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INFOSYS.110 BUSINESS SYSTEMS:

DELIVERABLE 2: BUSINESS SECTION
2014

Name Ryan Greaves
NetID rgre503
Group Number: 395
Website Link: http://infosys110group395.blogspot.co.nz/
Tutorial Details
Tutor: Day: Time:
Kirsten Thursday 12.00am
Time Spent on
Assignment:
9 hours Word Count: 1643

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DELIVERABLE 2: IHYDRATE
INTRODUCTION
Problem, students do not drink enough water. We have developed a business idea, with the
key purpose of motivating people to drink water and exercise more. iHydrate is an
application for your mobile device, which actively measures the amount you walk or run and
rewards you with a free bottle of water after a certain score.
3. BUSINESS SECTION
3.1 Vision

To improve public wellbeing, by inspiring healthy living

3.2 Industry Analysis:
Industry: Mobile app industry
Force: High/Low: Justification:
Buyer power: Low Although there are millions of applications
available to the public, from our research of
current app stores, there are none which have
similar functionalities as iHydrate. Buyer power is
low, because buyers have little choice when
buying a similar app.
Supplier power: High One of our major suppliers are app platforms.
Because market share is dominated by the two
major platforms; Google Playstore and Apple App

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Store; supplier power is high. If we were unable
to sell our app on either of these platforms, we
would be significantly crippled.
Threat of new entrants: Very High
The mobile app industry has been rated as one of
the easiest to enter. In an analysis of the mobile
app industry, author Figge Suter comments that
Capital requirements to enter the industry are
relatively low, because no inventory is needed
and fixed costs is very low (Suter, 2012). The
threat of new entrants is therefore very high.
Threat of substitutes: High In the same report Suter explains that switching
costs for consumers are low or non-existent and
unfortunately there are a number of similar
products (Suter, 2012), within app stores. This is
very true for our product. Although there are no
products exactly like iHydrate, there are many
that are similar in their measurement of walking
distance and so threat of substitutes is relatively
high.
Rivalry among existing
competitors:
High Competition for consumer attention is fierce
(Suter, 2012). The relative ease to which apps can
be developed and posted on app store has meant
that close to 2000 apps are being added to the
Apple app store alone, every month (148 Apps,
2014). As a result there is huge rivalry among
competing apps to break through into the
frequently downloaded group of apps, where
worthwhile profits can be generated.

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Overall attractiveness of the industry: Overall the mobile app industry, specifically the
health and fitness app industry, is relatively unattractive. The mobile app industry has been
dubbed a sexy industry (Suter, 2012); appealing at first due to its low setup costs, but in
fact is crippled by high competitor rivalry, and relatively low profitability.

3.3 Customers and Thei r Needs
Target Market
We have decided that our initial target market is Auckland university students. This market
segment was chosen due to their centrally located high density of potential customers (on
campus), as well as their generally greater demand for mobile applications. The majority of
students attending UoA and AUT are very mobile already, using public transport on a daily
basis, and so could put greater value on the benefits of walking.
Demographics:
Occupation: students, work part time
Age: 18-26
Gender: not-gender specific
Educated
Socio economic level: wide range (small budgets i.e. student loan)
Psychographics (Needs):
Health conscious: The most image conscious generation
Busy lives: do not have time to spend configuring specific mobile applications
Individualised: Attracted to products which can be personalised.
Mobile: Always on the move, using public transport and walking through the city
Connected: Heavily invested In a range of social media platforms. Want to share
life with friends.
3.4 The Product and Service
We believe the iHydrate app satisfies the needs of our target market as summarised above:
Health conscious: The iHydrate app provides a convenient tool, which motivates its
users to walk and run more.
Busy Lives: Application must be simple to use and not time consuming
Individualised: iHydrate is personalised different daily targets for different people

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Mobile: iHydrate is a mobile application; GPS enabled and constantly running in the
background.
Connected: Application directly connected with Facebook. Enables recognition.

3.5 Suppliers and Partners
Suppliers:
- Mobile application stores: Provide the platform for iHydrate app to be sold. Free
apps are sold with no commission, whilst around 30% of paid apps sale price is
claimed by platform. Example: Google Playstore and Apple AppStore:
- Refrigerated vending machine providers: To supply vending machines and provide
maintenance and restocking. Example: If partnered with Pump
TM
, could use their
existing refrigerated vending machines.
Partners:
- Pump
TM
or H
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GO : A partnership with one of these companies could allow iHydrate
to be used as a promotional tool, whilst still maintaining our goals and values. They
provide the water and infrastructure we provide the technology.
- App development and technical support: An application developer to design and
build our application, as well as perform maintenance and future updates. Potential
to partner with University of Auckland Engineering Department, to design software.
3.6 Strategy: Cost Leadership
Mobile apps generally follow two main strategies:
1. The free app, which generates revenue from advertising
2. The paid app, which charge users to download, but limits advertising
iHydrate would use a free app strategy, offered across all major platforms, where revenue
would be generated by advertising within the app. This demonstrates a cost leadership
strategy; appealing to a broad market (smartphone users) and at a low cost (free). The
average selling price of mobile applications is decreasing, showing that many developers

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have switched there strategies to cost leadership (free) from paid apps (Jain & Bansal,
2011). We believe this strategy would be best suited to our product as it supports a greater
volume of sales needed to generate a viral effect, essential in the mobile app industry.
3.7 Value Chain Activity: Marketing and Sales
In an age where millions of apps are readily available across a multitude of platforms and
only a small minority of the most popular apps generate revenue, it has become essential
for new apps to differentiate themselves and gain visibility. Because of these extremely
competitive market conditions, we believe Marketing and Sales is the most important value
chain activity to our business.
3.8 Business Processes
3.8.1. SALES REPORT PROCESS The sales report process is an essential process in the Sales
and Marketing value chain activity. Transactional information must be recorded, cleaned
and stored in a database, before it can be effectively used to generate analytical information
such as sales trends. The transactional information we would like to obtain is time and date
of sale (install), platform used (google or apple), as well as certain survey questions such as
How did you find out about us? and what university do you attend?

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3.8.2. ATTRACTING CUSTOMERS PROCESS This process is central to our marketing
campaign, ensuring maximum customer awareness within our target market. Due to our
young customer, the use of social media marketing, specifically Facebook, has been chosen
to best support our products publicity. Social media marketing expert Cindy Ferrie,
comments that the use of social media channels can exponentially multiply your reach,
through a viral effect (Ferrie, 2013), where one person exposed to our product, shares it
with several of their friends, who in turn share it with others. This process is a cycle,
occurring over and over again with each new installation of our app, ensuring maximum
visibility and sales.

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3.9 Functionalities
3.9.1. SALES REPORT PROCESS
Clean operational data
Generate analytical information
3.9.2. ATTRACTING CUSTOMERS PROCESS
Ask permission to post on users behalf
Post on users behalf

3.10 Systems

3.10. 1. DATABASE MANAGEMENT SYSTEM (DBMS) Database management systems are
computer programs which manage a database; a large set of structured data; and perform
are variety of operations on it. One of its main operations is the cleaning of data, which
involves detecting and removing errors and inconsistencies from data in order to improve its
quality (Rahm & Hong, 2002). An effective DBMS system is very important to our business to
insure the recording of sales and generating of analytical information is all automated, to
reduce staff costs.
3.10. 2. DECI SI ON SUPPORT SYSTEM (DSS) The decision support system is responsible for
modelling information to support managers during the decision making process. This system
incorporates the Generate analytical information functionality (above), where sales data,
from the sales database is transformed into analytical information such as sales trends and
forecasts, to be used by staff in planning the businesses future.
3.10. 3. INTERNAL AUTOMATION SYSTEM (I AS) The internal automation system exists in our
application code. It is responsible for the automation of customer response data within the
apps operations, eliminating the need for human input. The system and the code it is made
from, contains a series of protocol of how to react to specific user inputs such as unchecking
a box to allow iHydrate to post to Facebook on the users behalf. As mentioned previously,
internal automation, removing the dependence on staff interaction, is extremely important
for our initially low capital business.

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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)

Technology
Development
1. SALES REPORT
PROCESS

1. Cleanse, Clean and Scrub operational
data
2. Generate analytical information
DATABASE MANAGEMENT
SYSTEM
DECI SI ON SUPPORT
SYSTEM
Back office management
system

Management Information
Systems

2. ATTRACTING
CUSTOMERS
PROCESS

1. Ask permission to post on users behalf

2. Post on users behalf
INTERNAL AUTOMATI ON
SYSTEM
Automation Management
System

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CONCLUSION
Our goal is to encourage university students to drink water and exercise more. We believe
iHydrate can achieve this goal. Having been thrown into a relatively unattractive mobile app
industry, we hope that our specifically chosen target market, university students, will react
to our cost leadership strategy and aggressive marketing campaign and jump on board of
this great initiative. As mentioned previously, info systems will play an essential role in the
performance of our business. By allowing certain process to be automated will ensure less
inefficiencies and reduce costs.

REFERENCES

Suter, F. (2012). Analysis of the app market based on Michael Porters five
competitive forces. Retrieved from http://3xhappiness.com/analysis-of-the-app-
market-based-on-michael-porters-five-competitive-forces/ p. 1

Jain, S. & Bansal, N. (2011). Mobile Applications: A consulting report that defines the
entry strategy for Client Company. Retrieved from
http://www.slideshare.net/shwetaj/mobile-applications-7643425 p. 15

Ferrie, C. (2013) Social Media Marketing. Retrieved from
http://www.cindyferrie.com/business-to-business-marketing/social-media-
marketing/. p. 1

Rahm, E. & Hong, H. (2002). Data Cleaning: Problems and Current Approaches,
University of Leipzig, Germany. p. 1

148 Apps. (2014). App Store Metrics. Count on application submissions p. 1.
Retrieved from http://148apps.biz/app-store-metrics/



RYAN GREAVES