VIETNAM NATIONAL UNIVERSITY, HANOI SCHOOL OF BUSINESS LE THI PHUONG NHI BUSINESS PLAN: QUALITY INSPECTION CERTIFICATION SERVICE FOR USED CAR IN HO CHI MINH CITY (2014-2023) Major: Business Administration Code: 60 34 05 MASTER OF BUSINESS ADMINISTRATION THESIS Supervisor: Dr. Vu Anh Dung Ha Noi, 2012 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENTS ACKNOWLEDGEMENTS. iii TABLE OF CONTENTS. vii LIST OF ABBREVIATIONS.
x LIST OF TABLES .xi LIST OF FIGURES. xiii LIST OF CHARTS. 3 Scope & Limitation of the thesis. 3 Structure of the Research.
4 CHAPTER 1: LITERATUAL REVIEW OF A BUSINESS PLAN. What is Business Planning?. What is a Business Plan?. The importance of a Business Plan.
What are the key aspects of a Business Plan?. 6 CHAPTER 2: BUSINESS PLAN OF UCC COMPANY. OVERVIEW OF THE COMPANY. Vision and Mission.
Current status and key milestones of the company in near term (2013-2014). 17 vii LUAN VAN CHAT LUONG download : add luanvanchat@agmail. INTRODUCTION OF THE SERVICE - USED CAR QUALITY INSPECTION CERTIFICATION. Why used-car quality certificate?.
Who will use this service?. How to gain trust?. Business Model of Used-car Quality Certification service. Market identification and segmentation.
Promotion and Brand Development. Marketing budget planning. DEVELOPING SALES CHANNELS. Direct sales team.
Strategic sales distributors. Licensed with top used-car certification service company. Facilities and Equipment required. DEVELOPING HUMAN RESOURCE AND MANAGEMENT.
Funtional and organizational structure. Recruitment and Training. Salary and bonus scheme. FINANCIAL ANALYSIS AND PROJECTION.
58 viii LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Cost calculation and funding plan. Profit and Loss (P&L) Forecast. Cash Flow Analysis.
70 CONCLUSION AND RECOMMENDATION .79 APPENDIX 1: Sample of Inspection Report .81 APPENDIX 2: Cost Projection (2014 – 2023) .84 APPENDIX 3: Capital Funding Structure .87 ix LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF ABBREVIATIONS HCM Ho Chi Minh IRR Internal Rate of Return NPV Net Present Value UCC Used Car Certificate WACC Weighted Average Cost of Capital x LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF TABLES Table 2. Some key miletones at the start (2013 – 2014). Summary of some key figures of cars market in HCMC. Cost break-down projection of marketing activities in 2014.
Number of sales headcounts in 2014-2023. Monthly sales target for sales team and individuals (2014). Bonus scheme for ―sales center‖. 14/2012/QD UBND regarding Percentage of Land Rental Pricing (Clause 1.
Technical equipments required. Office equipments and furniture. Scope of work of functional divisions. Base salary scheme for key accounts (2014).
Assumption on basic fixed cost. Assumptions on cost associated with manpower. Assumptions on other operations fee and contingency fee .Cost of the first 3 years (2013-2015). Capital funding plan.
Productivity management and Sales target (2014-2023). Projected Profit and Lost (2014-2023). Analysis of cash flow, NPV, IRR and break-even time. Sensitive analysis of IRR vs.
Construction Unit Price and Sales Price. Sensitive analysis of IRR vs. Annual Salary Growth Rate and Sales Price. 72 xi LUAN VAN CHAT LUONG download : add luanvanchat@agmail.
Sensitive analysis of NPV vs. Annual Salary Growth Rate and Sales Price. Sensitive analysis of IRR vs. Annual Salary Growth Rate and Sales Price.
75 xii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF FIGURES Figure 2.1 : Business model of used car quality inspection certification .2: Customer Engagement Cycle .3: SK ENCAR’s home site. Key steps of service procedures. Car status report format. The value chain of used car quality certification service.
54 xiii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF CHARTS Chart 2. Sensitive analysis of IRR vs. Sales price and Construction Unit Price. Sensitive analysis of IRR vs.
Sales price and Annual Salary Growth. Sensitive analysis of NPV vs. Sales price and Annual Salary Growth. Sensitive analysis of IRR vs.
Licensing cost and Sales price. 76 xiv LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ABSTRACT BUSINESS PLAN: QUALITY INSPECTION CERTIFICATION SERVICE FOR USED CAR IN HO CHI MINH CITY (2014 – 2023) Le Thi Phuong Nhi MBA Candidate, 2007-2019 School of Business Vietnam National University, Hanoi Supervisor: Dr. Vu Anh Dung December 2012, 86 pages Taking the development trend of developed countries as well as emerging markets in Asia as a benchmark, it is no doubt that motorbikes will be constantly replaced by cars and public transportation towards the development of the socio-economy of the nation. The Vietnam’s car market, with its recent increase in demand and supply regardless of economics down-turn, also re-emphasize this trend.
Going in parallel with this development is the business transactions of used-cars. And one of the key concerns when people buy used car is the reflection of the true value and the true picture of its quality behind while the sellers tends to hide the defects or damages of the car. Therefore, used-car quality inspection service provider as a reliable third-party can help connecting the buyers and sellers via TRUST and, more importantly, to reduce unexpected accidents/ damages due to insufficient understanding or mistakes on the quality of the used car. The idea of used car qualily inspection certification service comes from the demand of using good-quality used car.
So far there is no one in Vietnam provides this service yet. Used Car Certificate (UCC) Company will be set up in Q4-2013 to service this untapped market demand. And it is critical to have iii LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com a business plan with which serves as an essential roadmap for UCC to break into the target market in near term, gain sustainable foundation for business success in the next 10 years (2014 – 2023) and earn good return on investment. In order to work out the business plan for UCC in the period of 2014-2023, the author has studied and summarized the literature review of business plan, analyzed the market of this service, worked out the sales and marketing plan, manufacturing and human resource planning and management, as well as financial analysis and projection.
The analyzed statistics are collected from a number of sources. The primary data is gathered from the Department of Transportation and Police of Ho Chi Minh and the Ministry of Transportation. One of the major sources of primary data is also from the interview using qualitative research methodology with target end-users and key auto-dealers in Ho Chi Minh. On the other hand, the secondary data is collected and enquired from reports of top used car quality inspection certification service provider and from the internet.
The thesis serves as a roadmap for UCC to penetrate in the Vietnam’s used-car market and position itself as a pioneer in the market. The study has figured out a positive financial figures and ratio based on key aspects of the business. Hence, this is a feasible business plan which is worth to pursue and invest. iv LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com INTRODUCTION Research Rationale Taking the development trend of developed countries (US, Japan, NATO countries, etc.) as well as emerging markets in Asia (such as Singapore, South Korea, China, Malaysia, etc.) as a benchmark, it is no doubt that motorbikes will be constantly replaced by cars and public transportation.
Talking about the Vietnam’s car market, its recent increase in demand and supply regardless of economics down-turn also re-emphasize this trend. And the development of the car market will lead to the growth of both new car and used-car market segment, which are always in parallel. Reference to the successful business model of used-car quality investigation service in developed countries (US, Europe, Korea, Japan, etc), this demand is driven by the development of the car market. And it is in fact that used car market in Vietnam is still at a very early stage with no centralized and trusted hub of transaction.
Most buyers do not know how to identify whether a used car is still in good condition and how much % of quality remaining? Hence most of them will rely on recommendations from their relationships. Some people will search on Internet or advertisements, and then ask their friends who are knowledgable enough about car to help identify its quality. It is also important to note down that one of the key concerns when people buy used car is the reflection of the true value and the true picture of its quality behind while the sellers tends to hide the defects or damages of the car. Therefore, used-car quality inspection service as a reliable third-party can help connecting the buyers and sellers via TRUST and, more importantly, to reduce unexpected accidents/ damages due to insufficient understanding or mistakes on the quality of the used car.
1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Problem identification Since the car sellers tend to hide defects or damages of the car, most of the buyers do not trust the sellers if they don’t have any connections/ relationships with them. In other words, identifying the current status and quality of the used car is important to the buyers. With a trusted car quality investigation service, bow the buyers are able to qualify the used car before before making decision on a considerable deal in terms of value, and more importantly safety requirement. To a broader view, it also helps to avoid unexpected accident/damages due to insufficient understanding or mistakes on the true quality of the used car and its components’ replacement requirements.
Towards such a fact, from business perspectives, there are two key issues that need to be addressed. Firstly, there is a need of having a third-party who is capable and reputable to certify on the quality of used car. As foresaid, this can help the buyers and sellers gain more confidence on each other. Secondly, there is a need of an effective online used-car market where buyers and sellers can easily find each other and trust each other via a network of used-cars which are certified in terms of origin and quality.
From social perspectives, it is important to note that the project Quality Inspection Certification of Used-car helps prevent unexpected accidents due to improper understanding on the real quality of the car and its components’ replacement requirements. In conclusion, I firmly believe the project will add a considerable value to the sustainable development of the car market in Vietnam in particular, and the socio-economy in general. 2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Research Objectives To develop a strategic business plan as an entreprenership project, which is feasible and profitable, based on sufficient and reliable business plan and implementation, feasibility study, sensitive analysis and risk management. Project Objectives The purposes of this research is to build up a feasible plan for a sustainable network of used car quality inspection certification service in Ho Chi Minh, targeting 3 centers in 2018.
Scope & Limitation of the thesis - Target market: The project will focus in Ho Chi Minh city first, which is the most potential market for this kind of service in Vietnam. The project can be developed further with expansion to key cities in Vietnam (Ha Noi, Hai Phong, Da Nang, Binh Duong, Dong Nai, Can Tho) to cover the entire market of Vietnam. In long term, the project can be formulated to Laos and Cambodia based on competitive advantage of the Vietnam’s presence. However, considering Ho Chi Minh as the key and also most potential market, within the scope of this project, Ho Chi Minh is taken as the primary focus and to paive for the expansion plan in the future which can be studied and executed separately and in parallel with this project.
- The quality inspection certification service is limited for cars only.