus- These are biggest threat in information security as they are type of
computer programmes which modifies computer program files into their developed codes.
In reference of Birhcbox, competitors might put these computer viruses into their
information security systems.
 Unauthorized access- With rise of use of digital technology, hackers has ability to control
or access to others information security system. This is major challenging point which is
needed to be consider as Birchbox need to update their information secularity system of both
website & application.

Thus, above matter states that through using of digital business models within enterprise
makes it easy for them to reach top customers. Further, it is easy to analyse there are various threats
of to information security which are required to be properly consider by enterprise who are
executing business operations through internet & web. So, models are discussed with detailed
information.
Reflects importance of collaborative relationships/ strategic alliances through digital technology
With increased competition, many enterprise are using strategies or tactics for growth/
development. In relevance of selected firm, they have been also focusing on collaborative
relationship with aim of implementing personalization in business. Collaborative relationships is
defined as process of working together with aim of achieving common desired goals. Also,
strategic alliance is being used for implementing personalization.
Importance-
 Through paying attention on collaborative relationship, it is easy for businesses to enlarge
their activities at global level by sharing profit and losses. In context of chosen entity, they
also have been establishing this relationship by collaborating up with Witherspoon and her
company Draper James (Phungsuk, 2017).
 Further, by adapting collaborative relationship & strategic alliance it is easier aligned &
achieve goals in appropriate way. Moreover, personalization is implemented through them
by using digital technology at more advanced level. For example- By strategic alliance &
collaborating with Draper James, Birch box is able to fulfil needs of person in personalized
as by delivering of two monthly March boxes instead of one (Schneider, 2019).
 Both these two are necessary to be adopted because it helps them in accessing to user data
by gaining more reliable information about customers which help them in understanding of
audience demands appropriately.
 Furthermore, both of them are being used through digital technology which assists in
implementation of personalization appropriately. In viewpoint of selected entity, they also
focus on expanding their collaboration with more enterprise so that they have to access to
large resources & more customers.
Further, above stated paragraph states that it is essential to use both these collaboration as
well as well as strategic alliance. They both help in implementation of personalization through they
are able to develop a positive relationship with each other. Main rationale for long term survival

business is they enterprises focus on fulfilling individual needs & requirements.
Discuss difference between digital business/ e-commerce. Analyse principles of e-commerce with
benefits
In corporation, digital business & e-commerce both are crucial to be focused when running
activities or operations. In retail sector, most of firms uses digital business with e-commerce. With
changing market trends, it is essential to be aware about them so that goals are accomplished
accordingly. Both these are different from each other & comparison is further explained below-
BASIS Digital business E-commerce
Meaning
It refers to business which uses
technology as competitive advantage
within their operations & functions.
It refers to buying or selling of
products or goods through
online or using internet.
Objective Main objective of digital business is
to carry out activities through using
digital platforms (Sornberger, 2016).
E-commerce main objective is
to sell goods or products online
in secured way.
Applications Digital business is used at wider
scale & at al market sectors.
E-commerce are used mainly
used for retailing operations or
activities.
It has been specified that it is important to focus non both concepts so that effective results
are achieved. It is essential to use them with proper market analysis so that problem or issue does
not arise. In concept of e-commerce, there are various types of principles which are used or focused
& are explained below-
Business plan-
It is first most important principle of e-commerce it reflects that planning regarding
business is done so that it is easy to further carry put process. Without implementing plan, it is not
easy to achieve objective. This is duty of manager to be well aware about such new development or
changes.
Responsive e-shop-
It is another crucial principle which is important & it specifies that an e-commerce is need
to be responsive & should be aware about all customer's enquiry, problem so that positive attraction
is made. Enterprise which is fast in response has ability to increase their brand value at higher level.

Be-aware of returns-
In this principle, it reflects that business activities which is running its activities online need
to be aware about date and time of returns by customers. It is crucial because keeping update about
returns assist in increasing trust of customers within business (Chan, 2019).
Use many payment methods-
It is also principle of e-commerce, in which it depicts that when developing e- commerce
business, it is important to use additional or several mode of payment methods such as e-wallets
like Paytm, debit & credit card and many more. Also, cash delivery can also be chosen by them as
payment methods. This is because various type of customers opt for different payment methods.
Know target audience-
In this, it states that when carrying out e-commerce business it is necessary to have
appropriate knowledge or credential about target audience so that resources & decision making is
done accordingly. Through targetting audience, chances of risk elimination is more.
Thus, it is evaluated that both digital business & e-commerce are need to carry out in such
way that objectives are achieved in effective way. Moreover, a wide level of market research is
required to be done that leads to positive results. So, different types of principles have been
discussed briefly. There are many ways through which e-commerce can be executed such as tablets,
mobiles, laptops etc. With changing time period, every individual wants things easy, so technology
& e-commerce is making life simple (Ananyin, 2018).
CONCLUSION
After a brief analysis of above report, it has been concluded that digital business is rising
and emerging in field. With rise of competition, every business is inter-connected with
digitalisation. It is important to be aware about these digital businesses which leads to achieving

of goals effectively. This report gives a brief information about focusing of personalization in retail
sector. Thus, discussions has been made about concepts of virtual business, analysis of environment
with SWOT, business models, collaborative relationships and comparison between digital business
& e-commerce. Therefore, it has been evaluated that it is crucial to use digital business in this
competitive era so that objectives are achieved in appropriate level.
REFERENCES
Books & Journal:
Ananyin, 2018. Digital organization: Transformation into the new reality. Бизнес-информатика,

(2 (44) eng).
Chan, 2019. Interactivity, active collaborative learning, and learning performance: The moderating
role of perceived fun by using personal response systems. The International Journal of
Management Education, 17(1), pp.94-102.
Gray, 2019. Doing research in the business world. Sage.
Gu, 2017. Managing Collaborative Relationships in Third Party Logistics: An Empirical Study.
International Journal of Information Systems and Supply Chain Management (IJISSCM),
10(2), pp.42-65.
Gubela, 2019. Conversion uplift in e-commerce: A systematic benchmark of modeling strategies.
International Journal of Information Technology & Decision Making, 18(03), pp.747-791.
Hussain, 2020.Managing Communication Chall Multicultural organization. Innovations and
Sustainable Growth in Business Management, p.53.
Ismagilova, 2017. Digital business model and smart economy sectoral development trajectories
substantiation. In Internet of Things, Smart Spaces, and Next Generation Networks and
Systems (pp. 13-28). Springer, Cham.
Murphy, 2019. Methodological approaches to situational analysis in global mental health: a scoping
review. Global Mental Health, 6.
Nazarko, 2017. Application of enhanced SWOT analysis in the future-oriented public management
of technology. Procedia engineering, 182, pp.482-490.
Phungsuk, 2017. Development of a problem-based learning model via a virtual learning
environment. Kasetsart Journal of Social Sciences, 38(3), pp.297-306.
Schneider, 2019. User-Based Valuation of Digital Business Models. URL: http://www. realopn.
jp/data/jaros2019-schneider_user-based. pdf (дата звернення: 16.12. 2020).