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Biz Plan Smart Solution
1. 2008
Traffic Control Plan
SMART SOLUTION
Nguyen thi Bao Quynh
Nguyen Phuoc Bao Dung
Nguyen The Vinh
1/25/2008
2. Smart Solution – Business Plan
1. EXECUTIVE SUMMARY...................................................................................... 6
1.1 DESCRIPTION OF SS PLAN ....................................................................................... 6
1.2 BENEFITS OF SS PLAN TO THE MARKET ......................................................................... 6
1.3 COMPETITIVE STRENGTHS: ....................................................................................... 6
1.4 OVERALL ENTRY STRATEGY ....................................................................................... 6
1.5 GROWTH STRATEGY ............................................................................................... 7
1.6 FINANCIAL SUMMARY – AND START-UP NEEDS ................................................................. 7
1.7 START-UP CAPITALS:.............................................................................................. 7
2. INTRODUCTION & BACKGROUND..................................................................... 7
2.1 HISTORY OF TRAFFIC CONTROL PLAN: .......................................................................... 7
2.2 BACKGROUND RELATED TO THE PERFORMANCE: ............................................................... 8
2.3 INTRODUCTION OF OUR SMART SOLUTION SYSTEM ....................................................... 8
2.3.1 Equipments: ................................................................................................ 8
2.3.2 Process and transfer information to requester:............................................... 10
2.3.3 Software: .................................................................................................. 11
2.3.4 Infrastructure: ........................................................................................... 11
3. EXTERNAL ENVIRONMENT ............................................................................. 11
3.1 TECHNOLOGICAL:................................................................................................ 11
3.2 ECONOMIC ........................................................................................................ 11
3.2.1 The growth of Vietnam economy has leaded to the growth of traffic modes: ...... 11
3.2.2 Affection of traffic jam to the city economy.................................................... 12
3.2.3 Economic solution of HCM City to settle traffic jam problem: ........................... 12
3.3 MARKET (DEMOGRAPHIC, PSYCHOGRAPHIC) ................................................................. 12
3.4 POLITICAL ........................................................................................................ 14
3.5 LEGAL ............................................................................................................. 14
3.6 ECOLOGICAL...................................................................................................... 14
3.7 SOCIO / CULTURAL .............................................................................................. 15
4. INDUSTRY ANALYSIS ..................................................................................... 17
4.1 PORTER‘S FIVE FORCES......................................................................................... 17
4.1.1 Entry barrier: ............................................................................................ 17
4.1.2 Intensity of rivalry: .................................................................................... 17
4.1.3 Substitutes:............................................................................................... 17
4.1.4 Bargaining power of suppliers: ..................................................................... 17
4.1.5 Bargaining power of buyers: ........................................................................ 18
4.2 CONCLUSION FROM ENVIRONMENTAL ANALYSIS ............................................................. 18
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3. Smart Solution – Business Plan
5. CRITICAL SUCCESS FACTORS ......................................................................... 18
5.1 EXCLUSIVE BOT AGREEMENT WITH HO CHI MINH CITY PEOPLE COMMITTEE ........................... 18
5.2 FINDINGS & TECHNOLOGY SUPPORTS BY STRATEGIC SHARE-HOLDERS ................................... 18
5.3 LOCATION FOR CONSTRUCTION OF CONTROL CENTER ....................................................... 18
5.4 STRONG MANAGEMENT TEAM ................................................................................... 18
6. ORGANIZATION CAPABILITIES ANALYSIS..................................................... 18
6.1 KEY RESOURCES AND CAPABILITIES ARE: .................................................................... 18
6.1.1 Key resource: ............................................................................................ 18
6.1.2 Capabilities: .............................................................................................. 18
6.1.3 Major weakness: ........................................................................................ 19
6.1.4 Business level strategy: .............................................................................. 19
7. SWOT ANALYSIS ............................................................................................ 19
7.1 STRENGTHS ...................................................................................................... 19
7.2 WEAKNESS ....................................................................................................... 19
7.3 OPPORTUNITIES: ................................................................................................ 19
7.4 THREATS:......................................................................................................... 20
8. PROPOSED BUSINESS & FUNCTIONAL / OPERATIONAL STRATEGIES ............ 20
8.1 MISSION & VISION .......................................................................................... 20
8.2 PURPOSE OF THIS BUSINESS: .................................................................................. 20
8.2.1 Mission ..................................................................................................... 20
8.2.2 Vision ....................................................................................................... 20
8.3 DETAILS SUPPORTING FUNCTIONAL / OPERATIONAL STRATEGIES......................... 21
8.3.1 Business & functional strategy ..................................................................... 21
8.3.2 Market research and analysis ....................................................................... 21
8.3.3 Market size & trends ................................................................................... 25
8.3.4 Competitors & competitive position: ............................................................. 27
8.3.5 Market share: ............................................................................................ 28
8.3.6 Ongoing market assessment: ...................................................................... 28
8.4 MARKETING PLAN................................................................................................ 28
8.4.1 Overall marketing strategy .......................................................................... 28
8.4.2 Pricing ...................................................................................................... 28
8.4.3 Sales tactics: ............................................................................................. 28
8.4.4 Guarantees & warranties:............................................................................ 28
8.4.5 Advertising & promotion : ........................................................................... 28
8.4.6 Logistics: not applicable .............................................................................. 29
8.5 PRODUCT & OPERATION ........................................................................................ 29
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4. Smart Solution – Business Plan
8.5.1 Value proposition: unique selling proposition ................................................. 29
8.5.2 Product development: differentiation, emphasizing brand for future market
expansion ........................................................................................................... 29
8.5.3 Product enhancement plans: ....................................................................... 29
8.5.4 Location & facilities: ................................................................................... 29
8.5.5 Proprietary issues – license, IP: priority license for advertisement on LED panels
at cross-roads ...................................................................................................... 29
8.5.6 Regulatory &legal issues: exclusive BOT agreement for traffic information to
assure project life-time ......................................................................................... 29
8.5.7 Training & development .............................................................................. 29
8.6 FINANCE MODEL & PLAN ........................................................................................ 29
8.6.1 Assumptions: market size, growth................................................................ 29
TABLE 2: REVENUE ASSUMPTION .......................................................................... 31
TABLE 4: BALANCE SHEET ..................................................................................... 39
TABLE 5: STATEMENT OF CASHFLOWS................................................................... 41
TABLE 6: CAPITAL EXPENDITURE .......................................................................... 44
TABLE 7: DEPRECIATION & AMORTIZATION CHARGE............................................ 45
TABLE 8: ENTERPRISE FREE CASH FLOW ............................................................... 45
TABLE 9: TERMINAL VALUE CALCULATION ............................................................ 47
TABLE 10: INTERNAL RATE OF RETURN ................................................................. 48
8.7 HUMAN RESOURCES ............................................................................................. 52
8.7.1 Organization & ownership............................................................................ 52
8.7.2 Key managers: .......................................................................................... 53
8.7.3 Remuneration for management team ............................................................ 54
8.7.4 Employees and stock options ....................................................................... 54
8.8 BOARD OF DIRECTORS .......................................................................................... 54
8.9 SHARE-HOLDERS ................................................................................................ 54
8.10 OTHER KEY CONTRACTORS:.................................................................................. 55
9. ACTION PLANS .............................................................................................. 55
9.1 TIME-TABLE FOR THE DEVELOPMENT (KEY ACTION STEPS AND DECISION POINTS, KEY FACTORS
REQUIRED AT EACH STEP) .............................................................................................. 55
9.2 FUNDING PROPOSALS (DESIRED FINANCING, CAPITALS REQUIREMENTS, USE OF FUNDS AND INVESTOR
RETURNS) ................................................................................................................ 56
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5. Smart Solution – Business Plan
TOTAL USD 7,808,963 MILLIONS, IN WHICH OUR OWN CAPITALS MUST BE 30% OF
INVESTMENT CAPITALS (IT MEANS $2,342,689), THIS WILL BE PREPARED AS
FOLLOWS : ............................................................................................................ 56
9.3 EXIT STRATEGY .................................................................................................. 56
9.4 IMPLEMENTING THE APPROACH ................................................................................. 57
9.4.1 Resource requirements and time table .......................................................... 57
9.4.2 Review mechanism ..................................................................................... 57
9.4.3 Change management process ...................................................................... 57
9.4.4 Action plan ................................................................................................ 58
10. STRATEGIC CONTROL: THE BALANCED SCORE CARD...................................... 58
11. QUANTIFIED PLANS ....................................................................................... 58
11.1 DETAILED OPERATIONAL & FINANCIAL PLANS FOR 12 MONTHS ......................................... 59
11.2 GENERAL OPERATIONAL & FINANCIAL PLANS FOR 12 – 48 MONTHS TIME PERIOD ................... 67
12. CONCLUSION ................................................................................................. 73
13. APPENDIX ...................................................................................................... 73
14. SOURCE OF INFORMATION ............................................................................ 73
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6. Smart Solution – Business Plan
1. EXECUTIVE SUMMARY
1.1 Description of SS plan
- At moment, traffic jam has become serious problem for Ho Chi Minh City Governors
and nightmare for Ho Chi Minh City citizens. People Committee of HCM City has
organized many meetings to find out solutions for this matter; however most of
solutions are long-tem planning only. Short-term planning such as: collecting
operation fees from automobiles or charging high fees for using automobiles in peak
time… are facing strong opposes from citizens.
- Our planning is to propose a solution which can be put into implementation in short
period without being opposed. The plan is to set up traffic control system to give
traffic information to HCMC citizens about routine situation and to suggest them the
most appropriate routine to move on. The information about traffic situation will be
recorded by camera installed at each cross-road and transferred to control center. IT
center will process this information to provide suggestions to require. The revenue
from this service will be mainly from information-providing charges and
advertisements at LED panels installed in the same camera poles.
1.2 Benefits of SS plan to the market
- Government need not use city budget to invest. Government can reserve budgets for
other plans for road building & expansion, metro & train system…
- formality for private investment is simpler than city budget investment, project can
be realized sooner
- HCM citizens can have 2 choices of receiving information about traffic :
o Active choice: before starting to go, they can spend small changes to
exchange options for routines to save time, save power and save cost of
gasoline… Even though in case there is no way to move, they can utilize their
times for useful works than spending time waiting on the streets!
o Positive choice : for poor people for whom even small changes are worth, they
can get information from LED panel on streets to inform which directions
ahead they can choose to avoid traffic jams.
This project can help to minimize the number of people who jams into 1 point at the
same time, therefore it can help to release the jam at soonest
- Camera system is also helpful for political & security purposes
1.3 Competitive strengths:
- At the moment, there has been no any project of the same type to be proposed to
HCM People Committee
1.4 Overall entry strategy
- This project will be proposed to People Committee of HCM City on the basic of BOT
term, so that we can get agreement for exclusive implementation.
- To push up the realization of this, we need to minimize implementation period to
settle the traffic problems at soonest to ease the strong complains of citizens to
governors. And we also must commit to allow HCM City Department of Policeman to
utilize our data for their activities free of charge.
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1.5 Growth strategy
- Our project will at first cover the plan for city center area only (including 1st & 3rd
District). If the plan is successful, we will develop to remained districts of Ho Chi Minh
City
- If we can be successful in HCM City at this 1st period, we will also move to Hanoi for
the same plan
- For far future, we can use satellite technology for this project in order to apply traffic
control to connect provinces to provinces in Vietnam
1.6 Financial summary – and start-up needs
- The financial structure for this project as follows :
o Total investment value: USD 7,808,963
o Registered capitals: valued 30% of total investment value USD 2,342,689
o Remained 70% of investment value : to be borrowed from HIFU (Ho Chi Minh
City Investment Fund for Urban Development) as approved by Ho Chi Minh
City People Committee at 3% (using WB loans for city infra-structure projects)
1.7 Start-up capitals:
Total USD 7,808,963 millions, in which our own capitals must be 30% of investment
capitals (it means $2,342,689), this will be prepared as follows :
- for the purpose of exclusive project and for the purpose of low-interest, we offer 20%
share of par value to HIFU (Ho Chi Minh City Investment Fund for Urban
Development) valued USD 468,537
- for the purpose of listing in 2010, we offer 10% share of par value to institutional
investor (we are discussing with Mekong Venture) valued USD 234,268
- for the purpose of obtaining experience & technology from expertise, we offer 10%
share of par value to NEXUS TECHNOLOGY – USA who have signed with us
agreement to support us in software & system control technology, valued USD
234,268-
- for the purpose of real estate and construction & funding, we offer 30% share of par
value to Indochina Group, valued USD 702,806
- Our group reserves 30% share to issue shares among key members, valued USD
702,806.
2. INTRODUCTION & BACKGROUND
2.1 History of traffic control plan:
- The idea for traffic control by camera system is not a kind of new technology
nowadays. The business model has been tested and proved to be successful in many
developed countries around the world, such as the United Kingdom, the United
States, Japan, Singapore, etc. (Please refer to the attached CD-ROM about camera
system linked with the traffic control centre in London – UK).
- However, traffic control camera until now still has not been set up in Vietnam yet,
even in big cities such as Ho Chi Minh City, Hanoi… Even the traffic policemen have to
react positively
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2.2 Background related to the performance:
Our groups have strong back-ground necessary for the realization of these projects.
Our groups include of personnel with following abilities & experiences and have a very
strong track record:
- 1 member has close connection with Vietnam Central Government, People Committee
of HCM City and strong networks with governing departments of People Committee.
She also has working experiences in overseas so that she can negotiate for
technology support and equipment procurements from foreign partners.
- 1 member is working for Mekong Capital- a fund manager, he can develop effective
financial planning and raise capital when needed
- 1 member is experienced in marketing; she can organize well the advertisement
network.
- Other key share-holders of this projects are also have strong back-ground :
o Indochina Co. Ltd is the long-term experienced and successful company in
construction & real-estate investment
o Mekong Venture (an subsidiary of Mekong Capital) is an experienced fund-
management company, who can add value and support us to list our stocks
for future expansion
o HIFU belongs to People Committee of Ho Chi Minh City, with strong & close
relationship with all governors in the city
o NEXUS Technology is USA partner with experience in soft-ware developing and
hard-ware export, they have also experiences in providing soft-ware solution
and hard-ware for biggest corporation in Vietnam such as Vietnam Petroleum
Corp, Vietnam Electricity Corp…
2.3 Introduction of our SMART SOLUTION system
- The project uses medium-high technology with coordinating solutions.
2.3.1 Equipments:
a. Receive and transfer data to the centre
- High-tech cameras (temperature-proof, water proof, high capacity & flexible zoom
length, specification as attached appendix) are installed at hot traffic spots. Special
stainless steel columns are also installed to protect the cameras from being stolen.
- Cameras to be linked with the centre through visual cable system.
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9. Smart Solution – Business Plan
- In case we use the cables of the TV cable companies, the map is as below:
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- Sensors alarming device linked to the centre and alarming device at site.
2.3.2 Process and transfer information to requester:
2.3.2.1 Automatically
- Computer system at the centre process data through specialized software.
- Computer system receive and answer messages automatically
- Control system at the centre transfer data about the routes to the electronic LED
Panel on the streets.
2.3.2.2 Manually
- Telephone operators at the centre will access the system to have information for
requests through telephone or fax.
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- Website is linked with the system to provide information for those who use the
Internet.
2.3.3 Software:
- Include all software which is linked together into a solution system
- Calculating and classifying software is installed to process data from the cameras,
and continuously update data. Based on these data, the software assesses the level
of jams.
- Vehicle travelling speed software calculates the time for vehicles to get out of the jam
spot, so travelers can know (if they do not want to choose other ways) how long it
takes them to get out of the crowd.
- Software to select the suitable routes provides instructions about routes to avoid jam
spots. However, if so many people switch to the same route, there will be possibly
another jam spot; so the software must make estimation and prompt adjustment
properly
- Software for Identifying and automatic answering will analyze & read the message
from requires to identify their requests and to respond
- Processing software sends information about traffic spots linked with electronic LED
panel (every 2 minutes). When passing the LED panel, travelers will be informed
about the possibility of traffic jams if they go straight, turn right or turn left at the
next crossroad.
- This software solution is similar to that of MESH LINE in USA (use fiber-optic cable).
2.3.4 Infrastructure:
- Install fiber-optical cables to link traffic spots to the centre. Temporarily at the
starting time as experiment period, we can rent the excising lines in 1st District and
3rd District of Ho Chi Minh City Television Company.
- Construct a building functioning as control centre to install data processing
equipments, telephone operation centre, data storage office…with total usage area of
12,200 m2 (in which 5,000 m2 is reserved for future expansion)
3. EXTERNAL ENVIRONMENT
3.1 Technological:
- We can corporate with oversea-suppliers to study applied technology in developed
countries, especially the MESHLINE system in USA.
- About road map, at the moment in Ho Chi Minh City there have been several
companies providing software for searching streets. Therefore, we can utilize this
software company as sub-contractor to save our time for writing routine searching
program.
- For other main equipments of the projects such as camera and LED panel, we have
already connected with main suppliers in USA and China to provide equipments and
operation technology.
3.2 Economic
3.2.1 The growth of Vietnam economy has leaded to the growth of traffic
modes:
- Up to September 2007, private transportation vehicles had increased sharply. The
registered quantity of vehicles in the city has exceeded 3.5 million (motorcycles:
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3,233,105 units, cars: 319,603 units); not including 60,000 cars, 700,000
motorcycles from other provinces and 60,000 tricycles and 2 million bicycles. The
average quantity of the newly registered vehicles is about 960 per month for car and
37,790 per month for motorcycle. This means within each 1 minute, the city has
another new motorcycle and within each 45 minutes, another new car. With the
rocketing increase, the fear of traffic jams all over the city will become true soon. The
traffic flow is far over the infrastructure capacity. Especially, during the peak hours,
the situation is much worse.
(Date source: from Traffic control section, Department of Transportation & Public works – People
Committee of Ho Chi Minh City).
3.2.2 Affection of traffic jam to the city economy
- According to the calculation of experts in Ho Chi Minh City Economic Institute, if there
are no solutions to settle current traffic jam problems, the loss of city economy is
estimated around VND 14 billion or USD 900 million per year. This amount is
equivalent to half of the city’s GDP in 2006 or the damages to the country by the bird
flu in 2005 and is big enough to build up the irrigational network for the whole
Mekong Delta area from 2006 to 2010
- The traffic jam also has bad influences to the investment environment, holding back
the attraction of investment into HCMC.
- President of the People’s Committee of HCMC, Mr. Le Hoang Quan, described the
traffic jams in the city as ‘ant-nest break’. “If one person loses 15 minutes per day in
a traffic jam, the city with millions of people will definitely lose so much”, he said.
- According to the calculation of experts, during the traffic jam, a motorcycle has to
consume 1 / 4 litter of gas more per km (speed in traffic jam is around 1-8 km/ hour)
- The business of the city citizens will be damaged as well: taxis cannot run; groceries,
restaurants, fashion shops are shortage for shoppers who are stuck in the traffic
jams, etc.
3.2.3 Economic solution of HCM City to settle traffic jam problem:
- The city authority has put forward some solutions to the traffic jams. The overall
estimated cost for a solution including traffic lane organization, lane installation,
public transportation system improvement… is around 260 billion VND. The objective
of the plan is to reduce at least 7.7% the traffic accidents, 3% death, 10% injury and
15% traffic jam spots. The development of infrastructure cannot meet the demand of
transportation means development. As a result, to solve the traffic jams problems the
city authority is waiting for vital traffic plans such as: building underground, sky-high
metro, constructing new centre-align routes as well as city-boundaries etc…..
However, to these plans will not come true until the next 5-10 years at least.
- Therefore, practically, until above plans can be put into implementation, establishing
the traffic control centre is crucial and vital as an immediate solution to control the
increasing traffic problems.
3.3 Market (demographic, psychographic)
- Vietnam is ranked 12th largest population in the world and HCMC is the biggest city
in population of Vietnam. HCMC is also the city with the highest GDP nationwide with
GDP/ capital of USD 2,000, nearly double the national average, 30% higher than that
of Hanoi (IMF data).
- The No. of people in the rank of using automobile from 20 to 50 years-old averagely
is about nearly 50% of total population.
- The No. of residents in HCMC up to end 2006 is as below:
Table 1: Population and density 2006 by district
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Quantity of Population Density
Area (km2)
wards (person) (person/km2)
Total 322 2,127.34 6,530,265 3,070
District 259 526.05 5,493,084 10,442
1st District 10 7.73 226,736 29,332
2nd District 11 49.74 130,189 2,617
3rd District 14 4.92 222,446 45,213
4th District 15 4.18 192,007 45,935
5th District 15 4.27 191,258 44,791
6th District 14 7.19 253,166 35,211
7th District 10 35.69 176,341 4,941
8th District 16 19.18 373,086 19,452
9th District 13 114.01 214,345 1,880
10th District 15 5.72 239,927 41,945
11th District 16 5.14 238,074 46,318
12th District 11 52.78 306,922 5,815
Govap District 16 19.74 496,905 25,172
TanBinh District 15 22.38 417,897 18,673
TanPhu District 11 16.07 376,855 23,451
BinhThanh District 20 52.78 449,943 8,525
PhuNhuan District 15 4.88 183,726 37,649
ThuDuc District 12 47.76 356,088 7,456
BinhTan District 10 51.89 447,173 8,618
Small districts 63 1,601.29 1,037,181 648
CuChi District 21 434.70 309,648 712
HocMon District 12 109.26 254,598 2,330
BinhChanh District 16 252.69 330,605 1,308
NhaBe District 7 100.42 74,945 746
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Quantity of Population Density
Area (km2)
wards (person) (person/km2)
CanGio District 7 704.22 67,385 96
Source: Department of Planning & Investment – People Committee of Ho Chi Minh City
- Above statistical No. s are excluded the quantity of around 1 million of immigrants
from other provinces, foreigners and tourists.
- From the above table, the total residents in 1st & 3rd District is 450.182 persons,
the number of residents using automobile daily in & out these districts is about
225.000 persons (not including persons living in other districts, but working in 1st
district).
- Researches in 64 main office buildings in operations located in 1st & 3rd District
proved the total quantity of 190,000 persons working & frequently visiting these
buildings. At the moment, there are about 433 hotels in 1st District and 86 hotels
in 3rd District (in all ranks from 5-star to mini hotel. There are also 109 office
building in 1st District and 33 office building in 3rd District (not including about 18
buildings to be put into operations in city centers soon in 2008-2009). There are
also 15 super-markets, 12 shopping centers, 6 open-markets. The number of
companies officially registered in 1st District only has been about 1,112
companies till Dec/2006. The potential increasing quantity of customers for traffic
information would practically increase remarkably.
3.4 Political
- Ho Chi Minh City Department of Police has already planned for years to build up
camera systems to control traffics, to issue penalty for traffic-law breaker, and to
control security, but they still cannot precede idea due to complicated formality to
get funds even for researching & writing plans. Our plan of camera control
systems will contribute a lot to providing the information to the authority,
especially the HCMC Police stations for their traffic control and coordination, crime
capturing, city security assurance.
- And because this project does not use the national or city budget, the city can
solve the traffic jam problem without spending their budget. The city authority
can use the budget for other traffic long-term projects in road & metro
investments.
3.5 Legal
- The Vietnam government in general and the HCMC authority in particular have
always been encouraging the socialization and privatization of proposals for public
benefits.
- Because the project uses the private capital, the implementation process will not
be much complicated as government budget‘s procedure, then it will be soon put
into operation to settle traffic problems in time.
3.6 Ecological
- As the traffic jams cause the increase in gas consumption, more exhaust fumes
will be produced, bring harms to the people’s health.
- According to a research conducted by a group of scientists of Chicago University
(Chicago), air pollution can make the blood curdle, leading to coronary thrombosis
and some other dangerous diseases. This result is really a warning to all the
travelers in such a polluted environment.
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- According to the research conducted by the Asian Institute of Technology (AIT)
and Engineering University in HCMC, through observation stations installed along
the streets, it was found that up to 40% of the poisons in the air came from the
transportation.
- This project will help people avoiding staying on streets in traffic jam, therefore
will help to prevent people from diseases caused by polluted environment.
3.7 Socio / Cultural
- It is clear that traffic jams cause harmful to the society:
- One survey of Ministry of Transportation and civil engineering shows that: the
speed of a motorcycle in the peak time (around 5 pm) is around 10kms/ hour, of
a car in main routes such as Bach Dang, Hoang Van Thu, Ly Thuong Kiet, Nguyen
Kiem, Hai Ba Trung, Nguyen Van Troi – Nam Ky Khoi Nghia, Pasteur, only 8kms/
hour. The survey also states that currently, the city has around 100 road junctions
which are always in the tense situation; only a small incident will cause a severe
traffic jam.
- Many flights have been delayed because 50% passengers of the flights were stuck
in the traffic jams so they could not arrive at the air-port in time (for example the
flight CX 764 to Hong Kong at 19:05 on 15 November). The passengers have to
estimate more time to travel from the city centre to the airport (around 90
minutes on a 10-km route) to avoid the above-mentioned situation. This also
affects the city image as well as the plan to call for investment and to develop our
tourism.
- Traffic jams also causes problems to ambulances, threatening the patients’ lives.
- On the main routes in the city, the automobile queues get longer and longer. To
pass a crossroad, it takes around 2-3 times of the traffic light signal. This is one of
the main reasons of the traffic jams.
- Ho Chi Minh City is seriously short of parking space; routing is not suitable; the
travelers’ self-discipline is still low; the city is centre-focused;
- The traffic jams also affect the characteristics of the citizens. There will be more
violation, people will be easier to get angry, and everyone will feel tense, trying in
all means to make ways to get out of the crowd.
.
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Figure 1: Traffic jams at the roundabout of Cong Truong Dan Chu, Dist.3, HCMC
Figure 2:Traffic jams on the Nguyen Dinh Chieu Street, Dist.3, HCMC, at 18.00, 12
September, 2007
Figure 3: Despite traffic lights, the policeman had to go into the roadway to settle the jam
(3/2 and Nguyen Tri Phuong cross-road, Dist. 10, HCMC)
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4. INDUSTRY ANALYSIS
4.1 Porter‘s Five Forces
4.1.1 Entry barrier:
- We can prevent future competitors for this scope due to exclusive BOT contract
with Ho Chi Minh City People Committee.
4.1.2 Intensity of rivalry:
- There is no competition in this newly created business. There are only 2
previously similar activities but its mission & affection is quite different
4.1.2.1 In HCMC:
- Currently, there is already a traffic control centre of the city traffic police station.
However, they have installed only 30 cameras and process the data manually
(they use screen monitoring supervisor only). Besides, the centre cannot provide
the information to the travelers.
4.1.2.2 In Hanoi:
- GAPIT assign 7 employees to update the information at 7 police stations. These
employees collect the information that the policemen inform through walkie-talkie
from 222 traffic spots in Hanoi. They are updated every 15 minutes during the
peak hours and every 60 minutes during the rest. The data are transferred to the
main server, processed and sent to subscribers. Cost for a message is 1,000. Up
to now, there have been 3,000 subscribers.
- However, the solutions have some disadvantages as follows:
o The police have to be present at all the traffic spots to assure all data can
be collected.
o The data cannot be updated quickly and the quantity of the vehicles cannot
be calculated so it is impossible to estimate when the jams can be
exhausted.
o The subscribers cannot remember 222 codes for 222 traffic spots.
o The project is just for sending messages through mobile phones, not for
answering calls, internet. As a result, the No. of subscribers is very
limited.
4.1.3 Substitutes:
- There is possibility of substitutes in the future when Vietnam starts and operates
stably satellite; therefore we must also consider expanding in this scope in the
future.
4.1.4 Bargaining power of suppliers:
- There are several suppliers in the world that can provide cameras, computer
software, LED panel and fiber-optic cables at similar standard of specification,
therefore bargaining power of supplier for these equipments are not remarkable.
- It is important to choose proper supplier of software for SMART SOLUTION, USA
Company will be 1st priority of choice due to their familiarity with MESH LINE
using in USA. However, because of our policy to offer software supplier 10% of
our total shares, they will play the role of investors too, therefore their bargaining
power will be reduced.
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18. Smart Solution – Business Plan
4.1.5 Bargaining power of buyers:
- because we have no competitors, therefore customers may only choose whether
to use our service or to suffer waiting in traffic jam on streets, this bargaining
power of buyers of service will be not much
- At the moment, Ho Chi Minh City People Committee has not issued any license for
advertisement by electronic bill-board in the city, except for only 2 boards: 1 in
front of Ben Thanh market and another one in front of Tan Son Nhat airport. This
kind of license will be very hard to get. Therefore, if we have this license in hand,
we are in very good position for customers to approach us for advertisement by
LED panel on streets. Therefore bargaining power of buyers of advertisement will
also be not much
4.2 Conclusion from environmental analysis
- Currently Ho Chi Minh City is seriously in need of prompt solution to reduce traffic
jam and to support policeman in dispatching human resources to ‘hot’ locations in
time. SMART SOLUTION would be certainly very suitable to satisfy this need.
Therefore, SMART SOLUTION would be appreciated highly by both City Governors
and Ho Chi Minh citizens. The high feasibility of the project basing on the
demands and great space for expansion also can highly attract experienced share-
holders. Existing environment brings great chance for this project. If we catch this
chance promptly, we would be the pioneer to open this kind of business in
Vietnam.
5. CRITICAL SUCCESS FACTORS
5.1 Exclusive BOT agreement with Ho Chi Minh City People Committee
5.2 Findings & technology supports by strategic share-holders
5.3 Location for construction of control center
5.4 Strong management team
6. ORGANIZATION CAPABILITIES ANALYSIS
6.1 Key resources and capabilities are:
6.1.1 Key resource:
- The license of this project can be considered as the valuable asset
- The building constructed for the purpose of control center can be used partly for
office rent (priority for the member companies of our group)
- Well financial status of group members.
6.1.2 Capabilities:
- The reputation of Indochina Group – main key holder in infra-structure projects in
Ho Chi Minh City. Indochina Group also has strong connection with land-owner
authorities who are ready to offer us the location to run this project.
- Our strong connection & affection to top government to assure exclusive BOT
agreement.
18
19. Smart Solution – Business Plan
- The knowledge of our group members (trained in MBA – RMIT, Entrepreneur
course...)
- The experience of our group members (in marketing, in management, in finance
and in IT)
6.1.3 Major weakness:
- Because this kind of project is still quite new in Vietnam, therefore most of our
members have no experience to run this business before. It must cost a lot of
time to research for mastering this technology. Until we can master this, we
mostly have to rely on partners.
6.1.4 Business level strategy:
- competitive scope: ‘product focus’ with special products to serve special types of
customers :
o traffic information providing service for automobile travelers
o advertisement services by LED Panel on streets for advertisements
companies
- Competitive advantage: through ‘differentiation’ by features, we will offer typically
functional characteristics of products.
7. SWOT ANALYSIS
7.1 Strengths
- strong resources, experience & public relations of group members as mentioned
above
- Exclusive BOT contract is the important strength.
- Position of business pioneer
- Strongly warm appreciation and cooperation of government.
7.2 Weakness
- We do not have experience in operating the system; therefore we must rely
mainly in our partner at starting period.
- There has been no any research data about quantity of travelers of each traffic
jam point; it must take time to measure this data to set up precise positions.
- Our benefits for the must be limited within 15 years of operation only, after that
we must transfer all project to People Committee of Ho Chi Minh City
- The quality of services heavily depends on other service suppliers (communication
services for phone and electricity supply for camera)
7.3 Opportunities:
- high demands in society for both traffic control and advertisement service
- Strong barriers for competitors. Especially this type of business is classified into
‘sensitive business’ which only limited type of persons can own & run.
- Increasing problems of traffic in Ho Chi Minh City, Hanoi and in other cities of VN
in the future.
- VN now is increasing OEM contracts with USA for software writing, in the future
we can utilize VN Software Company to amend & develop software for additional
function.
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20. Smart Solution – Business Plan
7.4 Threats:
- new business, there may be unpredictable matters
- no any legal guidance for this business, when government person in charge is
changed, level of supporting may be changed
- Restriction of government in advertisement in advertisement business may threat
the income for this.
- Pressure of implementation timing
8. PROPOSED BUSINESS & FUNCTIONAL / OPERATIONAL
STRATEGIES
8.1 MISSION & VISION
8.2 Purpose of this business:
- To support government in reducing traffic jams in Ho Chi Minh City.
- Expand business operation scope of key share-holders for effective usage of funds
8.2.1 Mission
- The project: is to set up a system including cameras installed in busiest cross-
roads and a control centers. The camera will record traffic situations at places,
transfer to control center. Software in control center will process data to calculate
moving speed in each point and will provide this information to travelers (through
telephone, message, internet…)to decide whether they should or should not join
the traffic, and to propose the quickest way to move from place to place to avoid
traffic jam. In case travelers on the street at the time, they can look for
information from LED panels at the points to know about situation of traffic at
the next cross-roads.
- This system will also provide information free of charge to the police station so
that they can send policemen to the busiest points in time to control the traffic.
And 113 Policeman can use information from camera to act for urgent security
purposes.
- This business will not only offer benefits to society but also good profits and short-
term refunding to investors.
8.2.2 Vision
- In the future, this system can also be upgraded to serve several other purposes:
o Recording traffic actions for punishment to traffic-law breakers (for
example: wrong routine moving, not wearing helmet…)
o recording automobile No. s for toll collections when moving into city center
at peak time (this application is used in Stockholm now)
o Invest in the image storage system within 60 days for traffic control,
investigation and social security.
o Based on the permission of the authority, we can expand the data
providing through radio frequency and television channel, and satellite, this
will be the basic for our expansion into communication business.
- If this project is proved to operate well, we can automatically extend the
operation to all remained districts of Ho Chi Minh City and even to Hanoi City. In
those periods, we will set up our own fiber-optic cables to run the project. And
with this fiber-optic cable network, we can also extend to other projects in
communication.
20
21. Smart Solution – Business Plan
- The project wills set-up foundation for share-holders to enter into other attractive
business in VN, and increase its offering benefits to society.
8.3 DETAILS SUPPORTING FUNCTIONAL / OPERATIONAL STRATEGIES
8.3.1 Business & functional strategy
8.3.1.1 Business strategy
- defining & selecting business: we would focus in 2 kinds of business as follows at
the moment :
o Traffic information providing
o Advertisement on LED panels
- in the future the scope of product type can be expanded more:
o Traffic & security information providing
o Advertisement on LED panels, by TV channel and on radio frequency
o Communication operators of fiber-optical cables and channel of satellite
- Competitive scope: from product focus now to broad scope in the future.
- Generic competitive strategy ‘DIFFERENTIATION !’ through the exclusive BOT
agreement with government
8.3.1.2 Corporate strategy
- Synergy corporate composition: the above 2 types of business must be closely
related each other, if 1 cannot be put into implementation, the remained one will
be also isolated.
- Corporate management:
o Integration mechanism: both 2 business will operate in the same infra-
structure, therefore only 1 management board will manage 2 business, The
2 business units will act differently only in marketing & trading. Other units
of finance, techniques and administration will serve both 2 business units
o Corporate integration through control & cooperation
8.3.2 Market research and analysis
8.3.2.1 Customers:
(A).Customer‘s target segment:
- Mainly focus on people who usually travel to 1st & 3rd District area for working.
List of main office buildings in 1st & 3rd District and estimated quantity of working
staffs and visitors of each building is as follows:
TYP
# LOCATION E ADDRESS TRAFFIC
1 H i Thành B 2 Thi Saùch , Dist.1 720
2 Tu n Minh B 90 Le Thi Rieng, Dist.1 1,024
3 Saigon 3 B 140 Nguyen Van Thu, Dist.1 7,680
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22. Smart Solution – Business Plan
TYP
# LOCATION E ADDRESS TRAFFIC
4 IBC B 1 Me Linh, Dist.1 1,320
5 Dông Anh B 181 Dien Bien Phu, Dist.1 1,112
6 Pasteur Tower B 139 Pasteur, Dist3 2,592
7 Kim ô B 123 Le Loi, Dist.1 1,560
8 Lucky Star B 201 Bis Le Lai, Dist.1 680
9 Ph m Vi t B 149 Truong Dinh, Dist.3 400
10 Hoa Rang B 32 Ngo Duc Ke, Dist.1 1,440
11 Titan B 18A Nam Quoc Cang, Dist 1 672
12 LAT B 14-16-18 Chu Maïnh Trinh, Dist.1 480
13 Morning Sun B 15/1 Le Thanh Ton, Dist 1 400
14 Central Garden A 225 Ben Chuong Duong, Dist1 5,200
15 Nam An B 167 Dien Bien Phu, Dist.1 1,280
16 Opera View B 161 Dong Khoi, Dist.1 4,880
17 Lieân Sôn B+S 34 Nguyen Binh Khiem, Dist.1 480
18 A&C B 229 Dong Khoi, Dist.1 1,200
19 VCCI B 171 Vo Thi Sau,Dist, 3 4,400
20 Nhà R ng B 185 Dien Bien Phu, Dist.1 1,216
21 Anh Kim B 43 Le Thi Hong Gam, Dist.1 560
22 T&T B 9A Nam Quoc Can, Dist.1 768
23 Central Park B 208 Nguyen Trai, Dist.1 4,432
24 Harbour View B 35 Nguyen Hue, Dist.1 6,800
25 Anh Kim B 141 Nguyen Thai Binh, Dist.1 400
26 Nam Phuong 2 B 101 Nguyen Van Thu, Dist.1 560
27 Fosco B 6 Phung Khac Khoan, Dist.1 2,800
28 Ngoïc Ñoâng Döông B 76 CMT8, Dist.3 1,320
29 Höõu Nghò B 35 Le Loi, Dist.1 280
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23. Smart Solution – Business Plan
TYP
# LOCATION E ADDRESS TRAFFIC
30 Giaøy Vieät B 180-182 Ly Chinh Thang, Dist.3 4,800
31 The Landmark B 5B Toân Duc Thang, Dist.1 8,840
151 Ter Nguyen Dinh Chieu,
32 151 TerNDC B+A Dist.3 1,780
33 AD B 18 Nam Quoc Cang, Dist.1 672
34 Savimex B 194 Nguyen Cong Tru, Dist.1 2,800
35 TT NC&TV KHCN B+A 291 Dien Bien Phu, Dist.3 1,200
36 Maison B 180 Pateur, Dist.1 1,080
37 Zen Plaza B 54-56 Nguyen Trai, Dist.1 5,600
38 141 HBT B 141 Hai Ba Trung, Dist.1 400
Indochina Park
39 Tower B 4 Nguyen Dinh Chieu, Dist.1 2,800
40 Star View B+A 63 Nam Ky Khoi Nghia, Dist.1 2,000
41 1 Mac Dinh Chi B 1 Mac Dinh Chi, Dist.1 3,000
42 Petro Vietnam B 1-5 Le Duan, Dist.1 8,400
43 Savico B 68 Nam Ky Khoi Nghia, Dist.1 720
44 ÑMC ÑBP B 223 Dien Bien Phu, Dist.1 500
45 Saigon Coop A Pham Thai Hoc, Dist.1 350
46 Spring Court B+A 1bis Phung Khac Khoan, Dist.1 224
47 Loc Le B 454 Nguyen Thi Minh Khai, Dist.3 1,120
48 Vitek B 63 Vo Van Tan, Dist.3 2,400
49 Melinh Point B 2 Ngo Duc Ke, Dist,1 17,600
50 Sacombank B 278 Nam Ky Khoi Nghia, Dist.3 2,600
51 Central Plaza B 17 Le Duan, Dist.1 8,640
52 Saigon Riverside B 2A-4A Ton Duc Thang, Dist.1 14,400
53 Botanic Tower C 312 Nguyen Thuong Hien, Dist.1 4,800
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24. Smart Solution – Business Plan
TYP
# LOCATION E ADDRESS TRAFFIC
Saigon Finance
54 Center B 9 Dinh Tien Hoang, Dist.1 10,400
55 Blue Star B 23 Ton Duc Thang, Dist.1 720
56 26 Haøm Nghi B 26 Ham Nghi, Dist.1 2,912
57 Sunshine B 74C Nguyen Van Cu, Dist.1 720
58 Ocean Bank B 185-187 Nguyen Thai Hoc, Dist.1 1,020
59 Rando B 67-71 Thach Thi Thanh, Dist,1 660
60 Tuildona B 119 Dien Bien Phu, Dist.1 660
61 E-Star B 147-149 Vo Van Tan, Dist.3 780
62 Sunwah B 115 Nguyen Hue, Dist.1 18,000
63 Satra B 275 Pham Ngu Lao, Dist.1 650
64 Royal Sfone B 19 Ton That Tung, Dist.1 800
TOTAL 190,704
- This number is not included quantity of people in other 78 office buildings which
we have not carried out the research, estimated about 120,000 peoples.
According to our short interview in these buildings (utilizing support of telephone
operators and receptionist), 85% of the people using motorbikes have warmly
welcomed our service and 100% of people using car readily accepted to use our
service of traffic information.
- Therefore, number of potential customers in 1st & 3rd District will be:
o Number of people working in office building: 190,704 + about 120,000 =
about 310.704 people
o Supposing that 50% of this No. is citizens of 1st & 3rd District, remained
persons from other district will be about 160.000 persons
o Half population of 1st & 3rd District who may use automobile (as
mentioned in above item III-3) : 225,000-
o The number of car traveling in city center : 6,000 – 7,000 times/ day &
night
o Total market size is about 160,000 + 225,000 + 6,000 = 391.000 persons.
(B). No. s of advertisement by LED panels and by LCD in HCM City at the
moment:
- People Committee of Ho Chi Minh City so far has licensed for only 2 LED panels on
streets: 1 in front of Ben Thanh market (however the license will be expired
24
25. Smart Solution – Business Plan
without review early of 2008), 1 in front of Tan Son Nhat Airport. There are other
2 LED panels inside Saigon Railway Stations. There has been no any policy to
issue any license for advertisement at cross-roads so far.
- in Ho Chi Minh City so far, only 1 Golden Focus Media (leader in LCD advertising)
there are 178 LCD TV inside of office building and 736 LCD TV inside of super
markets to be installed for advertisement purpose purely.
8.3.3 Market size & trends
8.3.3.1 Traffic information providing service
- Currently traffic jams have been sharply increasing. Despite many proposals from
the city authority, with the current increase in the No. of vehicles, the
establishment of the traffic control centre is crucial. The demand for information
from travelers is huge.
B ng 1: Data up to September 2007 about the traffic jam spots as follows:
No Area – District name Quantity of jam spots
1 1 &3 16
2 5 & 10 15
3 6 & 11 9
4 Tan Binh 10
5 Tan Phu 21
6 Binh Tan 1
7 Binh Thanh & Phu Nhuan 14
8 Go Vap 10
9 t4&8 3
Total 99
Note: Source: Transportation and Public Works Department – HCM City
- Currently, the No. of jam spot has been remarkably increasing, especially in the
centre and the surrounding areas, in the routes from the centre to the airport and
from the Saigon Bridge to the centre.
- However, the Transportation and Civil Engineering has not been able to count the
vehicle quantity at each spot at each time slot during the day. However, we can
refer some other data from other projects as below
o From North-East to the centre: there are 5 main streets (Nguyeãn Höõu
Caûnh, Xoâ Vieát Ngheä Tónh, Ñieän Bieân Phuû, Ñinh Tieân Hoaøng, Hai
Baø Tröng), daily traffic flow is around 1,626,180 vehicles, during the 2
peak hours in the morning around 569,202, average for one street around
113,840 per hour
o From North – East, South – West to the centre: there are 9 streets (Lyù
Chính Thaéng, Voõ thò Saùu – Ba Thaùng Hai, Ñieän Bieân Phuû,
Nguyeãn Ñình Chieåu, Nguyeãn thò Minh Khai, Nguyeãn Du, Lyù Töï
Troïng, Leâ Thaùnh Toân, Traàn Höng Ñaïo - Leâ Lôïi), daily traffic flow is
25
26. Smart Solution – Business Plan
around 1.845.600 vehicles, during the 2 peak hours in the morning around
406,000, average for one street around 113,840 per hour
o North to the centre: there are 5 main streets (Nguyeãn Vaên Troãi, Leâ
Vaên Syõ, Caùch Maïng Thaùng Taùm, Lyù Thöôøng Kieät, Leâ Ñaïi
Haønh), daily traffic flow is around 1.201.500 vehicles, during the 2 peak
hours in the morning around 253.105, average for one street around
113,840 per hour
- Upon receiving official approval from People Committee of Ho Chi Minh City, we
must start to count vehicles at the jam spots and the nearby spots to locate the
camera installation positions.
(a.2) The 10 most serious jam spots:
- 1. An Sương roundabout: jams from 9 am – 16pm due to too many trucks.
- 2. T-junction Âu Cơ - Cách m ng tháng Tám - crossroad Cách m ng tháng Tám -
Tân Kỳ Tân Quý - crossroad Tân Kỳ Tân Quý - C ng Hòa: form an endless jam net
both in peak and normal hours
- 3. From Cách m ng tháng Tám to 6-way crossroad Công trư ng Dân Ch ,
crossroad Võ Văn T n, Nguy n Th Minh Khai, 6-way crossroad Phù ng Thiên
Vương, crossroad Ph m Ngũ Lão, Tr n Hưng o...
- 4. Nguy n Th Minh Khai - Cao Th ng - Nguy n Thi n Thu t - i n Biên Ph has
traffic jams during peak hours both in the morning and evening.
- 5. Nguy n Oanh - Phan Văn Tr - Hoàng Minh Giám (Gia nh Park) – Nguy n
Ki m has traffic jams during peak hours both in the morning and evening.
- 6. Phan ăng Lưu – Bà Chi u market - Phú Nhu n cross-road – T junction Hoàng
Văn Th – H Văn Huê
26
27. Smart Solution – Business Plan
Figure 5: On the Hoàng Minh
Giám street (Gia nh park) at
Figure 4: In the Pasteur street noon 18-9 with lots of buses
- 7. Lý Thư ng Ki t - Tân Bình market – Tjunction Thành Thái - crossroad Tô Hi n
Thành - L Gia
- 8. Roundabout Cây Gõ - roundabout Phú Lâm has traffic jams in the morning due
to lots of buses from Ch L n in and out.
- 9. Xô Vi t Ngh Tĩnh - inh B Lĩnh (roundabout Hàng Xanh - Mi n ông bus
station - crossroad Bình Tri u) has traffic jams nearly all the time.
- 10. Ch L n area has new jam spots in the morning: roundabout Phan ình
Phùng, H i Thư ng Lãn Ông - H u Giang after the city started East-West highway
projects, water environment projects with setting up fences, banning travelling in
the Châu Văn Liêm, Tr n Hưng o, demolishing Chà Và Bridge.
8.3.3.2 Advertisement service
- In the past time till now, the mode of out-door advertisement in HCM City is
mainly by painting bill-boards, and recently there are LCD TV inside of office
building and super-market as mentioned above. The advertisement by LED
panel on streets, which are very popular in many Asian countries such as Hong
Kong, China, Malaysia. Japan, Korea… have been still not licensed in HCM City
yet, due to limitation policy of People Committee of Ho Chi Minh City by his
decision No. 108 issued on 2002. This restriction is important entry barriers to
prevent our competitors.
- According to Saigon Times Weekly on Dec/12/2007, the current demands for out-
door advertisement by new technology such as LED panel, LCD TV in HCM
City is quite much bigger than capabilities of advertisement companies at the
moment. Estimated advertisement revenue for total advertisement expenses of
VN enterprises will be about 15,000 billion VND (equivalent to USD 950 million) in
2010 and about 55.000 billion VND in 2020 (equivalent to USD 3.5 billions). Also
according to above mentioned article, most of advertisers prefer to use high-
technology like LED panel than old-type bill-boards in order to increase
attractiveness. Therefore, our license to advertise by LED panel on streets will be
very the essential competitive strength to be market-leader in this business.
8.3.4 Competitors & competitive position:
- Competitive advantage: differentiation
- Competitive position: market leader, market pioneer.
27
28. Smart Solution – Business Plan
8.3.5 Market share:
- full market share in Ho Chi Minh City because no competitor
- Estimated quantity of customers is calculated basing on 30% of total number of
people frequently working and visiting 1st District & 3rd District.
8.3.6 Ongoing market assessment:
- Increasing demands for traffic information service within 10 years until other
construction projects come into fully implementation
- increasing automobile quantity
- Technology for information providing service must be up-dated following
developments of technology
8.4 Marketing Plan
8.4.1 Overall marketing strategy
- Marketing concept: societal- marketing orientation (focus on satisfying customer
needs & wants while enhancing individual & societal well-being)
- Segmentation: product focus
- Buyer‘s behavior type: habitual buying behavior
- Brand strategy: defensive marketing
8.4.2 Pricing
- attractive pricing : ideal for market penetration at introduction stage of Product
Life Cycle to reach ‘market share leadership’ (low as possible price to encourage
more users of service)
- legality : price fixing
- generic pricing strategy : ‘high-value strategy’ (high quality, medium price),
value-based pricing (uses buyer ‘s perception of value of service rather than seller
‘s costs to set price)
8.4.3 Sales tactics:
- Direct distribution of both services (traffic information providing and
advertisement) basing on exclusive service with valued pricing.
8.4.4 Guarantees & warranties:
- make traffic information to be optimum & effective
- Refund if request cannot be reached to customers due to un-predicted problems
(of telephone line, electricity….), this can be applied for long-term contract
customers only.
- extend service period equivalent to the suspension period of advertisement in
case of electricity cut-off or technical problems of signals
- Report to advertisers for No. s of travelers passing by advertisement LED panel
daily
8.4.5 Advertising & promotion :
- Advertisement through the LED panel on the street itself (occupying 50% of total
broadcasting time at starting period and gradually reduce to none in replace by
advertisement service)
- Advertisement through newspaper, television and radio for both services
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29. Smart Solution – Business Plan
- Promotion:
o For information users: free of charge during trial operation, discount during
1st period of operation, additional value-added service to long-term
contract customers, for example: weather forecast message, stock
exchange information…
o For advertisers: free of charge advertisement at traffic web-site, discount
for long-term contract.
8.4.6 Logistics: not applicable
8.5 Product & Operation
8.5.1 Value proposition: unique selling proposition
8.5.2 Product development: differentiation, emphasizing brand for future market
expansion
8.5.3 Product enhancement plans:
- increase frequency of use by customers
- add new users
- design more added-value to service
8.5.4 Location & facilities:
- Operation of company is concentrated at control center; Soft-ware will
automatically calculate No. s of users at each point of camera.
- Distribution :by direct providing information service and advertisement service to
customers
- there must be technical teams check daily at locations of camera & panel
8.5.5 Proprietary issues – license, IP: priority license for advertisement on LED
panels at cross-roads
8.5.6 Regulatory &legal issues: exclusive BOT agreement for traffic information to
assure project life-time
8.5.7 Training & development
- operation & maintenance of hard-ware to be trained by suppliers
- installation & developing soft-ware to be trained by both suppliers and partners
8.6 Finance model & Plan
8.6.1 Assumptions: market size, growth
8.6.1.1 Investment structure:
- 2 cameras to be installed at the corner of every 2-way street, 1 of every 1-way
street. The No. of cameras can be calculated on the principle of 4 times of jam
spot quantity (it means there must be at least 1 camera at cross-road leading to
the jam locations)
- Total 16 heavy traffic jam spots in 1st & 3rd District (as given by Department of
Public Transport), so No. of camera will be 64 camera and No. of LED panel will
be 32 LED panel.
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30. Smart Solution – Business Plan
- For the purpose of negotiation of license, quantity of LED Panel must be not more
than 50% camera quantity.
8.6.1.2 Revenues:
- Revenues from information providing :
o Service users: as mentioned in above VIII-2.2.1, the market size about
391,000 persons using automobiles. Our calculation is based on assumption
that there will be about 35% of potential customers using our service and 5%
of potential customers who are citizens of 1st & 3rd District will have long-
term contract for information service.
o No. s of days of revenues per month: 22 days (excluding Saturdays and
Sundays as these days are weekend with less traffic jams).
- Revenues from advertising :
o Based on the rate quoted by Goldsun Focus Media (in-house TV) and
PROWTECH VINA CO. LTD (outdoor LED panel) as below:
Goldsun Focus Media (in-house LCD TV 17”), 60 times/day, 30 seconds
/ time, full package USD 550/month, broadcasting at the same time in
178 TV installed in 113 buildings in HCM City
ROWTECH VINA CO.,LTD (outdoor LED panel size 56 m2), advertising
cost USD 4,000 /month (3,600 spots / month, basing on 1 sector (1
hour / day displaying 120 spots TVCs 30”), broadcasting at the same
time at 4 LED panels installed inside Saigon Railway Station and Tan
Son Nhat Airport
30
31. Table 2: REVENUE ASSUMPTION
Year 2,008 2,009 2,010 2,011 2,012 2,013 2,014 2,015 2,016 2,017
COMPANY'S SHARE ISSUANCE
Equivalent No. of Absolute Shares 3,748,30 3,785,78 3,823,64 3,861,87 3,900,4 3,939,5 3,978,8 4,018,68 4,058,8 4,099,4
Issued 2 5 3 9 98 03 98 7 74 63
1,386,24 2,810,49 3,041,85 3,185,21 3,335,3 3,492,6 3,657,4 3,828,43 4,002,9 4,185,7
SMART SOLUTIONS 0 8 6 3 80 83 62 6 26 01
% Growth 102.74% 8.23% 4.71% 4.71% 4.72% 4.72% 4.67% 4.56% 4.57%
% of Total Revenue 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
No. of STATIONS
No. of stations at Beginning of Year
64 64 64 64 64 64 64 64 64 64
No. of Additional stations - - - - - - -
No. of offices at End of Year
64 64 64 64 64 64 64 64 64 64
Average No. of stations during year
64.00 64.00 64.00 64.00 64.00 64.00 64.00 64.00 64.00 64.00
No. of PANEL
No. of panel at Beginning of Year
32 32 32 32 32 32 32 32 32 32
No. of Additional panel - - - - - - - - -
No. of panels at End of Year
32 32 32 32 32 32 32 32 32 32
Average No. of panel during year
