ncg week case competition

Intro Situation Complication Objectives Proposal Timeline Risks/Results

Introduction

Situation Analysis

Agenda


Solution


Agenda Timeline

Risks and Assumptions

Wrap-Up

Daniel Marzec

● Sophomore● Computer Engineering


Drew Pinkerton

● Sophomore● Supply Chain Management

Prajwal Chandrashekar

● Freshmen● Mechanical

Engineering

Josiah Mooney

● Sophomore● Needed a team

OUR TEAM

+ +Growing movement of environmentally friendly transportation

Sustainability Shift

Profitable last few years and government funding

Large BudgetIncreasing frustration with operational inefficiencies

Customer DissatisfactionMicro Cars have steady and dominating market share

High Car Usage


+

SITUATION

Restrictions-Government-Infrastructure-Pricing

Untapped CustomersLarge segments of customers are

untapped. Lack of focus on specific high-growth potential

segmentsReputationDelays cause dissatisfactionHigh customer expectationsLack of organizational unity

GrowthMust stimulate 7.5% increase in

passenger kilometers within 3 years

COMPLICATION


KEY OBJECTIVES


Eliminate delays in information

Create a seamlessly integrated user experience

Increase annual travel distance by 7.5% in 3 years

Remain profitable Leverage $400

million budget Satisfy high

expectations

REPUTATIONPOLITICALECONOMIC

8

Commerce Slides

RE-BRAND

INTEGRATE

RE-STRUCTURE

THE RIR SOLUTION


9

Commerce Slides

RE-STRUCTURE


Create new parking spots in each of the 200 least used stations

Parking

Pricing

RE-STRUCTURE


Decrease prices for all non-peak hours

SafetyReassure customers about changes done to assure safety

11

Commerce Slides Intro Situation Complication Objectives Proposal Timeline Risks/Results

RE-STRUCTURING STRATEGY 1: PARKING

Create at least 30 new parking spots in each of the 200 least used stations


Motivated Non-User segment 702000 people

50% acquisition of segment in 10 years 351000 people

60 customers per spot 5850 spots

Stations with lowest traffic/most 200 stations

29.25 spots/station

Daily spendable parking tickets for customers.

RE-STRUCTURING STRATEGY 1: PARKING

13

Commerce Slides Intro Situation Complication Objectives Proposal Timeline Risks/Results

RE-STRUCTURING STRATEGY 2: PRICING

Decrease prices for S-train for all times around the rush hours


Continue removing the number of “products” offered

RE-STRUCTURING STRATEGY 2: PRICING


Emergency Call Systems placed strategically throughout the stations

Immediate Customer Safety alerts sent through the app

RE-STRUCTURING STRATEGY 3: SAFETY

EXPENSES

REVENUE

20,000 Krone per parking lot

Conservative Emergency Call Box price estimate

$406,000 Projected Expenses in 2 Years (Appendix B)

NET EFFECT

FINANCIAL ANALYSIS


Conservative New Customer Acqusition Estimate

$1,392,000 in Additional Revenue in 2 years (Appendix B)

New Customer Acquisition

$986,000 Projected Net Income in 2 Years

17

Commerce Slides

INTEGRATE


Multiple apps required

Inaccurate and late reports

Limited functionality

Overall lack of integration

Current State

Commerce Slides

Simple User Interface

DesignEasier Point of

Service with 24/7 Support

ServiceTrip planner and seat reservations

Plan

Store Frequent Routes and get updates on timing

Bus and Taxi service integration

Immediate safety alerts

Increased Mobile Payment Processing

Our Solution


Customer AcquisitionPlatform for growth

Passenger AnalyticsPredict and prepare for

customer needs

Data CollectionFeedback and optimization

Point of ServiceDirect link to customer

INTERNAL BENEFITS


EXPENSES $540,000 Initial Investment (Appendix A)

REVENUE $792,000 Projected Revenue in 3 Years (Appendix A)

NET EFFECT

FINANCIAL OUTCOME


$252,000 Projected Net Income (Appendix A)

Seamless consumer experience

2,000 added customers per month

RE-BRAND


RE-BRAND

Current State of DSB’s Brand

Slow and Delayed

Subpar Customer Service

Outdated and Expensive


24

Commerce Slides

1 New Logo

Incentive Programs2

3

RE-BRANDING PLAN


Advertising Campaign

Unmotivated Heavy

Motivated Light Motivated Non-User

Motivated Medium

● Digital Savvy

● Live in Capital Region

● Find travel stressful

● Women and Singles

● Environmentally aware

● Capital region and Aarhus

● Elder and Married

● Capital region and large cities

● High income

● Rural demographic

● 2+ km away from train stations

● Take car or bus

TARGET MARKET SEGMENTS


1 New Logo

Referral Program

Loyalty Program

● 5 km per referral (around 20% of average trip: Appendix C)

● Gain market share through continuous referrals

● Integrated through mobile app

● Discounted pricing for travel times around rush hour

● 5% of kilometers travelled awarded back

● Integrated through app

● Retain customers through incentives

2 Incentive Programs

Advertisements

Television

• Advertisements focused on new station features, app and +time

• Market: All targeted

Social Media

• Facebook, Instagram and Twitter ads with direct link to app and info on sustainability

• Market: Unmotivated heavy and Motivated medium

Billboards

• Billboards with a focus on +time and sustainability around less populated areas

• Market: Motivated non-users

3

29

Commerce Slides

Potential Market Growth


Bull• 4% market growth in one Year• Approximately 2,475,000,000 km (Appendix C)

Conservative• 3% market growth• Approximately 1,855,000,000 km (Appendix C)

Bear• 2% market growth• Approximately 1,240,000,000 km (Appendix C)

Total Expense: 16,600,000 Krone or 2,400,000 USD (.05% of annual budget)

Task Year 1

Year 2

Year 3

Unveil Logo

Marketing Launch Plan

App Development

App Launch

App Support

Construct New Parking

Safety Construction

Adjust Pricing

30IMPLEMENTATION TIMELINE

31

Commerce Slides

● Performance of marketing campaign depends on many factors

● Limited time to change brand-image

● Innovations in sustainable transport

● Customer retention

● East-West construction will cause periodic delays for 3 years

Low Medium High


RISKS

IMPACT

Economic Political Reputational• Expanded customer base• App as alternate revenue

stream• Meeting high demand

• DSB serves as backbone of Denmark’s transportation

• Political expectation for growth satisfied

• Seamlessly integrated user experience

• Delays, traffic info, security• Communicating change to

the consumer


QUESTIONS

Appendix A: IT Development Financials● $500,000 for frontend and backend development

○ As seen in instagram and ubers development (source: https://savvyapps.com/blog/how-much-does-app-cost-massive-review-pricing-budget-considerations)

● $20,000 to restructure train & rail system GPS infrastructure○ Source: http://www.gps.gov/applications/rail/

● 0.05% per transaction ~ $20,000 set-up○ Source: https://paylinedata.com/pricing/

● $20,000 ad revenue per month○ 160million monthly users * 50% ○ Source: http://ryanmorel.com/mobile-advertising-calculator/

● New customer acquisition rate estimate = .005%○ Population with smart phones = .73(total population) = 4.03mil○ ~$2,000 in ad revenue calculated from○ Source: http://ryanmorel.com/mobile-advertising-calculator/

https://savvyapps.com/blog/how-much-does-app-cost-massive-review-pricing-budget-considerations

https://savvyapps.com/blog/how-much-does-app-cost-massive-review-pricing-budget-considerations

http://www.gps.gov/applications/rail/

https://paylinedata.com/pricing/

http://ryanmorel.com/mobile-advertising-calculator/

http://ryanmorel.com/mobile-advertising-calculator/

Appendix B: Re-Structuring Financials● 2,800,000 in Expenses

○ Parking spots = (200 stations)*(10,000 Krone per parking lot) = 2,000,000 Krone○ ECB= (400 stations)*(2,000 Krone per station) = 800,000

● Ticket Prices○ http://www.fyidenmark.com/ticketprices.html

● 9,600,000 Krone in Revenue○ Revenue = (2,000 customers per month)*(48 months per 2 years)*(100 Krone per

ticket)= 9,600,000 Krone

● Conservative monthly new customer acquisition rate estimate = .05%○ Population with cars= .70(total population) = 3.92mil*.0005= 1,996 potential

customers

http://www.fyidenmark.com/ticketprices.html

Appendix C: Branding FinancialsKilometers travelled through DSB: 6,246,000,000 (10.1% market share)

Total Kilometers travelled in Denmark: Approx. 62,000,000,000 passenger km4% market share: 62,000,000,000 * .04 = 2,475,000,000 passenger km3% market share: 62,000,000,000 * .03 = 1,855,000,000 passenger km2% market share: 62,000,000,000 * .02 = 1,240,000,000 passenger km

Expenses(1 year)2 ads a day on primetime: 6,800,000 Krone4 ads non-primetime: 6,800,000 KroneMake 6,000,000 impressions with 250,000 downloads: 2,000,000 Krone40 billboards in rural areas: 1,000,000 kroneTotal: 16,600,000 krone

Average trip length: Passenger kilometer / Total trips taken(domestic + abroad)6,246,000,000 / (191,881,000 + 9,185,000) = 31.1 km6 km / 31.1 km = .19%

Appendix: Value Index

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