Introduce a new business-to-consumer (B2C) app and website for Halfpenny

Phase 1: Strategic Analysis & Design

A. Strategic Rationale

• Market Trend Alignment: The bread industry in Keeland is shifting towards artisanal, healthier, and customised products. B2C channels allow Halfpenny to control brand messaging, capture consumer data, and offer niche or premium products (like multi-seed and rustic loaves).

• Threat Mitigation: Halfpenny is over-reliant on large retailers who demand lower margins (20% below small retailers). B2C channels offer higher pricing power and reduce dependency.

• Digital Transformation Agenda: The appointment of a new IT Director (Benjamin Juma) and the noted “Website Capability Gaps” in the pre-seen suggest an internal appetite for digital evolution.

B. B2C App & Website – Key Features

1. App and Website Integration (mobile-first design)

2. Online Ordering – including custom loaf builder (ingredients, shape, crust level)

3. Subscription Services – recurring deliveries for households or dietary plans

4. Product Personalisation – catering to health-conscious consumers (e.g. gluten-free, plant-based)

5. Live Order Tracking – integrated with in-house logistics

6. Sustainability Insights – carbon footprint data, local sourcing transparency

7. Customer Loyalty Program – discounts, baking tips, rewards

Phase 2: Development & Costing Approach

A. Development Approach

1. In-House vs. Outsourced

• In-house: Allows control, better alignment with business processes (favoured if Benjamin can lead)

• Outsourced: Faster time-to-market, but risk of misalignment or IP concerns

2. Agile Development Methodology

• Begin with a Minimum Viable Product (MVP): core ordering, account management, and delivery tracking

• Expand to include customisation, recipes, loyalty, and live chat in Phase 2

B. Costing the Development

We can apply Activity-Based Budgeting (ABB) principles to estimate and manage costs accurately. Here's a breakdown of key cost drivers:

Cost Component	Estimated Range (K$)	Notes
Project Planning & Analysis	20–30	Business requirements, user journey mapping, compliance review
Design & UX/UI	15–25	Visual branding, customer experience across web & mobile
App Development	50–80	Native Android/iOS or cross-platform (React Native/Flutter)
Website Development	40–60	E-commerce integration, CMS, responsive design
Back-End Infrastructure	30–50	Hosting, payment gateway, security, CRM integration
Testing & QA	10–15	User acceptance testing, load/stress testing
Marketing Launch Campaign	25–35	Online ads, influencer marketing, SEO, promotions
IT Maintenance & Support (1 yr)	15–20	Bug fixes, updates, hosting, customer service
TOTAL ESTIMATED COST	K$205–K$315	Varies depending on scale, complexity, and whether built in-house or not

C. Cost Accounting Treatment

• Capitalisation:

  • Per IAS 38, most development phase costs (e.g. coding, UI design, infrastructure) can be capitalised as intangible assets if future economic benefit is probable.

• Expensed:

  • Costs for research, planning, and some marketing (especially pre-launch) must be expensed as incurred.

• Depreciation:

  • Intangible assets (app/website) should be amortised over 3–5 years, aligned with expected technology life cycle.

Other Considerations

• Sales Tax Setup: Keeland’s 20% sales tax must be built into pricing and digital checkout.

• Logistics Alignment: App integration with delivery routing to maximise efficiency (internal fleet of EVs is a strength).

• Legal & Compliance: Data protection (GDPR), e-commerce regulation, and food safety traceability must be embedded.

Summary

Launching a B2C app and website is strategically aligned with Halfpenny’s evolving goals: mitigating over-reliance on retailers, responding to consumer trends, and leveraging its internal IT leadership. With a clear roadmap, activity-based budgeting, and a strong in-house team (including logistics and finance), Halfpenny is well-positioned to make a smooth transition to a more digital, direct-to-consumer business model.