(TIỂU LUẬN) midterm report STRATEGIC MANAGEMENT

FOREIGN TRADE UNIVERSITY Midterm Report STRATEGIC MANAGEMENT Instructor: Assoc Prof Dr Lê Thái Phong Name: ID: Lê Thị Quỳnh Trang Izzo Antonio Mỹ Duyên Pelli Giovanni Lorenzo Vũ Thị Huyền Thương 1512280078 1990102036 1515280021 1990102048 1513280072 SUMMARY Executive summary Hanoi, September 24th, 2018 Overview of the project .4 Description of Kidschool Goals and objectives .5 EXTERNAL ANALYSIS PEST MODEL Political Economic Social Technology PORTER’S FIVE FORCES Threats of new entrants (Moderate force) Threat of substitutes (Low pressure) Bargaining power of suppliers (Low pressure) Bargaining power of suppliers (Medium pressure) Competitive Rivalry (Low pressure) STRATEGIC GROUPS (the graph) INTERNAL ANALYSIS 10 VALUE CHAIN ANALYSIS 12 SWOT ANALYSIS .14 BUSINESS-LEVEL STRATEGY 16 Market penetration 16 Differentiation on market segmentation .16 Differentiation on products 17 IMPLEMENTATION .20 Build relationship with drivers .20 Build a brand image completely different from the opponent .20 Organizational structure .20 Leadership and incentives .21 Legal structure 21 CONCLUSION 22 ASSESSMENT 23 REFERENCES 23 Executive summary In Vietnam, the new school year begins with the fact that many parents have to cope with the need to bring their children to school every day Bringing children to school can be very difficult for parents with busy jobs or unstable schedule Moreover, some parents are too worried about safety of their young children to let them go to school by themselves or take public transportation We surveyed a group of parents and they confirmed that a safe and convenient shuttle service with reasonable price is one of the top priority for them Taking advantage of these emergent demands and innovation in technology, we come up with a new service that can satisfy the parents need: Kidschool This report is written to interpret our idea into a practical project focusing on how we build our strategic plan and structure the firm in order to achieve it The report consists of five parts In the first part, we provide some information about our company, its core value and the competitive advantages compared to the competitors The next two parts talk about the evaluation of internal and external environment The analysis method includes: PEST and Five forces analysis in external environment; resources, capability, distinctive competency, SWOT with different alternatives and Value chain analysis in internal environment The fourth part focuses on the strategy the company needs to implement after analyzing the present context At the end, we came up discussing the implementation and the firm’s structure Overview of the project Description of Kidschool Kidschool is a technology platform, headquartered in Hanoi, Vietnam It is an app – based shuttle service whose aim to help parents, who have small children in school age, in carrying kids to class every day by cars Kidschool technologies develop, market, and operate a ride-sharing mobile application which allows consumers to submit a trip request, which is routed to drivers To drivers, our smartphone application connects them with people who need a ride To consumers, the Android, iOS and Windows Phone app connects them with drivers using their phone's GPS capabilities, letting both parties know one another's location The driver will text customers when the ride has arrived The Kidschool app will show parents the details of the driver, such as name, photo, and type of car so clients will know what to look for Parents can easily watch the live journey video and keep track with their children itinerary through camera which is installed previously in the car and able to connect to parents’ personal account in our app Kidschool offers different payment forms for their trips: obviously cash, but also credit cards, internet banking, Paypal and so on Kidschool is a technology platform, headquartered in Hanoi, Vietnam It is an app whose aim is to help parents, who have small children in school age, in carrying kids to school every day by cars We created a ride-sharing mobile application which allows consumers to submit a trip request, which is routed to drivers in order to connect them through the Android, iOS and Windows Phone app connects them with drivers using their phone's GPS capabilities, letting both parties know one another's location The driver will text customers when the ride has arrived The Kidschool app will show parents the details of the driver, such as name, photo, and type of car so clients will know what to look for Parents can easily watch the live journey video and keep track with their children itinerary through camera which is installed previously in the car and able to connect to parents’ personal account in our app Kidschool offers different payment forms for their trips: obviously cash, but also credit cards, internet banking, Paypal and so on Initially, the main duty of the driver is to pick students from home to school and take them home when their parents request it through the app Afterwards, when our company has gain a certain reputation and a large number of loyal customers, we might offers several complementary services Parents can sign long term contracts with one driver and he/she will be in charge of their child every day at a fixed time and place For each student, there will be a contract valid for at least one month, stating clearly the student’s address, the school address and both parents and student information The bills will be paid at the end of the month according to the itinerary diary However, there is also the possibility to get our service for a single ride or for a shorter periods To access to our long term service, parents will send their requirement form to our company through online app After one week, we will send back the full information of expected driver who will be in charge Moreover, parents can invite their friends or relative who live nearby or attend the same school to share the car in order to be more cost-effective The number of children in each group depends on the size of the car If parents expresses their willingness to group with others but they are unable to find appropriate customers, we will find other students to combine a group of three to five students who will share the same driver As regards the customer segment, we focus on parents who are at the ages between 35 and 50 and currently allocated in Hanoi and Ho Chi Minh city They have middle or high income and the monthly average is equal or higher than VND 15,000,000 Each certainly has smartphone which can connect to the Internet They tends to be busy with their jobs and have limited time so they have difficulty in carrying their children to school on time The more detailed analysis will be shown in the strategy part of the report Goals and objectives Vision: To become the first and also the best app–based shuttle service for children to attend school in Vietnam Mission: Kidschool is committed to provide the shuttle service through qualified drivers and cars with reasonable price Kidschool lays on five core values: - Quality: we have service quality which people can rely on In working process, cars that are rated below 3* in the feedback function will be eliminated Therefore, Kidschool serves its customer with the highest quality cars - Affordable: The price that our company offers will satisfy any parents We follow the based price of our initial service, which is VND 7,500/km and some promotions depending on events Customers with longterm contracts will receive a discount of 20-30% - Time – saving: we help customer to save time so they can concentrate more on home and office work - Safety: Besides the time guaranteed, we give special prominence to the safety of the students The delay may occur for some objective reasons provided that drivers guarantee traffic safety and minimize unfortunate accidents - Customer service: We have a customer service department to listen to customers problems and deal with their problems effectively, absolutely and as fast as possible In addition, frequent customers will be given raincoat, helmet as gifts for their frequent use EXTERNAL ANALYSIS PEST MODEL Political Vietnam is considered one of the countries with the most stable political background The wars’absence, not only brings a peaceful life for the people, but also helps the economy to develop and the country to be more civilized This situation will make Kidschool easier to develop and to focus just on the business Vietnam aims to become a country with middle-income class by 2020 and become a modern industrialized state To achieve this goal, the government has planned to develop a functioning national innovation system Since past few years the Vietnamese government has been trying to foster many startups and supporting the growth of innovation Therefore, the government are trying to offer the best support for all vietnamese startups so they can develop at their best, also by attending courses abroad to implement their strategies according to an international vision The current corporate tax is about 20% and 15-17% for startups With above conditions, Vietnamese government is creating more opportunities to establish new business and attract so many talented people to business in Vietnam The startups’development has a huge impact on economic growth Therefore countries around the world have many policies to support start-up businesses, the mains are tax incentives Direct tax incentives for start-ups often focus on corporate income tax Accordingly, start-up enterprises shall enjoy preferential tax rates and enjoy tax exemption and reduction in the first period of production and business activities In addition, indirect support for start-up businesses consists on: agevolazioni in personal income taxes for investors who investing in start-up businesses, tax incentives for venture capital funds and for establishment of enterprise Personal income tax incentives are made by exempting income from capital investment in start-up businesses In Vietnam, there is the restriction in freedom of speech as press is strictly and censored by the government, that will have unfavorable impact on enterprises However, the situation is gradually improved when the freedom of press seems to be extended and the Party has taken tough measures to eliminate and punish the wrongdoing Economic According to main statistics Vietnam’ GDP is around 705 billion USD and GDP per capita is 7463 USD in 2017 GDP growth rate in recent years has been hovering around to 7% (6.79% in 2017 to be specific), making Vietnam become one of the most dynamic emerging economies in East Asia The country’s inflation rate in 2017 is 2.65 percent (Trading Economics, 2018), which has been a positive sign of a developing economy It means that the living standard of Vietnamese people is higher and higher and they will spend more money to enjoy highquality services to improve their life Kidschool launched will be the good idea for busy parents to pick up and take their children from home to school with safety and reliability However, the growth of Vietnamese people’s income could be also a weakness for our company because more and more parents can afford luxury cars or motorbike and want to take kids to school by themselves or hiring assistants or charwoman to that instead of them Social Firstly, the population in 6-18 years old is increasing Experts estimate Vietnamese market as a profitable potential market, Vietnam has a big part of the population under the age of 30 Therefore, there is a huge demand for transportation, especially for going school However, parents tend to become busier and busier, they even work hard for 12 to 14 hours a days to earn more money or complete their jobs and they have less time to take care of their children And all they need are services to help them caring about their kids more and better Nowadays we are living a technological boom Adults and even children use smartphones They are always exploring and searching on the phone to satisfy their own needs and make life more convenient Kidschool is exploiting this aspect, in fact it is launching its own projects through a phone app Another social factor is the climate changing Citizens in big cities are facing more and more heavy rain, flood, bad weather Moreover, every year 15000 people die in traffic accidents in Vietnam In 2017, traffic accidents reduced but still alarming with more than 20,000 cases, resulting in 8,267 deaths and many of them are school-age children They are all warnings which makes parents not want their kids to go to school by themselves and hope them be safe in cars or motorbikes with qualified drivers to take them to school However, kidnapping in big cities has increased recently, which may reduce the trust of parents in our transportation services So it will be a big challenge for Kidschool to build trust from parents Technology Smartphones are becoming more and more popular According to research made from eMarketer, this year the number of smartphone users globally will go up to 2.39 billion people, of which the biggest increases are India and Vietnam In addtion, there are more and more smart apps on telephones, tablets, laptops to serve and improve living standard Last but not least, Internet is becoming available everywhere in Vietnam, not only in big cities but also in suburbs In big cities such as Da Nang, Ho Chi Minh city and Hanoi, government installed free wifi in some places which they not need to pay for fees or passwords PORTER’S FIVE FORCES Threats of new entrants (Moderate force) In big cities like Ho Chi Minh, Ha Noi, GoViet and grab are transportation apps with reasonable cost and using motorbikes and cars as their main vehicles They have Therefore, it is a little easy for them to develop an app like Kidschool They have a very talented young team and are very intelligent with good business strategies Moreover, their supply is also remote drivers having their own cars and motorbikes like kidschool so it's easier for these apps to develop another function or apps like kidschool Threat of substitutes (Low pressure) In some schools with high fees, there are school buses However, on each trip, between 16 and 30 children will need to be taken to school and home In addition, large cities such as Ho Chi Minh and Ha noi always have traffic jams during peak hours, which will make children spend more time on the car which takes time and also causes them fatigue Moreover, there are so some public buses with the route on the way from home to school with cheap prices but spending so much time because of traffic jams and robberies, pickpockets, and pedophiles are still happening on the public buses which are very dangerous for kids Some taxi drivers, who have close relationship with parents will sign contracts with parents individually, not through the company they work to take kids to school everyday In addition, parents can book taxi, Grab, GoViet, “xe om” to take their kids to school in some emergency cases not for daily purposes Bargaining power of suppliers (Low pressure) Kidschool only hires licensed drivers However, there are some people who not know the traffic law clearly because they not have a license with their true ability and cheated in the exam which had some bad effects when driving Moreover, Kidschool ask each car and motorbike should have a camera installed which can help parents track their kids’ itinerary but not all vehicles are equipped these so Kidschool need invest a part of money buying camera to support drivers Bargaining power of suppliers (Medium pressure) The big problems is that kidnapping, robberies, pickpockets, and pedophiles in big cities are increasing, which may reduce the trust of parents in our transportation services and a big challenge for Kidschool to persuade them to use this app Moreover, because it is a kind of private transportation so the price for using every day for such a long time is not cheap with low income families Therefore, it is one of the limitations of Kidschool Competitive Rivalry (Low pressure) There are no companies like Kidschool in Vietnam market at the moment so it is not big problems with Kidschool at that time There are only some taxi drivers signing contracts with parents individually and disorganizingly, which have the same module as Kidschool STRATEGIC GROUPS (the graph) High price and low market segmentation: traditional taxi High price and high market segmentation: bus school Medium price and low market segmentation: Grab, GoViet Low price and low market segmentation: public transportation Where our company want to be in: Kidschool INTERNAL ANALYSIS Internal analysis is the process of identifying the assets and obstacles that define your company’s potential and limitations The company internal environment consists of all the assets, skills, attitudes and liabilities that you bring to short and long term business activities How are we differentiating our strategy from others? The aim of the strategy is to generate competitive advantage, that is the firm’s ability to gain more profitability than its competitors However, the firm’s main goal is to maintain this competitive advantage during the time through better profit and growth rate Kidschool company can be considered, by people that not know it, a taxi service company but it is quite different from the average taxi service Kidschool strategies is implemented for a specific target: the kids who attend school Therefore, it offers a service to provide parents’ need to bring their children to school and not have time to that It is the first peer-to-peer ridesharing company that allows families to be sure that their children go safe and quickly to school, avoiding any waste of time The service is 10 much more than a simple way of transportation, it offers the possibility to parents to monitor their children’s travel and to be sure that they arrive safe at school thanks to the cameras installed in the drivers’ cars Which resources and which capabilities make up the distinctive competencies of our firm? Kidschool company holds both tangible and intangible resources that if well mixed can led to attainment organizational and operational capabilities Among tangible resources we distinguish our physical assets (administration and management offices), financial assets (cash equivalents, borrowing capacity, capacity to raise equity), technological assets (copyrights, innovative safety system, our app, innovative map location placement) and organizational resources However, our main force points are intangible resources: innovation resources, technical and scientific expertise are fundamental for us, reputation resources, brand name and reputation with reliability and product quality with customers are the key points of our business VALUE RARITY INIMITABILITY NON HIGH QUALITY HIGH QUALITY CUSTOMER ORGANIZATIONAL STAFF YES PRODUCT YES SERVICE YES STRUCTURE YES NO NO NO YES NO NO NO NO NO YES NO NO SUBSTITUTABLE Resource-based model (VRIN) How we create value? On what are we focusing to it? There are many competitors in this kind of market like traditional taxis, Grab or school buses made up by some schools However, Kidschool company has a different feature because it tries to offer a higher price service betting on the quality and the experience of its drivers, that are selected carefully by the top management We create value through a perfect organization, for us it is the most important thing We need to heal carefully every single aspect of the offered services because our company is entirely based on customer loyalty and satisfaction Therefore, the high price is justified by the high quality of the services, but above all from high management and administrative costs We create value not through low price but offering a quality constant improve of services and providing people needs 11 VALUE CHAIN ANALYSIS Inbound logistic Generally, inbound logistics involves receiving and storing raw materials Kidschool does not own the vehicles it uses to serve customers The vehicles are owned or rented by Kidschool drivers, who are not employees, but contractors The drivers need to possess smartphones to use our app software Therefore, value addition in inbound logistics relates to internet-based nature of business operations and the business model of the company Specifically, thanks to our business model, inbound logistics is only limited to mainly hardware and office equipment needed to sustain the business Operations The usage of Kidschool services involves the following stages: Requesting the ride Customers can use app to tap each ride option to see wait time, size, and price Customers can enter their pickup location and tap-request for their driver to arrive in minutes Ride Customers are able to see contact information of their driver, as well as, vehicle details on the app Pay and Go When they reach their destination, kids simply get out of the car and parents rate their driver They don’t need to have cash or credit cards with them, parents can pay the ride via app Outbound Logistics Outbound logistics in value chain analysis is associated with distribution of products Outbound logistics does not fully apply to service sector such as ride-hailing due to inseparability of delivery and consumption of services 12 Marketing and Sales The ride-hailing mainly relies on social media marketing and word-of-mouth marketing to communicate its marketing message to the target customer segment Moreover, Kidschool uses print and media advertising, sales promotions, events and experiences and public relations as part of its marketing strategy Convenient payment method is a source of value addition for the company Therefore, kids don’t have to have cash when they reach destinations The rides are payed previously by the parents with all the possible payments, like cash, internet banking, credit cards, Paypal and so on Service High level of service is one of our core competitive advantages Parents’ riders rate their drivers on the scale of to after each journey and accounts of drivers with average low riding scores are promptly deactivated Drivers therefore have an incentive to maintain a clean car and provide good service Each ride receipt includes a map and a GPS track Customers can complain if their driver took a strange route to reach the destination We also put cameras in the drivers' cars to make the whole service safer and to give parents the opportunity to monitor their children What are our key success factors?  Reliability  Speed  Service quality management  Safety SWOT ANALYSIS 13 STRENGTHS  Helping parents to save money when sharing instead of WEAKNESSES  hiring own driver for their children  Allowing parents not to waste time for taking children to It is hard to gather enough children for a car at the beginning time when it is not widely known yet  The price is more suitable for middle to high class parents so the number of users is limited school  Safe and reliable service  Limited working area  High standard of service, verified and qualified driver  It is hard to assure to the parents that the service is cars safe  Low operational costs  Modern technology and service so we own fast connection and convenient payment through paying in  If children are very far from each other booking the same car could be a waste of time  Highly dependent on manpower (drivers) cash, credit card, internet banking, Paypal and so on  Rating system between drivers and users as control quality  Look like family cars with camera for parents to check their children  Raise a regular income for drivers OPPORTUNITIES  Innovation in technology has led to an increase in the THREATS  smartphone access Therefore, users may find paying  late for school through cards more convenient than cash-payments  Many competitors: Grab and traditional taxis Social media is developing so it can be easier to  Low offer of Internet connection or the limitation in advertise this project  Parents are becoming busier so it could be a great access to smartphone  opportunity to satisfy their needs  Increasing traffic jam in Hanoi can make children In future, there will be a project banning motorbikes in  Hanoi, it will be a problem for many students that will need to utilize their own cars, taxies or services like the Xeom with lower price and convenience in rush hours Some schools have enough money to offer a school bus service  Government regulation ours  Through the new and accurate map location placement system, it can be easier to aggregate the cars’ demand into different city’s areas 14 From this table, we have proposed strategies for our firm SO strategy: using internal strengths we try to reach external opportunities We can invest more money on research and development of new technology both to improve quality and to offer more facilities to access our services We try to invest a lot on app development to give the possibility to all people to easy access our platform This can be a great advantage to make our work more efficient and faster We can invest more money on social media advertising and promotion It can be helpful not only to reach more customer, but also to hire people who want become our drivers easily ST strategy: using the internal strengths we try to avoid or minimize the impact of external threats Reducing costs and focusing on qualified service to build customers’ loyalty and to get new customers to compete better against our competitors, are the main goals of this strategy We also will try to collaborate with the government to regulate Hanoi traffic jam, especially in the rush hours WO strategy: developing internal weaknesses by exploring external opportunities Propose more promotion, vouchers to attract more customers who have middle income or lower income to experience Furthermore, we can celebrate some promotion events at school living area to attract more customers in the same school and living nearby WT strategy: overcoming internal weaknesses and minimizing external threats the high price is our weakness We can try to decrease the price by investing in advertising and therefore increasing our catchment area This could also lead to the possibility of expanding the service to lower income groups and therefore increasing our strength compared to our competitors 15 BUSINESS-LEVEL STRATEGY Market penetration In the recent years, Uber and Grab have emerged as a simple ride sharing app to connect the taxi drivers with the customers The convenience of these apps made their popularity grow and their customer base grew fast Low costs and extra convenience helped them to build customer loyalty and grow their shares after the initial launch in the market Aware of fierce development of this kind of service, Kidschool is based on the idea of e-commerce transportation service like Grab and Uber, however, we have come up with a new market to serve We recognize that today's parents are very busy and not have time to bring their children to school, so Kidschool was established to meet this need Kidschool will substitute for parents in bring their children to school safely and reliably, helping parents save time and reduce anxiety Instead of serving the mass market, we focus on serving children to improve the quality of service as well as meet the current needs We will be the pioneer in this market, pursuing the differentiation strategy, which helps us to enhance the competition Differentiation on market segmentation From the beginning, we have chosen a segment that is completely different from our competitors Our market is focus only on children and their parents with the following characteristics: Geographic  Two main cities in urban areas in Vietnam: Hanoi (political centre), Ho Chi Minh City (metropolitan centre)  Areas which are concentration of kindergarten, primary and secondary schools Demographic  Age range 22 -50, office workers  Have children at 5-12 years old 16  People with from middle to high income and are able to afford premium car service (salary is at least 10- 15 million VND/month) Psychographic  Too busy with their work and not have time to pick up their children  Care for their children’s safety  High tech and enjoy convenience of transportation app  In an urgent demand for a reliable approach helping with picking-up children problem Behavioral  Usually rely on others to help with taking their children to school  Usually use travelling apps such as Grab and Go-Viet  Tired of traffic congestion and sometimes hesitate to move on crowded streets to pick up children  Have a perception that “Price and quality need to be equal”, be willing to spend money on high price and high quality service  Willing to try on new service which can meet their needs Differentiation on products Product features We offer a completely new service on the market, which is to bring kids to school in place of their parents Because we recognize the urgent need of these parents that they are so busy with work that they can not bring their children to school Our service will help parents address these issues Parents can book an individual trip or sign a long-term contract with us for pickup We will select carefully quality cars and qualified drivers to meet the needs of our customers, and make our parents more confident when entrusting their children Also in the shuttles we also have cameras to help parents keep track of their children All information about the driver and the car will be sent to the message to parents to capture Moreover, we also allow parents and children to evaluate on a daily and monthly basis and always supervise closely to improve the quality of service Instead of being positioned as a brand for everyone's mobility at a cheap price, our service is focused solely on one customer’s group and will put 17 the quality of the guarantee on the top These are the features that competitors not have Because they cater to a wide range of customers, they will not be able to meet the needs of their customers and we will only serve a single clientele that can focus on meeting every need and requirement from customers This is the difference on the products between our company and competitors Operation and administration process Our service management can be a great way to set our brand apart from competition Because we take advantage of technology, we can eliminate various transaction costs, hence reduce financial burden when entering the market As result, we can compete with taxis and school buses The taxi industry, even the sector that is dedicated to car rentals and car-hires, used to have the monopoly on the transport industry, which pretty much gave them free rein when it comes to setting fare rates and charges Therefore, the riding public had no choice but to shoulder the search costs and other transaction costs added to their base fare Kidschool follow the model of Grab and Uber so that these transaction costs no longer exist There are no charges to be paid when reserving a car through the mobile app This is certainly not the case with your conventional car-hire service, where you have to pay a fee for every step of the transaction of reserving or hiring the car, independent of the actual fare that you will pay at the end of the ride On the part of the drivers, they are not bound to comply with local regulations on costs such as their permit to operate as a transport service provider, insurance and other municipal costs Granted, they will still pay some fees with respect to the maintenance of their private cars, but it is considerably lesser than what taxi drivers and taxi companies Although we are not the first mover in terms of technology application, we have improvement on operation and administration process compared to our competitors because we only service one segment 18 Therefore, we can offer our drivers better benefit and compensation, while we also offer to our customers high quality service at an appropriate price Performance– is another great product attribute that can be used to differ our brand from competition We make great use of this concept by positioning our service as “safety and reliability” Parents, who are busy with work, have always to ask relatives help or rely on school bus to bring their children to school because they not really trust that children take a taxi or transportation services like Grab They fear that the kids’ safety is not guarantee from these services We make a better performance by selecting the best quality cars and drivers In addition, we have a camera to monitor the trip to ensure the absolute safety of children So, when they come to us, they will not have to worry about leaving their children for a stranger Consequently, they will turn to us without consideration because we solve their problem that other competitors not Differentiation on price Successfully competing on price requires recognition that every customer has a different price they would be willing to pay for our product Segmentation and differentiation allows a business to come close to maximizing the potential revenue by offering each segment a differentiated product at a different price Price differentiation recognizes that the value of goods is a subjective reality, which varies by customer, use occasion, and operating environment In short, price discrimination allows a business to capture consumer surplus — the difference between the amount consumers are willing to pay for a good or service and the amount that they actually pay We aim at different market, so our pricing strategy is also different from our competitors We will offer a price comparable to the service we provide Because our service is more advanced and we serve high class customer, the price of our company will be higher than Grab However, to compete with private taxis and school buses, we will offer a high price but just reasonable to add value to customers Customers will enjoy good quality services at reasonable prices Differentiation on service 19 For a service company, ultimate service is a very effective way to differentiate Because we only serve a group of high-class customers, we want to bring the best experience for them We will put emphasis on customer service We will take care of every customer, listen to the comments and experience of each individual in companion with our travel This is what keeps us different from our competitors because as Grab, they cater to everyone so they will not be able to deliver the best experience for each person but will only satisfy the majority of customers Moreover, because of the special features of our customer group, they are the ones who have good conditions Our service must be superior so that they will come to us because they are willing to pay any price to buy safety and creditability for their children IMPLEMENTATION Build relationship with drivers Kidschool's business model relies on a network of drivers right across the country In essence, they aren't really employees They are part-time contractors workers Moreover, kidschool is a new business in the market, so initially the number of drivers will be very small Consequently, to attract drivers to a completely new company like us, besides salaries and benefits, building and maintaining a good relationship with them is very important Our strategy focuses on treating each driver as a customer so that they feel respected, also we have policies to honor them and help their families When they feel satisfied, they will commit and work harder for us We believe that through this strategy, we will attract more and more drivers to work for the company Build a brand image completely different from the opponent 20 Since we focus on a different group of customers than our competitors, from the very beginning, our company will build a different brand image to help potential customers to perceive and know it To build a different brand image, we will have a marketing strategy aimed at differentiation We will introduce our customers through the media and advertising, making clear that we are a transportation app but it is also very important to share concerns with parents about their children In addition, we will bring our clients a safe and reliable image of the services we provide by offering customers unique benefits that no other firm offers However, as a new business with limited financial capacity, we will only be able to spend a small portion of marketing budget and think about smarter strategies that will help save costs With a small marketing budget, the smartest, most effective strategy is to move away from a branding strategy and towards a customer-driven strategy Focus on serving our potential customers and give them exactly what they want, and it better than anyone else can Organizational structure Following differentiation strategy, we will have to choose the organizational structure which defines how activities such as task allocation, coordination and supervision In our structure we will have to be efficient, flexible, innovative and caring in order to achieve a sustainable competitive advantage The best approach to realize it, is the functional organization structure, a hierarchical organization structure wherein people are grouped following their area of specialization These people are supervised by a functional manager with expertise in the same field This expertise helps him effectively utilize the skills of employees, which ultimately helps organizations in achieving its business objectives Here each department will have a department head who will be responsible for the performance of his section This helps the organization control the quality and uniformity of performance However, our structure will be very simple since we don’t have any operations So it would be as following: Owner Accounting and finance Marketing IT R&D  Accounting and finance department: used to record and report the cash flow and budgeting control  Marketing department: used to define and manage our app and promote the business  Information technology department: used to ensure that the network runs smoothly 21  Research and development department: used to consider potential changes or upgrades Leadership and incentives In terms of the type of power used to manage the firm it should follow the leadership in the first time, it is the only way to make right decisions and don’t have internal issues or disagreement The leader has to make important strategic decisions and everybody has to follow his idea A key point in starting this type of business, where workers are the real protagonists, is to have responsible drivers The service, especially because we are serving children, has to be impeccable to gain trust from parents In these terms the engage and commitment of drivers has to be very high So, as the service must be perfect, incentives and benefits for drivers must be applied thanks to feedback of customers, in this way we can make our reliable drivers satisfied This is the key point of our firm: reward the merit to make our customers happy Legal structure Kidschool, as a new company, has to face some important decisions dealing with the legal structure, this is probably the most important choice when you start a new business Not only this decision will have an impact on how much the firm will pay in taxes, but it will affect the amount of set of forms the business is required to do, the personal liability it faces and its ability to raise money The simplest structure for our company is the sole proprietorship, which usually involves just one individual who owns and operates the enterprise It is also the best one in order to implement our strategy Indeed, this structure has a lot of advantages: it is easy to start, it is less regulated, the sole trader receives all profits and the income from the business are included on the personal income tax return of the sole trader However, we have to face with few disadvantages and difficulties sole proprietorship can present: selecting this structure means you are personally responsible for your company's liabilities As a result, you are placing your assets at risk, and they could be seized to satisfy a business debt or a legal claim filed against you Then, more important, raising money for a sole proprietorship can also be difficult Banks and other financing sources may be reluctant to make business loans to sole proprietorships In most cases, you will have to depend on your financing sources, such as savings, home equity or family loans That is the biggest problem to start a new business: if nobody trusts you and doesn’t want to lend you some money, you will have to run alone In our case we will not need a huge amount of money to launch our business, we will just have to build an app and make people known about that through advertisement However, if we will not be able to start the business for the lack of money, if for example the cost of advertisement are too high, we will have to try to make a partnership with a taxi company, as Grab did In this way we will already have some taxis and drivers we could count on but we would have to split the revenues and we would enter in a firm already launched where we will have less power to make changes or to take decisions Entering in a firm is very complicated and would take 22 some time to gain respect and trust In this situation we would not be free to implement our strategy as we want, but every decisions to take will be a compromise with the partner So for these reasons, it will be essential for us to run alone in order to create a different service with a reliable brand image CONCLUSION With the growth of industrialization and busy schedules occupying people's daily lives, they have got difficulty in coming up with an effective means of transport and time management method Therefore, we launch Kidschool with a fierce desire to bring about some positive and beneficial changes in the field of shuttle service After doing analysis on strengths and weaknesses of the company, we have decided to choose differentiation as our main business level strategy The implementation of our strategy is mostly focus on parents as our sole market segmentation along with development of our own internal and external relations Kidschool, as a new enterprise with unique target clients, strives to build an attractive brand image which can leave the distinctive mark in customers' minds Rebuilding the transportation model and modernizing the service for students is essential, this is one of the five major solutions to tackle with congestion and to reduce the number of traffic accidents in big cities By our business strategy, we want to increase the quality of life for all citizens, especially parents and children ASSESSMENT Name Student ID Content Completed Percent (100%) Le Thi Quynh Trang 1512280078 20% Vu Thi Huyen Thuong Antonio Izzo Nguyen My Duyen Giovanni Lorenzo Pelli 1513280072 1990102036 1515280021 1990102048 Part I: Company overview Executive summary Conclusion Part II: External analysis of the company Part III: Internal analysis of the comapny Part IV: Business level strategy Part V: Implementation of the company Synthesis, report drafting and final review 20% 20% 20% 20% REFERENCES https://blog.marketresearch.com/6-ways-to-differentiate-your-business-from-the-competition 23 http://branduniq.com/2011/differentiation-strategy-how-to-gain-competitive-advantage-through-productleadership/ https://en.wikipedia.org/wiki/Sole_proprietorship https://www.entrepreneur.com/article/75118 https://pmstudycircle.com/2012/08/what-is-a-functional-organization-structure/ 24 ... need: Kidschool This report is written to interpret our idea into a practical project focusing on how we build our strategic plan and structure the firm in order to achieve it The report consists... of suppliers (Medium pressure) Competitive Rivalry (Low pressure) STRATEGIC GROUPS (the graph) INTERNAL ANALYSIS 10 VALUE CHAIN... children to school on time The more detailed analysis will be shown in the strategy part of the report Goals and objectives Vision: To become the first and also the best app–based shuttle service