This report sheds light on the effect of adopting business information systems on the revenues of Harry's Bikes. It is important to note that companies need to integrate information technology into their business processes. Harry's Bikes possesses strengths that stem from the expert employees of the company and its broad nature of the services it offers. However, there are threats that arise from the low investment in cycling infrastructure in Australia. The excel spreadsheet reflecting the sales made by Harry's Bikes acted as a powerful tool in evaluating the value proposition of the company. Thus, the report gives a holistic view of how Harry's Bikes can grow its revenues from bicycle sales.
Part A: Evaluation of the Business
Industry Background
Over the previous years, the bicycle repair and retail market has evolved and is getting bigger by the day (Agostinho et al. 2016, p.65). In particular, the rise in the bicycle sales is attributable to the health consciousness of Australian citizens. It is important to note that cycling popularity has gone up in the last five years and has increased by approximately 6.3 percent (Boshyk 2016, p.41). Besides, cycling is considered by most Australian citizens as a low impact aerobic exercise that has a little impact when it comes to environmental pollution. On the other hand, the number of vehicles on the road has been increasing which has resulted in people preferring cycling as a better option.
In Australia, 1 percent of the country's population uses bicycles as a means of transport. Despite this figure being lower than expected, other nations such as Canada, the United Kingdom, and the United States have recorded a similar number. It is important to note that Germany, Netherlands, and Finland have established cycling infrastructure which has encouraged more people to use bicycles in the form of transport (Cassidy 2016, p.21). Besides, the level of cycling participation is directly proportional to the available infrastructure. For this matter, a growth in the investment in cycling infrastructure will lead to a rise in cycling participation over and above the current 1 percent in Australia.
Most of the cyclists are located in the regions that are densely populated. In particular, Melbourne has 4,529,496 individuals whereas Sydney has 4,920,970 people (Pearlson, Saunders and Galletta 2016, p.76). When comparing the two regions in terms of the incomes of households, it becomes evident that there is no significant difference. However, Melbourne has more cyclists owing to its flat landscapes and the few numbers of motorists that encourage cycling.
Trends from the Provided Data
The sales of kid bicycles were around November and December. Therefore, coming up with cycling infrastructure after this period will serve as one way to encourage lower traffic congestion. The primary reason for this is because parents and children in the coming period are likely to engage in cycling. In a move to create opportunities, there is the need for Harry’s Bikes to introduce new bike launches, promote family cycling events, and lay more emphasis on cycling birthday parties.
Professional cycling generated a substantial amount when it comes to the revenues of Harry’s Bikes. It is important to note that this specific product is highly profitable and the company needs to introduce more ways to boost its revenues. Besides, most of the professional bike sales occurred during the period when Harry’s Bikes was reporting its taxes which paves the way for higher Tax Return sales, hiring more specialist employees, and increasing the professional bikes’ inventory.
Travel bikes sold most at the beginning of the year. Besides, there has been a rise in the number of individuals who enroll for fitness sessions in Melbourne at the start of the year. The primary reason for this is because individuals set their resolutions for the new year around this time. For this reason, Harry’s Bikes taking this into consideration will ensure that they offer customers a wide range of travel bicycles that will over time see a rise in cycling participation.
The Australian government brought into law the $200 rebate whenever one purchases electric bicycles. (Boshyk 2016, p.53) Despite the higher price charged for this product, most users are aged between 35 and 55 which means that they have incomes that facilitate their purchases. For this reason, creating more awareness among individuals lying in this age gap will lead to more sales of electric bikes and further translating to the rise in revenues generated from this high-end product of the company.
Business Model and Environment
Adults contributed significantly to the sales made by Harry’s Bikes. It is important to note that the target market for the target market for Harry’s Bikes is consumers with higher income. The primary reason for this is because these individuals are better placed to buy accessories, bicycles, and their parts that belong to this category. On the other hand, high-end bicycles are non-essential when it comes to most cyclists. Therefore, as the incomes of the potential customers decrease, the sales of high-end bicycles decline. However, incomes of the customers who are willing to buy high-end bicycles are increasing over time which translates to more opportunities in the future. Moreover, Harry's Bikes has expanded its operations by offering both distribution and retail services. Hence, whenever the retail business undergoes a downshift, Harry's Bikes will manage to generate profits from distribution. The only condition that has to be met is that customers should be willing to buy bicycles from Harry's Bikes.
Distributor Brokerage Model
Harry's Bikes brings together different bicycle manufacturers that are within and outside of Australia. Therefore, the company needs a business-to-business model (B2B) that foster good relations between retailers and manufacturers.
Retail Sales – Direct to Customer Model
Harry's Bikes serves as a link between bicycle manufacturers around the world and potential buyers in Australia. Therefore, the company derives its benefits from the bulk purchases it makes from time to time. Besides, it is through the bulk purchases that Harry's Bikes manage to charge a lower price compared to its competitors.
Future Options
Merchant Model
Harry’s Bikes has not embraced the online avenues that will pave the way for an increase in bicycle sales. For this reason, focusing on this proposition will see the company diversify their customer base and further be in a position to reach customers that are in far-flung regions within Australia.
Franchise Model
It is important to note that Harry’s Bike has gradually grown since its initiation. However, the company is likely to accelerate its growth through franchising by coming up with solid systems. On the other hand, the bicycle market in Australia has other small participants and by franchising, Harry’s Bikes can increase their market share and their revenues.
Value Proposition
Harry’s Bikes has hired workers with appropriate skills to run the business. Moreover, the company operates with the perception that cycling is a passion that is possessed by both employees and employers. For this reason, coupling the knowledge of its workers and founders, the company is in a position to deliver the best products to its customers (Abbasi, Sarker and Chiang 2016, p.28). Adopting an online presence will allow customers in their remote locations to browse through the products Harry’s Bikes has to offer. Hence, the company will know the needs to address within the market.
SWOT Analysis
Strengths
The primary strength possessed by Harry's Bikes is its ability to offer dedicated services to customers. In particular, most of its competitors are not in the most densely populated regions in Australia and therefore they cannot serve their clients in a similar manner. The improvement in the cyclic infrastructure will ensure that more people embrace cycling and thereby expanding the market.
Weaknesses
Harry's Bikes has optimized its online presence which has limited the number of potential customers the company is able to reach. For this reason, the absence of online platforms has slowed down the growth of the company. Secondly, Harry's Bikes uses a mixed product specialization which may lead to confusion of consumers. Lastly, the sales of kids' bicycles are low yet they have a substantial discount. Therefore, the company needs to look into this market.
Opportunities
Bicycle sales grow whenever there is an economic slowdown as most people opt for cheaper commuting. Therefore, Harry’s Bikes can take advantage of this period to increase its sales. Secondly, adult customers have over the years dominated cycling participation in Australia. In addition, they have a higher disposable income than children which paves the way for Harry’s Bikes to use this opportunity to raise its revenues. Third, the population in Australian cities such as Melbourne and Sydney is growing by the day and cycling continues to be an effective means of transport. Hence, Harry’s Bikes should come up with strategies to make their bikes affordable to most Australians. Lastly, the knowledgeable workers at Harry’s Bikes have the potential to boost revenues of the company through offering excellent repair services that their competitors do not provide.
Threats
There is a high level of market fragmentation when it comes to the bicycle industry. Moreover, the small participants in the market handle specific items of the segmentation. Secondly, there are minimal entry barriers which pose a threat to the company in the event the relationship with retailers worsens. Lastly, most customers prefer online purchases and this may lead to a loss of customers in the future.
Porters 5 Forces Analysis
Competitive Rivalry
Harry's Bikes experiences competition from other players in the market. In particular, the competitors do not only retail bicycles but they also offer distribution services. Therefore, the company needs to venture into online retail and adopt e-commerce in a move to ensure it remains competitive.
Bargaining Power of Suppliers
The bicycles sold by Harry’s Bikes are acquired from different suppliers around the world. Therefore, the company faces a medium force when it comes to the bargaining power of suppliers as they can adjust bicycle prices and thereby resulting in an increase in the purchase price for customers.
Bargaining Power of Customers
Owing to the increase in the number of people seeking to use bicycles as a means of transport, the number of competing businesses is likely to go up. Besides, Harry’s Bikes needs to offer discounts to customers to encourage more sales. Therefore, the company faces a strong force when it comes to the bargaining power of the customers.
The threat of New Entrants
There are fewer barriers that prevent other sellers from entering the bicycle market in Australia. However, Harry's Bikes has over the years displayed expertise to their customers which have promoted loyalty. Similarly, the company has managed to establish strong supply agreements with its customers. Hence, the company faces a weak force when it comes to the threat of new entrants as the business will still generate profits from the relationships it has created in the past years.
The threat of Substitute Products
Cities such as Melbourne have not established the adequate infrastructure to promote cycling. For this reason, the use of other means of public transport like buses compared to cycling will see most people use the fastest way of commuting. Therefore, Harry's Bikes needs to closely watch public initiatives that promote cycling infrastructure. Hence, the company faces a medium force when it comes to the threat of substitute products.
Part B: Information Portal Design
Harry’s Bikes needs to come up with an online portal that enables the customers to gain access using their portable devices. It is important to note that mobile devices contribute to a significant share of the web traffic (Abbasi, Sarker and Chiang 2016, p.33). Besides, mobile users have a strong online presence. Therefore, Harry’s Bikes building a website that notifies the online visitors of the new products will help increase its sales revenues. Moreover, the company can gather relevant information from the customers who visit the online platforms in a move to meet their needs. Secondly, the company can introduce new ways of conducting follow-ups on the orders made. Lastly, the website should have a discussion board that will improve relations between the customers.
Conclusion
Recent trends reveal that there has been a rise in cycling participation. Harry’s Bikes offers retail and distribution services to customers who are interested in cycling. Moreover, the company deals with both adult and children bicycles who engage in travel expeditions and professional activities. Bicycle sales for adults generate more revenue for the company compared to those for children. For this reason, Harry’s Bikes needs to come up with a business information system that will boost its retail sales and brokerage capacity as a distributor.
References
Abbasi, A., Sarker, S. and Chiang, R.H., 2016. Big data research in information systems: Toward an inclusive research agenda. Journal of the Association for Information Systems, 17(2).
Agostinho, C., Ducq, Y., Zacharewicz, G., Sarraipa, J., Lampathaki, F., Poler, R. and Jardim-Goncalves, R., 2016. Towards a sustainable interoperability in networked enterprise information systems: trends of knowledge and model-driven technology. Computers in Industry, 79, pp.64-76.
Boshyk, Y. ed., 2016. Business-driven action learning: Global best practices. Springer.
Cassidy, A., 2016. A practical guide to information systems strategic planning. Auerbach Publications.
Pearlson, K.E., Saunders, C.S. and Galletta, D.F., 2016. Managing and Using Information Systems, Binder Ready Version: A Strategic Approach. John Wiley " Sons.
Turban, E., Sharda, R., Delen, D. and Efraim, T., 2014. Decision support and business intelligence systems (Vol. 9). Pearson.
Appendix
Table Completion
