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Question:

Discuss About The Drone Service In Faster Delivery Target Pty?

Target Australia Pty is a retail business that carry out chain store in the country to sell various types of goods such as clothing, cosmetics, electronics and others. It is owned by Westfarmers that operates 308 stores in the country. The company operates it own online store as well to offer home delivery to the customers. However the company is recently facing various types of problems with its delivery services due to its staffs. This has made it tough for the company to cope up with the tight competition faced from the retail business (Target Online Shopping | Target Australia. 2017). The paper discusses about the introduction of drone technology to solve the problem faced by Target Pty.

The company is facing problem with its online delivery service that it offers to its customers leading to fall in its demand. The problem is due to the lack of staff cooperation and management for the online service that is in great demand in today’s world. Such bad online service affects the company as well as the customers because the customers does not get their things in time and the company fails to offer high class services (Kwon, Kim& Park, 2017). This has caused a reduction in the loyalty rate of the customers towards the company making them difficult to survive in the competitive environment of online services.

The demand of the company is falling over time due to its problem in its online services as there are various other options available to the consumers in the market. The company has faced a fall in its demand from customers that it forecasted to be around 2 million customers in a year. It has only got a traffic of 1million customers which is much less than the target. Key performance indicator that the company that faced a problem is the delivery of service within the stipulated time, minimum damaged goods reaching the customers and others. However, it was seen that the company faced a lot fo problem in meeting its delivery goals (Muthukrishnan &Winiski, 2016). For example maximum time of reaching the customers is set by the company at 2 to 3 days. However the company failed to do it and was always late because of lack of staffs support.

The issue needs to be met by the government as soon as possible because the online market is increasing rapidly. Every company is introducing their own website to offer online service to customers at their home. Thus it requires the government to take necessary steps to introduce drone technology to improve its online services again. However a failure to meet the problem now might result in problems such as losing the online market share, failure to abide the legislation requirement, failure to meet the lead time and reduction in customer traffic for the company (Borden, 2017).

Problem Statement

Drone technology that the company will introduce to solve the problems arising in its online services will also help the company to solve other problems such as building good customer relationship, gaining more customer base, reducing the cost of recruiting staffs for delivery services and maintenance of better database. These opportunities are offered by the drone technology that the company is aiming to introduce because drone is a type of a satellite enabled device that helps carrying goods to customers by means to tracking their address.

Use of drone technology by the company not only put many benefits on the company as well as on the economy in which it is taking place. One of the most important benefits that drone offer is the fastest and hassle free delivery option to the customers and help the company to deliver their goods easily. This benefits the company as well as the society taking delivery service from the company using drone. Drone helps in delivering difficult and inaccessible areas easily which will allow the company to expand its business to these areas as well. Next benefits of reduction in cost due to reduction in staff usage for delivery services. Drone also assist the government to carry out environment sustainability project by offering pollution free services compared to traditional delivery sources through roads and rail (Hong,  Kuby& Murray, 2017).

Drone technology will be important to government as it is an environmental friendly technology that will help the government to carry out their sustainability work easily. This is because drone does not emit harmful emission into the environment like traditional sources of delivery by road and rail transport (Chen, 2017). 

The key performance indicators that will give the evidence about the benefits drone technology has offered to the Target Pty are:

  1. Reduction in delivery time form before
  2. Customer’s comments and opinion after the introduction of technology
  3. Government opinion after the introduction of drone
  4. Increase in number of customer traffic

The baseline and details of key performance indicator is given in appendix 1.

Interdependencies that Target Pty can depend in to achieve maximum gain from the drone project is the sustainable project. The benefits of drone can easily be measured by sustainability it achieves. Thus sustainability and drone usage can depend on each other (Marin, 2017).

The method that can be used to judge the intervention procedure is the secondary sources because it will help to get a detail knowledge about the benefits of various intervention technique that the company will use to reach its potential customers about the drone technology.

He strategic intervention can be used by the company for each of its intervention procedure. For the intervention one the company can use social media by posting advertisement about drone usage and its benefits that the new generation can learn about. In intervention 2 the company can sue email messaging where it can write about the technology and the way it is assisting the delivery services. Lastly it can also print pamphlets to reach out to the customers that are not active in the internet and are the potential customer of the company. These three intervention for the strategic intervention of Target Pty (Tuten& Solomon, 2014).

Strategic Interventions

Intervention 1: Through Online channels such as social media which is the most commonly used technology by every household

Intervention 2: direct marketing by emailing and messaging the customers about the introduction of new drone technology

Intervention 3: By offering leaflet and pamphlet to the existing customers to educate them about their new technology

Benefits of Drone Technology

Table1: strategic intervention

Source: Author’s creation

With the strategic interventions the company can also target various options for each strategic responses. For online intervention it can use social media, YouTube, twitter and other social media portal to enter the market with its new technology. Social media Facebook gaining the maximum importance. For direct marketing it can use emailing method or also messaging methods. Lastly, for traditional method it can use pamphlet or telephone call. From all the three intervention online method with the help of social media is of utmost importance for the company (Risselada,Verhoef & Bijmolt, 2014).

Strategic options

Option 1

Option 2

Option 3

Social Media

Emailing

Pamphlet Distribution

Benefits

Percentage of full benefit to be delivered

50%

25%

25%

Benefit 1

Increase in customer traffic

%

60%

25%

15%

Benefit 2

Maximum awareness about drone

%

50%

25%

25%

Benefit 3

Lowest cost

%

30%

50%

20%

Cost

Estimated capital investment cost (Range)

$1mil - $1.5 mil

$.25 mil - $.50 mil

$3 mil - $5 mil

Estimated operational costs (Range)

$1 mil - $2 mil pa

$.30 mil - $.60 mil pa

$2 mil - $3 mil pa

Time

(Range)

three month

two month

One months

Risks

Risk 1 (low attention)

low

medium

High

Risk 2 (less customer attraction)

low

medium

high

Dis-benefits

Dis-benefit 1 (no recognition)

no

yes

yes

Dis-benefit 2 (less revenue)

no

no

yes

Ranking

1-3

1

2

3

Table2: Ranking strategic options

Source: Author’s creation

The recommended technique of intervention for drone technology by the company is the online method through social media. This medium is the most used medium and has the potential of attracting maximum customer traffic. Moreover, the cost is very low compared to other medium of intervention. Further any new message regarding changes in technology can be easily conveyed through public through social media page.

Project options available for online, direct and traditional method of intervention are:

  1. Online source has the maximum source of educating customers. It also has the most customer attraction and revenue generating options. This option can be easily accepted by the government for its benefits. Social media is growing at a very fast rate in today’s technologically advanced world.
  2. Emailing is yet another option and is the easiest method of informing the people by just mailing them the details of the project. This method can also be easily accepted by the government.
  3. Last is the pamphlet method which has the let potential of attracting customers as most of the customers does not bother to read the pamphlet they receive. This method is not readily accepted by the government due to the attracted environmental risk because of paper usage.

The key stakeholders of the project drone are the customers, the management of the company and employees. With the introduction of this technology the customers and manager will gain the most from because of the easiest delivery option available to them. While the employees will suffer and most of the sales staffs will be put out by the company after this technology is introduced (Drucker, 2014).

The project drone will offer a lot of social benefit to the customers as well as to the society by delivery their goods fast and in a safe manner. It will also deliver goods to the regions inaccessible by traditional method. However, it might hurt the society by increasing the unemployment rate due to sale staff dismiss (de Lusignan, et al., 2014).

Environmentally drone is very sustainable as it is pollution free and does not emit any harmful gases in the atmosphere like the traditional delivery method that uses roads and rail transport for delivery.

With the introduction of drone the company will be able to increase its revenue annually. This intern will also help the economy to increase its GDP rate over the years. Thus the project also has a lot of economic benefit. However it might hurt the economy by increasing unemployment rate and low workforce participation.

Thus from the above analysis it can be seen that the introduction of the project will have both positive and negative impact on the company and on the economy in some way or the other. However, it will benefit the customers in all way by getting the most efficient way of delivery services.

Cost to the society because of using drone technology is increased unemployment rate, decreased workers participation rate. On the other hand benefits are increased customer traffic, improved delivery services, improved GDP, increased revenue and environment friendly technology. Thus its can be seen that benefits are more than the cost for using this technology.

Particulars

0

1

2

3

4

5

Initial Investment:

Purchase of Non-Current Assets

-5410000

Preliminary Expenses

-540000

Working Capital

-64284250

Total Initial Investment

-70234250

0

0

0

0

0

Net Opearting Profit before Tax

0

91207500

100188150

110026878.6

120808038.7

132623989.9

Less: Income Tax

0

27362250

30056445

33008063.59

36242411.61

39787196.97

Net Operating Profit after Tax

0

1.19E+08

130244595

143034942.2

157050450.3

172411186.9

Add: Depreciation & Amortization

0

846000

792800

745784

704229.92

667500.3296

Net Operating Cash Flow

0

1.19E+08

131037395

143780726.2

157754680.2

173078687.2

Terminal Value:

Sale of Non-Current Assets

1230000

Recovery of Preliminary Expenses

150000

Recovery of Working Capital

64284250

Total Terminal Value

0

0

0

0

0

65664250

Net Annual Cash Flow

-70234250

1.19E+08

131037395

143780726.2

157754680.2

238742937.2

Discount Rate (WACC)

8.50%

8.50%

8.50%

8.50%

8.50%

8.50%

Discounted Cash Flow

-70234250

1.1E+08

111310408

112567095

113831720.5

158774897.7

Net Present Value

536310470

IRR

179.09%

Average Accounting Profit

75516423

ARR

107.52%

Profitability Index

763.60%

Table3: financial analysis

Source: Author’s creation

References

Borden, P. N. (2017). The Peering Predator: Drone psychology Leaves Children Unprotected from Registered Sex Offenders. Campbell L. Rev., 39, 167.

Chen, G. Y. (2017). Reforming the Current Regulatory Framework for Commercial Drones: Retaining American Businesses’ Competitive Advantage in the Global Economy. Northwestern Journal of International Law & Business, 37(3), 517.

deLusignan, S., Mold, F., Sheikh, A., Majeed, A., Wyatt, J. C., Quinn, T., ... &Blakey, H. (2014). Patients’ online access to their electronic health records and linked online services: a systematic interpretative review. BMJ open, 4(9), e006021.

Drucker, P. (2014). Innovation and entrepreneurship. Routledge.

Hong, I., Kuby, M., & Murray, A. (2017). A Deviation Flow Refueling Location Model for Continuous Space: A Commercial Drone Delivery System for Urban Areas. In Advances in Geocomputation (pp. 125-132). Springer, Cham.

Kwon, H., Kim, J., & Park, Y. (2017). Applying LSA text mining technique in envisioning social impacts of emerging technologies: The case of drone technology. Technovation.

Marin, L. (2017). 6 The deployment of drone technology in border surveillance. Surveillance, nursing and Security: Citizens’ Perspectives, 1.

Muthukrishnan, S., &Winiski, M. (2016). Drone Technology for Low-Cost Precision Mapping on Campus and in the Community.

Risselada, H., Verhoef, P. C., &Bijmolt, T. H. (2014, March). Dynamic effects of social influence and direct marketing on the adoption of high-technology products. American Marketing Association.

Target Online Shopping | Target Australia. (2017). Target Australia. Retrieved 29 September 2017, from https://www.target.com.au/

Tuten, T. L., & Solomon, M. R. (2014). Social media marketing. Sage

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[Accessed 13 July 2024].

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My Assignment Help. Introduction Of Drone Technology To Improve Delivery Service At Target Pty [Internet]. My Assignment Help. 2019 [cited 13 July 2024]. Available from: https://myassignmenthelp.com/free-samples/drone-service-in-faster-delivery-target-pty.

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