New Business Development Plan: Vservices

Author: Iloka Benneth Chiemelie

Published: 5ith March 2014

1.0 BUSINESS BACKGROUND ANALYSIS

Entrepreneurship is generally referred to as the pioneering, innovative, risk bearing idea, personality, determination, style and qualities which serve as momentum for facilitating a new business formation, development and growth (Zheng and Yang, 2010). Lumpkin and Dess (1996) basically divided entrepreneurial elements to consist of five parts, which are, autonomy, innovativeness, risk taking, reactiveness and aggressive competition.

Such definitions above are the main reason behind the formation of Vservice. Vservice is coined around the word “Virtual”, which literary means “electronic world” when described in business terms. Vservice is an online service solution that offers customers high bargaining power by providing them with numerous businesses to choose from, while also providing businesses with potential customers at a lower cost.

Vservice was founded in Malaysia by vimala Tangavelu in 2012. Being a new business, the company was destined to face numerous entrepreneurial difficulties, but proper management and strategic approaches are some of the elements which are behind the possible success of the company. All these elements are further discussed in the preceding chapters.

Basically, Vservice works in three different approaches which are:

1.      Customer places order or business places company profile.

2.      Vservice team reviews customer orders and new business profiles

3.      Business makes quotation for order placed by customer and is given customers contact details.

Thus, Vservice makes profit from only the credits sold to businesses. Contact information of customers is hidden when they place a new order, and for businesses to access the customer information, they will make quotation in form of credits which are bought in cash payment. The logo below is Vservice’s logo and further illustrates the company’s objective of providing the most reliable “Online Service” in Malaysia.

Figure (1): Vservice’s Logo

2.0 MARKET ANALYSIS

2.1 MARKET SEGMENTATION

Vservice’s Market is basically divided into two segments:

1. Business Segment
2. Customer Segment

2.1.1 Business segment – this segment of the market comprises of all potential businesses that will handle customer orders. Since it is an internet based business, both companies and individuals such as freelancers are considered as potential businesses. Business segments are based on the following criterion:

1. Will need to register as a business for free
2. Must have a valid contact information for verification purposes
3. Must be located in Malaysia
4. Must be willing to pay by credits for quotes they want to handle

2.1.2 Customer segment – this segment includes all customers (both individuals and businesses) that will place a need through Vservice. The potential customers are required to choose from the main category and sub-category listings when placing a new need. This segment is determined based on the following criterion:

1. Must be located in within Malaysia
2. Must open a free customer account with Vservice and provide detailed information for businesses to contact them

2.2 MARKET SEGMENT TARGETING STRATEGY

Based on the above market segments, Vservice has developed two separate strategies to target each segment in order to ensure that all needs placed by customers are handled by businesses. The strategies are show below:

2.2.1 Niche Targeting for Business – the chosen strategy for business segment is niche market. This strategy is based on the fact that each business is unique in their capability, and they will be targeted based on their business sector(s). Vservice has developed 28 main and each business will be targeted based on the business they offer. This process is illustrated below:

Figure (2): business segment targeting strategy

1. Business registers in specific category(ies)
2. E-mail will be automatically sent to business once there is new customer need within their business category.

2.2.2 Mass Targeting for Customers – since every single person residing in Malaysia is considered as a potential customer, they will be targeted using mass targeting strategy. This is because the needs of each specific customers is unknown until they place an order, thus the main activity within this section involves persuading customers to place order for their needs. This can be illustrated below:

Figure (3): customer segment targeting strategy 

1. Customers are able to ask any kind of services based on Vservice categories.
2. Customer will be notified by mail immediately if any business places quotation or ask a question for them

2.3 MARKET NEEDS IDENTIFICATION

The internet offers a unique service solution as customers can place orders for a particular service at their convenient time. Vservice categories are developed based on identified customer needs, and each category is unique in relation to common needs sort by customers. The categories are as listed below.

1.      Accommodation

2.      Accounting

3.      Advertising and Media

4.      Agencies and Brokers

5.      Air Conditioning

6.      Appliances Repair

7.      Automotive and Logistics

8.      Beauty

9.      Cleaning

10.  Clothing

11.  Computers

12.  Construction

13.  Education

14.  Fitness and Health

15.  Food and Beverages

16.  Gardening and Agriculture

17.  Graphic Design and Printing

18.  Home Services

19.  Interior Design

20.  Legal

21.  Marketing and Sales

22.  Photography

23.  Private Investigator

24.  Rubbish Removal

25.  Security Systems and Alarm

26.  Sound Systems

27.  Training Services

28.  Wedding And Event

2.4 MARKET TRENDS AND GROWTH

Since the year 2000, Malaysia has witnessed a rapid growth in the adoption of internet and mobile telecommunication for both personal and corporate use. Below is a statistical overview of this growth.

Table (4): Internet Usage as a Percentage of Population (Source: World Bank)

Source as adapted from: WorldBank (2012)

From the above fast passed adoption of internet technology, it can easily be deduced that a business such as Vservice with the capability of offering convenient business placement for customers and free customers for business; will have a high success rate.

According to CISCO Technology News, this trend is expected to quadruple in the entire world by 2015 due to the increase growth in Smart Phone and Android tablets. Thus, this creates an expected increase of up to 24 million internet users in 2015. Such fascinating growth is expected to pioneer the success of Vservice as a service solution point in all Malaysian market.

3.0 INDUSTRY AND COMPETITORS ANALYSIS

In Malaysia, the kind of service offered by Vservice is a new trend within the market. Although some companies such as Mudah and Lelong adopt this type of service to a minor extent, they are more focused on the product sector.

Vservice is unique and can easily be differentiated because it focuses on only services as compared to their main competitors. Focusing on services alone ensure full integration of business plan, huge market penetration and market leadership developed through high product value. Besides Vservice, they are other companies in Malaysia that offer a limited form of the services being offered at Vservice and these companies are as discussed below.

Table (1): Top shopping, auction and service placement sites in Malaysia

Company Name	Company Category	Potential Competitors
Mudah.my	Auction, Online Market Place and Service Placement	Somehow Related. Mudah is the main competitor because customers can places a service need and get contacted by companies but this section of mudah is not in their focus as they cannot charge customers and businesses as well and this website is not design for this manner.
Lelong.com.my	Auction and Online Market Place	Presently No. But it is necessary to keep a close watch on them, as they can easily adopt a service section based on their current market recognition and value.
Mybarang.com	Auction, Online Market Place and Service Placement	Somehow Related. Besides Mudah.my, this is the only website in Malaysia that offers type of services which is somehow related to the Vservice. The nature of this website is classified ads and the earning of the website is based on sponsor advertisements and it’s not working like Vservice.

4.0 STRATEGY AND IMPLEMENTATION

4.1 STRATEGY PYRAMID

Figure (5): Vservice’s Strategy Pyramid 

4.2 VALUE PROPOSITION

Vservice was founded with the core principles of offering quality services to customers and ensuring high investment returns. This will be achieved with the following value propositions.

4.2.1 Management – the management system is based on a resourcefully, friendly, reliable and efficient system. All members of the management team are self-motivated and result oriented because they are all direct investors in the company. Thus, the management positivity and pledges to undertake any action within it capability to ensure profit maximization and growth of market share.

4.2.2 Service offerings – the core values of services offered at Vservice are reliable, effective and consistent. This will be achieved through prompt and friendly response to all customer needs, as well as a flat management system that will stimulate customer orientation and create a reliable business culture.

4.3 COMPETITIVE ADVANTAGE

Being Malaysia’s first customer service provider, Vservice have numerous competitive advantages compared to the potential competitors discussed above and these advantages are as illustrated below.

4.3.1 Quality website – Vservice’s website is highly advanced with latest internet and mobile technology devices, and the site platform is easy compared to their competitors in terms of programming, database security and graphic user interface. The site also offers high customer/business participation by various ways such as email notification system, fully self-controlled dashboard, business public profile, etc. This offers a competitive advantage in the sense that high customer participation will increase possibility of more service placement and the friendly design will reduce psychic cost associated with using some of our competitors’ websites.

4.3.2 Focused business – compared to the competitors, Vservice is highly focused and this will reduce advertisement cost as single advertisement can be placed for all the services offered. Being focused also allows deployment on one strategy for all the services offered as compared to our competitors.

PESTLE ANALYSIS

This analysis is conducted to understand how the company will fair in face of numerous environmental factors in Malaysia.

Political factors

Malaysia is a pseudo-democratic nation, with some of its leaders elected while the rest are selected based on cultural and family ties (Michelle, 2009). There is still a high case of Malay favouritism and authoritarianism in the country, and the past government have enacted certain policies to favour local (Malay) companies at the expense of their competitors. However, in consideration of the fact that this is an online based form of business, the political factors wouldn’t be much of a problem to the sustainability of the business based on the understanding that the company can bypass numerous political hindrances that might come in the form of ethical preferentialism or  higher imposed tax on goods and services as the company will be dealing directly with its customers online and providing the needed services to these customers without going through any agency. Basically, the business is established to serve as a link between customers and service providers in the sense that customers will come to the website in search of repair personnel, while the companies that offer these services will come there in search of potential customers. On that account, the understanding that these two people need each other will present a common notion that they would do whatever it takes to come at service for each other, and this will significantly eliminate the chances of the government having to play any significance influence on the business process.

Economic factors

The level of GDP per capita of Malaysia is estimated to be US$ 8,118 per year by IMF (2008), US$ 7,221 per year by the World Bank (2008), and US$ 8,800 per year by CIA Factbook (2008) (Michelle, 2009). It also been argued that the country’s continue appreciation of democracy will further increase the per capital income. The economic fact is very significant to the business in the sense that increase in real GDP of the people in the society will significantly increase the level of purchases for goods and this will have a direct influence on the level of demand for series designed to help the customers maintain these purchased goods and increase adoptability of the website based on the understanding that it offer the customers and companies the needed convenience in order to strike the right business partnership.

Social factors

There is a growing new trend in the Malaysian society, which is model around a culture of increased adoption of online based transaction as the customers seed to reduce the level of inconveniences associated with offline transaction and also allocate their time for other important activities (Dalat, 2009; Communicaid, 2009). Additionally, the just experienced recessions did without a doubt infuse some level of criticism, comparison and demand for lower prices in customers as they seek to recover from the experience and save more in order to ensure that such experiences in the future doesn’t have any significant negative influence. All these factors now means that the website will be a high hit because it would allow the customers the opportunity of comparing the services offered by company and making choices based on the best companies that have the lowest prices. On that account, it can easily be seen that the website will be very profitable business in the Malaysian setting.

Technological factors

Malaysia is one of the most technologically advanced countries in South East Asia (Malaysian industries development authority, 2009; Hobday, 1995). Malaysia is one of the most technologically advanced countries in the world with a high level of internet adoption as demonstrated in the market analysis. Another understanding is that the level of economic growth now means that numerous consumers can afford to have some of the most sophisticated communication devices with phones being one of the most popular of such. On that account, access to the internet is very common in the country and the implication for this business is very significant. This is based on the understanding that the access to internet will serve as a the right ground for persuading the customers to adopt out services as they would be able to compare between companies no matter where they might be across the country, and the companies on the same hand can access their accounts to post new adverts or manage the customers’ contracts for their services.

Legal factors

This business environment is also favourable to Mas-AirAsia because of the highly advanced business laws, patent right law, and other bylaws (Mida, 2011) established to protect the business operations of the new merger. Also given the fact that these companies have been operating in the company before, they will have quality lawyer that will legally protect all the company’s assets. The legality of the country is an interest aspect of the business process for the company and this is based on the understanding that a number of legal related issues occur in businesses today, which means that companies need to take extra measures to understand their business actions and ensure that they are not violating the laws of the country in anyways and also that their business assets are protected under the law. This is most significant in the online business setting because online business such as the one the company is set to offer can easily be imitated by designing a similar website, thus, is very important that the corporate assets in terms of logo, patent right and other copywriter materials be well protected and the legal system of the country is there to usher in such protection.

Environmental factors

Geographically, Malaysia is sparsely distributed and this means that some areas are either inaccessible by road or too far with road transportation (Malaysian Employment Federation, 2007; Chew, 2005; Chew and Basu (2005). In terms of the form of business being created, the environment has little influence as it is purely based online and is purely services. This is because the environment deals with natural disasters that might impact on the business process negatively such as flooding and earthquakes and this is most significant in cases where the business are based on production and have lots of physical assets. While this has been eliminated in this case, it doesn’t mean that the environment has no influences as such environmental factors can still influence on the business process negatively and as such need to be monitored in order to ensure that the business is well protected. For instance, earthquakes can result in numerous damages that will impact on the building where the server is hosted and this will mean negative influence on the business availability. In any case, Malaysia has little cases of environmental issue and as such this gives the business the right boost needed in order to ensure that operations yield success.

From the above analysis, it can be deduced that the external environment is favourable for the sustainability of the business and this is based on the understanding that the necessary features needed to protect the company in the form of well-established legal system are in the country, with the level of internet adoption in the country yielding a direct positive influence on the business process as it would increase the desires of customers to adopt the services offered by the company. On that account, it can easily be stated that the Malaysian market will yield significant returns for the investment made towards the establishment of the business and this is based on the understanding that the business environment has the right ingredients to make such happen.

5.0 MARKETING STRATEGY

5.1 MARKETING OBJECTIVES

1. To increase the number of active businesses up to 30,000 within the first 6 months of operation.
2. To increase the number of orders placed by customers and quotations made by businesses up to 30% of total users within the first 6 months.
3. To gain full market leadership in the service placement industry within the first 12 months of operation.

5.2 MARKETING MIX

5.2.1 Service element – Vservice’s main objective is to connect customers with respective companies that are capable of satisfying their service needs. In essence, it offers customers high bargaining power to choose the best companies at lowest price and also provides companies with potential customers while eliminating the cost associated with customer acquisition (CPC). The product elements are as illustrated below.

Figure 6): Vservice’s Service Elements 

The above figure basically describes all elements of Vservice’s Service offering and it can be explained that:

1)      A registered customer placed a need.

2)      An interested business will ask a question of customer anonymously for further information on the need placed.

3)      Once they have agreed between each other, the business will make quote for the need by payment “using credit point,” where the cost of one credit point is RM 4.00.

4)      Customer will send feedback on the business, once their order has been handled (not mandatory).

5)      Based on customer’s feedback, Vservice will employ necessary actions to ensure continued quality service in order to increase brand loyalty.

5.2.2 Pricing – the pricing strategy is a value based pricing. This simply implies that the prices are charged based on the value of services offered to customers, and consideration of the possibility for customers to accept these charges as being worth the service they get. The prices chargeable at Vservice are as illustrated in the table below.

Table (2): Value per chargeable price at Vservice

Market Segments	Cost of Service (RM)	Value of Price Chargeable
Customers	Free of Charge	Customer can post unlimited service needs at no cost.
Businesses	1 credit point = 4.90 Business verification = 88 per annum Business can verify their profile at the cost of RM 88. Verification of profile is essential for building customer trust on businesses but it’s not compulsory.	§  1 credit  for  services valued between 1 - 500 (RM) §  2 credits for services valued between 501 – 5,000 (RM) §  3 credits for services above 5,000 (RM)

5.2.3 Place and Time – Vservice is only available for the Malaysian market, and businesses and customers can place orders or quotation 24/7 through the website.

5.2.4 Promotion strategy – being a new company, Vservice is focused more on market penetration and has adopted numerous promotional strategies that are designed to create 50 percent brand awareness within the next 12 months.

Table (3): Electronic Media– chosen platforms and cost

Chosen Platform	Cost (RM)	Duration	Expected Outcome
Facebook	0.30 per click	Throughout the year	80-100 connections per day
E-mail Marketing	500 per month	Throughout the year	10% click through (50,000 email)

Table (4): Print/online Media - chosen platforms and cost

Online Newspapers	Online (RM) per 7days	Total Cost (RM)	Duration (2012)
The Star (English)	16, 000 (Leadership)	32000	1.5 months (two weeks each one respectively)
	12500 (Leadership)	25000
	8,000 (skyscraper)	16000
Metro Harian (Malay)	7000  (Leadership)	14,000	Two weeks
Berita Harian (malay)	7000 (Leadership)	14,000	Two weeks
Sin Chew Daily (Chinese)	7, 700 (Leadership)	15,400	Two weeks
Total		116,400	2.5-3 months

According to the statistics, Metro (47%) and Berita Harian (20%) are the best online news portals in Malay language and also Star stands in the first position (5%) in English news portals (NSTP, 2012).

5.3 PERCEPTUAL MAP

Figure (6):  Vservice’s Perceptual Map

The figure above illustrates that Vservice’s positioning statement of being viewed as a quality service and low cost organization. By being a low cost organization and also offering quality service at the same time, Vservice will easily penetrate the Malaysian market through a trust building and valued based proposition as customer are certain they will be attended to.

5.4 LONG-TERM GOALS

The financial objectives of Vservice are to be operating at break-even cash flow by the middle of the second year, with steady growth over the next five years. We aim to be profitable from Year two onward; our goal is to earn at least RM500, 000 post tax profits in Year Two and nearly RM 1, 000, 000 in Year Three.

5.4.1 Steps for Achieving Goals

Vservice’s strategy for achieving our goals consists of six major points:

1. Establish an extensive public relations campaign
2. Recruit well-trained, enthusiastic staff
3. Deliver superior service knowledge
4. Provide high-quality customer service
5. Create a library of tools/reference materials for clients
6. Offer competitive pricing

The first step to achieving our goals is to hire a competent public relations agency. This will be the key to producing state-of-the art publicity materials and determining where these materials should be placed for optimum visibility.

The second step will be to increase the staff. The individuals recruited will go through an extensive training program to ensure that they will be able to provide superior product knowledge in the field of European adventure travel. The present staff is passionate about adventure vacations, and we intend to maintain their enthusiasm through constant product development and skill training. We will only recruit those individuals who share our vision. We also want the business to have an enjoyable atmosphere.

The third step is to install a library of reference works in the shop. These materials will be available for clients to browse through while in the shop or to “check out” and peruse at home. An agent will be on hand at all times to answer any questions.

CONTINGENCY PLAN

Contingency planning is part of the business process and this is based on the understanding that it presents the right ground for performing business activities in such a way that it doesn’t shift from the business focus and also allow the business owners to building a defensive shield against any forces that might tend to be influencing the success of the business negatively. On that account, a number of contingency plans have been drafted in this paper in order to ensure that the business process is not negatively influenced in any way. They include:

Monitor advertisement and reshuffle expenditure based on expression – the advertisement will be monitored and the expenditures will be reshuffled with every significant changes noticed in order to ensure that the most performing platform receives the highest level of investment. The notion behind this is to significantly increase the advertisement process and ensure that higher awareness is created for the brand by focusing on the most performing platform.

Monitor public perception - In order to ensure that the business is moving in the direction it has been designed to move in, it is important to monitor what the public thinks about the services offered and the outcome will determine the next course of action. In cases where the public associated it with high level of negativity, the course of action will entail a shift in public view by designing a public relations campaign that will communicate more value for the services offered and increase consumers demand for the service.

Change business focus in terms of failure – failure is something that no business owner wishes for, but the fact is that it can occur in the business process and how it is handled will determine how the business will shift from the present position occupied as a result of failure to a better position in the business process and this will be looked into in this business. Failure of the business will not mean full closure; instead the focus will be redesigned into other areas such as connecting business to business, or other forms of services that will still adopt the designed database.

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