Buy Or Rent com ISQS 5338 Instructor Dr
Buy. Or. Rent. com ISQS 5338 Instructor : Dr. Jaeki Song Texas Tech University Presented by Samata Tummala Pradip Kumar Sahu Ganesh Prasad Bhawsinka
Presentation Outline • Mission and Objectives • Industry Analysis • Competitors Analysis • Customer Analysis • Feasibility Analysis • Business Strategy • Business Rules and Assumptions • Conceptual Design • Website Architecture • Data Flow and ER Diagram • Prototype Demonstration • Conclusion
• The future belongs to those who see possibilities before they become obvious --Unknown • Our doubts are traitors, And make us lose the good that we oft may win, By fearing to attempt --William Shakespeare
Sources • • • Electronic Commerce – Gary P. Schneider and James T. Perry Notes of Dr. Jaeki Song – Fall 2001 E-Business & E-Commerce for Managers – Deitel and Deitel Modern System Analysis & Design - By Jeffrey A. Hoffer Joey F. George and Joseph S. Valacich Competitive Advantage – Michael E. Porter American Book Association ( ABA ) Research Department Amazon Your Industry: Extracting Value from the Value Chain - By Timothy M. Laseter, Patrick W. Houston, Joshua L. Wright, and Juliana Y. Park www. strategy-business. com http: //publishing. about. com/library/weekly/aa 020800 d. htm www. bookweb. org/research/stats/ www. amazon. com Market Guide form Mutex. com
Mission Our mission is to make any category of book available to any category of customer, irrespective of his or her purchasing power and geographical location within the country.
Objectives • Make books available at affordable cost to all people from diverse segments of society (emphasis on student community). • To provide books under three options –Buying New, Used books and Renting used books. • To serve as a channel for buying new as well as used books. • To provide a linkage for lending books on various topics. • Guide the customers to fulfill their requirements at the best possible price.
Industry Analysis Year Total Revenue Total Retail % of Book of Bookstores Retail Revenue Sales 1998 1997 1996 1995 1994 1993 13179 12688 12381 11524 10306 9199 (Million $) 2566209 2461196 2329310 2229878 2073839 (Million $) 0. 49% 0. 50% 0. 46% 0. 44%
Industry Analysis Year Total Revenue % increase in Bookstores Book Sales (Million $) 1998 1997 1996 1995 1994 1993 13179 12688 12381 11524 10306 9199 3. 87% 2. 48% 7. 44% 11. 82% 12. 03%
Industry Analysis
Industry Analysis Online Spending on Book Purchase: Percentage of Adults who Order Books Online
Industry Analysis Online Spending on Books Purchase
Industry Analysis – Some Facts • In late 1999, over 22 million U. S. adults were shopping for books online. • Currently, online book purchasers report that on an average 47% of all their books purchased are purchased online. • This figure is expected to grow up to 54% over the next 5 years.
Industry Analysis – Some Facts SUBJECT CATEGORY SHARE: 1999/1998 · Popular Fiction ----------53. 3% (50. 9% in 1998) · Cooking/Crafts ----------10% (9. 9% in 1998) · Religion --------------9. 3% (9. 7% in 1998) · General Nonfiction -------7. 8% (8. 1% in 1998) · Psychology/Recovery ------5. 2% (6. 2% in 1998) · Technical/Science/Education --5. 8% (5. 7% in 1998) · Art/Literature/Poetry ------3. 3% (3. 8% in 1998) · Reference -------------2. 2% (2. 5% in 1998) · Travel/Regional ---------1. 4% (1. 4% in 1998) · All Others -------------1. 7% (1. 8% in 1998)
Competitor Analysis - Physical Stores - Barnes & Noble - Borders Group - Crown Books and - Books-A-Million - Internet Only - Amazon. com - Half. com and - bn. com
Competitor Analysis –Market Share 1997 1996 1995 Sales % Sales % Total All Bookstore 12536 100 12547 100 11617. 0 100 Four Largest Chain 5670. 3 45. 2 4973. 2 39. 6 4239. 2 36. 5 Barnes & Noble 2782. 3 22. 2 2448. 1 19. 5 1976. 9 17. 0 Borders Group 2266 18. 1 1958. 8 15. 6 1749. 0 15. 1 Crown Books 297. 5 2. 4 287. 7 2. 3 283. 5 2. 4 Books-A-Million 324. 8 2. 6 278. 6 2. 2 229. 8 2. 0 All Other Bookstores 6865. 4 54. 8 7573. 8 60. 4 7377. 8 63. 5
Competitor Analysis Percentage Change in Market Share 1997 vs. 1996 vs. 1995 vs. 1994 Total (All Bookstore) - 0. 1 8. 0 9. 9 Four Largest Chain 14. 0 17. 3 17. 4 Barnes & Noble 13. 7 23. 8 21. 8 Borders Group 15. 7 12. 0 15. 8 Crown Books 3. 4 1. 5 - 7. 2 Books-A-Million 16. 6 21. 2 33. 3 All Other Bookstores - 9. 4 2. 7 6. 0
Competitor Analysis – Detail of Total Revenue Physical Only Store
Competitor Analysis (Internet Only) As per the recent data from Amazon. com – ‘books, music and DVD constitute more than 50% of net sale’.
Physical Store Vs. Internet Only Store • small independent bookstores - 6, 500 in 1991 to 3, 500 in 1998 • The largest publisher in the United States, Random House Inc. , released 2, 500 new trade titles in 1998. • Retailers' costs - store space, sales clerks and inventory - quickly eat into margin - the bookseller typically makes only about $1. 50 per book. ( For a book costing approximately $25 I. e. 6 % ) • Bookstores, like most retailers, monitor their economics using revenue per square foot of retail space as a measure. Driving up that metric in a traditional retail outlet requires a lot of customer traffic and the right product selection.
Physical Store Vs. Internet Only Store • Amazon. com allows consumers to browse 4. 5 million titles from the comfort of their own computers • With virtual shelf space replacing physical retail space, sales per square foot becomes a mathematical infinity. • Today, Amazon. com and bn. com , the two largest online chains, account for 45 percent of total trade sales. • For an Internet only store , the biggest challenge comes from other Internet startups targeting the same inefficient network, rather than from traditional retailers
Customer Analysis • Top Five Reasons for buying Online - Convenience - Saving - Selection - Personalization - Information
Customer Analysis Book Buyers who use Online Technology some of the Time
Customer Analysis Demographic comparison of education and household income vs. Adult web users Education High School Or Less Adult Web Users 16% U. S. Adults 53% Vocational/ some college 28% 26% College Grad. / Post Grad 55% 20% Under $ 50, 000 37% 72% $ 50, 000 or more 63% 28% Household Income
Customer Analysis Percentage of Adults indulging in selected activity when alone
Customer Analysis Frequency of purchasing professional and scholarly books
Customer Analysis – Some Facts • According to Cyber Dialogue, U. S. university enrollment exceeded 15 million in the fall of 1999, and is expected to grow to 18 million or more by 2004. • Today, 90 percent of the 15 million full-time university students in the United States use the Internet, and 66% surf the Web at least once a day. • More than 50% of students using the Internet have credit cards in their own names, and 1/3 rd are actively buying online.
Customer Analysis – Some Facts • Student online purchases exceeded more than $600 million U. S. in 1999 • The average annual spending for books on all transactions is $174 per Year • According to a study done by the online research firm Cyber Dialogue, wired students spend more on books, movies and software online than other online adults Students Other Adults Books 20% 16% Software 16% 11% Movies / Videos 11% 6%
Feasibility Study • Economic Feasibility • Technological Feasibility • Operational Feasibility • Schedule Feasibility • Legal and Contractual Feasibility • Political Feasibility
Economic Feasibility Costs • One Time Costs These costs associated with project initiation and development and start – up of the system e. g. new hardware , software , user training , site preparation etc. • Recurring Cost These costs resulting form the ongoing evolution and use of system e. g. Application software maintenance, incremental data storage expenses , incremental communications , new software and hardware leases, supplies and other expenses.
Economic Feasibility One time cost Year 0 (Amount in $ ‘ 000) A Development Costs 20, 000 B New Hardware 15, 000 C 5, 000 D New (purchased) software User training E Site Preparation 5, 000 F Other Misc. Expenses 2, 500 Total One-time cost 2, 500 50, 000
Economic Feasibility Recurring Cost ( $ ‘ 000) A Application software maintenance 25, 000 B Incremental data storage required 1, 000 C 2, 000 D Incremental communications (lines, messages, … ) New software or hardware leases E Supplies and miscellaneous F Other Total Recurring Costs 500 1, 000 30, 000
Economic Feasibility Total number of Adults buying books online = 22 million Total Student Population = 15 million Total spending by Students (Online) = $ 600 million Average Spending per customer = $ 174 Our expected Economic Benefit for 1 st Year = $ 4 Million Average Operating Profit Margin = 5% Total Revenue Required to Generate the Expected Economic Benefit = ( 4, 000 *100 ) / 5 = $ 80 Million Total Number of Customer required to Generate the above Revenue = 80, 000 / 174 = 459, 770 Percentage of total population (only students) buying books online = 459770 * 100 / 15, 000 = 3%
Economic Feasibility Amount in $ ' 000 Expected Economic Benefit * Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 0 40, 000 44000 48400 53240 58564 Less One-time Cost Recurring Cost -50, 000 Expected Net Benefit Cumulative PV of Expected Net Benefit 0 -30000 -30000 14, 000 0. 747 18406. 08 21337. 31 5719. 68 -12686. 4 28, 564 0. 792 15437. 6 -28124 23, 240 0. 839 12446 -40570 18, 400 0. 889 9430 -50000 0 0 0. 943 -50000 0 0 10, 000 1 PV of Expected Net Benefit -50, 000 Discount Rate ( 6%) Total 27056. 99
Economic Feasibility Break Even Analysis
Technical Feasibility • This analysis includes an assessment of the development group’s understanding of the possible target hardware, software, and operating environments to be used as well as system size, complexity of existing similar type of systems. • The amount of technical risk associated with a given project is contingent on four primary factors: project size, project structure, the development group’s experience with the application and technology area, and the user group’s experience with development projects and application area.
Operational Feasibility • The purpose of analyzing operational feasibility is to gain an understanding of the degree to which the proposed system is likely to solve the business problems or take advantage of the opportunities outlined in the systems service request or project identification study. • As the proposed business system will be totally new and have to be implemented from scratch, we don’t foresee any problem as far as the effect on organizational structures and procedures are concerned. At the same time, we expect that this system will be able to exploit the opportunities present in the market.
Schedule Feasibility The purpose of analyzing schedule feasibility is to gain an understanding of the likelihood that all potential timeframes and completion date schedules can be met and that meeting these dates will be sufficient for dealing with the needs of the organization.
Schedule Feasibility Project Milestones with timelines Initial market analysis Initial Web scope document Database Design Interface design Graphic Design and logo and testing Timelines (in week) 1 -3 4 -5 6 -8 9 -10 11 -13
Legal & Contractual Feasibility This feasibility consists of the process of assessing potential legal and contractual ramifications due to the construction of a system. Possible consideration includes copyright or nondisclosure infringements labor laws, antitrust legislation ( which might limit the creation of systems to share data with other organizations ), foreign trade regulations and financial reporting standards as well as current or pending contractual obligations
Political Feasibility This is the process of evaluating how key stakeholders within the organization view the proposed system. Since all the promoters of this business system are equal stakeholders and approved the idea of the proposed business plan.
Business Strategy Keys to Success - Availability of Books. - Providing more options to customer in terms of buying and selling. - Providing Insurance coverage. - Home delivery of books at selected location. - Display our web Address (URL).
Business Strategy Keys to Success (contd. ) - Create at E-Mail Newsletter. - Collect E-Mail Address. - Create an Affiliate program. - Update content on our home page at least weekly. - Respond to Online customers quickly.
Business Rules & Assumptions • Customer has User ID and Password for Login, and needs to login for purchasing, renting or buying books. • Features such as Book Category, Shipping Type, and Price Listing are accessible with or without login. • A shopping cart is associated with one transaction. • Each invoice is associated with one cart. • Each shipping record is associated with one invoice.
Business Rules & Assumptions • Invoice can be generated only after credit card information s filled and verified with Credit Card Company. • Invoice can be generated from a valid Login only. • A Shopping cart can be saved only from Login Account. • A cart can be checked out only from Login Account. • A cart can be accessed without Login.
Anatomy of Credit Card Transaction • Authorization - check to see if funds are available • Acquiring bank • Issuing Bank • Verification / Authentication - card number valid - Card number active - Card number not reported lost or stolen • Money issued to merchant after product / service is distributed
Anatomy of Credit Card Transaction Issuing Bank Card Holder Merchant Establishment Mastercard / Visa / American Express Acquiring Bank
Credit Card Authorization Customer’s Sign verify Client encrypt Buy. Or. Rent’s Sign decrypt verify PC verify Sign e-Commerce encrypt Server decrypt verify Acquirer's encrypt Sign Payment decrypt Sign verify decrypt encrypt verify Sign Gateway Server
Conceptual Design • based on the storefront model of e-business • combines transaction-processing, security, online payment and information storage to enable users buy and sell books online
Conceptual Design • Implementation through shopping-cart technology. • Organizing online catalogs of books in various categories • Take orders through website • Accept payments securely • Manage customer data
Book Categories · Popular Fiction · Cooking/Crafts · Religion · General Nonfiction · Psychology/Recovery · Technical/Science/Education · Art/Literature/Poetry · Reference · Travel/Regional · All Others
Website Architecture
Special Promotions • Email Marketing • Promotions • Banner Advertising
Context DFD of the proposed website
Overview DFD of the proposed website
Entity Relationship Diagram
Relationship Diagram of the Access Database
Prototype Demo http: //lri-server. chem. ttu. edu/psahu/home. asp
Conclusion and Thanks The future belongs to those who believe in the beauty of their dreams. --Eleanor Roosevelt Thanks Everyone for your support and attention for our presentation Thanks Dr. Jaeki Song
- Slides: 59
