Name Christopher Paul Kolston NetID ckol846 Group Number: 57 Website Link: http://infosys1102014fcgroup57.blogspot.co.nz/p/d1.html Tutorial Details Tutor: Day: Time: Kayur Monday 2pm Time Spent on Assignment: 15 hours Word Count: 1649
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2 CHARITY INDUSTRY ANALYSIS INTRODUCTION The problem that we addressed in deliverable 1 was the homelessness problem in Auckland city; in that there are approximately 300 people sleeping on the streets every night (Auckland City Mission annual report: 2012). The solution to this issue is the implementation of a donation system whereby customers at supermarkets can opt to add an extra dollar to their shopping cart which will be donated to Auckland City Mission. The advantage of this sytem over existing donation systems is that a) incentives are provided to donate and b) the cost of donating will appear less to the consumer (compared to the overall cost of their shop). Consumers will, if having chosen to donate, receive a code on their receipt that they can send via text or online to send their donation to the service, which will then be passed on to Auckland City Mission after it is sorted and data is collected from it. 3. BUSINESS SECTION 3.1 Vision To provide those in need with reliable and sufficient funding to live in a safe environment. 3.2 Industry Analysis: Donation collection industry Industry: Donation collection Industry. Businesses that collect donations for those in need (i.e. salvation army) Force: High/Low: Justification: Buyer power: High There are multiple agencies in Auckland city that provide donation collection services 86 charities support accomodation/ housing alone (Auckland Charity Statistics: 2014).
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3 Supplier power: Low The amount of charities in Auckland city alone displays the options that buyers have, meaning that suppliers have relatively low power over the buyers (donators). This is an example of an assymetric relationship between buyers and suppliers (Marjolein C.J. Caniels*, Cees J. Gelderman: 2005). Threat of new entrants: Low It is difficult to set up a charity as it is a rquirement that they are non-financially motivated (Internal Affairs, legal structures for social enterprise: 2013), and so the CEO must collect people who are motivated to worth without a financial incentive. Threat of substitutes: Low Donators cannot donate effectively to those in need without going through a donation collection providor (or charity). Also, charities use media to make people want to donate, and so they have a higher power over the individual who is collecting donations. (Robbins, 2010). Rivalry among existing competitors: High There are over 25,000 charities registered in New Zealand (as of 2011), with almost 5,000 of these being in Auckland alone. The sheer number of charities creates huge rivalry as charities will have to compete in order to get the donator to donate through their service. (NZ Charities Commission, 2011).
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4 Overall attractiveness of the industry: Overall, the industry attractiveness is low due to the high rivalry among existing competitors, and also the high buyer power. Although the threat of substitutes is low, the high rivalry negates this as well as the low threat of new entrants. 3.3 Customers and Thei r Needs Statistics show that people over the age of 50 are more likely to donate than any other age demographic. However, since overall 66% of people in New Zealand donate, approximately 50% of these are over 50 and so the other 50% (under 50) should not be ignored (Charities Aid Foundation: World Giving Index, 2012). This signifies that all who are over 18 are potential customers specifically those who are financially stable so they are more likely to spend that extra money to donate. One of the main needs of donators is the awareness of tax advantages, as one can claim tax deductions after donating to charity. Also, donators want to know where their money is going and also how it is going to contribute to those in need/ the organisation (Vesterlund, 2006:569,571). 3.4 The Product and Service This service will meet the needs of the customer as regular updates about their donations/ the organisation will be sent to them via the service automation system mentioned below (see 3.10: systems). Information provided will include how their donations have helped those in need directly and also they will be sent reports updating them on the progress of the organisation, providing them with incentive to donate again (as the organisation creates value and is successful). 3.5 Suppliers and Partners Suppliers: 1. Public (shoppers at New World/ Pak n Save) The public will supply the donations which will go to Auckland City Mission through this service. They are the original source of donations. 2. Foodstuffs
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5 Foodstuffs owns the supermarkets New World and Pak n Save. They will be offered the opportunity to increase their sales by giving their customers the option to donate at the end of their shop, giving them a better brand image and supplying this organisation with the donations through a customer base. Partners: 1. Auckland City Mission The donations collected will go to Auckland City Mission, who will use the money to support those in need by increasing their shelter facilities, providing food/ clothes etc. 2. NZ government Charity sector The government would support this service by providing funds if necessary as it helps the homeless people of Auckland have a better living quality. They would also help to advertise this service as it gives New Zealand a better image (no/ less homeless people = more attractive country) 3.6 Strategy: Focused l ow cost The porters generic strategy would have a wide competitive scope as it essential to maximise donations, which can be done by attracting the widest demographic/s possible. The low cost strategy would be used as this service would be a non-profit organisation as it is both the law and so that donators know that their donations arent going towards creating a profit for the business, but rather directly towards those in need. The overall strategy is therefore Focused low cost 3.7 Value Chain Activity: Technology Development (R&D) The most important value chain activity for this business is Technology Development (R&D) This product involves the use of technologies such as the internet and barcode input systems. In order for the product to be successful, these systems must work together efficienty and effectively so that donations are managed without discrepancies. Also, since
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6 the money will be distributed to Auckland City Mission online, account management must be accurate and up to date to ensure statistics are not false. 3.8 Business Processes 3.8.1. FINANCE MANAGEMENT PROCESS Finances will be managed online by an automated system, and so a finance management process is essential. This will include from the collection of the donations from the various supermarkets to the distribution of the finances to Auckland City Mission. For this process to run smoothly, steps will be created to keep the process in full, on time, and in spec (IFOTIS). FINANCE MANAGEMENT PROCESS
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7 3.8.2. DATA ANALYSI S PROCESS This process involves the collection and analysis of data collected from various sources. It will be beneficial to the technology development value chain as the information produced from this process will provide helpful feedback on what to work on/ improve in order to maintain a functioning system DATA ANALYSIS PROCESS
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8 3.9 Functionalities 3.9.1. FINANCE MANAGEMENT PROCESS Collect donations from customer Keep customer up to date with their donation status 3.9.2. DATA ANALYSIS PROCESS Filter/ separate data to create relevance pools To send reports to departments for analysis 3.10 Systems
To provide those in need with reliable and sufficient funding to live in a safe environment.
3.10. 1. SERVICE AUTOMATI ON SYSTEM This system includes the organisation of emails being sent to donators in order to let them track what is happening with their money and also to keep them up to date on the running of the service. This contributes to the functionality of the finance management process, which in turn supports the vision of the organisation by making customers want to donate more (one of their needs), meaning it is more likely to reach sufficient funding to live in a safe environment. 3.10. 2. DATA FILTRATION SYSTEM The data filtration system adds frameworks/ filters to data to sort relevance and to group it according to these filters. This system adds to the functionality of the data analysis process which also contributes to achieving the vision, as it sorts information which allows the organisation to more efficiently gain information which can be used to improve the effectiveness of the organisation as a whole. 3.10. 3. ACCOUNT MANAGEMENT SYSTEM Account Management System involves controlling the accounts of donators. This includes the amount they have donated and recording where their money is going towards, creating profiles based on this information. This contributes to the functionality of both the data analysis process and the finance management process as it helps to keep customers up to date and also uses the reports sent to departments. In terms of the vision, this system helps as it makes donators more motivated to donate as it
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9 fulfills their need to know what is happening with their money, therefore generating the initial funding.
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10 3.11. Summary Table: Value Chain to Systems
Value Chain Activity Processes Functionalities Specific Information System(s) Broad Information System(s)
Technology Development (R&D) 1. Finance Manageme nt Process 1. Collect donation from customer
2. Keep customer up to date with their donation status Service Automation System
Account Management System Customer Relationship Management
Transaction Processing System 2. Data Analysis process 1. Filter/ separate data to create relevance pools
2. To send reports to departments for analysis (inter-departmental relationship establishment) Data Filtration System
Account Management System Decision Support System
Transaction Processing System
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11 CONCLUSION The service that has been suggested to tackle the homelessness problem in Auckland city is a new donations system that works in collaboration with supermarkets (Foodstuffs) and Auckland City Mission to gain another source of funding. This service makes use of information systems and information technology to achieve this goal, including an SMS system, data filtration, service automation, and account management system etc. All of these systems contribute to the effectiveness of the solution stated as they add value by automating steps and sorting through data without any manual effort needed. REFERENCES
1. Charities. (n.d.). Auckland Live statistics The Register. Retrieved May 24, 2014, from http://www.charities.govt.nz/the-register/statistics/auckland/ 2. Caniels, M. C., & Gelderman, C. J. (2005). Power and interdependence in buyer supplier relationships:A purchasing portfolio approach. Industrial Marketing Management, 36, 219-229. Retrieved May 25, 2014, from http://www.academia.edu/884015/Power_a nd_interdependence_in_buyer_supplier_relationships_A_purchasing_portfolio_ap proach 3. N.g.. (2013). Legal Structures for Social Enterprises. Wellington: Department of Internal Affairs. 4. Robbins, M. (2010, September 20). One for all or all for one?. The Guardian. Retrieved May 24, 2014, from http://www.theguardian.com/science/the-lay- scientist/2010/sep/20/charitable-giving-identifiable-victim-effect 5. Charities Commision. (2011, February 28). A Snapshot of New Zealand's Charitable Sector. Retrieved May 24, 2014, from http://www.charities.govt.nz/assets/docs/key- statistics/2011/sector.pdf 6. A Global View of Giving Trends. (n.d.).World Giving Index 2012. Retrieved May 24, 2014, from http://www.cafonline.org/PDF/WorldGivingIndex2012WEB.pdf 7. Vesterlund, L. (2006). Why do people give?. The Nonprofit Sector, 2, 568-587.