© Pradeep Kumar Ramiya Mothilal 2012 - No copying without permission
Ace Inc.
Coin Card Every Penny Counts...
Vivek Singh Niranjan | Rasheed Ahmad | Azamain Yusof
Chao Yu-Shu (Bianca) | Pradeep Kumar Ramiya Mothilal
Coin Card 2012
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Table of Contents 1. Executive Summary ......................................................................................................................... 4
1.1 Business Overview .................................................................................................................... 5
2. Organization Structure .................................................................................................................... 6
2.1 Business Strategy ...................................................................................................................... 6
3. Marketing........................................................................................................................................... 8
3.1 Ace Inc’s Mission: ...................................................................................................................... 8
3.2 Ace Inc’s Vision: ......................................................................................................................... 8
3.3 Market Research ....................................................................................................................... 8
3.3.1 Primary Research ............................................................................................................... 8
3.3.2 Secondary Research ......................................................................................................... 8
3.4 SWOT Analysis .......................................................................................................................... 9
3.5 5P’s of Marketing ....................................................................................................................... 9
3.5.1 Product ................................................................................................................................. 9
3.5.2 People .................................................................................................................................. 9
3.5.3 Promotions ........................................................................................................................ 10
3.5.4 Price ................................................................................................................................... 10
3.5.5 Place................................................................................................................................... 11
3.6 Marketing Plan ......................................................................................................................... 11
3.6.1 Building awareness and Understanding ....................................................................... 12
3.7 Advertisements ........................................................................................................................... 12
4. Operations: ..................................................................................................................................... 13
4.1 Operational Snapshot ............................................................................................................. 13
4.2 Supply Network Design .......................................................................................................... 13
4.3 Departments ............................................................................................................................. 14
4.4 Support Infrastructure ............................................................................................................. 14
4.4.1 Office Space: ........................................................................................................................ 14
4.4.2 Server and database: ........................................................................................................... 14
4.5 Products: ..................................................................................................................................... 15
4.5.1 RF Card Reader: .............................................................................................................. 15
4.5.2 Smart Card: ....................................................................................................................... 15
4.6 Quality Control and Performance Improvements: .............................................................. 15
5. Financials ........................................................................................................................................ 16
5.1 Funding ..................................................................................................................................... 16
Coin Card 2012
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5.2 Sales .......................................................................................................................................... 16
5.3 Purchases ................................................................................................................................. 17
5.4 Value Added Services ............................................................................................................. 17
5.5. Revenue Generations ............................................................................................................ 17
5.5.1 Advertisement on Card .................................................................................................... 17
5.5.2 Advertisement on Website .............................................................................................. 17
5.6 Cash flow forecast ................................................................................................................... 18
5.7 Sales Forecast ......................................................................................................................... 19
5.8 Break Even Analysis ............................................................................................................... 20
6. Expansion Plan .............................................................................................................................. 21
7. Appendix ......................................................................................................................................... 22
Coin Card 2012
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1. Executive Summary
Ace Inc.’s Coin Card service is a prominent contactless smart card application
payment service provided to students for managing low-priced transactions
efficiently. Moreover, the Coin Card service provides convenience and safety for
each and every penny transacted with attractive discounts from various businesses
that are high valued and utilized. The businesses which tie up with the Coin Card
service end up promoting their offers on products to potential customers and
increase their revenues. Thus the Coin Card service serves as a bridge between the
business and customers to increase transactions. Increase in transactions will result
in increase of revenues for the Coin Card services.
The Coin Card services will begin its operations from January 1st, 2013 by
reaching the university students with Coin Cards. The Coin Card once activated and
registered for a negligible cost will serve its customers providing information on
offers available in the nearby businesses. The Coin Card can be topped up using
Coin Card Web Services. The students can coin the Coin Card in the Card Readers
installed at multiple locations (Cafe, Vending Machine, Photocopiers etc).
The marketing and research strategy of Coin Card service aims to seek
businesses that offer discounts and offers to potential customers who are using Coin
Card. The discounts offered to the Coin Card Customers will generate revenues in
terms of advertising costs. The research information will give an insight on the
expansion strategy. The analysis of competitors reveals that although there are
many similar services available across the globe, none of the smart card services
predominantly target the student population by providing the university related
services at negligible cost. There is a tremendous market for the Coin Card service
as the survey conducted with university students revealed that 84% of the students
will opt for the Coin Card.
The infrastructure facilities for the Coin Card Web services will be located in
the United Kingdom for information accessibility, while the software related web and
security services will be outsourced to India to avail the quality deliverables at an
affordable cost.
The Coin Card service is estimated to break even in 8 months from its
initiation despite the cost of operations to provide superior services to customer. Led
by a high qualified team from Ace Inc., the Coin Card service will exceed customer
expectations during its operation and thus achieve its vision in the nearby future.
Coin Card 2012
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1.1 Business Overview
Coins have been linked to the concept of money 2500 years ago when they
originated in Anatolia and since then they have been part of our everyday’s life. The
circulated coins, considered to be the building blocks to value wealth and to trade,
gave rise to the transaction era.
Today, despite the advent of internet and technology to perform transactions,
millions of in-expensive transactions take places every day using coins. Each and
every individual spends substantial periods in his life time, valuing his wealth in
terms of coins as well as doing in-expensive transactions using coins, whereas there
are many means to do the same efficiently. One of the approaches could have been
to eradicate coins from circulation, however given that there are more than 41600
unique coins in the world; it is easier said than done. Rather than getting rid of coins,
the value of the coins can be transferred in an electronic card and can be used to do
in-expensive transactions efficiently and hence make every penny count. Ace Inc
makes this very thing possible for everyone.
The Coin Card service, provided by Ace Inc., is one of most prominent service
that has been inspired from the leading contactless smart card application payment
services which serves specific classes of people across the world. To start off, unlike
other electronic payment services, the Coin Card service has been shaped to best
suit the requirements of students for performing in-expensive transactions so that it
becomes an integral part of their life. Irrespective of the value involved, may be as
small as taking a photocopy which takes approximately 3.5 penny, the transactions
can happens in an efficient way valuing each and every penny. Besides efficiency,
the Coin Card service offers convenience and safety to manage coins for all kinds of
transactions.
The Ace Inc, provides this invaluable service to customers using the Coin
Cards and the Coin Card Readers installed at multiple locations in the university
campus. In addition to making transactions efficient, Ace Inc. provides value added
service to all its customers by offering them information on discounts and offers. In
turn this results in the promotion of businesses which ties up with Ace Inc for
advertisements. The expansion plan will be solely based on the marketing and
research information from reaching out for more businesses who wish to collaborate
and endorse their products. Thus, Ace Inc Coin Card service creates a win-win
situation for all its customers who serve each other by valuing transactions.
Coin Card 2012
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2. Organization Structure
See Appendix A for the executive profile of the Ace Inc’s leadership team.
2.1 Business Strategy
Ace Inc. has a business strategy for short term and long term business continuity. The short term strategy underlines the objectives to help the business grow and occupy market share in initial phase of the release. The long term strategic business objectives provide a platform to maintain a competitive advantage in a technologically advancing and evolving market through innovativeness and value addition. The short term business objectives are summarized below:
To expand the business in the targeted segment across major Universities in U.K.
To break even in the first year by aggressively promoting and selling the product and associated value added services to its customers.
Rasheed Ahmad (MD & CEO)
Pradeep Kumar Ramiya Mothilal(CIO)
Web Maintenace
Database Management
Security
Quality Control
Yu-Shu (Bianca) Chao (Head Maketing &
Branding)
Promotions
Branding
Marketing
Sales
Vivek S Niranjan (COO)
Sales & Customer Service
Purchase
Human Resource
Procurement
Maintenance and operational support
Azamain Yusof (CFO)
Accounts Recievable
Accounts Payable
Coin Card 2012
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To aggressively promote and install Ace Inc. payment system (card reader) at amenities which are used by students like vending machines, takeaways, taxi services, book stores, small grocery stores etc.
The long term business objectives are summarized below:
To innovate and research in the area of cashless payments and provide facilities to integrate the Coin Card chip in smart phones.
To expand the business aggressively and provide high returns to shareholders.
To become market leader in providing cashless payment facility for day-to-day transactions to international and home students.
Coin Card 2012
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3. Marketing
3.1 Ace Inc’s Mission:
To provide the university students worldwide, an easy, efficient, in-expensive, convenient and safe means to do low-priced payments with attractive promotions that are highly valued and utilized
3.2 Ace Inc’s Vision:
Imagine a world without coins which have been replaced by innovative and cutting edge technology solutions for its ingenious usage across the oceans. We are Ace.
3.3 Market Research
This part of the plan aims to examine the potential coin card users by primary and secondary research and identify the strengths and weaknesses through a SWOT analysis.
3.3.1 Primary Research
Sample: 88 college student (including postgraduate and undergraduate)
A summary of key trends are as follows:
The survey shows a highly willingness (84%) to substitute coin with card and a highly preference (82%) of discount and promotion with using card. Details of primary research is available in Appendix B
3.3.2 Secondary Research
See Appendix C for the Secondary Research done for the Coin Card Service.
Yes 84%
No 16%
Willingness to substitute coin with card
Yes 82%
No 18%
Preference of discount and promotion with
using card
Coin Card 2012
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3.4 SWOT Analysis
Ace Inc. team will address all the weakness covered in the analysis and will work to convert them to company’s strength. Our R & D department will develop a robust program to provide high end security to the users.
3.5 5P’s of Marketing
3.5.1 Product
- Coin Card 1. Product Name: Coin Card 2. Ace Inc. Tag Line: “Every penny counts” 3. Product / Service Description: Customer can use this card in every store,
café, vending machine in the campus by only swiping your card in front of the card reader and also enjoy the discounts offered on nearby stores, including pubs, taxi, restaurants, book stores and clothing stores.
- Card Reader Product Name: Coin Card Reader
3.5.2 People
Ace Inc Target customers for the smart card services are university students (international & domestic students) who have limited amounts of money and have to manage their expenses in a fixed amount. Ace Inc. provides an integrated system which keeps track of their money and also provides ease of making day-to-day transactions. The parents of students could also be a potential target customer, as the card can be topped up by them for pocket money expenditures, and thus ensures parents that their children don’t spend cash wastefully.
Coin Card 2012
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Figure: Market Segmentation analysis
The vendors who install Ace Inc.’s card reader in their Vending Machines present at the outlets will be the target customer for Card Reader market.
3.5.3 Promotions
Ace Inc. will use number of promotion techniques to retain the interest of customer as well as vendors on usage of Coin Card and its services. It will ensure that value added solutions are provided to the customers. Free Distribution of Coin Card - Ace Inc. will distribute Coin Card to the target market for free. After coordination with the University, the cards would be included in the welcome pack/arrival pack of new students. Discounts – Vendors associated with coin cards will provide discounts to the customers which in turn will benefit the vendors by getting large volume of customer. These discounts shall be available on the company website and would be subject to weekly changes. Refer Appendix J.
3.5.4 Price
The following parameters have been taken into consideration for the pricing of the cards:
1. Suitability to national and international students 2. Usage of the card. 3. Best rates compared to the competitors
Card Fees:
Cost to open account (Handling and Admin Expense)
£ 2
Cost to Customize Card (Name Imprint/Own Picture)
£ 2.5
Use of Card at Point of Sales (POS) Free
Coin Card 2012
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Recharging Coin Card account:
Direct Deposit (Company reload N/W location)
Free
Direct Debit £ 1.5
Online Top-Up through website portal Free
Manage your Account:
Web Portal Free
Lost or Stolen card replacement £ 2
Maintenance (Name or mobile number change)
Free
Statement (on request) £ 5
3.5.5 Place
Ace Inc. is going to target universities cafe, vending and coffee machines, other student utility services (like taxi, stationery stores, nearby grocery outlets etc.) for the card reader, and national and international students for the smart cards. Customers can order coin card though our website, buy from retail outlets and/or grocery stores, or collect from hand to hand distribution. Refer Appendix D.
3.6 Marketing Plan
The following diagram illustrates the marketing plan and strategy for the Ace Inc. coin card.
Coin Card 2012
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3.6.1 Building awareness and Understanding
Coin card being completely new and unique product, Ace Inc. will initially create awareness and understanding of the coin card among the potential and targeted customers using various forms of marketing communication such as advertising, transactional agents, field agents and friends and family.
3.7 Advertisements
See Appendix E for how the Coin Card Services has been advertised.
Coin Card 2012
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4. Operations:
4.1 Operational Snapshot
Ace Inc. provides the next generation technology of smartcard cashless payment
system. It is a unique card payment system that aims to eradicate the use of coins
for small payments at places like vending machines, public toilets, coffee terminals,
take away counters, taxis, buses etc. It replaces bulky coins in the wallet with a card
that can be used to pay the exact change anytime and every time.
Given below is a block diagram indicating the steps involved in a transaction made
by Coin Card:
The card can be easily recharged (Top-Up) either online, or through recharge cards
available at local grocery shops and retail stores or by direct debit. The upper limit of
the balance that can be held in the card is 50 Pounds, i.e. a user can top-up his/her
card from 1 Pound to 50 Pounds. Money is transferred from user’s bank account to
the company bank account and the balance information is saved in company’s
database against the user.
4.2 Supply Network Design
Ace Inc. has a business model that would enable it to cut costs and hence provide
greater value added services to its customers. The supply network structure is made
Coin Card 2012
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to best utilise the capabilities of the firm and sets boundaries for vertical integration.
An indicative supply network diagram is given below to illustrate the operations of
Ace Inc.:
4.3 Departments
See Appendix F for various departments for operating Coin Card Services.
4.4 Support Infrastructure
4.4.1 Office Space:
See Appendix G for proposed office.
4.4.2 Server and database:
See Appendix H for the Server and database details.
Coin Card 2012
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4.5 Products:
4.5.1 RF Card Reader:
Specifications:
Place of Origin: Guangdong, China (Mainland)
Brand Name: Mingwah Model Number: RF-30
RFID card writer: 13.56MHZ Mifare reader Work frequency: 13.56MHZ Type of Read/Write: Mifare S50
4.5.2 Smart Card:
Coin Card has a smart chip embedded in it. The specifications of the chip are: Sony 13.56 MHz FeliCa radio frequency identification (RFID) chip.
4.6 Quality Control and Performance Improvements:
See Appendix I
Coin Card 2012
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5. Financials
5.1 Funding
The business start up cost of £ 28,000.00 is the capital, which is jointly funded
through £ 13,000.00 equity with each of the directors contributing £ 2,600.00 and
£ 15,000.00 loan from bank. The Long Term Loan will be repaid over 4 years with
the interest rate of 7%.
5.2 Sales
Ace Inc’s research survey has identified that over 84% of the students are interested
in replacing the coins that tend to make wallets heavy, with card. Our sales
forecasting is mainly on the number of students in Leeds, which is approximately
35,000.
Month-1, we start to advertise and market our product to the students. Below are the
forecast of sales from Month-2 to Month-12.
Through our marketing efforts (for Months-8) we manage to capture the market by
33,561 students approximate to 95% out of 35,000.00 students’ population. Refer
Appendix I.
Ace Inc also plans to sell card reader for £25 each from year 2 onwards.
Coin Card 2012
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5.3 Purchases
The total purchases for year 1 amount to £ 4,500. For detailed breakup of the
purchases and other expenses refer appendix L.
5.4 Value Added Services
Ace Ice will provide many free value added service and will charge for very few services such as charges for printing account statement.
5.5. Revenue Generations
5.5.1 Advertisement on Card
The company will focus on getting extra revenue by printing vendor’s advertisement on coin card. As a promotional strategy the company will give free advertisements space on the card for first year. From second year the company is proposing to earn £ 5000 for one year.
5.5.2 Advertisement on Website
The company will rent out space on its website for businesses to advertise their offers, thereby promoting their deals and products and would also in turn generate revenue.
Coin Card 2012
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5.6 Cash flow forecast
Cash Flow Forecasts for Five years
Month: Year One Year Two Year Three Year Four Year Five Totals
Receipts
Collections from credit sales 146,361 175,633 210,760 252,912 303,494 £ 1,089,161
New equity inflow 13,000 £ 13,000
Loans received 15,000 £ 15,000
Other 0
Total Receipts £ 174,361 £ 175,633 £ 210,760 £ 252,912 £ 303,494 £ 1,117,161
Payments
Purchases 9,000 10,800 12,960 15,552 18,662 66,974
Payments to creditors 0 0
Salaries and wages 103,200 118,680 136,482 156,954 180,497 695,814
Employee benefits 0 0
Payroll taxes 0 0
Rent 3,840 3,840 3,840 3,840 3,840 19,200
Utilities 1,200 1,200 1,200 1,200 1,200 6,000
Repairs and maintenance 1,000 1,000 1,000 1,000 1,000 5,000
Insurance 2,400 2,400 2,400 2,400 2,400 12,000
Travel 2,000 2,200 2,420 2,662 2,928 12,210
Telephone 1,520 1,520 1,520 1,520 1,520 7,600
Postage 0 0
Office supplies 2,300 2,000 2,000 2,000 2,000 10,300
Advertising 1,600 1,600 1,600 1,600 1,600 8,000
Marketing/promotion 3,600 3,600 3,600 3,600 3,600 18,000
Professional fees 0 0
Training and development 5,000 5,000 5,000 5,000 5,000 25,000
IT-Server 1,000 1,000
IT-Database 200 200
IT-Infrastructure 3,000 3,000
Loan repayments 4,800 4,800 4,800 4,800 0 19,200
Tax payments-Corp 0 249 2,641 130 4,141 7,161
Capital purchases 0 0
Other 1,948 1,948 1,948 1,948 1,948 9,740
Total Payments £ 147,608 £ 160,837 £ 183,411 £ 204,206 £ 230,337 £ 926,400
Cashflow Surplus/Deficit (-) £ 26,753 £ 14,796 £ 27,349 £ 48,706 £ 73,158 £ 190,762
Opening Cash Balance £ 26,753 £ 41,549 £ 68,898 £ 117,604 £ 254,805
Closing Cash Balance £ 41,549 £ 68,898 £ 117,604 £ 190,762 £ 418,813
Coin Card 2012
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5.7 Sales Forecast
The Ace Inc forecast the Sales and Purchases will be increase by 20% yearly due to
expansion to various Universities and High schools.
From the forecast for 5 years, the chart shows that the company will generate
potential revenue in the long-run.
As far as the total Profit/Loss is concerned, our company starts with a negative cash
of -£1,247.00 for Year 1 and would then slowly increase to a profit of £ 73,158.00 in
Year 5.
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
Year 1 Year 2 Year 3 Year 4 Year 5
Am
ou
nt
5 years Forecasts
Total Sales Total Cost
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5.8 Break Even Analysis
Based on the break-even analysis chart given below, Ace Inc. can break-even at the
end of Month-7. Before that, our Total of Sales are below the Total Cost (i.e. revenue
is negative) since theTotal Costs are more in the beginning, until Month-8 after which
revenue generated becomes greater than the cost.
-
5,000
10,000
15,000
20,000
25,000
30,000
1 2 3 4 5 6 7 8 9 10 11 12
Am
ou
nt
£
Month
Break-Even Analysis
Total Sales Total Cost
Break-Even
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6. Expansion Plan
Coin Card service will keep up with the growth of technology by embedding the technology into mobile phones.
Coin Card service has been projected to expand to reach customers in all the universities located in United Kingdom and Europe.
Coin Card service will expand its operations to provide services outside the universities.
Coin Card service plans to introduce Penny Card for school children.
Coin Card service will enhance security features in its operations and web services.
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7. Appendix
Appendix Title
Appendix A – Executive Profiles Appendix B – Market Research Questionnaire Appendix C – Secondary Research Appendix D – Website Appendix E – Advertisements Appendix F – Departments Appendix G – Office Space Appendix H – Server and Database details Appendix I – Quality Control and Performance Improvements Appendix J – 12 Month Cash Flow Appendix K – Flyer printing quotation Appendix L – Detailed Financial Assumptions
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Appendix A – Executive Profiles Rasheed Ahmad – MD & CEO
Rasheed has worked for number of top IT and consultancy firms and has a rich experience of handling a project team at large scale. He has worked for companies like Deloitte & Touché, Infosys Limited. With the proven leadership and managerial skills, Rasheed as a MD and CEO will have overall responsibilities of Ace Inc. Pradeep Kumar Ramiya Mothilal– Chief Information Officer (CIO) With his strategic leadership capabilities, Pradeep Kumar is the CIO of the Ace Inc. Being a Six Sigma Green Belt, he has over 5 year experience in IT industry and have handled several globally acclaimed projects. Pradeep will take lead role in all the technical aspect of the Ace Inc including designing and implementation of quality product and services. Vivek Singh Niranjan – Chief Operations Officer (COO) After graduating as an engineer, Vivek worked for a newly established company with a vision of creating sustainable energy. In past he has successfully implemented and handled the company’s operational activities across the field. As a COO of Ace Inc, Vivek is going to improve company’s inventory and the working capital and will be directly responsible for the company’s strategic planning and its implementation. He will also take care of the post sale activities of the company. Chao Yu-Shu (Bianca) – Head Marketing & Sales
After graduating from Ming Chuan University-Taiwan and worked for one of
the biggest food company in Taiwan with clients such as McDonald and KFC as a
marketing group leader. Chao has in-depth experience in the groom and launch of
both brand and product. As Head of Marketing, Chao will contribute on developing
the marketing strategy, focus on market need for Ace Inc.
Azamain Yusof – Chief Financial Officer (CFO) Finance is the back bone for any company. As CFO of Ace Inc, Azamain will not only focus on the strategic finance decision, cash forecasting and budgeting but will also monitor and implement all these activities. Azamain has a strong work experience in Banking Sector and is well adapt with banking rules and regulations.
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Appendix B – Market Research Questionnaire
1 How much change in terms of coins you carry daily? (All values given below are in Pounds)
A- None (5)
B- 0-0.99 (2)
C- 1-1.99 (11)
D- 2-2.99 (20)
E- 3-5 (37)
F- more than 5 (13)
2 Does carrying coins bother you (do you feel uncomfortable)?
A- Yes (49)
B- No (39)
3 Have you run out of coins when you were in need of them?
A- Yes (71)
B- No (17)
4 Do you spend time in counting coins for a small payment?
A- Yes (62)
B- No (26)
5 How much time do you spend on counting coins or change returned at the cash counter?
A- Less than a minute (71)
B- 1-2 minutes (15)
C- More than 2 minutes (2)
6 In a “week”, how much time do you spend waiting on a “pay-here” queue (any queue which accepts payments for product purchases or services received)?
A- Less than 5 minutes (30)
B- 5 to 10 minutes (28)
C- 10 to 20 minutes (22)
D- 20 to 30 minutes (5)
E- More than 30 minutes (3)
7 On a scale of 1 to 5, (1 being least likely and 5 being most likely) will you wait behind a queue of 10 or more people to buy a product when substitutions (alternatives) are available?
A- 1 (least likely) (41)
B- 2 (24)
C- 3 (19)
D- 4 (1)
E- 5 (most likely) (3)
8 Would you like to have the coins replaced by a card which has each and every penny?
A- Yes (74)
B- No (14)
9 Will you be interested to get promotions or discounts from the vendor when you use the “coin card”?
A- Yes (72)
B- No (16)
10 Two vendors are selling equivalent products or providing equivalent services. Will you choose a vendor giving promotions or discounts over one who doesn't?
A- Yes (82)
B- No (6)
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Appendix C – Secondary Research Background According to UK Card Association, in September 2012 almost 831 million transactions were done using credit card or debit card amounting to total of £40.8 billion. As at September 2012, the total money spent using plastic money has averaged £41.5 billion for the year 2012, which is more than the average compared to last year. Looking at the current situation of economy, where customers are in need of a trade-off between convenience and budgeting. Competitor Analysis
Existing plastic money providers are our competitors. With the expansion in mind Ace Inc. coin card looks debit cards and credit cards as the biggest competitor. In smaller segment where Ace Inc. will target its coin card will have other competitors such as Refresh Card, Bristol Pound and Oyster Card. After a detailed analysis, we identified out main competitors below:
Comparing credit cards/ Debit cards in the market, with coin card, the users do not have to worry about the due date payment, the penalty charges and the interest charges. Being a prepaid cash card it will also help reduce the debt and strengthen the economy. Moreover, using bank services without over-expenditure and involvement to banks will be the unique feature offered by Ace Inc. coin cards.
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Appendix D – Website
Home Page Coin Card Service
Promotions Page - Business Advertisement
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Topup Page
Account Statement Page
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Appendix E – Advertisements The advertisement will help Ace Inc. create awareness and understand Coin Card among potential and targeted customers. Ace Inc. will focus on two following forms of advertisement. The company will advertise in all four corners of the universities Union Website – University union website is one such place on internet where students visit often. The inquired rate for advertising on the homepage of the website is £ 900 for six month. Poster Site – Ace Inc. will also hire the available poster sites available at various corners of the university and the rate for the poster site is £ 900 per 6 month. Face to Face – Ace inc. will distribute flyers and hire students to advertise the Coin Cards to the other students of the university. Appendix D shows the price quotation for flyer printing.
Ace Inc. has a proposed budget of £ 5200 for first year of operation. Simultaneously with advertisement Ace Inc. will also create strong understanding of the product among the targeted customers. Other marketing Cost
Educating and Activating Customers Ace Inc. will here use more personal approach; as such company will leverage transactional agents, field agents, current users and friends and family to guide potential customers from awareness to use.
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Appendix F – Departments The Key departments of the firm are:
Procurement Department: Ace Inc. will have a procurement team which will
perform the task of purchasing the card readers, smartcards from suppliers in China
and other material. The diagram below indicates the location of key operations of
Ace Inc.
Sales/Marketing Department: The sales and marketing team would be responsible
for sales and distribution of the card reader and smart cards to potential customers
and to promote the value added services offered by the firm.
Security Management Department: Ace Inc. will strive to ensure high standard of
security is maintained to prevent hackers from getting into system and to provide
ethical services to customers.
R&D and Innovation Department: The R&D team shall constantly research and
come up with latest advancements in the cashless transactions system. The future
strategy for R&D team is to realise the incorporation of smart card chips into mobile
phones to launch the next level of payment methodology.
Quality Control Department: The Quality control team shall constantly perform an overall quality audit of the company to ensure best operational practises are followed in the operations.
Outsourcing
- IT Support and web development
- Stationery and other day-to-day necessaties
Offshore outsourcing
- Purchase Card Reader and smart cards from China
- Customer Service Support in India (Expansion Strategy)
Domestic Operations
- Customer Service operations during initial stages
- Technical Support
- Design, R&D and Innovation
- Quality Control
- Sales and Procurement operations
Offshore operations
(None)
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Appendix G - Office Space
Highs and description:
South Parade in Leeds City Centre
A 1930's art deco building
Extensive refurbishment
High quality office accommodation.
Each floor is approximately 5000 sq. ft. in size
Excellent views of the City Centre Cost for rent: £82pw
References: http://www.gumtree.com/p/flats-houses/office-space-to-rent-south-parade-ls1/113046841#gallery-item-full-1
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Appendix H – Server and Database details
IBM Server: IBM System x3500 M4 Express
Specifications:
Intel® Xeon® E5 -2603 1.8GHz 10M 4C
4GB (1 x 4GB RDIMM)
Open BAY FOR 3.5" Hot Swap SAS/SATA HDD (8)
M1115 disk controller
750 Watt power supply
Database: Oracle 11g Enterprise Edition Database for holding customer records and
transactional history. See Appendix for further details.
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Appendix I – Quality Control and Performance Improvements
Ace Inc. seeks to deliver value in its products and associated services for its short term and long term sustainability in the market. The organization takes the Balance Score card approach given below to get the overall picture of the quality aspects that need to be implemented.
The Ace Inc.’s Coin Card service targets a small segment of market to start with which involves limited production and services even though it has the potential to seep into other market segments and expand. However, foreseeing the growth of technology in the future, the Coin Card service will inevitably become a service that involves mass production. Hence, for Quality Control and Performance improvements, the Coin Card service will tend to align Total Quality Management (TQM) and Six Sigma right from the outset. The Ace Inc. craves to make continuous improvements throughout its life cycle of existence in order to meet the growing expectation of the customer and avoid radical changes to its operations. As the improvement in operation performance stems from the improvement in operations capabilities, the Ace Inc. will use the following: • Total Quality Management for continuously improving the tangible aspects of its service such as Operations, Customer Relationship Management to deliver quality to customers • Six Sigma for intangible services such as Transaction processing, network management primarily to eliminate flaws and improve performance Quality Management of tangible services:
Quality Management of tangible services is aligned to the Element Approach of the Total Quality Management which takes key process and units into consideration and uses the tools of Total Quality Management to foster improvements. Ace Inc. plans to bring about quality in the Coin Card Service by performing the following:
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Customer Focused: As the Coin Card Service revenues depends upon meeting customer expectations, Ace Inc. shall phase out the quality improvements such as upgrading Coin Card Readers or Coin Cards, training employees depending upon whether the efforts were worthwhile for the customer by seeking regular feedbacks. Involving all hands: Ace Inc. shall involve all the employees to work towards common goals and hence improve commitment. Proper environment will be provided by the Management team to integrate continuous improvement efforts with normal business operations. Process centric: The process involved from procuring the Coin Card and Readers from the suppliers to delivering the Coin Card Service to the customers will be broken down into unique process with performance measures to monitor unexpected variation. Integrate Systems: The Ace Inc. will integrate the horizontal processes of the vertically structured departments such as marketing and operations so as to connects business improvement elements to exceed expectations of customers, employees and other stakeholders. Strategic and systematic approach: To achieve the organization’s vision, mission and goals with quality, Ace Inc. will follow a strategic and systematic approach. Continuous Improvement: Small improvements in terms of being analytical and creative, will be made wherever applicable, to become more competitive for meeting stakeholder expectations. Decision Making: The decisions made by Ace Inc. on Coin Card service will be fact based which has been collected over a period of time to improve accuracy on decision making and to achieve consensus. Communication: As Total Quality Management involves the organizational improvements effective communications plays a major role in Ace Inc. for motivating employees at all levels and maintaining the morale.
Process Activities Inputs Outputs Customer Document
ation
Criteria
Sales of Coin
Card Services
and
advertisements
Provide
Specification
Answer
Customer
inquiries
Coin
vending
machines
literature
Customer
purchases
Coin Cards
or Readers
Vendors
People
who use
Coin Cards
Registration
Details
Revenue
Growth
Net income
growth
Scheduling for
installation of
Coin Card
Combine jobs
in order to
maximize
Coin
Vending
Machine
Successful
installation
University
services
Installation
report
Percentage
on time
installation
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Services efficiency location
Purchasing of
Coin Card
Services
Qualify
suppliers
Monitor
Supplier
performance
Feedback
from
customer
s who
use Coin
Card
Services
Purchased
Services
Vendors
People
who use
Coin Cards
Service
Feedback
Percentage
delivery of
service
Shipping Packaging
products
Monitoring
shipments
Shipping
supplies
No damage Vendors
People
who use
Coin Cards
Shipment
Feedback
Percentage
delivery on
time
Transaction
Processing
Getting the
information
Information
Update
Amount
and card
number
Transaction
successful
Customers
who use
the Coin
Card
Transaction
statements
Accuracy
Time taken
for
Transaction
Termination of
Service
Termination
request
Verifying the
request
Card
number
and
customer
mobile
number
Coin Card
Service
termination
successful
Customers
who have
stopped
using the
Coin Card
Service
Termination
Reference
number
Percentage
of successful
Termination
of Service
Replacement
of Coin Card
Request for
replacement
Replacement
of Coin Card
Card
number
and
customer
mobile
number
Shipping
address
Successful
replacement
of Coin
Card
Customer
who has
lost the
card
Replaceme
nt Service
Reference
number
Percentage
of successful
Coin Card
replacements
Quality Management of intangible services:
Ace Inc. uses Six Sigma to focus on Quality Management of intangible services resulting in elimination of defects in the System. The Coin Card Service stands apart from other competitors in terms of delivering reliable service at high performance level. By implementing Six Sigma in the Transaction processes, Coin
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Card saves 54 minutes of transaction time every year for hundred concurrent transactions happening concurrently across the market. The time savings can be translated into system performance cost. Ace Inc. believes that the savings will improve exponentially as the Coin Card Service expands across all the markets and thus prove to be remarkable in value to all the stake holders of Ace Inc.
DMAIC Methodology: Transaction Process Improvement
Define TPM-Graphical L1, Graphical L2
Results in trivial and non trivial thoughts Provides the approach towards solving a problem
Brain storming results
about the Transaction
process improvement
Measure Process Map- HL,LL C&E matrix
Depicts inputs and outputs of the process and its flow. Provides the required trivial and non trivial inputs and all outputs.
Represents the variations Determines the priority
Analyze Process FMEA Identify failure/potential risks. Severity of each risks
Prevention of failure
Improve RCA Determines the root cause. Eliminates repeated occurrences of the same problem.
The problem description
Control Control Plan The description of the actions that need to be taken. The person to take the action
Sustain the project gains.
Analyze Improve Control Measure Define
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Results:
CTQs as
identified
in the
Charter
Metrics\
Measures
Baseline
Value
Improvement
after DFSS
deployment
Time
Savings
Projected
for next 6
months
Remarks
Transaction
Processing
time
Time taken
for 100
Transaction
s
10seconds
1second
27
minutes
Assume 100
Transactions
happened
per day
Cost Saving Calculation:
CTQ - Transaction Processing time Goal achieved - 1second /100 transactions Assumption - 100 Transactions happened per day Time Saved - 9seconds / Day (approx) 1 month (4 weeks / 20 days) - 4.5 minutes 6 month projected saving - 27 minutes
Coin Card 2012
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Thought Process Map - 1
Thought Process Map - 2
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Process Map As is Low Level
Process Map To be Low Level
Process Map to be High Level
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Cause and Effect
Failure Mode and Effect Analysis
Example Rating Scale for Severity
Severity Description Ranking
Hazardous without warning
Resulting in corruption of the system and loss of data without warning.
10
Hazardous with warning
Resulting in the OS Corruption but no loss of user data. 9
Very High Application / configuration corrupted no loss of data 8
High Application / configuration corrupted no loss of data. 7
Moderate System partially operable (loss of secondary function. 6
Low System partially operable but with significant
degradation of performance. 5
Very Low System fully operable with significant degradation of
performance. 4
Minor System fully operable with significant degradation of
performance. 3
Very Minor System operable with minimal interference (using
refresh / retry). 2
None No effect 1
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Example Rating Scale for Probability
Probability Description Rating
Very High: Failure is almost inevitable
> 1 in 2 10
1 in 3 9
High: Repeated failures
1 in 8 8
1 in 20 7
Moderate: Occasional failures
1 in 80 6
1 in 400 5
Low: Relatively few failures
1 in 2,000 4
1 in 15,000 3
Remote: Failure is unlikely
1 in 150,000 2
<1 in 1,500,000 1
Example Rating Scale for Detection
Detection Description Rating
Absolute Uncertainty
Design control cannot detect potential cause/mechanism and subsequent failure
10
Very Remote
Very remote chance the design control will detect potential cause/mechanism and subsequent failure
9
Remote
Remote chance the design control will detect potential cause/mechanism and subsequent failure
8
Very Low
Very Low chance the design control will detect potential cause/mechanism and subsequent failure mode
7
Low
Low chance the design control will detect potential cause/mechanism and subsequent failure
6
Moderate
Moderate chance the design control will detect potential cause/mechanism and subsequent failure mode
5
Moderately High
Moderately High chance the design control will detect potential cause/mechanism and subsequent failure mode
4
High
High chance the design control will detect potential cause/mechanism and subsequent failure mode
3
Very High
Very high chance the design control will detect potential cause/mechanism and subsequent failure mode
2
Almost Certain
Design control will detect potential cause/mechanism and subsequent failure mode
1
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Root Cause Analysis
Control Strategy For Control Plan for Transaction Process
Objective Reduce Transaction Processing Time
Out of Control Conditions
Server Performance
Procedure Nature of Control What to Check Action Responsible
Transaction Processing
Review on successful transactions
Concurrency Control Performance
Measure performance on the basis of time
Chief Information Officer
Transaction Request
Review on card reader data
Accuracy of Input data
Take a data sample and measure accuracy
Chief Information Officer
Appendix J – 12 Month Cash Flow
Coin Card 2012
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Appendix K – Flyer printing quotation
Coin Card 2012
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Following is the price list for printing the flyer from Priceless Print in Leeds
A6 Printed Flyers size 105mm x 148mm
Colour Sides 250 500 1000 2000 3000 5000 10000
b/w 2 £34 £51 £78 £105 £123 £152 £214
b/w 2 £40 £64 £98 £115 £136 £167 £236
full colour 2 £44 £74 £109 £128 £150 £185 £261
full colour 2 £63 £100 £153 £179 £212 £261 £368
Printed on 130gsm gloss. Other materials available on request (price may vary)
A5 Printed Flyers size 148mm x 210mm
Colour Sides 250 500 1000 2000 3000 5000 10000
b/w 2 £34 £59 £94 £125 £148 £175 £236
b/w 2 £40 £70 £104 £138 £163 £192 £259
full colour 2 £64 £85 £115 £153 £182 £213 £288
full colour 2 £85 £100 £162 £216 £255 £300 £405
Printed on 130gsm gloss. Other materials available on request (price may vary)
A4 Printed Flyers size 297mm x 210mm
Colour Sides 250 500 1000 2000 3000 5000 10000
b/w 2 £45 £82 £105 £145 £167 £214 £314
b/w 2 £50 £90 £115 £160 £183 £236 £345
full colour 2 £75 £100 £128 £177 £202 £262 £383
full colour 2 £108 £141 £179 £250 £285 £368 £539
Printed on 130gsm gloss. Other materials available on request (price may vary)
Appendix L – Detailed Financial Assumptions
Coin Card 2012
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Expenses
Purchases
The price of the reader machine cost £ 20.00 each, bought 40 pieces and the smart
card cost £ 2,500 for 50,000 pieces (we buy in bulk). Total purchases as follow;
1. Reader machine (100 pieces @ £ 20.00) - £ 2,000.00
2. Smart card (50,000 @ £ 0.05) - £ 2,500.00
Total Cost of Purchases - £ 4,500.00
Loan
The company borrowed a Term Loan for £ 15,000.00 from the bank with the interest
of 7% for 4 years. Therefore, the loan repayment is £ 400.00 monthly for 48 months
plus with the total interest of £ 4,200.00 (yearly £ 1,050.00).
Corporate Tax
The company will pay corporate tax of 20% of the company business minus the
capital of the business. For the Year 1, the corporate tax is £ 312.00 to be paid on
Year 2.
Salaries and wages
All directors will received salaries monthly of £ 1,200.00 each (5 persons -
£ 6,000.00), and 2 staffs will received £ 500.00 each (2 persons - £ 1,000.00).