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Digital Technologies in Business > Week 2 - Digital Business > Flashcards

Week 2 - Digital Business Flashcards

1
Q

Define Digital Business

A
  • Creation of New Business Design by Blurring the Digital and Physical Worlds

“New business designs” - new Kinds of Products and Services etc
“Blurring the Digital and Physical Worlds” - Physical Products becoming Smart and Connected

  • Technologies No Longer just Enabling Doing the Same Things Faster and Cheaper but Changing the Very Way we Conduct Business
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2
Q

Explain concept - Waves of Business Digitisation

A
  • ‘digitisation’ Originated in late 90’s, when Companies Started to Use the Web to Sell Online - subsequent Rise of E-commerce
  • in 2000s, Web Continued to Transform Business
    Web 2.0, social media etc : users went From being Content Consumers To Content Creators
  • 2010’s have seen : Digital Devices Extending to Mobile and Everyday Devices. New Digital Extrants such as uber, airbnb are Shaking Up Existing Business Sectors
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3
Q

Define E-Commerce

A

Process of Buying and Selling Goods and Services Electronically
- Any Electronic Means, Not Just the Internet
- 2 Sides to Consider for a Company : Buying From Suppliers and Selling to Customers

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4
Q

Define E-Business

A

E-Commerce + the Use of Internet or Other Digital Technologies for Performing (internal) Business Processes and Coordinating with Suppliers and Partners

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5
Q

State and Explain the CATEGORIES Of E-COMMERCE In TERMS of NATURE Of PARTICIPANTS

A
  • Business-to-Consumer (B2C) : Retailing Products and Services to Individual Shoppers
  • Business-to-Business (B2B) : Sales of Goods and Services Among Businesses
  • Consumer-to Consumer (C2C) : Consumer Selling to Consumer
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6
Q

State and Explain the CATEGORIES Of E-COMMERCE In TERMS of BUYER’S CONNECTION

A
  • Through a Desktop Computer or Laptop
  • Mobile Commerce (m-commerce) : using Handheld Devices (e.g. smartphone or tablet)
  • Location-based Commerce (I-Commerce) : M-Commerce Transactions Targeted to Individuals in Specific Locations, at specific times
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7
Q

Explain ELECTRONIC DELIVERY in terms of SUPPLY Of SERVICES and SUPPLY Of PRODUCTS

A

SUPPLY Of SERVICES
- can Often be Done 100% electronically, with Considerable Cost Reduction Potential
- examples : Electronic Banking, Online Securities Trading, Online Job Markets, Travel Services etc
SUPPLY Of PRODUCTS
- a Few “Digitised” products : mp3s, e-books etc
- for Other Types of Products, a Reliable, Cost Effective Physical Delivery Strategy is a Key Issue

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8
Q

Define ORDER FULLFILMET

A
  • all of the Activities Needed to Provide Customers with Ordered Goods and Services, Including Related Customer Servies
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9
Q

Define Logistics

A
  • the Operations Involved in the Efficient and Effective Flow and Storage of Goods, Servies and Related Information from Point of Origin of Point of Conumsption
  • Traditonal Logistics : Large Amounts of Mateirals to a Few Destinations
  • “e-logistics” typically small parcels Sent to Many Home (in B2C)
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10
Q

Explain the following Types of Companies in the “New Economy” : Bricks and Mortar, Pure-Play, Clicks and Mortar

A
  • BRICKS and MORTAR : Traditional Companies Based in the Physical World Only
  • PURE-PLAY : Organisations are Companies that are Engaged Only in Electronic Commerce
  • CLICKS and MORTAR - Organisations are Those that Conduct Some E-commerce Activities, yet their Primary Business is Done in the Physical World
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11
Q

State 5 Advantages of E-Commerce

A
  • may Eliminate Need for Maintaining Physical Shop Front
  • Reduced Transaction Costs ; Increased Transaction Speed
  • Ease of Crossing Geographical Boundaries
  • Websites available 24/7
  • Ease of Updating Existing and Distributing New Information
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12
Q

State 5 Barriers to E-Commerce

A
  • SMEs’ Digital Readliness
  • Regulatory Barries
  • Suitabilitty of Product - ‘feel and touch’
  • Trust and Fraud Issues
  • Digital Divide
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13
Q

Explain the Impact of the Internet on Digital Business - CHANGING ECONOMIC OF INFORMATION

A

Interent has Changed the Economic of Information by :
- Shrinking Information asymmetry
Easier for Customers to Obtain and Compare Pricing and Other Info

  • Extending both Richness and Reach of Information Provision
    Digital Channels capable of Reach of Information Provision
    Opportunities for Mass Personalisation (cf. richness of information
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14
Q

Explain the Impact of the Internet on Digital Business - REDUCING TRANSACTION COSTS

A

Internet Potenitally Reduces Transaction Costs :
- Finding Buyers : No Mass-Mailing of Expensive Brochurs, or Expensive TV and Radio ads
- Fully automatic Collection of Payment
- (in some cases) Delivering Product (e.g. digitised products)
- Support : email, online FAQs, user forums instead of person to person, chatbots

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15
Q

Explain the Impact of the Internet on Digital Business - IMPACT on (Industry) VALUE CHAIN

A

from impacting the value chain

  • Tradionally, ICT were First Introduced to Support and Streamline Organisation’s Interval Value Chain Activities

to impacting the Value System
- the Intenet Offers a New Distribution Channel
- Allows Businesses to Coordinate More Closely with value Chain Partners (e.g. enabling data to flow between them)
- has Transformed many Industry Value Chains
Disintermediation : cutting out the “middleman”
Reintermediation : new types of middleman appearing instead

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16
Q

What is DISINTERMEDIATION?

A
  • removal of Intermdiary Steps in a Value Chain e.g. Selling Directly to Consumers

–> lower purchase transaction costs
–> potential price advantage

17
Q

Explain CHANNEL CONFLICT

A

Tension Among Different Distribution Chains for the Same Product or Service
- Channel Member Perceiebes Anther Channel to be Engaged in Behaviour that Prevents or Impeds it from Achieving its Own Goals
- e.g. web based direct sales channel
–> Risk of Alienating Traditonal Sales Reps (internal conflicts) or distributors (external conflicts)
–> Threats may Inlcude Lockouts or even Lawsuits by Distributors
- Disintermediation is Usually Not Instaneous

18
Q

Explain what REINTERMEDIATION is

A

shifting of the Intermediary Function in a Value Chain to a New Source

  • e.g. for Delivery now Need a Third Party Logistics Provider such a Royal Mail, Parcelforce, UPS
  • New Intermediaries : transaction brokers, e-marketplaces, price comparison sites etc
19
Q

Explain the Impact of the Internet on Digital Business - THE INTERNET & PORTER’S COMPEITIVE FORCES

A
  • 5 Major Forces of Competition Determine Industry Structure and How Economic Value is Divided Among the Industry Players in an industry
  • Porter noted - for Many Firms, the Internet has Intensified Most of these Forces
20
Q

Explain the Impact of the Internet on Digital Business - ECONOMIC IMPACT OF DIGITITISATION

A
  • But the Internet (and more recently mobile) also Create New Markets for Purely Digital Products and Services
  • Digital Products Markerts have a Different Cost Structure

Strategies to Avoid Downward Price Spiral :
- Patenting
- Versioning
- Creating a Network Effect and Deriving Extra Value from it
- Product bundling and Cross-Subsidisation

21
Q

Explain the Impact of the Internet on Digital Business - NON DIGITAL vs DIGITIAL PRODUCTS

A

for Traditional Industries with Tagible Proudcts:
- Marginal Costs (i.e. Cost of producing an Extra Product, e.g. assembling an Extra Car) Increases as Production Capacity becomes Stretched
- Each Competitor Makes Maximum Profit when they Set their Production Output to Level where Marginal Costs Meets Marginal Revenue (i.e. Market Price )

In Contrast, in Markets for Digital Products or Services such as Software, Music streaming etc
- Near-zero marginal cost (i.e. Cost of an Extra Downlaoded or Copy is Neglible ; Most of the Costs are Fixed Costs Incurred Early
- Creates Incentive to Undercut Prices of Competitors in Attempt to Grab the Market

22
Q

Explain Platforms and Sharing Economy - GIVING RISE TO THE SHARING ECONOMY

A
  • a Company may Not Make or Own Products at All
  • Internet has Enabled the Growth of what Some Refer to As the ‘Sharing Economy’
  • Original Intention : Internet-enabled Sharing
    Use of Tech Platforms to Allow Consumers to Make Unused Resources (Temporarily) Avaliable to Other Consumers
  • People Said to Value “access over ownership”
  • Claimed benefits
    Save Money, earn income
    Rediuce Carbon Footprints
    Strenghten Community Ties
  • Definition Increasingly Blurred
    Not just Proudcts but Also Services (e.g. Ride Hailing - Uber)
  • Increased Supply of Otherwise Unused Resources presents Growing Challenge to Sector Incumbents
    Airbnb vs Hotels
    Uber v Taxi Industry
23
Q

Explain the Impact of the Internet on Digital Business - SHARING ECONOMY CRITICSMS

A
  • Increasingly Monopolistic Platforms
  • On-demand Services fueling Worker Exploitation
    often not employing workers but self-emploted ‘partners’ paid per job
  • Unfair Practises
    Airbnb - Does the Platform do Enough to Prevent Users from Circumventing Planning Restrictions, Local Taxes etc
    UberX - concerns about Driving Vetting, reports of Incidents led to temporary Loss of Licence to Operate in London
24
Q
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Digital Technologies in Business (11 decks)

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