- Consultation challenge (Individual report)
One possible job for students majoring in the supply chain is a business consultant. In this class, you will practice how to be a consultant and find practical solutions to real business cases. The context in that you need to provide a piece of advice is digital payment. Nowadays, many companies struggle with the decision to adopt new forms of digital payment (e.g., cryptocurrency).
A summary of Bitcoin
Cryptocurrency refers to digital currency with encryption techniques to regulate the generation of each currency unit and verify the transfer funds. A form of cryptocurrency is Bitcoin (a peer-to-peer electronic cash system), which was created in 2009. Bitcoin transactions are verified by each computer in the network and recorded in a blockchain. As the first decentralized digital currency, Bitcoin was also the most popular one. In the meantime, hundreds of cryptocurrencies, including Ethereum, Ripple, and Litcoin, also emerged.
As an exchange medium, Bitcoin reduced the cost of transactions. With a decentralized peer-to-peer network, transactions are conducted directly between two parties, verified across the network, and do not need a third party for clearing and settlement. The absence of intermediaries means that transaction costs can be kept to a minimum. Encryption algorithms are used to mask users’ identity in the Bitcoin blockchain, which, along with the feature of immutability, have made Bitcoin more robust against hackers’ attacks. The greater transparency and enhanced traceability of Bitcoin also result in better accountability, as transactions are effectively achieved across the network and left a digital trail. Blockchain allows users to mask their identity with numeric identifiers (also known as Bitcoin addresses, akin to one’s email address). Users mostly remain anonymous during transactions, which helps to protect their privacy online. However, law enforcement agencies have the ability to trace Bitcoin transactions by matching the numeric identifiers with user information.
Now, please read the following article to get more information about this consultation session and also different forms of digital payments:
Beyond Bitcoin: What Blockchain and Distributed Ledger Technologies Mean for Firms ( https://www.sciencedirect.com/science/article/pii/S0007681319300023?casa_token=TX4vtt68W6wAAAAA:CktStN8wgj7ooppQQfkJ-RiG04KL6zBdIRkvGtkbrzNZCSBpP5hJrwoHyUbIjsu3G8JLb725nRo)Scenario
A company is a leader in supplying low voltage cables, connectivity products, infrastructures, and accessories. The managers have a number of options in order to handle financial transactions with their suppliers, distributors, and customers. For instance, currently, they accept:
- Credit and debit cards
- Google wallet
- Amazon payments
- Apple pay
- Recently, their most profitable customers adopted Bitcoin, and they desired to pay in Bitcoin largely. The managers of the company are not aware of Bitcoin’s characteristics, advantages, and disadvantages. Moreover, the other main competitors have not used Bitcoin in their financial transactions. The managers invited two consulting companies to first understand what Bitcoin is and then decide to adopt it or not!
Today, the two groups from two professional consulting services in Florida are invited to the company’s headquarter in Miami.
About the two groups:
- One of them thinks that the company should modify its regular financial policies and adopt Bitcoin not only to deal with the mentioned customer but also with other companies and customers. (consultant 1: For Bitcoin)
- The other one believes that Bitcoin is still in its infancy, other competitors have not used it, its transactions are still risky, and the public awareness about digital currency (e.g., Bitcoin) is very low. (consultant 2: Against Bitcoin)
- Both consulting teams are trying to give enough evidence and facts to convince the managers to adopt/ reject bitcoin. First, consultant 1 offers reasoning, facts, analysis, statistics, industry trends, and justification to convince the company to adopt and use Bitcoin. Second, consultant 2 presents some reasoning, facts, analysis, statistics, industry trends, and justification to convince the company to reject Bitcoin.
Now, you need to pick one of these consulting teams (1 or 2) and imagine that your team plays the role of that consultant in that meeting. If you think the company should adopt Bitcoin select consultant 1, otherwise select consultant 2.
If you pick Consultant 1, please include:
- ALL reasons, facts, and analysis you will use to convince the managers of the company to adopt Bitcoin in their transactions. In your report, you need to describe at least 7 points as the main facilitators or advantages of using Bitcoin (as a cryptocurrency).
- What do you consider as three key risks or barriers associated with Bitcoin? Explain those factors too.
- Moreover, in the last two paragraphs, compare and contrast possible advantages with risks and compose your final reasoning and justification on why the company should adopt Bitcoin?
- If you pick Consultant 2, please include:
- ALL reasons, facts, and analysis you will use to persuade the managers of the company to refuse Bitcoin in their transactions. In your report, you need to describe at least 7 points as the critical barriers or disadvantages of using Bitcoin ( as a cryptocurrency) in current business transactions.
- What do you consider as three key facilitators or benefits associated with Bitcoin? Explain those factors too.
- Moreover, in the last two paragraphs, compare and contrast possible advantages with risks and compose your reasoning and justification on why the company should not adopt Bitcoin?
- Important Note
- This activity counts for 30% of your final grade.
- Well-written, complete, accurate, and innovative reports will get full marks.
- This is an individual assignment; each student should submit this report individually.
- Deadline: June 15th, 11:59 pm.
- What to include in your report
- Length: Minimum three-page report
- The font should be Times New Roman 12pt and double-spaced
- Introduction – offers a brief, clear explanation of the scenario and identifies which position/consulting team you chose
- Body – describes the advantages and disadvantages of adopting or rejecting Bitcoin from the perspective of your chosen consulting team, presenting facts, analysis, statistics, and industry trends
- Conclusion (two paragraphs) – offers convincing reasoning and justification for the company to follow your recommendation regarding the adoption or rejection of Bitcoin.