The document provides details about a proposed loyalty card system that would combine all individual loyalty cards into a single card. It discusses the business plan for the loyalty card system, including the vision to enhance consumer shopping experiences and bring growth to businesses. Key aspects of the business plan covered include industry analysis, customer needs, the product/service offering, suppliers, cost leadership strategy, and important business processes and systems like the purchasing process and supplier selection process.
The document provides details about a proposed loyalty card system that would combine all individual loyalty cards into a single card. It discusses the business plan for the loyalty card system, including the vision to enhance consumer shopping experiences and bring growth to businesses. Key aspects of the business plan covered include industry analysis, customer needs, the product/service offering, suppliers, cost leadership strategy, and important business processes and systems like the purchasing process and supplier selection process.
The document provides details about a proposed loyalty card system that would combine all individual loyalty cards into a single card. It discusses the business plan for the loyalty card system, including the vision to enhance consumer shopping experiences and bring growth to businesses. Key aspects of the business plan covered include industry analysis, customer needs, the product/service offering, suppliers, cost leadership strategy, and important business processes and systems like the purchasing process and supplier selection process.
Name Tok Fang Jun NetID ftok584 Group Number: 141 Website Link: http://infosys1102014fcgroup141.blogspot.co.nz/ Tutorial Details Tutor: Day: Time: Helen Tuesday 2pm Time Spent on Assignment: 15 hours Word Count: 1546
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2 THE LOYALTY CARD INTRODUCTION The growing competition in all industries causes businesses in New Zealand finding ideas to retain customers. This includes giving out loyalty cards to their customers which provides them with incentives such as discounts. However, every business has their own card, which results in a problem: People find it a hassle to carry too many cards. This discourages people from bringing their cards around and thus missing out the incentives that these loyalty card can bring. Hence, we create a card system that encompasses all loyalty cards into one, which is more convenient and user-friendly. 3. BUSINESS SECTION 3.1 Vision To enhance and optimise consumers shopping experience while bringing growth to businesses in the world. 3.2 Industry Analysis: Industry: Telecommunication Force: High/Low: Justification: Buyer power: Low As of now, there is no other card system that combines all loyalty cards into one, hence customers do not have other choices. Supplier power: Low There are many suppliers that are able to supply raw materials such as electromagnetic strips and plastic, thus there are many options to choose from in the market, hence decreasing the
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3 suppliers power. Threat of new entrants: High A new card system that only focuses on loyalty cards is not hard to implement due to the fact that there are so many card systems in the world such as credit card. It is mentioned in one of the interviews that there are cards for every situation in life (Lipka, 2012). This emphasises the point that card systems is not hard to implement. Threat of substitutes: High Coldewey (2013) states that coin collaborates with smartphones to combine all of the cards, from credit cards to loyalty cards, into one. This substitute creates a high level of threat as it serves the same purpose as our product, with its disadvantages being high cost and the need of a smartphone to operate it. Rivalry among existing competitors: Low Currently, there is no other card system that emcompasses all loyalty cards into one, thus the competition is low. Overall attractiveness of the industry: Not attractive. Even though the buyer power and the rivalry among existing competitors is currently low, but it may become relatively high in the future due to the threat of new entrants such as a new card system put in place is quite high as it is easy to implement and the threat of substitutes such as the innovation of coin is relatively high due to it serving the same purpose as the Loyalty Card.
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4 3.3 Customers and Thei r Needs The customers of the Loyalty Card are shoppers, ranging from people who does grocery shopping to people grabbing a sip at the nearest cafe. Every operating business has their own unique loyalty card, resulting in the situation whereby customers have too many cards at hand. Tuttle (2013) states that people are tired of having to fumble through their things just to find a loyalty card. Moreover, shoppers are also losing out on benefits and incentives which they can attain from loyalty programs. Neville (2009) states that carrying around too many cards can be a chore and that people might not want to carry the cards around to ensure that they are able to get discounts and benefits. Thus, the shoppers need a convenient method to join loyalty programs while not having too many cards. 3.4 The Product and Service Our product is a card system that emcompasses all loyalty cards into one, thus ensuring that people only need to have one loyalty card at hand at all times. Morran (2012) states that people want the incentives that loyalty programs can bring but do not want to be overwhelmed with plastic fobs. The Loyalty Card will be able to get rid of the problem of excessive number of loyalty cards. 3.5 Suppliers and Partners One of our suppliers would be electronic companies. This is because in order to make the loyalty cards, it is important to ensure that we are able to input the magentic strips on the cards so that our customers would be able to fully utilise the cards. Another supplier would be plastic companies, this is due to the fact that the raw material of the the Loyalty Card is plastic and it is essential for us to be able to acquire plastics so that manufacture of the Loyalty Cards can take place. Forming strategic partnership with software companies will ensure that the software in which our company uses would be up to date and transactions between businesses and their customers can smoothly proceed with a flawless database. Another strategic partner would be with businesses. This is because businesses have to adpot the Loyalty Card system into their operation for it to function properly.
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5 3.6 Strategy: Cost Leadership The competitive scope of our business is broad and the cost strategy is low, thus the generic strategic that the business is using is cost leadership. Our potential customers are shoppers in New Zealand which is a very large market. It is of a low cost because we wanted our card system to be accessible and available to everyone in the market at a price in which they are able to afford. 3.7 Value Chain Activity: Procurement The most important value chain activity for this business is Procurement. This value-chain activity is important to the business as it adds the most value to our product. By ensuring that the Loyalty Cards that were sold is of good quality and that it does not break easily, it will result in customers satisfaction in our system and thus enhancing their shopping experience. As our strategy is cost leadership, we would also want to procure materials which are of lower cost, thus attracting more customers. This may result in more businesses forming strategic partnerships so that their customers will also able to enjoy the benefits that our Loyalty Card brings. This could inevitably lead to the growth of the company as their consumers is able to enjoy benefits of their loyalty programs and thus resulting in higher customer retention.
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6 3.8 Business Processes 3.8.1. PURCHASING PROCESS As part of the value chain activity of procurement, the purchasing process is very important. This process ensures that the business will always have inventory at hand, so that there will always be stock to fulfill the customers demand. Start Create purchase requisition Create purchase order Check inventory Send purchase order Receive goods and services Receive bill Send Payment End Sufficient? No Yes Warehouse Receiving Accounting
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$ $ Purchasing
Inventory Management System
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7 3.8.2. SUPPLIER SELECTI ON PROCESS This is also an essential process in procurement as it helps in the choosing of the supplier by weighing the pros and cons of different suppliers. Through the supplier selection process, the most cost effective supplier can be picked out and it is also to ensure the quality of the the raw materials supplied by the company is of good quality. Start Investigate suppliers market Filter out undesirable suppliers Compare existing suppliers Create budget Does supplier fulfill the budget criteria End Warehouse Management Accounting Yes No
Market Analysis System
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8 3.9 Functionalities 3.9.1. PURCHASING PROCESS Validate the order Acknowledge the bill 3.9.2. SUPPLIER SELECTION PROCESS Validate the budget Acknowledge the selected supplier 3.10 Systems
3.10. 1. ORDER PROCESSI NG SYSTEM This system supports the functionality of validating the order in the purchasing process. The system ensures that the order can be carried out smoothly resulting in sufficient supply for the customers. This allows the customers to optimise their shopping experience with the product which in line with the vision of the company. The optimisation of shopping experience can lead to a boost in business. 3.10. 2. COST ANALYSIS SYSTEM This system supports the functionality of validating the budget in the supplier selection process. By creating a budget using the analysis of different costs when purchasing the raw materials, it ensures that we can keep our cost low and thus making it available to all shoppers. This is consistent to the vision of the company which ensures that shoppers is able to acquire the product and thus enhancing their shopping experience. 3.10. 3. SUPPLY MANAGEMENT SYSTEM This system supports the functionality of acknowledging the selected supplier in the supplier selection process. This decision of accepting of the supplier influences the cost of producing the Loyalty Cards and can affect the pricing decision of the product. Thus, it is important in acknowledging the correct supplier in order to be cost effective and the system helps in determining that. This is in line with the vision of the business as value is added by cost effective measures so that all shoppers are able to acquire the card to enhance their shopping experience.
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9 3.11. Summary Table: Value Chain to Systems
Value Chain Activity Processes Functionalities Specific Information System(s) Broad Information System(s) Procurement 1. Purchasing process 1. Validate the order.
2. Acknowledge the bill. Order Processing System
Bill Processing System Transaction Processing System
Transaction Processing System 2. Supplier selection process 1. Validate the budget.
2. Acknowledge the selected supplier Cost Analysis System
Supply Management System Decision Support System
Decision Support System
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10 CONCLUSION In conclusion, the creation of the Loyalty Card is to enhance and optimise shopping experience of people while in turn bringing growth to businesses. It serves the needs of the customers as it solves the problem of having too many cards. As the strategy of the business is cost leadership, procurement is the most important value chain activity. The systems that support functionalities, which in turn support the key business process is vital in ensuring that the operations is working towards the vision of the organisation. REFERENCES
Coldewey, D. (2013, November 15). Master Card? Coin combines debit, credit and others into one. Retrieved from http://www.nbcnews.com/tech/gadgets/master-card-coin-combines-debit- credit-others-one-f2D11591259 Lipka, M. (2012, April 18). Can you have too many credit cards? Retrieved May 15, 2014 from http://www.reuters.com/article/2012/04/18/us-credit-cards-howmany- idUSBRE83H0U620120418 Morran, C. (2012, August 6). Are you overdosing on supermarket loyalty cards? Retrieved May 15, 2014 from http://consumerist.com/2012/08/06/are-you-overdosing-on-supermarket-loyalty- cards/ Neville, C. (2009, March 17). Loyalty cards-how many is too many? Retrieved May 15, 2014 from http://www.charlesneville.com/2009/03/loyalty-cards-how-many-is-too-many/ Tuttle, B. (2013, July 11). A disloyalty movement? Supermarkets and customers drop loyalty card programs. Retrieved May 15, 2014, from http://business.time.com/2013/07/11/a-disloyalty- movement-supermarkets-and-customers-drop-loyalty-card-programs/