U capsule hotel

Business Plan
U Capsule Hotel

The E.N.D Team
2012/3/7

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I. EXECUTIVE SUMMARY................................................................ 3
II.PRODUCT AND SERVICE ............................................................ 5
1. PRODUCT ..............................................................................................5
(1) Product Description..........................................................................5
(2) Reserve..........................................................................................5
2. SERVICE ...............................................................................................5
(1)Basic Service ...................................................................................5
(2)Outplacement Services......................................................................6
3. OUR ADVANTAGES ....................................................................................6
III.MARKET DEMAND ANALYSIS.................................................... 7
1. INTRODUCTION OF MARKET .........................................................................7
2. EXTERNAL ENVIRONMENT ANALYSIS AND TARGET MARKET ANALYSIS ...........................7
(1) External environment analysis（PESTLIED analysis method） ................7
(2) Target market analysis ................................................................... 11
3. CERTAIN TARGET MARKET ANALYSIS (HANGZHOU) ............................................. 12
4. CONSUMPTION LIMITATIONS ...................................................................... 13
5. SIMILAR INDUSTRY ANALYSIS ..................................................................... 14
6. INDUSTRY OPERATION ANALYSIS.................................................................. 15
7. THE SUMMARY OF THE MARKET PROSPECT ....................................................... 17
IV.MARKETING AND SALES.......................................................... 18
1. MARKETING PLAN................................................................................... 18
2. MARKETING STRATEGIES .......................................................................... 18
(1)Product positioning ......................................................................... 18
(2)Multi-tiered marketing strategies:..................................................... 18
(3) Marketing Methods ........................................................................ 19
3. COOPERATIVE PARTNER ............................................................................ 21
4. MARKET CONNECTIONS ............................................................................ 22
5. SOCIAL ASSESSMENT .............................................................................. 24
V.BUSINESS ORGANIZATION AND MANAGEMENT........................ 25
1. ORGANIZATIONAL STRUCTURE .................................................................... 25
(1) Introduction of the organizational structure....................................... 25
(2) Function of each Department .......................................................... 26
2. OWNERSHIP INFORMATION ........................................................................ 27
3. MANAGEMENT MODEL.............................................................................. 27
VI.SWOT ANALYSIS..................................................................... 29
1. ANALYSIS OF STRENGTH & WEAKNESS .......................................................... 29
(1) Strength: ..................................................................................... 29
(2) Weakness:.................................................................................... 30
2. ANALYSIS OF OPPORTUNITY & RISK.............................................................. 31
(1) Opportunities:............................................................................... 31

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(2) Risks: .......................................................................................... 32
3. ASSESSMENT OF THE OVERALL RISK SITUATION: ............................................... 34
VII.FINANCIAL PLANNING .......................................................... 35
VIII.APPENDIX ........................................................................... 38
1. QUESTIONNAIRE (ENGLISH VISION) ............................................................. 38
2. QUESTIONNAIRE (CHINESE VISION) ............................................................. 39
3.REFERENCE .......................................................................................... 40

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I. Executive Summary
Purposes and business models
The purpose of our company, U capsule hotel is: insist on the people-based
concept of service and establish the people-based service environment, to
the unique capsule hotel for U.
U of our “U capsule hotel” means: 1.unique 2.you(r) 3.useful 4.unparalleled
Our “U capsule hotel” is a limited liability company in the start-up phase. Our
ideal address is Huanglong in Hangzhou.
Product and Service
A capsule hotel is a type of hotel that features a large number of extremely
small capsules intended to provide cheap and basic overnight
accommodation. Our new-type capsule hotel concentrates on the innovation
of capsule design and high quality of comprehensive service. Each capsule is
designed by different designers and has different style. In addition, there
are quilt, mini TV and desk, light, air conditioning, disposable washing tools,
ventilation system, fire protection system in each capsule (but it will differ
from designers). Our basic service includes: bath, dry cleaning, morning
wake up, deposit guests' luggage for free, etc. Besides, we will provide
moving capsule hotel for special occasions and we receive reserve.
Target Market
Our market position is to develop a new-type capsule hotel in bustling big
cities. At present, China's market has not well developed, only a few capsule
hotel companies operating in different regions of China. The main targets of
costumers are those who are not very wealthy, including employees who are
overtime, backpackers or travelers, floating population (in tourism center),
fans or event participants. We are prepared to open a capsule hotel in

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Hangzhou’s Huanglong sports centre considering the beneficial location.
Management
The organizational structure of our company has four levels. It has 11 basic
departments.
We choose to use the combination of Maslow theory and Herzberg theory to
manage our Capsule Hotel. Besides, we decide to apply PRE-PASS
management model into management.
Marketing and Sales
Our marking methods includes Concept marketing, Service marketing,
Experience marketing, Emotional marketing and Differentiated marketing.
Besides, we will find manufacturer, designer, decoration company, travel
agency and government as cooperative partner. We will also look for sponsor
and venture capital. In addition, the different methods of advertising will
also be developed.
(Because the capsule hotel is a new industry in the world, we cannot
find many figures and information to make a perfect Business Plan.
If you have any questions, please contact us. Thank you!)

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II.Product and Service
1. Product
(1) Product Description
A capsule hotel is a type of hotel, developed in Japan that features a large
number of extremely small "rooms" (capsules) intended to provide cheap
and basic overnight accommodation for guests not requiring the services
offered by more conventional hotels. Each capsule is reduced in size to a
modular plastic or fiberglass block roughly 2 m by 1 m by 1.25 m, providing
room to sleep. Facilities range in entertainment offerings (include a
television, an electronic console, and wireless internet connection). These
capsules are stacked side by side and two units top to bottom, with steps
providing access to the second level rooms. Luggage is stored in a locker.
Privacy is ensured by a curtain or a fiberglass door at the open end of the
capsule.
(2) Reserve
• Guests can Oder by telephone, email and internet.
• We are online all day and willing to answer guests’ questions.
2. Service
(1)Basic Service
• Washrooms are communal.
• There are vending machines around the capsules.
• We provide dry cleaning and morning waking up.
• Simple meals are available during the day.
• We order train and airline tickets for guests.
• We deposit guests' luggage for free.
• We recommend places of interest and provide more traveling

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information.
• Disposable washing tools are provided.
• Hot water and electricity is available for 24 hours every day.
(2)Outplacement Services
• Airport Service: Providing moving capsules in airport for people to
have rest
• Company Outsourcing: Providing capsules to needed companies
• Capsules (more than 5) can be transported outside, and we will be
responsible for transportation.
3. Our advantages
• Every capsule has different styles, concluding styles of sea beaches,
pirates, cartoon and so on. We will invite famous designers to help
design our capsules in the future.
• We will take photos of guest with permission to make souvenirs that
guests can bring back.
• When our guests check out, we may request guests’ advice and
suggestions to perfect our service.
• We charge fewer fees but provide more considerate service.
• We advocate environmental protection, so if guests bring their own
washing tools, there will be a discount.
• In order to meet more guests’ needs, we plan to expand our business.
There will be a chain of capsule hotels in the near future.
• We have professional employees to maintain the best condition of
capsules.
• Some interesting activities will be held for special festivals.
Our capsules are fireproofing and soundproofing. We make every effort to
ensure guests’ comfortable rest.

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III.Market demand analysis
1. Introduction of market
We hope to participate in the service sector of the residential services
market analysis and competition. We believe that the future trend of this
domain is toward the development of environmentally friendly, low-cost,
innovative, miniaturized and high-quality product.
We predict that the competitive situation of the market can sustain develop.
The main force of the impact of this change includes the urbanization of the
population, the increasing gathered occasions of people, increased mobility
of the population, overtime culture, rising prices of houses, traffic
congestion, the development of financial center and tourism. In the field of
residential services, development prospect of the most extensive region is
the new-type capsule hotel.
Our market position is to develop a new-type capsule hotel in bustling big
cities. In the past few years, this market has been developing in our country.
« We will use a questionnaire to do the market research. The
questionnaire is in the appendix part.
2. External environment analysis and target market
analysis
(1) External environment analysis（PESTLIED analysis method）
• Politics Factors:
For:
1. The Government of China has focus on the encouragement of new
environmental protection industry. This will be a good chance for the

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found of Capsule Hotel.
2. Traffic control (car policy) in big city is to limit the number of car on
the road. This policy makes it difficult for workers who live far away
from their companies to go to work. Therefore, workers may want to
look for a cheap hotel to spend the night.
3. Extra fuel tax also makes driving more expensive. Many people
may would rather to find a place spending the night than driving
home.
Against:
1. Price Control Policy (on housing) is a chance for people who cannot
afford a house before to buy a house. Having a fixed place to live in,
they may not like to stay in Capsule Hotel.
• Economic Factors:
For:
1.
Inflation and pickup in rice (house and traffic) makes people

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consciously to save money. Besides, the rental cost of house rising up
also gives Capsule Hotel an opportunity to get more customers.
2. Demand exceeds supply in lodging industry also appears in tourist
cities and big cities.
Against:
1. The prices of raw materials go up. More expensive to manufacture
Capsules and purchase other related goods.
• Society Factors:
For:
1. Centralization of City financial centre makes and overtime cultures
in China the markets of overtime workers bigger.
2. The emergence of the backpacker and the like of cheap travels
make Capsule Hotel more attractive.
3. The development of traffic hinge makes railway station, airport and
bus station big markets in lodging industry.
4. The emergence of” ant tribe” in China
Against:
1. Chinese are hardly to accept new things
2. Public expense reimbursement may drive people choosing big
hotels rather than capsule hotel.
3. Chinese people’s backward ideas may affect them to think living in
capsule hotel is losing face.
• Technological Factors:
For:
1. The advance technology makes high-tech product much smaller
and can be equipped into Capsule Hotel

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2. Make a capsule hotel more cheap and convenient
3. Make network marketing possible
Against:
1. Solar energy is still very expensive and energy supply may be a
problem
• Legal Factors:
For
1. It is possible to have Start-up capital loans
Against:
1. It may be a problem to apply for business license
2. Patent law
3. Safety law in service industry is strict
• International Factors:
For:
1. After reform and open, China has more communication with foreign
countries and the international design concept can be used to design
a capsule hotel
2. Have a good experience for reference the capsule hotel abroad.
Against:
1. There will be more competition
• Environmental Factors:
For:
1. Environment, Performance, Style and Easy
2. Space saving
3. Efficient

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• Demographic Factors:
For:
1. The urbanization of population
2. The mobility of population
3. Population Trends Obviously
4. The emergence of” ant tribe”
(2) Target market analysis
Our market position is identified for the new capsule hotel. At present,
China's market has not well developed, only a few capsule hotel companies
operating in different regions of China.
The typical customers of our capsule hotel are looking for comfortable,
affordable accommodation in a short period. We can inspire their passion of
the living in capsule hotel by low price, high quality, and unique design.
Main Market Orientation:
[Positioning 1] Financial centre
[Positioning 2] Tourism center
[Positioning 3] Transportation center
[Positioning 4] Cultural exchange center
Main Customer Type:
[Client 1] Employees who are overtime
[Client 2] Backpackers or Travelers
[Client 3] Floating population (in tourism center)
[Client 4] Fans or Event participants

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For now, the company's disadvantage limited to the shortage of capital. Now
we take the following steps to alleviate these problems: asking for venture
capital, bank loans, angel fund and financing.
Environmental threats (such as the shrinking of the market, consumer
orientation, the vagaries of the economic situation) and other external
factors that impact on us reflects in the price, market share, number of
wholesale.
In addition, there are well-known specific factors, such as: the legal system
did not build the full, government policy is not transparent.
3. Certain target market analysis (Hangzhou)
We are prepared to open a capsule hotel in Hangzhou’s Huanglong sports
centre.
(LOCATION MAP):
Advantages:
(1) The location is near the scenic spot West Lake. (West Lake was made a
UNESCO World Heritage Site in 2011, and was described as having

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"influenced garden design in the rest of China as well as Japan and Korea
over the centuries" and as reflecting "an idealized fusion between humans
and nature.") Therefore, there is a growing number of visitors coming to
Hangzhou and it would be a large market.
(2) The location is in the traffic hub (Huanglong Bus Station).Therefore;
there is a large amount of floating population.
(3) It is located in the city centre. Due to the traffic jam and overworking,
many workers may like to stay in Capsule Hotel.
(4) It is near the stadiums, concert hall, and cultural exchanges centre.
Hence, the fans going to concert in the night can live in Capsule Hotel.
(5) It is near the Zhejiang University.
(6) It is round by many related services such as catering services, and
entertainment services (KTV).
Disadvantages:
(1) The rent in that place is very high
(2) Competition of similar industry is cruel
(3) Not easy to rent a house for us
4. Consumption limitations
Base Services:
• Object oriented mainly in low-income people rather than high income
people.
• Service costs of the capsule hotel are divided into two parts: the basic
service fee (including cleaning fee, service charge, etc.) hour fee
(including using fee, electricity, etc.).
• In order to improve the flexibility of the capsule hotel, we can make a
few double capsule luxury capsules and president capsule.

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• All kinds of other services (such as food, massage, bathing,
recreation, etc.) can be divided into different consumption level.
• Consumption is not strictly limited. The size of the space may affect
some customer choice and our interior design innovation may also
attract customers.
Outplacement services:
• Consumption limitations of Airport Service
（1）Mainly aimed at the people in high position, who do not hope in
waiting in the lounge
（2）In peak time, when the airport lounge is full
（3）When the plane is delayed or people want to stay at the airport in
night
• Consumption limitations of Company Outsourcing:
（1）Mainly aimed at the company group
（2）Fees calculated depends on outsourcing time and amount of capsule
（3）Outsourcing expenses should be higher
5. Similar industry analysis
(1) Ordinary hotel
Advantages: Well-equipped, good service, a larger space, neat and clean,
the management of large-scale
Disadvantages: Low space utilization, higher cost, lack of innovation,
maintenance is poor for some hotels, re-decoration may not have high
plasticity, furniture is hard to move, etc.
(2) Youth hostel
Advantages: Relatively inexpensive and appropriate space

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Disadvantages: Management model needs to be improved, services and
equipment may not be complete, may not neat and clean, location may not
be good
(3) Ordinary capsule hotel
Advantages: Very cheap, neat and clean, the management of large-scale
Disadvantages: small space, Service and equipment may not complete
(4) Our U capsule hotel
Advantages: Very cheap, clean and tidy, management of large-scale, each
capsule is unique (innovative design), complete integration into the innovation,
well equipment and services, a form of outsourcing
Disadvantages: small space
6. Industry operation analysis
(1) Foreign operation analysis
• Japan:
The first capsule hotel to open was the Capsule Inn Osaka, designed by
Kisho Kurokawa. It opened in 1979.
Background:1979,Overtime culture (workers missed the evening's final
train departure) and raising fare ( boosted by ¥50 to ¥380.) for taxis cause
that "capsule hotel" represented a sensible alternative to taking a taxi home
after the last train stopped running.. For ¥1,900 per night, a stay in the
Capsule Inn was a sensible and thrifty alternative — though in those days it
was a men-only option.
Difference between now and 1979: The first thing is that the numbers
identifying each capsule are now illuminated, making one's cubbyhole easier
to locate in the dim corridor. In addition to an alarm clock and radio, each

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capsule now comes with a 12-inch color TV. Among the other amenities are
Washlets (bidet-type commodes) down the hall in the shared loo — a
product that was just a gleam in its designer's eye in 1979.
• Russia:
Capsule hotels come to Russia. Fashion trend, which several years ago
captured the global hotel market, today found its continuation in Moscow.
Architectural firm Arch Group designed the first capsule hotel in Russia.
Concept was called Sleepbox. The hotel is designed for short-term staying.
Its rooms are very compact, thus offers its guests the latest innovations,
such as WiFi and a plasma TV.
Background: With the advent of the 21st century, capsule hotels have
become more relevant than ever. The financial crisis has spurred the hotel
chains to find new low cost accommodation. The fact that the capsule hotels
in the world have a bright future is backed by the success of the network of
micro hotels Yotel, which opened its micro hotels in airports in London and
Amsterdam. Not so long ago, on the Spanish hotel market the concept of
prefabricated capsule hotels was presented by Lookotels company. To a
certain extent analogous capsule hotel can be considered opened in 2009 in
the Sheremetyevo Airport "Air Express" Hotel, where the area of
the numbers ranged from 7.5 to 22 square meters.
Breakthrough: In the Russian capsule hotel concept Sleepbox were taken
into account the experience of world analogues. Capsule rooms are
equipped with comfortable beds and modern system of ventilation and air
conditioning.
(2) Domestic operation analysis
• Shanghai

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A capsule hotel located in the northern square of Shanghai Railway Station
will open soon. According to an employee of the hotel, the capsule hotel has
a total size of over 300 square meters and is arranged into three areas. The
hotel includes 68 tailor-made beds which are 1.1 square meters wide and
2.2 meter long. Each room is also equipped with a separate power plug,
clock, adjustable wall lamp and flat TV. Air conditioner and wireless
broadband network is also available.
• Beijing
A capsule hotel has popped up in Beijing. Unlike the direction 9 hours takes,
Mr. Huang Rixin, a 78-year-old kind-hearted retired engineer, has a more
socially benevolent philosophy. He saw a calling to provide affordable
accommodation to fresh graduates who have little in their pockets – who are
known as ‘Ants.’ However, recently, the capsule hotel was forced to close
because of the policy of the government.
7. The summary of the market prospect
According to this analysis, capsule hotel is still a new industry for China.
External environment analysis and similar industry analysis shows that
capsule hotel industry has a great opportunity and a large market. However,
the problems that the legal system did not build the full, government policy
is not transparent and capital is hard to collect should still take into great
consideration. Besides, the success of foreign operation of capsule hotel can
be a good model for us. The challenges they met and experience they get in
Beijing and Shanghai can also be a reference for us. With new product
designing and service providing, good management and organization,
effective marketing and sales, the market prospect of our new capsule hotel
will be better.

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IV.Marketing and Sales
1. Marketing plan
The marketing plan of capsule hotel is based on the following marketing
methods:
We will take Concept marketing, Service marketing, Experience marketing,
Emotional marketing and Differentiated marketing in to consider
synthetically to manage hotel and make a revolution in existing hotel
industry. We can decrease the price based on making full use of space, in
order to contain the trend of the rising fees in accommodation.
2. Marketing strategies
(1)Product positioning
Capsule hotel focuses on travelers, population who work overtime and
those who stay briefly. It attracts customers and receives their high
evaluation through the novel and different style, perfect equipment, low
cost and considerate services.
As for marketing positioning, we can satisfy the different customers’
demands by different price and style of “capsules”.
(2)Multi-tiered marketing strategies:
First is the market penetration, attract customers to have a try for the first
time by using their curiosity about new products and plenty of
advertisements.
The second step is to pay attention on tour groups. Young people and fixed
customers is our customer base.
The third is to develop the relationship with cooperation partners, such as

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large-scale concerts and Sport Competition
(3) Marketing Methods
• Concept marketing: in the information society, the customers’
attention has become a scarce resource. It is crucial for a company to
attract customers’ attention. It is a marketing strategy based on
certain tangible or intangible product with modern media technology
to extend a new concept of consumption, attract customers’ attention
and raise the customers’ demand of new product ultimately. Capsule
hotel in China as a new type of hotel concept, not only provides
customers with the more convenient and cheap service, but also
attract customers through their curiosity of new product. The
advantages and disadvantages analysis: the advantages of the
concept of marketing are that make customers know and accept a
new product, and expand the sales and reputation of a company, by
means of a new concept. However, some companies usually do not
know how to define their own enterprise products and how to use the
new concept to exchange with the demand of customers. They always
overestimate products’ profits, and cause dislocation of marketing
and concept, and untimely make enterprise in passive in the
marketing activity.
• Service marketing: capsule hotel provide catering, entertainment,
leisure and other services while we provide accommodation. In
addition, we set a special laundry room for customers and have
attendants to change and clean bedding at intervals. Letting
customers experience the warmth of home is our object. The
advantages and disadvantages analysis: advocate service marketing
is significant to improve employees’ service consciousness and

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service capacity. However, the key is the selection and training of
employees; otherwise, it is easy to affect the hotel image.
• Experience marketing: capsule hotel can launch customers
experience activities, such as a two-hour lunch break experience at
half price in the early opening and off-season. These activities not
only can use the idle resources of the hotel, but also can attract new
customers and grasp old customers for the hotel. The advantages and
disadvantages analysis: with the increase of the proportion of
customer sensibility, experience marketing can help close the
distance between customers and hotel. However, if these activities
are taken too much, it will bring a large of loss to hotel.
• Emotional marketing: the personal emotions differences and
demand of customers is the cure of brand marketing’s strategy.
Enterprise achieves business objectives by means of emotional
packaging, emotional promotion, emotional advertisement,
emotional reputation, and emotional design. In the capsule hotel
we intend to provide single room, double room, the room for
family and others according to the different demand of. Each
"capsule" has its own design style. Because our "capsule" is
removable, if a group of people book different style “capsule” in
advance, we can put them together in the same area, providing
convenience to their communication. The advantages and
disadvantages analysis: emotional marketing is beneficial to
build a better marketing environment, improve customers’ brand
loyalty and beat other similar hotels in competition, but it may
also cause the waste of resources.
• Differentiated marketing: the real differentiated marketing is
based on understanding the product characteristics, circulation

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channel, efficacy technology and the promotion of information
resources. Afterwards centralize superior resources, avoid
mainstream methods and create product concept and sales channels
in a special way, achieving the unexpected effect. It is mentioned
above that each "capsule" has different styles, different sizes, and
even different prices, which is the pretty important creative of our
capsule hotel. According to differentiated marketing, capsule hotel
not only can meet different levels of customers’ demand, but also can
attract them to experience different styles of “capsule”, increasing
repeat customers. The advantages and disadvantages analysis:
Differential marketing strategies greatly improves the
competitiveness of the hotel, improves customers’ loyalty and
increases occupancy rate. Diversification of advertisement,
multi-channel distribution, a variety of market research expenses and
administrative expenses are barriers to entry of other similar hotel.
However, the variation has its own limitations; the biggest drawback
is the high cost of marketing, because general productions are small
batch, making the unit cost of production relatively rise, which is
uneconomical. In addition, market research, sales analysis,
promotion plan, sales channel, advertising, logistics and distribution,
and other many aspects of the costs will no doubt increase greatly.
This is the reason why many enterprises have done differential
marketing, the market share has expanded, sales have increased, but
profits decrease.
3. Cooperative partner
• Manufacturer for equipment: looking for sponsor, purchase
equipment from one manufacturer, establishes long-term cooperation

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relations with it, and advertises for it in multimedia devices and hotel
inner magazine, in order to decrease cost.
• Designer: we intend to employ new designer who is newly graduated,
and engrave their name on the “capsule” they designed, helping them
improve reputation, and paying less for their designs simultaneously.
• Decoration Company: decrease cost by competitive bidding
• Travel agency: establish long-term cooperation relations, ensure that
passengers, achieve win-win
• Government: another creative is that we tend to provide “moving
capsule hotel”, which is a large vehicle with several “capsules”. However,
this type of vehicle has not existed in China yet, so it is important for us
to get the support of governments in aspect of the vehicle’s safety and
gate pass.
• Looking for sponsor, venture Capital
4. Market connections
We know how to manage a hotel successfully, so expanding customer base
is necessary.
In order to expand customer base and Grasp Market Trends, we need make
connections with other companies or organizations, and build good
relationship with them.
• Hotel fair
Specifically show the object and service of capsule hotel from all 360
degrees.
Make customers understand the superiority of our hotel and the
convenience we provide. In addition, capsule hotel can be further

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popularized by means of hotel fair.
• Hotel seminar
We plan to hold a seminar with other hotels at intervals. These seminars
can promote our communication and develop relationship with them,
acquire latest information and technology, and stay the top of hotel
industry constantly.
• Advertising
Advertising is the most common method to promote a new product. We
use several different methods to make and extend advertisements.
v Large posters: we can put different styles of capsule on the ad space
of a centre street.
v Experience activities: such as a two-hour lunch break experience at
half price in the early opening and off-season.
v Announce latest activities and news of hotel in company’s
website: we plan to build a website for our capsule hotel. So it can be
a effective way to advertise new activities and news of our hotel and
other relative business.
v Flyer, brochures: this type of advertisement is more useful in the
period before opening.
v Design an inner magazine of hotel: the inner magazine is not only
useful to make the advertisement for hotel and other cooperation
partners, but also a method for employees’ and customers’
entertainment.
• Put articles in travel magazine

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It is a useful way to increase exposure, drawing customers’ attention
constantly. It also can improve the position and reputation of our hotel.
Customers’ good comments are usually convincing.
5. Social assessment
The social assessments on product’s safety, effectiveness and strategies are
important sales tools. It can increase customers’ trust and brand loyalty to
hotel. Therefore, we will invite some industrial leaders, analysts, main
customers or university as the reviewers of our product. These reviewers
should publish their support to our hotel in public.

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V.Business organization and management
1. Organizational structure
(1) Introduction of the organizational structure
As the chart shown, the organizational structure of our capsule hotel
company has four levels. The highest level is Board of Directors, second
level is Executive Director, and the next is three directors: Director of Admin,
Director of Operation and d Director of Managing. In management of each
director, there is three or four department: (Director of Admin) Human
Resource Department, Information Technology Department, Quality

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Surveillance Department; (Director of Operation) Financial Department,
Sales Department, Marketing Department, Public Relations Department;
(Director of Managing) Security Department, Service Department, Purchase
Department, Cleaning Department.
(2) Function of each Department
Human Resource Department: Manage our company’s workforce and is
responsible for the attraction, selection, training, assessment, and
rewarding of employees, while also overseeing organizational leadership
and culture, and ensuring compliance with employment and labor laws.
Information Technology Department: Manage information of company
and costumes (make service and review easier). Make website of our
company and using it to show every unique capsule (including the designer
and photo of the capsule) and to propaganda.
Quality Surveillance Department: Evaluate the quality of service,
products, company operating, etc.
Financial Department: Make financial planning, financial accounting,
financial audit, etc.
Sales Department: Planning and hold some activities for sales.
Marketing Department: Do the marketing research and promotion of our
capsule hotel
Public Relations Department: Manage the flow of information between

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Business Plan
2012.3
27
an organization and its publics, provides an organization or individual
exposure to audiences using topics of public interest and news items that do
not require direct payment. Persuade the public, investors, partners,
employees and other stakeholders to maintain a certain point of view about
the company, its leadership, products or of political decisions.
Security Department: Guarantee the property security of each costumer;
Guarantee personal safety of each costumer; Prevent the accident happens
Service Department: Manage and provide services, including the basic
services, outplacement services, after-sale service
Purchase Department: Ensure the reserve of each goods related to our
service to ensure the costumers’ needs.
Cleaning Department: Make the hotel clean and do some maintenance
2. Ownership information
• The ownership will belong to the founders of the company,
Co-partnership Company.
• In encouraging employees, we will also motivate them with partial
ownership.
• The percentage of ownership depends on the extent of involvement
with the company.
• The form of ownership will be common stock.
3. Management Model

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Business Plan
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28
We choose to use the combination of Maslow theory and Herzberg
theory to manage our Capsule Hotel.
Belonging is very important in Chinese people’s motivation. Concentrating
on meeting the motivation of employees can make them more loyal to our
company. In addition, employee training (depends on every employee’s
personality) is also an important part of our management model. Promoting
the innovation of the employees and making for a cohesive and effective
organisation is rather important.
Besides, because capsule hotel is still a new industry, we can also apply
PRE-PASS management model into management. PRE-PASS includes P
（problem）——finding and define problem、R(reason)——looking for reason、
E（essence）——reveals essential、P(project)——establish ways、
A(action)——put into effect、S(self-criticism)——review feedback and S(step
by step)——improving and enhancing. These seven parts form an integrated
cycle to better management.

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Business Plan
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VI.SWOT Analysis
1. Analysis of Strength & Weakness
(1) Strength:
1. U Capsule Hotel is a very competitive organization. Our founders are
often quoted as saying that 'Business is a war without bullets. U Capsule
Hotel has a healthy dislike of its competitors. So it pursuits better
location (ideal address: Huanglong, Hangzhou), promotion (skill
training), management (according to Maslow’s hierarchy needs theory
and Herzberg’ two factors theory), personalization (different design
styles) and financing capability (moderate loan), suitable price (includes
basic fees and extra fees according to disparity use of each customer),
the most quality products and services in Chinese market.
2. The organization has strong ethical values and an ethical
missionstatement as follow, U Capsule Hotel is committed to be
responsible to environment and society '.
3. U Capsule Hotel has been advanced in management system. It does not
tie up cash in buildings and workers. It hires normal apartment to set
capsules and every worker holds shares working for themselves. And it
provides a series of practical or financial help for its workers, for
example, additional rewards for working overtime. Another focus is that
U Capsule Hotel invests time and money on excellent staff training and
builds their loyalty because outstanding talents are a key to success in
business.
4. U Capsule Hotel’s Ever-improving service quality. U Capsule Hotel will

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Business Plan
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30
set up a Group customer service center for group order to solve network
access demand and a service hotline, complaint hotline to provide
interactive services.
5. Another core competence is that U Capsule Hotel puts emphasis on
advanced IT system and international communication. For example,
under the support of the IT system, every capsule’s operating condition
and logistics information can be clearly seen. IT also strengthens hotel’s
efficient procurement and maintenance process. Moreover, we visit
domestic and foreign enterprises in this field to learn lessons every year.
(2) Weakness:
1. The conflict of Strategic Management and Strategic Development. On
the one hand, the corporate decision-making of our hotel is only
concerned about the current tactics and strategies, ignoring the
long-term strategy and losing in the daily operations of things. On the
other hand, the lack of talents with abilities to respond to the complex
and changing environment of business operations is the core issue in the
current implementation of sustainable development and maintain
long-term competitive advantage.
2. Internal contradictions of innovation and development. The functions of
the planned management model, organizational model will gradually
become the main factor restricting enterprise to participate in global
competition. ERP, management and organization model of reform and
innovation, as well as the construction of the enterprise features of
human environment should be considered as the focal points.
3. Visible liquidity of workers in the service sector creates risk of high
investment of human training.

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31
4. The organization of U Capsule Hotel has a strong presence in Hangzhou
and needs seed money. It is often argued that they need to look for a
portfolio of companies, in order to spread business risk, which is
different to overcome.
5. The majority of U Capsule Hotel’ income is derived from renting. In
another word, profit tends to get squeezed because of the low price
competition pressure, the rising cost and population movements.
6. Each guest staying at the capsule hotel must consciously abide the
"contract": protect public facilities, keep silent and respect the
privacy of others or it will lead to pressure on maintenance and create
benign atmosphere for rest.
2. Analysis of Opportunity & Risk
(1) Opportunities:
As an enterprise with new concept, U Capsule Hotel is exposed to a wide
variety of developments described in this report and the company’s overall
situation.
1. Policy opportunities: More space distribution on the set of public facilities,
reasonable limits to minimize private sleeping space and cost savings
consistent with the sustainable development strategy in China. As WTO
brings world-class competitors to Chinese companies, faced with
increasing market competition, strive to improve the technological
content and quality level of every capsule is the mainstream.

U Capsule Hotel
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32
2. Economic opportunities: The adverse effects of the financial crisis and
world economic fluctuations and the high price of living in China, boost
the growth of demand for the capsule hotel.
3. Social opportunities: With the improvement of living standards and
economic conditions, people’s ideas and patterns of behavior also began
to change, tending to be receptive to new things. The mobility of talents
in services sector brings vitality to our hotel.
4. Technology opportunities: With the development of electronic
information technology, marketing and communication channels are
widened. Completion of the information superhighway greatly improves
the labor productivity of enterprises, while changing the traditional
business model. At present, the application of IT in design and decoration
improves beauty of our hotel.
(2) Risks:
As a company birth with new concept, the U Capsule Hotel is exposed to
numerous risks. Significant risks are outlined in the following sections. The
order in which the risks are listed is not intended to imply any assessment as
to the likelihood of their materialization or the extent of any resulting
damages.
1. Policy risk：Refers to the instability of policy. The policy can affect people's
needs, which limits hotel’s service and product.
2. Legal risks: We are exposed to numerous legal risks from legal disputes
or proceedings to which we are currently a party or which could arise in
the future, particularly in the areas of product liability and competition

U Capsule Hotel
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33
law, patent disputes, tax assessments and environmental matters. In
addition, the outsourcing service has been concerned in traffic laws. The
outcome of any current or future policy adjustments cannot be predicted.
3. Requirement risk: Sales of the U Capsule Hotel are subject to seasonal
fluctuations. This applies particularly in the Crop Science business, which
is also affected by factors such as weather conditions. The performance
of our Material Science subgroup is affected by cyclicality in customer
industries. A downturn in the business cycle, characterized by weak
demand may lead to price pressure and more intense competition.
4. Competing risks: The competition is another source of risk for we can
never imagine the rapidly increase rate of new-born companies or fully
understand the next step of competitors. Moreover, the low technical
content of hotel industry and service products which are easy to imitate
put pressure on companies development.
5. Management risks ： include the lack of coordination between the
functional departments and leadership, and the delay, low efficiency and
quality caused by sudden leave of team staffs. Errors of judgment of
consumers’ spending habits and tendencies led from the individual
consumer behavior as a consumer tendency to developed products and
service lead to money waste and loss of market opportunities.
6. Product development risks: The U Capsule Hotel’s competitive position,
sales and earnings depend significantly on the development of
commercially viable new products and services. We therefore devote
substantial resources to research and development. Because of the
lengthy development processes, technological challenges, regulatory
requirements and intense competition, we cannot assure that all of the

U Capsule Hotel
Business Plan
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34
products we will develop in the future or are currently developing will
actually reach the market and achieve commercial success as scheduled
or at all.
7. Financial risks: Management of financial and commodity price risks. U
Capsule Hotel is exposed in the normal course of business to credit risks,
liquidity risks and various market price risks that could materially affect
its net assets, financial position and results of operations. It is suggested
company use derivatives to minimize or eliminate the market price risks
associated with operating activities and the resulting financing
requirements.
8. Market risks: relate to the possibility that the fair value or future cash
flows of financial instruments may fluctuate due to variations in market
prices. Market risks include currency, interest rate and other price risks,
especially commodity price risks.
3. Assessment of the overall risk situation:
Compared with the previous year, the overall risk situation did not change
significantly in the reporting period. The overall risk assessment is based on
a consolidated view of all significant individual risks. At present, no potential
risks have been identified that either individually or in combination could
endanger the continued existence of the U Capsule Hotel.

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VII.Financial planning
Startup Expenses
U capsule hotel
Sources of Capital
Owners' Investment (name & %
ownership)
Founders 400,000¥
Employees 200,000
Copartners 400,000
Total Investment 1,000,000¥
Bank Loans
Bank 1 500,000¥
Total Bank Loans 500,000¥
Startup Expenses
Capital Equipment List
Furniture 25,000¥
Equipment 20,000
Fixtures 50,000
Machinery 100,000
Other 10,000
Total Capital Equipment 205,000¥
Location and Admin Expenses
Rental 200,000¥
Other 30,000
Total Location and Admin Expenses 230,000¥
Opening Inventory
Hotel fair 5,000
Hotel seminar 20,000
Others 5,000
Total Inventory 30,000¥

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Business Plan
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36
Advertising and Promotional
Expenses
Advertising 50,000¥
Signage -
Printing -
Travel & Entertainment -
Other / Additional categories -
Total Adv and Promo expenses 50,000¥
Other Expenses
Training 20,000¥
Car rental 10,000¥
Total Other Expenses 30,000¥
Reserve for Contingencies 50,000¥
Working Capital 200,000¥
Summary Statement
Sources of Capital
Owners' and Other Investments 1,000,000¥
Bank Loans 500,000
Total Source of Funds 1,500,000.00
Startup Expenses
Capital Equipment 205,000
Location / Admin Expenses 230,000
Opening Inventory 30,000
Advertising / Promo Expenses 50,000
Other Expenses 30,000
Contingency Fund 50,000
Working Capital 200,000
Total Startup Expenses 795,000¥

U Capsule Hotel
Business Plan
2012.3
37
Security and Collateral for Loan Proposal
Collateral for Loans Value
Real Estate ¥ 120,000
Other Collateral -
Description
Residence at 199 Eastern
Taikang Ave.The E.N.D Team
Owners
The E.N.D Team
Other owner
Other owner
Loan Guarantors (other than owners)
Loan Guarantor 1
Loan Guarantor 2
Loan Guarantor 3

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Business Plan
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VIII.Appendix
1. Questionnaire (English vision)
Questionnaire about capsule hotel
Age Occupation Gender
Marital
status
Married/Single/Divorced/ Confidential
Housing
situation
Have house/Rent house/Others/Confidential
1. Have you heard of capsule hotel?
2. Do you think capsule hotel is necessary in contemporary society? Why?
3. What style do you think the capsule hotel should use?
4. What equipments and services do you think the capsule hotel should have?
5. What factors do you think can affect the people’s demand of moving
capsule hotel?
6. What methods do you think the capsule hotel should use to charge
customers?
7. Do you want to experience capsule hotel?
8. What response do you think the competitors will make after capsule hotel
enter into the market?
9. Do you think it is necessary to make moving capsule hotel?
10.Where do you think the capsule hotel should locate?

U Capsule Hotel
Business Plan
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39
2. Questionnaire (Chinese vision)
胶囊旅馆问卷调查
年龄职业性别
婚姻状况已婚未婚离异保密
住房情况拥有租用其他保密
1. 您听说过胶囊旅馆吗？
2. 您觉得现在的社会需要胶囊旅馆吗？为什么？
3. 您心目中的胶囊旅馆的设计是怎么样的？
4. 您觉得胶囊旅馆应有哪些设备，提供哪些服务？
5. 您认为有哪些因素能够影响社会对可移动胶囊旅馆的需求？
6. 您希望胶囊旅馆如何收费？
7. 您希望体验胶囊旅馆吗？
8. 胶囊旅馆进入市场后，您觉得竞争者会有什么反应呢？
9. 您觉得胶囊旅馆有必要做成移动的吗?
10.您觉得胶囊旅馆应该建立在什么地理位置？

U Capsule Hotel
Business Plan
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40
3.Reference
1.http://capsulehotel-inn-osaka.com/
2.http://www.japantimes.co.jp/text/fl20110116x2.html
3.http://www.designboom.com/weblog/cat/9/view/8111/9-h-nine-hours-c
apsule-hotel-in-kyoto.html
4.http://house.ifeng.com/home/gj/detail_2009_11/20/195424_0.shtml
5.http://www.city-of-hotels.com/174/2010-0701/capsul-hotel-russia-en.ht
ml
6.http://www.flamingoshanghai.com/blog/2010/05/12/capsule-hotel-in-be
ijing/

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