Enterprise Resource Planning: Check Tag Startup Market Analysis Report

This report examines the market potential of the Check Tag startup, an innovative venture aimed at improving baggage handling in the airline industry. It explores the current market scenario, highlighting the increasing issues of mishandled and lost luggage due to rising air traffic. The report details the Check Tag concept, a GPS-enabled tracking system, and its benefits for both airlines and customers, including real-time tracking and enhanced security. A cost analysis reveals the potential for significant savings compared to existing systems. The report also identifies challenges such as tag material variations and the need for global tracking infrastructure. Recommendations include maintaining customer privacy and conducting pilot projects. The report concludes that Check Tag has significant market potential, offering accuracy, cost-effectiveness, and improved customer satisfaction, while also providing solutions to the challenges associated with baggage handling.

Running head: ENTERPRISE RESOURCE PLANNING
Enterprise resource planning
Name of the student
Name of the university
Author note

1ENTERPRISE RESOURCE PLANNING
Executive summary
The aim of this report is to discuss about the market potentiality of a startup using the concept of
innovations. The potentiality of the new idea is being discussed in this report along with
identifying the cost involved with it. Various challenges are been identified in this report, which
may pose threat to its utility. Several recommended steps are also being discussed in this report
in order to enable them to overcome the identified challenges. This report concludes that,
initiation of innovative approach of tracking tags to the airliners will help to reduce the issue of
mishandling of baggage in the airports.

2ENTERPRISE RESOURCE PLANNING
Table of Contents
Introduction......................................................................................................................................3
Current market scenario...................................................................................................................3
Initiation of check tags.....................................................................................................................4
Cost involved in the process............................................................................................................5
Challenges........................................................................................................................................6
Recommendations............................................................................................................................6
Conclusion.......................................................................................................................................7
Reference.........................................................................................................................................8

3ENTERPRISE RESOURCE PLANNING
Introduction
In the current business scenario, innovation is one of the key sources of gaining
competitive advantages in the market. Thus, any entrepreneurial ventures should first identify the
gap in the current marketing scenario, according to which they will offer their products or
services in the market. Initiation of the innovative approach in the market will help the
entrepreneurs in having positive organizational performance from the initial stage (Volberda,
Van Den Bosch & Heij, 2013). Check tag is a new entrepreneurial venture started in Australia,
which will provide security and tracking tags for the luggage of the air travelers. This is one of
the most innovative and potential market to have for them due to the reason that, in the current
scenario of air transport, millions of people are availing the service and with the increase in the
air traffic, more instances of loss of luggage is originating (Sennou et al., 2013).
Thus, with the help of the safety and tracking tags, check tag will enable the airliners as
well as the customers to track the movement of their luggage in real time. The instances of loss
of luggage will also get reduced. Due to the fact that. This is a new concept in the market and
thus check tags will have huge market potential for them.
This report will discuss about the potentiality of check tags in the market. Moreover, the
idea of this concept along with various factors of having potential of this idea will also be
discussed. Recommendations will also be discussed, which will further help them to enhance
their effectiveness and performance in the market.
Current market scenario
With the increase in the air traffic and movement of air travelers around the world, issues
such as mismanagement and loss of luggage is rapidly increasing. As of 2016, 5.76 cases of loss
of baggage per 1000 travelers had been aroused (Ahmed, Pedersen & Lu, 2013). Moreover, it is
being expected that with the increase in the air traffic in the coming years, these types of
instances will increase further. Thus, there is an urgent need of initiating some sort of
technological devices to overcome this issue (Alsyouf, Humaid & Al Kamali, 2014). This is due
to the reason that, the loss of baggage involves not only the particular travelers but also the
airliners. Airliners have to pay penalty and compensation to their customers in case of loss of

4ENTERPRISE RESOURCE PLANNING
baggage. This involves a good amount of money for them. On the other hand, customers also
have to born the consequences when their baggage having important documents is getting lost. In
addition, the rate of satisfaction level of the customers also gets reduced due to this issue (David,
2013).
Mishandled Bags
5,73 mishandled bags per 1000 in 2016 3,77 billion passagiers a year
Luggage lost 0.0057
Passangers woldwide 3,770,000,000.00
Total mishandled bags 21,602,100.00
towards SITA 2016 10,200,000.00
Costs for Airlines
costs for mishandled bags 2016 (SITA) 2,100,000,000.00 US $
costs per passenger 0.56 US $
Table: 1 Cost involved in mishandling of the bags
Source: Author’s creation
From the above table, it is been seen that, a huge cost is being involved with the airliners
in paying the compensations. However, in the recent past, no effective means of overcoming this
issue is being found. This is due to the reason that, the management of baggage of the air
travelers is quite complex and involves several process and methodologies (Nicolae et al., 2016).
Airliners have to maintain all the luggage of their customers to be transported in various part of
the world from different areas. Thus, the new concept should effective as well as efficient in
order to provide holistic and full proof solution. In addition, the involved cost should also be
considered in initiation of new concept.
Initiation of check tags
With the need in the market of a new sustainable and effective concept to overcome the
above identified issue, check tags is being initiated. It will be a GPS enabled tag, which will be
attached with the check in tag of the customer’s baggage (Collota, Pau & Tirroto, 2015). This tag

5ENTERPRISE RESOURCE PLANNING
will have multiple benefits for both the airliners and the customers. This tag enables the airliner
to keep track of the movement of the baggage from the check in counter of the customer to the
outbound facilities. They can also track he movement of the baggage in the arrival airport till the
time it is being delivered to the customer (Mantin & Wang, 2012). Thus, it will help the airliner
in keeping the track of the whole movement of the baggage along with identifying the area of
loss in case of any loss of baggage. Security can also be enhanced with the involvement of the
check tags. Any types of theft can be effectively identified and traced (Ahmed, Calders &
Pedersen, 2015). On the other hand, customers will have the access of seeing the movement of
their baggage from the departure airport to arrival airport in real time. Thus it will also empower
the customers. If the customer will have the access to this, then they will be surer about the
security of their baggage, which will in turn increase their satisfaction level.
Moreover, customers will be provided to dedicated apps in their mobile devices, where
they will have the access of tracking and managing their baggage (Page, 2012). Push messages
and notification will be sent to the customers after delivery of their baggage in every destination.
This system will be similar to what is being followed in the delivery of the online products.
Thus, customers will have the periodic update about the movement of their belongings. The ap
will also feature alarm button for the customers, which they can use in case of any emergency.
For instance, if customer thinks that their baggage is going the different way, then they can
communicate with the airliner with the help of the alarm button.

6ENTERPRISE RESOURCE PLANNING
Cost involved in the process
The concept being discussed above will only be successful if it can prove cost effective
compared to the existing system of baggage handling. Thus, a complete chart of cost involved
with this new concept compared to the existing one has been made.
Check tag cost
(Including all)
(US$)
Cost/
passenger
(US$)
Mishandled bag cost
(per passenger) (US$)
saving (Per
passenger)
(US$)
Sum per
year (US$)
Airport > 25 m
passengers 2,360,000 0.0944 0.56 0.4656 11,640,000
Airport > 10 m
passengers 952,000 0.0952 0.56 0.4648 4,648,000
Airport > 5 m
passengers 448,000 0.0896 0.56 0.4704 2,352,000
Airport > 1 m
passengers 80,000 0.0992 0.56 0.4608 460,800
Table: 2 Calculation of cost involved
Source: Author’s creation
From the above table, it is been seen that, the cost involved in mishandling of baggage
per passenger is 0.56 US$. However, on the other hand, cost involved including all the elements
of check tags per passenger is 0.0944 US$ for the airports having more than 25 million of
passengers annually (Le et al., 2012). Thus, there is a savings of 0.4656 US$ per passenger,
which can summed up to US$ 11,640,000 per year with help of check tags. Thus, all the
stakeholders related to the management of baggage of the travelers will be benefited from
incurring low cost. Thus, it is proved that initiation of check tags will be more cost effective
compared to the existing systems.
Challenges
 Though initiation of the check tags will change the existing scenario in the airports, but
there are still some challenges that may pose threats to its utility. This includes tag having

7ENTERPRISE RESOURCE PLANNING
different built material and color in different regions. For instance, European standard tag
should have to be black and white with green strips. Thus, it will be difficult for the
airliners to change the tag in between the journey in case of travelling from one region to
another. Another challenge is built material.
 If the tags are being built with hard material then the cost will get increased and on the
other hand, if it is being built with soft paper material, then chance of worn out of the
GDP label is high (Caceres & Friday, 2012). Thus, it will also pose challenge.
 To have the optimal utility of the tags, tracking systems should have to install in every
airports around the world. Thus, this will involve a good cost and will require permission
of the respective authorities.
Recommendations
 Privacy of the customers should be maintained effectively. This is due to the reason that,
customer information will be stored with the tag. Thus, breach of privacy can happen and
should be prevented effectively.
 Check tags should start as the pilot project in the domestic aviation of Australia. If it can
get success, then it will be easy for them to convince the governments in other countries
for installation.
 Technical part should be considered effectively due to the reason that the tracking the
luggage with the help of the tag in the mobile of the customers will be based on pure
technical expertise. Thus, it should be ensured by them that, any type of technical snag
will not happen. Otherwise, it will affect the impression and service quality to the
customers.
Conclusion
Thus, it can be concluded that, check tags have huge potential in the market due to being
an innovative concept. It is been discussed in this report that, Check tags will provide accuracy
as well as cost effectiveness to the users along with reduction in the probability in the chance of
any theft and security concerns. Satisfaction level of the customers will also get increased due to
this. However, there are some challenges also being identified in this report. Accordingly,

8ENTERPRISE RESOURCE PLANNING
recommendations are being provided to overcome these challenges and have effective and
holistic implementation of this concept.

9ENTERPRISE RESOURCE PLANNING
Reference
Ahmed, T., Calders, T., & Pedersen, T. B. (2015, June). Mining risk factors in RFID baggage
tracking data. In Mobile Data Management (MDM), 2015 16th IEEE International
Conference on (Vol. 1, pp. 235-242). IEEE.
Ahmed, T., Pedersen, T. B., & Lu, H. (2013, June). A data warehouse solution for analyzing
rfid-based baggage tracking data. In Mobile Data Management (MDM), 2013 IEEE 14th
International Conference on (Vol. 1, pp. 283-292). IEEE.
Alsyouf, I., Humaid, F., & Al Kamali, S. (2014, December). Mishandled baggage problem:
Causes and improvement suggestions. In Industrial Engineering and Engineering
Management (IEEM), 2014 IEEE International Conference on (pp. 154-158). IEEE.
Caceres, R., & Friday, A. (2012). Ubicomp systems at 20: Progress, opportunities, and
challenges. IEEE Pervasive Computing, 11(1), 14-21.
Collotta, M., Pau, G., & Tirrito, S. (2015, March). A preliminary study to increase baggage
tracking by using a RFID solution. In AIP Conference Proceedings (Vol. 1648, No. 1, p.
780005). AIP Publishing.
David Mc A, B. (2013). Service quality and customer satisfaction in the airline industry: A
comparison between legacy airlines and low-cost airlines. American Journal of Tourism
Research, 2(1), 67-77.
Le, V. T., Zhang, J., Johnstone, M., Nahavandi, S., & Creighton, D. (2012, October). A
generalised data analysis approach for baggage handling systems simulation. In Systems,
Man, and Cybernetics (SMC), 2012 IEEE International Conference on (pp. 1681-1687).
IEEE.
Mantin, B., & Wang, J. H. (2012). Determinants of profitability and recovery from system-wide
shocks: The case of the airline industry. Journal of Airline and Airport Management,
2(1), 1-33.

10ENTERPRISE RESOURCE PLANNING
Nicolae, M., Arıkan, M., Deshpande, V., & Ferguson, M. (2016). Do bags fly free? An empirical
analysis of the operational implications of airline baggage fees. Management Science.
Page, T. (2012). The Influence of Mobile Devices and Apps on Product Design: Design Tools on
the Move. LAP Lambert Academic Publishing.
Sennou, A. S., Berrada, A., Salih-Alj, Y., & Assem, N. (2013, January). An interactive RFID-
based bracelet for airport luggage tracking system. In Intelligent Systems Modelling &
Simulation (ISMS), 2013 4th International Conference on (pp. 40-44). IEEE.
Volberda, H. W., Van Den Bosch, F. A., & Heij, C. V. (2013). Management innovation:
Management as fertile ground for innovation. European Management Review, 10(1), 1-
15.