Overview of the Key Trends and Advantages
The report aims at providing an evaluation of strategies of an independent B2C e-commerce business from the perspective of a business consultant. The e-commerce B2C business chosen for this particular report is Amazon. As far as the business overview is concerned, it can be said that Amazon.com provides an online retail-based shopping service. It delivers service to the four key customer sets comprising sellers, consumers, enterprises and content creators (aboutamazon.com 2022). The firm is also known to provide other promotional and marketing services like online advertising and co-branded agreements of credit cards. The firm also serves its consumers through a retail website focusing on the price, selection and convenience. Amazon is known to design its website to allow its products to get sold across varied product categories. It further sells and manufacture Kindle e-reader and aims towards offering the customers the lowest price through offers of free shipping and daily product pricing, including the membership across Amazon Prime. The company also serves the enterprises and the developers via Amazon Web Services, which helps in providing technology infrastructure enabling any kind of business. Amazon operated across two key segments, one across North America and the other International. The company was founded in the year 1994 by Jeff Bezos.
When it comes to the growth of the business nationally, it can be said that North America seems to make up for a bigger share of the business, recording close to around $64.4 billion in sales in comparison to the international sales of around $30.6 billion (Davis 2021). The overall sales at the firm rose to about $108.5 billion, which is 44 per cent more than the previous year. The company’s profits tripled, reaching close to around $8.1 billion (nytimes.com 2021). As far as overseas expansion is concerned, Amazon reported that the lockdowns due to pandemics across Europe and UK drove higher sales on the site. Around March, Amazon launched a new site across Poland. The company also expanded the brick-and-mortar presence across London launching three grocery stores. Amazon also invested hugely in connecting with the local customers.
As far as the report structure is concerned, it commences with an overview of the major trends as well as advantages of the digital technology along with the inferences of managing the computer-generated business worldwide. The report also evaluates the evolving and the innovative digital based business model in terms of the key issues of the business associated to ethics and cyber security. This report further evaluates the influence of the strategic alliance and the collaborative relationship of the chosen firm via digital technology. Lastly, the report also critically discusses the cryptocurrency’s influence on the business and discusses El Salvador’s tender for legal adoption.
Definition of Digital/Virtual Business
The digital based business indicates one that makes use of technology as the advantage across the internal and the external operation (Luz Martín?Peña, Díaz?Garrido and Sánchez?López 2018). Information technology brought about a change in the operation and the business’s infrastructure from the time when the internet became available to individuals and businesses (Lee et al. 2018). This transformation has brought about a profound change in how the business conducted its daily operations. It also maximised the benefits of the data assets and the technology-intensive initiatives. In other words, the digital business use technology to create value in the business models, the experience of its customers and internal capabilities for supporting the core operations. Digital business aids in creating a competitive edge that depends on the unique combination of physical and digital resources (Bican and Brem 2020). They seem to do things that others are not able to, and in a manner that builds the comparative advantage.
The benefits of the virtual or the digital based business are as follows (Karpunina et al. 2020):
- Results in Enhanced Productivity and Efficiency: Adoption of the latest technology such as big data, mobile devices, cloud and analytics aid the business in achieving higher levels of productivity and efficiency.
- Development of New Channels of Contact with Customers: The digital occurrence not only opens up the sales channels but also newer means of communication with the customers. It is considered as a means of enhancing not only customer loyalty but also sales.
- Effective Decision-Making: The digital business makes it possible in having constant contact with customers, which also enables the business in getting to know them better.
- It Encourages Innovation: Digital business leads to innovation dynamics that enable it to be increasingly aware of the newer possibilities and trends put forward by the new technology.
- Leads to Improved Working Condition: Digital business has improved working conditions such as flexible working hours or teleworking.
The key tendencies in the digital business include (Pihir, Tomi?i?-Pupek and Furjan 2018):
- Enhanced Online Shopping:Increasing number of customers prefer online shopping due to accessibility, convenience, consolidation of baskets and zero effort required physically.
- Booming of Privatized Labelled Products: This involves the purchase of bulk goods from the factories, followed by labelling them with the brand of the business owner. An increasing number of entrepreneurs are moving towards this kind of trade since it eliminates the production step of the procedure. Hence, they can focus on marketing the products and have an early understanding of the return on investment.
- Enhanced Prevalence of Market Place Over The Online Stores: The online marketplace offer consumer goods that run the entire gamut of the essentials and the non-essentials, both dry as well as wet and from the edible to the non-edible. Online stores are also found to exclusively sell the product of a single brand or various brands of a single firm.
- Rising Capabilities of Fulfillment: With varying levels of fulfilling demandson the local and the international level increasing number of players are generally predicted towards joining the game. Each of them is expected to put across higher levels of benefits for staying competitive and winning the customers of the online stores.
- Artificial Intelligence (AI):AI in the form of Virtual Reality (VR) and Augmented Reality (AR) is on-demand on the e-commerce platforms, with the consumers looking forward to replacing the shopping experience in-store. The use of AI not only resolves the challenge of the virtual fitting but also analyse the purchase and the browsing history to present the customers with the options as per their specific preferences (Tarafdar, Beath and Ross 2019)
When it comes applying the digital business with advantages, it can be said that being a digital business, Amazon can enhance its efficiency and productivity through better decisions and technological tools, which makes the work faster (Bonnet and Westerman 2021). Due to its digital presence, clients can adopt multiple ways to establish contact with the firm. It is also found that the digitalisation of business makes it possible to have constant contact with customers, which provides Amazon with the opportunity of knowing the customers better. It further puts across an opportunity for Amazon to apply Big Data in making decisions that create an impact on the whole business such as marketing as well as the production process. Amazon’s digitisation generally leads to dynamic innovation which enables it to be increasingly aware of the new possibilities and trends offered by the newer technologies. A digital business-like Amazon will have improved working conditions that seem to offer different benefits not just to employees but also to the firm. It also aids in decreasing the turnover of the job and enhance the retention of talent.
The rising inclination can explain the key trends towards online shopping. It has been amplified with e-commerce sales across the world. It, including Amazon, is estimated to be about US$4.28 trillion for the year 2020 (statista.com 2021). It is, however, projected to rise by US $5.4 trillion for the year 2022. The trend of the booming of the private label products led to the rapid and steady growth of the wellness, health and self-care products of Amazon in the year 2020 (Wright 2020). The marketplace trend prevailing over the online store, on the other hand, enables the shoppers at Amazon to mark a basket consolidation as premium. It helps in fulfilling the desire of the consumer to discover every possible thing under a single roof. As far as the trend of fulfilling the growing capabilities are concerned, it has been found that newbie sellers that learn the way of selling stuff on Amazon need to know that the Fulfillment by Amazon (FBA) enables the business to grow at a faster rate. This option releases them from worrying about shipping, storage and returns since Amazon seems to take care at a reasonable rate. The incorporation of Artificial Intelligence (AI) enables Amazon clients with instant customer service as well as product information such as colour, size as well as availability with just a tap on the screen of the phone or kiosks.
Advantages of Digital or Virtual Business
An emerging and fresh digital based business model might be well-defined as this model seems to leverage the digital technologies for the improvement of the various aspects of the organisation. It includes how a company seem to acquire customers and the product or service it provides (Gregori and Holzmann 2020). A digital business model is one where digital technology helps in enhancing the value proposition. Some of the new and emerging models of digital business are as follows (Li 2020):
- Freemium Model:It is particularly meant for the products having a lower marginal cost. This model offers a free version that is not satisfying but is already attractive for the customers, and it tries to upsell with increased services.
- Subscription Model:This model aims at binding the customers for the longer term through splitting the monthly payment.
- Free Offerings:In this model, usage is completely free, and the firm tries to generate the revenues depending on factors such as advertising
- Marketplace Model: This is a popular model for internet business. Here the marketplace tries to sell varied products. This model also offers a double-sided platform.
- Sharing Economy:This model explains how sharing of goods is done with the other physical and tangible assets.
- User Experience Premium: This focuses on realising higher prices through offering an effective user experience.
- Pyramid Model:This are built across the affiliate system
- Digital Ecosystem:This is considered one of the successful models. It locks customers into an ecosystem of service and offerings so that they do not leave. Firms can make multiple points along the customer journey
- On-Demand Model:This model indicates that services can be brought on demand.
The basic yet vital form of cybersecurity refers to encryption since it keeps the data safer across the organisation. It is vital for keeping the email, documents and all the forms of encrypted data from being stolen, intercepted or misused by any third party (Nayyar, Rameshwar and Solanki 2020). The digital business also faces various ethical issues such as misuse of personal information, deep fakes and misinformation, lack of oversight and the acceptance of the responsibility, respect for the customers and the employees, moral use of resources and data and the responsible adoption of the disruptive tech. In the context of the issues of the cyber security as well as ethics, the fresh and emerging model of digital business model helps in the generation of added value. The Freemium model of digital business also helps characterize the sales with the help of trends such as early onboarding and automation. The readiness of the customers towards payment along with independent value creation acts as one of the key features of the digital business model.
The subscription model represents a new and emerging business models Amazon uses. Here products and services can be offered as subscriptions. The amount generally occurs once a new service gets created, which is periodically billed. The aim lies in binding the customer for the long term. In comparison to single time purchases, the customer can benefit from the extensions and improvements of the service. As per the model, non-divisible products might get converted into subscriptions. Amazon provided us with an example of this system on how the products such as detergents, cosmetics, etc., can be automatically delivered. Subscription is considered quite powerful as this allows in generating income with time and expand the organisation with too much high as well as lows (?im?ek et al. 2022)
New collective partnerships refer to the actions and agreements which the consenting organisation makes for sharing the resources for accomplishing the mutual goals (Margerum and Robinson 2015). Collaborative relationships rely on the involvement of at least two parties who agrees on sharing resources such as knowledge, finance and the people. Organisations in collaborative partnerships seem to share common goals. The essence of such a relationship is to mutually benefit both parties working together.
Key Trends in Digital/Virtual Business
Strategic alliance refers to the procedure between the two organizations for taking up a project that is mutually beneficia, with each firm retaining its independence (Tjemkes, Vos and Burgers 2017). The agreement is considered less binding and complicated compared to the joint venture in which two business seems to pool resources for the creation of a distinct business entity. A firm might enter into a strategic alliance for expanding into the new market, improving the product line or developing an edge over the competitors. This arrangement enables the two businesses in working towards a common goal that benefits both. The relationship might be too long or short, while the agreement might be informal or formal. Strategic alliances are flexible and have some burdens which the joint venture can include. Both the firms does not require merging the capital as well as remaining independent. The strategic alliance has its risks. While agreement happens to be clear for both firms, there exist differences in how firms seem to conduct business. The differences might lead to conflict. Besides, when a strategic alliance requires both parties to share proprietary information, there should be trust existing between the two allies. In a strategic alliance for longer-term, one of the parties might become dependent on others. Disruption of alliance generally endangers the health of the firm.
The advantages as well as the disadvantages of the new collective relationship through the digital technology include:
- Improved Team Interaction:Digital collaboration seems to play a key role in improving the interaction of the team, particularly the team members who happen to be geographically dispersed.
- Quicker Information Access: Collaboration through digital technology improves the workflow through ensuring that the employees seem to have admittance to the accurate content and the files at the most suitable time.
- Improved State of Business Execution:The tools of digital collaboration provide the employees with the flexibility and the agility to work as well as tackle problem whenever and wherever.
- Improved Knowledge Sharing:Knowledge happens to be the key asset of the firms as it provides a firm with an edge over the competitors.
- Reduced level of Productivity: It reduces personal contact, which can lead to confusion regarding what is being expected of the team members.
- Reduced Efficiency:A tool for online collaboration leads to quick cluttering of the email inbox with huge notifications.
- Diffusion of Focus:Collaboration via digital technology might be tempting in widening the overall base without an accurate assessment of the reasons and the reasons for their engagement. It might lead to the slowing down of the collaborative process.
The advantages and disadvantages of Strategic Alliances through Digital Technology:
- Makes it possible for every partner to concentrate on the activities that best matches the capabilities.
- Involves gaining knowledge from partners and developing competencies that might be exploited elsewhere.
- Involves adequate suitability of the competencies and the resources of an organisation for its survival.
- Speed to the market seems vital and strategic alliances improves it considerably.
- Partnerships seem to facilitate access to the global markets.
- One of the disadvantages of the strategic alliance is that one partner handling all business must depend on the second partner.
- Strategic alliances come with their own risk, particularly when the partners are not equivalent financially.
- Various alliances seem to be involved in the corporate culture clash or perceived diminution of independence.
In the digital age, teams are increasingly agile and collaborative. Amazon makes use of the new collaborative relationship through (amazon.com, 2022):
- Amazon Connect:Sold by Amazon Web Services, it designs the flow of contact, management of the agents and tracking the performance metrics without any required technical skills.
- Amazon Workdocs: It refers to a secured content collaboration sold by Amazon Web Services. The Amazon WorkDocs enables an individual to easily edit, create and share the content. And since it is centrally stored within the AWS so it can be accessed from any device.
- Amazon Chime: Sold by Amazon Web Service, it enables online meetings and video conferencing or business calling
- Amazon WorkMail: Sold by the Amazon Web Service, it is also a secure, manageable email and calendar service providing support for the existing desktop and the mobile email-based client applications.
- Amazon Worklink: It provides the employees with easier and secure access to the internalized corporate websites as well as web apps through the mobile phones.
When it comes to the formation of the strategic alliance, Amazon Web Service (AWS), an Amazon.com firm, announced a global, multi-layer agreement with the BlackBerry QNX, which is a world leader in intelligent security services and software. Together they formed a platform representing Intelligent Vehicle Data known as the BlackBerry IVY (amazon.com 2022). The BlackBerry IVY represents a cloud-based scalable software platform that enables the automakers in providing a secured and consistent way of reading the data of the vehicle sensor, normalising and also creating actionable insights based on the data both locally within the vehicle and in the cloud. The automakers can use this information for creating responsive services with the vehicle, which would enhance the experience of the passengers and drivers and also provide product insight to the manufacturer.
Application To Using Digital Business With Advantages And Key Trends Applied To the Chosen Organisation
A cryptocurrency represents a string of encrypted data that denote a currency’s unit. It is organised and monitored by the peer-to-peer network known as the blockchain, which also acts as the secured ledger for the transactions such as selling, buying and transferring (Swan 2015). Unlike physical money, cryptocurrencies remain decentralised, which indicates that they do not get issued by the government or any financial institution. The cryptocurrencies are created and secured through cryptographic algorithms, which are confirmed and maintained within a process known as mining, where a network of computers or any specialised hardware like an application-oriented integrated circuit process validates the transactions. The method incentivises the miners who seem to rum the network with cryptocurrency. Some of the examples of cryptocurrencies include Bitcoin, Ether, Litecoin and the Monero.
The influence of cryptocurrency on the landscape of digital marketing is massive. Today when we consider the data available to the digital marketers, most decisions are undertaken due to the building and the optimisation of the campaigns depending on the consumer data. The information enables a digital business to convert any person into a client. The cryptocurrency’s blockchain technology offers the consumers control, thereby limiting the pool of customers. For instance, if a digital business aims towards creating a highly targeted ad on Instagram that reaches 100 million people while converting three per cent of the audience into customers, then a digital business will have close to three million customers. If the pool of targeted audience suddenly decreases by 30 per cent, then the digital business shall only be able to reach 30 million people with close to 900,000 clients implying a drastic decrease. Besides, the blockchain also has an impact on the day-to-day aspects of the business including the marketing department. It might be used for fulfilling the critical objectives of marketing like brand recognition and fraud prevention. Blockchain also helps meet consumers’ desires concerning data safety and transparency. All the variables seem to have a significant level of impact on digital marketing with the notable gain lying in accessing the private data of the users.
According to Frankel (2021), El Salvador became the primary nation that has agreed to take cryptocurrency, bitcoin, as the legal tender. Certain economists believe that the idea can be economically dangerous for a developing country specifically. Economists can also not understand the need for cryptocurrency since they cannot understand the problem it solves. They also hold the belief that cryptocurrency is not designed well for fulfilling the key monetary functions since their prices happen to be extraordinarily volatile. The volatility is because cryptocurrency is neither backed by the reserves nor by the reputation of an established institution such as the government or the private bank. Thus, the bitcoin and the fellow cryptocurrency took due to the anarcho-libertarian distrust of the central bank. Various central banks, particularly the developing nations, hold a history of debasing the currencies. However, the adoption of bitcoin as the legal tender makes very little sense for El Salvador.
New and Emerging Digital Business Models
According to Hartley (2021), Bitcoin has not been received well in El Salvador. The domestic residents do not prefer to be obliged for accepting it. International markets also happen to be quite unenthusiastic. There has been a spread amongst the interest rate that government should pay its debt, with the US treasury rate being increased sharply due to the plan of adopting the bitcoin. There exists a function that the cryptocurrency does not serve. It involves facilitation of the illegal transactions. It is not considered as use that needs to be encouraged. Also, mining cryptocurrencies like bitcoin, which relies on the technology of the blockchain for verifying transactions, requires a huge amount of energy which harms the ambience.
Conclusion
On a concluding note, it can be said that through the report, one gets a closer insight into Amazon and its insight into its present growth nationally as well as globally. The report also overviews the key trends as well as advantages of the digital technology for the management of the virtual business. The report further undertakes a critical assessment of new as well as evolving new digital based business with regard to of the major issues of the business, such ethics and cybersecurity. The report also assesses the influence of the collective relationship along with the strategic alliance via the digital technology of the chosen organisation. One also gets an insight into the impact of the cryptocurrency on the chosen organisation along with a critical review of the Bitcoin adopted by El Salvador. The report also portrays that bitcoin and the other cryptocurrencies seem to be steadily being accepted worldwide. Businesses choose to undertake transactions using such currencies instead of the conventional procedures of financial banking. Such currencies seem to be built on blockchain technology and deploy decentralised networks. It is to be noted that the future of the digital business, whenever combined with then cryptocurrency appears brighter.
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