Kudler Fine Foods is a large food store located in several parts of California. The main objective of the Kudler’s store is to increase revenues by providing quality products at affordable prices in comparison to the other competitors. Keeping up with inventory and making sure that everything is stocked and up-to-date is vital to maintaining a thriving business. These are key factors to everyday business and stability. The company is now looking to enhance its services by improving the efficiency of its operations. It also wants to increase the consumer purchase cycle by expand its business through Electronic Commerce, in addition to the Retail Stores and develop a Frequent Shopper Program.
Kudler Fine Foods Frequent Shopper Program
Frequent Shopper Programs nowadays are becoming very popular among large retailers. In the same series, Kudler Fine Foods also wants to develop a frequent shopper program for Electronic Commerce. The Frequent Shopper Program will allow store to track various shoppers behaviors and process offerings to best satisfy their valued customers.
The store will have to follow several steps under this program. The Store will require a sale system that will track shopper’s activity and send data to shopping history database. They will also need to modify communications between the POS systems and provide discounts on frequent shopping. In addition, for the development of this Frequent Shopper Program, Kudler Fine Foods Store has to consider several business considerations including legal, ethical and security and many others.
Legal Considerations of Frequent Shopper Program
When doing business online the company has to follow certain rules and regulations established by the government. There are several Legal Considerations in the E-commerce which are as follow: According to the Privacy and Electronic Communication Regulations, an opt-in consent procedure is required for making commercial emails and e-commerce. Before organization can do any type of business online they are required to provide verified information to the recipient for online service to meet E-Commerce Regulations. In order to release Frequent Shopper Program to the public the store has to manage online advertising but first they have to make their advertising and promotion strategies according to the guidelines of the E-Commerce Regulations. Electronic contracts are now can be legally signed electronically for online business transaction and privately kept by the service provider, however, for the approval of an online order, the business organizations are required to have physical signatures.
The tax laws vary from one country to another thus for the E-Commerce the business organizations have to consider the taxation laws of the Native Country.
• All online shoppers should be provided with a copy of all the terms and conditions.
• To copy the business processes and the intellectual properties of the business organizations has to consider important legal consideration of the E-Commerce.
Ethical Considerations of Frequent Shopper Program
In addition to the legal considerations, there is a number of ethical considerations that the Kudler Fine Foods Store has to include in their frequent shopper program. Some of the important ethical considerations are as follow:
• The customer’s personal information cannot be released without customer’s authorization.
• The store has to rely on dependable and up to date online security to protect sensitive data of the corporate as well as the individuals.
• Anything related to pornography on the name of e-commerce is prohibited according to the ethical considerations of the business.
• Breaches of any kind of contract on e-commerce are also an important ethical consideration.
• Unwelcome intrusion is also considered unethical in the field of e-commerce.
• The store is reliable for any information provided on the company websites.
• Sexually explicit or violent graphics or any access to these graphics are prohibited.
Security Considerations of Frequent Shopper Program
In addition to the Legal and Ethical Considerations, Kudler Fine Foods Stores is required to implement security measures to secure confidential data from unwanted individuals. Security is the most important aspect of E-Commerce in Frequent Shopper Program. The main Security Considerations are as follows:
• Any business organizations operating E-Commerce have to secure their data. The customers, who do transactions, ask the organizations to secure and save all the electronically sent information about them, especially related to financial risks.
• Protection from the Cyber terrorism is also an important security consideration in E-Commerce.
• The technologies used by the different organizations should be protected to prevent access from an unauthorized people.
• Essential technical skills or expertise not available internally should be secured from outside the organization.
• User access privileges must vary among employees and customers.
• The efficient imposition of the intellectual property rights in the business transactions on E-Commerce is also an important matter under security considerations.
Financial Analysis
The value of systems from a financial perspective essentially revolves around the issue of return on invested capital. The main concern here is if Frequent Shopper Program system will produce sufficient returns to justify its costs. For the development of the Frequent Shopper Program the store will have to make expenditures in different fields.
Regular reports on investments and profits or revenue growth will help firm run more effective and efficient. Maintaining customer records would be important function of the Frequent Shopper Program for the revenue process. According to firm’s Intranet the company is already in process of integrating a system to track customer purchase behavior over time. In my analysis I recommend that store should primarily focus on measures of cash flows into and out of the firm. It is important for the store to integrate the systems that tracks and controls cash inflows and out flows because the difference between cash outflows and cash inflows can be used to calculate the financial worth of an investment. Cash inflows take the form of increased sales of more products or reduced costs in production and operations. The investment cost of Frequent Shopper Program would be an immediate cash outflow. In subsequent years, the investment may cause additional cash outflows that will be balanced by cash inflows resulting from the investment. If the store receives enough inflows to cover additional expenses than program is profitable and the store can expect more increase in sales for years to come. For the development of the Frequent Shopper Program, the store must include all expenditures in every field associated with this program. Some of the main expenditures will be related to marketing, advertising, market research, online registration and website redevelopment.
Conclusion
When all reports are collected and put together the justification of all these expenditures can be done by comparing revenues from the last years. The difference will reveal the financial analysis of all the expenditures. If revenues are lower than the past year than the program has no value and may not produce enough capital to run another year. But if the revenues will be higher than the past year, the expenditures will be favorable for the store.
References
Apollo Group, (2007). Sales & Marketing. Retrieved May 13, 2009, from Kudler Fine Foods
Web site: https://ecampus.phoenix.edu/secure/aapd/cist/vop/Business/Kudler/KudlerHome002.htm