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Practicum Report August 2006 Jie Shi
PhotoMap Business Plan Practicum Report August 2006 Jie Shi 55138098 MECB Xiangjie Gao 55136966 MECB Jiayuan Li 55231116 MECT Quan Zhou 55137695 MECT Page 1 PhotoMap Business Plan Declaration We hereby certify that this material, which we now submit for assessment on the program of study leading to the award of the Master of E-Commerce Degree in Dublin City University, is entirely our own work and has not been submitted for assessment for an academic purpose at this or any other academic institution other than in partial fulfillment of the requirements of that stated above. Signed:___________________________ Signed:___________________________ Signed:___________________________ Signed:___________________________ Date:____1 August 2006______________ Page 2 PhotoMap Business Plan Acknowledgements We would like to take this opportunity to thank the following people for their help and support: Thanks to all the lecturing staff at Dublin City University, for their support and guidance over the past one year. Special thanks to our project supervisors, Cathal Gurrin and Regina Connolly, for their great help and patience. We would like to thank everybody who took their time to participate in our questionnaire including our fellow MECB/MECT students. Thanks to all the people who gave us guidance and help. Thank you all. Page 3 PhotoMap Business Plan Table of Contents 1 EXECUTIVE SUMMARY ......................................................................................7 1.1 MISSION STATEMENT ...........................................................................................................7 1.2 OBJECTIVES .............................................................................................................................7 1.3 SERVICE OFFERING ...............................................................................................................7 1.4 MARKET OVERVIEW .............................................................................................................8 1.5 BUSINESS MODE .....................................................................................................................8 1.6 VALUE PROPOSITION ............................................................................................................8 1.7 COMPANY BACKGROUND....................................................................................................9 1.8 FINANCE ...................................................................................................................................9 2 COMPANY SUMMARY........................................................................................10 2.1 Company History ......................................................................................................................10 2.2 Company Founding...................................................................................................................10 2.3 Company Location....................................................................................................................10 2.4 Company Roadmap...................................................................................................................11 3 STRATERY AND IMPLEMENTATION .............................................................13 3.1 Value Chain Analysis................................................................................................................13 3.1.1 Attract ............................................................................................................................................................. 13 3.1.2 Interact ............................................................................................................................................................ 13 3.1.3 Act .................................................................................................................................................................. 14 3.1.4 React ............................................................................................................................................................... 15 3 .2 Revenue Model Analyses.........................................................................................................16 3.2.1 Current trend of online advertising spending .................................................................................................. 16 3.2.2 Current trend of online advertising revenue.................................................................................................... 17 3.2.3 Current main problem of online advertising ................................................................................................... 18 3.2.4 The solution of online advertising within our web site ................................................................................... 19 3.3 Growth Strategy Analysis .........................................................................................................20 3.3.1 Initial Phase / (pre-site testing) ....................................................................................................................... 21 3.3.2 Expansion phase / (implementation phase) ..................................................................................................... 21 3.3.3 Further development phase ............................................................................................................................. 21 3.4 Marketing mix...........................................................................................................................22 3.4.1 Product............................................................................................................................................................ 22 3.4.2 Place................................................................................................................................................................ 22 3.4.3 Price ................................................................................................................................................................ 22 3.4.4 Promotion ....................................................................................................................................................... 22 3.5 Management Structure ..............................................................................................................23 Page 4 PhotoMap Business Plan 3.5.1 The Change of Management Structure............................................................................................................ 23 3.5.2 Management Duties ........................................................................................................................................ 23 4. MARKETING ANALYSIS ...................................................................................25 4.1 Market Research .......................................................................................................................25 4.1.1 Research Methodology ................................................................................................................................... 25 4.1.2 Research Results ............................................................................................................................................. 25 4.1.3 Target Market ................................................................................................................................................. 27 4.2 PEST Analysis ..........................................................................................................................27 4.2.1 Political Factors .............................................................................................................................................. 27 4.2.2 Economic Factors............................................................................................................................................ 29 4.2.3 Socio-cultural Factors ..................................................................................................................................... 31 4.2.4 Technological Factors ..................................................................................................................................... 31 4.3 Porters Five Forces Model ........................................................................................................32 4.3.1 Bargaining Power of Suppliers: ...................................................................................................................... 32 4.3.2 Bargaining Power of Customers: .................................................................................................................... 33 4.3.3 Threat of New Entrants:.................................................................................................................................. 34 4.3.4 Threat of Substitutes: ...................................................................................................................................... 35 4.3.5 Competitive Rivalry within the industry:........................................................................................................ 35 4.4 SWOT Analysis: .......................................................................................................................37 5 TECHNICAL REPORT .........................................................................................38 5.1 Architecture Overview..............................................................................................................38 5.2 Operational Model ....................................................................................................................40 5.3 System Components..................................................................................................................41 5.4 Function Test ............................................................................................................................43 5.5 Functions...................................................................................................................................43 5.5.1 Register/login.................................................................................................................................................. 43 5.5.2 Search photos.................................................................................................................................................. 43 5.5.3 Upload/manage photos.................................................................................................................................... 44 5.5.4 Share photos with friends................................................................................................................................ 44 5.5.5 Order photo print............................................................................................................................................. 44 5.6 Usability....................................................................................................................................44 5.7 Risks analysis............................................................................................................................45 5.8 Technology used .......................................................................................................................46 5.8.1 Web 2.0........................................................................................................................................................... 46 5.8.2 Mapping API................................................................................................................................................... 46 5.8.3 Ajax ................................................................................................................................................................ 47 5.8.4 GPS ................................................................................................................................................................. 47 5.8.5 Server-side technology.................................................................................................................................... 47 5.9 FUTURE EXPANSIONS .........................................................................................................48 Page 5 PhotoMap Business Plan 6 FINANCIAL SUMMARY......................................................................................49 6.1 Total Income Vs Expenditure ...................................................................................................49 6.2 financial ratios...........................................................................................................................49 6.3 Annual Financial Statistics........................................................................................................49 6.4 Finance Risk..............................................................................................................................51 Bibliography ...............................................................................................................53 Appendix.....................................................................................................................54 Appendix I—Database Structure ....................................................................................................54 Appendix II Financial Appendices..................................................................................................55 Appendix III—Management Profile ...............................................................................................58 Appendix IV Digital Camera and Camera Phone Sales Overview .................................................59 Appendix V Questionnaire and Result............................................................................................61 Appendix VI Digital Camera and Camera Phone Sales Overview .................................................68 Appendix VII Digital Printing Overview........................................................................................70 Appendix VIII TOP 20 COUNTRIES WITH HIGHEST NUMBER OF INTERNET USERS.....72 Appendix IX TOP 20 COUNTRIES WITH THE HIGHEST NUMBER OF INTERNET DSL BROADBAND SUBSCRIBERS - 2004 Q4...................................................................................74 Appendix X GPS Embedded Mobile Phone and Camera ...............................................................76 Page 6 PhotoMap Business Plan 1 EXECUTIVE SUMMARY The following document is a business plan for PhotoMap. PhotoMap is a website based on the online mapping service and the concept of Web 2.0. PhotoMap provides the capability of uploading, managing and sharing photos in an interactive way. 1.1 MISSION STATEMENT To enhance users online photo storing, managing and sharing experience by providing photo-map integrated service. 1.2 OBJECTIVES z User: We want our users have a different online surfing feeling through our active and communicative service. z Profit: To generate sufficient profit to finance future growth and to provide the resources needed to achieve the other objectives of the company. We predict a net profit of 198,873.05 in our third year of operation. z Growth: We expect our company grow in a manageable and sustainable way by our unique business model and web concept, and with the financial assistant of venture capital, we want to grow up as the world-class online-photo album service provider. 1.3 SERVICE OFFERING 1. We want to help people make their photos available to the people who they want to share photos with.. Maybe they want to keep an album of moments captured on their camera phone, or maybe they want to show off their best pictures to the whole world in a bid for web celebrity. Or maybe they want to securely and privately share photos of their kids with their family across the country. PhotoMap makes all these things possible. To do this, we want to get photos into and out of the system in as many ways as we can: from the web, from mobile devices, from the users' home computers and from whatever software they are using to manage their photos. And we want to be able to push them out in as many ways as possible: on the PhotoMap website, by email, by posting to outside blogs or ways we haven't thought of yet. Page 7 PhotoMap Business Plan 2. We want to enable new ways of organizing photos. Once you make the switch to digital, it is all too easy to get overwhelmed with the huge number of photos. Albums, the principal way people go about organizing photos today, are great -- until you get to 20 or 30 or 50 of them. Part of the solution is to make the process of organizing photos collaborative. In PhotoMap you can tag your photos and post them in the map, so people can search by manage their photos by location information. And this feature makes the process of displaying and searching more interactive. 1.4 MARKET OVERVIEW Online photo sharing and managing is a fairly new market in the internet. A few companies are playing in this area. In the same time, the online map service is becoming a hot topic. We are entering a new market as the concept of web 2.0 is just released and more interactive and personalized web service is just starting booming. 1.5 BUSINESS MODE At present we provide a free user account and storage space to the customer and our profit will come from online advertising. Generally we have two type of advertisement. Google AdSense: The ads are dynamic and are related to the photo’s tags or search keywords. Location-based Ads: We put small advertising items on the map. Both two ways of posting ads is related to users request and interests, and will have a high click through rates. In the future, other value-adding service such as Gigabytes of storage space, photo printing and delivering, proving photo API can provide a sustainable revenue source. 1.6 VALUE PROPOSITION We are going to offer internet users a unique service that will help them embrace the new online-mapping service on the Internet named location based photo management and in the future GPS-integrated digital cameras and camera phones. We will also provide them sharing and managing their photos with people all Page 8 PhotoMap Business Plan around the world. 1.7 COMPANY BACKGROUND We are a group of Masters in Electronic Commerce students from Dublin City University who have come together to develop a location based photo album service using our individual talents and expertise. 1.8 FINANCE We assumed first 3 years financial ratios for our website. Year 2006 to 2007 Year 2007 to 2008 Year 2008 to 2009 Revenue €84,625.00 €170,850.00 €479,400.00 Investment €40,000.00 Sales €44,625.00 €170,850.00 €479,400.00 Expense €130,238.65 €165,128.90 €240,724.40 Profit -€45,613.65 €5,721.10 €238,675.60 Balance -€45,613.65 -€39,892.55 €198,873.05 Profit % -53.9% 3.3% 49.8% Page 9 PhotoMap Business Plan 2 COMPANY SUMMARY 2.1 Company History Our company is founded by four university postgraduate students who are from business stream and technical stream in electronic commerce. Due to the consistent view and opinion to the present and future status of Internet, these four postgraduate students form a team, work together and set up a company in Sep 2006. The main service offered by this company is to provide a new and free photo sharing and managing platform to all Internet users. This service is distinctive to the most of existing websites that are based on online photo album. Users can share and enjoy their real lives with their friends, students, colleagues, or relatives by uploading and downloading photos. The main advantage of this service is that it provides an enhanced user experience by providing interactive photo sharing service. 2.2 Company Founding The four founders of the company have spent almost more than three months planning this business venture, which include business model analysis, market analysis, finance analysis, risk assessment, management structure analysis and technical analysis, so we are confident in company success. Therefore we have decided to invest €5,000 each to assist in the start-up costs of the company. Major costs include our initial IT needs e.g. service space for our web site, and some necessary office equipments e.g. PCs, printer, scanner. 2.3 Company Location In the initial phase, our company will be located in the campus of Dublin City University. This is because within this phase, in terms of technical aspect, our company urgently needs some necessary technical support from our lecturers and computing school. We believe that our lecturers and computing school will timely support us. In terms of business aspect, we can fully utilize the good relationship with our campus students to launch our business. At moment, more than 15,000 students are studying in this campus, which include full-time and part-time students, all of them would be our potential users of the service, so it would be great to help us propagate our service to other colleges, and form a good start point and foundation to our company. Page 10 PhotoMap Business Plan 2.4 Company Roadmap Page 11 PhotoMap Business Plan Page 12 PhotoMap Business Plan 3 STRATERY AND IMPLEMENTATION 3.1 Value Chain Analysis In terms of eCommerce value chain, our company is strongly around the following four steps—Attract, Interact, Act, React 3.1.1 Attract Attract Website Ads Print Ads E-mail Ads Our company provides a useful and free communication platform for users to share their pictures of different events from different locations with their friends over Internet, so it can greatly attract massive Internet users. Our company strongly believes that this kind of service will greatly satisfy the needs of Internet users globally, and allow them to more easily communicate their latest events. Because this kind of web service is completly new, we decide use some simple and effective ways to make people know and visit our web site in order to improve the page view of our web site, which include web Ads, print Ads and e-mail, 3.1.2 Interact Interact Capture personal contact info. Keep contacting with users Provide effective feedback At this stage, our web site fully utilize the advantages of the internet, it means Internet users can not only become our potential customers, but also a free and abundant “source of supply” to our web site. This is because our web site allows users to upload their photos for free. So in this stage, we can clearly see that the Internet users carry the dual roles for our company, this will bring our company Page 13 PhotoMap Business Plan huge benefits. So we should use different ways to keep interact with our users, such as capture user’s personal information, keep contacting with our users over e-mail, provide effective feedback to users. 3.1.3 Act Act Free upload photos Free download photos Online advertising The stage of act within our web site value chain is a key and core stage. This is because this stage mainly describes the services provided by our web site and the major profit format. Our web site mainly provides a free communication platform for Internet users who focus on sharing their pictures with their friends over Internet worldwide; this is because this kind of service can greatly meet the further needs of most internet users. Nowadays, internet users are not satisfied with making friends and simply chatting over internet; they need further keep contact, share feelings, and get into each other’s lives. Pictures are one of the best ways due to the application and popularization of Internet, digital cameras and all kinds of equipments with the function of camera. The purpose of this service is to make the users know their friend’s true life, sufficiently share their true feeling and farther know their living environment. Additionally, because the service provided by our company is completely free for all Internet users, the profit of our company is mainly from various advertisings. This is because online advertising is the most important and main profit format for most of online web site. At the same time, our company can firmly make sure that our company’s reputation and the page views of our web site will be gradually improved by meeting the correct needs of most Internet users; it will build a stable and firm base/foundation for the online advertising with this improving good company reputation. Page 14 PhotoMap Business Plan 3.1.4 React React FAQ Answer customer queries Satisfy users’ further needs In the last stage of our value chain, we mainly focus on answer the queries from our customers, and further satisfy the user’s needs. Because we think this stage is very important to keep the current users and customer, attract more potential users or customers, and in this way improving our web site reputation. Page 15 PhotoMap Business Plan 3 .2 Revenue Model Analyses 3.2.1 Current trend of online advertising spending In terms of revenue model, advertising is the most popular and adoptive revenue model for many online companies and web sites. From the following diagrams, we can clearly see that the general trend of advertising spending on the Internet is dramatically increasing and booming world widely since 1999. So we can predict and believe that this trend will keep and retain for the following years. Source: http://www.click2advertising.com/images/slide2.jpg Now, let us look at the following diagrams, they can clearly reflect the detailed situation of online advertising spend in different countries and areas, which include US (2000-2004), France, Germany, UK, Italy, Spain (2004—2006). So this will further confirm the general trend and our prediction about online advertising spending. Page 16 PhotoMap Business Plan From the above analysis and diagrams, we are satisfied with the trends of online advertising spending. So we think that it could be a right revenue model, and we can have a good expectation of profit 3.2.2 Current trend of online advertising revenue After analyzing the current situation of online advertising spending, then how about comparing online advertising revenue versus spending? We all think this is a very important issue to any investors, it means if this continuous increasing online advertising spending could not generate a continuous improving online advertising revenue, otherwise the investors will lose their confidence on investing online advertisement industry. Fortunately, we can see a good result for the online advertising revenue. The following diagram can clearly provide us a promising result for the online advertising revenue. This diagram shows us that the global Internet advertising revenue is steadily improving form 2003—2006, and this trend will also keep within the following years by confirmed estimation and forecast. Page 17 PhotoMap Business Plan So, by above analysis of online advertising spend and revenue, our company decided to focus on advertising as our main revenue model. 3.2.3 Current main problem of online advertising In terms of network or online advertising, the click ratio is very important, this is because click ratio is a vital symbol and indication to network advertising or online advertising, it can accurately indicate the advertisement effect and impact, and can clearly tell us whether or not the service advertised or product advertised can cause the people’s attention or interest. However the current click ratio is still very low, which include different advertisement formats and different areas. Now let’s look at the following data diagrams. Data Source: http://news.eastday.com/service/advertise.htm Page 18 PhotoMap Business Plan http://www.mediachina.net/index_news_view.jsp?id=45791 http://www.mediachina.net/index_news_view.jsp?id=82587 From the above data diagrams, we can see clearly that the online advertising click ratio is very low even though the online advertising spending and revenue satisfied us. So how to improve the online advertising click ratio is the key issue for our company revenue. By our analysis we think the reason for the low click ratio is that the advertising does not have the directly relationship with the content that the Internet user is reading, so this advertisement will not cause the user’s interest, and the most of users will not click and visit it. Take a online news page as an example When people visit this page, they only pay attention to the news content, and there may have some irrelevant advertisements on the page, which include insurance, laptop and eircom. Obviously most visitors will ignore these irrelevant advertisements and won’t click them to see these advertisements, and the click ratio would be very low with these irrelevant advertisements in this news page. 3.2.4 The solution of online advertising within our web site In order to improve the online advertising click through ratio, we think that the online advertisement should have the direct relationship with the content that the people are browsing. In terms of our web site, it means when user chooses a photo, the relative advertisements about this scene or facilities round this scene will be shown. For instance, when a user selects a picture of DCU campus, the linkages of Page 19 PhotoMap Business Plan online advertising for Sports Club or Helix will be listed, so it would benefit the users to further explore more about the DCU campus, and the users would not be limited by the single photo. Another way of improving click through ratios is that we are using Google Adsense, it means when users enter one or more key words to look for a photo within our web site, the Google Adsense will automatically list the top 5 relevant online advertisements. The great benefit of this way is not only helping our web site to find the most relevant online advertisements, but also can make a relation between the location of taken photo and the location of advertisement. For instance, if a user uploads a photo that is taken in Dublin, Google Adsense will list some online advertisements that are relative to Dublin. For example: Dublin hotels, Dublin real estate. In this way users can be motivated to find out what are around the location of photo and improve the online advertising click ratios. Through the above analysis, we believe that the click ratio of online advertisement within our web site will be much higher than the average advertisement click ratio. By our estimation, it would be reach to 3%-5% or more. 3.3 Growth Strategy Analysis The growth strategy for our web site involves following three different phases—initial phase, expansion phase, further development phase. And in each phase, we will emphasize different aims. Page 20 PhotoMap Business Plan 3.3.1 Initial Phase / (pre-site testing) In this phase, since our company is a new entrant in this market, so the primary duty in this stage is to make more users know our web site and encourage them to visit our web site. Besides all kinds of propagation formats such as online Ads, print Ads and direct mail, our web site will specially focuses on our DCU students, friends, and relatives. This is because it is relatively easy to obtain their information; we can easily contact them and introduce our web site to them. In terms of DCU students, at moment there are around 10000 students in DCU, which include both full-time and part-time. We can send our web site address to them by the student mail list, and introduce them about our web site and it functions. On the other hand, we can quickly get feedback or suggestion from the above them; additionally they could have a potential and feasible opportunity to propagate our web site to their friends, relatives and students. So we think this will make a good foundation and starting point for our web site, and make our web site occupy a position in a competitive market environment. 3.3.2 Expansion phase / (implementation phase) In this phase, our web site will continue to expand the user’s amount, web reputation. We are still going to focus on college students, the range of college students will be from DCU to the other colleges in Dublin, Ireland, EU and US. Additionally, in this phase we are going to expand the range of users into professions, whose age would be from 26—35 years old. This is because the professional people within this age range have a good education background and good internet or computer skill, digital camera, camera phones and other digital equipment with camera function are quite popularized within this group. 3.3.3 Further development phase In this phase, We will mainly focus on provide more service to our users such as photo printing. We can also provide specialized tools to help the user achieve their personalized photo album. Page 21 PhotoMap Business Plan 3.4 Marketing mix 3.4.1 Product The primary intention of our product is to provide an online communication platform to all Internet users, sharing their life and events by photos. The most significant feature of our product is that it integrates both photo and maps. 3.4.2 Place Due to fast penetration and wide popularization of Internet, our product /service will be directly operated for the widest Internet users over the Internet, so our product will be distributed to any place where can access to the Internet. In another word, our product/service and users will be worldwide. So the Internet will greatly benefit our product/service, and help us effectively save the logistic and transport fee of our product/service. 3.4.3 Price The price of product or service is of main considerations to our customers and will give us a competitive advantage over competitors. This is because the low price of product or service can have a stronger attraction to customers, and it can also help us form a more powerful competency against our competitors. In terms of our product /service, it is completely free to our users. This kind of free service will attract more users, encourage those potential users to try our product/service, and build up our unique competency. With the growing of customer numbers, our product/service reputation will grow up, create a famous brand for our product/service, and form a good foundation for our revenue model. 3.4.4 Promotion Even though our product/service is completely free, we still have to try to market our product/service at any online or offline marketing environments, and let the users know that our product/service is existing. We would like to advise initial promotion of our service to involve commercial radio in different cities such as Dublin, Cork; billboard advertising is very useful and effective at various key locations such as the Port, Airport, bus stop and train stations; we will also consider the online advertising on some popular local web sites such as www.fm104.ie, and the print Ad is a very useful and cheaper way of promotion. We all think the above promotion ways should be kept at any time, this is because promotion is not only help us market our product (service) and create a famous reputation, but also can assist us to maintain and solidify the position in the Page 22 PhotoMap Business Plan competitive market environment after we get success on our product (service) 3.5 Management Structure 3.5.1 The Change of Management Structure Network era emerged with the wide application of ICT (information communication technology) and Internet since 1990’s, it caused huge change on every aspect. In terms of management structure, this change is so fast and deep. Traditional management structure has been changing from vertical pyramid structure to the parallel structure. This is because all powers and rights are centralized on the top level within the traditional management structure, all information and command had to be passed from one level to another level, from one department to another department. This kind of management structure strictly regulated and restricted the relationship of organization members. We decide to adopt parallel management structure because this kind of structure can make the whole management structure flat, reduce the management levels, and different levels or department can cooperate together as a whole team. So due to the above analysis of management structure, our company decided to adopt the parallel management structure. See the flowing structure diagram, CEO Financial Director Marketing Director Technical Director In the above diagram, we can clearly see that each part of organization is not a single unite or entity, the relationship between these parts have essential connection, it emphasizes parallel cooperation within the management group. 3.5.2 Management Duties So all the duties are assigned and performed within our company based on this kind of structure. The following is going to introduce the detailed duty of each part of our management structure. Page 23 PhotoMap Business Plan z CEO --Designing the strategic plan for the company long-term development plan. --Managing, supervising and cooperating with the functional departments z Marketing Director: -- Building a good reputation for our web site. -- Identifying potential customers who can adopt the services provided by our web site successfully. --Acting as Sales Representative in Ireland and EU. --Designing the sales plan and sales process. z Financial Director: --Controlling and monitoring the company finance implementation. --Providing accurate reports of financial spending activities. --Forecasting future spending and revenue levels. --Management of financial function including sourcing capital, account preparation, wages, financial control and budget plan --Designing the feasible budget plan z Technical Director: --Management of administration function including our web site system development and performance. --Ensuring security when users are transferring information --Development of web application software --Researching potential technologies that could be used by the functions of our web site. Page 24 PhotoMap Business Plan 4. MARKETING ANALYSIS 4.1 Market Research 4.1.1 Research Methodology z Primary research Our primary research is composed of a set of questionnaires we designed for our potential customers. Our purpose is to find that how much do they know about the GPS embedded camera phones and are they willing to use online album to organize the photos. Further more, we investigated the potential benefits that we can get from our service as providing traveling and accommodation information from our website. And the questionnaire is based on about 200 testers, so we think they can represent most of our target users in some ways. z Secondary research After executed the Primary ones, we arranged several online meetings with people who are working in Chinese Telecommunication Industries now to take their advices in a formal way. Additionally, we browsed and sent our queries to some main online statistic sponsors like ComReg and OECD to collect the useful tables and policies which can help us to develop our service in the future. 4.1.2 Research Results After investigating 200 potential users for our web service, we found some satisfying and helpful results for our research. Our primary age group is around: Please indicate the age group to which you belong? Percentage Responses <15 0.0 0 15-20 1.5 3 21-25 44.5 89 26-30 44.0 88 31-35 6.5 13 36-40 3.5 7 41-45 0.0 0 46-50 0.0 0 Page 25 PhotoMap Business Plan >50 0.0 0 Total responses: 200 The daily usage of their mobile’s camera is: How often do you use your mobile phone’s camera? Percentage Responses Daily 19.0 38 Weekly 12.5 25 Monthly 19.5 39 Never use it 18.5 37 Not sure 30.5 61 Total responses: 200 Their interests of the GPS embedded camera are: Are you interested in any of above GPS embedded device?(5 means strongly interest and 1 means no interest) Percentage Responses 5 18.0 36 4 22.5 45 3 38.5 77 2 10.5 21 1 10.5 21 Total responses: 200 Page 26 PhotoMap Business Plan And how much the users are willing to see the service and information provide on our website: Are you willing to see traveling information (hotel, restaurant, etc) on online photo management system? (5 means very interest and 1 means not at all) Percentage Responses 5 36.5 73 4 20.0 40 3 27.5 55 2 12.5 25 1 3.5 7 Total responses: 200 4.1.3 Target Market From our research results, we concluded that nearly 90% of our respondents who have camera phones are between the age of 21 to 30, and half of them are students, the rest are professionals. They’re willing to use their mobiles to take pictures within a weekly basis. And more than 80% of them have strong interests on GPS embedded camera phones. Nearly half of them are using online album now to organize their photos. So we think that our initial target market is based on 21 to 30 year olds students and professionals who are willing to use our service for both business and personal use. Our website also provide up-to-date travelling information for each member, according to the recent Irish tourist policies and the extension of EU members, more and more people are attracted to visit Ireland as tourists. So our website will definitely benefit them and they will be our potential and target user as well. 4.2 PEST Analysis Our initial target and market research are all based on Ireland, so we just outline our PEST analysis for Ireland now and we will further our analysis step by step with the worldwide extension of our product. 4.2.1 Political Factors Page 27 PhotoMap Business Plan The steady political circumstance that Ireland has facilitates the IT company and online corporate hugely in recent years. The main purposes of the latest policies indicates that foreign companies mostly from American benefit a lot from these and drive the whole Ireland IT industry to a speedy and stable development way. A really good example to explain that is the Broadband Policy in Ireland: 1998: Information Society Action Plan: z Establishment of the Office of the Director for Telecommunications Regulation- ComReg.ie z Full liberalisation of the telecommunications market from 1 December 1998 z Public/private partnership approach for telecommunications and internet infrastructure provision z Implementation of ICT in the public service z Establishment of a Digital Park [Digital Economy] Country DSL Service Launch Date Canada US Korea UK Sweden Japan Ireland 1996 1997 April 1999 July 2000 September 2000 September 2000 May 2002 Source OECD, 2001 The Development of Broadband Access in OECD Countries. The Government’ Position for Broadband is providing targeted infrastructure investment: z Framework international connectivity deal with Global Crossing z Grant aiding the development of additional high-speed backbone infrastructure z Provision of state owned infrastructure operating on an open access, carrier neutral basis z Development of community based infrastructure z The provision of broadband is a matter for private sector companies in a liberalised market z The Irish Government has recognised that the market failed to respond to demand Page 28 PhotoMap Business Plan z The state have undertaken a number of initiatives to stimulate competition in the market [Digital Economy] And as the COMMUNICATIONS REGULATION ACT 2002 ruled by ComReg (The Commission for Communications Regulation) informed, much more focuses have been changed from the traditional industry to IT ones in Ireland by political factors. Also more and more mobile company like Nokia and Sony Ericsson start to manufacture variousy kinds of GPS mobiles, and trying to put it directly into the Irish market. The stable policies may properly accelerate the development of the GPS mobiles and our business may also be boosted with the great influence of Ireland’s political factors. Further more, with the GPS popularization worldwide, we can also expend our business all over the world in the near future. 4.2.2 Economic Factors Ireland experienced rapid growth over the period 1990 – 2000 GDP annual average growth rates Ireland US Japan EU 15 1970-80 4.7 3.2 4.4 .92 1980- 90 3.6 3.2 4.1 .86 1990-00 7.3 3.2 1.3 1.62 Source: OECDb. 2004, p.19 As the table indicates, Ireland experienced rapid GDP growth over decade. ICT(Information Communication Technology) is a main new economy that affected Ireland’s GDP growth in the following ways: z Investment in ICT goods, capital investment, contributes to overall capital deepening leads to an increase in labour productivity. z Rapid technological progress in the production of ICT goods and services may contribute to more rapid multifactor productivity (MFP) growth in the ICT-producing sector. Page 29 PhotoMap Business Plan z Greater use of ICT may help firms increase their overall efficiency, and thus raise MFP. Greater use of ICT may also contribute to network effects. [Digital Economy] Source: OECD(2003a), OECD Science, Technology and Industry Scoreboard. That’s the mainly diffusion of ICT in OECD, it could help us to clearly go through all the ICT diffusions among all the OECD countries and make a suitable decision to choose the right market for us to explore. Source: OECD Productivity Database, OECD Capital Service Database, 2003. Another main component that inflects the economic growth in ICT sector in Ireland is the investment in ICT goods. That means if we can take the advantage of these things, we can definitely grow our business. Page 30 PhotoMap Business Plan 4.2.3 Socio-cultural Factors With the cheaper and much more convenient usage of the mobiles nowadays, people who live in Ireland on average have more than one mobile in their daily life. Mobile becomes a multi-function instrument that facilitates people’s life everywhere you can see. We can predict that more and more GPS embedded camera mobiles catch people’s eyes and lead the fashion for a wide range of citizens aged from 15 to 45. People are willing to take amazing pictures whenever and whatever they want. That’s not a word “popularization” can easily describe. Our website can provide the suitable photo management services that meet people’s needs and become popular easily. A new business needs chances to start, if we can make fully use of the socio-cultural, we’ll absolutely take the preferential opportunities and run our own business successfully with the perfect initial step. 4.2.4 Technological Factors GPS (Global Position System) has become a vital global utility, indispensable for modern navigation on land, sea, and air around the world, as well as an important tool for map-making, and land surveying. In late 2005, the first in a series of next-generation GPS satellites was added to the constellation, offering several new capabilities, including a second civilian GPS signal called L2C for enhanced accuracy and reliability. In the coming years, additional next-generation satellites will increase coverage of L2C and add a third and fourth civilian signal to the system, as well as advanced military capabilities. The Wide-Area Augmentation System (WAAS), available since August 2000, increases the accuracy of GPS signals to within 2 meters (6 ft) for compatible receivers. GPS accuracy can be improved further, to about 1 cm (half an inch) over short distances, using techniques such as Differential GPS (DGPS). With the rapid development of the GPS technology, mobile industry is now embedding this new technology into their mobiles. That implies the huge potential for our website and the more exact services we provide to our customer, the more exact benefits we can gain from that. All these depend on the high penetration rate of GPS Technology in Ireland and worldwide. Page 31 PhotoMap Business Plan 4.3 Porters Five Forces Model Porters model is based on the insight that a corporate strategy should meet the opportunities and threats in the organizations external environment. Especially, competitive strategy should base on understanding of industry structures and the way they change. We use this model to further analyze our external environment and market for our unique online album service, each element we evaluate may help us to fully understand the whole competitive circumstance and make the suitable decision for our future business plan. 4.3.1 Bargaining Power of Suppliers: The term 'suppliers' comprises all sources for inputs that are needed in order to provide goods or services. The online album market does not have a certain number of suppliers. We can use variety source of online server spaces and the GPS information is automatically Page 32 PhotoMap Business Plan generated by GPS embedded camera phones and cameras. z z z z There are fewer substitutes for the particular input. The suppliers are fragmented, so their bargaining power is low. The switching cost from one supplier to another is not much higher. The buying industry has low barriers to entry 4.3.2 Bargaining Power of Customers: Similarly, the bargaining power of customers determines how much customers can impose pressure on margins and volumes. There exist a certain number of customers who are using the online album now, especially the youth and middle age people, so there is a concentration of customers. This kind of service is undifferentiated and can be replaced by substitutes, but we have our unique competitive advantage on well combined online map and album system. Switching to an alternative service is relatively simple and is not related to high costs, it’s free for our customer to register their own accounts and we provide up to 100MB free space for each member, z Customers have low margins and are price sensitive, and we provide ideal services and are not intend to gain profits from our members. z Customers can upload and manage their photos themselves, no extra charge for that. z The service is not of strategical importance for the customer but will make their lives better. z The customer knows about the whole process for costs of the service. There is the possibility for the customer integrating backwards. Page 33 PhotoMap Business Plan 4.3.3 Threat of New Entrants: The higher the competition within an industry will be, the easier it is for other companies to enter this industry. In such a situation, new entrants could change major determinants of the market environment (e.g. market shares, prices, customer loyalty) at any time. There is always a latent pressure for reaction and adjustment for existing players in this industry. The threat of new entries will depend on the extent to which there are barriers to entry. z It doesn't need very high initial investments and fixed costs for start-up a new business to enter the online album market. e.g. we will spend 10000 euro per person for our initial investment. z Cost advantages of existing players due to experience curve effects of operation with fully depreciated assets, we are also using online maps supported by Microsoft and may take over the online server in China with a relative cheap price. z Brand loyalty of customers, we have the ability to attract the existing customers due to our ideal service. z Protected intellectual property like patents, licenses etc, new Internet policies may give new players like us more chances and we can apply for our own intellectual property. (No monopolization) z Scarcity of important resources, e.g. qualified expert staff like us who are always full of energy and motivated for the new entrant. z Access to raw materials as GPS embedded photos are not controlled by existing players, we can also share them freely and conveniently. z Distribution channels are also not controlled by existing players, Internet could be the mainly one we are using to provide our service. z Existing players have relative close customer relations, but with the time goes by, we can also establish our own brand successfully. Page 34 PhotoMap Business Plan z Low switching costs for customers, ‘free to use’ is our slogan. z Legislation and government action, no tariffs for us to provide our service within Ireland. 4.3.4 Threat of Substitutes: A threat from substitutes exists if there are alternative services with lower prices of better performance parameters for the same purpose. They could potentially attract a significant proportion of market volume and hence reduce the potential sales volume for existing players. This category also relates to complementary services. z Brand loyalty of customers, same as above which we discussed in new entrants part, the ideal service we provide will definitely attract the existing and new users. z Closer customer relationships. z The relative price for performance of substitutes, users can get free of charge service from us. z Current trends, more and more people are willing to use online maps like Virtual Earth, Google Earth, and such mapping service provider have the facilitate to join the market online album service. 4.3.5 Competitive Rivalry within the industry: It describes the intensity of competition between existing companies in an industry. Page 35 PhotoMap Business Plan High competitive pressure results in pressure on prices, margins and on profitability for every single company in the industry. z There are many players of about the same size, our competitors like Flickr, Bebo etc, are exactly the same size and probably share the same size of market and customers in some way. So the barrier could be kind of strong for us. z Players have similar strategies, exactly, similar strategies to attract customers and similar strategies to gain profits (Via Ads) may increase the barrier power in some degree. z There is not much differentiation between players and their products; hence, there is much price and service competition. Up to 100MB free space per member and the vivid map combined online album are our unique competitive advantages contrasting with our strong competitors. Further more, we are going to develop our own software which automatically collects GPS information when users take one shot by GPS embedded camera phones and provides certain options for users to upload their GPS photos to our website. z Potentially high market growth rates, during our investigation and questionnaire, we found that more that 80% of the informants are willing to organize their photos online and share with their friends. z Barriers for exit are low (e.g. cheap and no highly specialized equipment). Even graduates like us are able to start-up our own online album system freely and easily. The problem is how to extend our business and retain it with a high growth rate. Page 36 PhotoMap Business Plan 4.4 SWOT Analysis: Strengths Weaknesses Personalisation Adaptability Professional Academic Develop Team Successful Integration Ideal development potential Early development stage Costly to establish initial prototype Lack of funding Lack of Business and Marketing Skills Difficult to enter markets as new comer Possible implementation problems Opportunities Threats Huge potential for online album Huge potential in the market High growth rate for potential customers Widely usage of GPS embedded camera phone Working with partners Can also learn from competitors’ strengths Existing competitors Potential competitors Bargaining Power Security threats: Hackers New Technological Processes Government policies/regulations Page 37 PhotoMap Business Plan 5 TECHNICAL REPORT 5.1 Architecture Overview There are three kinds of users who would access our system, customer, internal users and our business partner. Customers are our vast majority of users accessing the system by the Internet. In this online photo management system, they could register themselves as registered user, having some advanced functions. After registering the system, user could upload their photos, manage them and share with their friends. Users could define the photos they upload as private or public. If it is private, only users’ friends could view these photos. If it its public, every customer, even not registered, could use our search engine to view photos. Customer who has photos uploaded could Page 38 PhotoMap Business Plan manage these photos anytime. For example, he/she could add a new photo, delete a photo, rename a photo, modify the description of photo, etc. On our site, we will provide photo printing service in the future. If customer are satisfied a photo of our site (may be his own or belongs to someone else), he could make an order that we would print them and delivery to customer’s home. Internal users, most of which are our staffs, could access not only the site, but the internal system by Internet and Intranet, such as administrator mode, server and database. Different staff could access different parts of system. For example, staff, whose duties are to maintain the system, may have the right to access administrator, then they could update the content; staffs, whose duties are to deal with customers’ order or backup database, may have the right to access database. So different staff would have their own username and password to access the system and system would authenticate and authorize them to corresponding part of system. In the daily maintaining the system, we may need some useful information, such as the popular area of uploading photos, most popular photo which has most clicks, so another work for our staffs is to record and analyze the site statistic data. Then we may know ourselves better, having more confidence when talk with our business partners. We may have 3 kinds of business partners providing different services to us. One is search engine company, such as Google. We have our own search engine for searching a particular photo according to customer’s need. But when we like to provide some relevant advertisement to our customer, we may need outside search engine. For example, if customer wants to search a photo of Paris, when the results are given, our system would also give some link to some Paris hotels or Paris travel agency. All these advertisements would be dynamic and only relevant to customers’ search, so we may need help of outside search engine. Another kind of business partner is filter system. We need some company providing filter system to do some photo filter work if photos uploaded are not legal or suitable on our site. We also need some company providing firewall service for us, and then we can provide better service and sufficient security for our clients. Page 39 PhotoMap Business Plan 5.2 Operational Model Our online photo management system is a typical 3 tier System. Web browser is in the front tier. Here http protocol and TCP/IP is used to transfer data to client side. Server service is provided in the middle tier. All service and report components are held and executed on this middle tier. The advantage of this configuration is that the service and report components execute at the speed of the Server device, not the Client. Third party, also called business partners also provides services for our clients or us. The end tier is database tier. SQL would be used to manage the database from servers. Between each 2 tiers, firewall is always set for security. Access Control is also used to provide authorization. The reason why we use 3-tier architecture is to provide more efficiency. Using 3-tier architecture, we could update or replace any of 3 tiers independently as technology always changes. It is easy to develop 3 simple parts than a complex one. Page 40 PhotoMap Business Plan 5.3 System Components 1. User User is the client who uses browser-based front-end application to accept and process data. 2. Internet Internet is a huge medium including lot of routers and servers to transfer data between users and servers. 3. Firewall Firewall is piece of hardware or software to prevent some communications forbidden by security policies. 4. Security Filter Security Filter does web content filtering and blocking Page 41 PhotoMap Business Plan 5. Web Server Web Server accepts HTTP requests from users and serves them web pages, which usually are HTML or other type documents. 6. Content Management System Content Management System is responsible for creation, modification and deletion of content, which might be HTML pages, XML files or, other forms of documents. 7. Directory Service The Directory service in the Architecture is responsible for storing information needed to perform authenticating users who want to access the application. These authentication credentials include the User ID and password. The Directory component will also access rules that help establish what the functions and data that the users are authorized to access within the system. This component would store the different access rules and, given an access request, determine if the user is allowed to perform that task. This component should be flexible in the types of tasks and user groups, allowing for customization at all levels. 8. Request Management Request Management receives the HTTP request from web server and interacts with session management system to establish a new session to get session data. Then it would receive response and choose a response page based on the type of service. So that a response could be sent to user by web sever. 9. Session Management Session Management system deals with tracking a user’s interaction with the system during a session. Session tracking mechanism, such as cookies must be used and it must be secure to prevent some user hacking other user’s session. 10. Database Database is usually a mainframe, used to store data. It would probably needed to custom written using SQL queries. 11. Backup Backup is used for store data in another place. In case main database was attacked or Page 42 PhotoMap Business Plan destroyed by some reason, backup data could be used for support. 5.4 Function Test Action Situation Response Register Different Password PASS Login Wrong Password PASS Edit Profile Different Password PASS Add comment More than 255 char PASS Location Search Place does not exist PASS Photo zoom in/out Maximum and Minimize PASS Photo classification See private photo in PASS public Download Download large file PASS Upload File doesn’t exist PASS Delete user User doesn’t exist PASS Delete comment Comment doesn’t exist PASS Logout Staytime less than 1 PASS minute over than 1 hour 5.5 Functions 5.5.1 Register/login When user log on our site, if he/she need more services from us, not just search a photo, he/she could login. To a registered user, he/she just needs to type the username and password, and submit it. To an unregistered user, he/she is required to fill our registration form. This is a very simple form and only took about 2 minutes. All information filled would be kept secret from our user being annoyed by junk mail or other ways. 5.5.2 Search photos Search function is available for both registered user and unregistered user. User could input the location he/she wants to search and submit, and then user will get the most match photos. The location might be a country, city, town or even a street Page 43 PhotoMap Business Plan or park. As some photos are private, search function could only provide users public photos unless you are already a log on user and your friends’ photo are search available to you. When you found photo from our map, you will also find some recommendation places near the place you are looking for, such as good restaurant and hotel. Our site also provides user links to some local travel agencies that might help users know these places better. 5.5.3 Upload/manage photos As a registered user, you will have a space to upload your own photos and you can manage these photos anytime you want. Besides uploading, you can also modify file name, add a comment to photo or even delete the photo. If the photo you provide does not include longitude and latitude, then you need to add these information your self or locate it on your global map system. This way could make your photos easy to search. At last, a user needs to define the classification of each photo, public or private which whether allow others to search or not. 5.5.4 Share photos with friends If user set his/her photo private, other normal users could not see these photos. Only friends of this user who this user has defined could view these photos. This is a very interesting part in this system. Just think about when you want to see all your friends photo, all you need to do is nothing more than open one site, then you can view all of these photos. You can even use search function to find the most wanted photo. This could make you and your friends closer. 5.5.5 Order photo print When you find some interesting or attractive photo on our site or you just want to print your own photo, you can use the print ordering system, which could provide an easy and efficient way for users to get a physical photo. All steps needs to do is to click mouse and wait at home. That’s it. Leave the rest to our professional staff and they will print photo you want and send to your place on time. 5.6 Usability z Structure Photomap.com left all navigation buttons on the top left corner and all buttons about login or register on the top right corner. On the right side, we leave all the related information links to let users know if they need these kinds of information. Thus the structure of the site would look very compact and user could find useful information very quickly. Page 44 PhotoMap Business Plan z Simplicity Pages of Photomap.com look very terse. As our main focus is our photos on the map ,so we are trying to make pages terse that users would really notice the most interested part of our site, not others. z Visibility Photomap.com is a easy-to-use site. The site provides all buttons, links or instructions to users that almost all tasks in photomap would be easy to implement. z Feedback System would return feedbacks automatically if users finish tasks, such as register successfully, login and update photo space and so on. Then customers would not be confused and know what they have done. They will like this kind of feedbacks and be more confident on our site. z Tolerance Photomap.com is a flexible and tolerant site which allows users to undo and redo, such as canceling and going back. This prevents users doing some mistakes and gives chances to get them right. 5.7 Risks analysis z z z z z z Failure of website may caused by: Failure of hardware Failure of software Problems of surroundings, power failure, fire or flooding Loyalty problems of staffs Virus or attack by hacker For the first 3 causes, our company will have a good mechanism in managing staff, training staff in order to lower the possibility of hardware/software failure and surroundings problems. Human is the most important wealth to our company. If staffs leave, what we loose is not only just a talent staff, customer information, business secrets and system information might be also gone as well. So besides providing good benefits, our company would give a full training and build a good management system to all staffs to avoid security issue because of staff quitting. Page 45 PhotoMap Business Plan The server and database might be attacked through virus or by hacker. According to site attack statistic from mini honeypots, simple CGI telnet command execution constitutes 65.58% of all attacks. To detect these attacks and protect system, we would have a lot of methods to implement, such as set access control list on router, set password on operating system and router, install antivirus software and firewall, use cryptography software on some important data. Besides these, the most important thing to do is to back up the database and important files, which could make company not lose everything if the system was really crashed. http://www.marston-home.demon.co.uk/Tony/uniface/3tierhardsoft.html http://www.rootsecure.net/?p=attack_stats 5.8 Technology used 5.8.1 Web 2.0 “Web 1.0 was commerce. Web 2.0 is people.” ------- Ross Mayfield, CEO of SocialText Web 2.0 is a concept rather than a technology. It defines web as a renaissance with changing rules and evolving business models. Proponents of the Web 2.0 approach believe that Web usage is increasingly oriented toward interaction and rudimentary social networks. We take this concept in developing PhotoMap. We want create a more interactive environment for our users. 5.8.2 Mapping API There are several mapping APIs that available for our project. Two of them which provided by some big-names are: Google Map and Microsoft Virtual Earth. All of them stand out for their high-quality, up-to-date, accurate maps and let developers embed the maps in their own web pages with JavaScript. You can add overlays to the map. Another useful feature is that you can also zoom in on satellite photos of urban areas in these countries. The most important reason for us in deciding to adopt Virtual Earth is that Google Maps prohibit commercial use and Virtual Earth gave their blessing to commercial use. Page 46 PhotoMap Business Plan 5.8.3 Ajax Ajax, shorthand for Asynchronous JavaScript and XML, is a web development technique for creating interactive web applications. Nowadays, almost all the mapping service is using Ajax. It will increase the web page's interactivity, speed, and usability. It is also effectively working on lightweight mobile applications. We are using JavaScript to manipulate the map at this stage and in the future we will fully enable Ajax to enhance users’ experience. 5.8.4 GPS Stand for Global Positioning System. More than two dozen GPS satellites broadcasts precise timing signals by radio to GPS receivers, allowing them to accurately determine their location (longitude, latitude, and altitude) in any weather, day or night, anywhere on Earth.. The accuracy is between 5 and 40 metres provided there is a clear view of the sky. 5.8.5 Server-side technology We use PHP, Apache Webserver and MySQL database, the most popular technology used in web application. They are all open source software and free of charge. This feature meets our initial needs since we have a limited start funding. We chose the most stable release at the time of development. PHP: PHP is a server-side scripting language that developed by Zend Technologies. Using this technology we can generate dynamic content in the server. The version we used is 4.4.1 MySQL: the world's most popular open source database. Its architecture makes it extremely fast and easy to customize. Extensive reuse of code within the software and to produce functionally-rich features has resulted in a database management system unmatched in speed, compactness, stability and ease of deployment. The version we used is 3.23.49. Apache Server: Develop by Apache Software Foundation (ASF), it supports Linux and Windows operation systems. Apache is the most-used web server software package in the world for its ease of use and stability. The version we used is 2.0.58. Page 47 PhotoMap Business Plan 5.9 FUTURE EXPANSIONS z MMS/Direct browsing and uploading from mobile phones In the future, we will provide mobile version of our website, which means users can access to the photos directly from their mobile. And users can upload the pictures their space from their mobile phone. z GPS Issues: direct embed the photos to the map As you know, GPS embedded cameras is still rare in the market, but we believe that these kind of cameras will dominate the market in the future. Users don’t have to set up the location information manually and the system can recognise the geographic information from the JPEG header and tag the picture automatically. z Registered Users: value-added service We will provide other value-adding service for registered users. For example: larger album space and photo printing in the future. Page 48 PhotoMap Business Plan 6 FINANCIAL SUMMARY 6.1 Total Income Vs Expenditure Here are our Sales, Expenditure and Profits expectation within first 3 years. € 500,000 € 400,000 € 300,000 Sales Expenditure Profits € 200,000 € 100,000 € 0 -€ 100,000 1 2 3 Years 6.2 financial ratios Year 2006 to 2007 Year 2007 to 2008 Year 2008 to 2009 Revenue €84,625.00 €170,850.00 €479,400.00 Investment €40,000.00 Sales €44,625.00 €170,850.00 €479,400.00 Expense €130,238.65 €165,128.90 €240,724.40 Profit -€45,613.65 €5,721.10 €238,675.60 Balance -€45,613.65 -€39,892.55 €198,873.05 Profit % -53.9% 3.3% 49.8% 6.3 Annual Financial Statistics Year 1 Page 49 PhotoMap Business Plan Annual Financial Statistic €50,000.00 €40,000.00 €30,000.00 €20,000.00 Sales Expenditure Profits €10,000.00 €0.00 1 2 3 4 5 6 7 8 9 10 11 12 -€10,000.00 -€20,000.00 Month Year 2 Annual Financial Statistic €25,000.00 €20,000.00 €15,000.00 Sales €10,000.00 Expenditure Profits €5,000.00 €0.00 1 2 3 4 5 6 7 -€5,000.00 Month Year 3 Page 50 8 9 10 11 12 PhotoMap Business Plan Annual Financial Statistic €60,000.00 €50,000.00 €40,000.00 Sales Expenditure Profits €30,000.00 €20,000.00 €10,000.00 €0.00 1 2 3 4 5 6 7 8 9 10 11 12 Month 6.4 Finance Risk With the process of our business, it is inevitable that our company will face the all kinds of risks, and finance risk is the most important one of them. This is because finance risk will directly effect our business situation and processing, if we can’t forecast or prepare for those finance risk, we will meet some unpredictable difficulties or obstacles for our business, so it is vital for us to assess finance risks By our analysis, we think we will meet the following finance risks. z Cash Follow Due to the limitation of our initial founding (40,000 Euro), after we spend some essential cost, which is about more than 30,000 Euro, we do not hold enough cash flow in company’s account. It means we are weakness on some emergencies, it will limit our reacting capacity in competitive marketing environment. Especially when we are in the initial phrase. z Budget Deficit We think this problem would be emergence in the second phase of company’s road map. This is because during this stage our main company’s aim is going to focus on expanding the amount of our web site users. By our analysis, due to the rapid Page 51 PhotoMap Business Plan expanding mount of users, we need more investment in our facilities—rent more servers. If our prediction of users amount is less than the actual user amount, we have to rent more servers for these additional users. It will directly result in budget deficit, and affect our other payout within this phase. If we change our budget, it may result in extra cost. Additionally we have to consider whether or not we can get balance between the additional cost and revenue when we change our budget. Page 52 PhotoMap Business Plan Bibliography Allen, K., Launching new ventures an entrepreneurial approach third edition, 2003, Houghton Mifflin company Digital Economy, Lecture Notes from Teresa Hogan, Dublin City University. Enterprise Strategy Group 2004. Ahead of the Curve- Ireland’s Place in the Global Economy. Dublin: Forfas. [Online] http://www.forfas.ie/publications/esg040707/pdf/esg_ahead_of_the_curve_full_re port.pdf [Accessed 29th June, 2006] IBM IT Architecture Workshop, 2006, Toby Thurston, IBM Corporation Marc J.Dollinger. (2003) Entrepreneurship: Strategies and Resources. Chapter 5 to Chapter 6, pp126-217. OECDb. 2004, p.19 OECD Productivity Database, OECD Capital Service Database, 2003. OECD, 2001 The Development of Broadband Access in OECD Countries. Organisation for Economic Co-operation and Development, [Online] http://www.oecd.org/home/0,2987,en_2649_201185_1_1_1_1_1,00.html [Accessed 22nd June, 2006] Recklies Management Project GmbH, www.themanager.org, http://www.themanager.org/pdf/p5f.pdf [Accessed 25th June, 2006] [Online] The Consumer Website of the Commission for Communications Regulation, [Online] http://www.askcomreg.ie/ [Accessed 20th June, 2006] The Commission for Communications Regulation, [Online] http://www.comreg.ie/_fileupload/downloads/CC01.pdf [Accessed 20th June, 2006] http://news.eastday.com/service/advertise.htm http://www.mediachina.net/index_news_view.jsp?id=45791 http://www.mediachina.net/index_news_view.jsp?id=82587 http://www.marston-home.demon.co.uk/Tony/uniface/3tierhardsoft.html http://www.rootsecure.net/?p=attack_stats http://www.amazon.co.uk/gp/product/B000FBDJCK/202-9503623-3408662?v=gl ance&n=560798 Page 53 PhotoMap Business Plan Appendix Appendix I—Database Structure PhotoMap_users Field Name Field Type user_id int(11) username varchar(32) password varchar(128) email varchar(128) sessionID varchar(128) Field Name Field Type pic_id int(11) description text owner_id int(11) title varchar(128) date date longitude float(20) latitude float(20) file varchar(128) Field Name Field Type id int(11) parent_id int(11) title varchar(128) session_id varchar(1) longitude float(20) latitude float(20) file varchar(128) Field Name Field Type comment_id int(11) author_id int(11) pic_id int(11) title varchar(128) date date body mediumtext PhotoMap_pic PhotoMap_thumbnail PhotoMap_comment PhotoMap_group Page 54 PhotoMap Business Plan Field Name Field Type group_id int(11) founder_id int(11) member_id int(11) Appendix II Financial Appendices Inflows Investment Sales Total Cash Inflows Quarter 1 Sep Quarter 2 Dec Quarter 3 Mar Quarter 4 Jun TOTAL to Nov to Feb to May to Aug €40,000.00 €40,000.00 €5,100.00 €7,650.00 €12,750.00 €19,125.00 €44,625.00 €45,100.00 €7,650.00 €12,750.00 €19,125.00 €84,625.00 Outflows Start up Costs €4,817.00 Rent €4,200.00 €4,200.00 €4,200.00 €4,200.00 €16,800.00 PRSI €1,377.60 €1,377.60 €1,377.60 €1,377.60 €5,510.40 €135.00 €135.00 €135.00 €135.00 €540.00 €18,000.00 €18,000.00 €18,000.00 €18,000.00 €72,000.00 €200.00 €200.00 €200.00 €200.00 €800.00 VAT €1,071.00 €1,606.50 €2,677.50 €4,016.25 €9,371.25 Online Server €3,000.00 €3,000.00 €3,000.00 €3,000.00 €12,000.00 Pension €1,800.00 €1,800.00 €1,800.00 €1,800.00 €7,200.00 €300.00 €300.00 €300.00 €300.00 €1,200.00 Total Outflows €34,900.60 €30,619.10 €31,690.10 €33,028.85 €130,238.65 Net Cash €10,199.40 -€22,969.10 -€18,940.10 -€13,903.85 -€45,613.65 Ending Balance €10,199.40 -€12,769.70 -€31,709.80 -€45,613.65 Broadband Wages Advertising Supply charge €4,817.00 Page 55 PhotoMap Business Plan Inflows Quarter 1 Sep Quarter 2 Dec Quarter 3 Mar Quarter 4 Jun TOTAL to Nov to Feb to May to Aug Sales €28,050.00 €35,700.00 €45,900.00 €61,200.00 €170,850.00 Total Cash Inflows €28,050.00 €35,700.00 €45,900.00 €61,200.00 €170,850.00 Rent €4,200.00 €4,200.00 €4,200.00 €4,200.00 €16,800.00 PRSI €1,377.60 €1,377.60 €1,377.60 €1,377.60 €5,510.40 €135.00 €135.00 €135.00 €135.00 €540.00 €18,000.00 €18,000.00 €18,000.00 €18,000.00 €72,000.00 €500.00 €500.00 €500.00 €500.00 €2,000.00 VAT €5,890.50 €7,497.00 €9,639.00 €12,852.00 €35,878.50 Online Server €6,000.00 €6,000.00 €6,000.00 €6,000.00 €24,000.00 Pension €1,800.00 €1,800.00 €1,800.00 €1,800.00 €7,200.00 €300.00 €300.00 €300.00 €300.00 €1,200.00 €38,203.10 €39,809.60 €41,951.60 €45,164.60 €165,128.90 Net Cash -€10,153.10 -€4,109.60 €3,948.40 €16,035.40 €5,721.10 Ending Balance -€55,766.75 -€59,876.35 -€55,927.95 -€39,892.55 Outflows Broadband Wages Advertising Supply charge Total Outflows Inflows Quarter 1 Sep to Nov Quarter 2 Dec to Feb Quarter 3 Mar to May Quarter 4 Jun to Aug TOTAL Sales €79,050.00 €99,450.00 €132,600.00 €168,300.00 €479,400.00 Total Cash Inflows €79,050.00 €99,450.00 €132,600.00 €168,300.00 €479,400.00 Rent €3,600.00 €3,600.00 €3,600.00 €3,600.00 €14,400.00 PRSI €1,377.60 €1,377.60 €1,377.60 €1,377.60 €5,510.40 Broadband €135.00 €135.00 €135.00 €135.00 €540.00 Wages €18,000.00 €18,000.00 €18,000.00 €18,000.00 €72,000.00 Advertising €800.00 €800.00 €800.00 €800.00 €3,200.00 VAT €16,600.50 €20,884.50 €27,846.00 €35,343.00 €100,674.00 Online Server €9,000.00 €9,000.00 €9,000.00 €9,000.00 €36,000.00 Pension €1,800.00 €1,800.00 €1,800.00 €1,800.00 €7,200.00 Supply charge €300.00 €300.00 €300.00 €300.00 €1,200.00 Total Outflows €51,613.10 €55,897.10 €62,858.60 €70,355.60 €240,724.40 Net Cash €27,436.90 €43,552.90 €69,741.40 €97,944.40 €238,675.60 Ending Balance -€12,365.65 €31,187.25 €100,928.65 €198,873.05 Outflows Investment: Our research group will initially invest 10,000 euro each for our opening funds. Sales: Our sales formula is sales = number of user who browsed our website X number of pages he browsed X click rate X profits. Example: First Month sales = 100,000 X 10 X 1% X .10 euro (AD1) + 100,000 X 10 X 3% X .25 (AD2) euro = 8500 euro. Page 56 PhotoMap Business Plan Start up Costs: It’s include: 4 Dell laptops Broadband Connection GPS embedded camera phone Firewall Dell Server Printer Total 2997 euro 250 euro 500 euro 250 euro 700 euro 120 euro 4817 euro Rent: We rent an office in Dublin City Centre. The monthly rental is 1400 per month for first two years and the 3rd year’s rental is 1200 per month. PRSI (Pay Related Social Insurance): If you earn more than 440 euro per week and pay a Class A1 contribution, you will pay 2% on the first 127 euro of your earnings and 6% on anything over that amount up to a maximum of 46,600 euro. You will pay 2% on any earnings above 46,600 euro. Each of our members has to pay 114.8 euro per month because of our salary. Broadband: 45 euro per month. Wages: 1,500 euro per person per month lasting for 3 years. Advertising: 200 euro per month in first year; 500 euro per month in second year; 800 euro per month in third year. VAT: 21% for VAT payable. Online Server: 100G online server space for 10 euro per month in China. We will rent 100 servers in first year, 200 in second year, 300 in third year. Pension: 10% of our wages. Supply charge: Heat and light fees will approximately cost us 100 euro per month. Page 57 PhotoMap Business Plan Appendix III—Management Profile PhotoMap Management Team Quan Zhou Qualifications CEO M.Sc in Electronic Commerce [technical], DCU B.Sc in Computer Science, HDU Xiangjie Gao Marketing Director Qualifications M.Sc in Electronic Commerce [business], DCU B.Econ in International Economics and Trade Jie Shi Financial Director Qualifications M.Sc in Electronic Commerce [business], DCU B.Sc in Computing Science in Griffith College Dublin Jiayuan Li Technical Director Qualifications M.Sc in Electronic Commerce [technical], DCU B.Sc in Computing Science in Griffith College Dublin CCNA certification Page 58 PhotoMap Business Plan Appendix IV Digital Camera and Camera Phone Sales Overview This year, 20.5 million digital cameras are expected to be sold, 82 percent of the total camera market, and increase from 73 percent in 2004. Digital camera sales are expected to grow until the end of 2006 or 2007 and then the sales slow considerably (see below) In 2004, more than 55 percent of digital cameras were four megapixels or more compared to 30 percent in 2003 (see below). The trend of phones with embedded cameras — camera-phones (see below), Page 59 PhotoMap Business Plan http://www.mobileimagingreport.com/Mobile_Imaging.htm Top 20 countries with the highest number of Internet DSL broadband subscribers Page 60 PhotoMap Business Plan Appendix V Questionnaire and Result 1) Are you Male or Female? Percentage Responses Male 67.0 134 Female 33.0 66 Total responses: 200 2) Please indicate the age group to which you belong? Percentage Responses <15 0.0 0 15-20 1.5 3 21-25 44.5 89 26-30 44.0 88 31-35 6.5 13 36-40 3.5 7 41-45 0.0 0 46-50 0.0 0 >50 0.0 0 Total responses: 200 3) Please indicate your occupation. Percentage Responses Student 44.5 89 Professional 43.0 86 Other 12.5 25 Page 61 PhotoMap Business Plan Total responses: 200 4) Do you have a mobile phone with an embedded camera? Percentage Responses Yes 72.0 144 No 28.0 56 Total responses: 200 5) Do you share your photos with your friends, relatives, or colleagues? Percentage Responses Yes 88.0 156 No 22.0 44 Total responses: 200 6) If the above answer (Q 5) is yes, what tools would you like to choice for sharing your photos? Percentage Responses By physical pictures 12.2 32 By e-mail 29.3 42 By blog 31.7 49 By instant messenger (ICQ,MSN,etc) 26.8 33 Other 0.0 0 7) How often do you use your mobile phone’s camera? Page 62 PhotoMap Business Plan Percentage Responses Daily 19.0 38 Weekly 12.5 25 Monthly 19.5 39 Never use it 18.5 37 Not sure 30.5 61 Total responses: 200 8) Have you heard GPS(Global Position System) before? Percentage Responses yes 81.5 163 no 18.5 37 Total responses: 200 9) Have you heard any following device with embedded GPS before? Percentage Responses Camera 11.8 29 Mobile phone 35.4 87 PDA 50.8 125 Other 2.0 5 10) Are you interested in any of above GPS embedded device? (5 means strongly interest and 1 means no interest) Percentage Responses 5 18.0 36 4 22.5 45 Page 63 PhotoMap Business Plan 3 38.5 77 2 10.5 21 1 10.5 21 Total responses: 200 11) Are you familiar with Internet? (5 means very familiar and 1 means not familiar) Percentage Responses 5 57.5 115 4 30.0 60 3 12.0 24 2 0.0 0 1 0.5 1 Total responses: 200 12) Have you used any online photo management system(i.e. bebo,flickr)? Percentage Responses yes 58.5 117 no 41.5 83 Total responses: 200 13) If the above answer is no, why don’t you use this kind of system? Please briefly indicate your reason (all results shown) - no interest - simply will be not enough spread time Page 64 PhotoMap Business Plan - I'm lazy - i don't know it - never heard of it - don't have many photos - no time - I don’t no - I haven't heard about them. - the speed of internet is too slow . - never heard before - no needs - never think it before - other 14) What’s your opinion about existing online photo management systems? Please briefly indicate your opinion (all results shown) - They can be very slow to upload photos sometimes. - convenient - no comment - Not necessarily - have no idea - MSN Space is a really poor system to manage the photoes. I hope I can find another better one. - diffcult to use - not interested - no idea - easy to share photo and search other interesting pictures - a little bit complex and speed is too low. - It's useless. - They are easy to use,but cost me a lot of time. Page 65 PhotoMap Business Plan - convenience and safety - use easy;to pass round for perusal extensively - very useful - cheap - not sure about it - other 15) Do you like traveling? Percentage Responses yes 100.0 200 no 0.0 0 Total responses: 200 16) If the above answer is yes, how often do you usually take your traveling? Percentage Responses Less than once a year 22.0 44 Once a year 36.5 73 Twice a year 23.0 46 More than twice a year 18.5 37 Total responses: 200 17) How would you find your traveling information? These information include your accommodation, route of traveling, basic information about your destination etc. Percentage Responses From travel agency 19.5 39 From travel website 42.5 85 29.5 59 Hearing from your friends, relatives or Page 66 PhotoMap Business Plan colleagues Other 8.5 17 18) If you get travel information from a website, which format of the above information would you like to have? Percentage Responses text 41.0 82 picture 47.5 95 video 11.5 23 Other 0.0 0 19) Are you willing to see traveling information (hotel, restaurant, etc) on online photo management system? (5 means very interest and 1 means not at all) Percentage Responses 5 36.5 73 4 20.0 40 3 27.5 55 2 12.5 25 1 3.5 7 Total responses: 200 20) Any other ideas, opinions about this survey? (all results shown) - no Page 67 PhotoMap Business Plan - I'd like to know your result if it's possible. Thanks! - Nothing. - I'm eager to travel, carrying my DC :) - no - no ideas - other Appendix VI Digital Camera and Camera Phone Sales Overview This year, 20.5 million digital cameras are expected to be sold, 82 percent of the total camera market, and increase from 73 percent in 2004. Digital camera sales are expected to grow until the end of 2006 or 2007 and then the sales slow considerably (see below) In 2004, more than 55 percent of digital cameras were four megapixels or more compared to 30 percent in 2003 (see below). Page 68 PhotoMap Business Plan The trend of phones with embedded cameras — camera-phones (see below), Page 69 PhotoMap Business Plan http://www.mobileimagingreport.com/Mobile_Imaging.htm Appendix VII Digital Printing Overview The number of photos printed in 2004 is expected to have been 27.4 billion, a decrease from last year of 28.7 billion. Sixty-one percent -- 3.1 billion -- prints were made at home compared to 76 percent (2.3 billion) in 2003 (see below). Although billions of photos are printed, the majority are not and it is significant opportunities for increasing revenues by convincing consumers to print more photos (see below). Page 70 PhotoMap Business Plan Page 71 PhotoMap Business Plan Appendix VIII TOP 20 COUNTRIES WITH HIGHEST NUMBER OF INTERNET USERS TOP 20 COUNTRIES WITH HIGHEST NUMBER OF INTERNET USERS Population ( 2006 Est. ) Internet Penetratio n Source and Date of Latest Data % User s of Worl d # Country or Region Internet Users, Latest Data 1 United States 205,326,680 299,093,237 68.6 % Nielsen//NR Jan/06 20.1 % 2 China 111,000,000 1,306,724,06 7 8.5 % CNNIC Dec/05 10.9 % 3 Japan 86,300,000 128,389,000 67.2 % eTForecasts Dec/05 8.4 % 4 India 50,600,000 1,112,225,81 2 4.5 % C.I.Almana c Mar/05 5.0 % 5 Germany 48,721,997 82,515,988 59.0 % Nielsen//NR Jan/06 4.8 % 6 United Kingdom 37,800,000 60,139,274 62.9 % ITU Oct/05 3.7 % 7 Korea (South) 33,900,000 50,633,265 67.0 % eTForecast Dec/05 3.3 % 8 Italy 28,870,000 59,115,261 48.8 % ITU Sept./05 2.8 % 9 France 26,214,173 61,004,840 43.0 % Nielsen//NR Jan/06 2.6 % 10 Brazil 25,900,000 184,284,898 14.1 % eTForcasts Dec/05 2.5 % 11 Russia 23,700,000 143,682,757 16.5 % eTForcasts Dec/05 2.3 % 12 Canada 21,900,000 32,251,238 67.9 % eTForcasts Dec/05 2.2 % 13 Indonesia 18,000,000 221,900,701 8.1 % eTForcasts Dec/05 1.8 % 14 Spain 17,142,198 44,351,186 38.7 % Nielsen//NR 1.7 Page 72 PhotoMap Business Plan Jan/06 % 15 Mexico 16,995,400 105,149,952 16.2 % AMIPCI Nov/05 1.7 % 16 Australia 14,189,557 20,750,052 68.4 % Nielsen//NR Jan/06 1.4 % 17 Taiwan 13,800,000 22,896,488 60.3 % C.I.Almana c Mar/05 1.4 % 18 Netherland s 10,806,328 16,386,216 65.9 % Nielsen//NR June/04 1.1 % 19 Poland 10,600,000 38,115,814 27.8 % C.I.Almana c Mar./05 1.0 % 20 Turkey 10,220,000 74,709,412 13.7 % ITU Sept./05 1.0 % TOP 20 Countries 811,986,333 4,064,319,45 8 20.0 % IWS Mar.31/06 79.4 % Rest of the World 210,876,974 2,435,377,60 2 8.7 % IWS Mar.31/06 20.6 % 1,022,863,30 7 6,499,697,06 0 15.7 % IWS Dec.31/05 100. 0% Total Users World - NOTES: (1) World Internet User Statistics were updated as of March 31, 2006. (2) Data for users in individual countries and regions may be found by clicking each country name. (3) Population numbers are based on data contained in the world-gazetteer page. (4) The most recent user information comes from data published by Nielsen//NetRatings, ITU, and other trustworthy research sources. (6) Data from this site may be cited, giving due credit and establishing an active link back to InternetWorldStats.com. (6) For definitions and navigation help, see the Site Surfing Guide. ©Copyright 2001-2006, Miniwatts Marketing Group. All rights reserved. Page 73 PhotoMap Business Plan Appendix IX TOP 20 COUNTRIES WITH THE HIGHEST NUMBER OF INTERNET DSL BROADBAND SUBSCRIBERS 2004 Q4 TOP 20 COUNTRIES WITH THE HIGHEST NUMBER OF INTERNET DSL BROADBAND SUBSCRIBERS - 2004 Q4 Internet Users Latest Data Population ( 2005 Est. ) Source and Date of Usage Data # Country or Region DSL Broadband Subscribers 1 United States 33,900,000 199,861,345 293,271,500 Nielsen//NR Feb./05 2 China 25,800,000 94,000,000 1,288,307,100 CNNIC June/04 3 Japan 12,739,564 66,586,234 127,853,600 Nielsen//NR Nov./04 4 Korea, (South) 11,900,000 30,670,000 49,131,700 KRNIC June/04 5 Germany 5,950,000 46,455,814 82,633,200 Nielsen//NR Oct./04 6 France 5,253,000 24,803,250 60,011,200 Nielsen//NR Oct./04 7 Italy 3,680,000 28,610,000 57,987,100 C.I.Almana c - Dec/03 8 United Kingdom 3,335,000 34,874,469 59,595,900 Nielsen//NR Oct./04 9 Taiwan 2,900,000 11,602,523 22,689,300 Nielsen//NR June/01 10 Canada 2,568,351 20,450,000 31,846,900 C.I.Almana c - Dec/03 11 Spain 2,227,805 14,095,951 41,895,600 Nielsen//NR Oct./04 12 Brazil 1,633,700 18,660,650 179,383,500 Nielsen//NR Oct./04 Page 74 - - PhotoMap Business Plan 13 Netherlands 1,552,000 10,806,328 16,254,900 Nielsen//NR Oct./04 14 Belgium 983,000 3,769,123 10,402,200 Nielsen//NR Apr./02 15 Australia 910,000 13,410,833 20,275,700 Nielsen//NR Oct./04 16 Hong Kong 774,000 4,878,713 6,727,900 Nielsen//NR Oct./04 17 Sweden 751,000 6,722,564 9,010,700 Nielsen//NR Oct./04 18 Switzerland 717,000 4,585,364 7,433,000 Nielsen//NR Oct./04 19 Israel 600,000 2,000,000 6,867,200 ITU Apr./02 20 Denmark 594,000 3,375,850 5,397,600 Nielsen//NR June/02 DSL - TOP 20 Countries 80,179,987 640,219,011 2,676,975,800 IWS Jan.20/05 Rest of the World 5,120,013 179,712,581 3,713,171,687 IWS Jan.20/05 Total World - DSL Users 85,300,000 819,931,592 6,390,147,487 IWS Jan.20/05 NOTES: (1) Countries DSL subscriber data are from DSLForum and Point Topic Survey. (2) Table data corresponds to March 31, 2005. (3) Demographic ( population ) numbers are based on the data contained in world-gazetteer.com. (4) The most recent usage information comes from data published by Nielsen//NetRatings , ITU and other research sources, for definitions please read the surfing guide. (5) Data from this site may be cited, giving due credit to sources and establishing an active link back to InternetWorldStats.com. Broadband includes a technology called ADSL (Asymmetric Digital Subscriber Line) and requires an external modem that is plugged into the USB or Ethernet expansion slot on your computer. Choosing a broadband supplier (cable) may require the installation of a new telephone line at your premises to deliver the broadband service. Even though the Internet connection is always on and you may be working on the Web, you can still make and receive telephone calls using a broadband telephone line. Page 75 - PhotoMap Business Plan Appendix X GPS Embedded Mobile Phone and Camera z Navman iCN 750 GPS Camera The Navman iCN 750 digital camera contains a GPS unit and display, so that users can "geostamp" their pictures, or perform traditional functions like receiving directions to a destination. http://www.amazon.co.uk/gp/product/B000FBDJCK/202-9503623-3408662?v=gl ance&n=560798 z Dual-mode GPS/Bluetooth phone runs Linux A Swiss company has published a datasheet for a dual-mode Linux smartphone that also integrates a GPS (global positioning system) receiver, WiFi, and Bluetooth. ImCoSys says its smartphone, a quad-band GSM design with a PDA-like form-factor, will be showcased next month at CeBIT in Hannover, Germany. Source: http://www.linuxdevices.com/news/NS4475809720.html Page 76