Digital Business Report: Three UK, Strategic Alliances, and E-commerce

This report provides a comprehensive analysis of digital business, exploring its advantages and disadvantages with a focus on the telecommunications company Three UK. It delves into various digital business models, such as the freemium model, and evaluates their pros and cons, while also considering business issues like cybersecurity and ethical considerations. The report further examines the impact of new strategic alliances and collaborative relationships enabled by digital technology, again using Three UK as a case study. Finally, it identifies and analyzes e-commerce principles relevant to the chosen organization, offering insights into how digital strategies can drive business success. The report offers a detailed overview of digital business strategies, models, and their implications, making it a valuable resource for understanding the evolving landscape of digital commerce.

Digital business

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY .................................................................................................................................3
Overview of digital business including advantages and disadvantages with the help of a
chosen organisation.....................................................................................................................3
Evaluate new and emerging digital business models while considering business issues such as
cybersecurity and ethics that the given organisation may uses...................................................5
Determine the impact of new strategic alliances and collaborative relationship through digital
technology by also considering your chosen organisation.........................................................7
Identify and analyse E-commerce principles to chosen organisation.........................................9
CONCLUSION.............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Digital business organisations are growing drastically. With the change and evolution of new
technologies, businesses are doing everything in order to survive in the market. Many businesses
are changing their business model and shifting towards new online platforms in order to achieve
lucrative and growing online market. In order to be successful, getting traffic on website is not
enough unless leads are converted into sales. Digital businesses platforms provide clear strategic
position to the organisation with arguments through which organisation can convince targeted
group of people.
MAIN BODY
Overview of digital business including advantages and disadvantages with the help of a chosen
organisation.
Creating new value in business model by using technology is termed as digital
businesses. It improves its core operations by providing support through customer experience
and by enhancing internal capabilities of an organisation. Digital business involves both only
digital brands and also brick and mortar brands who are transforming themselves with the help
of technology. Digital businesses a have more potential nowadays as people are spending more
time on digital platforms. (Domazet, I.S. and Neogradi, S., 2019.)Digital companies seeks new
competitive advantages in the digital world as people are more familiar with digital services and
products that provides growth to digital economy. In order to be a key differentiator in digital
economy the company needs to achieve expertise in the field of customer services. When a
company is able to provide exceptional customer experience, audience often tends to spend more
as it is experience that matters the most to the customer. Organisations working beyond customer
expectations is most likely to be successful as customer satisfaction eventually takes the center
of digital services.
In context to company, Three UK is a telecommunication and internet service provider
company which is a subsidiary of CK Hutchison Holdings. The company is headquartered in
Maidenhead, England, UK. They deals in the products of mobile telephony and broadband
internet. They are the fourth largest network provider in UK with approximately 1116 million of
revenue and 13.3 million subscribers. In order to compete against Vodafone's Voxi and O2's
giffgaff, three launched a brand called SMARTY which is a no frills SIM-only product.

ADVANTAGES OF DIGITAL BUSINESSES:
More data collection: Digital platforms help digital businesses to collect data on
customers and analyse and optimise that data in order to drive business forward. Digital
businesses creates a system to gather the information in incorporate that information in business
intelligence for further studies. (Haffke et. al., 2017. )By collecting data and after analysing that
data, the company can make changes in their products and services according to the
requirements of the audience. More customised products and services can be provided to the
customers with the help of information collected through data. In context to Three UK, the brand
collects data through their network in order to give better experience to the customer.
Better resource management: Digital technologies consolidates resources and
information into a system which brings together all resources and information of the company
into one place. Company uses approximately 900 applications which makes it exceptionally
difficult for company to provide consonant experience. In reference to Three UK, the company
uses technology in order to manage their resources more efficiently so that nothing will go
waste.
Overall better experience: customers expectations are always increasing. Customers
have endless choices and wants fast delivery, low prices and extraordinary services. In a research
it is analysed that companies are competing mostly for customer experience. ( Kane and et. al.,
2017.)In respect to Three UK, the company uses their data to provide better usage of service and
also make changes according to the needs of the customer.
Increment in profitability: Using digital platforms, the companies are able to decrease
the cost of workings and increase in business. Digital platforms are increasing the profitability of
the firms as they are saving huge cost that they have to bear when they are using brick and
mortar. In context to Three UK, the company uses its network variations to make profits as no
customer wants to accept less when more is available at affordable prices.
Enhanced productivity: Digital platform provides the employee a freedom to do
collaboratively work without any complications related to location or device. (Kofler et. al.,
2017.)When an employee works in an environment where they are comfortable and their mind is
free then it will definitely increase the proactivity of the employee. In reference to the company,
they provide best incentives to their employee so that they feel satisfied and improve their
productivity.

DISADVANTAGES OF DIGITAL PLATFORM:
Extreme dependence on technology: Digital businesses are extremely dependent on
technology and digital platforms only run on technology. Without technology there is no
meaning of digital. In context to Three UK, it is very important for them to update technology
before anyone in the market.
Privacy and security issues: Increasing cyber crime is a big disadvantage for digital
platforms as technical people can hack the system which contains data related to the information
collected by company(Kotarba, M., 2018.). This data is of customers which was collected by the
company for ethical uses but hacker may use this information for unethical uses. In reference to
Three UK, the company is collecting every data that a consumer is putting through their network
and hacking of that data can lead to serious issues.
High maintenance cost: Digital businesses involves high maintenance costs because of
the constantly changing environment which needs to be updated. Technological changes are high
and every company needs to update themselves in order to acquire competitive advantage in
marketplace. In order to update technology company needs to bear high costs as their
functioning is fully dependent on the system they are working on. In respect to Three UK, the
maintenance cost of poles, wires, etc. are very high and they needs to be regularly checked to
avoid any accident or network issues.
More price competition: As transparency is high and everyone can compare the prices
of each and every website, it is difficult for an organisation to keep prices more in order to earn
higher profits as people are highly price sensitive. (Kozar et. al., 2017.)The major factors
contributing in a final purchase consists price factor which highly affects the behaviour of
consumer when it comes to purchasing. In context to Three UK, the price competition in
telecommunication sector is very high as network is an important thing in today's world and its
pricing highly affects the customer preference.
Evaluate new and emerging digital business models while considering business issues such as
cybersecurity and ethics that the given organisation may uses.
These digital business models is a framework that finds systematic way in order to create
value based on capturing value through monetary benefits and delivering through providing
value to customers. Some of the models are discussed below:

Freemium Model: Company provides limited function of software or service witghout
charging anything from the customers. The company provide trial packages for their best
software so that user can buy it after trying. The aim of this model is to convert convert trials
into actual lead that can provide company some monetary benefits. The principles that are
followed by freemium model is competence standardization.(Lederer et. al., 2017,) Companies
such as Spotify, Dropbox, Ever-note, etc. all are using freemium model and are highly
successful. This model allows customers to engage with the free product and they will pay
afterwards only if they wants to.
PROS of freemium model
Basically viral: It refers to that the free user may not buy the package offered by the
company but they may recommend it to someone who is willing to pay for this service. If the
product is actually good then company will get a benefit of word of mouth.
Least level of barrier of entry: the entry barrier for the company's product is as
minimum as possible because its free of cost. The trial packages are absolutely free which gives
a confidence to customer that just in case if they didn't like the product then also they will not be
charged by the company.
Free traffic: Free traffic on website can sometimes convert into advertising revenue.
because of the free traffic the product sometimes comes into trend which attracts lots of other
potential customers as well.
CONS of freemium model:
It costs money: Even though user enjoy this service without paying anything but that
doesn't mean that company also doesn't have to pay. All the cost of freemium is payed by the
company providing it. Which ultimately increases the cost of the company.(Reis et. al., 2018,)
Also the conversion rate of freemium to paid version is very low which means extra cost will be
a complete loss for the company.
Huge volume is required for ROI: As conversion rates are low, in order to have return
on investment the free user population is needed to be at least ten times bigger. Only 10 percent
of freemium user actually become paid members of the company. This increases the cost of
maintaining a freemium service and for small companies the market may not even consider those
numbers.

The freemium model helps the cyber security firms in order to turn data into intelligence. This
model in coordination with the threat intelligence platform in order to build a community around
its enterprise that helps to identify real and current threats and help security professionals to
gather useful information from that data.
SUBSCRIPTION MODEL: In order to get a product or service again and the user
needs to pay again for additional time then the company is following subscription model. The
recurring charges can be on monthly or annual basis.(Santos et. al., 2018.) This is not a new
model, it is in the market from a long time. It is present in a persons daily life like coffee
subscription, library subscription, etc. this model ensures recurring stream of revenues.
Advantages of subscription model.
Ensures revenues: this model predicts future revenue stream. It helps in keeping smooth
flow of business operations and finances.
Good customer relationship: subscription model helps to company to establish a good
relationship with customers and also helps the company to know their customer better.
Cybersecurity in subscription model:
Subscription model helps the company to innovate more. It encourages IT department
by providing them specific data collected through the users, which gives a direction to IT. It also
give ways to make security strong so that no one can interrupt and find the data that is given by
the user to company.
In context to Three UK, the company can use freemium model as they are providing
mobile as well as broadband services which can give a one month free trial offer to customer
which will attract more customers as they can look at the quality that Three UK is providing and
also the services that are offered by the company at reasonable prices which not only convert
existing freemium customers into actual customers but also attract new customer base through
existing customers recommendations.
Determine the impact of new strategic alliances and collaborative relationship through digital
technology by also considering your chosen organisation.
It is an agreement between two or more companies to collaborate for a beneficial project
without interrupting in each others independence. As compared to joint venture, this agreement s
a little bit less biding and less complex. Both the companies pool resources in order to create a

separate business entity. (Venkatesh et. al., 2019.)In order to enter a new market, in order to
expand their business in current market or getting a competitive edge over competitors this setup
allows the the businesses to work towards a common goal for the benefit of both the company
mutually. According to the mutual understanding of both the companies the agreement in
between them can be formal or informal.
Three UK, confirms its collaboration with Nokia network as this collaboration will help
the company to develop Ireland's best ever mobile network after its acquisition of O2 in Ireland.
Three's investment plan is to make a network of 300m and Nokia will help Three in upgrading
the operator's 2G and 3G network (Three confirms partnership with Nokia Networks as part of
overall €300m network investment plan , 2021).
Advantages and Disadvantages of Strategic alliance.
Strategic alliance does not include all the burdens that are included in joint venture. The
agreement between both the companies is flexible and can be changed. Even after merging
capitals of both the companies, they both remain independent of one another.
Strategic alliance bring its own risk as even after clear conditions of the agreement , there may
be differences in the workings of the companies which might create conflict. Also in a long-term
alliance one company may become dependent on other company and disruption in alliance can
harm the business of both the companies.
Collaborative relationship:
It refers to a partnership between two or more individuals or business in order to
accomplish common objectives and goals. It is the best way to find a solution as different
individuals have different point of views which helps in analysing the situation a little better.
(Wiesböck, F. and Hess, T., 2020.) Businesses structure themselves in a variety of ways which
suits both the internal and external management of the company.
Advantages of collaborative partnership.
One of the most important advantage of collaborative partnership is that they can
enhance the relationship between two businesses working together in order to get a benefit in
market competition. Also when two companies collaborate both their dedicated customer base
also collaborate which gives an advantage to both the firms individually to market their products
in two customer bases instead of just one.
Disadvantages of collaborative partnership:

In order to make collaboration successful both the companies need to make efforts so that
both of them individually have something to offer to one another. Cultural differences can also
be a big difference that can create a conflict between both the companies in order to have a
successful management the companies must clear all the conditions in the contract prior to
collaboration regarding management of the separate entity.
Identify and analyse E-commerce principles to chosen organisation.
E-commerce or electronic commerce is a model of business that allows businesses,
individuals and groups to sell or buy products and services via online or over the internet. It
operates in majorly four segments namely business to business, business to consumer, consumer
to consumer, business to government. ( Zott, C. and Amit, R., 2017. )Three UK uses e-
Commerce in ways to provide service of payment of their monthly bills of mobile phones as
well as broadband via online which gives the customers a convenience of recharging from
wherever they want without stepping out of their houses.
Principles of e-commerce:
Information transmission: e Commerce websites helps the companies to inform large
audience about the product via online. Spreading the information about the product is important
for every business in order to sustain in the business. In respect to Three UK, they uses e-
commerce to spread information about their new talk time plan or their plans for broadband
users.
Information capturing: Collection of data is one of the most important principle of e-
commerce as people using e-commerce websites gives their information in order to use that
websites and through that a system stores all the information that is given by the user. In
reference to Three UK, While recharging or searching for a better plan the customer gives their
data of their preferences which gives the company a view of what customer actually wants.
Commercialisation and publicity: It helps the company to market their product in the
customer segment presented online. Nowadays large amount of audience is present online and
they purchase products over the internet. In context to the company, While being online the
customers can search for new products that three UK is offering and also recommend it to others
which gives the company an additional advertising as well.
Engagement with stakeholders: Stakeholders not only include shareholder but also
consumers, suppliers, retailers, etc. e-commerce helps the company to engage with their

stakeholders 24/7. all time services are provided by the company to its stakeholder which also
increase the trust in customers for the company. In context to Three UK, they find it very
important to stay connected to their stakeholders as it is a telecom company and e-commerce
helps the company in this matter

CONCLUSION
From the above report it is understood that, online business helps to reach a wider audience with
less cost is involved. Also digital platform provide equal opportunity to businesses irrespective
of their size , small companies now have a chance to and resources to perform their best sales
and marketing processes which was previously available to only large companies. Digital
businesses are expanding rapidly because of their digital technology. Technology enables the
company to reach much more audience without paying high costs related to promotion and
advertising.

REFERENCES
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Wiesböck, F. and Hess, T., 2020. Digital innovations. Electronic Markets, 30(1), pp.75-86.
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Online
Three confirms partnership with Nokia Networks as part of overall €300m network investment
plan , 2021. [Online] Available through
<https://www.nokia.com/about-us/news/releases/2014/08/22/three-confirms-
partnership-with-nokia-networks-as-part-of-overall-eu300m-network-investment-plan/>