Digital Strategies & Goods

• These are study notes about digital strategies

Digital Strategies

• UN could make an online shop from 3 store locations
• The aim is to improve business performance through technology (use less money), new products and processes and create a competitive advantage
• Implementation involves tactical measures, adaptation and using tech for new services like team meeting AI
• It's important to consider future target audience

Digital Goods

• These fulfil needs
• Exist in digital form from data
• Offer user utility
• Are immaterial

Immateriality

• Only exist in a digital form, not touchable from the internet or other electronic sources

Five Digital Goods

• Software
• Digital Content (e-books, image, music, videso, text, blogs)
• Services (iCloud, storage services, booking systems, communication services)
• Online platforms
• Electronic marketplaces (Ebay, Etsy)

Electronic Markets

• Digital platforms where buyers and sellers meet on the internet to exchange information, goods, and services
• Example: Book tennis lessons at 1am, Zara online shop

Characteristics of Electronic Markets

• Online platform
• Transaction processing (Paypal)
• Transparency (Data, CRM, Newsletter)
• Automation (saving personnel costs, chatbots, order, delivery processes)

Types of Electronic Markets

• B2C (Amazon, Zalando)
• B2B (Temu, Alibaba)
• C2C (Ebay, Etsy)
• Platform Ecosystems (Google Play Store, Apple Store)

Electronic Markets as a Role in Strategies

• Expanding market access (new customer groups)
• Increasing Effciency (Automation, Sales channels, Cost reduction)
• New business models
• Simplified scaling
• Data protection decision

Network Effect

• The value of a product or service increases as more people use the product or service

Direct Network Effect

• Benefit increases for each user as more people join the network
• More interaction possibilities
• Example: Sharing memes, Clubhouse, greater effect from more users

Indirect Network Effect

• Users benefit indirectly in platforms like Amazon or Airbnb
• More sellers attracted to Amazon by more buyers, resulting in wider offerings
• Example: Airbnb attracts more hosts through larger guest numbers
• Nike funds Amazon, benefitting from Amazon's existence

Achieving Growth Via Network Effect

• Network effects help companies achieve exponential growth and a stronger market position

Network Effects and Digital Strategies

• Competitive advantages are difficult to copy
• Scaling attracts new users via recommendations or the need for a large network
• Platform models bring together supply and demand (eBay, Linkedin)

CEM - Customer Experience Management

• Customer experience management means creating positive customer experiences to build a closer emotional connection between the user, product and service provider.

Internet Economy

• Describes the economic world of business that arise from internet and digital tech (online sales of products, services, data collection, ordering processing)
• Transformation of the global economy through digital technology and the internet

Businesses Must Be Adaptable and Innovative To Compete

• Digital strategy
• Tech implementation
• Business model adaptation
• Understanding of data analytics (monitoring)
• New opportunities for value creation, efficiency and global networking are important

Seven Key Characteristics of the Internet Economy

• Digitization of business processes (online personalization)
• New business models (Online workshops)
• Network effects (indirect, direct)
• Digital marketplaces (Ebay, Etsy)
• Disintermediation (manufacturers sell directly to end customers, change markets, and reduce costs)
• Highly scalable (test and launch new product or services rapidly, with low distribution costs but no emotional cost)
• Sharing economy (users share resources and rent instead of buying)

Digital Business Models

• Based on digital technologies
• Offer customer benefits in products or services so convincingly that customers pay for the value

Digital Transformation

• Describes the process by which companies, organizations or industries integrate digital technologies to improve or redesign workflows, products, and services
• Companies must implement e-commerce to be competitive (online distribution channels). For business models, Uber and Airbnb and service to convey.

Value Creation

• Data exploitation = monitoring
• Data exploitation is key to success and a vital resource for digital positioning

Benefits of Data Exploitation

• Personalized customer experience
• Optimizing business decisions
• Strategic advantages through a better understanding of the market
• Prediction and trend recognition
• Automation
• Heightened efficiency

Business Models Data Models that Use Data Analysis

• Subscription model (Netflix): Personalised content improved with user data from subscriptions
• Freemium models (Spotify): Revenue with advertisement and subscription options
• Advertisement financing (Google): Companies pay to appear on Google AdSense
• Cross-selling

Cross-Selling

• The action or practice of selling an additional product/service to an existing customer
• Example: An electronics retailer offering a laptop bag, cleaning cloths, and a mouse to a customer purchasing a new laptop