Digital Business (Week 2) Flashcards
What is Digital business?
The creation of new business designs by blurring the digital and physical worlds
What is digital disruption?
Digital disruptions are rapid changes caused by new digital technologies, altering industries, markets, and business models.
What is E-Commerce?
The process of selling and buying goods through electronic devices
What is E-Business?
E-business is using the internet and digital tech for buying, selling, and managing business processes with suppliers and partners
What is B2C?
Business selling good or services to customers
What is B2B?
Sales of good or services to other businesses
What is C2C?
Consumers selling to other consumers
What is M-Commerce?
Using hand-held devices to perform transactions
What is L-Commerce?(Land-based)
M-Commerce transactions targeted to consumers in specific places and times
What is Value?
The way we perceive things
What is a value chain?
A sequence of processes that add value to a product or service, from raw materials to distribution
What is Order fulfillment?
All the steps required to give customers what they ordered, plus any extra services to keep them satisfied.
What is Logistics?
The movement and storage of goods, services, and information from where they start to where they’re used
What is a Bricks and Mortar business?
Companies based in the physical world
What is a Pure play business?
Companies that only engage in E-Commerce
What is a clicks and mortar business?
Companies that engage in E-commerce and have a physical store
Advantages of E-commerce
–> 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
Disadvantages to E-commerce
–> Regulatory barriers
–> Fraud issues
–> Digital divide
–> No ‘touch and feel’
–> Readiness for digital technology
What is Disintermediation?
Removal of intermediary steps in a
value chain, e.g., selling directly to consumers
What is Channel Conflict?
Tension among different distribution chains for the same product or service
What is Reintermediation?
Moving the middleman role in a value chain to a new provider
Effects of producing Tangible products on a business:
–> 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
Effects of producing Digital Products on businesses:
–> 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.
Strategies to increase price for digital products
–> Patenting
–> Versioning
–> Creating a network
effect and deriving extra value from it
–> Product bundling and cross-subsidisation
What is a Sharing Economy?
A system where people share access to goods and services, often facilitated by a digital platform
Advantages of a Sharing Economy
–> Save money, earn income
–> Reduce carbon footprints
–> Strengthen community ties
Disadvantages of a Sharing Economy
–> Market domination by major platforms
–> Concerns about worker exploitation in on-demand services
–>Platforms engage independent contractors, not employees
–> Instances of unfair business practices
