Questions: 1. Analyze the Virginia Bikes business using Porter\'s Five Forces An
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Question
Questions:
1. Analyze the Virginia Bikes business using Porter's Five Forces Analysis to complete the table below.
FORCE
List Porter's Five Forces
IMPACT (POSITIVE, NEGATIVE, or NEUTRAL)
This must have an entry
JUSTIFICATION of your selected impact
Minimum 2 good sentences that explain the impact of the force on Virginia Bikes to demonstrate understanding of the force.
Refer to specific details from the business in the case study to support your explanations.
2. Identify which of Porter's Generic Strategies is most appropriate to Virginia Bikes and explain why you selected it in light of your Five Forces Analysis.
3. Bill uses the three business processes listed below, and each of them could be improved using technology. Explain in general how an information technology system solution could improve each one of the processes without naming a specific solution.
Selling bicycles - how technology could improve the process:
Repairing bicycles - how technology could improve the process:
Managing inventory - how technology could improve the process:
4. Using the three business processes listed in question #3, list one input and one outputthat would be part of that process. (These are for the entire process, and are not limited to any particular step in the process.)
Process
Input
Information/data item entered into the system as part of this process
(input needed for the system)
Processing
Processing or action the system must perform for this process
(what the system will do with the input)
Output
Information/data item displayed or printed out for theuser in this process
(what the system will output/display)
Selling Bikes
Repairing Bikes
Managing Inventory
5. Bill has decided to use technology to improve one of business processes identified in question #4 above. Select one of the processes and analyze the IT requirements as they apply to that process using the table below.
Name the business process that you selected from #4 here: __________
IT
Requirement
Importance/
Relevance
High,
Medium,
Low, or Not Applicable (N/A)
(each must have a ranking)
Explanation for Ranking
(Write a minimum of 3 good sentences for each. Use the name of the business and the selected process in each answer. Identify the data or type of data used in your explanation, where it applies.)
Usability
Information Quality
Database
Reliability/ Availability
Security
6. List and briefly explain three specific quantifiable (measurable) business benefitsthat Virginia Bikes would get from using a cloud-based Software-as-a-Service (SaaS)solution. Your explanations should include references to the Virginia Bikes business in the case study.
Business Benefit #1 and explanation:
Business Benefit #2 and explanation:
Business Benefit #3 and explanation:
7. Bill has decided to implement a cloud-based SaaS solution to improve the bike repair process for his business. Identify one important activity that Bill would need to do during each of the following phases of the system development life cycle to implement his solution (an example answer is provided for the Programming phase):
a. Planning:
b. Analysis and Design:
c. Programming: Since the system has already been developed by the SaaS vendor, Bill is not required to take any action regarding the Programming Phase.
d. Configuration:
e. Testing:
f. Implementation and Use:
8. Bill would like to increase repair work and rentals as they are the highest profit aspects of his business. He wants to analyze the data he will be collecting in his new information system to help him do this. Identify three questions that Bill would want answers to in order to determine ways to increase repairs and rentals. Then, identify what information Bill would need to answer each question. Finally, explain how that information and the answers to the questions would help Bill increase repair work and rentals.
Question, information and explanation #1:
Question, information and explanation #2:
Question, information and explanation #3:
9. Bill has set up a website with information about his stores, and he wants to expand this website to conduct e-commerce. Identify two different categories of e-commerce (as defined in the Week 2 Learning Resource "Categories of Electronic Commerce") that Bill could use to improve his business. Explain how each e-commerce category would be used. Your explanations should include the name of Bill's business and demonstrate your understanding of each of the two e-commerce categories.
E-Commerce category #1 and how it would be used:
E-Commerce category #2 and how it would be used:
10. Explain how each of the following could benefit Bill's Virginia Bikes business. Use 2-3 sentences for each and be sure your explanations mention Virginia Bikes and show that you understand each of the types of systems.
a. Supply Chain Management System
b. Customer Relationship Management System
c. Enterprise Resource Planning System
FORCE
List Porter's Five Forces
IMPACT (POSITIVE, NEGATIVE, or NEUTRAL)
This must have an entry
JUSTIFICATION of your selected impact
Minimum 2 good sentences that explain the impact of the force on Virginia Bikes to demonstrate understanding of the force.
Refer to specific details from the business in the case study to support your explanations.
Explanation / Answer
1)
FORCE
List Porter's Five Forces
IMPACT(POSITIVE, NEGATIVE, or NEUTRAL)
This must have an entry
JUSTIFICATION of your selected impact
Minimum 2 good sentences that explain the impact of the force on Virginia Bikes to demonstrate understanding of the force.
Refer to specific details from the business in the case study to support your explanations.
Competitive rivalry
POSITIVE
Bill Thomas and his company,Virginia Bikes should understand the industry trends in reference to competition and try to gain a competitive advantage over its rivals. Bill should ensure strive to hold a greater percent of the market share through an analysis of the rivalry through industry concentration.
Virginia Bikes should pursue undertaking an improved product differentiation, by advancing its bikes rental business, improving on the terms of renting among other features, enhancing its variety of bikes to be meet different customer needs, creating a system of customized innovations in the bikes’ repairs and creative designs, advancing its accessories stock and sales by availing modern bike accessories. Bill should show a clear understand his competitors’ marketing strategies and actions and hence improve his strategic positioning with other rival firms.
Threat of substitutes
NEGATIVE
The threat of substitution imposes an effect on the competitive environment for Virginia bikes in this industry and influences the its ability towards achieving profitability .Consumers might choose to purchase the substitute product instead of the business’ product and this creates a negative impact.
The threat of substitutes of its major selling product, bicycles, is experienced when fluctuation in price of bicycles and their accessories is created by other bike businesses. The price elasticity also gets affected by these substitute products .As the available substitutes increase, the demand tend to become elastic as customers have more alternatives. Availability of the business’ close substitute products in the market limits the ability of Virginia bikes to raise prices and generate desired profits.
Threat of new entrants
NEGATIVE
If there are new entrants to the bicycles business, there will be increased competition to gain a grip on the market share. This will exert pressure on the costs, prices and the rate of investment in the bicycle industry. If the new entrants try to diversify across the various markets, they create pressure on the existing cash flows .
The bicycle business has a common technology base, very little brand awareness or loyalty, and accessible channels of distribution to all the sizes of organization, thus making it easy for rival firms to enter into the market. Entry of new firms makes profits decrease and also force some of them exit the market. This restores a market equilibrium in the overall equation.
Supplier Power
NEGATIVE
Virginia Bikes needs its supply of spare parts and other bicycle accessories hence creating buyer-seller relationships between the suppliers and the market. Distribution power lies with the suppliers if they can use their influence in dictating prices and the availability of the products. Suppliers who are in a strong bargaining position can also decide to reduce the available product quantity, if they are aware that there are few substitutes available for Virginia Bikes .
Buyer Power
NEGATIVE
An analysis on how customers impact on the industry and it its products and services is necessary for Virginia Bikes. When customers have a strong position they are very likely to impose pressure on the business and demand for improved quality or even ask for lower prices.This can raise costs at the expense of the industry profitability.
Bill can use his position as buyers succeed in exercising their buying power by seeking good deals from his suppliers. He can approach suppliers with more bikes than they need and purchase them bikes at a discount for the rentals and the low-end sales.
Competitive Rivalry.
Virginia Bikes has gained a greater market share in the context of the industry competitors. It has gained a greater competitive edge in the market when compared to other business establishments around offering similar services and products.
Virginia Bikes has a good grip of the industry’s forces of demand and supply hence seeking firms with excess bicycles and their parts accessories and buying from them at a discounted rate.
The positivity that would be brought by competing businesses undertaken by Virginia Bikes makes them offer better services at reasonable prices thereby scaling a greater extent of a competitive advantage over its rivals in order to maintain and capture untapped market as well.
The difference between Virginia Bikes and its competitors makes Virginia Bikes understand the most appropriate actions to be taken and the marketing strategies to eb adopted for maintaining a wide market share.
3)
Selling bicycles - how technology could improve the process:
The application of information technology is an aspect that no business, would avoid at its own expense in the current digital world. For instance, if cost of advertisement budget ranges from to zero to almost $40,000 yearly as from when the business ventured into using a simple website which provides information across its various locations, customers and even to local biking trail sites. Hence with respect to bicycle sales, the customers can eagerly explore the website and expect a great experience brought about by the new technology-backed Virginia Bikes business.
Social media can also help create a platform through which it could build and relate with customers and be able to show personal insights of the business thus connecting them directly. This creates brand connection, and forces them to influence their friends and to rent bikes or even buy bikes and accessories.
Adoption of a system of technology with less cash-payment requirement would be a big step for the business in terms of the convenience it provides for the customers who want to go cashless. If Virginia Bikes adopts a simple technology as the Square Card Reader device(a card reader which plugs directly into a tablet or a smart phone), it would eliminate some of the manual process required hence avoiding manual entry mistakes and bringing in more customers .
An introduction of information technology would mean greater productivity in terms of efficiency, elimination of manual energy and unnecessary costs. The use of the technology would save energy and time, thus making employees focus on providing excellent experience to their customers and focusing their attention towards getting more productive work done like like finishing the products, saving money and hence increase bicycles sales.
Repairing bicycles - how technology could improve the process:
An information technology system could help in identification of the equipment’s defects and organizing their repair work especially the bicycles fleet category of rentals. This information can be obtained from the bicycle users or from the personnel assigned by Bill to be in charge of a bicycle station. Users can provide information about the defect of equipment by the using the input screen at the terminal of the station or report it over the phone or e-mail to the customer service agents.
The information about defects can be then recorded in the repairs and relocation ITsubsystem to help Bill and his service team to effectively plan their work, undertake field visits, or make arrangements to transport the damaged equipment to the main repair center in Vienna.
The data collection and the processing of the subsystem provides the operator critical information for analysing the rental statistics for hourly, daily and weekly demands .This can help organize the bicycles repairs with a backup information source with which stations can carry out future repairs.
Managing inventory - how technology could improve the process:
Failure to adopt an information technology system in the business would result in higher cost structures and thus competitive disadvantage. Usage of high rated inventory management technologies in the business, like electronic data transfer with the suppliers would increase operational efficiencies, backend data automation and thus ensure improvement of services offered to the customers.
Process
Input
Information/data item entered into the system as part of this process
(input needed for the system)
Processing
Processing or action the system must perform for this process
(what the system will do with the input)
Output
Information/data item displayed or printed out for the user in this process
(what the system will output/display)
Selling Bikes
Price
System produces a receipt listing the item, date and cost of sale.
“Paid” status
Repairing Bikes
Part repaired
System analyzes the extent of damage and displays whether to repair or replace
Displays “Repaired” or “Replaced”
Managing Inventory
The number of available equipment
Stores the recorded number of equipment available at a particular time.
Displays count of Total items available
4)
5)
Name thebusiness processthat you selected from #4 here: Inventory Management
IT
Requirement
Importance/
Relevance
High,
Medium,
Low, or Not Applicable (N/A)
(each must have a ranking)
Explanation for Ranking(Write a minimum of 3 good sentences for each. Use the name of the business and the selected process in each answer. Identify the data or type of data used in your explanation, where it applies.)
Usability
High
The adoption of information system by Virginia Bikes within the framework of its Inventory Management, requires a high level of usability. The business front line operators, Bill and other staff members, should in a position to easily use the system in accomplishing the business basic inventory management tasks every time they encounter the design.
There should be minimal errors arising from the system, and a quick recovery from such errors should be achievable. The “High” ranking of its IT requirement depicts that its significance regarding customers using the system should be high.They should be able to explore it easily and promptly for the realization of the system’s full potential.
Information Quality
High
As Virginia Bikes is increasingly expanding its data base, the collection, storage and mining of critical data for the bicycle business users becomes fundamental because of the fact that the information produced becomes increasingly significant in the everyday business.
Low quality information to the business may lead to squandering of resources on ineffective projects, while quality information ensures identification of business needs, direct targeted services and affirms efficiencies in every day work. The quality of data and information for the Virginia Bikes plays a critical role in a data-intensive, knowledge-based business environment towards predicting the organization’s outcomes.
Database
Medium
Since the business database for Virginia Bikes is currently less developed,the need to have a resourceful and informative database is a fundamental aspect for the company. The database needs in terms of customers, inventory management among others are in progress with time, but in limited application as the systems develops.
The “Medium” rating shows that currently the database requirement isn’t a high priority but the need to develop it with time is an inevitable undertaking for the business.
Reliability/ Availability
High
The formulation and designing of the Virginia Bikes IT system should consider the aspects of IT requirements of availability and reliability. The aspect of the system reliability implies that the elements of the system consistently perform in accordance to its specifications. The system should be not prone to errors or considered relatively free from technical errors.
The availability aspect of the design is the ratio of time the business IT system is actually functional to the total time it is expected to function. This ratio should be on the higher side for an average day to ensure high availability always.
The “High” ranking indicates the necessity of the system being reliable and available for the timely operation of the bicycle business.
Security
High
The safety of the company’s data and information is a critical aspect in the progress of the business. Highly protected information of the business from malicious users and hackers is important.
The “High” ranking shows the necessity and the priority of the security aspect of the Virginia Bikes business data.
6) The business benefits that Virginia Bikes would get from using a cloud-based Software-as-a-Service (SaaS) solution are as follows:
Lower costs
Cost is a critical factor in consideration for every step Bill undertakes in pushing the Virginia Bikes business to a higher level. In the spirit of cost-reduction Bill closes the Bethesda store, retrenched his manger and thus such a course of cost-reduction must just be upheld in consideration of the cloud-based Software-as-a-Service (SaaS). SaaS relies on multitenant or shared environment in which the software and hardware license and maintenance costs are low as compared to other models.
Reduced time to benefit
The aspect of time is a key factor to Bill, as most of the work relies on him. He works in the Vienna store only twice a week in order to keep up with other stores in days of need. His time table is full throughout the week and hence SaaS should come with greater time conscious measures for his business. The SaaS application is installed and configured already. Bill’s business has the advantage of provisioning the server in the cloud, and in a few hours the application will be ready for use. The entire process reduces time spent in the installation and configuration and thus reduction of issues arising from the way of the software deployment from the company side.
Unrestricted location of work
The Virginia Bikes has a number of outlets in different locations, for instance, a store in Purcellville, VA, Springfield warehouse among others because of its expansion programs. The need to be able to undertake effective operations with the help of SaaS in any of the Bill’s business locations after the installation and configuration of the software is very essential .
The SaaS software is hosted in the cloud and is accessible over Internet. Users from various business of Virginia Bikes can access to it via mobile devices / tablets when connected. The services provided by the system would be checking customer bike rental details and histories prior to making a new deal as well as having access to real time order and real time data tracking with the customer.
7)
The planning process t should include the selection of the best development path by keeping in mind the impact of the software outsourcing options, internet, and other custom software development alternatives.
o Analysis and Design: Bill should ensure that the application solves the business collaborative challenges in a networked environment. The analysis aspects would entail detailing the provision of the software online renting and the adoption of the diversified payment patterns.
On the other the hand , the system’s designing aspects majorly rely with the vendor through customized elements to suit the bicycle business need.These can be incorporated by the vendor whenever Bill deems it necessary. Bill can even ask for a system security test to ensure the business information is provided with utmost protection.
o Programming: Since the system has already been developed by the SaaS vendor, Bill is not required to take any action regarding the Programming Phase.It deals with the vendor side.
o Configuration:The SaaS software has “SaaS Provisioning” which can only be operated sufficiently with the help of the software developer because of the administrative authentication it requires.Bill will have to acquire admin configuration services from the application’s vendor.
o Testing: The testing of the application is undertaken by the vendor in the presence of the user Bill. This involves affirming the reliability, scalability and usability aspects of the system as a whole.
o Implementation and Use: Bill finally puts the software into full use to facilitate the business undertakings of Virginia Bikes. He would ensure a basic orientation to his other staff who will be using the application in future.
8)
How many repair work and rentals do the business incur in a day?
The information Bill would need is the average number of repairs and rentals that the business processes per day. This would help in allocating servicing personnel at different locations and availing the appropriate number of bicycles for renting.
Which store(s) has the highest number of repair work and rentals?
The data on the particular stores with the highest number of repairs and rentals is required before taking any action to increase the repairs and rentals. This information would make it possible for Bill to know the stations which urgently require repair staff and their count also. Knowing the store with highest rentals helps in provisioning enough rental bikes in that particular store.
Which days and seasons do the business experience higher repairs and rentals?
Virginia Bikes experiences huge rentals and repairs in weekends and his highest sales occur in the months of May while June and September are the business months for rentals. This kind of information enables Bill to ensure that he properly plans in those times and periods to ensure optimizing on the returns of the business without incurring any losses.
FORCE
List Porter's Five Forces
IMPACT(POSITIVE, NEGATIVE, or NEUTRAL)
This must have an entry
JUSTIFICATION of your selected impact
Minimum 2 good sentences that explain the impact of the force on Virginia Bikes to demonstrate understanding of the force.
Refer to specific details from the business in the case study to support your explanations.
Competitive rivalry
POSITIVE
Bill Thomas and his company,Virginia Bikes should understand the industry trends in reference to competition and try to gain a competitive advantage over its rivals. Bill should ensure strive to hold a greater percent of the market share through an analysis of the rivalry through industry concentration.
Virginia Bikes should pursue undertaking an improved product differentiation, by advancing its bikes rental business, improving on the terms of renting among other features, enhancing its variety of bikes to be meet different customer needs, creating a system of customized innovations in the bikes’ repairs and creative designs, advancing its accessories stock and sales by availing modern bike accessories. Bill should show a clear understand his competitors’ marketing strategies and actions and hence improve his strategic positioning with other rival firms.
Threat of substitutes
NEGATIVE
The threat of substitution imposes an effect on the competitive environment for Virginia bikes in this industry and influences the its ability towards achieving profitability .Consumers might choose to purchase the substitute product instead of the business’ product and this creates a negative impact.
The threat of substitutes of its major selling product, bicycles, is experienced when fluctuation in price of bicycles and their accessories is created by other bike businesses. The price elasticity also gets affected by these substitute products .As the available substitutes increase, the demand tend to become elastic as customers have more alternatives. Availability of the business’ close substitute products in the market limits the ability of Virginia bikes to raise prices and generate desired profits.
Threat of new entrants
NEGATIVE
If there are new entrants to the bicycles business, there will be increased competition to gain a grip on the market share. This will exert pressure on the costs, prices and the rate of investment in the bicycle industry. If the new entrants try to diversify across the various markets, they create pressure on the existing cash flows .
The bicycle business has a common technology base, very little brand awareness or loyalty, and accessible channels of distribution to all the sizes of organization, thus making it easy for rival firms to enter into the market. Entry of new firms makes profits decrease and also force some of them exit the market. This restores a market equilibrium in the overall equation.
Supplier Power
NEGATIVE
Virginia Bikes needs its supply of spare parts and other bicycle accessories hence creating buyer-seller relationships between the suppliers and the market. Distribution power lies with the suppliers if they can use their influence in dictating prices and the availability of the products. Suppliers who are in a strong bargaining position can also decide to reduce the available product quantity, if they are aware that there are few substitutes available for Virginia Bikes .
Buyer Power
NEGATIVE
An analysis on how customers impact on the industry and it its products and services is necessary for Virginia Bikes. When customers have a strong position they are very likely to impose pressure on the business and demand for improved quality or even ask for lower prices.This can raise costs at the expense of the industry profitability.
Bill can use his position as buyers succeed in exercising their buying power by seeking good deals from his suppliers. He can approach suppliers with more bikes than they need and purchase them bikes at a discount for the rentals and the low-end sales.
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