Chapter 1 Flashcards
(52 cards)
What is a digital business model?
A way of doing business using the internet and other technologies as underlying systems and infrastructure.
What are some key functions of a digital business model?
Understanding, mediation, evaluation, planning, and implementation.
Why are digital business models essential in today’s business environment?
They help companies adapt to rapid changes in technology, globalization, and consumer expectations.
What role do social media platforms play in digital business models?
They facilitate communication between people and influence public opinion about products and services.
How has digital technology impacted customer expectations?
Customers now demand high-quality experiences and can easily switch providers if unsatisfied.
What is one example of a successful digital business model?
Amazon, which became the largest online retailer by offering convenient online shopping and customer communication tools.
How do digital business models contribute to a company’s success?
They provide a clear framework for employees to understand their roles in creating and delivering value in a digital context.
What is the ‘understanding function’ in a digital business model?
It helps managers grasp and analyze elements of existing business models, serving as a reference point for decision-making.
Define the ‘mediation function’ of a digital business model.
Serves as a com- munication tool among key stakeholders who would like to understand key aspects of a digital business model
Describe the ‘evaluation function’ in digital business models.
This function enables managers to evaluate the technical feasibility and business potential of the digital business model
What does the ‘planning function’ involve in a digital business model?
Planning means performing a series of tasks to accomplish a business goal
What is the ‘implementation function’ in a digital business model?
A well-developed digital business model serves as a tool for benchmarking, comparing your business with the best one on the market
Why is transparency important in digital business models?
With numerous options available to customers, transparency helps companies stay competitive as switching costs are low.
When was the term “business model” first used in academic literature?
The term was first used in the academic literature in the late 1950s
What event led to the common use of “business model” in the 1990s?
The start-up boom and the commercial use of the internet in the mid-1980s made “business model” a common term in the 1990s.
Which companies were early innovators of business model concepts in the 1950s?
McDonald’s and Toyota, focusing on organizational structure, decision-making, and marketing
Why did start-ups in the 1990s need to explain their business models to banks and investors?
To secure financing by showing how they differentiated from established companies and demonstrated competitive positions
Which companies became successful in the 1960s and 1970s due to novel business models?
Walmart, FedEx, and Toys “R” Us
How did the COVID-19 pandemic impact the importance of business models?
It accelerated technology adoption, making business models critical for positioning companies against innovators.
What were the main reasons for Nokia’s failure according to Verma (2020)?
Failing to adapt to the market, lack of innovation, poor market repositioning, leadership crisis, and not switching to Android technology.
How did Google and Apple create competitive advantages in the digital ecosystem?
By building digital communities for developers, customers, and producers, while Nokia stayed outside this ecosystem.
What lesson does Nokia’s failure illustrate about business models?
Past success doesn’t guarantee future competitiveness, especially during uncertain market conditions.
What feature made Google valuable after it started as a small business in 1998?
Its search engine algorithm became a critical tool for information inquiry, enhancing its value over traditional brands.
Why did Facebook invest in WhatsApp despite it not generating significant revenue?
Facebook saw long-term potential, anticipating that people and small businesses would use WhatsApp for payments and business communication.
