REPORT ON CONTEMPORARY DIGITAL BUSINESS APPROACHES

Student: CO1-127 Phm Mai Anh

Unit tutor: Dr Tran Trung Kien
1. Introduction

Modern digital business approaches are the strategies and methods that use modern tools and
data to create value for customers, workers, and other partners. Businesses can change their
operations, goods, services, and business models to meet the changing wants and demands of
the market by using modern digital business strategies.

2. Digital approach in organisation

A company's digital strategy is its plan for expanding its market presence via the use of
digital mediums (Indeed, 2022).

Digital approach 1: digital banking

BIDV will apply BIDV smartbanking in 2021. This is a mobile banking application that
allows users to perform monetary transactions on their mobile devices. This app includes
many features like account balance inquiry, fund transfer, bill payment and so on. This digital
approach can help BIDV's customers use the most convenient and independent service
without having to go to a transaction point. Thus it improves the experience of old customers,
attracts new customers and expedites its growth (BIDV, 2021).

Digital approach 2: communication

Threads is a social networking service created by Meta. This application can perform the
same functions as Twitter. Threads is Meta’s first app envisioned to be compatible with an
open social networking protocol which allows users to communicate between different
platforms without having to switch between apps or create new accounts. Hence, with
Threads Meta can expand their social media system and have the potential to grow in terms
of user base and revenue (Meta, 2023).
3. Relationnship between digital business approaches and their impact on achieving
KPIs

KPI 1: Improve the BIDV smartbanking app’s rating on app stores by 0.5 stars within the
next 6 months.

KPI 2: Increase the number of customers using BIDV SmartBanking by 15% in 2024.

By offering convenient banking services with straightforward controls and clear guidelines,
BIDV SmartBanking may facilitate the achievement of such key performance indicators for
the business. Customers of BIDV may now do transactions online from any location with an
Internet connection and a computer or mobile phone (BIDV, 2021). The app allows
customers to check their account amount, move money between accounts, pay bills, and
more. BIDV SmartBanking can help the company reach its KPIs by giving customers an
easy-to-use service with regular transaction limits and better security (VIR, 2021).

KPI 3: Increase the number of users by 10% within the next 6 months.

KPI 4: Increase the number of daily active users by 10% within the next 6 months.

Threads can help the company reach these KPIs by adding more social media features and
bringing in more new users and revenue.

4. The importance and limitations of digital business

Digital business has been growing at a rapid pace as it can improve efficiency and create
many opportunities to scale in the market for businesses. First of all the importance of digital
business is demonstrated through its global reach. Digital business is not limited by
geographical location, only with a well-designed website, businesses can reach global
customers regardless of time and location.
Take Amazon as an example, this leading online retailer started as a bookstore then has
expanded to the global market and offers a wide range of products to consumers around the
world through digital transformation.
Second, one of the biggest benefits of digital business is cost efficiency. Digital businesses
can cut the cost of operating infrastructure such as rent, utilities, and employees. For
example, new fashion businesses can save money on building and maintaining chain stores
while still offering competitive prices to customers (gbs, 2017).
Besides, the interaction with customers is also significantly improved. Through social media,
email, chatbots and communication features on e-commerce businesses can improve
relationships with loyal customers and new customers.
McDonald's is a prime example when they launched the McDonald's mobile app. The app
allows customers to use food delivery, accumulate membership points, redeem rewards for
their loyalty, and improve their personal experience with ordering foods (McDonald’s, 2023).

Digital business is a new form of business that is quite complex and risky. The limitations of
digital business are that it is not suitable for all types of businesses. Some businesses require
face-to-face interaction with customers, which is not possible with digital business.
Examples of businesses that require face-to-face interaction with customers such hair salons,
psychological councelling, makeup service. These businesses rely on personal interaction
with customers to provide a high level of service and build relationships with customers. One
of the disadvantages of a digital business is the cost of investing in new hardware and
software, and the cost of training employees on how to use it.
In 2012, Procter and Gamble decided to launch a huge digital transformation campaign with
the goal of becoming the most digital company on the planet. However, this goal has led to
initiatives that lack purpose, while the return on investment for a digital transformation is
small. Along with the economic downturn, this strategy has caused the company to face many
losses (Morgan, 2019).

Digital businesses also face concerns about customer confidence regarding privacy and data
protection. Even a small mistake that causes customer information to be leaked can lead to
serious consequences for the company. Facebook has previously faced scrutiny and fines
from US regulators for mishandling user data and invading user privacy (Los Angeles Times,
2019).

Despite these limitations, digital business still benefits businesses in the long run. According
to research by Thinkwithgoogle 53% of users research on the internet, social media before
buying at the store (Think with Google, 2018). Besides, it is easy to see that the trend of
online shopping is increasing rapidly, customers can search for any information they want,
whenever they want. Therefore, the application of digital business will strengthen the
presence of the business in the minds of customers on all platforms (Factory, 2021).
Startups are good examples of companies that rely entirely on digital technology. To be
successful they need to test their goals in a low-risk environment so they can calculate if the
new goals are cost-effective, and the digital platform is where they allow them to (News,
2022).

To be able to overcome the limitations of digital business, businesses should come up with
appropriate strategies and policies. Businesses should identify the right goals of digital
transformation from the beginning and align them with the vision and goals of the
organization. In order to have a team of skilled employees to maintain the digital business of
the organization, there should be appropriate training routes to help them know where the
organization is growing and what new skills and knowledge they need to update.

As mentioned above, digital business has many obvious cybersecurity risks, so businesses
should implement security policies and controls, invest in new security technologies and
manage risks. To be able to control financial resources well, businesses need to carefully plan
their budgets, which should be prepared based on goals and strategies, deadlines, outcomes,
ROI, and comparison. This budget needs to be flexible to deal with any growing problems
(PECB, 2022).

5. Digital technologies in organisations

Technology 1: Augmented reality (AR)

IKEA has launched an AR app called IKEA Kreativ that allows customers to realistically
visualize any piece of furniture in their home. The app is accessible via phones, tablets and
computers, and customers can view 3D products in 50 different showrooms and swap their
locations. With the help of the IKEA Kreativ panoramic scanner, customers can create
lifelike replicas of their homes in precise dimensions and interact with them. Once satisfied
with their design, they will easily add the product to the cart and order it to be delivered to
their door (IKEA, 2022).
IKEA's objectives in applying this technology are to bridge the gap between e-commerce and
in-store customer journeys and reaching customers who cannot go to the physical store.
IKEA Kreativ gives customers the confidence, ability, and control to create functionally
designed and attractive spaces in a simple, time-saving experience. Thus, it contributes to
their ability to convert customers and improve profits for businesses.

Technology 2: Artificial intelligence (AI)

Amazon uses AI algorithms in inventory management and market demand forecasting. To be
more specific, AI will create models to forecast customer demand for different types of
products to help Amazon optimize inventory management and respond to customer needs in a
timely manner.

Their objectives are to adjust inventory properly, thereby improving business efficiency and
cost efficiency. AI's ability to process large amounts of data quickly and accurately can help
Amazon ensure popular items are always available and prevent excess inventory. Finally,
accurate demand forecasting will ensure that Amazon can respond to customer needs in a
timely manner, thereby improving customer satisfaction as well as increasing profits for the
business (Amazon, 2020).

6. The effectiveness and ineffectiveness of technologies in digital business

Netflix
Netflix is a great example of a company that has changed the entertainment business by using
digital technologies well. Netflix changed the way video rentals and cable TV worked by
giving people a way to watch movies online.
With the help of data analytics, AI, and machine learning, Netflix is able to use user behavior
to make personalized content suggestions. This has made it much easier for customers to get
involved and stay with the service. The company's focus on digital has helped it grow quickly
and become the dominant player in the world's entertainment market (Carlospena, 2018).

BlackBerry
BlackBerry used to be the leader in mobile communications, but it didn't change when
touchscreen smartphones and the app environment became popular. BlackBerry was an early
pioneer in mobile email and private messaging, but its market share declined because it was
slow to respond to changes in the market and stuck to its own operating system. The
company loses its place in the smartphone market because it can't compete successfully with
Android and iOS devices (Pandey, 2023).

The Healthcare business hasn't been very good at adopting new tools in general for the
following reasons. Using digital technologies in healthcare can cost a lot up front, especially
when it comes to improving infrastructure, teaching staff, and doing regular maintenance.
Smaller health care sites may find it hard to find the money for these kinds of projects.
Besides, the healthcare business is a prime target for cyberattacks because patient data is so
private. Some digital tools can be hard to use because people worry about their data and
privacy being stolen (Pisuwala, 2022).

7. How business approaches has helped promote new business growth

Digital business approach 1: Amazon's E-commerce platform

Amazon's shopping plan has been a big reason why it has been able to get so many new
customers. Amazon not only sells its own products, but also lets other people list and sell
their own products on its site. This creates a large and varied collection of products.

Because Amazon is set up as a marketplace, it can sell a wide range of goods, many of which
are special or one-of-a-kind, and attract customers from all over. This range keeps customers
happy and makes it more likely that guests will become buyers.
However, Amazon's marketplace model can make it hard to make sure that the items offered
by third-party sellers are real and of good quality. People have said that the site has fake and
low-quality goods, which can hurt customer trust (Amazon, 2020).

Digital approach 2: Uber's C2C transportation

By using digital technologies, Uber made a mobile app that is easy to use and connects riders
and drivers quickly and easily. This changed the traditional cab business.
Uber's digital method creates a lot of real-time data about how people want rides, how traffic
flows, and how people act. This data-driven method lets Uber improve pricing, supply
sharing, and route planning, which makes operations run more smoothly and gives customers
a better experience (N., 2022).
However, Uber's innovative digital business model has run into trouble in many places and
countries because of pushback and rules. Local cab rules and license requirements have made
it hard for Uber to grow, which has led to court fights and increased public attention (Jalloh,
2021).

Amazon and Uber have taken different methods to their digital businesses that have helped
new businesses grow. The shopping strategy that Amazon uses lets third-party sellers get
more customers. With this method, businesspeople have been able to start e-commerce
businesses, which has led to the growth of new businesses on the site.
On the other hand, Uber's easy-to-use mobile app and real-time data analytics changed
everything. This made it easy to get new users and grow the business quickly. The digital
policies of both companies have helped to spur creativity, improve user experiences, and
bring in new businesses.

8. Conclusion

A digital transition is a hard and dangerous thing to do. When done right, it can lead to great
results that won't change in the future. When done wrong, it can be very expensive and
embarrassing for the company. These changes that didn't work show common mistakes, but
many companies show that failure isn't the end of the road and that digital transformation can
work.

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