Digital Strategy (AQA A Level Business): Flashcards
Exam code: 7132
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Define digital strategy.
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Define digital strategy.
A digital strategy is a business's plan for using digital technology to achieve its overall objectives across the whole organisation.
Why is buying digital tools without a strategy risky?
It risks wasted investment. A strategy is needed to use the tools effectively, especially where staff lack the skills to implement new technology.
The widening gap in digital capability between large and small firms is known as the ____________.
The widening gap in digital capability between large and small firms is known as the digital divide.
How can a digital strategy improve efficiency?
Automating processes and digitising record-keeping reduces manual work and human error. This frees up staff time for higher-value tasks.
How does a digital strategy support data-driven decision-making?
Digital systems generate large amounts of data that can inform more accurate marketing, HR, finance and operations decisions than judgement alone.
True or False?
Digital technology only allows a business to digitise its existing way of selling.
False.
Digital technology can create new revenue streams. For example, Adobe moved from one-off software licences to its subscription-based Creative Cloud service.
A strong digital strategy helps a business avoid falling behind rivals, reducing the risk of strategic ___.
A strong digital strategy helps a business avoid falling behind rivals, reducing the risk of strategic drift.
True or False?
A digital strategy is mainly the responsibility of the IT department.
False.
The same technology often changes how marketing, finance, HR and operations run, so digital strategy must be planned for the whole business.
How can social media advertising benefit the marketing function?
Digital promotional channels such as social media advertising allow precise targeting and measurement of campaign effectiveness.
How can cloud-based accounting benefit the finance function?
Cloud-based accounting platforms give real-time visibility of cash flow and financial performance.
How can digital tools affect the human resources function?
Digital recruitment platforms and AI-based screening can speed up hiring. Collaboration software supports flexible and remote working.
How can a digital strategy help a business gain competitive advantage?
It enables faster responses to customer needs and the ability to reach customers globally without physical expansion.
True or False?
Digital platforms lower barriers to entry, making it easier for new competitors to challenge established businesses.
True.
New competitors can reach customers online without large-scale physical facilities of their own, so digital platforms lower barriers to entry.
How can a digital strategy become a product in its own right?
A business can sell its digital capability to others, creating extra competitive advantage beyond its core operations. For example, Tesco turned its Clubcard data system into Dunnhumby, which sells data analytics services to other retailers.
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