1

INFOSYS.110 BUSINESS SYSTEMS: DELIVERABLE 2: BUSINESS SECTION2014

Name Wendy ChungNetID wchu571Group Number: 397Website Link: http://infosys1102014s1group397.blogspot.co.nz/

Tutorial DetailsTutor: Day: Time:Kit-wah Huang Wednesday 12pm

Time Spent on Assignment: 24 hours Word Count: 1628

2

STOCKTAKE APPLICATIONINTRODUCTION

Shopping can be frustrating when you can’t find your size because it is sold out, creating a problem of out-of-stock products. This demand for out-of-stock products wastes money for customers and retailers. As a result, customers may waste time to repeatedly check if a desired item is back in stock and retailers may lose customers and potential sales which may lower their reputation. This problem can be solved by a phone app (Stocktake) that enables customers to check the inventory levels of clothing stores, via an inventory management software plug-in that sends data from the store directly to the app. This will make shopping less stressful by allowing shoppers to know exactly what is in store and retailers using the Stocktake app will have a significant competitive advantage over stores which do not use it.

3. BUSINESS SECTION

3.1 Vision

We intend to provide customers with real-time information of stock levels with an easy to use app, while helping retailers provide total visibility on inventory management. We believe in helping retailers to provide customers with a seamless shopping experience, allowing us to change the way people shop.

3.2 Industry Analysis: NZ Inventory Management Application Industry

Force: High/Low: Justification:

Buyer power: High There are over 1 million apps in Apples app store

alone (Ingraham, 2013). This would include

multiple apps to help with inventory

management.

Supplier power: Low There are many suppliers available to provide raw

materials to an inventory management industry.

Threat of new entrants: Low It would normally take at least 18 weeks to

develop an app (Chemov, J., Wasmer, D., n.d.) and

can cost over $300000 to develop the app for the use

of inventory management which would indicate a high

2

3

barrier to entry (Kinvey’s App Cost Estimator, n.d.).

Threat of substitutes: High There are many substitutes to using an

application to determine inventory levels eg.

Manually recording inventory (Hedrick,F.D. Barnes,

F.C.,Davis, E.W., 2008).

Rivalry among existing

competitors:

High There are inventory management apps that are

free to use which contribute to the 45% of free

apps in Apple’s app store, so people may be

inclined to use those. (Suter, 2012)

Overall attractiveness of the industry: The industry is attractive as the threat of new entrants is low which means it would be hard to enter the market. Even though the threat of substitutes is high, it would not be as efficient as using an app to manage inventory.

3.3 Customers and Their Needs

One customer that would use the Stocktake app would be everyday shoppers as they tend to purchase a lot of clothing on a regular basis but do not have a lot of time to look through every item in order to find the right size and that appeal to their taste.

Another customer that would use the app for would be clothing retailers with at least 3 different locations around the country. They would need to know the amount of inventory in the store to be able to order the right products to satisfy demand. Because merchandise tends to be out-of-stock 10-12% of the time, retailers would need to upgrade their systems in order to find out which sizes are the most popular and be able to collaborate between the stores which would avoid lost sales (Checkpoint Systems, 2009).

3.4 The Product and Service

To satisfy everyday shoppers in their buying needs, Stocktake gives them real-time stock levels of the retail store to help them determine if their size is in stock. They can either search through the list of items on their smartphone app or simply scan the barcode of the item to be presented with the relevant information they need. If the size is not in store, the customer will be shown when it will come back in stock and will be notified through the app of when it arrives. They can also choose to search through the stock in another location and request for it to be delivered to their closest store.

In order to satisfy clothing retailers, Stocktake manages their inventory across the different locations so that it is visible to both the retailers and shoppers. All the items are added on to the inventory list and they will be able to know exactly what is available to sell to customers. The app will also alert the store of the most popular items and their sizes at the end of each month and because the store has multiple locations, Stocktake will be

3

4

able to compare the results across the stores and suggest which items to swap among the stores so that there is adequate stock available which would decrease the amount of out-of-stocks.

3.5 Suppliers and Partners

One supplier of the Stocktake app would be the software app developers as they would be the ones who would develop the inventory management system to meet the needs of customers. They would design and test the app to ensure that it is working correctly and run regular maintenance to ensure that it is up-to-date.

Mobile platforms such as Vodafone and Apple would be a supplier as they would be providing the devices for the app to be used.

Apples app store would be a partner as the app would be sold in the app store to customers. The app would assist retail stores in their inventory management and help with shoppers of those stores find their desired item.

Google Play would also be a partner as there would also be many android users in need of the app whether it would be to keep track of their store inventory or simply help make shopping trips more effortlessly.

These two are the major players in the app world and would help to get the Stocktake app out to the public.

3.6 Strategy: Broad Cost Leadership

Both retail stores and shoppers would use the Stocktake app to keep track of the store’s inventory. These two markets account for most of the population. Therefore, the scope would be for a broad market.

The cost of the app for retailers would vary depending on the size of the company, but would typically go for at least $50 per month for a retailer with a minimum of 3 store locations. Shoppers would be expected to pay $2.99 for a one year subscription of the app. The cost strategy for the Stocktake app would therefore be at a low cost.

The overall strategy is therefore Broad Cost Leadership

3.7 Value Chain Activity: Receive and Store Raw Materials

The most important value chain activity for this business is Receive and Store Raw Materials.

This is because the business would need the inventory information to store into the database from the retailers in order to help them manage their inventory more efficiently. Without this information, the business would not be able to supply information about the stock levels to customers, which may result in shoppers spending more time than they want looking for the right item.

.

3.8 Business Processes

3.8.1. INVENTORY TRCAKING PROCESS- This process is used as it helps keep track of the amount of stock in the store and it will be able to notify when items are out-of-stock. Without this process, stock numbers will take longer to determine and the customers of the retailers using the app will be able to know straight away whether an item is available or not.

4

5

5

6

3.8.2. CUSTOMER INFORMATION COLLECTION PROCESS- The process of collecting information about the sizing of the retailer’s customers is needed as the app would not be as helpful without knowing enough information about the customer’s size and clothing preferences. With this information being stored, the process of shopping will be faster and with the addition of adding multiple profiles, it would also be able to be used to help family and friends.

6

7

3.9 Functionalities

3.9.1. INVENTORY TRACKING PROCESS

Requesting inventory levels from store. Updating stock levels into system

3.9.2. CUSTOMER INFORMATION COLLECTION PROCESS

Requesting sizing information from customers Adding/ Updating customer information into system

3.10 Systems

3.10.1. INVENTORY MANAGEMENT SYSTEM- An inventory Management system is used to track the inventory levels of the stores so it will be able to store and update all the information which would then be able to be accessed by all users in real-time.

3.10.2. INFORMATION STORAGE SYSTEM- This system is used to store the details of the customers using the app so that they would be able to know the stock levels of the item scanned based on the information stored in their profile.

3.10.3. CUSTOMER IDENTIFICATION SYSTEM- This system uses the sizing information to identify which items and sizes customers go for in order to reduce out-of-stocks and unsold clothing.

7

8

3.11. Summary Table: Value Chain to Systems

Value Chain Activity

Processes Functionalities Specific Information System(s)

Broad Information System(s)

Receive and Store Raw Materials

1. Inventory Tracking Process

1. Requesting inventory levels from store

2. Updating Stock levels into system

Inventory Management System

Inventory Management System

Transaction Processing System

Enterprise Resource Planning System

3. Customer Information Collection Process

1. Requesting sizing information from customers

2. Adding/Updating customer information into system

Customer Identification System

Information Storage System

Customer Relationship Management System

Customer Relationship Management System

8

9

CONCLUSION

To decrease store out-of-stocks and increase customer satisfaction, we have created a stocktake app which discloses stock levels to all users, providing total visibility from all perspectives. By scanning the barcode of an item of clothing, you will automatically be told if your size is available and if not, it will notify you when it will be restocked or which of their other stores still has that size. Because this app is used by clothing retailers with multiple stores around the country, the stores will be able to collaborate with each other more efficiently which would help sell more clothing.

REFERENCES

1. Hedrick, F. D., Barnes, F. C., Davis, E. W., Whybark, C. D. C., & Krieger, M. (2008). Inventory Management. Washington, DC: US Small Business Administration.

2. Chemov, J., Wasmer, D.. (n.d.). How Long Does It Take To Build an iOs or Android App? Photograph. Retrieved from http://www.kinvey.com/blog/2086/how-long-does-it-take-to-build-a-mobile-app

3. Kinvey’s App Cost Estimator. (n.d.). Retrieved from http://www.kinvey.com/app-cost-estimator4. Checkpoint Systems. (2009). Checkpoint Systems Introduces World’s First Source-to-store Merchandise

Visibility Solution. Retrieved from http://www.checkpointsystems.com/en/About/press-releases/2009/Checkpoint-Systems-Introduces-Worlds-First-Source-to-store-Merchandise-Visibility-Solution.aspx

5. Ingraham, N. (2013). Apple announces 1 million apps in the App Store, more than 1 billion songs played on iTunes. Retrieved from http://www.theverge.com/2013/10/22/4866302/apple-announces-1-million-apps-in-the-app-store

6. Suter, F. (2012). Analysis of the app market based on Michael Porter’s five competitive forces. Retrieved from http://3xhappiness.com/analysis-of-the-app-market-based-on-michael-porters-five-competitive-forces/

9