Individual Report MIS Executive Edibles
tyroneolivemehel
IndPaperSample.docx
J Abbas
3/21/2015 Stu ID 11809023
J Abbas
3/21/2015 Stu ID 11809023
Flower Power Flowers Individual Report
BUS 410
John Abbas
3/21/2015
Student ID 11809023
In this project, our goal was to develop a presentation that was convincing enough to use in a hypothetical scenario. The scenario we used in our presentation was to convince our business partner that our flower store will be closed by the end of the year unless we integrate a management information system into our business practices. We covered current practices and outlined the different organizational and practical issues we have in the workplace. Next, we used the Michael Porter's model to develop a sample of what our industry looks like. We went into detail when covering the each of the five forces in order to “drive home” the different obstacles we are facing in our industry. We then discussed the different changes we propose to implement into our business. We covered specific financial projections in order to quantify the profitability of our proposed investments. Finally, we discussed the importance of this integration in order to survive in our industry.
Identifying the problems our business is facing is critical to developing efficient business practices. To do that, we must first discuss current practices. Relative to developments in the modern business, our work practices are best described as antiquated. Methods of processing transactions include using notepads, writing up receipts, using paper spreadsheets, and using carbon copy sheets when in need of duplicates. Currently, we only accept cash as payment. This has led to turning many customers away because they only carry cards. Our inventory records are also kept in paper spreadsheets. We’ve had occasions in which our inventory clerk has misplaced or damaged a spreadsheet. This has caused us to under or over order inventory, which causes a large loss of profit because the stock that isn’t sold begins to decompose and has to be thrown out. Our marketing strategies are underdeveloped. We don’t really make an attempt to reach out to our customers. We don’t have an incentive system in place for customers to continue shopping with us. Finally, at Flower Power Flowers, we are very proud of the business model our founder developed. Unfortunately, we currently don't illustrate that model through our practices as best as we could be.
In our presentation, we used the Michael Porter’s Five Forces Model to develop a sample of the market our business is in. The “five forces” in this model should be understood as a way to analyze a business’ competitive advantage, or disadvantage, in an industry. It is said that this model shapes the future of a firm.
Because all firms share their respective markets with other competitors, it is useful to compare our practices to that of other firms that are constantly developing new and efficient ways to carry out their business model. For our competitor, we chose 1-800-Flowers. This competitor uses a b2b and b2c business model. They are ecommerce based, and have done a great job marketing themselves through their own website and through social media. Choosing 1800-Flowers was important for us
because they are a good example of a business that uses modern methods to succeed.
The “new market entrants” area covers the new companies that are entering a market.
This area is very important because there aren’t very many barriers, or requirements, in order to enter the market of flower boutiques. One kind of new entrant, which would be a great danger to our business, would be one with an information system already in place. This could be a great problem for us because we are just now considering the implementation of an information system into our business. Another issue would be new entrants with a workforce that is trained to handle those information systems. The problem with that would be that we have not worked with an information system before, and need to assimilate before becoming efficient.
In our market, the threat of substitutes is significant. Currently, there are several companies in the market available for our customers to choose from. The problem with more substitutes available to our customers is that it takes away price control from us. This can lower our profit margins. Customers can easily go online and shop around for the best specials from companies like ProFlowers, Teleflora, and Conroy’s.
Any successful company depends on how well it can attract and keep customers. Because we have not yet developed any marketing strategies, we have not developed a good customer base. Customers are very aware of how well a company tries to keep its customers through good specials and marketing. Unfortunately we have not made any attempts to distinguish ourselves from our competitors through product differentiation.
Suppliers have a great effect on a firm’s ability to have competitive prices. The more suppliers a firm has, the more flexible its prices can be. Fortunately for our company, we have a great diversity of suppliers. In addition, we have great communication with our suppliers. This allows us to always have a good inventory, and be able to handle expedited orders well.
Although we are currently at a disadvantage against other firms in our market, there is still an opportunity for us to become more competitive, and eventually make our business more profitable. We can still make our business profitable due to our power of suppliers. Because we have a variety of suppliers, we have great control over our prices and how well our products can differentiate from that of our competitors. Ultimately, we won’t be able to exploit these advantages until we have integrated an information system into our business, which is what we plan to do.
Our proposed changes include contracting a web developer agency to launch a web page for our business, purchasing a web traffic membership to bring traffic to our site, equipping our staff with smartphones, which will be preloaded with the Square application, and purchase of a new vehicle for deliveries. We will also be marketing our business online through our webpage and through social media. Marketing will also be done offline by contacting local businesses and providing samples of our bouquets. Integration of this new MIS will allow for us to differentiate our products from that of our competitors, allowing for an increase in profit.
Our proposed MIS will begin with launching our business’ new webpage. BuyerZone, a web-developing firm, will design the web page. Contracting BuyerZone to develop our page will cost $5000. This includes credit card processing, e-mail notifications/invoice, multiple shipping and sales tax options, order tracking, and secure checkout & order processing. One of the key features in our website will be the BYOB builder. The BYOB builder will allow customers to visit our site, find the products they like in our inventory, and build a bouquet out of them. Allowing customers to build their own products can create a bond between customer and product. Customers would also find value in the fact that they have more price control. This feature will not only be available through our webpage. It will be available through our BYOB app as well. Customers will be able to build bouquets, check their order status, and place orders on bouquets made by our florists. Finding a way to bring traffic to our website is also important. That’s why we’re hiring Site Solutions, a search engine submission company specializing in search engine optimization. Their services include unlimited keywords and a guaranteed first page listing on Google. For our new POS, we will be using the Square app. This application is free, and includes many of the features that we need to run our business. Some of the features include processing card and cash transactions, tracking inventory values, sending receipts to customers through text or e-mail, and analyzing what products are purchased most frequently. Our new POS will be implemented through a combination of the storefront, our driver, and every employee. First, the storefront will be equipped with an iPad, which will be preloaded with the Square app, and a stand. The stand consists of a frame for the iPad to be permanently placed into, and a card reader for credit transactions. Next, all employees will be able to process card transactions wherever in the store they are. This will be possible through use of the Square app installed in their smartphones. Customers will have the choice of receiving their receipts through a text message or e-mail. Our driver will also be equipped with a smartphone, allowing him to process transactions upon completion of a delivery. Having a smartphone will also give them access to maps, our inventory values, and the ability to call customers if a delay occurs. Our driver will also be able to communicate much better with our suppliers in case we have expedited orders to complete.
The following is a summary of our current and proposed expenses:
|
Current |
|
Proposed |
|
||
|
Products |
Monthly Cost |
Annual Cost |
Products |
Monthly Cost |
Annual Cost |
|
Property Lease |
$2,083 |
$25,000 |
Property Lease |
$2,083 |
$25,000 |
|
Payroll |
$9,166 |
$110,000 |
Payroll |
$7,500 |
$90,000 |
|
Auto Insurance/Maintenance/ Fuel |
$308.33 |
$3,700 |
Auto Insurance/Maintenance/ Fuel |
$230 |
$2,760 |
|
Inventory/Stock |
$4,000 |
$48,000 |
Inventory/Stock |
$2,500 |
$30,000 |
|
Utilities |
$350 |
$4,200 |
Utilities |
$350 |
$4,200 |
|
Office Supplies |
$350 |
$4,200 |
Office Supplies |
$65 |
$780 |
|
|
|
|
Webpage |
|
$5,000 (one-time cost) |
|
|
|
|
Marketing |
$399.99 |
$4,800 |
|
|
|
|
iPad and Stand |
|
$699 (onetime cost) |
|
|
|
|
Smartphones |
|
$400 (onetime cost |
|
|
|
|
Smartphone Service |
$433.44 |
$5,201.28 |
|
|
|
|
Vehicle |
|
$20,000 (onetime cost) |
Some details to notice about the expenses table are that we spend a significant amount of our monthly budget on office supplies. This is because of our dependence on physical record keeping. Also, spend a lot on fuel for deliveries. We could easily lower that expense by investing in a new vehicle that consumes less fuel. Our inventory expenses are high because of customers don’t have very good access to what we have in inventory. We don’t market what we carry. Because of that, a lot of our merchandise goes bad and has to be disposed. We could easily save $20,000 a year by adding an information system. This will allow us to lay off a clerk, and give the other employees access to more specialized training.
This graph is an illustrated comparison of our projected increase in profit with and without the implementation of an MIS. The graph shows that we will eventually reach a halt in profits. Unless we implement this MIS, we will be forced to declare bankruptcy and close our business. Implementation of the MIS has the potential of increasing our revenue by $25,600 by the third year.
Below are a few examples of the combinations that can be made available in the bouquet builders our customer will use. This database uses the products that are available to us through our different suppliers:
|
Bouquet # |
Bouquet Name |
Cost |
Flower |
Vase |
Filler |
Card |
Wrapping Paper |
|
11 |
California Poppies |
$11.03 |
632 |
24 |
32 |
102 |
62 |
|
12 |
Baby Blue Eyes |
$8.21 |
699 |
23 |
31 |
101 |
64 |
|
13 |
Golden Bartonias |
$11.52 |
665 |
26 |
33 |
103 |
63 |
|
14 |
Wind Poppies |
$8.34 |
626 |
25 |
34 |
102 |
64 |
|
15 |
Meadow Foams |
$6.19 |
683 |
23 |
32 |
101 |
63 |
|
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In the Bouquet Name table, the “Bouquet #” column is the primary key for each product combination. The “cost” column is a combination of the cost of each component of a bouquet. The flower, vase, filler, card, and wrapping paper column are foreign keys that make up the primary key.
All of the tables that support the “Bouquet Name” table have columns for the supplier that each item was obtained from, and the cost for each item. The “Supplier” table also shows the contact number for each supplier.
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