Analysis of Digital Business: ASOS Case Study and Strategic Insights

This report provides a comprehensive analysis of ASOS's digital business operations. It begins by defining digital business and its impact, followed by an evaluation of virtual business trends, including drop culture, exclusive discounts, and sustainability. The report explores the advantages and disadvantages of virtual business, the use and impact of technology on ASOS and Birchbox, and the challenges of information security. It then delves into ASOS's business model, including value proposition, revenue model, market opportunity, competitive environment, competitive advantage, and marketing strategy. The importance of strategic alliances in the digital landscape is also examined. Furthermore, the report includes a SWOT analysis and contrasts digital business with e-commerce, offering insights into ASOS's strategies and challenges in the online retail environment. The report concludes with a discussion of the key findings and their implications for ASOS's future.

Digital Business

ABSTRACT
Digital business can be defined as the introduction of technology in the operations of the
business. This technique is adopted with the aim of adding personalisation and replacing the
manual operations across the company. The application of digital technology will enhance the
efficiency and innovativeness of the workforce in the complex working environment. This report
will be going to cover the current trends in the digital business and challenges of information
security faced by these businesses. It will also discuss the various business models and
advantages of operating business in the digital world. Also, this report will emphasize on the
collaboration of personalisation in developing strategic alliances in the working environment.
Moreover, e-commence also plays an critical role in the business environment.

Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
TASK 1............................................................................................................................................4
Evaluation of Virtual Business in the Global Environment........................................................4
TASK 2............................................................................................................................................7
Information security and Business Models.................................................................................7
TASK 3............................................................................................................................................9
Strategic Alliances and its importance .......................................................................................9
TASK 4..........................................................................................................................................10
SWOT Analysis and Situation Analysis...................................................................................10
TASK 5..........................................................................................................................................12
Digital Business and E-commerce............................................................................................12
CONCLUSION .............................................................................................................................14
REFERENCES..............................................................................................................................15
Books and Journals...................................................................................................................15

INTRODUCTION
Digital business can be defined as a way of using information technology in the
operations of the business to enhance their efficiency and effectiveness. The information
technology have made the work easier for the workforce which helps them in enhancing their
own knowledge and skills in the external working environment. This strategy will elevate the
opportunities for the business organisation. This report will be going to focus on the British
fashion retailer ASOS plc (Ambalov and Heim, 2020). It was founded as a cosmetic and fashion
retailer in 2000. The company is currently operating in 196 countries with its headquarter in
London, UK. The company follows its tag line “ Buy what you see on film and TV” to sell
exclusive clothing products to satisfy their customers. This report will focus on the digital
business of the ASOS and how the company is tackling their challenges in digital world to
achieve continuous success and growth. Also, this report will analyse the SWOT framework of
the company which provides a brief of their USP. Lastly, it will cover the contrast of e-
commerce with the digital business.
MAIN BODY
TASK 1
Evaluation of Virtual Business in the Global Environment.
Virtual business is another name of the digital business which defines that the business
operations are performed over the electronic devices with the maintenance of authenticity and
reliability. Doing digital business in such a competitive environment is not an easy task for the
management of the company (Banalieva and Dhanaraj, 2019). But they have to add innovation
and personalisation in order to sustain their loyal customer base. ASOS is a top fashion retailer in
London provides a digital experience to get an insights about the customer preferences.
Key trends in the virtual business: There are certain trends that have entered in the
virtual business in order to maintain its innovativeness for serving the customer in a better way.
In relation with ASOS, the trends of the digital business can be explained as follows:
 Drop Culture: This is common culture which have been adopted by many organisations
across the globe. It is a combination of social media with the fast fashion which will

enhance their effectiveness of the operations of the company. ASOS adopt this culture
which involve posting the pictures of the products on the social media to engage large
customer base towards the products of their brand.
 Exclusive Twitter Discounts: This technique acted as a way of promoting their product
over the social media platform. ASOS uses this tactic by posting the pictures of their
brand's outfit on the twitter to demand the suggestions form their followers. This will
enhance their mass followers (Bughin, Catlin and Dietz, 2019).
 Sustainability: This is a way of bringing the circular economy in the brand and its
operations. This act as an commercial opportunity for enhancing the business operations.
ASOS uses this trend to introduce sustainable fashion which will maintain their carbon
footprints. Due to this they will be able to meet the demand for ethical clothing products.
Hence, these are the trends of the virtual business which are introduced with the purpose
of maintaining the customers for longer duration and enhance the operations worldwide.
Advantages of Virtual Business: A virtual business has the following advantage in the
external environment:
 Improved employee satisfaction: This facility will provide the employee of the
company to work from home. ASOS virtual business will motivate and enhance the
satisfaction of the employees which improve their productivity and profitability.
 Lower overhead Cost: The digital business of ASOS will decrease the operating cost of
the company. The company will be able to earn more profits which will enhance their
product developments techniques. The company will be able to invest in the
personalisation to serve the customers in a better way.
 Access to Global market: This is the major advantage of the online business to the
company. ASOS performs its operations at a global level to attract the pool talent across
the world (Deiss and Henneberry, 2020). The company will be able to enter in the new
competitive markets to attract new customers towards their brand's products.
Hence, these are the advantages of the digital business for the brand in order to sustain
their competitive advantage in the external environment.
Disadvantages of Virtual Business: The disadvantages of digital business can be
explained as follows:

 High Competition: Digital business faces high competition across the virtual platforms.
ASOS faces competition across the digital world which makes it difficult for them to
grab the attention of the customers. Feedback and complaints: The negative feedback will tarnish the image of the
company. Digital media is a powerful tool which impacts the goodwill of ASOS across
the globe (Dzhavdatovna and Azimovich, 2020).
Use and Impact of Technology On ASOS
ASOS is a fashion brand which use digital-platform for connecting with the customers.
The use of technology in the company can be explained as follows:
 The use of technology will enhance their customer base which will maintain their
competitive strength.
 ASOS uses technology to enhance their operations worldwide.
Now, the impact of technology can be explained in the following way:
 ASOS use technology for reaching their target customers but sometimes they can't be
able to analyse their preferences properly which dissatisfy their customers from their
brand.
 It improves the customer relationship of the brand with their customer which will
optimize their workings.
Use and Impact of technology on Birchbox
Birchbox is an online business which provides monthly subscription to their customers of
sending the products to their customers. The company uses the technology in the following way:
 The company have introduced their first Instagram shop to engage the customers. This
have enhanced their sales potential which elevated their profits at the higher level.
 The company users technology to collect customer data in order to develop the products
accordingly (Fletcher and Griffiths, 2020).

TASK 2
Information security and Business Models
Information security is an important concept that need to be focused while doing online
business operations. ASOS emphasizes on the maintenance of the information of their online
business. But the company sometimes faces some challenges in maintaining the security. These
challenges can be explained as follows:
 Privacy: It is very important for a company to maintain the privacy of their online
content. ASOS faces this challenge due to lack of knowledgeable workforce in the sector
of IT. The main concern of the company is the identity threat. Due to which their
customer base is declining. The information exchanged in their online must be kept safe
from the unauthorised parties with the help of security software and tools.
 Integrity: ASOS face this challenge in the growth path of their brand. The information
that the company is exchanging is used or tampered by the third party. Due to rise in the
number of hackers, the company focuses on the maintenance of the integrity of their
information (Gault, 2019). Authenticity: This is a process in which the sender and the receiver must prove their
identity in order to get the information. ASOS has a challenge to sustain the authenticity
in order to improve customer engagement. Nowadays everything is going digital and the
customer focuses on where the company is using their data in order to protect them form
mishandling.
Business Model of ASOS
Business model describes the core principles followed by the company in order to
achieve their targets in the industry. The business model followed by ASOS can be explained in
the following way:
 Value proposition: This defines the reason that ASOS is providing to their customers to
buy their products. It involves the introduction of personalisation, convenience,
customization and reduction in products cost. Personalisation defines the introduction of
innovation in the company to engage the customers. This will enhance the convenience of
the customers by providing everything online. Also, ASOS provides the facility of

customization in which they design the products of the company according to the
requirement of their customers (Gerster, 2017).
 Revenue model: It describes that how ASOS generates their revenue and enhances their
level of profitability. The company develops effective advertising and promotional
strategies in order to make a mass appeal from the customers. For this the company use
twitter as a social media tool to generate their customer base.
 Market opportunity: it deals with the overall market opportunities available for ASOS.
It also describes their financial plans developed by the company in order to incorporate
the funds in effective areas. ASOS must plan to expand its operations in the areas where
there is less competition to capture the market share.
 Competitive Environment: The major competitor of the brand is Amazon. The
company is facing a number of challenges due to the e-commerce business of Amazon.
This will reduce their market opportunities which will ultimately impact on their
revenues and returns.
 Competitive advantage: ASOS has developed its competitive advantage by selling
differentiated products to their customers (Gruber, 2019). This will enhance their
customer base which will elevate their position in the industry as a leading brand in the
industry. Also, the company targets the social preferences of the customer in order to
sustain their competitive advantage.
 Marketing strategy: ASOS adopt the penetration strategy for pricing in order to attract
their loyal customers towards their brand products. The company adopts the accessibility
and convenience strategy for placing their brand in the industry and in the minds of the
customers.
Hence this is the business model followed by ASOS which has various elements
explained above. Each element has its own importance in contributing towards the growth of the
company.

TASK 3
Strategic Alliances and its importance
Strategic alliances are important for a business to grow in the working environment. This
helps them to access their capabilities in order to sustain their competitive advantage. Digital
technology have established effective strategic alliances. These alliances promote personalisation
in the industry (Ištvanić, Crnjac Milić and Krpić, 2017). Due to which customers gets satisfied
with the customers products. The importance of the strategic alliance formed thorough digital
technology can be explained as follows:
 Building competitive edge: The strategic alliances helps in building the competitive
edge for the company. Also, the company will be able to fulfil the demands of the
customers by producing value added products for them.
 Flexibility in the operations: strategic alliances promote the flexibility among the
operations of the company. Due to which the employees feel motivated in the working
environment.
 Advantage of enhance capital and reduces risk: Strategic alliances help in managing
the risk associated in the industry. The company will get an advantage of enhance capital
which can be invested in personalisation process (Kaur, 2017).
 Acceleration of technology and resources: These collaborative relationships will
enhance their technology space which will guide the working of their workforce. These
resources are utilised efficiently across the operations of the company.
These strategic alliances promote personalisation ASOS. The company uses their
Instagram platform to attract large customers. Also, the company performs mass appeal to attract
loyal customers. Furthermore, as a part of their personalisation technique the company have
developed smarter navigation in their website. In this if the customer have browsed the women
wear for the first time then in their next visit they land on the same section. The another
technique is the digital fit assistant which is used as a tool of personalisation. This explain the
guidance to the customer regarding various clothes sizes.
The company uses machine learning which will be easier only after the implementation
of successful personalisation techniques. These technique will persuade the customer to purchase

the product and performs word of mouth advertising. The company also provides free shipping
services to their customers which is another differentiation technique. After a brief analysis of
the customer recent product visit, their history and choices, the company creates their own
suggestions regarding the various products (Mithas and McFarlan, 2017). The company calls it
“your very own edit” which will provide suggestion of products on the basis of evaluation of
their choices and preferences. The company provides too much choices to their customers which
will enhance their customer engagement.
TASK 4
SWOT Analysis and Situation Analysis.
ASOS stands for “As seen on Screen” which depicts that the customer will get valuable
products from the company which was shown on TV or any other media. The SWOT analysis of
the company will provide an overview of their internal environment. This is explained below:
STRENGTHS WEAKNESSES
 The brand has partnered with other
communities in order to promote their
clothing products.
 Furthermore, the company provides
unique designs with more than 30 sizes
of same price (Lipton, 2016).
 The research and development of the
company is weak in terms of their other
leading partners.
 The company provides free shipping at
the global level which has effected their
gross margins.
OPPORTUNITIES THREATS
 The current trends and the changing
customer preferences are effective
opportunities for the company.
 For enhancing the customer traffic over
the website the company can use
effective marketing tactics.
 Competition from Zara and other
leading brand can be difficult for the
company to survive in the industry.
 The economic factors can effect the
working environment of the company.
Like the impact of Brexit.

Situation analysis
The situation analysis of the company can be described through the evaluation of five C
analysis. These five C includes the company, competitors, customers, collaborators and climate.
Situation analysis can be describes as a combination of various methods adopted by manager in
order to evaluate the external and internal environment of the organisation. These five C can be
explained as follows:
 Company: It defines the goals, objectives and vision of ASOS. The company has a
vision of becoming world's leading fashion brand (Peillon and Dubruc, 2019). It also
describes the marketing strategy adopted by ASOS in order to engage diversified
customer groups.
 Competitors: This includes the analysis of the competitors by identifying them in the
external environment and taking initiatives in order to compete with them. ASOS
develops differentiation strategy for its competitors.
 Customers: The company targets the customer groups by analysing their offering in the
particular field. ASOS diversify its customers on the basis of geographical,
demographical, social and many other factors.
 Collaborators: ASOS focuses on maintaining strategic alliances with the help of
personalisation which will develop effective relationships (Murawski and Bick, 2017).
The company establish cooperative relationship with agencies, suppliers, partners and
their distributors.
 Climate: ASOS implement the PEST analysis for the evaluation of climate. This will
provide them an understanding of political, technological, social and economical
environment of the environment.
Hence, this is the situation analysis of the ASOS which focuses on personalisation in the
working environment. The company creates value for their customers by providing them
differentiated products at one stop.

TASK 5
Digital Business and E-commerce.
Digital business can be defined as way of blurring the difference between physical world
and digital world. This involves the implementation of information technology in the operations
of the company to enhance their productivity and growth. On the other hand, E-commerce can be
defined as selling of goods and services through internet and connecting with the customers via
digital means (Petkovics, 2018). The company uses this platform to initiate their electronic
purchasing and selling of goods and services.
BASIS DIGITAL BUSINESS E-COMMERCE
Meaning It is a way of running business
over the internet.
It is way of expanding the
physical business operations
over the internet.
Transactions It carry out business
transactions.
It carry out commercial
transaction.
Forms of Internet It uses internet, intranet and
extranet.
It only uses internet to operate
in the online world.
E-commerce Principles and their implementation in digital Business.
There are certain principles which are implemented by the companies in order to develop
their business operations. The principles of e-commerce can be explained as follows:
 User Friendliness: It involves devising effective strategies for reaching the customers
and satisfy them with their products. ASOS applies this principles in which the company
connects with the customer through social media platforms to enhance their level of
engagement (Scholz, 2017).
 Unique Design Elements: It defines that the company must use innovative designs of
their products which will enhance their personalisation. This will help ASOS in tackling
tough competition in the external environment.