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INFOSYS.110 BUSINESS SYSTEMS: DELIVERABLE 2: BUSINESS SECTION2014

Name Jayesh SahayNetID Jsah907Group Number: 446Website Link: http://infosys1102014s1group446.blogspot.co.nz/

Tutorial DetailsTutor: Day: Time:Khushbu Thursday 12pm

Time Spent on Assignment: 19 hours Word Count:

1792(not including words in business module)

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RUN-REWARDINTRODUCTION

The world is becoming a unhealthier place day by day. Since 1980 the overweight and obesity rates has doubled, 30% of adults over the age of 20 are now overweight while another 11% are now obese. Even children under the ages of 5 are also affected by obesity where 40 million children worldwide are now overweight or obese. United States of America spends around 21% of their total health care costs(Susan Kelley,2012) just for obesity related issues, while here in New Zealand we spend 4% of our total health care costs into obesity(Martin Johnston,2012) problems at the moment it may not seem much but figures have doubled in New Zealand since 2005. However the sad thing is that all these obesity related problems and costs are avoidable through healthy lifestyles such as healthy diets and regular exercise, but the problem is people are just not into it because they have over things that occupy their time.

3. BUSINESS SECTION

3.1 Vision

Run-Reward's vision is to help people achieve a healthier lifestyle through motivation in areas such as exercise and diet and award them with rewards to achieve their goals faster.

3.2 Industry Analysis: Fitness Industry

Industry: Run-Reward is under the fitness industry. The fitness industry is growing as overweight and obesity ratios rise around the world. Forbes has indicated that 1.6 Billion people are overweight and it is set to rise by 40% in the next 10 years (Lauren Sterib, 2007). This is a good indicator that the Fitness industry will be growing in the future to provide its services to the tremendous growth rate of overweight people.

Force: High/Low: Justification:

Buyer power: High The buyer power in the Fitness industry right now is

high. This is because there are many subsitutes that

can be pursued when people are looking to get

healthier. People will not want to pay $400-$500 to join

a gym when they can buy a ball for $10 and play

soccer at a local park for free and get their daily

exercise. In the last census of New Zealand it shows

only 650,000 or 8-10% of the population attempted to

go to gyms which shows a very small potential of

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pulling in customers (Fitness New Zealand,2013).

Supplier power: Low Suppliers for the fitness industry will have low

supplier power because there are many

company's in the world that supply sporting

equipment that fitness industries require for their

consumers. Large international sport equipment

producers such as Addidas, Nike, New Balance all

offer equipment such as Running shoes, Heart-

Beating monitors and other running related

equipment. There are even cheaper companies

from China that supply what Run-Reward

requires to further their own profit such as Li

Ning and much more (B.Bodnar,2014).

Threat of new entrants: Low The threat of new enterance for the Fitness

industry business is low because it will require

lots of financial investment to be sucessful. And

since Run-Reward is a high risk/high reward type

company we have to target something which is

guaranteed people will try. There wont be many

people to take such a risk especially in a Fitness

related industry where Gyms such as Jetts fitness

cost up to $500,000 to start up a gym (Sarah

Stowe, 2012)

Threat of substitutes: High The threat of subsitutes for a company such as

Run-Reward within the Fitness Industry is high.

Subsitutes to Run-Rewards program range from

gyms, personal training, and playing sports to

keep fit and active. In the last census of New 3

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Zealand it was estimated that there are anywhere

from 150-400 gyms/clubs in New Zealand (Fitness

New Zealand,2013) thats a lot of subsitutes that

people could go to.

Rivalry among existing

competitors:

High Rivalary among existing competitors is high. In

the last census taken in New Zealand it was

estimated 540,000 New Zealanders go to some

sort of fitness centre or 8-10% of New Zealands

population to the already avaliable 150-400

gyms/clubs in New Zealand (Fitness New

Zealand,2013). This is already a big portion of

New Zealand locals already doing similar

programs to what Run-Reward offers.

Overall attractiveness of the industry: The overall attractiveness of the fitness industry is appealing because it is a growing industry. With the numbers stated on rise of overweight and obesity rates people will eventually want to start getting healthier to live a better life. And the first place they will seek help is a industry which specialises in weight loss and motivation for healthier diets and better lifestyle.

3.3 The Customers and their needs:

Run-Reward is taking an approach to its customers by thinking that people are lazy and unfit and their needs are motivation to start regular exercise and consume a healthier diet. We are assuming that whatever methods of training and weight loss approaches they have taken have not worked out because they are not being rewarded, whether it be through the form of losing weight or simply because they no longer have the motivation to carry on to see these results. We have also taken approach in thinking that the customers do not simply have the time to plan out everything to keep a regular exercise/diet plan and needs someone to do it for them. And because the method of exercising they are attempting is just not attractive enough for them to keep doing (Karen Springen, 20XX).

3.4 The Product and Service

The product of Run-Reward comes in two methods which work side by side to satisfy the customer. The Run-Reward app which will track and monitor performance and keep track of your reward points will be purchased from the respective systems (Android, ITunes). The App will supply the user with their diet plans for each day based on their taste and physical condition. It will also be a daily alarm reminder of when the user has set their free time to exercise. But most importantly the app will maintain the reward points accumulated from the

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Run-Reward checkpoints and display the recommended rewards available for the customer to claim. The second product that Run-Reward offers is the checkpoints which will be set around the local parks and surrounding areas. Based on the heart-rate monitor for Kilometres ran from one checkpoint or another which will be linked into the app which will then help provide the reward points. The point of the checkpoints are to create unique routes to keep customers motivated as their scenery each day can change to leave boredom and repetition of the same thing each day.

3.5 Suppliers and Partners

For suppliers there are many range of companies we can pick. Run-Reward can choose such as established and expensive brands such as Nike, Adidas and New Balance or cheaper alternatives such as Chinese sporting giant Li Ning to supply the customers with more affordable equipment. When choosing the suppliers it is about what attracts more customers cheap prices or quality equipment. Personally I would prefer companies such as Li Ning since Run-Reward is a new entrant and needs to start off cheap, however showing prestige brands as suppliers also pull in lots of customers.

For Partners, partnership with the government and local councils are a must. First of all permission will be needed from local councils to use the local parks to set up check points which are vital to Run-Rewards success. And with the government it is a priority to set up advertising better health and Run-Reward being a way to achieve that goal with the highest form of authority.

3.6 Strategy: Differentiation

The strategy Run-Reward will pursue is Porters Differentiation strategy. Run-Reward is a company that will focus on a broad market by offering them something different, in our case it is the rewards system. Run-Reward has set up a reward system where it gives prizes to people for exercising which is different from its competitors such as gyms and fitness centres where people just pay to exercise. The profit will be accumulated from the purchase of the app so customers can access the reward system and through mark up on the equipment which collaborate with the checkpoints. The cost of the app will be a mere $3-4 per month subscription which when multiplied with its customers adds to big amounts of profit.

3.7 Value Chain Activity: Service after sale

The most important value chain activity for this business is service after the sale.

I think service after the sale is important to Run-Reward because it is a company that focuses on motivating their customers to continue with the Run-Reward program so profit is increased. Providing customer support for Run-Reward is like having a personal trainer, you listen to what they tell you to do for the best results. That is the type of relationship we would like to establish with our customers. In a way we would like them to feel lost if our customer support wasn't there to guide them through the program. This would be achieved through the app with its daily reminders.

3.8 Business Processes

3.8.1. MARKERTING AND SALES PROCESS - Marketing and sales is a very important business process for Run-Reward, since it is a new entrant into the fitness industry it will require heavy advertisement for its cheap and rewarding aspects that no other firm in the fitness industry offers. It is also required to get customers to join our monthly app subscription as it is one of the main points of profit for the company.

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Interested Customer

Downloads and Subscribes to app

Added to list of customers to be tracked and charged monthly fees

Inducted into reward point tracker

Invoiced of Subscription /Equipment charges

Customer buys required Equipment to participate in Run-Reward

End of Marketing and sales Department

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3.8.2. CUSTOMER SERVICES PROCESS - Another important business process that will be vital to Run-Rewards Success is the Fitness industry will be Customer services, this is where Run-Reward is so different from its competitors. The customer service provided by the app is a decision making tool for the customers so they can be provided the best results in terms of weight loss and better fitness levels.

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Customers Download App.

(Customer Service Function)

Customer feeds in details of meal courses preferred, free time for exercise, weight loss/fitness level goals.

Data is recorded and timetable for user is setup.

Reward point tracker

Customer is alerted meals to be taken and exercise routes suited to meals consumed.

Customer eats suggested meals or does recommended exercise routeReward points

gathered

Is Goal Achieved?

No

yesRewards redeemable suggested.

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3.9 Functionalities

3.9.1. ELECTRONIC PAYMENT PROCESS

To track and charge monthly subscription fees when charges are due. To be able to charge and process equipment purchases.

3.9.2. DATA GATHERING PROCESS

Be able to collect data of customers diet habbits/free time to create diet plans and prove exercise timetables.

Be able to gather data from Run-Reward Check points and properly convert them into reward points.

3.10 Systems

3.10.1. DECISION SUPPORT SYSTEM - Decision support system (DSS) is vital for the app to

provide proper diet plans and exercise timetables to the customer. The app will be required

to take the users timetable and current diet habbits and convert them into more healthy

and productive decisions for the customer so they will be able to achieve their goals of

weight loss.

3.10.2 CONTACT MANAGEMENT CRM SYSTEMS - Contact Management CRM System will be

required since, further relationship with customers can provide further business.

Reccomendations from customers to other people will be vital for Run-Rewards growth, and

having a Customer relationship is the best way to achieve goals such as pulling in more

customers.

3.10.3. DATABASE MANAGEMENT SYSTEM - Database management systems will be required

in Run-Reward because the Run-Reward app will have to go through every single customers

lifestyle data and modify it so that the customer can be provided with the best possible

timetable.

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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)

Service

after sale

1. Customer Service 1. Provide the customer with appropiate Diet

plans and regular exercise timetable which fits into their free time.

Customer Relationship management system.

Decision support System

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CONCLUSION

In conclusion Run-Reward will be a company which will transform the way people go about

exercising. Run-Reward will aim to target people by giving them incentive to exercise by

offering them rewards through their rewards program. In profitability i think Run-Reward

will do really well due to monthly subscription on its app and through the mark up on

equipment sold if we decide to team with a cheap sports equipment provider from China or

if Nike or Adidas decide to supply with low prices.

REFERENCES

1. Sarah Stowe. 21 Feb,2012, Jetts Fitness tops fastest growing franchise list. http://www.franchise.net.au/news/jetts-fitness-tops-fastest-growing-franchise-list

2. Not Avaliable, Gym Statistics: members, equipment and cancellations, http://www.fitnessforweightloss.com/gym-statistics-members-equipment-and-cancellations/

3. Lauren Streib, 2/08/2007, Worlds Fattest Countries, http://www.forbes.com/2007/02/07/worlds-fattest-countries-forbeslife-cx_ls_0208worldfat.html

4. Karen Springen, N/A, top 6 exercise excuses and how to beat them, http://www.webmd.com/fitness-exercise/guide/the-top-6-exercise-excuses-and-how-to-beat-them

5. Fitness New Zealand, N/A, Statistics on the New Zealand Health and Fitness Centre Industry, http://www.fitnessnz.co.nz/stats.asp

6. Martin Johnston, December 10th 2012, Obesity gobbles up health dollars, http://www.nzherald.co.nz/lifestyle/news/article.cfm?c_id=6&objectid=10853018

7. Harvard School of Public Health, N/A, Economic Costs, http://www.hsph.harvard.edu/obesity-prevention-source/obesity-consequences/economic/

8. Susan Kelley, April 4th 2012, Obesity accounts for 21 per cent of US health care costs, http://news.cornell.edu/stories/2012/04/obesity-accounts-21-percent-medical-care-costs

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