Old Dominion Trail Bikes - Essay Example

Essay: Old Dominion Trail Bikes The following are 3 strategic goals for Ted’s business I. Reduction of expenses-Ted has worked his business in such a way that he is aware of expenses and decreases them wherever practical in order to preserve profits. Ted has for instance cut his advertising expense close to zero by using a simple website and has links on many of the local biking trail sites to provide information about his various locations. He also has got very few employees and he actually closed one of his stores at Bethesda, gave up the warehouse and moved his inventory to the Vienna store, releasing the manager. He thus took all the general management tasks himself. II. The second strategy that Ted uses is diversification of his business and apart from selling bicycles, Ted also capitalizes on tune up, repair and rentals since they have huge profit margins. III. Ted also tries to get good deals from his suppliers so he can realize a good margin on his bikes and accessory sales and repairs. Ted therefore looks for situations where suppliers have got more bikes in a line than they need and buys those bikes at a discount for rentals and low-ends sales while at the same time maintaining a rapport with end suppliers so that he can offer his customers the best at reasonable prices. 2-Ted needs the following types of information for him to run his business; I. Sales information-this will help him quantify the amount of sales he has done II. He needs information showing him the months with the highest turnovers. III. He also needs information on the kind of business with most profits; whether it is rental, selling bicycles or any other. IV. He needs information concerning number of his employees, their payroll and their contribution to the business. V. He needs information about his suppliers and supplies-especially the type of bicycles that move faster as well as the suppliers with the least prices so as to maximise his profits. 3. The 3 business processes likely to be used by Ted in his business include; I. Ted uses accounting as a business process and use of technology can help increase speed, accuracy, transparency and easy determination of business worth as well as it soundness. II. Ted also uses human resource processes which are very vital. Use of technology would assist in defining the roles of the employees, payroll, their tasks as well as overall management. III. The other vital process is operational process which spells out what should be done at any particular moment of the day and by who. Technology would assist by increasing efficiency in the business as well as assisting employees to manage their duties well (Qingyu, 2007). 4. Ted could make use of the internet by utilizing the following two other ways; first he could start selling his wares such as helmets, speedometers, online. In this case he would be very sensitive by using pricing as an e-business concept and thus he should be very wary of the competition and what they have in store. Ted should therefore price his wares strategically so that he can get customers Secondly Ted could also make use of the internet for researching purposes. This is what is known as value proposition and assists in describing the value that the given company provides to its customers as well as many others. He would research on what is most required by customers and the latest trends so that he can satisfy them. 5. Supply chain basically means the management of the way goods flow through an organization. Thus for Ted the flow of his products from the manufacturers to his stores and afterwards to the final consumer can effectively be manned by SCM. Thus SCM involves making a product from various parts bought from suppliers, and later on selling those products to consumers. Thus Ted could reap a lot of benefits from SCM by planning how the services(repairs, rentals) or goods(bikes, helmets, etc) he is selling will meet the needs of his customers, developing a strong relationship with suppliers of his raw materials required for enabling the repairing and selling of bikes, making sure the bikes so repaired or rented are tested and scheduled for delivery to the customers as well as ensuring quality levels are maintained. The fourth stage of SCM is known as delivery and would benefit Ted in that it would involve receiving customer orders and delivering of the various goods/products as planned. The last stage is known as return and in this case Ted’s customers may return any defective bikes given to them and address any questions customers may ask. Thus SCM is effective and generates the highest level of customer satisfaction at the lowest cost. (Qingyu, 2007) 6. Ted can have the information from the in-store customers combined with those who purchase via the website into a single Customer Relationship Management (CRM) by having it recorded in a log from a central point such as a customer care service center. By adopting CRM, Ted would be able to; decrease marketing efforts by correctly identifying his target audience for the bikes thus reducing the cost of acquiring customers. Secondly Ted would also increase sales by analyzing his visibility of his customers. Thirdly he would increase efficiency through standardizing and automating processes so that employees can access important information as well as completing tasks quickly (Lakshman, 2008). 7. Ted would like to increase repair work and rentals as they have the highest profit aspects of his business and the internet is not a competitor. He could use social networking sites such as Facebook, twitter so as to make known the type of services he is offering. Secondly he can also be sending text messages as well as email to clients whose bikes have been repaired and are ready for collection, thus increasing customer rapport. Finally Ted can also direct his clients to various stores that he owns and various favorite routes used by most bikers through the use of such avenues as google maps. This would definitely endear him to more customers (Lakshman, 2008). 8. Enterprise resource planning is management software used by businesses –mostly a suite of several integrated applications that a firm can utilize in collecting, storing, managing and interpreting data from several business activities.ERP would ensure Old Dominion Trail Bikes have got complete visibility in all critical processes, across different departments of the organization. Secondly ERP would ensure that there is a single and unified reporting system to aid in analyzing various sales as well as rental statistics for Old Dominion Trail Bikes in real time. Thirdly, an ERP will enable Old Dominion Trail Bikes to have an automatic as well as coherent workflow from one department to the next so as to ensure there is a smooth transition as well as a quicker completion of processes. Ted should consider the following two considerations before implementing an ERP; ERP challenges such as data quality costs, customization challenges as well as some hidden costs of implementation. ERP capabilities-usually ERPs are taken to be having better integration/technology capabilities as well as increased operational area coverage. The 3 metrics or measures that Ted can use to determine whether ERP was a success include; Head count together with total labor costs in relation to the profits or revenues –thus the first year is most likely to be an outlier, however from the 2nd year onward, they might really be useful as well as informative. Employee productivity is another metric Ted can use-his employees ought to be more productive essentially operational wise than they were before ERP was implemented. The last but not least metric would be if there is any improvement of the company’s KPIs or at least many of the most important ones-thus Ted should be able to notice a change in any of the company’s KPIs so that he can at least gauge whether he got value for his money(Qingyu, 2007). 10. Ted should consider the following factors before proceeding with his IT projects; Establish objectives and goals-Ted should know why he is establishing an IT project in Old Dominion Trail Bikes. This would be an excellent time to map out main business processes that a new system would bring and support. Data sharing and security-Ted should think about Old Dominion Trail Bikes’ data sharing model as well as security of the new IT system. Ted should also create a steering committee which should be a representative of a cross-section of Old Dominion Trail Bikes ‘departments such as sales, rentals as well as repairs. Ted should prepare his employees for change and make the necessary preparations. Thus everyone in Old Dominion Trail Bikes will be affected and it is crucial that Ted sets the tone for the IT project early enough. Finally Ted should make sure that Old Dominion Trail Bikes has got proper and enough resources in place so as to make sure that the coordination of the project is well coordinated and implemented(Mehdi,2001). References Lakshman, J. (2008). Customer Relationship Management:A Strategic Approach. New Delhi,ND: Global India Publications Pvt Ltd. Mehdi, K. (2001). Managing Information Technology in a Global Economy. New York,NY: IDEA Group Publishing. Qingyu, Z. (2007). E-supply Chain Technologies and Management. New York,NY: Information Science Reference. Old Dominion Bikes case study Read More