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▣ Textbook: Digital Business

◎ Author: Stephen Bradley, Stuart Madnick, Changsu Kim
◎ Publication Date: January 2015
◎ Publisher: Chicago Business Press, USA

The great historian, Dr. Arnold Joseph Toynbee, explained human history by the law of challenge and response in his masterpiece『A Study of History』. He emphasized that humanity’s response to change is the driving force for the advancement of civilization and history in human society. The law of challenge and response has continued without ceasing throughout world history. Human history shows that the individuals and organizations that settled into existing ways and did not respond appropriately to new challenges had to give up their places to the individuals or organizations that accepted the new innovations quickly. The purpose of this book is to provide insight into business issues and strategies for actively responding to change derived the digital revolution.

New revolutions driven by the innovation of digital information and communication technology require new challenges and responses by every individual, enterprise, and nation. We are now living during a turning point in society, moving toward the intellectualization of individuals, the digitization of society, and the globalization of nations. In the global digital economy, the adoption of digital business methods based on new information communications technology (ICT) is no longer a matter of choice, but is an essential prerequisite for success in the digital age. A successful company does not always mean a successful digital business enterprise. Though there are various prerequisites to make a successful firm, it is necessary to become a digital business suited to the flow of the digital economic era.

The digital business competence of an organization has been regarded as the major criterion for evaluating the competitiveness of their digital economy. An enterprise that fails to appropriately respond to the paradigm shift towards digital business will gradually out of the competition in the digital economy. Therefore, organizations that quickly adopt digital business models will lead the future market by strengthening their competitiveness, while the companies that fail to respond will see their survival itself threatened, because they are unable to compete with the companies that have gone on ahead.

Digital business is the crucial challenge of the digital revolution faced by today’s individuals and organizations when they try to new wealth and business value in the global digital economy. The most significant characteristic of digital business is that the mutual interaction between the creative application of innovative ICT and the digital business model has been greatly strengthened. Digital business has evolved the electronic business (e-business) stage to the mobile business (m-business) stage, and the m-business stage to the ubiquitous business (u-business) stage of today.

First, wired-network-based e-business deals with intra- and extra-organizational business transactions and utes on- and offline transactions separately. E-business provides accumulated-information services (AIS) based on customer data that is consciously entered by customers when they purchase a product or service. An important example of an e-business would be major online marketplaces such as Amazon.com. Second, wireless-network-based m-business has interconnected the on/offline channels and enabled semi-conscious business transactions. It has affected both the intra- and extra-organizational transactions and individual behavior activities. Semi-consciousness means that there is a partial separation between conscious business transactions and unconscious business transactions, such as location-based services (LBS) based on the locations of customers. A representative example of m-business is the Amazon Kindle. Third, u-business is based on a ubiquitous network, in which there is simultaneous interworking between on- and offline, and in which all business transactions are unconscious. U-business provides customers with situation-based context information services. A representative example of u-business is the Zipcar company.

While giving lectures related to digital business at undergraduate and graduate schools, we have used various textbooks for our classes, and we realized that these all failed to adequately cover many aspects of digital business. Therefore, this book has been designed to increase the student’s theoretical understanding and provide practical applications for all aspects of digital business, e-business to u-business. Thus the book includes theoretical content as well as practical cases pertaining to digital business. We have used the manuscript of Digital Business as the primary textbook for courses at Yeungnam University. The students who attended were very satisfied with the text and enthusiastic about exploring the current digital business trends and the various digital business cases.

◎ Audience
The book is written to provide a balanced view of and knowledge about digital business for both undergraduate and graduate students, and is targeted at two main audiences.
The first target group is undergraduate students. The book is useful for the systematic study of the academic foundations and practical applications of digital business, focusing on the concept and model, successful operations, and strategic issues. The book is particularly suitable for teaching freshman and sophomore-level courses about the new trend of digital business. This is because digital business concentrates on new trends of digital-based business phenomena such as Apple Inc., Google, Facebook, YouTube, Groupon, Angry Birds, Coca-Cola, Florida Hospital Celebration Health, Wal-Mart Inc., and FedEx Corporation, etc. Undergraduate students studying this book will develop an understanding of the principles of digital business.

The second target group is graduate students. The book can be taught in its entirety in a one-semester graduate growth course. In each chapter, the book provides the graduate student with a framework or a model, which should motivate new research ideas and insights. The use of the frameworks and illustrations will also be beneficial for expanding their understanding of several concepts related to digital business. Moreover, this book can be used to teach MBA students about digital business in practical and academic terms. The book provides a good foundation for MBA students working on team projects dealing with digital business. It can also be used in utive education courses. It is expected that this book will provide both an academic foundation and practical guidelines for the strategic adoption and application of the principles of digital business in organizations.
For any course, Digital Business is comprehensive enough to stand alone, but also intentionally concise so that it will work well with detailed case studies. A number of Harvard Business School case studies have been recommended in the teacher’s manual.

◎ Courses
The book can be used as a textbook for classes on digital business, internet business, management information systems, electronic business, information technology management, information technology and strategy, and information systems and strategic applications at the undergraduate, Master’s, and M.B.A. levels.
There are no prerequisites for the course and it does not have an unusual curriculum structure that needs to be addressed. The book can be used by any student with a basic business and information technology background that is interested in learning about the digital business world.
The book differs the other books in their field in many ways. Firstly, it appears that there is no such book as a purely digital business book addressing a unified view of e-business, m-business, and u-business, though there are many books relevant to electronic commerce, electronic business, and management information systems. Secondly, the book explains major concepts and strategies by showing appropriate frameworks and models developed by the authors. This approach provides a solid foundation for each chapter and increases the systematic understanding of our readers. Thirdly, knowledge of digital business becomes vivid only when it is applied to understanding actual events. Thus, the book introduces many new cases which illustrate digital business phenomena, such as Apple Inc., Amazon.com, Google.com, Facebook.com, e-Bay.com, Angry Birds, Coca-Cola Co., Wal-Mart, and FedEx Co. The numerous case studies are an important learning catalyst, integrated closely with the theoretical material presented in each chapter.

◎ Pedagogy
The book is rich with examples that illustrate the concepts presented. Each chapter includes a case study about a company that has adopted the specific information technology addressed and succeeded by doing so. Each chapter is followed by a set of case questions to guide the case analysis, and there is a series of discussion questions at the end of each chapter. The case studies are an exciting part of the book for students. They will be able to sharpen their knowledge by resolving multiple questions about each case study presented in each chapter. As a result the students will gain an expanded understanding of the major concepts of each chapter in their practical applications, as well as a more balanced understanding of the academic concepts and their applications.
After studying a chapter, students will immediately be able to test and increase their understanding of its basic lessons by answering the questions for discussion presented in each chapter. This will expand the students’ understanding beyond the material covered directly in the body of the text.

◎ Supplements
A comprehensive teachers manual is made available to instructors to provide guidance on how to make the most effective use of the book. First, a series of PowerPoint slides provides comprehensive coverage of the material in each chapter. The slides are designed to assist the instructor with the preparation of lectures and presentations that develop the key themes and content each chapter. Second, detailed answers are provided to the questions posed following each of the cases introduced in the text. Third, detailed answers to the discussion questions provided at the end of each chapter are included. Fourth, the teacher’s manual includes a test bank of questions containing 50 multiple-choice and true/false questions for each chapter in order to address the major issues that are developed in each chapter. Finally, a number of Harvard Business School case studies are suggested for use as supplements with each of the chapters. Each of these case studies, which are available Harvard Business School Publishing with detailed teaching notes, is chosen to provide the basis for a rich discussion of the issues raised in the text.

◎ Overview
The book focuses on the digital business driven by the Internet and the rapid advancement in information and communication technologies. The book begins with a description of the rapid changes that drive the global digital economy, and then discusses the evolution of digital business in three stages: e-Business (Internet), m-Business (mobile), and u-Business (ubiquitous computing). This book is concerned with three types of digital business: e-business (Chapter 2, 3, 4, and 5), m-business (chapter 6, 7, 8, and 9), and u-business (chapter 10, 11, 12, and 13).

Part I of the book, chapters 1 to 5, addresses the global digital economy and e-business.
Chapter 1 provides an overview and explores the characteristics and impact of the digital economy, as well as the relationship between the digital economy and digital business. Following the introduction of the global digital economy in Chapter 1, Chapter 2 gives an overview of electronic business (e-business). It aims to provide a comprehensive underpinning for e-business. The relationship between the Internet and e-business is the first concept that is reviewed in this chapter, followed by a review of the definitions of key concepts related to e-business and electronic commerce, and an examination of their differences and similarities. Based on this, the major components of the e-business framework are examined in both the macro and micro-environment. Chapter 3 discusses the benefits, evolution, and success strategies for e-business. The first section examines the benefits of e-business derived the successful adoption of e-business. Next, we review issues that drive the evolution of e-business, which is divided into four stages: adoption, growth, maturity, and transformation. The major issues related to each stage are examined in terms of their social, economic, political, and technical aspects. Then, we examine the characteristics of successful strategies of e-business entrepreneurs. In Chapter 4, a social network business is examined as an emerging and fast-growing business trend using social media technologies. This chapter introduces the concept of social networking sites and the general characteristics of social network business. Chapter 5 addresses digital goods business (DGB) as a purely online based e-business. DGB refers to the business of intangible products sold in digital formats over the wired- or wireless- Internet. DGB is a novel e-business phenomenon which has facilitated the shaping process of the digital economy. This chapter examines an overview of the digital goods business, provides a categorization model and characteristics of the DGB model, and highlights the evolution strategies and application of the DGB model.

Part II of the book, chapters 6 to 9, introduces mobile business (m-business), which plays the role of matchmaker between e-business and ubiquitous business (u-business). Chapter 6 presents an overview of m-business. As the emerging mobile business has used mobile communication technologies to new business values, a new market and industry centered on mobile business have formed as major forces which drive growth, not only in the IT industry but also in the digital economy. Mobile business is characterized by increasingly personalized and location-based services. In this chapter, we focus on the concept, characteristics, and value chains of mobile business. In Chapter 7, we examine the characteristics and applications of the m-business model. Compared to the standard e-business model, mobile business applications deliver dynamic functionality on various mobile devices. There is a growing interest in the wireless mobile business model as a new growth engine of the 21st century. This chapter discusses the characteristics and applications of the major mobile business models for inter-business, business-to-business, and business-to-customer. Finally, we take a closer look at the major issues required for the continuous diffusion of mobile businesses. Chapter 8 introduces mobile cloud computing. The hottest wave of information technology in the world right now is the quick diffusion of mobile cloud computing. Mobile cloud computing has been attracting the attention of entrepreneurs as a profitable business option that reduces the development and running costs of mobile applications, as a new technology with which a rich experience of a variety of mobile services can be achieved at low cost, and as a promising solution for green IT. This chapter deals with the overview, architecture, applications, advantages, and issues of mobile cloud computing. Chapter 9 deals with the mobile game business as a major application of m-business. The rise of the diffusion of mobile devices has paved the way for the modern advanced mobile game industry. Given our broader objective to increase our understanding of the mobile game business, the purpose of this chapter is three-fold. First, it provides an overview of mobile games. Second, it introduces a classification model for mobile games to evaluate their characteristics. Finally, this chapter suggests some evolutionary strategies to help mobile game businesses advance, and also provides useful insight for further study.

Part III of the book, chapters 10 to 13, provides an overview of ubiquitous business focusing on its business model, technology, and growth strategies. The evolution of computer technology has shifted the mainframe era, to the mini-computer era, to the personal computer era, and finally to the Internet age. However, now it is heading towards a new paradigm called ubiquitous computing. The concept of ubiquitous computing refers to an environment in which computational technology permeates almost everything, thereby enabling people to access and control their environment at anytime anywhere. Chapter 10 examines the environment, the concept, and the application of ubiquitous computing. Chapter 11 discusses major challenges in ubiquitous computing technology. An example of such a major challenge is the physical integration and embedding of computing and communication technology to link people, computers, and objects by combining daily life with electronic space on a network. Ubiquitous computing technology has been applied into everyday objects and activities to the point that technology has become virtually invisible in our lives and environment. Ubiquitous computing technologies include automatic identification technologies (e.g., Radio Frequency Identification: RFID), sensors for location (e.g., Global Position System: GPS), temperature, acceleration, and other environmental parameters, as well as wireless technologies. In this chapter, ubiquitous computing technology is divided into basic technology, network technology, and auto-ID technology. Chapter 12 examines an overview of the application, models, and major success factors of u-business. The ubiquitous computing-based business environment is called U-business. The U-business model combines the convenience of the e-business and m-business models. The U-business model is expected to be the next stage in the evolution of business beyond that of the m-business model. Finally, Chapter 13 explores the background of the U-business growth strategy, presents a categorization model for U-business, and develops U-business transition strategies and applications. Several businesses have steadily begun to adopt the U-business model. For the continuous advancement of U-business, it is necessary to establish a systematic business plan. Enterprises encountering new challenges are required to respond to these by establishing appropriate plans and strategies for the successful adoption of U-business.