AUTHORS: SRUJIT BIRADAWADA, RAVEENA SHARMA, AKASHDEEP KAUR
Introduction
Nextdoor Holdings Inc. is a publicly traded company that specializes in creating a safe and trusted platform for neighbors to connect with one another (Nexdoor, 2023). The organization provides a platform where neighbors can connect to exchange ideas and helpful information, goods and services. The purpose is to create a kinder world where everyone has a neighbor. This is done through their product, Nextdoor, which is the flagship platform that connects neighbors to each other and local businesses.
Management Analysis
Nextdoor offers various features on their platform such as group messaging, communication with local government and police, posting of events happening in the neighborhood, and local classifieds (Nexdoor, 2023).
Nextdoor employs over 1,500 people in various roles including managers, production workers, and knowledge or information workers (Nexdoor, 2023). There are several levels of management each with its own purpose as it relates to the overall strategy of the company.
Concerning information systems and technologies that would be important for a company such as Nextdoor, the primary focus would be on customer relationship management (CRM) software. Nextdoor relies heavily on direct sales and paid advertising to generate revenue (Nexdoor, 2023). In addition, Nextdoor could benefit from artificial intelligence (AI) technologies that can automate customer engagement tasks such as handling inquiries or providing personalized recommendations to customers based on their past interactions with the company (.Loureiro, Guerreiro & Tussyadiah, 2021). Geographic information system (GIS), would also allow the entity to track key demographics about their user base such as location-specific interests or concerns.
Financial Performance
Sales History for the Last Three Years: The table shows that Nextdoor Holdings Inc. has experienced steady growth in sales revenue over the last three years, with a significant jump in 2022 recording sales up to $213.
| Year | Sales | Domestic sales ($) | International sales ($) |
| 2022 | $213 | $231.7 million | $6.5 million |
| 2021 | $192 | $179.2 million | $4.2 million |
| 2020 | $123 | $128.3 million | $2.3 million |
The graph depicts that Nextdoor Holdings Inc. generates a significant proportion of its sales revenue from domestic sales compared to international sales. However, the company has seen growth in its international sales, which increased to $6.5 million in 2022. As seen from the table below, the company’s gross margin has decreased over the years, while the net margin has also been negative. This could be due to high operating expenses especially attributed to internalization.
| Year | Gross Margin | Net Margin |
| 2021 | 76.7% | -41.5% |
| 2020 | 78.5% | -64.2% |
| 2019 | 85.4% | -222.4% |
The proportion of domestic to international sales is approximately 84% domestic and 16% international. International sales have grown relative to domestic sales, as evidenced by the 60% increase in international sales in 2021.
Sales Revenue Growth and Cost of Goods Sold: Nextdoor Holdings Inc. has experienced steady sales revenue growth over the last three years, with a significant increase in 2021 (Nexdoor , 2023). However, the cost of goods sold has also increased, as shown in the income statement, which could be a cause for concern.
Gross and Net Margins: Nextdoor Holdings Inc. has experienced a decline in gross margin over the years, while the net margin has been negative. This could be due to high operating expenses, which have increased significantly over the last three years.
Operating Expenses and Debt: Nextdoor Holdings Inc. has seen a significant increase in operating expenses over the last three years, indicating that the company is investing heavily in its growth. However, the company is not heavily in debt and has assets to pay for expenses and to finance the development of new products and information systems
Value Chain Analysis
Nextdoor Holdings Inc.’s major competitors are Ning, Foursquare Labs Inc, Yammer and Goodreads. Compared to these competitors, Nextdoor’s main selling points are their emphasis on privacy and security, comprehensive local targeting capabilities with multiple layers of detail and the ability to create meaningful connections between neighbors. Nextdoor can maintain their competitive position by offering competitive pricing for their services as well as offering high-value additional features such as loyalty programs or other incentives (Gupta, Ivanov & Choi, 2021).
To maintain their competitive edge, Nextdoor should pursue a customer-oriented strategy that uses local targeting capabilities and data-driven insights to identify customer needs and deliver customized solutions for each target segment (Chaudhry et al., 2019). Additionally, Nextdoor should leverage analytical tools such as predictive analytics to anticipate customer needs and recommend additional services based on individual customer profiles.
Information systems such as customer relationship management (CRM) software would help Nextdoor gain a competitive edge by providing data insights into customer behavior. Additionally, data analytics could be employed to uncover patterns from user behavior and provide feedback on the effectiveness of existing ad campaigns or promotions (Wang, Ng & Brook, 2020). Finally, Nextdoor should invest in artificial intelligence (AI) and “Single Source of Truth” to enable faster decision making processes based on large sets of data and improve overall operational efficiency.
Developing Website Privacy Policy
Nextdoor Holdings Inc. must prioritize data collection and data privacy of users. Utilizing analytics on how users interact with the website in order to understand user behavior and provide better website experiences provides value to Nextdoor Holdings Inc. as it can improve customer retention and increase user engagement with the product or service being offered. Nextdoor Holdings Inc. should use anonymized data or establish a clear opt-in/opt-out policy for users in order to ensure that the data collection process is as respectful of user privacy as possible to avoid any privacy issues.
Nextdoor Holdings Inc. should consider using cookies on their website in order to provide a better user experience for their customers. There is no downside for users in using cookies on their website, as long as they are secure and do not store any sensitive information such as passwords or credit card numbers.
The organization should consider joining an organization like TRUSTe that certifies compliant privacy practices in order to demonstrate their commitment to protecting customer data and online privacy to customers. This will help boost customer confidence in providing their personal data and increase trust in the company among potential customers.
To provide customers with greater control over their personal information, Nextdoor Holdings Inc should include a short privacy statement on its website, which should include details on how personal information is collected, how it is used, who it is shared with, and how it is secured. The privacy statement should also detail what measures have been taken to ensure compliance with applicable laws regarding data protection such as GDPR or CCPA as well as provide details on any third party partners that could access customer data and details on consumer rights relating to the collected information and how these requests can be made. Besides, ways in which customers can opt-in or opt out of any data collection practices should be outlined clearly so that the visitors of the website have control over whether or not their data is collected and stored by Nextdoor Holdings Inc.
Renting vs. Purchasing Software
To compare the total three-year cost of licensing and maintaining new manufacturing software or renting the software from an application service provider, a spreadsheet software can be used to calculate the costs of both options as shown below.
| Year | Licensing Fee | Implementation and Customization | Server | Information Systems Specialist | User Training | Annual Software Upgrades | Total Cost |
| 1 | $100,000 | $20,000 | $4,000 | $55,000 | $10,000 | $5,000 | $194,000 |
| 2 | – | – | – | $56,650 | – | $5,150 | $61,800 |
| 3 | – | – | – | $58,295 | – | $5,305 | $63,600 |
| Total | $100,000 | $20,000 | $4,000 | $170,945 | $10,000 | $15,455 | $320,400 |
Renting costs
| Year | Rental Fees | Implementation and Customization | User Training | Total Cost |
| 1 | $62,500 | $12,000 | $10,000 | $84,500 |
| 2 | $62,500 | – | – | $62,500 |
| 3 | $62,500 | – | – | $62,500 |
| Total | $187,500 | $12,000 | $10,000 | $210,500 |
Based on these calculations, renting the hosted software is the lowest-price alternative with a total cost of $210,500 compared to purchasing the software which has a total cost of $320,400. However, cost should not be the only factor to consider when making this decision. Other factors such as security, customization and scalability are also critical.
DataBase Redesign
Redesigning Nextdoor’s customer database can store and provide the information needed for marketing. We can create a new database schema with multiple tables:
Customers table: This table would store customer details like customer name, address (street, city, state, zip code), telephone number, email address, and any other relevant contact details.
Models table: This table would store the details of the products sold by the distributors, like the model name, model number, price, and a brief description.
Purchases table: This table would store details of each purchase made by the customers, like the date of purchase, model purchased, and the distributor from whom the product was purchased.
Distributors table: This table would store the details of the distributors who sell the company’s products, like the distributor name, address, telephone number, and email address.
Events table: This table would store the details of events sponsored by Nextdoor, like the event name, date, location, and type of event.
Attendees table: This table would store details of the customers who attend the events sponsored by Nextdoor, like the customer name, the event attended, and the date of attendance.
Reporting
We are generating various types of reports using the customer database that can be useful for the marketing and sales department.
Customer Demographic Report: This report provides information on the age, gender, education level, income, and occupation of the customers. This report can help the marketing department understand the customer base and develop marketing strategies that target specific demographics.
Customer Purchase History Report: This report provides information on what products or services the customers have purchased in the past, how frequently they make purchases, and their purchase patterns. This report can help the sales department identify repeat customers, offer them incentives, and develop strategies to increase sales.
Sales by Distributor Report: This report provides information on which distributor has sold the most products and generated the most revenue. This report can help the sales department identify the top-performing distributors and reward them accordingly.
Event Attendance Report: This report provides information on the customers who attended events sponsored by the company. This report can help the marketing department understand which events were successful and which ones need improvement.
Customer Feedback Report: This report provides information on the feedback received from customers about the company’s products and services. This report can help the marketing department identify areas for improvement and develop strategies to enhance customer satisfaction.
Customer Loyalty Report: This report provides information on how loyal the customers are to the company. This report can help the sales department identify repeat customers and develop strategies to retain them.
Sales Forecast Report: This report provides information on the projected sales for the upcoming period. This report can help the sales department identify areas for improvement and develop strategies to increase sales.
Internet tools can help the employees at Nextdoor work more efficiently. Some of these include:
a) Email: Email can be used for both internal and external communication, reducing the need for phone calls and physical mail. All employees can benefit from email as a means of communication, particularly those who work remotely or have a lot of external communication.
b) Video conferencing: Video conferencing can be used for meetings with employees, clients, and suppliers, saving time and reducing travel expenses. Employees who work remotely or who need to communicate with people outside the company can benefit from video conferencing.
c) Instant messaging: Instant messaging can be used for quick communication between employees, particularly those who work in different departments or locations. This can be particularly useful for urgent matters that require immediate attention.
d) File sharing: File sharing can be used to share documents, images, and other files between employees, reducing the need for physical documents and making collaboration easier. This can benefit all employees, particularly those who work in teams or remotely.
| Tool | Type of Employee/Business Function | Benefits |
| All employees | Internal and external communication, reducing need for phone calls | |
| Video conferencing | Remote workers, employees who communicate with people outside the company | Saves time and reduces travel expenses |
| Instant messaging | Employees who work in different departments or locations | Quick communication for urgent matters |
| File sharing | Employees who work in teams or remotely | Sharing files and documents easily, making collaboration easier |
Intranets can be beneficial for sales and marketing, human resources, and manufacturing and production departments by providing easy access to relevant information and improving communication between employees. For example, an intranet for the human resources department could provide information about Nextdoor policies, job postings, and employee benefits. This intranet could also allow our employees to submit time-off requests and other HR-related forms online, reducing the need for physical paperwork and saving time for both employees and HR staff. Overall, an intranet can increase efficiency and productivity for the departments by streamlining processes and providing easy access to information.
Analysis of System Vulnerabilities and Disaster Recovery Planning
The most likely threats to the continued operation of Nextdoor’s systems would include power outages, cyberattacks, equipment failures, natural disasters such as floods, hurricanes, and earthquakes, and human errors such as accidental deletion of data.
Identifying Nextdoor’s critical systems is crucial in disaster recovery planning. These include databases, servers, financial systems, and communication systems. The impact of these systems being down vary depending on the importance of the system. The impact could be severe if the critical systems are down for an extended period. Therefore, it is essential to have a plan in place to minimize downtime and data loss.
Disaster recovery services could help your company recover from a disaster by providing data backup, recovery, and restoration services. Two such services that a small business could consider are:
Backblaze: Backblaze offers cloud backup and storage services. It provides unlimited storage for a fixed fee and offers features such as automated backup, web-based restores, and support for external hard drives. It is a cost-effective and easy-to-use backup solution for small businesses.
Datto: Datto is a comprehensive disaster recovery solution that offers backup, recovery, and continuity services. It provides both onsite and cloud backup solutions and offers features such as ransomware protection, instant virtualization, and remote management. Datto could be an excellent solution for Nextdoor as it provides robust and comprehensive disaster recovery services.
Internet Technologies to Improve Efficiency
Using collaboration tools like Slack, Trello or Asana can help team members communicate more efficiently, assign tasks, and track progress on projects. Also, Cloud based storage services like Google Drive, Dropbox or OneDrive can help employees store and share files, making it easier to collaborate with team members and access important information from anywhere. With remote work becoming more common, video conferencing tools like Zoom, Microsoft Teams or Skype can help employees stay connected with colleagues and hold virtual meetings.
Supply Chain Management
For supply chain management software, we have found two providers that could be suitable for Nextdoor.
Zoho Inventory: This cloud-based software allows businesses to manage their inventory, sales, and purchases from a single platform. It includes features like order management, warehouse management, and shipping integration.
Fishbowl Inventory: This software is designed for small and mid-sized businesses and includes features like inventory tracking, order management, and barcode scanning. It can integrate with a range of other software programs, including QuickBooks.
Both software applications could help us manage our supply chain more efficiently by streamlining inventory management and tracking orders. However, Zoho Inventory may be more suitable for a small business like Nextdoor as it is more affordable and has a simpler interface compared to Fishbowl Inventory.
Benefits of E-commerce
E-commerce allows Nextdoor to reach a wider audience and sell its products or services directly to customers, increasing sales revenue. Additionally, Customers can easily browse and purchase products or services from the comfort of their own homes, and receive fast and convenient delivery. By selling products or services directly to customers, Nextdoor can also eliminate the need for middlemen or resellers, reducing costs and increasing profit margins. Nextdoor could also sell both products and services on its e-commerce website, offering a convenient and easy-to-use platform for customers to buy and book services like babysitters or cleaning assistants. The website could also be used for advertising products and services, and for providing customer service. A well-designed e-commerce website can provide value by increasing brand awareness, attracting new customers, and streamlining the purchasing process. The cost of developing an e-commerce website for a small to medium-sized company can vary depending on the complexity of the site, but typically ranges from $5,000 to $20,000. In order to justify the investment, the website would need to generate enough revenue or cost savings to cover the initial development costs within a reasonable time frame.
The specifications for Nextdoor’s e-commerce website should include product and service listings, detailed product and service descriptions, prices, and images along with a secure shopping cart and checkout system that allows customers to easily purchase products or services. It should be integrated with a payment processing system that allows customers to pay securely and conveniently, and provide customer service options such as a chatbot or email support to answer customer queries and resolve issues. It should also be linked with Nextdoor’s social media platform to increase brand awareness and drive traffic to the site, and be integrated with analytics and reporting tools to track performance metrics and measure ROI. Additionally, links to other websites or systems should include integrations with shipping and fulfillment providers, payment gateways, and customer relationship management (CRM) systems.
Knowledge Management
Knowledge Assets
Software designs, ideas, learning, insights, capabilities and technical skills are the main knowledge assets of Nextdoor Holdings Inc. Software developers, design technicians, Chief knowledge officer, product developers and senior executives are responsible for creating, distributing, and using these knowledge assets.
Utilization of Knowledge management
Software designers and engineers, product development specialists can use the knowledge work systems to convert their ideas into actual software products. Marketing specialists, sales department staff and representatives and managers can use the customer feedback to improve the quality of the products and to remain up-to-date with the current trends.
Enterprise Portal
Nextdoor can use Enterprise Portal to provide knowledge resources to employee groups to help them in completing their objectives. The homepage would have always updated news sections from both the Nextdoor Holdings and financial worlds.
System Analysis Report:
The company does not have a career plan or succession plan to quickly identify qualified employees who have the training to fill vacant positions.
Proposed Solution and solution objectives
Creation of the talent pools to identify people who might be interested to develop a career in the company. To develop the talent pool, management needs to conduct appraisal reviews every 6 months or 1 year.
Information requirements to be addressed
Managers need to set the goals for the employees and need to review the set goals on a monthly basis to make sure if the goals have been achieved or not. Management can develop an appraisal review at the end of the year and with the score of the review talent pools can be created. Talent pools will provide a clear idea on which employees are capable of filling the vacant position. Management and organizational Issues
Goals need to be defined for each employee organization wide and the progress of the set goals need to be reviewed. Software developers and engineers need to be educated about the latest technology updates to prove a company’s competency in the market.
Report for management analyzing the return on the investment for this system over a five-year period using the following capital budgeting models: net present value, return on investment (ROI), internal rate of return (IRR), and payback method
Initial Cost
| Business Staff Cost | 5,000 |
| Information System Cost | 15,000 |
| Initial data conversion Cost | 5,500 |
| Total Initial Cost | 25,500 |
Yearly Cost
| Annual Data Entry Cost | 1,000 |
| Maintenance Support Cost | 3,000 |
| Total Yearly Cost | 4,000 |
Yearly Saving
| No of weeks in a year | 52 |
| No of working hours in a week | 40 |
| Total working hours in a year (52*40) | 2080 |
| Saving in year in hours (2*52) | 104 |
| Saving per hour for salary 37000 (37000/2080) | 17.8 |
| Saving per hour for salary 42000 (42000/2080) | 20.19 |
| Saving per year for salary 37000 (17.8*104) | 1,850 |
| Saving per hour for salary 42000 (20.19*104) | 2,100 |
| Total Yearly Saving for Staff Cost | 3,950 |
| Employee Recruiting Cost Saving | 11,000 |
| Total Yearly Saving (3950 + 11000) | 14,950 |
| Total yearly Net Saving (14950 – 4000) | 10950 |
Net Present Value (NPV) Calculation
NPV Formula = Cash Flow *(1+r)^-t
| Year | Cash Flow | NPV |
| Year 0 | -25,500 | -25,500 |
| Year 1 | 10,950 | 10,428.6 |
| Year 2 | 10,950 | 9,932.0 |
| Year 3 | 10,950 | 9,459.0 |
| Year 4 | 10,950 | 9,008.6 |
| Year 5 | 10,950 | 8,579.6 |
| Total = 21,907.8 |
Return on Investment
| Return on Investment | Average Saving/Initial Investment (10950/25500) | 42.9% |
Internal rate of Return (IRR)
IRR = 26.1%, IRR = R1 + ((NPV1 * (R2 – R1)) / (NPV1 – NPV2) ) where R1 = lower discount or return rate, R2 = higher discount or return rate, NPV1 = higher net present Value and NPV2 = lower net present Value
Payback Period
Payback Period = 2 + 3600/10950 = 2.33 Years
Target markets for the business
Developed countries would be the target markets where well-developed housing systems are present. These countries will have higher per capita income and there will be huge demand for the hyper-local social networking service for neighborhoods. Also the communities in developed countries are hyperactive socially and are more interested in networking.
Role of web to promote business
Website with latest news updates, marketplace will provide the customers the opportunity to sell and buy any items on the website. The customers will be provided with the ability to hire service providers like babysitters, dog sitters and cleaning assistants. Adding Promotion posts to the website that provides recommendations for functions, picnics, dates and having a networking platform on the website will also attract customers to buy the service.
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