Etsy's Digital Transformation: Trends, Alliances & Digital Currency

This report provides a detailed analysis of the influence of digital technology on Etsy's business growth. It explores key trends and advantages of digital technology in managing virtual businesses, evaluates emerging digital business models, and examines the impact of collaborative relationships and strategic alliances. The report also discusses the importance of digital currency on digital businesses, including the impact of recent crashes. It covers topics such as productivity boosts, cost reduction, quality consistency, decision-making improvements, and enhanced communication. The analysis includes a discussion of cybersecurity and ethical considerations, concluding with insights into Etsy's specific application of these digital strategies and their overall impact on the company's performance.

Role of Digital
Technology in Etsy.
EXECUTIVE SUMMARY
This report aims at the detailed description of influence of digital technology in global
business environment. Focused study with key points in relation with advantages and key trends
of digital technology enables deep understanding of virtual businesses. Apart, study conducted
on emerging digital business models enables to understand the key needs of emerging business

world. Further this report gives detailed description on business collaboration and strategic
alliances with emphasis on advantages and disadvantages of the same. At last, the impact of
digital currency on digital businesses unfolds the positive and negative influence caused by
digital currencies on e-commerce business.
Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Understand the key trends and advantages of digital technology and implications for
managing virtual business in the global environment ................................................................4

Critically evaluate new and emerging digital business models and key business issues such as
cyber security and ethics etc. in managing effective e-business.................................................6
Impact of new collaborative relationships and strategic alliances through digital technology in
context to Etsy.............................................................................................................................8
Advantages and disadvantages of new collaborative relationships and strategic alliances
through digital technology..........................................................................................................8
Application to your chosen organisation on how they use or could use new collaborative
relationships and strategic alliances through digital technology.................................................9
Discuss the importance of digital currency on digital businesses ............................................10
Critically discuss the impact of recent crash of digital currency on digital businesses............10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Digital technology plays an important role in the business growth. Digital business refers
to the process of starting digital technology to a particular business. It helps in enhancing the
consumer experience and products of a company. The main aim of the introducing digital
technology in a business is to maximise the profits of an organisation. It plays a significant role
in the success of the business. This report is based on Etsy company, which is an America based
e-commerce company which offers handmade or vintage and craft supplies. Company's
headquarters are present in Brooklyn, New York. It was founded on 18 June, 2005 by Robert
Kalin. In this report, different trends and advantages of digital technology and new and emerging
digital business models are discussed. Also the impact of new collaborative relationships and
strategic alliances through digital technology are evaluated.
MAIN BODY
Understand the key trends and advantages of digital technology and implications for managing
virtual business in the global environment
Digital businesses are the business organisations who has adopted the new and innovative
technologies in their business which gives the business an advantage over the other. The main
motive of introducing technology is smooth flow of business operations and growth of the
business. Nowadays digital economy is growing rapidly which also forces different business
organisations to use digital technology to compete in the relevant industry.(Aggarwal and
Kapoor, 2018). Digital technology reduces the work load of the business organisation which
gives a great convenience to the organisations. Many businesses are adopting this to enjoy the
benefits of digitalisation. Some of the advantages of digital business are discussed below -
Boosts productivity – By using advanced and hi tech technology, a company can boosts its
productivity. For example – if a food company uses advanced machinery for the production
of their food products then company can produce more quantity with less labour cost which
is also a benefit for the company. Also the chances of mistakes are reduced by using this

with a fast process. Increase in productivity of a company directly leads to better financial
gains of a company.
Lower operational cost – Manual processes of business activities are more time consuming and
company have to incur a lot of operational cost on manual process. On the other hand
automated process are much faster and company can save a lot of cost with less chances of
mistake by adopting this process. (Hou and Shen 2022)
High quality and consistency – It is one of the main advantage of the digital technology that all
business processes are made consistently with high quality. There are chances of errors with
human touch but with the technology it eliminates all the chances of errors. Also it promotes
efficiency in the organisation.
Better decision making – Digitalisation works closely with data management which helps the
organisation to gather data for a related subject and through that data a company can make a
suitable and best decision for the benefit of the company. Some companies also take it on
another level and uses big data to make their decisions. It also promotes to think innovative
and make a innovative decision that can help a company to achieve their target or objective.
Improves communication and teamwork – Digital technology in a business helps a company
in communicate better without any disturbance to discuss important matters, even when a
person is sitting far. It helps in better alignment of the goals which can be achieved
collectively through digital technology. (Dornberger, 2020)
Key Trends in Digital Business -
With advancement in the technology, different trends and changes happens in the
business. Some of the key trends are discussed below -
 Hybrid workplace – Because of Covid – 19 many virtual and hybrid workplaces are
developed in the business organisations for the continuous flow of business activities.
The work from home set up is an useful tool for the employees to work from far off
places but it is not an ideal solution. Nowadays companies are adopting this method not
only for health reasons but also to promote efficiency and cost reductions.(Hilali and
Manouar, 2019) )
 Data protection and security – After the number of internet users are increased in a
larger quantity, the need for data security has also increased. Not only companies but

consumers are also demands data security. Also many big companies like Facebook has
encountered security breach issues.
 Automation and AI – AI stands for Artificial Intelligence which is used at many places
such as analytics, data protection and search algorithms to support business activities. It
is helpful in improved and better support experience to customers and improving
efficiency among then staff.
Etsy company is using advanced technology in various business activities. Company uses
advanced machinery for their production and uses advanced technology to manage the day to day
business activities of the company. This results in increased productivity of the company as well
as improved overall efficiency in the company. Company's employees are connected even from
far off places, because company adopted hybrid work places to provide convenience to staff in
an effective manner.
Critically evaluate new and emerging digital business models and key business issues such as
cyber security and ethics etc. in managing effective e-business
New and emerging digital business models refers to different, new and disruptive ways
that an organisation uses to gain an advantage and maximise their revenue by using the
technology. It is important to follow a new or emerging business model as many companies are
making digital innovation and adopting customer experience strategies to create an edge in the
market. The perfect example of this is Uber, it is built on a sharing economy business model. The
company simply connects riders with the drivers who own the vehicles which was a great
innovation in the transportation industry and changed the perspective of the customers (Gomes,
2020).There are different types of models such as Free Model, Freemium Model, E Commerce
Model, On Demand Model etc. It is useful for a company to capture the market share in the
relevant industry and make a strong brand name among the consumers.

Issues in managing effective e-business -
Adoption of digital technology in business gives a great advantage to the business. But
also with advantages, many problems and issues are also faced by the business organisation.
Some of the issues are discussed below -
 Cyber security – It is necessary for a e-business to have a proper cybersecurity practices
and tools to eliminate the risk of data stealing and many other issues. A business can not
afford to have a downtime in the business activities such as sales because every order or
operation is important for the company for their financial success. A business should
have required or suitable data security software and action plan in case of the cyber
attack.
 Competition – Another main issue in adopting a digital business model is the
competition in the relevant industry. It is necessary for a company to maintain
competitive prices as well as high quality of product or service to attract the customers
due to high competition in the market. It is difficult for a digital business to stand out
from other different digital businesses as they are also using advanced and innovative
digital business model to gain competitive advantage. (Heaven, 2018)
 Customer Experience – When a company uses digital technology to run its business
operations, it becomes a challenge for the company to give customers a traditional
experience. For example – during online shopping many people prefers to check the
product by touching which is not possible in that process. However, companies focus on
giving quality products to customers at reasonable prices to make their experience
excellent and gain customer retention.
Etsy company follows a E–Commerce model to sell handmade and vintage products to
their customers through the medium of internet. This business model is perfect for this business
types. However, company make changes to this model in order to maximise their profits. Etsy
company have proper data security software as well as action for protecting the data and
eliminate the interference of hackers. Company very well focuses on giving a smooth experience
to the customers and company offers high quality products at reasonable rates which also leads
to customer satisfaction. Company also faces issues due to using digital technology and

sometimes it becomes difficult to fulfil all the needs of customer as company operates on a
medium scale compared to Amazon and many other e-commerce company.
Impact of new collaborative relationships and strategic alliances through digital
technology in context to Etsy.
Collaborative Relationship and Strategic Alliance – Collaborative relationship or
collaboration can be defined as the process where two or more businesses/ organisations or
people come together to perform/complete a task with the aim of achieving an objective. To
collaborate with each other, companies forms strategic alliances and share their assets, risks,
technology, strengths and control with one another in order to get competitive advantage and
acquire greater value in the market. In strategic alliances, both the partners have common
objective to pursue while remaining independent. (Jing and et. al. 2021)
Strategic alliances can be split into 3 kinds as mentioned below -
 Joint Venture – Joint venture refers to the creation of new child company formed by two
parent companies. Both the parent companies owns a proportion of share in the child
company.
 Equity strategic alliance – In such alliance, one company purchases equity in another
company in order to gain benefit from the competencies of other.
 Non-Equity strategic alliance – Non Equity alliance comes into place when two
companies agrees to collaborate together and form strategic partnership on a contractual
basis.
Advantages and disadvantages of new collaborative relationships and strategic
alliances through digital technology.
Advantages Disadvantages
 Collaboration aids in improving
resources of both organisations. Skills
and experience of employees is doubled
 Collaboration and strategic alliances are
formed to bring more efficiency with
new minds and creating innovative

Organisations use mutual digital
software as their technical resources to
store informations and perform their
operations effectively.
 Strategic Alliance increases brand
awareness in entirely new marketplace.
Use of digital media platforms help
organisations to boost their brand
presence at digital level.
 Through digital tech platforms it is easy
for companies to access more new
customers. Digital trade applications
used by organisations collaboratively
attract higher customers attention
towards their products and services.
ways to achieve goals. Organisations
uses technical software and internet
tools for research and communication
work but such digital platforms can
also distract employees creating delays
in achieving targets.
 Companies have relatively confidential
information on cloud based software
and weak data security may cause
leakage of crucial information
regarding both merged companies.
Here digital technology can act as weak
resource for both organisations.
Application to your chosen organisation on how they use or could use new
collaborative relationships and strategic alliances through digital technology
Further mentioned is the information regarding the use of collaborative relationship and strategic
alliances through digital technology in context to Etsy Inc. In rapidly changing business
environment it is necessary for e – commerce organisation like Etsy to earn competitive
advancement in the market. Growing market and demand of customers have created an urge for
the company to fulfil every need and wants of their customers by providing demanded products
on time. To meet the rising demands of customers it is must for Etsy to form collaboration with
new supply chain partners. Here, digital technology comes into action to make collaboration and
strategic alliances with suppliers more feasible and efficient for Etsy.
Etsy uses various softwares and tools to conduct business with their suppliers. For example –
Etsy has its own e-commerce website and application where all the collaborative business

vendors can list their product for selling purpose. Apart, company uses logistic management
software to mark and maintain the supply chain process along with planning of product
development and sharing resources with the vendors. Other businesses like suppliers and vendors
which are in collaboration or strategic alliance with Etsy also uses digital technology in the form
of applications for process sharing, delivery of products, data sharing etc. Cloud storage
softwares are used by Etsy to maintain and collect the data of their customers.(Kreutzer, 2021)
Discuss the importance of digital currency on digital businesses
Digital currency can be defined as the currency without physical presence in the market
and can only be accessible through the use of technology. Mobile phones and computers are used
to access digital currency as it only exist in electronic form. It can also be called as electronic
currency. (Mamédio and et. al. 2019)
In past few years, use of digital currency has experience abrupt boom in digital business.
Introduction of digital currency in digital business has brought significant impact on businesses.
Few of them are mentioned below.
No chargebacks- Use of digital currency has minimised the frauds caused by chargebacks.
Sometimes customer asks for full refund even after using the product. Such practices by
customers cost businesses. By using digital currency the transaction is complete once customer
places the order.
Convenient and faster Payments– Traditional payment methods cause delay in settling
financial transactions for both businesses and customers. Sometimes it takes weeks to appear
amount in bank accounts. By using digital currency the transaction is completed within a click
and financial transactions can be reflected in accounts as soon as transaction is completed.
Easier for international customers to do business- Customer's around the globe can place
order for any desired product from e-commerce platform and payment can be made through
digital currencies. This helps e-commerce business to gain more customer bandwidth across
nations generating more revenues for the company.(Milani, 2019)

Critically discuss the impact of recent crash of digital currency on digital businesses
In recent years market has experienced both bubble and burst of digital currencies. In last
5 years use of digital currency method has been accepted by customers at relatively higher rate.
Though, due to several economical factors, steep downfall can be observed in use of digital
currency causing the crash of digital currency market. Bubble stage can be defines as the stage
where the digital currency stays stable and experience sudden rise in its value. The phase of steep
rise in the value of digital currency is termed as bubble. On the other hand when the value of any
digital currency falls down at higher rate than its growth rate relatively, than it is termed as crash
or burst of the currency.(Perepelitsa and Timofeyev, 2022)
During the bubble phase, digital businesses like e-commerce business started their
transactions in digital currency due to instant settlement of transaction with traders in different
countries along with minimum transaction charges. But sudden crash in digital currencies in past
3 years have put digital businesses to use traditional monetary transaction methods. The crash
have also impacted businesses in several ways -
 In bubble face, e-commerce companies heavily invested in digital currencies like crypto,
Ethereum, Tether and also invested in blockchain technology to boost their finance
reserves. Steep fall in digital currencies or crash of digital currencies caused loss of
financial reserves to the -commerce companies.
 When accepting digital currency as a mode of payment there was accurate transparency
and frequent financial transactions settlements. Sudden crash of crypto, tether has made
companies and people to stop dealing in digital currencies creating traditional hindrance
in settling of financial transactions between both parties.(Xiaochun and Shouyang, 2020)
 Due to crash of digital currencies, companies adopted their traditional methods of
creating cash reserves in financial bodies charging hectic amount of depository annual
charges for the companies. This result in higher cost for the e commerce companies to
maintain financial reserves ultimately affecting the cost of products and services of the
company.

CONCLUSION
It can be concluded from the above report that digital business in present era has
definitely captured the global market. Mentioned advantages of virtual business are the facts and
reasons to understand the need of digital business in this technologically advance period. It can
also be known that multiple businesses have acquired digital business models to carry their
business digitally. Collaboration and strategic alliances between business creates new market
place and extended customer base for the businesses. It can also be concluded that digital
currencies have created hassle free transaction channels for the e-commerce and other virtual
businesses but crash in the market cause companies to adapt their traditional transactional
approach. No doubt, use of digital currency has created an interface which would turn out to be
beneficial for the companies in long run after this crash period will vanish.