In this article we will be looking into what is traditional business , digital business, business models and brief insight on traditional business vs digital business.
Managing and handling business is both challenging and interesting. It’s not like your 9-5 government job where one reaches the office at a particular time, does some mundane tasks, and then wraps up for the day at a fixed time. With business, everything takes a different turn. Inherent risks and the constant need to pacify customer requirements float in the business owners’ minds.
Traditional business has a physical presence and it serves people locally providing services or products. People themselves visit locating the stores. Talking about digital business, people sitting in any corner of the world can scroll through the web and find the store.
Traditional Business
The Various Types Of Traditional Business Models
Digital Business
Various Types Of Digital Business
Traditional Business Vs Digital Business
Now, let’s dive deep into these two types of businesses.
Traditional Business
The traditional business is the regular form of business. Organizations such as restaurants, agencies, and anything resembling an office-setup fall in this category. Such organizations usually sell products or services.
A traditional business services customers in exchange for compensation for monetary compensation. It works on CAPEX and OPEX. While such organizations focus on profit generation, a few of the—non-profit organizations—work for customers without expecting profits.
The Various Types Of Traditional Business Models
Manufacturer
The manufacturer's business model utilizes raw materials to create products that are then sold in the market. This type of business model involves the assembly of pre-manufactured items. The products are either directly sold to the customers in what’s known as B2C (business to customer), or to another business unit, B2B model (business to business). Automobile manufacturers are an example of B2C whereas wholesalers fall in the B2B model.
Distributor
A company in the distributor business model buys products directly from the manufacturer. The business then sells the procured products to consumers or retailers.
Retailer
The retailer business purchases products from the wholesaler/distributor. It then sells the inventory to the public. Brick-and-mortar stores fall in this category.
Franchise
In this setup, the owner buys the franchisee of a very successful brand and promotes the brand’s services/products to the general public. The franchisee segment is a popular way to build awareness across geography.
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Digital Business
Digital business is the modern form of business, a significant deviation from the established norm. This model leverages technology for value creation & addition, giving an entirely different customer experience.
The umbrella term includes both digital-only brands as well as traditional businesses that use modern-day innovations. Prominent examples of digital businesses are Uber (the cab-owning service which allows the user to book a taxi online ), Netflix (video streaming service), Disney+Hotstar, etc.
Various Types Of Digital Business
Basic
Small businesses fall into this category. With a small presence in the digital platform, such ventures rely on traditional marketing methods like direct mail and print advertising.
Intermediate
A level where small businesses use employ tools such as basic functionality websites without any e-commerce or mobile rendering capabilities. Other factors like listing in online directories or third-party marketplaces play a part here as well.
Advanced
Advanced websites with mobile app versions or e-commerce abilities are used by digital businesses here. Social media engagement is quite extensive. Video conferencing, SAAS apps, etc. are part of the toolkit.
This model is the epitome of the digital business. Such ventures have high social media visibility, have little or no physical presence (as in brick-and-mortar stores), and engage with customers extensively through the internet.
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Traditional Business Vs Digital Business
- The traditional business model requires more capital than its digital counterpart. The former needs place, furniture, transport, staff, and other utilities. In the case of digital businesses, cost-saving happens in this aspect.
- A business unit with the digital approach is convenient for customers through the flexibility offered in the variety and cost of products offered. In the traditional setup, rigidity is a major issue. As a result, consumers are inclined to do our shopping online.
- The digital business is yet to achieve perfection when it comes to living customer experience. For example, you can’t try a mobile phone before purchasing it from Amazon. You rely on customer reviews and the specifications listed on the website. With the traditional business model, this obstacle is overcome.
- Online businesses tend to have a larger digital market spend than their old school counterparts. Traditional businesses diversify marketing agencies to attract their customers from both the local areas and online demographics. But their reach is relatively less than the digital segment.
- Digital businesses work 24/7 and overcome both geographical and timing barriers. You can do online purchases in the middle of the night from anywhere in the world.
- Traditional business has restrictions on when and where they function. Timings are rigid and customer service isn’t flexible either. There are exceptions where few traditional business operate 24/7, but those are limited in numbers and function in select locations only.
Link : https://startuptalky.com/traditional-business-vs-digital-business/
Author :- Devashish Shrivastava
August 15, 2020 at 12:07AM
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