U4_THE CONCEPT OF DIGITAL BUSINESS

The main aim of this unit is to introduce students to the concept of digital business. Since
the creation of the internet, businesses have increasingly relied on the accessibility, speed
and ease of communication that the digital world can provide. Every industry, from
farming to computer software, accesses the digital world to improve its working
practices. If an organisation fails to anticipate the impact of technical innovations
taking place within its industry, it is likely to lose opportunities to competitors.

To promote their business, organisations now need to have exposure on a digital

marketing platform or create their own. Smaller businesses can join a platform which
allows consumers to access their product and leave reviews and feedback which could
then influence potential new customers.

In the digital age, organisations need to have a business strategy which recognises that
every aspect of their operation is now affected by technology. Factors which need to be
considered include how customers consume products, such as on phones and other
devices, how products are ordered and delivered using digital technology and how a
company manages its reputation when social media allows clients to express
dissatisfaction to a potential audience of thousands or millions almost instantaneously.

The modern business landscape can experience rapid changes due to digital disruptors.
This describes a fundamental transformation in a market, process or behaviour. Examples
of this type of disruption can be seen in the way that the tax-hailing app Uber became a
global phenomenon and, in travel, the impact Airbnb had on the hotel industry when
potential guests used the internet to connect with private home owners renting rooms by
the night. Such transformations are not always painless, however. Taxi drivers in many
countries protested vigorously against Uber’s incursion into their industry and Airbnb
has many customers who point out that quality control cannot always be stringent when
delivered on a collective platform rather than as a contract with a company. The term
‘digital disruption’ may sound negative but, at heart, it describes companies which are
leading the way, identifying gaps in the market and utilising the potential of technology
to do today what companies will be influenced by tomorrow.

Digital disruption can also result in questions raised about data and how it is gathered
and stored. Building their database to store information can eat up an organisation’s
energy, time and budget. The cloud refers to storing data in a collective database, rather
than using gigabytes of memory on computers, laptops and mobile devices.
However, there are concerns as to whether cloud providers can be trusted to keep data safe.
The data storage facilities are often stored in remote locations and concerns have been
voiced as to whether data security could be compromised or lost as the result of a natural
disaster or terrorist attack.

At the other end of the spectrum is the relationship of the individual to the companies
which are data mining in order to gather as much information as possible about
consumer habits and routines in order to target marketing more effectively. The
information may be gathered via an outside company who gather the information in a
variety of ways – for instance, through apps offering promotions. This has raised
questions about privacy: what information is willingly shared with big businesses? What
is taken without explicit consent?