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Swot Examination Of Aalsmeer Flower Auctions IT Essay

As an IT Advisor, I am obligated to recommend appropriate information systems and technology for Aalsmeer Bloom Public sale (known as AFA or company throughout the record) to attain their business objectives and ensure competitive advantages in the industry.

The report commences with an illustration of the business case study, suggestion on systems and strategies followed by the reason of the chosen system development methodologies that applicable in this case. The finish of the survey will describe the impact and efficiency of the proposed system to the organisation, management level and employees available.

Information system is a set of interrelated components that retrieve, process, store and send out the information to support your choice making in an organization (Laudon & Laudon, 2009). To be able to identify appropriate business and information required by Aalsmeer Bloom Auction (AFA), the organisation may use SWOT evaluation to carve out a strong business technique to meet tactical opportunities.

1. 1 SWOT Analysis of Aalsmeer Flower Auctions

1. 1. 1 Strengths

AFA recognized the organisation durability as the world largest Dutch Bloom Auction information by retaining market talk about of 44% (Esmeralda Farms Inc. , 2011) and play as mediation role to global growers, wholesalers and exporters in the bloom industry. AFA is also considered the world blossom price indications for growers in price setting and suppliers to obtain the right price for bidding in the auction. The company is effective in moving products by breaking large consignments from growers into smaller amounts for customers.

1. 1. 2 Weaknesses

One of the weaknesses is AFA struggling to response to flower industry that is demand focused. The organisation unable to satisfy changing demands of retailers called for fresher products, more kinds, smaller amounts and multiple deliveries each week. The nature of auction guidelines didn't provide incentives to clients by supporting deal in large tons (Eric Vehicle Heck, 1997) is one the reason why customers transitioning auctions to get more benefits.

AFA created inconveniency for both celebrations during business deal because buyers have to be physically present in an public sale room and growers then package deal the product as specified and deliver it the very next day to the buyer location in the auction complex or even to other buyer warehouse (Eric Van Heck, 1997). Thus, product packaging cost is incurred multiple times for transferring the flower to the public sale and repackaging for move out of the auctions (Ajit Kambit & Eric Van Heck, 1995).

1. 1. 3 Opportunities

Internet or new Information system sometimes appears as the opportunities of AFA to get more market talk about by increasing the transparency and encouraging decision making of both functions via new information system. Through the new system, AFA can redefined value chain and strengthen the link with wholesalers and suppliers by lowering in overall transactional cost.

1. 1. 4 Threats

However, AFA faces many threats in the industry starting from the domination of electric driven market over the original flower auctions. Then, the competitive environments encourage the forming of mergers and acquisitions among sellers which led to high bargaining power of buyers on the market. AFA also threaten by increasing trade beyond your auction as growers are choose to different way of offering such as via electronic and direct offering.


Figure Porter's Generic Strategies (QuickMBA. com, 1999-2010).

2. 1 Cost Management Strategy

By critiquing the SWOT evaluation of Aalsmeer Rose Public sale (AFA), it is seen that suppliers and customers are more desirable to generate less expensive running a business. Thus, low cost leadership strategy suggested by Porter (1980) is the most relevant target for AFA in gaining competitive gain through the reduction of deal cost to both suppliers and customers.

AFA can acquire cost gain by increasing process efficiency by installing new information system features like the case of AVNET Marshall. The organisation reported the Internet database benefit the company in reducing operation cost and strengthening business relationship between suppliers and customers (O'Brien, 2003). Intranet permits suppliers to get point of deal and inventory position survey about their product any moment for replenishes goal. Customers, on the other hands, can check the inventory position of the product they need as well as the order they recently placed (O'Brien, 2003).

Besides, AFA management in a position to keep costs at bare minimum by effectively link the utilization of new information system features in their value chain which consisting key and supplementary activities. For example, AFA could save deal cost by outsourcing the logistic process (principal activity) to downstream logistics lovers which electronically web page link through AFA Internet data source for sending bloom just with time to the auction and customers. As the organisation business efficient unit (secondary activities), could increase cost efficiency in gaining vertical integration decision making via proper information system.

The low priced strategy is regarded as to generate high go back to AFA as information by Porter's five causes competitive examination shown below that illustrate the extends of AFA in attaining competitive gain after applying the strategy. If AFA were to put into action the strategy, significant investments must be made on advised information system typically on venture reference planning (ERP), customer relationship management (CRM) and supply string management (SCM) which is discussed later in this proposal.

2. 2 Porter Five Pushes Competitive Research of Aalsmeer Rose Auction after Implementation of Cost Leadership Strategy

Porter's five forces


New market entrant

With the low cost strategy, AFA able to raise hurdle of admittance of new players to the flower industry as their size is smaller as compared to AFA from the ability of providing most reasonably priced in large level of selling as useful low priced service via the electronically link with customers and suppliers in the auctions. In this manner, the organisation can achieve economies of scale and stay profitable in the industry.


As an inexpensive leader, AFA could maintain price-value romantic relationship by using new information system features to hold on to customers from heading to other electronic digital driven market.


The strategy enables AFA, the reduced cost market innovator on carry down the bargaining power of suppliers because the utilization of new information system is effective on lowering the increase of price level to purchasers. For example, electronic digital data interchange (EDI) enable fast and fast electronic connection between your business and its own suppliers. This produce benefits for suppliers in term of lowering warehousing cost, delivery times and increase accuracy of information (Curtis & Cobham, 2005).


As a low cost leader, AFA directed to look at new system help decrease the search costs of purchasers and allow clients to seal the bids anytime everywhere without constraint. In this manner, it builds strong customer marriage of AFA which is rarely concentrated by any efficient auctions. Thus, buyer's incentive on making acquisitions in AFA increase.

Competitive rivalry

AFA will gain competitive advantage of being a low cost leader on the market and opponents will be competing in price war. However, it would not have an effect on AFA over time because competitors tend to be small level and they'll sooner be eliminated in the industry as cost of keeping day-to-day low cost will not justified their earnings. AFA, on the other side, benefited as the monopoly on the market and more likely to fully capture more income with low cost strategy.

2. 3 Cross -functional Organization System

Many organizations view cross-functional business system as a tactical way to use information technology to talk about information resources and improve the efficiency and performance of business operations, thus assisting E-business attain its tactical aims (O'Brien, 2002). AFA is recommended to purchase cross functional enterprise system consists of enterprise resources planning (ERP), source chain management (SCM) and customer romantic relationship management (CRM) within their success strategy.

2. 3. 1 Enterprise Resource Planning (ERP)

Enterprise learning resource planning (ERP) acts as a framework to combine and automate lots of the business processes that must definitely be achieved within the manufacturing, logistics, syndication, accounting, funding, and human resource functions of an business (O'Brien, 2002).

The integrated software allows AFA in achieving efficiency through the fast and appropriate data transfer and writing by many different business operations and functional devices throughout the venture (Curtis & Cobham, 2005). For instance, ERP software effectively help developing company typically in checking the position of sales, inventory, shipping and delivery, and invoicing, as well as forecasting raw material and individual source of information requirements of the business (O'Brien, 2002).

Financial and accounting

On the other hand, AFA need a complete and efficient accounting system to offset the troubles from electronically driven flower market. ERP software facilitates financial and accounting departments to process financial information using systems such as cash management, credit management, order control and financial planning. For example, order processing system provide fast, correct and efficient method of recoding and testing customer orders in the auction (O'Brien, 2002, p. 149). This streamline the management of AFA on making important decisions such as allocate of proper amount of investment on rose warehousing after revising the forecast financial performance of the business.

Human Resource

Besides, AFA also needs a proper human resource management (HRM) to improvise the internal performance to be able to create as pleasing customers and suppliers' service performance, which is essential to improve the market talk about of the company. HRM information systems involves staffing, training and development and reimbursement administration which profit AFA in making proper job and employees allocations in each division quicker and require little physical intervention of HRM departments. For example, AFA could raise the morale of employees through computer established multimedia appraisals to inspire employees to improve job performance in a variety of departments.

2. 3. 2 Customer Romantic relationship Management (CRM)

According to O'Brien (2002), "the unusual of selling a product to a new customer are 15 percent, whereas the odds of selling something to a preexisting customer are 50 percent". Thus, customers' retention is relatively very important to AFA to survive in the demand oriented rose industry as well as recording clients to secure business' profitability.

Customer relationship management (CRM) is one of the systems that will help AFA to attain permanent business connections with customers for mutual benefits (Bocij et al, 2003). CRM system involves software that enable AFA to interact with customers through integrating and automating lots of the customers servicing processed in sales, marketing, and product services. For instance, AFA can use CRM software to keep an eye on customers' deals from the databases that revealing the blossom purchase habits and the working price. And through the database, AFA can implement suitable marketing strategy such as by mailing electronic newsletters about the hot deals of bouquets product that up to certain customers' purchase tastes.

Besides, AFA can even effectively identify profitable customers and then implements appropriate customization and personalization of products and services that based on customer needs, needs and purchasing habits and life cycles (Brien, 2002, p. 131). AFA can improve customer support and support by through help desk software, which is part of CRM program to aids customer who having troubles such as presenting tips for customers in the decision of growers that can satisfied their product requirements. Electronic service data demonstrating stock portfolio of growers and their respected rose offered can facilitate assistance of help workplace too make quick recommendations for resolving problem.

In this way, AFA can strengthen the link with customers as CRM provide fast, convenient, trustworthy, steady customers experience and superior service and support across all the contact points a customer decides (O'Brien, 2002, p. 131).

2. 3. 3 Supply chain management (SCM)

Supply chain management is thought as coordination of all source activities of a business from its suppliers and delivery of the merchandise to its customer (Chaffey & Hardwood, 2005). Aalsmeer Flower Auctions is also advised to utilise SCM as a way to foster the human relationships with the suppliers, growers and vendors. SCM can help the organization to reengineers and streamlines traditional supply chain functions by motivating the stakeholders to use intranet, extranet and E-commerce Web website.

The system also targeted at helping organization to attain agility and responsiveness in interacting with the demands of suppliers and the needs of growers and wholesalers. By using SCM software, AFA can enhance supply string process, aided by Internet technology. For example, inventory management is improved upon through the info showing (data) on demand from products within merchants (Chaffey & Solid wood, 2004) which reduces the number of times something is handled, minimizing overall product packaging costs and damage (Eric Van Heck, 1997) of AFA ends up with reduction of deal cost.


3. 1 Waterfall Style of System Development Lifecycle (SDLC)

It is recommended for AFA to use waterfall style of system development lifecycle (SDLC) as a construction for bringing out new information system development. As illustrated in Amount 2, SDLC involved seven phases of system development that are initiation, feasibility, examination, design, build, and implementation and lastly review and maintenance. Each expression need to be completed before the next commence. Thus, the overall system could be influenced if the output presents week in virtually any phrase in the process.


Figure the traditional waterfall model of information systems development (Bocij, 2003, p. 298)

3. 1. 1 Initiation

Initiation is the start-up saying in SDLC involves evaluation of the requirements or suggestions to be considered in the information system in order to support the business enterprise needs of AFA. As illustrated in the case study, AFA acquires the support of new information system to maintain the company strong position in the flower industry as well as creating rigid method of trading with growers and sellers. Thus, the main element concentrate of the new system is to improve the efficiency of the company, potential buyers and suppliers in reduced amount of exchange cost.

3. 1. 2 Feasibility

After identifying the overall needs of new information system, feasibility key phrase is then set up as the point of the suitability of computer-based information system based on certain feasibility requirements as shown in Stand 1 below. AFA may need to revise these requirements as before further proceeds the new information system.

Table Feasibility criteria needs to be taken profile in system development.



Technical feasible

Does AFA have sufficient tech support team of the require system?

Economically feasible

Does AFA have sufficient financial resource to build up and preserve the new information?

Does the new system benefit AFA in the looked at of cost gain analysis?

Operationally feasible

Does the proposed information system capable of helping AFA within the required speed, level, usability and dependability?

Organisational feasibility

Do the existing employees have good attitude and skill pieces towards the proposed system?

In order to responding to the conditions, AFA should analyse through the inspection on the current system and the related records. Interview is among the best ways for AFA to get the opinion of employees about the new system and the results are needed to be documented for the system analysis.

3. 1. 3 Analysis

Once the proposed information system is decided to be possible, system analysis phrase begin where the AFA need to determine types of system required for the business. AFA will need to analyse the strength and weakness of these present system like the operating system, volume level, and response times. AFA is also suggested to revise the user requirement analysis file in an effort to further improvise the proposed systems and also other types of requirements shown in Table 2 below. The result of this stage involved a detailed requirements standards summarising system functions relating to the use of data circulation diagrams in order to approve by IT specialists and system users.

Table Examples of the efficient requirements (O'Brien, 2002, p. 286)

Examples of the useful requirement

User program requirement

Automatic access of the merchandise data entry screens for Web customers.

Storage requirements

Fast retrieval and upgrade of the data from the merchandise, pricing and customer directories.

Processing requirements

Fast, automatic, computation of sales totals, and delivery costs.

Control requirements

Signals for data mistakes and quick E-mail verification for customers.

3. 1. 4 Design

By using an individual requirement analysis document generated from the prior level, AFA will enter to system design phrase. System design specific the way the system will accomplish the requirements determined in previous stage. In this saying, AFA need to designate the database, production and activities to aid the user program in the machine design. For example, AFA will demand large data storage and capture to support internal use as well regarding the external usage like the purchase record and other precise about the clients and suppliers.

Besides, interior and external adjustments need to be part of the designed to ensure the machine would be reliable, exact, secure and maintainable. Lastly the key phrase will wrap up with system design specs which will be shown to the real users for review and authorization.

3. 1. 5 Build

System build saying is the creation of software regarding writing software, constructing and populating the repository and tests by programmers and end-users (Bocij et al, 2003). In this particular phrase, AFA must conduct operational records and techniques of ERP system which will have tricky consumer interfaces and highly tailored. AFA need to teach employees through training courses in order to work with the system effectively. AFA also recommended creating websites that is attractive with user friendly software such as video tutorials and with updated press release to educate the customers and suppliers to work with the new system.

Due to reality ERP is too sophisticated for new individual, AFA should test the performance of software by setting up step by step to avoid system inability. Besides, the connection and availability of Internet data source is a problem for AFA as it is important to fortify the relationship between clients and suppliers.

3. 1. 6 Changeover

It is often to come across errors at the live working stage; AFA should revisit the previous level in SDLC, and continued the system functioning until the mistakes are corrected (Bocij et al. , 2003).

3. 1. 7 Maintenance and review

After the machine changeover, AFA should review the information system such as ERP, CRM and SCM, because failures and problems tend to arise during procedure over a period. Thus, in this expression, AFA is must keep up with the system by meticulously monitoring, evaluating and modifying the information system to ensure it meet the changing business need.

AFA need to attempt the post implementation review process to screen the security and firewall of the machine in order to avoid leakage of company's confidential such as customers' information from system hackers. Alternatively, evaluation on the data source storage is required for AFA to make sure it is adequate on helping growing of suppliers and customers as time passes. Additionally, it is also very important to AFA to undertake system adjustment such as by adding new functionalities and features because the adopted system may turn obsolete credited to changing business environments.


4. 1 Impact and effectiveness of new system to organisation

The consumption of information system is deemed to delivered efficiency to AFA through the reduced amount of transaction costs specifically in the coordination of warehousing, communication with suppliers and customers. For instance, information such as varieties of flowers, delivery times and current position can be had electronically via Internet databases or email which can deliver higher value to customers.

On the other side, the cost on developing a new system is high for AFA and the worthiness of new system software depending the gaining of the company. According to the results of Brynjolfson's (1993), the computing electricity has increased by two orders of magnitude since 1970s, efficiency, especially in the service sector has stagnated (Davies, 2002). This implies if no improvement in efficiency is deemed to set-up loss to the organisation because the benefit outweigh the costs incurred before putting into action the new system.

4. 2 Impact and success of new system to management

ERP system advanced the efficiency in general management decision making process as information processing can pass down to each level speedy and in a systematic way. In addition, ERP system reduces human's workload and minimized human errors while preparing paperwork. In this manner, managements can refocus on more important job such as tone down operational cost by downsizing the amount of employees need in the company.

In reality, it would be hard for AFA management to lay down off any of the workers who have been faithful to the company after years of efforts. Thus, AFA needs to be rational in filtering the expert and negative aspects of your choice as the organisation benefits are priority concerns of most businesses.

4. 3 Impact and efficiency of new system to employees

The new system will definitely create both positive and negative impact to the employees. First of all, ERP system demanding IT qualified workforce attributed to its complexity and the needs of controlling, programming and preserving the system. Employees may be motivated to increase their IT skill to modify the changing conditions in the business. Additionally, the system will enrich careers and provides greater degrees of staff empowerments (Davies, 2002). For instance, customer support is advanced by letting customer service personnel make instantaneous decisions about actions to take in relation to customers with the aids of information system (Davies, 2002).

However, the automation system reduces social interaction among personnel due to the frequent usage of electronic mail in firm communication. Personnel on the other hands feel tense because be concerned to be let go as their job roles is slowly changed by information system. Thus, AFA must increase the workers' morale with relevant appointment and rewards system in order to prevent the event of low productivity after implementation of new system.


Conclusively, AFA still stay its functions as flower mediators by conditioning the business romance with both wholesalers and retailers via new information system request. New system enhances flexibility of both parties such as they no longer need to be physically within the auctions to make bargains which reduces unnecessary cost the procedure. Retailers is now able to surf and search varieties of plants available online and seal the bids with their favourite just by one click in the AFA Internet data source. While growers, is now able to constantly modified with the stocks and options needed in the public sale by accessing the web database. In this way, AFA will probably increase market talk about if they stay competitive in industry.

Last but not least, AFA should constantly notify and proactive in the industry as the current proposed system risk turning outdated overtime. Thus, modifications of the system need to be manufactured in order to provide more conveniences of the company internally as well concerning satisfying other stakeholders like growers and sellers in the business place.

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