Value Assessment

If IVK were to implement a new currency, Bitcoin, into their company, it could yield more profits. IVK’s IT staff would need to setup a website in order to become a Bitcoin currency exchange. At first, IVK will have to invest in Bitcoin as the profit will not begin to turn until customers are made aware, educated, and start to use Bitcoin as a currency. Once more customers start using it, IVK can start making money and turning a profit. IVK can start with 50 Bitcoins. If 10 people are interested the first month and want to get 10 Bitcoins each, it would cost them $6,656 per person. Since the rates change so frequently, it would be best for IVK to buy earlier when they can see a trend in the number of customers who are interested in using Bitcoin. Also, the amount customers purchase for will change as they will probably be doing business at different days and times. If the customers borrow 10 Bitcoins and then are to payback in a year with variable interest rates, there is a good chance that IVK increases their profits. They could make about $17,000 more than initially invested and the rates could just go up. IVK just has to watch the Bitcoin rates to ensure they are not investing more than they need to be. Also, paying attention to customer activity is crucial.

Month	IVK’s Bitcoin Rate	Quantity	Total
1st	$590.00	100	$59,000

Customer	Customer’s Bitcoin Rate	Quantity	Total
1	$665.60	10	$6,656
2	$650.43	10	$6,504.30
3	$643.87	10	$6,438.70
4	$601.09	10	$6,010.90
5	$630.70	10	$6,307
6	$658.31	10	$6,583.10
7	$688.25	10	$6,882.50
8	$702.13	10	$7,021.30
9	$550.17	10	$5,501.70
10	$568.90	10	$5,689
		Total	$63,594.50
		Interest Rate (avg.)	5%
		Grand Total	$66,774.23

 

If IVK were to implement Bitcoin into their company, there would be more media attention and satisfied customers. When a company implements a new system, especially one that has not been tested thoroughly or with many other companies is going to produce a lot of ‘talk.’ Just one person has to tell a news source that ‘IVK is starting to accept Bitcoin next month!’ and they will be hounding them for interviews and information. When the media gets involved, some of the information conveyed will be fake and some will be real. Some companies believe that any media attention is good media attention because interested customers will inquire further. Also, when customers have more choices and have the opportunity to try something innovative, they jump on the chance. If not too many other companies, especially one like IVK, are offering Bitcoin as another currency, IVK sort of is the monopoly. Competitors will watch closely to see if they are successful and jump on the bandwagon if they are.

The overall value of increased profits and media attention will help the company in the long run. Increased growth, more market shares and higher stock price are just a few of the benefits IVK can receive. When companies implement a successful new system or tool into their current processes, customers will be more satisfied as the new system or tool is usually benefiting them. Whether it affects them directly or indirectly, they can become a loyal customer leading to increased profits and the overall growth of the company. Offering bitcoin payment options and loam options is new to the financial market and is a huge value to IVK customers respond positively. If a company is growing, there is potential expansion into other states and countries, more job opportunities, and increased market share. IVK has about 1% more market share than a competitor. It won’t stay that way forever. One company is going to push forward and one is going to stay at a constant rate. In turn, the company who takes the risk will have an increased stock price as new shareholders will emerge and the company will become more well-known. Taking risks with a new technology like Bitcoin can give IVK the competitive edge they need to rise above and turn IVK around like Williams is trying to achieve.

 

 

References:

Austin, R., Nolan, R., & O'Donnell, S. (2009). The Adventures of an IT Leader. Boston: Harvard Business School Publishing Corporation.

Bitcoin. (2014). Retrieved May 15, 2014, from Bitcoin Open Source P2P: https://bitcoin.org/en/.

Hopkins, B. (2012, Sept 26). 3 Ways to Invest in Emerging Technology in the Age of Digital Disruption. Retrieved May 28, 2014, from CIO: http://www.cio.com/article/717305/3_Ways_to_Invest_in_Emerging_Technology_in_the_Age_of_Digital_Disruption.

Wan, T., & Hoblitzell, M. (2014, Apr 24). Bitcoin’s Promise Goes Far Beyond Payments. Retrieved 29 May, 2014, from Harvard Business Review: http://blogs.hbr.org/2014/04/bitcoins-promise-goes-far-beyond-payments/