PME 6093 ENTREPRENEURSHIP DEVELOPMENT FINAL

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1.0 INTRODUCTION

1.1 Concept of business

The company will establish its presence in the industry by acquiring an existing taxi cab

association. Techno Taxi Service (TTS) will provide complete taxi cab services using the

latest equipment and technology to facilitate the travel of individuals in and around the

Kuala Lumpur area especially for tourist. The company’s products and services show that

an innovative, forward thinking company that recognizes the need to move with ever-

changing customer needs. The company also realizes that, in a competitive environment,

flexibility and professionalism maintain that leading edge. The company has drivers and

employees that are helpful, courteous, and fully trained on the use of the computer

dispatch system. TTS is whose mission to provide reliable, timely, and safe cab services

by using complete, in-car credit and debit card access, along with computer-aided

dispatch. As an added safety measure for both drivers and passengers, TTS is fitted with

Global Positioning Systems (GPS), which enable the cabs to be tracked or located in an

emergency. All Techno Taxi Service cabs will be clean, well maintained, and inspected

regularly for safety and comfort.

1.2 Name and address of business

Techno Taxi Service, located in Kuala Lumpur offers an airport transportation service for

the greater tourist in city area. TTS will offer service 24 hours a day to most

neighborhoods in Kuala Lumpur. TTS located in stated address as below:

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7 Jalan 1/46A, Selingsing 7,

Taman Niaga Waris,
Jalan Kuching,
51200, Kuala Lumpur
Tel: 03 8024 2727, Fax: 03 8024 1111
Email address: http://www.tts.com.my/

1.3 Company Ownership

TTS is a sole proprietorship founded and owned by M.Elengeswarry. Sole proprietorship

is not a corporation. It does not pay corporate taxes, but rather the person who organized

the business pays personal income taxes on the profits made, making accounting much

simpler. A sole proprietorship also does not have to be concerned with double taxation, as

a corporate entity would have to.

1.4 Logo

1.5 Tagline

Techno Taxi Service is our desire.

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1.6 Vision

To be a world class ground Transportation Company, and to ensure that our customer

understand the link between good performance and the success of the company

1.7 Mission

 Provide reliable, timely, and safe cab services by using complete, in-car credit

and debit card access, along with computer-aided dispatch.

 Provide the customer the finest airport transportation service available.

1.7 Business objective

1.7.1 Financial objective

 To achieve first year turnover of RM 500,000

 Reach the breakeven point within 2 years

 Achieve 30% gross profit margin in our second year operation.

1.7.2 Marketing objective

Increase customers by 20% per year through superior performance and word-of-mouth

referrals.

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2.0 INDUSTRY ANALYSIS

2.1 Environment Analysis

In fact, it would be better to call this kind of analysis a business environmental analysis

but the acronym PEST is easy to remember and so has stuck. PEST stands for Political,

Economic, Sociocultural and Technological. The analysis examines the impact of each of

these factors on Techno Taxi Service. The results can then be used to take advantage of

opportunities and to make contingency plans for threats when preparing business and

strategic plans.

2.2 Politic

When looking at political factors that should consider the impact of any political or

legislative changes that could affect our business.

2.3 Economy

Economic changes can impact TTS in different ways. Such as, incensement in price can

reduce number of customer. Other than that, decrease in price effect the profit of TTS.

2.4 Sociocultural

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Social factors influence people’s choices and include societal beliefs, values and

attitudes. So understanding changes in this Kuala Lumpur area can be crucial, as they

lead to political and societal change. Added complications when looking at social and

cultural factors are differences in ethnic and social groups. Not all groups have the same

attitudes and this influences how they view various products and services.

2.5 Technological

 Global Positioning System

TTS has a unique Global Positioning System (GPS) that pinpoints the nearing

driver thus allowing the driver to give an accurate estimated time of arrival.

 Radio System

Reliable communications are essential under all circumstances. TTS will use the

KDT 5000 system design because it provides multiple levels of reliability to

assure communications will be maintained under the most rigorous condition.

 Credit/Debit Card System

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This system is the first of its kind in Kuala Lumpur and is convenient for both the

passenger and driver because approval is given instantly. The swipe machine is

located in the back seat, giving the passenger privacy.

2.6 Customers

TTS focus will be on the credit card market with target local tourist and foreign tourist in

the low to mid income range in the Kuala Lumpur area. The target customers are

motivated to use our services over that of competitors because of the convenience and

quality associated with our services.

2.7 Competitors

 Airport Limo & Taxi Service

 City Line
 Comfort Radio Taxi Service
 Eco Transit
 Genting Highlands Taxi Services Agency
 Mesra Cab
 Oriental Radio Taxi
 Public Cab
 Saujana Teksi
 Sunlight Radio Taxi
 SuperCab

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 SW Radio Taxis
 TeleCab
 Wira Cab

2.7.1 Competitive advantage

TTS recognizes that key to success will be providing unmatched customer service. TTS

competitive advantage will be based on an incentive system that rewards the driver

economically when they achieve good service, develop repeat customers and act in a

team fashion instead of competing against other company drivers. This incentive system

will reward drivers when:

 The company receives positive feedback about the driver

 The customer is turned into a repeat customer.

 The driver develops new customers.

 The driver acts in manners that are team based instead of for individual gain.

Other than that the cutting edge technology which is unique to the taxi industry in Kuala

Lumpur. The GPS will enable TTS to provide timely service by giving an accurate

estimate time arrival. The credit/debit card feature will give the customers convenience

and privacy during the transaction period.

TTS competitors include the above mentioned companies and general

maintenance and repair shops in the area. Some of these operations do not have the

capacity to handle a large amount of vehicles. While others may have the capacity, their

operations are run in a primitive manner, and TTS intends to capitalize on that. TTS

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competitive advantages include the availability of space, operations management, and

skilled employees.

2.8 SWOT Analysis

2.8.1 Strengths

The GPS will enable the company to provide timely service by giving an accurate

estimated time of arrival (ETA). The credit/debit card feature will give customers

convenience and privacy during the transaction period. The company’s management is

highly experienced and qualified and has extensive experience in the industry. The

company has, and will continue to establish, relationships with organizations that will

enhance professional growth. These alliances are valuable to TTS because they allow us

to get updates on technology, added tech support, and a strong presence in the market.

The company will leverage the newest in car technology to dominate the credit card

segment of the market. TTS will dominate the market because no other company has this

unique feature. TTS intends to get the confidence of customers and establish itself as a

company that provides superior customer service by using up to date technology to

provide timely and reliable services.

2.8.2 Weaknesses

TTS service can be utilized only by debit/credit card holder. Rather than that, TTS has

high cost of maintenance compare with others.

2.8.3 Opportunities

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Today’s global business environment such as position of Malaysia tourism industry with

respect to the ASEAN tourism industry, opportunities that exist for the Tourism industry

in Malaysia as well as challenges being faced by this transportation industry.

Therefore, owing to Malaysia’s stable government, vibrant economy and plural culture,

the country is heading towards a tourism boom regardless of the alleged global recession

in air travel and tourism industry.

2.8.4 Threats

Establish travel agency hotels and lodges may look at the development of new lines and

vertically integrate transportation so as to provide additional services to customers. Then,

competitive threats come from existing taxi cab companies in the Kuala Lumpur area.

During economy recession has some effect on travel and tourism industry.

3.0 OPERATION PLAN

TTS can provide airport travel on short notice if cars are available, but generally

work with a reservation system. A customer would call up in advance and provide TTS

with flight information. TTS would schedule the pickup time and then call and send an

email to confirm the pickup. For pick up at the airport, TTS would meet the customer

outside of baggage claim after the customer has picked up their luggage and would drive

them to preferred destination.

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4.0 MARKETING PLAN

4.1 Market Segmentation

Market Analysis

Foreign Tourist
Business travellers
Others

Figure 4.0 Market Analysis

We were focusing our customers into three groups. There are foreign tourist, business

travelers and others in Kuala Lumpur area especially at Kuala Lumpur International

Airport (KLIA) and Subang International Airport who arrived from various country or

places.

We will be focusing on those foreign tourists seeking leisure travel and excursions

whilst on vacation in Kuala Lumpur, with the intention of letting them see and appreciate

the numerous attractions in our country. Though we realize that the top ten tourist

generating markets for December 2008 were Singapore (1,030,013), followed by

Indonesia (251,118), Brunei (166,043), Thailand (122,776), China (including Hong Kong

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& Macau) (71,566), India (49,175), Australia (45,724), the Philippines (39,684), Japan

(37,776) and United Kingdom (36,131). Singapore registered the largest number of

tourists in 2008, contributing 49.9% of the total arrivals. This was followed by Indonesia

(11.0%), Thailand (6.8%), Brunei (4.9%), China (including Hong Kong & Macau)

(4.3%), India (2.5%), Japan (2.0%), Australia (1.9%), the Philippines (1.8%) and the

United Kingdom (1.7%). (Source: http://www.tourism.gov.my/corporate/research.asp.)

4.2 Product and Service

TTS will use the in-car credit/debit card system, which is a new market segment for the

taxi industry in Kuala Lumpur. This involves customers using their debit cards in any

TTS cab with approval being given instantly, eliminating the need to dial in to head

office for approval numbers. By using this system, the company will be addressing the

need for convenience and reliability. TTS also features a computer-aided dispatch

system which will be represented under the Patriot name. The company is currently in

the process of making Patriot a trademark. As an added safety measure for both drivers

and passengers, TTS is fitted with Global Positioning Systems (GPS), which enable the

cabs to be tracked or located in an emergency. The company has also applied for a

license to run a 490 narrow band frequency and voice data transmission. From the

perspective of customers, the advantage of TTS’s products and services is the high level

of technology, which leads to superior customer service. In contrast to competitors,

TTS’s products and services offer convenience. The key pad and swipe machine are built

into the back seat, thus giving the customer privacy. Whereas competitors have to call in

a credit/debit card transaction for approval, our customers will be able to get on-the-spot

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approval before the driver even pulls over. TTS will have to acquire extensive

insurance to cover all aspects of operations, but will be faced with high rates. TTS

realizes that it is difficult to locate a facility with the space required for all operations.

TTS has found a facility with ample space for all operations. There is enough room to set

up repair facilities, and there is adjacent space to store vehicles.

4.3 Pricing Strategy

TTS were used competition based pricing methods such as going rate or market

pricing that is charging the same as competitors or the market leader. Flag fare is

RM2.00 for the first 1 km and 20 cent for each 100 meters. Other additional charges are

actual road toll charges, RM2.00 for phone bookings, 50% additional charge for trips

between midnight and 6 am and 50 cent for each piece of luggage carried. Budget Taxi

range from RM70 (depending on destination) and TTS range from RM90 (depending on

destination)

Destination To KLIA From KLIA

Budget Premier Budget Premier
(RM) (RM) (RM) (RM)
Kuala Lumpur 57.80 69.80 66.80 91.80
Shah Alam 50.50 58.50 57.50 76.50
Genting 195.80 256.80 195.80 256.80
Highlands
Cameron 292.50 366.50 292.50 366.50
Highlands
Malacca 143.10 197.10 143.10 197.10
Muar 197.80 258.80 197.80 258.80
Seremban 50.90 58.90 57.90 76.90

Table 4.0 Taxi charges according to destination

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The one catch though is that the flag fall and trip charges of the new cabs will,

according to the country’s Minister for Tourism, Datuk Seri Tengku Adnan Tengku

Manso, “be slightly more expensive than regular cabs.”

This in itself is interesting as Malaysia’s taxi drivers claim the reason they are not

inclined to use their meters and charge surcharges of between 200 and 500% after

midnight (the official surcharge is 50%) is because the Government won’t approve

increasing cab fare rates.

4.4 Promotion Strategy

4.4.1 Advertising

Direct mailings and television advertising will be the company’s main marketing

channels. These channels ensure that target customers are reached repeatedly and

effectively. The key message associated with our products and services is cleaner,

efficient, flexible, and convenient taxi cabs.

The company also has additional promotional plans which are diverse and include

a range of marketing communications described below:

 Trade shows

Company representatives will attend and participate in several trade shows to

keep up with changes in the industry.

 Print advertising and article publishing

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Print company’s advertising program that will include advertisements in local

newspapers and local journal publications.

 Internet Marketing

The increasing growth of the Internet as an information source provides an

opportunity for ourselves that we may exploit. This is particularly so in view of

the increasing dissemination of information over the World Wide Web, as

individuals and groups look at obtaining the best deal possible.This will mainly

serve foreign tourists and other interested stakeholders.

In all the above we intend to communicate our ability to deliver a good service

that will satisfy the customers’ needs. All the above promotional tools shall be well

integrated and utilized in tandem so as to maximize their effect.

4.5 Distribution Strategy

Figure 4.1

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(Resource: http://www.kiat.net/klia/location.html)

As shown in the map above, these are the places which will be covered by TTS. The

airport will be part and parcel of the Multimedia Super Corridor where placement of high

technology industries is being actively pursued. These industries will propel Malaysia

into the next millennium. Surround by four main cities of Kuala Lumpur, Shah Alam,

Seremban and Malacca, the airport will be a catchment area and will offer opportunities

for a hive of business activities.

5.0 ORGANIZATIONAL PLAN

Most taxi companies followed a similar organizational pattern. So, TTS also follow this

pattern. Managers, sometimes the company owners’ ran the business, hired drivers, and

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performed other administrative duties. Dispatchers took calls and assigned cabs to

passenger locations. The position of dispatcher once represented a promotion awarded to

experienced cab drivers, whose familiarity with the city best qualified them for the job.

6.0 FINANCIAL PLAN

TTS’s total start-up capital requirement is approximately RM 300,000. Start-up will be

financed through the owner’s personal investment and a long-term note secured from the

Bank.

7.0 CONTIGENCY PLAN

TTS plans to respond to market needs by following up with taxi plus (wheelchair

accessible taxi vans with credit card access inside) with the next 5 years. TTS believes it

can capture this niche and a gain in overall market share. Additional plans for next

generation products and services include rent to own options for our drivers.

8.0 CONCLUSION

Although the taxi cab industry was not regarded as demanding in a high degree of

technology, several innovations have changed the way businesses operate. Computerized

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dispatching in which cabs were tracked by computer and dispatch instructions appeared

only to the cab assigned to a call allowed more efficient assignment of cabs to

passengers. Computerization also helped remedy the problem of “fare stealing,” in which

one driver intercepts a message meant for another and picks up the first driver’s fare.

Another development likely to change the industry’s focus involved its use of

certain radio frequencies. In the late 1980’s and early 1990’s, with investment in cellular

and digital communications skyrocketing, taxi cab companies found themselves in

possession of a valuable asset in the form of the broadcast frequencies granted them by

the Federal Communications Commission.

http://photojourn.wordpress.com/category/malaysia/malaysian-tourism/

http://www.kiat.net/klia/location.html

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