Traditional Business V/S Digital Business | What Is Traditional Business?

This post deals with traditional business , digital business, business models, and an insight into traditional business vs digital business.

Managing business is both challenging and interesting. It’s not like your 9-5 government job where one reaches the office at or before 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 by providing services or products. People themselves visit the stores by locating them. Talking about digital business, people sitting in any corner of the world can scroll through the web and find the store.

Traditional Business
Various Types Of Traditional Business Models
Digital Business
Various Types Of Digital Business
Traditional Business v/s Digital Business

Traditional Business Vs Digital Business
Traditional Business Vs Digital Business

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 serves customers in exchange for monetary compensation. It works on CAPEX and OPEX. While such organizations focus on profit generation, a few of them—non-profit organizations—work for customers without expecting profits.

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 model (business to customer), or to another business unit in the form of B2B model (business to business). Automobile manufacturers are an example of B2C model, and wholesalers follow 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.

Traditional And Digital Business Model 
13 Ways to Market Your E-Commerce Website in 2019
Having organized an ecommerce website is a job half done. The rest of the job is proper marketing of the website to gain more customers as more and more individuals become aware of the website, the sales increase and thereby establish the virtual presence of the ecommerce initiative. As the word of…

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, thereby 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 in 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 employ tools like websites with basic functionality; these sites don't have 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 in this category. 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.

Tips to Sell your SaaS Product?
SaaS [/tag/saas/] is a billion-dollar industry. And it’s only going to get bigger. According to TechCrunch, the SaaS industry is at the same stage as “the PC market in 1983, smartphone market in 2003, or the search market in 1998.” There is no better time than now to be in SaaS. But more opportuniti…

Traditional Business v/s Digital Business

Traditional Vs Digital Business
Traditional Vs Digital Business
  • The traditional business model requires more capital than its digital counterpart. The former needs place, furniture, transport, staff, and other utilities. Digital businesses are cost-saving 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. In the traditional setup, rigidity is a major issue. As a result, consumers are now inclined towards 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.

Frequently Asked Questions

What is the difference between traditional business and e business?

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.

Why is online business better than traditional business?

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.

What is 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.

What is traditional business models?

Types of Traditional Business Model.

  • 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.
  • Distributor: A company in the distributor business model buys products directly from the manufacturer.
  • Retailer: The retailer business purchases products from the wholesaler/distributor.
  • Franchise: The franchisee segment is a popular way to build awareness across geography.

What is difference between traditional and non traditional business?

Traditional

As the name implies, these are your typical franchise locations. Standalone stores, retail spaces in malls and any other type of place that houses a usual location for a given franchise.

Non-traditional

These types of franchise locations are smaller than traditional locations, which means they require less of a startup commitment financially. They are locations that are inside other, larger buildings.

Author image

About Devashish Shrivastava

I work on optimizing articles (SEO).
  • Raipur, Chhattisgarh
You've successfully subscribed to StartupTalky
Great! Next, complete checkout for full access to StartupTalky
Welcome back! You've successfully signed in.
Success! Your account is fully activated, you now have access to all content.
X