smartphone travel app business plan mba thesis

43
MBA Programs © By Alexander Hoskinson Corvinus Full-Time MBA Thesis July 2014 Alexander Hoskinson 6/7/22

Upload: alexhoskinson

Post on 17-Dec-2014

350 views

Category:

Business


8 download

DESCRIPTION

A summary of the findings of my MBA thesis for the Corvinus University of Budapest. The purpose of the thesis was to evaluate the need for a smartphone tour guide app, and then create a feasible business plan to create and introduce the product. The official title is "A Business Plan for a Mobile Travel Application that provides Guided Walking Experiences on Smartphones."

TRANSCRIPT

Page 1: Smartphone Travel App Business Plan MBA Thesis

MBA Programs ©Alexander HoskinsonApril 10, 2023

By Alexander Hoskinson

Corvinus Full-Time MBA Thesis

July 2014

Page 2: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

A Business Plan for a Mobile Travel Application that provides Guided Walking

Experiences on Smartphones

Page 3: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

OUTLINE

Strategy Overview

Industry Background

Product Description

Revenue Information

STP Model

Market Research Pricing Advertisin

g

Distribution

Competition

Company Structure

Financial Information

Future Goals

Page 4: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

STRATEGIC BACKGROUND

The primary strategy and framework for this study came from the following two sources

Blue Ocean Strategy

By W. Chan Kim and Renee Mauborgne, 2004

Business Model Generation

By Alexander Osterwalder and Yves Pigneur, 2010

Page 5: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

BLUE OCEAN STRATEGY

This is the overall framework that acts as a map for my study

The Blue Ocean Strategy (BOS) has many tools, and they will appear at various points throughout the presentation

For example, these are three of the tools I will use: Value Innovation

● Helped decide how to increase value while decreasing cost

Strategy Canvas● Helped determine competition and make sure this business model isn’t going head to head with them

6 Paths Framework● 6 paths to keep on track with the BOS (Kim & Mauborgne, 2004)

Page 6: Smartphone Travel App Business Plan MBA Thesis

MBA Programs April 10, 2023

BUSINESS MODEL GENERATION

This is a canvas designed to make sure a business model includes all necessary parts and doesn’t have any weak points

(Osterwalder & Pigneur, 2010)

Source: http://www.businessmodelgeneration.com/canvas

Alexander Hoskinson

Page 7: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

INDUSTRY BACKGROUND

Why is it a good idea to enter this industry?

It can be broken into two segments: Technology Travel Technology

Both of these are growing segments with ample opportunities (IDC, 2014; Eurostat, 2014)

Page 8: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

TECHNOLOGY (SMARTPHONE) INDUSTRY IN 2014

Smartphone shipments increased significantly last year, and are predicted to increase again this year

Samsung and Apple have largest market share, but there are an increasing number of competitors entering the market to give more options to more people

(IDC, 2014)

Page 9: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

TRAVEL TECHNOLOGY INDUSTRY

People are turning to technology to plan trips, and for resources while traveling

It isn’t used just for travel booking, but for many other aspects while on the go (cite all)

Social media allows much more feedback from customers about all things related to travel (Offutt, 2013)

Laptops are becoming less popular than smartphones, and the same could happen with hands free devices and other options

Page 10: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

PRODUCT DESCRIPTION

App Name:

ExploreGuide

Virtual tour EXPERIEN

CE

Uses an app on

smartphones

Users follow pre-designed

“tours”

Multiple choices of

tours based on various factors

BasicIdea

Page 11: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

PRODUCT DESCRIPTION

Asks users about location, interests, and time limit before suggesting tours

Gives a starting point (a local restaurant), and then gives clues to each location

Doesn’t give too many details of tour before in order to make it an adventure

Page 12: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

BOS VALUE INNOVATION

• This product gives the customers a new value by providing a user-created experience, not just following a tour guide

• Also, it guarantees that exploring independently will still result in finding interesting places

• Cost is reduced to customer by not having to pay

• Cost is reduced to the company by not having to pay tour guides for every tour

Source: http://www.blueoceanstrategy.com/concepts/

Page 13: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

BOS STRATEGY CANVAS

The Strategy Canvas is one of the fundamental tools of the Blue Ocean Strategy.

This tool shows how the main competitors act and how this will be different.

(From author, framework by Kim & Mauborgne, 2004)

Page 14: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

BOS FOUR ACTIONS FRAMEWORK

This tool helps determine how to different from the values of the current industry.

(From author, framework by Kim & Mauborgne, 2004)

Page 15: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

BOS ERRC GRID

The Eliminate – Raise – Reduce – Create Grid helps tie the values to this company.

(From author, framework by Kim & Mauborgne, 2004)

Page 16: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

BUSINESS MODEL CANVAS FOR EXPLOREGUIDE APP

(From author, framework by Osterwalder & Pigneur, 2010)

Page 17: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

POTENTIAL REVENUE MODELS

Revenue Models

Type: Traits:Sell the app Sell it one time

Sell per “tour” Sell it for a certain time limit (like a license)

Advertising Integrate advertising into the interface and collect money from the advertisers

Sponsorship Businesses will pay in order to have the app bring customers to them (i.e. a tour starts/ends at a restaurant)

Freemium Offer basic services for free, but charge for better services For example:

o Basic tours could be free, but there could be subscription options for other tourso The ability to get extra features (i.e. upload/download capabilities)o Unlimited usage (only allow a certain amount of free usage)o Better profile (i.e. allow to connect with other people)

Page 18: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

REVENUE MODEL CHOICE

Different through product evolutionStart with one very simple method, and integrate the others when possible/necessary

1. Start free At the very beginning, generate zero revenue to gain a slight following

2. Move to sponsorship Once there is a slightly established customer base, recruit sponsors and get

them to pay

3. Charge small amount for very unique tours If possible to offer very unique tours, charge a small amount from them to

generate more revenue

Page 19: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

STP

Attempting to narrow down the market segment, I came to the following conclusions

Segmentati

on

Targeting

Positioning

International travelers English speakers

Users of technology (at this point, not limited to

smartphones)

Have a desire to explore (common in most, but not all, travelers)

STP

Page 20: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

STP

Target Market - General Traits

Facts: Personality Traits: Age: 18 – 27 Male and female Low income (causing higher price sensitivity and desire for good

deals) Tech savvy

o Comfortable using technology (and embrace it)o Have access to different platforms (especially smartphone –

this is absolutely necessary)o Quickly learn/adapt to new programs

Smartphone users Social media active

o Use many forms of social mediao Have network of friends to share with

Curious/eager to learn and experience new things Open-minded Want to contribute to/feel part of a “community” Trust their networks

o Listen to advice from friends and familyo Like to share their own opinions

Not afraid to try new things and go new placeso But, want some help in doing this

 

Segmentation

Targeting

Positioning

Page 21: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

STP

Segmentati

on

Targeting

Positioning

The product will be positioned according to the following ideas

Unique product that is uncommon and unusualFree (or so cheap that it could be compared to free)Solves a problem that the consumers didn’t even realize they hadMakes the life of the consumer flexible, easy, and carefree while remaining successful in their travels

Changes the options they have while traveling

Page 22: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

MARKET RESEARCH

Key lessons learned from the interviews I conducted

Interviews

Industry Reports

The product is interesting to all different age groups

The younger age groups were more interested (and able) to share on social

media

Most don’t use mobile data while traveling abroad, and generally believe the GPS

requires this (which is not true)

They would be interested in using the product while traveling, but not really in

their hometown

Page 23: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

MARKET RESEARCH

Key learnings from industry reports

Interviews

Industry Reports

The majority of people don’t use cellular data abroad

(European Commisson, 2014)

The Android (Google) operating system is the most common, but the iOS (Apple) operating system has

significant market share(Kantar, 2013)

Consumers are increasing turning to mobile devices for travel needs

Free apps receive significantly more downloads

(App Annie Index, 2013)

MARKET RESEARCH

Page 24: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

PRODUCT PRICING OPTIONS

Free•Could achieve more downloads

Paid•Could gain revenue more directly

or

Page 25: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

PRICE CHOICE

Low price High price value for price sensitive consumers

Free as long as possible Revenue can come from sponsorship

Following the Business Model Canvas, there are other ways this product could create value, so it isn’t necessary to offer it free.

However, a free product creates value for the business partners who are potential sponsors by having a larger customer base, so that satisfies more parties. (Osterwalder & Pigneur, 2010).

Page 26: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

ADVERTISING

Online

These will be used minimally with a close scrutiny on success statistics

Social Media● Targeted, promoted posts

Google Ads● Targeted ads

Offline

Posters/fliers in partner businesses Stickers in window of partner business Stickers given to finishers

Page 27: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

SOCIAL MEDIA

Interact with other social networks as much as possible Ability to share information on maximum amount of

networks Create a Virtual Postcard that is attractive and

makes customers want to share Utilize hashtags and other popular trends

No attempt to build own social network Many apps attempt to create their own, and this

increases difficulty and frustration among customers

Page 28: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

DISTRIBUTION CHANNELS

App Markets Google Play App Store

Websites Owned

Website(s) we create and run

Earned Reviews and other discussions on outside

websites (i.e. blogs)

Unearned Paid reviews on other websites (used very

minimally, if at all)

Page 29: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

COMPETITOR ANALYSIS

Uti

lize

th

e B

OS

th

eo

ry

of

red

raw

ing

ma

rket

b

ou

nd

ari

es

Source: http://www.blueoceanstrategy.com/concepts/

Page 30: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

COMPETITOR ANALYSIS

Competing with two different industries: Guided and Self-Guided Tours

Land somewhere in the middle

Page 31: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

MAJOR COMPETITORS

There are three main types of competitors, and each one has different breakdowns

Guided

• International Tours• Organize whole trip• Just the tour

• Local Tours• Just the tour

Self-Guided

• Sources• Guide Books• Websites• Local People

• Types• Pre-planned

itineraries• Random

suggestions

Alternate Activities

• Museums• Cinemas• Theaters• Restaurants• Parks• Shopping

Page 32: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

NO DIRECT COMPETITION

Even throughout the massive amount of apps, there doesn’t seem to be a direct competitor.

There are travel and tour apps, but there isn’t one that offers users a gamified challenge to discover a city on their own, but also provides them with knowledge and information about their surroundings.

no direct competitor

gamified challenge

discover a city

provides knowledge and information

Page 33: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

EXPLAIN COMPETITIVENESS

Functional-Emotional Orientation is a significant differentiating factor

Instead of competing with quality and/or price like the majority of competitors (functional), try the emotional strategy

Sell this product as an experience where customers are responsible for their own adventure and success

Source: http://www.blueoceanstrategy.com/concepts/

Page 34: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

COMPANY STRUCTURE

Main organizational factors of the company:

Centralized Headquarters

• Only office till expansion is necessary

Outsource IT (cheap country abroad)

• More affordable way to develop product

1 person per city/region• Have one person to manage quality, local partners, and local knowledge in each

region

Updates/Maintenance• Regional person performs routine maintenance• Headquarters makes decision about necessity of outsourcing IT for more difficult

tasks

Page 35: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

TWO POSSIBLE METHODS FOR CONTENT CREATION

Internal External

Pros:• Complete control over content• Can quickly edit/update tours

Pros:• Only pay when receiving something• More perspectives and creative ideas

Cons:• Cost of constant employment

Cons:• Inconsistent work and topics• (Potentially) challenging to update

Who is actually writing the tours?

Page 36: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

CONTENT CREATION CHOICE

Start with internal only• Simple and cheap

With growth, consider external• Wider variety

If using external, use royalty payment method• Lower risk• Higher likelihood of quality

Page 37: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

DEVELOPMENT COSTS

Impossible to judge without actually paying a developer

Based on many factors including hourly wage of the software developer and the amount of features it will need (Angeles, 2012)

A survey of 96 apps found an average development cost of $6,453 (Ahlund, 2010).

This seems a reasonable estimate for this product

Page 38: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

STARTING INVESTMENT

These are the potential methods which the initial funding can come from (in order of preference and likelihood)

Family/friends

• Potentially easier for lower amount because they want to support you as much as the business

Incubator Funding

• Helpful for other resources (i.e. networking) as well as funding

Angel Investors

• Promising if idea is sound enough

Crowdfunding

• Usually have to find something to offer in return

Venture Capital

• Difficult without already being established

Page 39: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

SALES FORECAST

Potential Revenue From Sponsors

Number of Tours (2 Sponsors/Tour) 5 10 15 20 5 10 15 20

Sponsor Fee/Month $15 $15 $15 $15 $25 $25 $25 $25

Revenue Generated/Month $150 $300 $450 $600 $250 $500 $750 $1,000

Revenue Generated/Quarter $450 $900 $1,350 $1,800 $750 $1,500 $2,250 $3,000

Revenue Generated/Year $1,800 $3,600 $5,400 $7,200 $3,000 $6,000 $9,000 $12,000

Number of Tours (2 Sponsors/Tour) 5 10 15 20 5 10 15 20

Sponsor Fee/Month $35 $35 $35 $35 $50 $50 $50 $50

Revenue Generated/Month $350 $700 $1,050 $1,400 $500 $1,000 $1,500 $2,000

Revenue Generated/Quarter $1,050 $2,100 $3,150 $4,200 $1,500 $3,000 $4,500 $6,000

Revenue Generated/Year $4,200 $8,400 $12,600 $16,800 $6,000 $12,000 $18,000 $24,000

Difficult to forecast because it depends on too many factors

Number of Tours Number of

DownloadsOtherSponsors

CitySize of the Sponsor

Length of Contract

Sponsors will be the main form of revenue. Earnings will vary.

Page 40: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

BLUE OCEAN STRATEGY SUMMARY

Value Innovation• Helped create the core value from the beginning

Strategy Canvas

• Made Sure the product existed in a blue ocean

4 Actions Framework

• Helped create the value curve for the strategy canvas and challenge current industry thinking

ERCC Grid

• Helps turn the 4 Actions Framework into usable ideas

6 Paths

• Ensured the thinking remained in the blue ocean, and not in head-to-head competition

3 Tiers of Noncustomers

• Helped search for new customers and understand how to lose current customers

Sequence of BOS

• An overall map to show the progress

Page 41: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

FUTURE GOALS

Release Multiple Versions

• Start with simple, basic version, and update to newer versions with growth that have more features and functions

Strong Intent to Sell

• Develop a strong brand and customer base• Attempt to sell the product to a larger company who is searching for technology or brand name

Update for Regulatory Changes

• The EU is currently in the process of attempting to regulate mobile markets (i.e. banning roaming fees within member states)• Follow closely and update product to match

Page 42: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

FINAL RECOMMENDATIONS

It won’t generate revenue immediately, but could grow

exponentially with more customers, partners and tours.

The product is a feasible idea.

Many factors were decided following the Blue Ocean Strategy and the Business Model Canvas, but the most important

trait is offering an “experience” to

consumers.

Page 43: Smartphone Travel App Business Plan MBA Thesis

MBA Programs Alexander HoskinsonApril 10, 2023

REFERENCE INFORMATION

For a detailed summary of the references cited in this presentation, please see the printed executive summary of my thesis:

A Business Plan for a Mobile Travel Application that provides Guided Walking Experiences on Smartphones