Creating New Business in

Emerging Markets
Lecture 13
Digital Business Model
Subject Objectives

By the end of this class, we will be able to:

 Understanding the evolution of Internet

Business Model

 Defining the characteristics of digital as a

business model

 Illustrating the digital business models in

practice
? What is a digital business model?
Digital Business Model

 A digital business model is a way of generating value that

relies on the use of digital technology to produce consumer
advantages. The goal of the digital solution is to produce a
noteworthy benefit that clients are prepared to pay for
Advantages of Digital Business Model

Improved Employee Enhanced Better Decision Governance and Less Human

Morale Agility Making Reliability Error

1 2 3 4 5

6 7 8 9 10

Quality and Increased Reduced Operational Higher Streamline

Consistency Transparency Cost Productivity Process
Let us understand the evolution of business models
Evolution of business models

 Almost all economic sectors are impacted by

digitization, which calls for a fundamental
transformation of current businesses. Digitalization is a
strategic fundamental concern as a result. However,
many businesses face significant obstacles when
creating their own digital strategies
Stages in evolution of digital business model

 Changes in Business Models

 The era of production
 The era of relationships
 Model for Next Year
Changes in Business Models
 Understanding yesterday's business models
may serve as a beginning point for developing
tomorrow's, since each new business age develops
naturally from its predecessors
The era of production
 As firms were able to create much more than before thanks to
advancements in production technology, manufacturing
business models gained popularity. These machines were a
key component of business strategies that used economies of
scale to reduce costs and boost revenues
The era of relationships
 Solutions, as opposed to products, were the paradigm in this
age as company strategies centred on meeting the shifting
demands of customers with specialised goods and services
Model for Next Year

 With an emphasis on core skills and the utilisation of

contractors for specialised tasks, lean business models are
rising in popularity
 Characteristics of Digital as a Business Model

 Digital technologies are used to produce the value. A service is said to have a digital
business model if it is built on digital technology. As an illustration, consider
Facebook, Google, and Amazon. Without the internet, these titans would not exist

 The market is relatively new to the digital business paradigm. An illustration of this
would be when you use an app (like Uber or Lyft) to request transportation and the app
matches your request with a driver

 You must utilise a digital channel to sign up as a customer. Digital channels (like
Amazon) that display adverts while you conduct internet searches are frequently the
foundation of digital business concepts

 The digital creation of the USP is unique selling proposition. This indicates that a
consumer is prepared to pay for your goods or services, which is frequently monetized.
Examples of companies with a digital business model

Without Internet technology, firms like Amazon, Uber, and Airbnb could not
exist. Today, local markets like Amazon, Airbnb, and Uber exist. Uber is a
taxi company or a carpool service.
 Activity
Mohit runs a business of leather bags for the past 2 years.
Due to COVID-19 he suffered a great loss and was unable
to shift his business online. Recently, he has gathered the
required capital to set up a business. What are the
advantages of shifting to a digital business model for
him?