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Summary Chapter 1 "Introduction To Business"

Source: Dave Chaffey; Tanya Hempfill; David Edmundson-Bird, 2019, Digital Business and E-Commerce Management, 7th Edition.

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Aziz Putra Akbar
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305 views2 pages

Summary Chapter 1 "Introduction To Business"

Source: Dave Chaffey; Tanya Hempfill; David Edmundson-Bird, 2019, Digital Business and E-Commerce Management, 7th Edition.

Uploaded by

Aziz Putra Akbar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Summary of Chapter 1

“Introduction to Digital Business”


by: M. Aziz Putra Akbar (425436)

Digital transformation has impacted traditional business in ways where technology


plays an important role. The first way is called inbound marketing. This type of marketing is
influenced by the proactivity of customers to search for their needs through the internet and
so that digital businesses optimize the use of search marketing (increasing company’s
appearance in the search engines), content marketing (deliver interesting and attractive
contents), and also social media marketing. Please bear in mind that social media is much
more than social networking (e.g: Whatsapp and Snapchat) where there are 5 other social
presences where companies can utilize including social knowledge, social sharing, social
news, social streaming, and company user-generated content and community.
Another effect of digital transformation is the existence of mobile commerce. This is a
type of commerce where transactions can be done anywhere. Some indications can be seen
by the rapid increase of trend in mobile applications as well as the flexibility given by a
company to its employees where they are not obliged to work in a fixed location.
Now, there are new terminologies introduced as the effect of the digital
transformation. Not all terminologies should be understood but there are clear differences
between ‘digital business’ and ‘e-commerce’ that should be considered. E-commerce has a
slightly narrower definition and scope compared to digital business. Yet, e-commerce is not
just selling-buying products online, but can be defined a little bit more instead. All
transactions performed electronically are deemed as e-commerce and this may include non-
financial transactions as well like customer support. There are 4 perspectives of how e-
commerce can be defined (communication perspective, business process perspective, service
perspective, and online perspective) and there are 2 types of e-commerce that contrast its
process: buy-side e-commerce (holding transactions to procure resources needed by an
organisation from its suppliers) and sell-side e-commerce (holding transactions to sell
products from an organisation to its customers).
In addition, there are various types of business or consumer models of the
transactions. This depends on who is the seller or who is the buyer. Despite being a buyer
(consumer) or standing in a position of a seller (business), each can be filled by 3 categories:
consumer, business, or government. Commonly, the business models can be allocated as
C2C, C2B, C2G, B2C, B2B, and so on.
In this new era of advancement of technology, there are more and more opportunities
introduced by the adoption of digital business. Every business entity would seek for the
betterment of profitability in their business and it can be achieved in 2 ways: increasing sales
by extending reach to customers and also in cost reduction. Digital business, fortunately,
gives those opportunities. The first driver is the cost/efficiency drivers and these include the
possibility to increase speed on obtaining supplies from the suppliers, increase speed in
dispatching their goods, and reduction in sales and operational costs.While the second driver
is called the competitiveness drivers where there is an increase in the customer demand,
improved quality, and the possibility to avoid losing market share.

Reference: Dave Chaffey; Tanya Hempfill; David Edmundson-Bird, 2019, Digital Business and E-
Commerce Management, 7th Edition.
However, as much as how digital business can provide new opportunities, there are
also barriers and some limitations that a business entity could face. The first barrier is
regarding the adoption of technology. It is true that technology is always changing from time
to time but not to forget, technology errors might always appear. There are some practical
risks that a company should consider for example, the potential of a website being crashed
when customers are trying to access it. Security issues could also be a risk like hackers being
able to hack the company’s system and steal private information from the customers. These
risks will lead to a bad customer service experience and sooner or later should be anticipated.
Another barrier that might emerge is from the customer itself. Customers may face
challenges when adopting digital technology. From a customer perspective, they might
perceive no benefits from using digital technology. In addition, the fear towards security
problems might lead to trust issues. Not only that, for some customers in different countries
where technology is not yet as advanced as in other countries, they might have lack of skills
and knowledge or acquire it due to the excessive cost. These barriers might as well be hurdles
for companies when shifting their business into digitally.

Reference: Dave Chaffey; Tanya Hempfill; David Edmundson-Bird, 2019, Digital Business and E-
Commerce Management, 7th Edition.

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