Digital Business (Week 2)

Question 1

What is Digital business?

Answer 1

The creation of new business designs by blurring the digital and physical worlds

Question 2

What is digital disruption?

Answer 2

Digital disruptions are rapid changes caused by new digital technologies, altering industries, markets, and business models.

Question 3

What is E-Commerce?

Answer 3

The process of selling and buying goods through electronic devices

Question 4

What is E-Business?

Answer 4

E-business is using the internet and digital tech for buying, selling, and managing business processes with suppliers and partners

Question 5

What is B2C?

Answer 5

Business selling good or services to customers

Question 6

What is B2B?

Answer 6

Sales of good or services to other businesses

Question 7

What is C2C?

Answer 7

Consumers selling to other consumers

Question 8

What is M-Commerce?

Answer 8

Using hand-held devices to perform transactions

Question 9

What is L-Commerce?(Land-based)

Answer 9

M-Commerce transactions targeted to consumers in specific places and times

Question 10

What is Value?

Answer 10

The way we perceive things

Question 11

What is a value chain?

Answer 11

A sequence of processes that add value to a product or service, from raw materials to distribution

Question 12

What is Order fulfillment?

Answer 12

All the steps required to give customers what they ordered, plus any extra services to keep them satisfied.

Question 13

What is Logistics?

Answer 13

The movement and storage of goods, services, and information from where they start to where they’re used

Question 14

What is a Bricks and Mortar business?

Answer 14

Companies based in the physical world

Question 15

What is a Pure play business?

Answer 15

Companies that only engage in E-Commerce

Question 16

What is a clicks and mortar business?

Answer 16

Companies that engage in E-commerce and have a physical store

Question 17

Advantages of E-commerce

Answer 17

–> Eliminates rent costs

–> Reduced transaction costs

–> More accessible

–> Web sites available 24/7

–> Ease of updating existing and distributing new information

–> Smaller firms can compete

Question 18

Disadvantages to E-commerce

Answer 18

–> Regulatory barriers

–> Fraud issues

–> Digital divide

–> No ‘touch and feel’

–> Readiness for digital technology

Question 19

What is Disintermediation?

Answer 19

Removal of intermediary steps in a
value chain, e.g., selling directly to consumers

Question 20

What is Channel Conflict?

Answer 20

Tension among different distribution chains for the same product or service

Question 21

What is Reintermediation?

Answer 21

Moving the middleman role in a value chain to a new provider

Question 22

Effects of producing Tangible products on a business:

Answer 22

–> Producing extra items costs more as production nears capacity.

–>Competitors maximize profit by producing until the cost of making one more item equals the market price

Question 23

Effects of producing Digital Products on businesses:

Answer 23

–> Near-zero cost for extra downloads; most costs are upfront.

–> This leads to price cutting to capture the market, but if everyone does it, profits vanish.

Question 24

Strategies to increase price for digital products

Answer 24

–> Patenting

–> Versioning

–> Creating a network
effect and deriving extra value from it

–> Product bundling and cross-subsidisation

Question 25

What is a Sharing Economy?

Answer 25

A system where people share access to goods and services, often facilitated by a digital platform

Question 26

Advantages of a Sharing Economy

Answer 26

–> Save money, earn income

–> Reduce carbon footprints

–> Strengthen community ties

Question 27

Disadvantages of a Sharing Economy

Answer 27

–> Market domination by major platforms

–> Concerns about worker exploitation in on-demand services

–>Platforms engage independent contractors, not employees

–> Instances of unfair business practices