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- 1. STAT212Assignment#6.docx Description In each of the 4 research scenarios and datasets below. 1. Read about the variables present, and formulate your default expectations about the relationship between two variables or groups. State these as your null and alternate hypotheses for this problem. Feel free to re-code the data to help formulate your hypothesis (for example, splitting a continuous measurement into two ordinal groups, "High" and "Low".) 2. What sort of measurements would help you evaluate your null hypothesis? compute sample statis- tics (center, dispersion, correlation) that will allow you to see if the data is consistent with your null or alternate hypothesis? 3. Create a graph that visually depicts the relationship between the variables in your hypothesis. Does the graph provide convincing evidence for one of your hypothesis? Explain why or why not. Scenario 1 The _le BodyFat.csv contains Body Fat percentage measurements, age, weight, density, height, and various body part circumference measurements. for over 200 male subjects. Scenario 2 The _le BestCity.csv contains various measurements of quantities associated with the quality of life in a collection of 20 different cities across the US. Scenario 3 The _le Normtemp.csv contains various average body temperature, gender, and heart rates for 130 participants. Scenario 4
- 2. The _le Titanic.csv contains information on those aboard the Titanic passenger class (0-crew, 1-_rst, 2-second, 3-third), Adult (1-yes, 0-no), Gender (0-Women, 1- Men), and survival status (1-yes, 0-no). Due 3/13/20 1 BestCity.csvCityIncomeCommuteJob GrowthPhysiciansMurder RateRape RateGolfRestaurantsHousingMedian AgeLiteracyHousehold IncomeRecreationA26000.049.210.81987.05.351.3925.05582.01 09400.035.35.268000.02620.0B29300.045.39.5517.06.650.8364. 09988.097000.043.26.070400.03066.0C24800.039.88.2592.08.2 77.71627.020511.0114700.029.59.460500.01297.0D27900.046.8 7.63310.06.751.2956.08946.099100.040.54.665900.02902.0E37 500.039.912.2975.05.140.1426.04000.0122200.047.15.684700.0 2214.0F31900.049.57.72238.06.938.01459.08970.0145300.039. 34.875800.01402.0G25300.044.45.4611.04.538.81063.09570.09 9500.038.66.862600.02900.0H22000.044.86.2272.07.565.7951. 019101.076400.041.62.854800.02448.0I29400.044.97.8381.08.4 48.7349.012099.0112500.041.84.572900.02756.0J42400.044.78. 01812.08.145.4397.010953.0143500.041.25.2100000.02508.0K4 0500.040.010.9294.08.069.6191.02655.0173600.041.76.410200 0.03000.0L24700.038.79.0196.02.819.0449.015796.0129200.03 3.41.765300.01570.0M24400.041.18.7404.07.377.21590.016001 .0126500.030.65.662200.01713.0N22400.042.88.3534.05.757.9 1160.016712.0102700.034.52.259200.02190.0O22200.037.88.41 66.05.650.9815.011856.0110300.035.42.757100.02142.0P27500 .048.48.11553.014.083.61195.012348.0107400.034.34.072000.0 2657.0Q23100.044.54.7502.07.942.7556.065804.0116000.038.5 2.159400.02066.0R25000.041.413.9172.04.017.8459.036151.01 20000.052.73.657300.01467.0S25800.053.55.34143.016.857.43 054.014310.0132800.036.25.071900.03520.0T22600.045.06.552 6.05.552.2861.08878.086500.041.55.354000.02977.0 Titanic.csvCLASSADULTSEXSURVIVE1111111111111111111
- 17. STUDENT EXAMINATION NUMBERS Y9998154 Y0000966 Y0076073 Y8528971
- 18. Y0071607 Y0077337 MODULE NO: MAN00001I MODULE TITLE: Business Planning Module Tutor: Dr. Alex Gillett Essay Title: Group Business Plan GROUP Number Group 2: MyTaxiBooker or name Word Count: 4,833 (excl. Executive Summary/Abstract, tables, figures, captions, table of contents, references and appendices) 0 kj628 Rectangle kj628 Rectangle
- 20. MyTaxiBooker Business Plan Serving your taxi needs in York and Leeds 1
- 21. Contents Executive Summary……………………………………………………………… … 4-5 1.0 Business Venture……………………………………………………………….. . 6-12 1.1 Product Offering 1.2 Nature of Demand 1.3 Mission 1.4 Vision 1.5 Values 1.6 Business Objectives 1.7 Strategic Capabilities 1.8 USP and Competitive Advantage
- 22. 2.0 Market Analysis……………………………………………………………… … 13-24 2.1 Macro Environment Audit 2.1.1 PESTLE Analysis 2.1.2 Porters Five Forces Analysis 2.1.3 Ansoff Matrix 2.2 Micro Environment Audit 2.2.1 The Market 2.2.2 Target Market Size 2.2.3 Customer Segmentation 2.2.4 Competitors 2.2.5 Perceptual Mapping 2.2.6 Suppliers 2.2.7 SWOT Analysis 2.2.8 Product Properties 3.0 Marketing Plan………………………………………………………………….. 25-31 3.1 Target Market 3.2 Brand Elements
- 23. 3.3 Product Strategy 3.4 Advertising Strategy 3.5 Marketing Strategy/Marketing Mix 3.6 Market Growth 4.0 Operations Strategy…………………………………………………………….. 32-36 4.1 Information Systems and Information Technology 4.2 External Accountancy 4.3 Quality Assurance and Control 4.4 Premises 4.5 Advertising Locations 4.6 Clients 4.7 Equipment 4.8 Insurance 5.0 Legal and Industry Requirements……………………………………………... 37-39 5.1 App Considerations 5.2 Employment Considerations 6.0 Human Resource Strategy……………………………………………………… 40-43 6.1 Board of Directors and Workforce
- 25. 6.4 Strategies to Maintain Staff Morale 7.0 Financial Proposal………………………………………………………………. 44-46 7.1 Projected Profit/Loss Summary 7.2 Projected Cash Flow Summary 7.3 Balance Sheet Summary 7.4 Break-even Analysis 7.5 Key Performance Indicators 8.0 Risk Analysis……………………………………………………………… …….. 47-53 8.1 Risk Assessment through PESTLE Environment 8.2 Risk Mapping 8.3 Strategic Risk, Operational Risk, Financial Risk and Commercial Risk
- 26. 9.0 Beyond Start-up (Exiting or growing the business)…………………………... 54-56 9.1 Exit Strategy 9.2 Future Development Conclusion…………………………………………………………… ……………… 57 References…………………………………………………………… ……………… 58-64 Appendices…………………………………………………………… ……………... 65-133 3
- 27. Executive Summary MyTaxiBooker is a multi-functional smartphone app and accompanying website targeted at locals and specifically the student population (over 85,000) in York and Leeds with the initial launch planned for October 2014. The identified need is for a convenient, easily accessible, cashless, intuitive, safe and cost-saving method of booking a taxi. The increase in the market for travel apps by 149% in 2013 and the expected trend
- 28. continuation (Khalaf, 2014) combined with the general ‘technolisation’ of society (Walker et al., 2010) exists in light of a shift in consumer preferences towards personal management of travel at their fingertips. The opportunity arises from an array of issues that may be broadly contained as two-fold in nature. From a student perspective, prolonged waits in undesirable weather conditions are not uncommon, followed by arbitrary waiting times that beckon the unwanted need to contact a taxi company on numerous occasions, often to discover extensive waiting times. Further, many students feel the need to walk home late at night as a result of an inability to justify journey prices, this raises safety concerns. From a company perspective, lack of competition exists within these cities and the market is dominated by a few larger taxi firms due to the incapacity of smaller firms to gain funds for efficient and effective marketing. Moreover, currently there is no proof of purchase therefore taxi companies cannot trace customers under the influence of alcohol for fare evasion. MyTaxiBooker targets these
- 29. issues. Confirmation from market research suggests strong demand at 85% for MyTaxiBooker’s service offering. Furthermore, tuition fee increases and the upward trend in cost of living imply that money saving and convenience techniques appear dominant on most people’s priority list. The company will exploit social networking as a cost efficient method of advertising to ensure maximum customer usage and development of a strong brand presence within the market. The company will utilise the ‘first mover’ advantage (Porter, 1980) as the first app of its kind and the only region specific app in York and Leeds. Rented office premises will be located in York city centre due to its close proximity to the University of York, York St John and the railway station for easy access to Leeds. Distribution staff will circulate promotional material, in and around the target regions 4
- 30. throughout the year, whilst the managing director will be responsible for negotiating deals and managing day to day activities. Furthermore, suppliers will include external accountants, lawyers, and website and app designers. An efficient outsourcing strategy will ensure low fixed costs, the effective use of capital, increases in profit levels. Employee numbers will
- 31. increase so as to meet business expansion. Six start-up shareholders will collaboratively inject £70,000 start-up capital (1 individual investing £20,000, 5 others £10,000) in order to fund advertissing as well as design and launch of the website and app and other start-up and initial running costs. As MyTaxiBooker, is a technology based product, costs are relatively low and profit forecasts are; £56,421 after year 1, £88,797 after year 2, and £106,039 after year 3. The company pays back within 1 year and 2 months and breaks even within the second month of operations. These minimalistic figures have been assumed from average assumptions extracted from market research and the company have assessed any risks that may hinder financial success. At termination of the three year period, the company will have sufficient understanding of the sales trends and demand fluctuations in high and low seasons. App popularity within York and Leeds should be such that a strong brand name will accompany the business aim of expansion to Manchester and Newcastle with a long term vision
- 32. to be present in 7 UK cities by 2020. 5
- 33. 1.0 Business Venture 1.1 Product Offering MyTaxiBooker is the innovative idea of six university students who have identified and confirmed through market research, a gap in the transport app market. MyTaxiBooker, a distinctive smartphone app and accompanying website, will remodel the existing taxi booking process and consumer experience. MyTaxiBooker ensures that students and locals in York and Leeds can benefit from an efficient travel experience as a result of its intuitive taxi booking system, coupled with the ability to earn ‘taxi miles’ through the app rewards system. MyTaxiBooker serves as an insightful data collection tool for taxi drivers and companies who list with the company; details of sales and demographics will be
- 34. available through the app system. However, it is company policy that no personal user information is shared with any secondary parties. York and Leeds possess abundant student populations, above 85,000 (Unistats, 2014) and an estimated overall population of over 900,000 (ONS, 2011) which MyTaxiBooker aims to capitalise on. The app will be available as a free download on the Apple App Store®, the Android Marketplace®, and Windows Store®. Targeting current journey concerns, costly fares, security fears, and waiting times epitomise the nature of MyTaxiBooker’s purpose. (Please see appendix 4.0 for an extensive list of features and product information and appendix 5.0 provides a process map of the service). Planning progress shall be hereby outlined. 1.2 Nature of Demand Demand for the product is ensured through identification and satisfaction of the needs of taxi users and taxi companies. Market research (appendix 1.0)
- 35. suggested that out of the 100 York and Leeds students questioned: 6 78% use a taxi at least 1-2 times a week 85% would order a taxi by app if a suitable one was available 90% suggested waiting times and price as their main concerns
- 36. 58% prefer to pay for their journey by card The research findings alongside the personal experiences of the business founders enabled identification of the following needs/concerns that are to be considered by MyTaxiBooker in order to generate high demand for our product. The table below illustrates the potential demands, both from a consumer a supplier perspective and how those demands may be satisfied by MyTaxiBooker. 7
- 37. Individuals booking through the app Taxi firms listing/advertising with the app Need/concern Satisfying the need Need/concern Satisfying the need Long waiting times High cost Safety
- 38. Late taxi arrival Loss of possessions Waiting times may be tracked and compared Discounts and taxi miles are available ID may be verified on the app to determine whether the driver is licensed to drive the vehicle Taxis may be monitored through GPS and this in turn should encourage taxi efficiency. It also reduces the need to repeatedly call taxi firms to enquire waiting times Proof of purchase so the taxi may be traced Market visibility of small taxi firms Lack of competition
- 39. No proof of purchase Competition from other forms of transport Reputation Maintenance Provides a platform where small companies are able to promote themselves against the larger firms without financial constraints Currently larger firms dominate the market due to customer familiarity. The app will enable smaller firms to offer discounts hence raise market competition Firms can identify the name of the individual who booked the app through a customer receipt. This avoids complications especially after clubs nights where people may claim a taxi they have not booked.
- 40. Ease of booking, lower costs, and timing availability for consumers should promote increased taxi usage. Firms are encouraged to act efficiently since consumers are able to observe company reviews and monitor waiting times. The liquidity of customer loyalty is such that they are easily prone to swapping to regular usage of taxi firms that appear to possess a superior reputation on the app. Increased efficiency will therefore enable ease of reputation maintenance. Option to pay by card Less need for cash Option to pay by card No cash at hand 8
- 42. 1.3 Mission “To provide economy and efficient minded taxi users with a free, user friendly and innovative platform for booking and monitoring the travel process with consistency of service, heightened opportunities for taxi affordability and safety advancement features. Our mission extends to building strong advertising links with the University of York, York St John, York College, Leeds University and Leeds Metropolitan University in order to instigate and strengthen brand awareness. Further, we seek to
- 43. introduce ease into the user booking experience and develop overall user satisfaction by addressing current concerns and discontents.” 1.4 Vision “MyTaxiBooker aims to develop and maintain its position as the leading provider of a taxi booking service providing discounts and savings specifically targeted at the UK’s student populations. The launch in York and Leeds will be the first of its kind in the UK and distinctive as the only region-specific UK taxi app outside London. Although the ‘free-rider effect’ (Lieberman & Montgomery, 1988) may be possible, whereby companies mimic an idea without the extensive costs of research and development, MyTaxiBooker intends to establish a strong reputation in its primary regions prior to extending services to other large cities with large student populations. We envisage the prospect of widespread customer loyalty through the advantage of being the ‘first mover’ in the market.”
- 44. 9
- 45. -
- 46. 1.5 Values Our Values Ensuring equitable market exposure for larger and smaller taxi firms Enhancement of student safety Fair treatment of all stakeholders Efficient and reliable service for users Rapid growth so as to maximise company shareholder returns whilst maintaining stakeholder satisfaction
- 47. Competitive Remuneration Packages (discussed with employees regularly) 1.6 Business Objectives MyTaxiBooker functions in line with the management by objectives concept (Drucker, 1954). All objectives should be Specific, Measurable, Attainable, Realistic and Time-bound (SMART) (Doran, 1981). To break even within the first three years To increase app usage by 3% (comparing usage to the respective month in the previous year) To begin expansion of services to Newcastle and Manchester in the fourth year of operations. Key Business
- 48. Objectives 10
- 49. 1.7 Strategic Capabilities Makadok (2001) emphasises the importance of capabilities which determine the firm’s capacity to efficiently deploy resources. In the first three years of operations, the firm will follow the dynamic capabilities view which focuses on competitive survival and adaptation during times of rapid external change in the macro environment. However often, adaptation is not possible due to practical feasibility constraints that apply to technological industries.
- 50. Operation in a low competition market The app is introduced at a time where there is a strong need which has been identified through market research, ‘right place at the right time’ Flexible to changes in the market environment since all operations are maintained electronically A financial advantage since low start-up and running costs result in a requirement for low capital investment and a net profit margin First mover advantage through technological leadership which is often considered the most strategic advantage if capitalised upon, ensuing long lasting profits (Reinganum, 1983) University support for advertising and promotion CAPABILTIES However the firm recognises the following resources as possible long-term contributors to sustained competitive advantage: 11
- 52. Tangible Resources Intangible Resources external expertise from a panel, managerial skills, practices and procedures Innovation and creativity – technical skills and capacity for innovation Reputation – Evaluation and control systems, company culture Financial resources such as cash accounts and the ability to raise equity Human – experience and capabilities of Physical Resources such as the office, favourable promotion locations Technological resources – intellectual property
- 53. distributors and the managing director, Applying Barney's (1991) VRIN (Valuable, rare, inimitable, and non-substitutable) framework assists determination of whether a resource is a source of sustainable competitive advantage. Priem and Butler (2001) state that this framework has little prescriptive value; and it is difficult to decide resources that meet all the VRIN criteria however, reflection does position managers to consider unique profit-creating resources that collectively construct the businesses resource base. 1.8 USP and Competitive Advantage The uniqueness of MyTaxiBooker and lack of competition in its target regions warrants the company an ability to distinguish itself as unique, offering a multi-functional free service with numerous user benefit-creating features (see appendix 4.0). The opportunity for strong brand presence and customer loyalty may ultimately instigate a brand image that is synonymous with booking a taxi in York and Leeds. According to primary research, 85 of
- 54. 100 student respondents and all four taxi respondents (ten were contacted) would utilise the app with the purpose of addressing journey apprehensions and ensuring an ordered and unproblematic booking process on behalf of both parties. 12
- 55. 2.0 Market Analysis 2.1 Macro Environment Audit 2.1.1 PESTLE Analysis (Please see appendix for 6.0 for PESTLE analysis) PESTLE (Political, Economic, Socio-cultural, Technological, Legal, and Environmental) analysis is an effective method of assessing the inevitable macro environmental factors that may impact on the success of MyTaxiBooker (Lynch, 2009). Model Weaknesses
- 56. PESTLE can readily become obsolete Analysis provides purely a list of factors Our Approach The company will regularly update the analysis in order to ensure anticipation, avoidance and minimisation of any threats that may limit, or take advantage of factors that may contribute to the company’s future success (Blythe, 2009). Analysis will be updated using contribution from all people involved in the business (employees and members of the board) in order to capture different business perspectives; in turn aiding the development of strategic thinking and the decision making process of MyTaxiBooker. Rapid market change renders it increasingly difficult to anticipate trends that
- 57. may affect an organisation in the future. However, the simple framework will enable the firm to rapidly position itself with regards to current market trends. It must be used in conjunction with other frameworks in order to ensure a holistic view of the company’s marketing environment (Cheverton, 2005). PESTLE highlights the opportunities and threats likely to affect the company and these will inspire the external inputs into the SWOT analysis. The factors under each heading have been listed in order of present and future significance, enabling the company to prioritise in order to counteract any risk that these factors may cause. 13
- 59. The company will use frameworks as a supporting tool for analysis and evade over-reliance since this can often lead to the oversimplification of data in the decision making process. 2.1.2 Porters Five Forces Analysis Michael Porter (1979) argued that the state of competition relies on five basic forces that affect the organisation. He developed the model to the then popular SWOT analysis which he believed to be without rigour. MyTaxiBooker will function in an industry, composed of a group of firms offering similar services. The following provides a useful tool for analysing the relationship between competitors, suppliers and the market. Intensity of rivalry within the industry Threat of substitute products Bargaining power
- 60. of buyers Bargaining power of suppliers Threat of new entrants (Lynch, 2009) The five forces model will be utilised in order to create a qualitative evaluation of MyTaxiBooker’s strategic market position and respond to apparent opportunities/deal with potential threats (Grundy, 2006). However, it must only be used at the business industry level as opposed to the industry group level. The analysis has been criticised by Coyne and Subramanium (1996), stating that unrealistic assumptions underlie the five forces such as that 14
- 61. buyers, competitors and suppliers do not interact, that barriers to entry create value and that participants in the market can plan for and respond to competitive. However, the framework provides the business with a tool for raising awareness as to the potential forces impeding on
- 62. its operations and an understanding of the relationship between competitors, suppliers, and the market. Werner (1984) argues that Porter’s five forces fail to consider the unique resources and capabilities that enable a firm to be successful in an industry. Therefore, when MyTaxiBooker transfers focus towards competitive advantage, it will combine the analysis with a RBV analysis in order for the firm to understand the competitive strengths that may enable it to overcome the forces, (Please see appendix 7.0 for five forces analysis) 2.1.3 Ansoff Matrix The app will undertake a product development strategy approach since it will utilise an existing industry and develop a differentiated product therefore improving the performance of the industry (Ansoff, 1957). The app provides an alternative taxi ordering method in York and Leeds. Please see section 9.2 (Further Development) for a fuller understanding of the matrix application to the business.
- 63. 15
- 64. 2.2 Micro Environment Audit 2.2.1 The Market The business market is the York and Leeds taxi industry (719 taxis) which is primarily dominated by large taxi companies. In York, Streamline and 669 taxis dominate the market; Leeds is dominated by Amber taxis. These companies have agreed to the use of our service (please see appendix 2.0) which in turn should encourage smaller taxi companies to participate. The York and Leeds markets do not currently possess an alternative booking system to the traditional phone call system. 2.2.2 Target Market Size The market size is large with a number of educational institutions possessing large student populations; the University of York with 15,253 students, York St. John University (5,824 students) and the surrounding colleges such as York College (7,492)
- 65. students. There is an ever larger student presence in Leeds with Leeds University (33,600 students), and Leeds Metropolitan University (18,994 students). 2.2.3 Customer Segmentation MyTaxiBooker will provide a solution to meet the needs of individuals and taxi firms identified in section 1.2 (Nature of Demand). A combination of desk and field market research has confirmed the need and the desire of our product amongst university students, locals and taxi firms. Heterogeneity in demand from our customer base is such that it can be segmented into diverse demand functions (Dickson & Ginter, 1987). This will enable the company to focus marketing on those more likely to use the product and identify the relevant resources to undertake this process. 1. Segment geographically – York and Leeds 2. Segment by markets (Business-to-Consumer and Business-to- Business), as follows: 16
- 68. Type of factor Business-to-Consumer Business-to-Business Characteristics of people/ organisations
- 69. Purchase/use Users’ needs and preferences for product Smartphone users: university/college students and locals, both male and female that use taxis as a means of transportation Size of purchase Size of their purchase is assumed to be 5% commission of an average £9.50 journey Brand Loyalty Provided that the app increases customer utility, brand loyalty will be high amongst this segment since no competition
- 70. exists Purpose of Use To facilitate the consumer in booking a taxi Purchasing Behaviour Frequency of use will be varied but market research suggests a minimum of 1 to 2 times per week. Seasonal variations will alter frequency (holiday periods) Importance of Purchase Enables a more convenient booking process as opposed to calling multiple taxi firms Product Similarity Not applicable since no direct competition exists
- 71. Price Preference The app is free so there are no financial costs to the consumer Brand Preferences Not applicable since no direct competition exists Desired Features These have been confirmed through market research, the extensive list can be found under appendix 4.0 Quality Ease of use and intuitive Small and large taxi companies, diverse in terms of levels of profitability Application To advertise their services and
- 72. journey offers Importance of Purchase To advertise their brand against competitors, improve efficiency with the time monitored aspect of the app (GPS) and increase market share Volume 13 taxi firms between York and Leeds Frequency of Purchase Register their interest in listing on the app every six months Purchasing procedure Block fees and commission of 5% are payable Performance Requirements
- 73. Effective functionality (no operational errors or GPS delays). This will be monitored by the managing director Brand Preferences Not applicable since no direct competition exists Desired Features These have been confirmed through market research, the extensive list can be found under appendix 4.0 Quality Ease of use and intuitive 17
- 74. 2.2.4 Competitors The company will employ a blue ocean strategy (Chan & Mauborgne, 2005) since the
- 75. existing market is reasonably sparse and most apps contain basic features that allow a customer to simply book a taxi; the marginally more advanced apps are London specific. Currently, no app exists to meet the multiple needs of taxi users specifically whereby a team liaise directly with taxi companies in specific cities to offer efficient journeys in terms of overall experience and price. Current available apps lack a personable characteristic and can be considered a platform to simply source all available taxi companies in the area without monitoring of quality. 90% of those questioned for market research were unaware of an existing taxi booking app to suit their needs. The team therefore trust that the barriers to entry are low and preliminary market research indicates that in highly populated student cities there is a desire for a method to solve student journey concerns; this implies a gap in the market. (Please see appendix 8.0 for a summary of rivals’ service offerings and the unique features of the app that will enable it to surpass this competition)
- 76. 2.2.5 Perceptual Mapping Perceptual mapping is used to identify opportunities, enhance creativity and tailor the marketing strategy so as to determine the most appealing solution for its consumers (Johnson et al, 1979). Furthermore, a perceptual map enables the company to determine how it intends to be perceived by society with respect to competitors. The company board and external contacts have concluded that the pivotal considerations for the app in comparison to competitors are; the app target market size (number of taxi firms/cities listed on the app), features of the app, and convenience of app use. 18 MyTaxiBooker Hailo Click A Taxi GetTaxi
- 78. features/specifications Limited features Extensive Widespread Niche Market target market MyTaxiBooker contains the most features/specifications amongst all competitors and focuses on a niche market (York and Leeds). The company focuses on efficiency; customer reviews on app
- 79. websites indicate that the more widespread the target market, the less efficient the app. 19 MyTaxiBooker Hailo Click A Taxi GetTaxi Uber Unibus/ Clubbers bus Kabbee
- 80. User Convenience
- 81. Inconvenient for user Niche Market Widespread target market (Adapted from Loudon et al., 2005) This second perceptual map, maps the convenience against the target market, MyTaxiBooker appears to be moderately convenient against competitors, with Unibus, Hailo, and Click A Taxi providing a quicker booking process (one or two clicks faster). However, MyTaxiBooker believe that this is a reasonable sacrifice for the presence of a much greater list of features/specifications in comparison to other competitors. 2.2.6 Suppliers MyTaxiBooker’s suppliers are limited since operations do not involve an outflow of material goods. However, the app and website developer, lawyers, accountants, office providers and those that assist the business operations may be considered suppliers. 20
- 83. 2.2.7 SWOT Analysis SWOT will enable the analysis of the company’s internal strengths and weaknesses and the external opportunities and threats that may affect the organisation. It enables an understanding of factors that are favourable and unfavourable in the pursuit of business objectives in order that business strategy can be formulated accordingly (Hill & Westbrook, 1997). To ensure consistent effectiveness, it will be reviewed twice a year through collaboration of business stakeholders. Model Weaknesses SWOT analysis has been criticised by Menon et al. (1999) for listing factors
- 84. uncritically without prioritisation. It has been further suggested that rarely companies use the framework effectively to generate strategies (Hill & Westbrook, 1997). Our Approach MyTaxiBooker has overcome this criticism through analysis of the significance of each factor which has in turn been listed by importance. The company will utilise SWOT to generate strategies through matching and converting. Matching is used to determine competitive abilities through pairing strengths with opportunities. Conversion will
- 85. allow the company to convert threats or opportunities into strengths or weaknesses. An example of a conversion may be to avoid the threat of a new entrant by entering a new market. The threats or weaknesses that cannot be converted will be minimised (Mehta, 2000). Plans will be created to address the SWOT results and compared to later SWOT analyses. If improvements have not been addressed as a result of plans, this is an indicator to the business that strategy must be revised. The process will be undertaken alongside other frameworks analysed for a cohesive view of business/environmental factors. 21
- 87. Strengths Weaknesses Characteristics that provide an advantage over other businesses Characteristics placing MyTaxiBooker at a disadvantage relative to research
- 88. annual income -up capital required and low running costs -up capital) website development to favourably rated developers. The application is easy to access and feedback may be submitted. this will be maintained (see section 6.4 Strategies to Maintain Staff Morale). ple to access app with a combination of features that are not currently offered in the market. This has been verified as the optimum range of features through market research consumers (taxi miles)
- 89. their bag, phone, wallet they can contact the driver and retrieve their possessions uated in appropriate regions other businesses -up order to raise the company profile difficult to determine who is best for the job; this is vital as the initial success of the business may be dependent on the quality of the managing director employed seasonality; this will depend on the popularity of the app amongst locals
- 90. relevant information (such as taxi discounts) which will contribute to the functionality of the app become ‘out-fashioned’. It is therefore important that the company managing director monitors trends in order that the business can adapt to the market 22
- 92. Opportunities Threats Elements that could be exploited to provide an advantage Environmental elements that could negatively impact expansion into other regions, enabling the gain of a greater customer base and the ability to gain operating efficiencies, ultimately leading to greater profits improves of the features that customers claim to be missing from current London offerings - A high standard customer service may result in customers raising awareness of the app amongst peers. Word of mouth
- 93. may improve the company reputation f taxi firms in York and Leeds (second largest student city) enough, the company could sponsor university events such as sporting events, to further raise awareness amongst the target market places to eat in the region of their destination MyTaxiBooker online database app market is growing, especially for transportation and utility apps, the company may face increasing competition; this could reduce profits, the company’s market share and differentiation strategies that originally were a source of
- 94. market success (Threats of such nature will be determined quickly due to increased market knowledge that will develop overtime due to industry familiarity) people to use alternative forms of transport. Decreased revenues may result in taxi firms reviewing the percentage of their revenues that they allow MyTaxiBooker to consume may inhibit customers from using our application dverse economic conditions may affect the ability of the public to frequently utilise such premium methods of transport 23
- 97. 2.2.8 Product Properties Digital resources are becoming increasingly common as replacements for traditional face-to-face
- 98. marketing. In 2013, 73% of adults regularly used the internet and 72% regularly made online purchases (ONS, 2013). As a result, app and website based businesses often evaluate the likelihood of successful market penetration based on the unique set of product properties which determine the usage and enhance the customer experience. Profit and growth are stimulated by customer loyalty which is a direct result of customer satisfaction (Heskett et al, 1994). Properties Definition Application Marketing Implications The visual experience Bright colours that Determines the suit the purpose of the effectiveness of Vividness product information processing Interaction/ Responsiveness Intuitive Information Transfer
- 99. The speed and efficiency of information exchange between user parties Ease of use for those the app is targeted at The process by which information travels from one user to another The app involves interaction between taxi firms/drivers and taxi users. The speed of engagement will be managed through internal and external controls
- 100. The app allows users to follow the built in booking process buttons GPS and a shared information platform Positive interaction speed levels effect the likelihood of continued app usage Ease of use encourages returning customers and continued long-term usage The user becomes an active participant in the process with the
- 101. ability to self- control the booking process at their fingertips 24
- 102. 3.0 Marketing Plan 3.1 Target Market Our initial target market will be students in York and Leeds, the majority of which will be aged 16-24 and who use a taxi at least once a week. Students are generally concentrated around a small geographical radius surrounding university or college campuses which eases the targeting process. The app is not student exclusive, and it will be the responsibility of the distributors to circulate flyers to local residents in the city centres. The social media aspect of the business will also be pivotal to the company’s marketing strategy in spreading awareness. Travel apps are used on average 2.6 times per week (Khalaf, 2014), emphasising the demand for such a product.
- 103. 3.2 Brand Elements Brand awareness is of critical importance since customers will not consider a brand unless they are aware of it (Tan, 2010). The nature of the company is such that it will focus on developing Aided Awareness (Laurent et al., 1995) as the most appropriate form of brand awareness which occurs when a consumer can express familiarity with the brand when they see it or hear it. One of the key benefits of the app is reliability, in contrast to the long waiting times and no-show taxis that are currently frequent. Features that enable tracking and checking driver details emphasise the safety element of the app. The branding will be presented on all marketing material to develop and sustain brand awareness. Taxi drivers will further the spreading of brand awareness through verbal advertisement of the app with customers. It is expected that growth of the customer base will in turn develop a strong business reputation. 25
- 105. Name Logo and colours The company name, MyTaxiBooker, was chosen on the premise that it is simple, and explains exactly what the product does. The ‘my’ introduces a personal aspect to the app with connotations of an app designed to serve and meet the needs of each user. The logo is simple which emphasises the simplicity of the apps functionality. The branding of the App was designed to be clean, bright and as user-friendly as possible. The following branding colours were used since they best convey the emotions and characteristics we hope customers to associate the business with: Yellow – happiness and optimism Orange - physical comfort and social interaction
- 106. 3.3 Product Strategy The company’s main aim is to offer taxi users an easily accessible and convenient system to access local taxi information whilst providing a platform for taxi companies to compete through offering journey deals and ensuring heightened efficiency. The product strategy involves providing a common ground between taxi drivers and taxi users through a single platform. The strategy involves offering the app for free in order to attract maximum downloads. The ability to book using the app via credit card is also a distinct product feature. Unknown waiting times and taxi destination are dealt with. 3.4 Advertising Strategy Distributors will be employed at specific times throughout each year (please see the financial plan for more details) to distribute flyers and posters within York and Leeds educational campuses and the city centres. Their employment will match the seasonal nature of university and college timings. The managing director will be responsible for seeking promotional
- 107. opportunities within the universities that the company can take advantage of. As well as taking advantage of the university student union support during fresher’s week, posters and t-shirts with 26
- 108. the company logo/information on have been budgeted for. The main strategy is to ensure maximum downloads of the app in order to encourage it as their primary means for booking a taxi. Word of mouth and assistance from sports societies will also assist this as well as the aid of social networking sites Twitter and Facebook which have already developed a following. 3.5 Marketing Strategy/Marketing Mix The marketing mix is a form of analysis utilised by marketing managers in order to determine the elements required to implement the marketing plan and satisfy the target market (Rafiq and Ahmed, 1995). Traditionally, tangible products used a 4P’s
- 109. model suggested by McCarthy in 1960 (Needham, 1996) which were product, place, price and promotion, nowadays, the 7P’s is used more often by service sectors adding people, process and physical evidence to the original model (Ivy, 2008). It enables a more detailed and broader perspective of MyTaxiBooker’s operations within its service based market. The 7P’s model has developed over time to include more variables, it is therefore likely that the model is potentially incomplete and that further variables will be introduced into theory. The business will ensure these are considered in practice. This marketing mix is relevant to the company’s start up marketing plan and will therefore need to be revised at least once a year in order that it meets changes in marketing strategy. The company will adopt a differentiated strategy to targeting (Jobber, 2013); targeting individuals and taxi firms with dissimilar promotional messages that convey benefits that suit their distinct needs (refer to section 1.2 Nature of Demand). The targeting approaches can be
- 110. understood in greater detail through analysis of the marketing mix. A long term differentiated advantage will constitute the firms competitive advantage. 27
- 112. PRODUCT A successful business will provide product/services that carry sufficient demand from customers (CIM, 2009). - An app, MyTaxiBooker - A website – Customers can view the latest offers from different companies on this website, as well as MyTaxiBookers’s company details and privacy policy. - The app image is a yellow taxi with the name MyTaxiBooker superimposed on the image which simply elucidates the apps function and is in line with the simplicity of the business concept; it also permits an easily distinguishable app. - The quality of the product is guaranteed by both internal and external control. Internal control is managed by the managing director who will review customer feedback on a weekly basis. The external control is supported by Awesum, the company designing and updating our product. According to our market research, a taxi booking app is demanded by 85% of students.
- 113. PLACE ‘Place’ defines the regions and methods by which the business operates in and by (CIM, 2009). - MyTaxiBooker utilises the internet, also understood as a direct distribution channel. - Customers download the app in the relevant app store and can check the latest information regarding service updates on the website. - Another consideration is the location to which the services will relate. The business initially intends to focus on York and Leeds for the first three years. These cities were chosen for two reasons; they are in close proximity to the business founders which enables the high levels of involvement regarding operations and strategy that are often required during start-up. Secondly, familiarity with these regions and the availability of personal connections amongst the directors will result in an easier start-up process (greater likelihood of effective advertising and word of mouth success, directors
- 114. know what works and what does not in these regions). - These regions are also experiencing an increase in student populations, resulting in an increased consumer base. - The only potential competitors are located in London, however the consumer base in York and provides a large enough base to break even in three years. - Future expansion to other cities is a longer term strategy, imposing the need for an increase in managing directors that will manage operations from premises in different regions. 28
- 116. PRICE Price setting is an essential step that needs to be considered carefully; it does not only affect the revenue gained, but also the competitiveness of our product (Ivy, 2008). - Price setting in the conventional sense does not apply to MyTaxiBooker since the direct revenue does not stream from the customers who book taxis but taxi companies through block fees and commission from each journey - The app is free to purchase which can intensify product attractiveness. - We provide two scenarios which are 3%, and 5% commission from taxi companies; 3% being the worst case scenario and 5% the most realistic
- 117. scenario and both enable the company to break even in the first three years of operations. According to the responses from questionnaires, 5% is the average percentage taxi firms are willing to pay. - Block fees form another revenue stream, since £50 per month for each firm is a small proportion of their overall profits; all respondents have agreed to pay this sum. Block fees provide cash flow to ensure cost coverage during university holidays when revenue from commission is low due to low app usage. PROMOTION Promotion encompasses all tools that a business can use to enhance its recognition by customers; it includes advertising, sales management, special offers and exhibitions (Ivy, 2008). - The company’s main promotion strategies are self-advertising, an app trial period, meetings with local taxi firms to gain support, university and society support,
- 118. attendance at freshers events, an article in student newspapers, promotion through word of mouth and weekly updates of taxi offers on the website and social networking sites which are effective and free to use to the company’s advantage. - Posters are to be displayed on halls of residence notice boards and the distributors will be responsible for this. A large scale advertising campaign will be held in October every year to target the fresher population. - The trial of the app in order to test quality and functionality will last two months in the summer of 2014. International, postgraduate, and local students will be individually targeted to test the app. The trial will also produce a small return on customers through word of mouth recommendations. - Current YUSU president Kallum Taylor has also given his support, alongside various society social secretaries who would be willing to publicise the app and encourage usage on social events (see appendix 3.0). 29
- 120. PEOPLE The services provided by employees can directly influence the customers’ impression of a business (CIM, 2009). - The three main business connections that will contact consumers directly are the director, distributors and taxi drivers. However, the staffing
- 121. structure hierarchy outlines other business stakeholders (see section 6.1 Board of Directors). A good staffing structure will warrant unobstructed expansion to other regions. - The director and distributors are employed by the business directly. Part of the director’s responsibility is to review customer feedback and implement app revisions if necessary. - Distributors will hand out company leaflets to potential consumers in the city centre and on campuses. Training will be provided (see section 6.3 Training) regarding appropriate behaviour and dealing with customer FAQs. A friendly service attitude is necessary for an enhanced business image. However, the behaviour of distributors is difficult to monitor. - Company and taxi firm relationship management will be a key long term focus. PROCESS ‘Process’ comprises conditions necessary to optimise customer satisfaction; service waiting times, availability of information to customers and the helpfulness of staff (Ivy,
- 122. 2008). - For MyTaxiBooker, the waiting time of ordering a taxi is provided by each company and customers can track the precise location of the taxi whilst they are waiting, this avoids uncertainty surrounding times. - Customer satisfaction will be maximised through implementation of customer suggestions. PHYSICAL EVIDENCE A service cannot be experienced before it delivers therefore purchase may be carry risk of dissatisfaction (CIM, 2009). - The nature of the app is such that the company must aim to persuade customers through an app notification to submit positive feedback and certify whether the app is convenient and useful which will promote further downloads. - Word of mouth recommendations citing a beneficial experience from the app are a convincing way to persuade further downloads rather than simply business self- promotion. 30
- 124. ’ 3.6 Market Growth The estimated growth rates for the app during the first three years will result in a 3% increase in number of taxi journeys booked relative to the respective month in the prior year, equating to an increase of almost 50,000 journeys per year. By 2018, 54% of mobile devices will be “smart”, an expected increase of 21% from 2013 (Cisco, 2014). Specifically, demand for the travel apps market is expected to continue to rise following the increase by 149% in 2013 (Khalaf, 2014). Consequently, there is scope for significant growth in the app market which MyTaxiBooker will aim to take advantage of by expansion into Newcastle and Manchester as the secondary target.
- 125. The focus will be cities with a high student population. When region targets are satisfied and the company can see established demand and brand awareness, further cities will be targeted in order to increase advertising revenues. A gradual process is necessary and regular feedback implementation should improve overall customer satisfaction and encourage user growth. To maintain market share in the first two years (Currently this is 100%, therefore the aim is to deter new entrants whilst brand awareness is heightened). Become the UK s largest student taxi app within the next 5 years. To be present in 7 UK cities by 2020 Specific Marketing Objectives 31
- 127. 4.1 Information Systems and Information Technology The app and the website rely on the use of information technology. Both will be designed, created and maintained (updates or changes to the app and/or the website, as a result of customer feedback or fault) by a specialist, Awesum Company. Basic Microsoft Office tools will be required to produce general company daily/weekly reports Outlook will also be essential for communicating with the App/Web creator, customers and other arising parties. The system is guaranteed reliable due to internal and external control measures. Internal control is managed by the managing director through feedback review/fault submissions. Technology support from the designer provides the external control. The system will be the primary means for recording sales figures and GPS may be used to track the parameters of each journey. This enables determination of commission owed to the company through distance tracking should a customer choose to pay by cash. Due to heavy reliance upon IT, the business has ensured cyber
- 128. security measures with Awesum to ensure all data is backed up and no risk is presented to other businesses that choose to trade with us. In the event of proposed expansion, the system may need to be reviewed to account for this. 4.2 External Accountancy The director will work alongside an external accountant from The Accountancy Partnership. Since revenue can be automatically calculated through the IT system, a book keeping service is not required. Furthermore, due to the simplicity of the business finances, external accountants have suggested they be hired and paid based per hour. Accountant duties include payroll through the BACS transfer method and the completion of an annual p35 tax return. Please see appendix 15.8 for a full list of duties. To avoid confusion and inconsistency with accounts over the long- term, the accountants will remain unchanged for the foreseeable future. However, external accountants may take significant time to understand the company resulting in longer hours
- 130. 4.3 Quality Assurance and Control In order to ensure service quality, quality awareness is built into app production systems. The app will undergo a beta testing period The company understand that first impressions matter and negative impressions have the potential to damage the brand. Therefore, a two month trial for customers in July and August 2014 will take place and their feedback will enable adjustment of the product in September
- 131. before it enters the market in October. The app will be provided to students who remain at university during the summer period, notably postgraduate and PhD students, York-based placement students and students visiting for summer foundation courses. Subsequently, customers can feedback every time after they book a taxi through our app. Problem Taxi company service App functionality This beyond the control of MyTaxiBooker, however, the company may negotiate with firms to improve the service quality and heighten their awareness of customer perceptions Awesum will be contacted for
- 132. updates and existing app users will be notified on the app when a newer version is available for download. 4.4 Premises Our business is located within close proximity to York railway station and the local bus station. The premises will be rented for three years (although there are no long term contractual obligations present), after which company expansion may suggest relocation. 33
- 134. The rent includes all necessary facilities including a telephone system and -Fi broadband. A limitation of the location may be that business operations exist in York and Leeds yet the office is in one location, however, the travel time between two cities is such that the manager may easily travel via the closely situated transport links. 4.5 Advertising Locations Who? Rationale Term Time - - - Students and locals will be targeted within York and Leeds (students being the main target market). Advertising campaigns
- 135. will take place during term time Local targeted advertising after the initial three year set up period. Key selling points are in the York and Leeds city centres and distribution of leaflets within the University of York, York St John, York College, Leeds University and Leeds Metropolitan University. These locations have been chosen based on popular demand from market research. The geographical closeness to the business investors ensures that they can maintain input and easy access where necessary during early years. Further, Leeds possesses one of the largest UK student populations whilst
- 136. York holds a rapidly growing student population. Positioning will be chosen strategically in city areas with a large number of by passers. Distributors will be required to use their initiative and develop advertising skills. The business is easy to relocate and can therefore meet demand. Low season - - - - When the majority of students return home, it is expected that there will be a significant decrease in app usage. Loss will be partially compensated for the remaining PhD, masters and international students.
- 137. Any locals using the app will continue to provide revenue. Concentration on low season revenues will occur after the three year start-up period. For a breakdown of distributor numbers, please see the financials. 34
- 138. 4.6 Clients The potential is high for taxi companies besides those already in agreement with the initiative to become involved. This is because those that refuse involvement are posed the threat of losing potential customers to their competitors who have contract with our company. 4.7 Equipment Electrical Distributor Clothing Tangible assets include the laptop and mobile phone used by the managing director which will be necessary for stakeholder communication and daily
- 139. business management. The laptop depreciates each year however, for the first three years the likelihood of needing to purchase new equipment is minimal. Distributors must wear the following when undertaking business duties on campuses or in the city centres. Wearing a T-shirt with the business logo can enhance recognition to customers. The design appears professional whilst maintaining the convenience spirit of the business. 35
- 140. 4.8 Insurance Our business employs one full-time managing director and several part-time distributors. Every business that employs one or more employees must purchase employers’ liability insurance; this protects the business in the event of injured or ill workers. The company will also purchase business equipment insurance to protect our assets such as laptop.
- 141. 36
- 142. 5.0 Legal and Industry Requirements Although legal considerations are limited due to the nature of the business, it is vital that these are deliberated. 5.1 App considerations Data Encryption To ensure data protection, the app code will be encrypted by the app creator since the hardware for most smartphones is not already encrypted. Disclosure The app will disclose all potential monetary charges from in-app options. End User Privacy 1. The app will disclose to the user any information that will be
- 143. collected from the app, both intentionally and unintentionally. 2. No personal data including name, contact details or other personally identifiable information will be shared with any parties including taxi firms apart from the taxi driver involved in collection. There will be a necessary business purpose for any data collected and the data will be used only for the purposes for which the information was provided (in order to book a taxi). Intellectual Property 1. On the development and distribution of the app, it is important to address the protection of the company’s own rights and minimise the risk of infringing upon the rights of other companies. 2. The app and its code will qualify for copyright protection and authorship rights. Copyright will come into existence when the work is created and
- 144. stable in tangible form. This copyright will be registered. The company will enter into work-made-for-hire and IP rights assignment agreements with third-party app developers to ensure that rights are held with MyTaxiBooker Ltd. To minimise the risk of infringing or misappropriating third-party copyrights, the app will be created using an original developer code. 3. The apps name and logos/design elements will be trademarked. To reduce risk of trademark infringement, a trademark search will be undertaken through the intellectual property office. 4. At the beginning of and throughout app creation, MyTaxiBooker Ltd will ensure that it clearly defines and protects IP rights on any services provided to the public. 37
- 146. 5. The developers will also ensure and offer advice regarding compliance with app advertising laws. 1. The app stores that the company will list with will contain various non-Distribution negotiable agreements that vary in complexity. These will be reviewed before acceptance to ensure no unpremeditated consequences. Agreement 2. Any agreements between the third-party developer and the stores will also be reviewed for compliance purposes. Failure to address the issues above may cause inquiry by customers and potential competitors; therefore it is vital to understand potential legal concerns and actions that must be taken before operations. Best practice is advisable for this form of business since the legal boundaries regarding technology and apps are still to be solidified (Radley, 2012).
- 147. 5.2 Employment Considerations In order to ensure that the company remains within its legal boundaries and to mitigate risk of legal complications regarding employment, the company will consider the following; More specific employment considerations include the following: 38
- 149. 1. Advertising Stage The company must take caution to avoid discrimination on the grounds of age, sex or race and ensure that its keeps in mind the workers’ rights (Government, 2013.) 2. Interview Stage The company must avoid personal biases, ensure provision of realistic information to the best of the interviewer’s knowledge and not to create any verbal agreements/promises that have potential to be unfulfilled and constitute legally binding. 3. Right to employment The company must request the relevant documents to ensure that the individual has the legal right to work in the UK. The appropriate criminal records checks should be performed to ensure that individuals are suitable to undertake
- 150. and represent the company’s activities. 4. Statement of employment Written statements of employment will be produced within 2 months of employment for all employees and detail; salary, hours of work, holiday entitlement, sick policies and disciplinary and grievance procedures. This is to ensure no issues arise with employment tribunals for misconduct. 5. Tax Responsibilities The company will adhere to all taxation requirements including; ensuring due PAYE and National Insurance contributions are made by employees and that any student loan repayments are made if required by the managing director. 39
- 151. 6.0 Human Resource Strategy 6.1 Board of Directors and Workforce The board of directors will constitute the six primary investors/founders of the company. Total initial investment will sum £70,000, one investor contributing £20,000 and the other five, £10,000. The investors will not be involved in such activities due to other full time commitments. The board will hire a managing director in order
- 152. to manage daily business activities in return for a remuneration package. The business workforce is limited due to the predominantly self-regulating nature of an app. After year three, when expansion into Newcastle and Manchester is considered, it will be the responsibility of the director to hire further marketing material distributors and a further managing director for the two cities. Company structure and roles will be established as follows: 40
- 153. The Managing
- 154. Director The Distributors 1. The day-to-day operations of the business within York and Leeds 2. Maintaining contact with potential customers (taxi firms) 3. Identifying and solving problems within the company and monitoring the app/website system 4. Monitoring the overall performance of the company Some of these tasks may require him/her to travel within these two cities which we have considered by allowing a travelling expense budget. The director is also responsible for maintaining healthy stakeholder relationships. 1. Distributing flyers and posters in university campuses, bus stops and town centres. Potential distributors are mainly university students who want some part-time jobs. 2. In October in each of the three years, 20 distributors will be employed (10
- 155. York, 10 Leeds) and will each work 10 hours per week. This is due to the fresher’s week which provides heightened opportunity to gain customers, thus, a high level of advertising is required. 3. In November until February and the month of May, 6 distributors will be employed (3 York, 3 Leeds) and each will work 15 hours a month. High employment is necessary in October when the academic year starts in order to advertise to freshers. Lower employment is required in the following months in order to simply ensure maintenance of marketing material presence in our target regions. Distributors have not been employed during holiday months in order to reflect the seasonality of student presence. Using simple cost-benefit analysis, arguably the most comprehensive form of economic evaluation, suggests that maintaining advertising during these months is likely to result in a cost that
- 156. outweighs the potential benefits due an accepted and financially sustainable lower level of app usage during holiday periods and the company therefore considers this to be unnecessary (Robinson, 1993). 41
- 157. 6.2 Recruitment Distributors - Recruitment will occur through academic institutions in York and Leeds. - Advertisements will be positioned on campuses in areas with regular student transitions and details of the recruitment process will be included on the website on which applicants will be prompted to submit their applications. - Interviews conducted by the board of directors will follow, taking place at the rented office premises.
- 158. Managing Director - The managing director position will be advertised on employment websites and at university leavers in York and Leeds through the careers service. - The managing director will face a first stage interview from two members of the board, and if successful, a final stage interview will follow conducted by all board members to ensure agreement with the individual to be chosen for company representation. 6.3 Training Training will be required in order to ensure that employees hold brand awareness and an understanding of the company’s intended image and logistics of their role. Training will take place over one working day involving relevant themes including ‘how to maintain suitable advertising conduct’. The managing director will require separate training, lasting 3 days in order to ensure all company objectives, processes and activities are instilled, understood and
- 159. undertaken in a manner considered appropriate by the board. All training will be undertaken by the board members (the company owners); the only individuals to understand the nature of the company in its complexity and entirety. 42
- 160. 6.4 Strategies to Maintain Staff Morale According to Heskett et al (1994), ‘the Service Profit Chain’ suggests that company value is created by satisfied, loyal and product employees. Distributors - Regarding distributors, due to the simplicity and non-time- consuming nature of their role, and the seasonal aspect, the company will not be conducting appraisals. Managing Director - In order to motivate the managing director, a 3% pay rise will be awarded given that certain minimum standards are met that the board deems appropriate. This will be assessed through an annual
- 161. appraisal by confirmed members of the board. After three years when the company has established itself, the managing director will undergo an appraisal after which there is the potential for a substantial pay rise at the board’s discretion. The aim is to drive performance. Personnel Credentials Due to the innovative nature of the business, strong prior experience is not required amongst personnel and relevant skills are to be gained progressively and on training. However, advisors such as lawyers and accountants will have the specific expertise necessary to assist the business. Prior sales and marketing skills are beneficial for the managing director, though these are not vital. All employees will be required to possess strong communication and commitment skills. 43
- 162. 7.0 Financial Proposal Below is a summary of key financial projections. For revenue stream information, detailed
- 163. assumptions and statements please see appendix 14.0 and 16.0 respectively. 7.1 Projected Profit/Loss Summary In summary, MyTaxiBooker predict the following profits: 5% Commission (actual) 2014 2015 2016 3% Commission (worst case) 2014 2015 2016 £56,421 £88,797 £106,039 £6,320 £32,825 £42,881 7.2 Projected Cash Flow Summary The company is able to maintain a healthy positive cash flow during the three years. 5% Commission (actual) 2014 2015 2016 3% Commission (worst case) 2014 2015 2016 £126,503 £215,382 £321,502 £76,402 £109,309 £152,272 7.3 Balance Sheet Summary
- 164. In the first year, a laptop is to be purchased for the managing director’s use. The net book value of the asset is visible on the statement of financial positions. No long term liabilities exist since the company does not borrow funds. The liabilities present are creditors payable within a year: 44
- 165. 5% Commission (actual) 2014 2015 2016 3% Commission (worst case) 2014 2015 2016 Net Assets= Share Capital +Reserves £126,421 £215,218 £321,256 £76,320 £109,145 £152,026 7.4 Break-even Analysis The Table below indicates the predicted months in which MyTaxiBooker will breakeven along with the margin of safety percentage for both the 5% actual scenario and the 3% worst case scenario. 5% Commission (actual)
- 166. 3% Commission (worst case) Break Even Between October and November 2014 Between December 2013 January 2014 Predicted Journeys 81,000 148,500 Break Even Journeys 68,611 145,777 Margin of Safety 12,389 (15.29%) 2,723 (1.83%) 7.5 Key Performance Indicators The following table summarises key financial ratios that enable a summary assessment of the company’s forecasted performance for the first three years of operations. There is no gearing since the company does not finance operations through debt. The current ratio is consistently 1 as the company’s total assets equate to its total liabilities. 45