A1.3. Value Chain

 The idea to open a website for selling and buying used products is quite common. However, used products often mean lower markups. When dealing with sell a product on a obsolete medium, the main focus needs to be keeping the business at a level where it can flourish, while at the same time making sure you aren’t wasting time on a potentially nothing idea.  If I were to start a used CD website for example, I would eliminate the need for inventory and automate the experience as much as possible. Not hold inventory is key because it will drastically reduce your overhead. Automating the process means less questions, confusion and less customer services requests; this is assuming you get the automation process built correctly and in a user friendly way. These two key points means that the company could theoretically be run from a dorm room.

 Imagine a website available where students have access to an inventory of used CD’s that they themselves build. Using an open source database, students can plug in the UPC’s of the CDs that they want to sell. All of the information comes up and the information is saved in their personal inventory. They would also create a second inventory, either by typing in the CD they want or by searching the site. When the site finds a match of two people, each who have and want each others CD’s, the users are allowed to initiate a trade. Once the two users agree to the trade, they print out shipping labels that they would have to pay the site owner for. The users send each other the products and the transaction is complete.

 The value chain we read about, fits into the site idea in a “reduced” way because the site allows for the company to be as uninvolved as possible. Without getting too in depth into the idea I pose the following to be the upstream management section of the value chain for my company, not that of its users (who own the stock): The raw material would be the website, programming, domain and hosting package. Since my site actually has nothing to do with the inventory we provide, the used CDs shouldn’t be considered our raw material. The inbound logistics, or tracking of the raw material would consist of a schedule for the completion of projects, IE the website adding a new feature or the amount of time it takes to sign up a new client. Like I said earlier, the warehouse storage is completely reduced because we have no inventory. In the beginning, the whole system could be held on a server no bigger that a standard desktop computer. As the website continues to grow, you could add server racks until eventually (hopefully) the need to rent space at a data center. 

 For this website, the more advanced part of the value chain is the downstream management side because there is a lot more involvement here. The finished product (the website) would be an entirely automated storage and retrieval system; a separate system would not need to be built. I say this because in the most basic terms a data storage and retrieval system is the product we would be offering the clients. The outbound logistics or distribution planning system would be a shipment tracking system. When the user purchases a shipping label, they are also getting a tracking number. That tracking number data is automatically added to the transaction information section, and each party would be able to view the shipping details. Instead of building our own tracking system, we would just port the data from a shipping companies (like fedex’s) site.

 Marketing and promotions would be the most important aspect for us because the site would be nothing without its users. In fact, without the users there would be no site at all… If the target market is college students, the places to advertise them could include:

 Freshman welcome package

 Local college hangouts

 College sporting events

 Targeted Facebook ads

As a fellow student, you have access to the email address of everyone on campus and in some instances are allowed to send out email blasts (not spam). I would suggest looking into the ability to do this, but only if it is allowed.

 Customer services is an issue with any company and as easy as a site can be someone will always have a problem. There always needs to be a plan in place for what could go wrong…

 Did someone not fulfill his or her shipment?

 Did the shipment come broken?

 Is someone unable to work the website?

When the company starts, customer service could be one person on a cellphone but as the company grows, the customer service department must grow with it. The biggest expense will always be system maintenance though. To keep any site up and running with tons of users on it, there needs to be almost constant monitoring going on.

 In conclusion, if you are working with a product that is used and basically obsolete, you shouldn’t work to hard at selling it. There is a reason people are trying to get rid of their old CDs, so spending a lot of time and money is not going to get you to far. Let the customers do all the work for you. All you need to do is build a platform for users to meet.

Week 1. Task 2

choose any specific IS products sold on the market or developed in-house. Then describe its value for the coompany and describe what parts/processes cosntitute main systems components as they are shown on fig. 1.3 (p.8).

Recently I was at a concert, in Camden NJ.  Before the show started, people were in the parking lot selling their goods. This has always been a cash only thing. For the first time ever, I met a guy selling his product, and taking credit cards through an iPhone / Intuite credit card reader.  Genius!  

Now for the details of the equipment... Obviously this was a mobile - commerce system, which allows for one to conduct business "anywhere, anytime." 

The input in this scenario included: Entering the transaction amount, and swiping the credit card.

Processing we know was the transmission of data (price amount) to the merchants account.  

The output, in this case was the confirmation of a completed transactions.  In some cases an email receipt is sent, (the document or report).

The feedback - which shows both the merchant and customer that the process is moving along is show as - the loading screen of the program, the ability to change fileds during input, a rotating circle during the transactions, and a transaction complete notification at the end of the transaction.

The perks of this system include:
Accessibility - ability to take a transaction at any time

Accuracy - as opposed to cash, no change = no lose in profit

Security - the hardware, and software is all encrypted so security is "allegedly" not an issue.  This also beats out over cash which can be lost or stolen. 

Timely - information is delivered when it is needed

Verifiability - Both the customer and the merchant have the ability to verify the transactions has gone smoothly at any time. 

This is a light weight device that allows for a merchant to expand their market in respect to a client base. In some cases such as my own, a purchase is made just for the novelty of using the device. In the event that the customer doesn't have any money, they finally have another way to pay. It also gives the merchant an added security. If say the device is stolen, they still retain the data, transaction information and payment. If the merchant takes the usual route of just taking cash they run the risk of losing their money without the ability to get it back. In addition, they merchant would not have to carry change. Lastly, the merchant also retains customer data such as an email address, to allow for future contact with a potential customer.