The Growth of E-Commerce - Case Study Example

Systems & Operations Management Part Option 2. Digital economy in the US How the digital economy has changedthe U.S A digital economy is the convergence of computing, information and communications. Combination of new business models and networked computing has created an entirely new industry, market, work practises and business. The revolution in computing in the past few decades is an indication that the use of information technology will continue at a rapid speed. The growth of e-commerce is creating fundamental changes in society, governments and economies with political, social and economical impacts. The effects of these changes are diverse and may widen the digital divide among countries, disrupt labour markets, change taxation and alter the trade’s composition. Importance of the computing technologies in an economy depends on the growth of the ICT sector in the particular economy and the evolution of ICT in different sectors. The level of investments made in the US in ICT continues to grow every year and they contribute to the increase of productivity (Weber & Burri, 2012, p.1). The US has been a leading force in liberalizing trade in all ICT, telecommunication and audiovisual media sectors. The digital economy firms affect the daily livelihood of most industrialized nations. The firms are also very profitable and they have improved the economy of the U.S. Apple was once left to die. However, in 2011, it became the third most valuable company globally. Its market share was valued to be approximately $300 billion. Other firms that have helped to improve the U.S economy embraced FaceBook, IBM, Google, Microsoft, AT&T, eBay and Amazon with equal or slightly lower market values. Even though the value of these firms fluctuate, it is very clear that they are global players in the digital economy (Peitz & Waldfogel, 2012, P. ix). Global electronic commerce has led to great changes in the way businesses are being conducted in the U.S. Decentralized corporate processes and networked organizations have changed the relationships between the users and the producers of merchandises. They have spurred a rapid integration of global markets. The ICT and emergent advancements such as online business exchanges and virtual trading networks have transformed the traditional businesses practises by connecting the critical business systems directly to the consumers via the internet. These exchanges have changed the U.S business world (Weber & Burri, 2012, p. 2). How the government supports the strategic development of information technology and e-business. The U.S has been involved in assisting both SMEs and large corporations in the sale of their respective merchandises via the internet and all those who that want to do both local and international business on the Web. The U.S department concerned with the administration of commerce trade internationally operates a state’s website namely Export.gov whereby all US’ firms that want to sell abroad can adequately use it (Schneider, 2014, p. 47). Over the years, there have been privacy and security issues that have emerged and persisted for a sometime to date. The U.S government has taken steps to protect the privacy of its citizens. There exists evidence of some emerging regulatory consensus in significant policy guidance on information privacy. These regulatory consensuses have recently been issued in the US (King & Raja, 2013, p. 416). The U.S federal government has attempted to propel the advancement of Electronic Health Records (EHR). The government realised the benefits brought about by the use of ICT and how ICT would benefit the health sector. All the health agencies had to purchase interoperable ICT systems after president Bush issued a statement on effectiveness of EHR’s (Gauld, 2009, p. 80). Universal high speeds of accessing the internet can transform a country’s economy productively. Several municipalities in the U.S have been left behind when it comes to the penetration of internet. However, some of these municipal regimes have addressed this situation by launching initiatives aiming to offer a universal access to broadband internet citywide (Po-An Hsieh, 2012, p. 1). Blackberry Hill Farm Part 2 Geographical Business Process Map of Blackberry Hill Farm Customers arrive at the parking lot Vacant parking space? No park at the side walks yes Fixed exhibits Tractor rides Pick-your-own area Petting zoo Preserve kitchen Bakery Farm shop and cafe Internal difficulties Jim and Mandy have a big problem when it comes to balancing between diverse activities in their farm. According to table 11.4, the various activities in the farm had a variety of challenges. Jim’s biggest concern was that the visitors and the production activities bring more revenues to the farm when compared to the conventional agricultural activities. Jim is hesitant about the farm’s growth, as he does not want the farm to become a theme park because of increasing the number of visitors. According to table 11.4, there are only 85 spaces for car parking and 4 spaces for the 40-seater tour buses. Moreover, the farm has parking problems especially during the peak period and the police are complaining about the visitors parking their cars inappropriately on the local roads. Therefore, augmenting the figure of visitors implies that the farm has to extend to the size of the car park, which is extremely pricey. This may be necessary but not profitable, as it does not bring any extra income directly. Jim and Mandy have a complexity problem. They are concerned that whenever there is an additional attraction, the whole farm is affected as everything becomes more complex to manage. The numbers of employee they have are not enough to support all the activities. They therefore end up stretching themselves thin over a very wide range of activities. They do not have any time to think about the farm’s future or to spend with the employees. Jim and Mandy need to reduce the problems they have, especially the queuing problems. This is important as according to table 11.4, the customers gave good feedback for almost all the facilities but their biggest issues were the long queues and congestion during peak periods. Another problem that is of concern to Mandy is the management of staff. The firm has over 80 employees, both part time and seasonal. Moreover, during summer, they hire more than 20 students. They also hire other students from very far because labour is a big problem in regions around the farm. Therefore, it is very hard to attract local workers. According to table 11.4, the staff are few and some sections do not have any staff during off-peak. Moreover, some facilities require skilled staff to manage children. Jim and Mandy would love to keep some staff on a more permanent basis, but they are not sure if it is possible without the storage of products for too long. Jim and Mandy are having problems in making decisions as both of them have different ideas and visions for the farm. Jim wants to create some sort of maze that has been a growing trend worldwide and Mandy wants to lean more towards the education sector. Both ventures are expensive. This is a problem, as they need to choose one, as they cannot do both. Difficulties with the supply chain When it comes to the sale of their products, Jim and Mandy experience a very big variable in the Pick-Your-Own system where customers have to avail themselves personally for the products. This happens because most businesses take place during the weekends of late spring to early autumn. Table 11.3 shows that the number of customers increased rapidly from March with peak in august, and then it started to fall. During the other months of the year, the number of customers is very few. When it rains on weekends, customers do not visit the farm and the sales have to occur in a few days. To maintain the level of production, Jim and Mandy did not have any problem with the produce supplied. Only beneath 2 percent of the vegetables and fruits that went to the farm came from Blackberry farm. This is a problem, as customers do not understand why the farm has to purchase the fruits and vegetables from the wholesale markets. Improvement of current operation processes- this should promote the database system and other ideas for operations improvement. Jima and Mandy should centralize some important functions and split duties so that running the farm becomes easier. They can decentralize all the other activities that do not require much attention and hire more staff to take care of those activities. This will maintain a balance between all the activities (Tunduc, 2009, p. 3). Moreover, the complexity in running the farm will reduce. Jim and Mandy should also invest in a good electronic commerce system whereby, the customers are able to view the available products online and their prices. This will not reduce the sales when it rains as customers can purchase stuff online and the farm can organize how the products are delivered to the customer. The Internet will ensure effective coordination, communication and a constant rapid feedback with the clients. Moreover, all businesses from all sectors within the economy are more effective, faster and smoother because of using technology (Wu, 2012, p. 210). Since Jim is worried about becoming a theme park due to the many visitors, as this is what brings in the most revenue, they can maintain the activities they currently have. In addition to what they have, they can invest on e-commerce to boost the sales of their products (Tunduc, 2009, p.2). Jim and Mandy are torn in between two decisions for the future of the company. Use of ICT will solve this problem. There will be easier dissemination of information and fast feedback from customers. Numerous data will be stored in the computer and it will be very easy to analyze trends. This will make the process of decision making easier as they will be able to see which venture will be more profitable in the end (Maumbe & Okello, 2013, p.115). To solve the parking problems currently experienced, they can extend the parking lot and charge the customers for parking so that they can return their investment. Alternatively, they can convert most car park spaces to be big enough to fit a 40-seater van and then hire vans to be ferrying customers to and from the nearest largest public car park. Jim and Mandy may also incorporate ICT in their operations to help in the management of employees. A strategic implementation of ICT will ensure development of knowledge flows and networks between different levels. Jim and Mandy will be able to do things that they were doing manually using computers. These things include recording and disseminating information to employees. Use of ICT will also provide more corporate and individual feedback to more employees (Bondarouk & Olivas-Lujan, 2013, p.183). In addition, they can come up with benefits like the health insurance so that they can attract workers from the local populations. They can also use reward programs for employees in order to retain the workers. The customers do not understand why the farm purchases most of their products from wholesalers. Jim and Mandy should be able to explain to the customers that for an agricultural business to succeed, flexible and strategic alliances must be made with the wholesalers. These strategic alliances facilitate access to resources, information, and market and ensure the products purchased are of high qualities. The alliances have a positive impact on the company value (Tunduc, 2009, p.3). Part 3 Mind map/rich picture based on my improvement ideas Introduction of ICT and decentralizing business activities Balancing activities building40- seater parking spaces or extending parking and charging Introducing ICT ICT, reward reducing complexity managing car park issues system, benefits Employee management Introducing e-commerce Blackberry farm solving problems of customer variation Customer understanding on farm not becoming a External purchase of products decision-making theme park Explaining to them about usefulness of alliances ICT investing in e-commerce to boost sales To implement my ideas, the following management and technology changes are required; Jima and Mandy should try to computerize most of their work to ensure efficiency in their operations. They should also invest in a good internet connection to improve the communication between different sections of the farm and to be able to update information on their electronic commerce site. Moreover, the level that allows access to the new ICT proposed depends on the running of the farm, how it is organized and how it is led (Tunduc, 2009, p.3). Jim and Mandy should be able to stick to specific duties only to avoid doing many things on their own. They can do this by sticking to management and hiring adequate staff to do the other work. References Top of Form Top of Form Top of Form Top of Form Top of Form Top of Form Bondarouk, T., & Olivas-Lujan, M. R. (2013). Social media in human resources management. Bingley, U.K., Emerald. http://www.emeraldinsight.com/1877-6361/12. Gauld, R. (2009). The new health policy. Maidenhead, Open University Press. King, N, & Raja, V 2013, What Do They Really Know About Me in the Cloud? A Comparative Law Perspective on Protecting Privacy and Security of Sensitive Consumer Data, American Business Law Journal, 50, 2, pp. 413-482, Business Source Complete, EBSCOhost, viewed 16 July 2014. Maumbe, B. M., & Okello, J. (2013). Technology, sustainability, and rural development in Africa. Hershey, PA, Information Science Reference. http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&A N=547529. Pacific-Asia Conference On Knowledge Engineering And Software Engineering, & Wu, Y. (2010). Software engineering and knowledge engineering: theory and practice. Berlin, Springer. Peitz, M., & Waldfogel, J. (2012). The Oxford handbook of the digital economy. New York, Oxford University Press. Po-An Hsieh, J 2012, The Bumpy Road to Universal Access: An Actor-Network Analysis of a U.S. Municipal Broadband Internet Initiative, Information Society, 28, 4, pp. 264-283, Professional Development Collection, EBSCOhost, viewed 16 July 2014. Schneider, G. (2014). Electronic commerce. [S.l.], Cengage Learning. Tunduc, AA 2009, The Influence Of Digital Economy Upon The Rural Economy, Agricultural Management / Lucrari Stiintifice Seria I, Management Agricol, 11, 1, pp. 1-6, Business Source Complete, EBSCOhost, viewed 16 July 201Top of Form Weber, R. H., & Burri, M. (2012). Classification of services in the digital economy. Bottom of Form Bottom of Form Bottom of Form Bottom of Form Bottom of Form Bottom of Form Bottom of Form Read More