Digital Business Report: Models, Alliances, E-commerce, and Principles

This report delves into the realm of digital business, defining it as the operation of company activities through digital platforms. It highlights the advantages, such as wider reach, improved customer experience, increased sales and revenue, and enhanced communication, while also addressing disadvantages like heightened competition, security and privacy concerns, increased costs, and the need for employee training. The report evaluates various digital business models, including freemium, on-demand, subscription, and e-commerce models (B2C, B2B, and C2B), emphasizing their key issues like cybersecurity and ethics. It further explores collaborative relationships and strategic alliances, emphasizing the role of digital technology in fostering these connections. Finally, the report touches upon e-commerce principles relevant to businesses operating digitally, providing a comprehensive overview of the digital business landscape.

DIGITAL BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Digital business and its advantages and disadvantages...............................................................3
Evaluation of the new and emerging business models................................................................5
Collaborative relationship and strategic alliances........................................................................7
E-commerce principle..................................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES................................................................................................................................1

INTRODUCTION
Digital business or digitalization of the business refers to operation of the activities of the
company through digital mode or over digital platform. It is one of the important concept of the
today's world that provide new prospective of performing the business to the companies.
However, adoption of this concept also bring many advantages as well as disadvantages to the
company. This report will discuss the concept of digital business and its advantages and adverse
impacts. Various digital business model, concept of collaborative relationship and strategic
alliances along with its impacts are also being highlighted in this report. At the last this report
contain e-commerce principles which is being applicable to companies that are working through
electronic mode or through digital mode.
MAIN BODY
Digital business and its advantages and disadvantages
Digital business:
It refers to a business that is being operated digitally. It is one of the recent and trending
concept for the operation of the business of the company (Rossato and Castellani, 2020). In
simple words digital business refers to the operation of the business of the company in digital
mode. It can also be conceptualized as digitalization of the business wherein all the operation of
the business are being operate over the digital platform or through digital mode.
Advantages and disadvantages of digital business:
There are various advantages as well as disadvantages associated with the digital operation of the
business of the company. Out of them some are:
Advantages:
Wide reach:
It is one of the biggest advantage of digital business that it raise the reach of the company
towards the customers. Digitalization of the business by the companies will help them to broaden
up their scope so that along with serving their own customers they can also serve the customers
across then globe (Calvino and Criscuolo, 2019). Like other companies that operate their
business through digital mode, Amazon which is one of the biggest and famous company also

serve this advantage. This means that along with the digitalization of the business of Amazon its
coverage and reach for serving its customers is being raised.
Better customer experience:
Making the business digitalized also help the companies to raise the experience of the
customers in terms of providing better services and choice. As the needs and taste and preference
of the customers changes rapidly so in order to meet this needs digitalisation plays an important
role (Pardo, 2018). Amazon by making its business digitalised also grab this advantage in raising
the experience of the customers by providing them services at their mobile or over digital
platform.
Raise sales and revenue:
As digitalization of the business lead to serving more customers across the globe so it
directly contributes the companies towards raising the sales and revenue (Martinez, 2019).
Through digitalization of the business the share of profits and the sales of Amazon is also being
raised substantially because of serving more customers and the widening of scope of the business
of the company.
Raise communication:
Digital operation of the business by the companies also help them in raising the level of
communication. This means that through digitalization of the companies the dual communication
is being possible. As on the one hand companies are being able to interact with the customers
likewise digitalization also allows the customers to share their feedback and review with the
company. Thus, it helps the amazon too in terms of raising the communication as well as
customer's experience by considering their views and feedbacks in the services of the company.
Disadvantages:
Raise competition:
Digitalization of the business has raised the worldwide competition along with its
intensity. This means that through digital transformation the reach of the business in serving the
customers has raised but it has also raised the competition (Antikainen, Uusitalo and Kivikytö-
Reponen, 2018). This means that amazon instead of facing the local competition also face the
situation of facing the worldwide competition.
Security and privacy issue:

It is also an adverse impact of digitalization of the business. Since, due to raising cyber
crimes it is a common issue that the personal data of the customers is being leaked and
generalized. Likewise, Amazon as being a direct contact with its customer also get personal data
of the customers while performing the transactions. So, occurrence of this security and privacy
issue is very common but it put an adverse impact over the brand image of the company.
Raise cost:
Being digitally converting and operating the business of the company also involves huge
cost. As technology is being continuously upgrading and in order to meet such changes
companies need to spend a huge sum over the implementation of changes (Cassia, 2017.). Also
in order to protect cyber crimes companies need to spend a large amount. Thus, digitalization of
the business also bring high cost towards the company including Amazon too.
Skill and training:
It is not directly counted as adverse impact of digital transformation of the business but
from the perspective of the companies it becomes a disadvantage for their business. This means
that in order to incorporate with the latest technology companies including Amazon need to
spend a huge sum for providing training to its employees. Also, the operation of the latest
technology needs differential skill so it also raises the cost of the companies in appointing highly
skilled employees.
Evaluation of the new and emerging business models
Key business issues:
Cyber security:
Along with the trend of digitalization and digital concept the cyber crimes are also being
raising nowadays. Due to these crimes the personal data of the customers are being generalized.
These crimes have a direct impact over the company in terms of exploiting the image. So it is
one of the major issue for the companies to have consideration towards cyber security.
Ethics:
These are the moral principles that assist the company to determine and perform business
operation in accordance with ethical code of conduct. Ethics guides the company that along with
the performance of business operation it is also necessary that they have to work morally right.
Non compliance will lead to become an issue for the company.

There are various business models concerning the digitalization of the business. Out of them
some are:
Freemium model:
It is one of the most common and emerging model of digital operation of the business. As
per this model some services of the companies are being offered free of cost while companies
charge additional amount for rendering special and premium services. This model also guides the
companies to work as per compliance of the business ethics in such a manner that it can perform
its business operation along with serving something for its customers at free of cost (Holm and
Günzel-Jensen, 2017). This model is generally adopted by Spotify which is one of the famous
music company that offer music to its customers at free of cost. While in addition of that it also
serves its business with a premium model wherein it avails its premium services at a specific
charge. This means that in order to have access to the music that is new and specialized
customers have to pay a specific amount for getting its premium membership.
On demand model:
As per this model of the digital business the services are bing delivered to the customers
on their demand. This means the companies that are working as per this model will deliver their
services on the demand made by the customers (Wirtz, 2019). This model is usually adopted by
Uber which is one of the cab provide company that provide its cabs for its customers on the
demand made by them. In addition, of that, this model also lead the customers to have access of
those services which is usually not affordable to them. Thus, by enabling cabs to customers Uber
also fulfil the needs of their customer which could also be categorized under the ethical duty of
the company by making their dreams to be meet.
Subscription model:
This is also an important model of the digital business. As per this model companies
provide subscription to its customers for availing the services. Companies usually charges a
specific amount for such subscription. This is one of the emerging model because many
companies are adopting this model for the operation of their business (Viglietta, 2019). Also, it is
generally used by Netflex too which provide subscription to its customers so that they can avail
the services of the company. It is to be noted that this subscription is again valid for the specific
time period wherein after the expiry of the time period, customers again have to pay for taking
subscription.

E-commerce model:
This is one of the widely used model by the e-commerce companies including Amazon.
As per this model companies usually operate their commercial transactions through electronic
mode or through electronically (Blaschke and et.al., 2017). This model is again categorize into
different types which are as follows:
Business to Customer:
As per this concept companies directly transact with their customers. This means that the
companies directly sell their product to the customers. There is no involvement of any mediator.
Business to Business:
As per this model the companies will sale their product to some other company which
will ultimately deliver and sale the product to final user and customers. This means that under
this model there are three levels.
Customers to Business:
As per this concept the customer will sale the product to the companies and then after
processing it companies further sale it to its customers. Under this model customer will act as a
producer and supplier.
Out of the above model the e-commerce model is usually used by the Amazon where it
electronically performs its commercial transaction. This model helps the companies to perform
its business operation in digital mode that lead the company to serve its customers across the
globe. However, in addition of this subscription model is also being used by the Amazon
wherein it provides subscription to its customers on the payment of certain specific amount. This
method also has dual advantage in the form of raising profits of the company along with
attracting more customers towards it. Through the subscription model it offer its customer's a
prime membership by which they can grab additional advantages of the company in terms of
accessing early for sales or enabling additional discounts.
Collaborative relationship and strategic alliances
Collaborative relationship:
It refers to the relationship between two companies wherein both the companies agrees to
perform the business for the accomplishment of the common goal. This means that when two
people and companies will agree to perform the business together for the achievement of

common objectives then it would be considered as collaborative relationship. It is one of the best
way of performing the business between such individual who have different views and opinions.
Thus, this process will also lead the individual to listen that things which they don't like to. It is a
common mode of doing the business. When digital technology will be infused in making this
relationship then it will be termed as collaborative relationship through digital technology
(Alsheyadi, 2020).
Strategic alliances:
It refers to an agreement that lead the companies to attempt mutually advantageous
project without merging their business. This means that under this relationship the companies
will remain independent, but they will work for the common perspective (Geleilate, Parente and
Talay, 2021). Here a new entity is not being formed by pulling the resources but the objectives
will still be achieved.
Making of collaborative relationship and strategic alliances through the inculcation of
digital technology is also a common mode nowadays. Indulgence of digital technology in the
collaborative relationship and strategic alliances has made both the process simpler as well as
effective. In fact digital inculcation in these concepts made the companies easy to make
collaboration with any company because it has broadened up the scope and reach. Since digital
touch allows the companies to have interaction with those companies and business that exist in
some other countries. So it makes both the concepts to be easy to perform. As these alliances and
collaborations are generally made for the accomplishment of the objectives of the participating
companies so digital involvement will make the companies to have better choice for making
collaboration in order to meet the goals.
In case of Amazon which operate its business over a wider scale also make collaboration
and strategic alliances with other companies in order to perform its operations and achieve its
goals. Digital collaboration also helps it to make alliances with various other companies in terms
of availing the products from different supplier companies so that it can easily make its business
operation. Likewise, digital involvement in such relationship made it easy for Amazon to make
collaboration with any company and move towards the achievement of objective with serving
more customer's needs. As competition is raising day by day so making alliances and
collaboration with various other companies also assist the Amazon in terms of meeting and

blocking the competition. Thus, it would not be wrong to said that the alliance and collaboration
with digital touch has benefited the company as a whole.
E-commerce principle
E-commerce refers to electronically operating the commercial operation of the company.
In simple words buying and selling of goods and performing transition of the company over the
mode of internet is all counted under the e-commerce activities of the company. However, in
order to operate e-commerce activities every company including Amazon need to comply with
certain principles. These principles are as follows:
User friendly:
It is one of the important principle of e-commerce that every company have to consider
while inculcating this concept in the working operation. As per this principle the website of the
company must be user-friendly (Nisar and Prabhakar, 2017). This means that it should be made
as per user so that they can easily operate it. Amazon also complied this principle in its website
which results in the easy operation of its official website.
Security:
This is one of the major principle applicable to e-commerce activities. It is very essential
that the website of the company must be secured so that the personal details and bank details of
the customers will not be generalized. Every company including Amazon has to take adequate
safety and security measures while making its business digitalized. This is very important so that
customer can freely operate the website of the company without worrying about the security
purpose.
Search option:
This is an important element while designing the website of the company and operating
the business of the company digitally. As per this principle the search option of the company
need to be visible and displayed over the main screen of the website (Babenko and et.al., 2019).
This will allows the customers to have better searching and will again help the companies too in
terms of raising sales and revenue.
Efficient action:
Operation of business over the digital platform is not only enough for the companies until
they will be responsive towards the audience. This means that is also an important principle of e-

commerce that along with operation of the business of the company they have to be responsive
towards their customers. This means that every company have to be responsive in terms of
answering and redressing the feedbacks of the customers while operating the business over
electronic mode.
Responsive technology:
It means making the technology responsive in such a manner that the customers will not
have to wait for the running of the website of the company. Making the website of the company
to be unique with many features will be of no use if it is not responding and hangs while
working. This principle also need to be kept by the companies while operating their e-commerce
activities.
Knowledge about target audience:
It means that the operation or conversion of business into digitalized mode will be made
and depend upon the target audience. This can be understood as if the targeted audience is not a
user of digital platform, and they like to purchase directly through stores then in that case making
the business at digital platform will be of no worth (Stair and Reynolds, 2020). This shows that
knowledge of the target audience before digitalization of the business or while transacting the e-
commerce activities is very essential for the Amazon and other companies so that they can
achieve their targeted goals.
Product detail page:
E-commerce activities or the digital operation of the business is of no worth if the
product detail page is not being included. This manes that this is an important principle which
need to be inculcated by every company including Amazon so that the customers can acquire the
knowledge about the product. This will have dual advantage in the form of compliance of the
principle as well as raising the interest of the customers towards the company and the products.
Checkout process:
It is also an important principle and element that made the operation of the e-commerce
activities effective. This means that if the checkout process is very complex then no customer
would show in using the website. However, making the process as per customer's need and wants
will lead to bring more customers towards the company. Thus, every company have to follow
this principle while making their e-commerce transaction and designing their websites.

CONCLUSION
From the above report it is concluded that digitalization of the business or making the
business digital is very important for the company in order to move along with the trends or to
meet the competitive requirement. Digitalisation of the business also allows the Amazon to take
various advantages in the form of widening the scope, raising the percentages of sales and
revenue and various other. It is also understood from the report that there are various emerging
digital business models that assist the companies in the operation of their operation. Likewise,
making of collaborative relationship and strategic alliances with the involvement of digital
technology is also understood from this report that how digital technology made the implication
of these concepts easy. E-commerce and the various principles that is needed to be considered by
the company is also summarized under this report that how consideration towards these
principles are important for the companies and the operation of their business.
Although being a successful operator of business through digital platform it is being
recommended to Amazon that a careful analysis and compliance of the e-commerce principles
and implementation of subscription model would help the company in terms of raising its
efficiency. Through this Amazon can also increase its sales and revenue share more than that is
being earning and generating now.

REFERENCES
Books and journals
Alsheyadi, A., 2020. Collaborative e-business efforts and firm performance. International
Journal of Productivity and Performance Management.
Antikainen, M., Uusitalo, T. and Kivikytö-Reponen, P., 2018. Digitalisation as an enabler of
circular economy. Procedia CIRP. 73. pp.45-49.
Babenko, and et.al., 2019. Factors of the development of international e-commerce under the
conditions of globalization. In SHS Web of Conferences (Vol. 65, p. 04016). EDP
Sciences.
Blaschke, and et.al., 2017. Designing business models for the digital economy. In Shaping the
Digital Enterprise (pp. 121-136). Springer, Cham.
Calvino, F. and Criscuolo, C., 2019. Business dynamics and digitalisation.
Cassia, F., 2017. Digital landscapes. How digitalisation impacts business. Sinergie Italian
Journal of Management. 35(May-Aug), pp.25-31.
Geleilate, J.M.G., Parente, R.C. and Talay, M.B., 2021. Can systems integration lead to
improved performance? The role of strategic alliances. Industrial Marketing
Management. 95. pp.17-28.
Holm, A.B. and Günzel-Jensen, F., 2017. Succeeding with freemium: strategies for
implementation. Journal of Business Strategy.
Martinez, F., 2019. Process excellence the key for digitalisation. Business Process Management
Journal.
Nisar, T.M. and Prabhakar, G., 2017. What factors determine e-satisfaction and consumer
spending in e-commerce retailing?. Journal of retailing and consumer services. 39.
pp.135-144.
Rossato, C. and Castellani, P., 2020. The contribution of digitalisation to business longevity from
a competitiveness perspective. The TQM Journal.
Stair, R. and Reynolds, G., 2020. Principles of information systems. Cengage Learning.
Viglietta, G., 2019. Going Viral with the Subscription Business Model. In LA Symposium
Journal (Vol. 72, pp. 14-18).
Wirtz, B.W., 2019. Digital business models. Springer International Publishing.
Online references
Pardo, D., 2018. 8 advantages of digitalization of business. [Online]. Available through
<https://ehorus.com/digitalization-of-business/>
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