INFOSYS.

110 BUSINESS
SYSTEMS:
DELIVERABLE 2: BUSINESS
SECTION
2014

Name Mitchell James Glenn-Campbell
NetID mgle237
Group Number: 419
Website Link: http://infosys1102014s1group419.blogspot.co.nz/
Tutorial Details
Tutor: Day: Time:
Kit-Wah Sunday 11pm
Time Spent on
Assignment:
12 hours
Word
Count:
1585


The Market
Introduction
As the world becomes more technologically driven, retailers are greatly benefitted by
having an online website. However, the cost of setting up and maintaining an e-
commerce site is often too expensive for retailers. The Market is an online collaboration
project aimed at bringing together retailers and democratising e-commerce by providing
a website whereby businesses may upload products for free, creating an online shopping
centre for consumers.
3. Business Section
3.1 Vision
To create a democratic online marketplace which provides New Zealand retailers a
means to display and sell their products to customers.

3.2 Industry Analysis: E-Commerce
Force: High/Low: Justification:
Buyer power:

High Buyer power is very high in the online shopping
industry as customers have easy access to
many different online stores from many
different countries. In 2012 there was
reportedly 102,728 ecommerce stores based in
the United States who earned over $12,000
revenue
1
.
Supplier power:

High Supplier power is high because shops are not
required to use e-commerce. According to New
Zealand Statistics, online sales are still only 6%
of total revenue in New Zealand.
2
There are
also many alternative options to The Market
such as Trademe, Ebay or Amazon. Suppliers
may also choose to make their own online site.
Threat of new entrants: High Online stores are fairly easy and cheap to
setup, and so the threat of new entrants is





high. An online store costs approximately
$10,000-$20,000 to setup
3

Threat of substitutes: High Online stores will always be faced with
substitutes as physical stores offer a material
interaction between customers and the product.
Rivalry among existing
competitors:
High The online industry is extremely competitive as
there are many stores all who wish to be as
profitable as possible. Many online stores offer
discounts or free shipping on first purchase in
the attempt to lure in and retain customers.
Overall Attractiveness: The E-Commerce industry is not very attractive due to all of the
five of Porters forces being high. This is primarily due to the online market being so
vast. Buyers have hundreds of thousands of options to choose from, and the rivalry
between firms is fierce as they attempt to lure in customers from all around the globe
with various deals and offers. The online industry also will always be faced with the
constant substitute of a physical store, as it creates a connection whereby consumers
may touch and have absolute certainty about the product, which is yet to be translated
into an online experience. The E-commerce industry may seem to be unattractive, but
what Porters 5 Forces fails to represent is the potential profits of being an industry
leader in online retail. For example, in 2013, Amazon reported net sales of over $74
billion dollars.
4
So although this industry is unattractive, if a site is able to earn a
significant portion of market share it may become one of the most profitable
organisations in the world.

3.3 Customers and Their Needs
The Markets primary customers are New Zealand internet users, who are willing and
able to purchase goods online. Customers require an accessible website which allows
them to search for and discover goods and services that they wish to purchase.
Customers also need a way of paying for the goods. Credit cards are the most common
form of online payment, with almost 90% of online business to customer transactions in
North America being paid via a credit card
5
. Customers also need a way of receiving the
goods anywhere in New Zealand. It is important that The Market meets the primary
needs of the customers because without these basic components the site is useless and
will not succeed








3.4 The Product and Service
The Market is an online website which means it is accessible to customers with an
internet connection to their product range. The Market offers many means of payment,
including credit cards, Paypal and bank transfers in order to provide all customers with
the ability to pay for goods. The Market provides a service to the customers, by
calculating the products expected delivered date. This may be done through an item
tracking process, which calculates the distance the product is yet to travel and displaying
this information for the customer on the website.
3.5 Suppliers and Partners
The Markets suppliers are the shops or brands which upload the products to the sites.
As this is an online mall, it may be any shop or brand in New Zealand which sells goods.
An example may be local painter, Kelly Poulton. Kelly is an abstract artist who sells
artwork to families at Alfriston Primary. Kelly would greatly benefit from the exposure
The Market would provide her as her artwork may be viewed and purchased by anyone
on the internet. Lynettes is a small clothing boutique in Te Puke
6
. Lynettes has not
displayed their products on their website; this is possibly due to it not being worth the
investment to create an online store with this capability. Boutiques like Lynettes and
self-employed artists or designers like Kelly Poulton would be the primary suppliers of
The Market as they do not have the means to design and support their own website.

3.6 Strategy: Cost Leadership
To provide customers with the ability to see the many products, brands and shops from
around New Zealand, The Market must first get enough suppliers and partners. To do
this The Market uses Porters Generic Strategy of Cost Leadership.
The scope of The Market is retail businesses in New Zealand. This is a large competitive
scope as there are many retailers. Statistics New Zealand reports that in 2011 there
were 470,050 enterprises in New Zealand
7
. The key reason The Market is expected to
gain suppliers and partners is due to it being free and requires only a portion of the sales
revenue. Therefore the cost strategy is low cost.

3.7 Value Chain Activity: Market and Sell the Product
The Market relies upon its ability to market and sell the products which businesses
upload to the website. Apart of The Markets vision is to create a website with the





means to display and sell products. Therefore its ability to sell goods is important in
retaining suppliers and partners. The Market uses a low cost strategy, which
unfortunately means that it will make very little revenue upon each sale (4%), and so to
ensure profitability, it must sell as many goods as possible.






3.8 Business Processes
3.8.1 Product Transaction Process:
The product transaction process has two primary purposes. It must be able to check with
stock lists that the product
users are wishing to purchase
is available. If not, information
systems should recommend a
similar product so as not to
lose the sale. The Market also
needs to distribute the
revenue (96%) to the firm
whose product was purchased
by the user along with
information detailing the
transaction so the company
may ship the product to the
customer.





3.8.2 Customer Registration Process
The customer registration process is very important to The Market because it provides
valuable informational that may be used later to analyse demographics. It also proves
the user is an authentic person and we are not storing unnecessary information in our
database. This authenticity check is done using decision making systems through an
email confirmation check. If the user does not click the provided link within a day, the
data is disposed. Part of the customer registration process is also finding out customer
interests so The Market may provide relevant advertisements and products on the users
homepage.


3.9 Functionalities
Product Transaction Process
Confirmation of Payment
Processing the Invoice
Customer Registration Process
Store Information in database
Confirmation Email
3.10 Systems
Decision Support System
The Decision Support System assists in the Business Processes of The Market by
making operational decisions in order to streamline the user experience. The decision
support system is required in order for the various processes to work, which in turn, will
improve customer satisfaction.
Customer Relationship Management
The Customer Relationship Management system is important to The Market as it
analyses the users previous purchase history and interests in order to recommend
relevant products in the future. This has the potential to increase sales as customers
may discover new products through the CRM system.
Collaboration System
The Market is a collaboration based website. The products are all uploaded voluntarily by
suppliers. This collaboration system is what drives our vision, as it creates a democratic
online marketplace, by allowing small businesses to upload products for free by
collaborating through The Markets online service.

3.11 Summary Table: VALUE CHAIN TO SYSTEMS
Value Chain
Activity
Processes Functionalities Specific Information
System(s)
Broad Information
System(s)

Market and
Sell the
Product
Product
Transaction
Process
Confirmation of Payment


Processing the Invoice

Payment Processing
System

Accounting
Management System
Transaction
Processing System

Transaction
Processing System
Customer
Registration
Process
Store Information in database


Send Confirmation Email

Marketing Analysis
System

Customer Management
System
Enterprise Resource
Planning

Transaction
Processing System

Conclusion
The Market is an online collaboration website, which democratises the online retail
industry by providing a free alternative to creating a website. It provides an online
customer centric service whereby anyone can browse and find anything they wish to
purchase. Through the use of information systems it is able to manage the vast amount
of information required in order to make the user experience as pleasant and also and as
profitable for the retailers as possible. The Market brings New Zealand businesses and
customers under one roof in the attempt to create an online mall which provides
beneficial services to all parties.

References

Thomas, I. Davie, W. Weidenhamer, Deana (2013) U.S Census Bureau News [e-
commerce sales] U.S Department of Commerce
2
BNZ (2013) BNZ Online Retail Sales Index. MarketView. Retrieved from
http://www.marketview.co.nz/uploads/Online%20Report_20131017.pdf
3
Edwards, A. (2012) Checklist for Setting up an Online Store. Retrieved from
http://www.totali.co.nz/blog/post/19/2012/11/09/setting-up-an-online-store
4
Amazon (2014) Amazon Annual Report 2013. Seattle. Amazon.com, inc.
5
Turban, E. King, D. McKay, J. Marshall, P. Lee, J & Vielhand, D. (2008). Electronic
Commerce 2008: A Managerial Perspective. London: Pearson Education Ltd. p.550
6
Lynettes (2014) Contact. Retrieved from
http://www.lynettes.co.nz/leftnavpages/contact/
7
Statistics New Zealand (2011) New Zealand Business Demography Statistics: At
February 2011. Retrieved from http://www.stats.govt.nz/