Table of Contents INTRODUCTION..........................................................................................................................1 Question 1: LO1...............................................................................................................................1 Key trends, advantages and disadvantages of managing virtual business in global environment along with importance of technology and its impact on Alibaba.com and MakeMyTrip.com. .1 Question 2: LO4...............................................................................................................................3 Comparing & contrasting native apps against web apps along with the impact of ROI on digital businesses in general and specifically of PWA on Alibaba.com.....................................3 Question 3: LO2...............................................................................................................................5 Emerging digital business models and challenges associated with IS threats and ethics in general.........................................................................................................................................5 Question 4: LO3...............................................................................................................................7 Dealing with situation at both companies differently if held responsible...................................7 Question 5: LO5...............................................................................................................................7 Comparing&contrastingdigitalbusinessande-commercealongwithE-Commerce principles and their application to digital businesses..................................................................7 CONCLUSION................................................................................................................................9 REFERENCES..............................................................................................................................10
INTRODUCTION Digital business can be referred to as the business that makes use of technology in a bid to facilitate creation of new value within the business models, improvement of customer experience and capitalisation on internal capabilities (Senyo, Liu and Effah, 2019). This provides support to the core operations, enabling a boost to the efficiency of businesses functioning within the economy. Digital businesses include digital only companies along with the traditional players that transform the business with the utilisation of digital technology. The current report seeks to gain an insight into the key trends, merits and demerits associated with management of virtual businesses. Along with this, it includes a comparison and contrast between native apps and web apps along with the influence of ROI on digital businesses. Further, the report explores the different kinds of digital business models together with issues linked to information security and ethics. Additionally, comparison and contrast is presented between e-commerce and digital businesses. At last, e-commerce principles along with their application to digital businesses are discussed in a comprehensive manner. Question 1: LO1 Key trends, advantages and disadvantages of managing virtual business in global environment along with importance of technology and its impact on Alibaba.com and MakeMyTrip.com A virtual business can be said to be any business which conducts majority or all of its transactions and activities by leveraging internet. The key trends of managing virtual businesses in the global environment are:- Technology: Technology is one of the main trends pertinent to management of virtual businesses. Virtual businesses are able to function properly within an economy because of technology. In the absence of technology, the chances of a virtual business functioning gets lessened (Park and Mithas, 2020). Internet: It is the main trend or essence of managing virtual businesses. Internet allows these businesses to carry out information exchange and thereby facilitate quicker execution of the business transactions (Chaffey, Hemphill and Edmundson-Bird, 2019). It is considered as the prerequisite for ensuring the functioning and management of a virtual business. 1
Mobile Communication: Virtual businesses do not just facilitate exchange of important business information by way of mails or fax, but also through the usage of mobile communication apps. These allow quicker exchange of data among the employees and management so as to ensure quicker execution of business activities and decision making process. Advantages of managing virtual businessesBrick-and-mortarcostsavings:Thereductionofneedforcarryingoutbusiness transaction by way of physical format saves investment made in terms of money upon overheads. Such brick and mortar cost saving may include expenses such as building lease, utility bill, insurance premium, and many more.Flexibility: The virtual businesses are acknowledged to be much more flexible than traditional businesses in terms of showing response to the changes taking place within the confines of market.Happy staff: When employees get the opportunity to work from their homes or any remote location, they are more motivated and are able to create a better work – life balance.Larger employee base: Since the individuals pertinent to virtual businesses are provided with the access to work from any remote location, these organisations are able to retain and maintain a wider staff base. Disadvantages of managing virtual businessesLack of institutional cohesiveness: As the employees are situated in diverse locations and work from there only, this tends to imply least or negligible cohesiveness among them.Potential communication barrier:It is often noted that virtual businesses encounter the issue of lack of face to face communication between management and employees as well as among the employees themselves. This can lead to confusions, misinterpretations or delay of procedures.Lost track of staff productivity: It is difficult for the management of virtual businesses to make sure that the employees are working in a productive manner as per the expectations and requirements of the company (Ziyadin, Suieubayeva and Utegenova, 2019). This 2
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leads to lack of discipline within the workforce towards working in the direction of accomplishment of organisational goal. Importance of technology and its impact on Alibaba.com and MakeMyTrip.com Technology is an inevitable and inseparable part of civic and commercial lives. This can be said because every sphere of the modern era is largely influenced by technology. It brings forth tools to facilitate quicker communication, information exchange, logistics, supply chain management, and many other aspects (Ansong, and Boateng, 2019). Thus, businesses have largely evolved because of technology. Especially the digital businesses running within the globalenvironmenthaveundergone tremendousgrowth and developmentbecauseof the evolutions in technology. Two of the biggest examples of companies who have evolved with the application of technology are acknowledged to be MakeMyTrip.com and Alibaba.com Question 2: LO4 Comparing & contrasting native apps against web apps along with the impact of ROI on digital businesses in general and specifically of PWA on Alibaba.com Native Mobile Apps Native apps areespecially developed for a specific mobile device and thus are installed upon the device directly(Scuotto and et. al., 2017). In this case, users can directly download these apps via the app store. There are certain pros and cons of native apps and these are discussed beneath:- Pros:These apps can be used in the offline mode. This ensures speed in accessing and opening them any time (Holotiuk and Beimborn, 2017). These apps enable the users to make use of device specific hand gesture. In case of native apps, mostly safety and security is guaranteed. Cons:These are relatively more expensive for development, especially whereby these apps are required to be compatible with more than one operating system. This leads to increment of development cost. The cost of maintaining native apps is also higher (Berghaus and Back, 2016). The app usage is totally dependent upon the will of the user to download it from app store and install it into the device. Mobile Web Apps Mobile web apps are acknowledged to be internet enabled applications which can be accessed via the web browser of the mobile device. In the case of these apps, the users are not 3
asked to download the app from app store and install it for gaining access to them (Weill and Woerner, 2018). These apps are written in the form of web page in CSS and HTML, alongside interactive part being withinJavaScript,Jquery, orany other codinglanguage.This implies that a single web app can be easily used upon several devices, if they have the capacity to surf the web, irrespective of the operating system. The pros and cons of these apps are briefly discussed as follows:- Pros:These apps can be instantly accessed through the usage of browser in several devices, irrespective of the operating system within them. Mobile web apps have relatively easier maintenance. In case the content or design of app needs to be changed, the update has to be published upon the servers and the alterations are instantly visible (Libert, Beck and Wind, 2016). The development of mobile web apps is acknowledged to be more cost and time effective than native apps as this makes use of programming language and technology that can be easily comprehended. Cons:Mobile web apps are not present in app stores. Further, they are acknowledged to have limited scope in terms of accessing the features of a mobile device (Zhang, Lichtenstein and Gander, 2015). In case of these apps, there is no regularized QC system which increases the risks related to security and safety of the apps. These apps cannot be accessed in offline modes, not even in the form of a basic version. Impact of PWA on Alibaba.com The management of Alibaba team took the decision to develop their mobile website as a Progressive Web App in order to effectively appeal to the audience and impress the first time visitors.The execution of PWA made Alibaba, encounter some tremendous results which are enlisted beneath:- 76 % more conversion across all the browsers 14 % more number of active users in a month upon iOS and 30 % upon Android 4 time more interaction rates from Add to Homescreen prompt 4
Question 3: LO2 Emerging digital business models and challenges associated with IS threats and ethics in general Digital businesses have become a substantial part of the corporate world. There are various kinds of digital business models that are currently running and constantly emerging with the passage of time (Márquez and Lev, 2019). These are briefly discussed as follows:- Emerging digital business models Freemium Model: This is one amidst the most widely used business models. Hereby, the user receives an item or service without payment of any charges. For the basic functions, no funds have to be invested(Ismagilova and et. al., 2017). However, for gaining access to premium functions, users have to incur money. By leveraging this model, businesses can rapidly reach to a larger base of audience, expand the business in new territories and generate higher income while carrying out conversion of users to paying ones. Such digital business model is most likely to be applicable upon offerings having lower marginal cost. The key to success of this digital business model is acknowledged to be'conversion'. A business just needs to identify a free solution which seems appealing to customers, but at the same time not totally satisfactory in order to influence users to incur money for premium features. The examples of this model includeSpotify, Linkedin, Xing, Canva.com, MailChimp(Homburg, Wielgos and Kühnl, 2019). Subscription Model: In this digital business model, offerings are basically offered as subscription. Hereby, an amount that normally only occurs just once is split or a new service is developed which is billed in a periodical manner(Matt, Hess and Benlian, 2015). The purpose is to keep the customers glued to the business for a long period of time. As against the one time purchases, the users herein benefit from the improvement as well as extension of services. In this regard, non divisible items can also be duly transformed in to subscription. Hereby,Amazonacts as one of the best examples of this digital business model by delivering products regularly. Other examples of this digital business model includeInternet Provider and Netflix(Liu, 2020). Marketplace Model: Hereby, a digital market is leveraged by businesses in order to set connection with the customer base. In this digital business model, income is generated through commission, fixed transaction cost, brokerage fee, etc.(Schwertner, 2017).In this model, possibility is also thereby 5
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to make use of membership fee upon the platform or generate income via premium positioning or advertisement facilities. Some examples of this model comprise ofAmazon, Alibaba, eBay, Uber, etc. Sharing Economy – Access over Ownership Model – Renting & Leasing: The sharing economy is also commonly called letting. Offerings which can basically only be bought are lent to other persons for a certain time period. Car sharing is an example of this digital business model. Hereby, the car is made accessible for a fixed time period and distance to other individual in exchange of a certain amount(Nadeem and et. al., 2018). Basically, this model can be applicable in context of all the items and services. Some of the best examples of businesses leveraging this digital business model consist of AirBnB, Sharoo, Mobility, Lyft etc. (Park, and Mithas, 2020). On-Demand Model: “Time is Money” is the principle on which this digital business model is developed. Hereby, the immediate access to a product or service is sold. Thus, the offering or the delivery can be called at any time. Video on demand and taxi on demand are the concepts emerging from this digital business model(Kane and et. al., 2015). Some of the exemplary companies making use of on demand model are acknowledged to be Upwork, Cloud Services, UBER, Amazon Prime, etc. Challenges associated with information security threats and ethics in general Even though the digital business models are quite beneficial in a number of ways, it is often seen that such models are posed to information security threats. This happens because of hacking, sabotage, virus attack, information extortion, identity theft, data theft and so on. These threats should be duly taken into consideration by businesses in order to prevent any kind of discrepancy in the business operations (Kraus,Roig-Tierno and Bouncken, 2019). Further, it also becomes important for digital businesses to consider ethical values such as fairness, trust, confidentiality, honesty, accountability and transparency in order to ensure existence in market place for a long period of time. All the business decisions should be taken in an ethical way by considering these values. 6
Question 4: LO3 Dealing with situation at both companies differently if held responsible The case studies of Alibaba.com and MakeMyTrip.com witnessed that PWA helped both the organisations to derive positive benefits. The usage of PWA allowed both of these digital businesses to drive success by augmenting the revenues as well as profits in the long run (Urbach, Drews and Ross, 2017). They leave a better impression upon the users, persuading them to effectively get engaged with the businesses for a longer period of time in future context. Had I dealt with the situation in both the companies, I would have considered doing the same. PWAs are obviously powerful and have a tremendous impact upon the business if employed (Park and Mithas, 2020). However, as a second alternative, I would have even considered the option of leveraging newcollaborative relationships and strategic alliances through digital technologywhichhaveapositiveimpactuponPWA.Thiswouldhavefurtherhelped Alibaba.com and MakeMyTrip.com to enhance their financial performance. Question 5: LO5 Comparing & contrasting digital business and e-commerce along with E-Commerce principles and their application to digital businesses Digital business and e-commerce have a lot in common and at the same time, have a number of things that make them different from one another(Kreutzer, Neugebauer and Pattloch, 2017). Both of them are compared and contrasted beneath:- Similarities: As e-commerce is a subset of digital business, thus the basic business model is alike. Both the businesses work with the help of technologies and internet. In both the business types, interaction with the customers takes place in online mode only (Sousa and Rocha, 2019). There is no face to face communication with the customer base at any point of time. Both the businesses foster the development of partner relationships in order to provide the customers with add-ons, accessories, and other essential services during or after sale. Differences: The most important difference lies in both the concepts, even when often people use both the terms interchangeably. E-commerce can be said to be the outward facing process involving interaction with the customers mainly in terms of purchase and sales (Bican and Brem, 2020). 7
On the other hand, digital businesses can be said to be behind the scene digital machinery employment to streamline the operations of a business entity and help it conduct transaction via online format. It may include e-commerce. Principles of E-commerce and application to digital businesses User friendliness: An e-commerce website or application needs to be easy for navigation because easier searches enable the users to explore several products and pages, instilling within them an urge to purchase. Also, the platform should provide users with large information base along with pictures to provide intricate details about products (Xu and Koivumäki, 2019). The more realistic a product or service looks; the more is the probability of a user purchasing it. This principle can also be applied to a digital business as this also runs with the help of technologies and thus the business should be easy to be accessed and comprehended by the consumers. Emphasis on security: The users who make purchases on e-commerce platforms require proper security to be present on these platforms so as to make sure that their personal and financial details are not exposed to third party or wrong hands. The payment gateway thus needs to be secure and safe, allowingquickcheckout(UrbachandRöglinger,2019).Thisresultsinaboosttothe organisational sales. This principle can also be applied to a digital business as they also carry an element of information security threat. Thus, the digital businesses can also follow this principle to make sure that a safe and secure platform is provided to people. Efficient call to action: The main goal of an e-commerce platform is to increase the conversion rates, thereby implying generation of more revenues(Bharadwaj and et. al., 2013). Hereby, Call to Action has a crucial role to play. The audience comes to these platforms seeking a particular solution, thus it is very important that the words used by e-commerce businesses upon the call to action button are aligned with the probable questions in the minds of users. These buttons should take the users to exactly what they are seeking. For creation of highly efficient CTAs, it is important that the words used are moreover focused upon action driven verbs. Some of the most common examples of successful trigger words that possess the capability to grab the attention of users to click upon them include “Get Instant Access”, “Join Now”, “Hurry, it’s the last day!!”, “It’s that hour of the day!!!!”, Claim high discounts”, and many more(Kane and et. al., 2015). This principle can also 8
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be applied to digital businesses in order to grab the attention of people in a very short span of time and persuade them to make a purchase or consumption. CONCLUSION On the basis of above discussion, it can be stated that technology has transformed the manner in which businesses are run and operated in today's world. In addition to this, it has been acknowledged that digital businesses are largely prevalent in the modern era. Further, mobile communication, internet and technology are the key trends that shape the management of virtual businesses. Besides this, it has been determined that there are certain similarities and differences between digital businesses are e-commerce and they should be duly noted. The similarities include similar business model, online interaction with the customers and development of partner relationships. The differences between both of them include the concepts of both the businesses. Along with this, there are various principles of e-commerce businesses such as user friendliness, security emphasis and efficient call to action. These principles can be duly applied to digital businesses in order to drive conversion in a quick period of time. 9
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