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INFOSYS.110 BUSINESS SYSTEMS:
DELIVERABLE 2: BUSINESS SECTION
2014

Name Tok Fang Jun
NetID ftok584
Group Number: 141
Website Link: http://infosys1102014fcgroup141.blogspot.co.nz/
Tutorial Details
Tutor: Day: Time:
Helen Tuesday 2pm
Time Spent on
Assignment:
15 hours Word Count: 1546

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THE LOYALTY CARD
INTRODUCTION
The growing competition in all industries causes businesses in New Zealand finding ideas to
retain customers. This includes giving out loyalty cards to their customers which provides
them with incentives such as discounts. However, every business has their own card, which
results in a problem: People find it a hassle to carry too many cards. This discourages people
from bringing their cards around and thus missing out the incentives that these loyalty card
can bring. Hence, we create a card system that encompasses all loyalty cards into one,
which is more convenient and user-friendly.
3. BUSINESS SECTION
3.1 Vision
To enhance and optimise consumer’s shopping experience while bringing growth to
businesses in the world.
3.2 Industry Analysis:
Industry: Telecommunication
Force: High/Low: Justification:
Buyer power: Low As of now, there is no other card system that
combines all loyalty cards into one, hence
customers do not have other choices.
Supplier power: Low There are many suppliers that are able to supply
raw materials such as electromagnetic strips and
plastic, thus there are many options to choose
from in the market, hence decreasing the

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supplier’s power.
Threat of new entrants: High A new card system that only focuses on loyalty
cards is not hard to implement due to the fact
that there are so many card systems in the world
such as credit card. It is mentioned in one of the
interviews that there are “cards for every
situation in life” (Lipka, 2012). This emphasises
the point that card systems is not hard to
implement.
Threat of substitutes: High Coldewey (2013) states that ‘coin’ collaborates
with smartphones to combine all of the cards,
from credit cards to loyalty cards, into one. This
substitute creates a high level of threat as it
serves the same purpose as our product, with its
disadvantages being high cost and the need of a
smartphone to operate it.
Rivalry among existing
competitors:
Low Currently, there is no other card system that
emcompasses all loyalty cards into one, thus the
competition is low.
Overall attractiveness of the industry: Not attractive. Even though the buyer power and the
rivalry among existing competitors is currently low, but it may become relatively high in the
future due to the threat of new entrants such as a new card system put in place is quite high
as it is easy to implement and the threat of substitutes such as the innovation of ‘coin’ is
relatively high due to it serving the same purpose as the Loyalty Card.



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3.3 Customers and Thei r Needs
The customers of the Loyalty Card are shoppers, ranging from people who does grocery
shopping to people grabbing a sip at the nearest cafe. Every operating business has their
own unique loyalty card, resulting in the situation whereby customers have too many cards
at hand. Tuttle (2013) states that people are tired of having to fumble through their things
just to find a loyalty card. Moreover, shoppers are also losing out on benefits and incentives
which they can attain from loyalty programs. Neville (2009) states that carrying around too
many cards can be a chore and that people might not want to carry the cards around to
ensure that they are able to get discounts and benefits. Thus, the shoppers need a
convenient method to join loyalty programs while not having too many cards.
3.4 The Product and Service
Our product is a card system that emcompasses all loyalty cards into one, thus ensuring that
people only need to have one loyalty card at hand at all times. Morran (2012) states that
people want the incentives that loyalty programs can bring but do not want to be “
overwhelmed with plastic fobs”. The Loyalty Card will be able to get rid of the problem of
excessive number of loyalty cards.
3.5 Suppliers and Partners
One of our suppliers would be electronic companies. This is because in order to make the
loyalty cards, it is important to ensure that we are able to input the magentic strips on the
cards so that our customers would be able to fully utilise the cards. Another supplier would
be plastic companies, this is due to the fact that the raw material of the the Loyalty Card is
plastic and it is essential for us to be able to acquire plastics so that manufacture of the
Loyalty Cards can take place. Forming strategic partnership with software companies will
ensure that the software in which our company uses would be up to date and transactions
between businesses and their customers can smoothly proceed with a flawless database.
Another strategic partner would be with businesses. This is because businesses have to
adpot the Loyalty Card system into their operation for it to function properly.


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3.6 Strategy: Cost Leadership
The competitive scope of our business is broad and the cost strategy is low, thus the generic
strategic that the business is using is cost leadership. Our potential customers are shoppers
in New Zealand which is a very large market. It is of a low cost because we wanted our card
system to be accessible and available to everyone in the market at a price in which they are
able to afford.
3.7 Value Chain Activity: Procurement
The most important value chain activity for this business is Procurement.
This value-chain activity is important to the business as it adds the most value to our
product. By ensuring that the Loyalty Cards that were sold is of good quality and that it does
not break easily, it will result in customers’ satisfaction in our system and thus enhancing
their shopping experience. As our strategy is cost leadership, we would also want to procure
materials which are of lower cost, thus attracting more customers. This may result in more
businesses forming strategic partnerships so that their customers will also able to enjoy the
benefits that our Loyalty Card brings. This could inevitably lead to the growth of the
company as their consumers is able to enjoy benefits of their loyalty programs and thus
resulting in higher customer retention.









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3.8 Business Processes
3.8.1. PURCHASING PROCESS – As part of the value chain activity of procurement, the
purchasing process is very important. This process ensures that the business will always
have inventory at hand, so that there will always be stock to fulfill the customer’s demand.
Start
Create purchase
requisition
Create purchase
order
Check inventory
Send purchase
order
Receive goods
and services
Receive bill
Send Payment End
Sufficient?
No
Yes
Warehouse
Receiving
Accounting

$

$
$
Purchasing


Inventory
Management
System

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3.8.2. SUPPLIER SELECTI ON PROCESS – This is also an essential process in procurement as it
helps in the choosing of the supplier by weighing the pros and cons of different suppliers.
Through the supplier selection process, the most cost effective supplier can be picked out
and it is also to ensure the quality of the the raw materials supplied by the company is of
good quality.
Start
Investigate
suppliers’
market
Filter out
undesirable
suppliers
Compare
existing
suppliers
Create budget
Does
supplier
fulfill the
budget
criteria
End
Warehouse Management
Accounting
Yes
No


Market Analysis
System

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3.9 Functionalities
3.9.1. PURCHASING PROCESS
 Validate the order
 Acknowledge the bill
3.9.2. SUPPLIER SELECTION PROCESS
 Validate the budget
 Acknowledge the selected supplier
3.10 Systems

3.10. 1. ORDER PROCESSI NG SYSTEM – This system supports the functionality of validating the
order in the purchasing process. The system ensures that the order can be carried out
smoothly resulting in sufficient supply for the customers. This allows the customers to
optimise their shopping experience with the product which in line with the vision of the
company. The optimisation of shopping experience can lead to a boost in business.
3.10. 2. COST ANALYSIS SYSTEM – This system supports the functionality of validating the
budget in the supplier selection process. By creating a budget using the analysis of different
costs when purchasing the raw materials, it ensures that we can keep our cost low and thus
making it available to all shoppers. This is consistent to the vision of the company which
ensures that shoppers is able to acquire the product and thus enhancing their shopping
experience.
3.10. 3. SUPPLY MANAGEMENT SYSTEM – This system supports the functionality of
acknowledging the selected supplier in the supplier selection process. This decision of
accepting of the supplier influences the cost of producing the Loyalty Cards and can affect
the pricing decision of the product. Thus, it is important in acknowledging the correct
supplier in order to be cost effective and the system helps in determining that. This is in line
with the vision of the business as value is added by cost effective measures so that all
shoppers are able to acquire the card to enhance their shopping experience.

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3.11. Summary Table: Value Chain to Systems

Value Chain
Activity
Processes Functionalities Specific Information
System(s)
Broad Information
System(s)
Procurement
1. Purchasing
process
1. Validate the order.


2. Acknowledge the bill.
Order Processing System


Bill Processing System
Transaction Processing
System

Transaction Processing
System
2. Supplier
selection
process
1. Validate the budget.

2. Acknowledge the selected supplier
Cost Analysis System

Supply Management System
Decision Support System

Decision Support System

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CONCLUSION
In conclusion, the creation of the Loyalty Card is to enhance and optimise shopping
experience of people while in turn bringing growth to businesses. It serves the needs of the
customers as it solves the problem of having too many cards. As the strategy of the business
is cost leadership, procurement is the most important value chain activity. The systems that
support functionalities, which in turn support the key business process is vital in ensuring
that the operations is working towards the vision of the organisation.
REFERENCES

Coldewey, D. (2013, November 15). Master Card? ‘Coin’ combines debit, credit and others into one.
Retrieved from http://www.nbcnews.com/tech/gadgets/master-card-coin-combines-debit-
credit-others-one-f2D11591259
Lipka, M. (2012, April 18). Can you have too many credit cards? Retrieved May 15, 2014 from
http://www.reuters.com/article/2012/04/18/us-credit-cards-howmany-
idUSBRE83H0U620120418
Morran, C. (2012, August 6). Are you overdosing on supermarket loyalty cards? Retrieved May 15,
2014 from http://consumerist.com/2012/08/06/are-you-overdosing-on-supermarket-loyalty-
cards/
Neville, C. (2009, March 17). Loyalty cards-how many is too many? Retrieved May 15, 2014 from
http://www.charlesneville.com/2009/03/loyalty-cards-how-many-is-too-many/
Tuttle, B. (2013, July 11). A disloyalty movement? Supermarkets and customers drop loyalty card
programs. Retrieved May 15, 2014, from http://business.time.com/2013/07/11/a-disloyalty-
movement-supermarkets-and-customers-drop-loyalty-card-programs/