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Gordmans is developing a mobile app to reach its target customers of mothers aged 25-49 with household incomes of $50,000-$100,000. The app will extend Gordmans' existing Oracle retail system to mobile using Oracle ADF, which supports both online and offline mobile apps. It has the potential to reach 19.5 million existing smartphone owners. The project timeline is 6 months and costs $538,000 initially but is expected to generate a net benefit of $4 million in the first year, with an 8.3% ROI and payback period of 12 months. It poses low risks and has a positive NPV and profitability index, indicating it is a good investment.
![References• Gordmans&Stores&2011,&Annual!Report.&Available&from:
hEp://investor.gordmans.com/common/download/download.cfm?
companyid=ABEAZ4WQIVI&fileid=565222&filekey=AA0B12A7Z
C359Z4FA2Z8F41Z638722C16306&filename=GMAN_2011_Annual_Report.pdf.&[19&February&2013].&
• Nielsen,&Survey!New!U.S!Smartphone!Growth!By!Age!And!Income,!20&February&2012.&Available&
from:
hEp://blog.nielsen.com/nielsenwire/online_mobile/surveyZnewZuZsZsmartphoneZgrowthZbyZageZ
andZincome/.&[22&February&2013].&&
• Nielsen,&Smartphone!Account!For!Half!Of!All!Mobile!Phones,!Dominate!New!Phone!Purchases!In!The!
U.S,!29&March&2012.&Available&from:&
hEp://blog.nielsen.com/nielsenwire/online_mobile/smartphonesZaccountZforZhalfZofZallZmobileZ
phonesZdominateZnewZphoneZpurchasesZinZtheZus/.&[22&February&2013].&&
• Oracle,&US&Oracle&Technology&Commercial&Price&List,&15&March&2013.&Available&from:&
hEp://www.oracle.com/us/corporate/pricing/technologyZpriceZlistZ070617.pdf.[19&April&2013].&
• Google&Insight,&Our&Mobile&Planet:&United&States,&May&2012.&Available&from:&
hEp://ssl.gsta4c.com/think/docs/ourZmobileZplanetZunitedZstates_researchZstudies.pdf..[20&March&
2013].&](https://image.slidesharecdn.com/board-presentation-final-mhh1g12-150511160346-lva1-app6892/85/Board-presentation-26-320.jpg)
Board presentation
- 2. Agenda 1. Current&Situa4on& 2. GOAL& 3. Method& 4. Solu4on& 5. Risks&&&Challenges& 6. Money&maEers& 7. Summary&
- 4. GOAL& “our primary target shopper is a 25 to 49 year old mother with children living at home with a household income ranging from $50,000 to $100,000” Gordmans 2011 annual report !
- 7. Method
- 8. “Mobile marketing is the most powerful media ever invented” New York Times
- 9. Effective Advertisement 66%# Mobile# Devices# Put# your# business# in# the# palms# of# customers# hand# when# they# need# a# solu>on#to#their#shopping#problem# #Source:&Google&Insight&
- 10. Factors People&check&their&mobile&150&4mes&a&day&& & “mobile!search!has!grown!400%!in!the!past!year”! &!“88%!of!these!users!take!ac=on”!!Google!insight! ! High broadcast advertisement read rate Traditional email : 4% Mobile PUSH notification technology : 97%
- 11. Solution
- 13. Oracle&ADF&Mobile& • Support&both&onZdevice&and&browser& based&mobile&applica4ons& • Hybrid&mobile&applica4on& architecture& • Offline&support&
- 15. Risks & Challenges • Customer&might&find&cheaper&price&product& over&the&internet& • Increase&cost&for&mobile&apps&maintenance& • Rapid&mobile&OS&versions&changing& • Lack&of&XZfactor&in&apps&requirement& • How&to&aEract&apps&downloaders&
- 16. Money matters
- 17. Implementa4on&Cost& Costs# Year#0# Year#1# Year#2# Year#3# Total# Sodware&+& Maintenance& $140,000& $24,000& $24,000& $24,000& $212,000& Applica4on& Development& $98,000& Z& Z& Z& $98,000& Ongoing&Labor& Z& $50,000& $50,000& $50,000& $150,000& Adver4sing& $300,000& $300,000& $200,000& $175,000& $975,000& Total#Costs# $538,000# $374,000# $274,000# $249,000# $1,435,000#
- 18. Return&On&Investment& 8.3% ROI in 1st year worth $5 million
- 19. Payback&Period& Year# Net#Benefits# Running#Total# 0& Z$538,000& $538,000& 1& $4,088,000& $374,000& 2& $4,726,000& $274,000& 3& $4,751,000& $249,000&
- 20. Net&Profit&Value& Year# Net#Benefits# Discount# Factor#with# Hurdle#Rate# 10%# Discounted# Value# Year&0& Z$538,000& 1.00& Z$538,000& Year&1& $4,088,00& 1.10& $3,716,364& Year&2& $4,726,000& 1.21& $3,905,785& Year&3& $4,751,000& 1.33& $3,572,180& $10,656,329#
- 22. Summary
- 24. 8.3%# ROI& $4.0#m# Net&Benefit& 12#month# Payback& $3.7#m# NPV&at&10%& Financial# Metric# Summary&
- 25. Going into your pocket lets Q & A
- 26. References• Gordmans&Stores&2011,&Annual!Report.&Available&from: hEp://investor.gordmans.com/common/download/download.cfm? companyid=ABEAZ4WQIVI&fileid=565222&filekey=AA0B12A7Z C359Z4FA2Z8F41Z638722C16306&filename=GMAN_2011_Annual_Report.pdf.&[19&February&2013].& • Nielsen,&Survey!New!U.S!Smartphone!Growth!By!Age!And!Income,!20&February&2012.&Available& from: hEp://blog.nielsen.com/nielsenwire/online_mobile/surveyZnewZuZsZsmartphoneZgrowthZbyZageZ andZincome/.&[22&February&2013].&& • Nielsen,&Smartphone!Account!For!Half!Of!All!Mobile!Phones,!Dominate!New!Phone!Purchases!In!The! U.S,!29&March&2012.&Available&from:& hEp://blog.nielsen.com/nielsenwire/online_mobile/smartphonesZaccountZforZhalfZofZallZmobileZ phonesZdominateZnewZphoneZpurchasesZinZtheZus/.&[22&February&2013].&& • Oracle,&US&Oracle&Technology&Commercial&Price&List,&15&March&2013.&Available&from:& hEp://www.oracle.com/us/corporate/pricing/technologyZpriceZlistZ070617.pdf.[19&April&2013].& • Google&Insight,&Our&Mobile&Planet:&United&States,&May&2012.&Available&from:& hEp://ssl.gsta4c.com/think/docs/ourZmobileZplanetZunitedZstates_researchZstudies.pdf..[20&March& 2013].&
- 27. The end Muhammad Hafiz Hasan mhh1g12@soton.ac.uk