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Public Bus Business model canvas

Applied Entrepreneurship (Royal Melbourne Institute of Technology University Vietnam)

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Public Bus
Assumptions & Testing methods

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Course code and name: BUSM4092 - Applied Entrepreneurship

Student name & ID: Ho Huyen Tran – s3634019
Assessment name: Assumptions and Testing methods
Length: 750 words
Type: Individual
Due date: Week 9 (May 8 by 23:00)
Late work: Deduction of 2 marks (10%) per late day, up to 7 days.

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I. Description of the Public Bus business model by applying BUSINESS

MODEL CANVAS (BMC)

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II. Assumptions identification

This section will identify three of nine building blocks describe base on BMC
provided in section I.
A. Customer Segments
Customer segment is divide into two groups, including individual customers
and business customers.

Individual customer groups include both men and women live in a big city with
income from low income or higher. Their age from seven and older because at
this age children can take the bus themselves if the distance travelled is not
too far and with the permission of parents. In another case, if children go with
their parents, they are old enough to sit in a single position should be counted
as the age of the prospect. Most bus users are housewives, students and office
workers because they have a fixed travel schedule, so buses are their top
priority. This type of customer enjoys the convenience and affordability; some
will use the bus because they are concerned about the environment. The
behaviour of bus users is closely related to time, and they will choose another
form of transportation if they are in a hurry to a location that the bus cannot
meet in time for them. Choosing another form of transportation at that time
works well for their needs, at which point prices are no longer a top concern.

The group of business customers divide into two groups, which use the shuttle
service for staff members, students and businesses using advertising services
through advertising decal stickers on buses. For a company using
transportation services (5-20 staff or 20-70 staff), they will choose the form of
offering a reasonable price, if any company offers a cheaper service than they
will choose to deal with that company. For enterprise using advertising
services, they will switch to a competitor if our advertising is not effective or
the competitor can provide similar services at lower prices.

B. Channels
This business model combines four different channels in order to reach its
customers in the fastest, efficient and cost-effective way as much as possible.

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Nowadays, smartphones have become universal; accessing the internet

becomes normal. A useful tool for promoting the company's image and
services to the market is a website. A website helps businesses take advantage
of the world of the internet in fair competition with significant competitors,
and it provides quick, up-to-date information to serve our customers better.
Web-base communication brings many benefits such as the unlimited amount
of information, help company advertising in the global market, information
available on the website and can be viewed at any time. Moreover, it is easy to
find, easy to change information without having to reprint like brochures,
catalogues and also easier to interact with customers.
Offices will represent the image of the business. Having internal and external
effects is very important. At offices, corporate customers can quickly come to
get information, discuss or sign contracts.
Payment stations will be a place for customers to top up or buy a new bus card
instead of a traditional bus ticket. At the station, will assist in providing
information to customers such as fees, bus stations, attraction or discount
programs available. Payment stations will be the place to provide information
as well as customer service stations with a face-to-face form. The station will
make it easier to reach customers, especially customers from other places and
foreign tourists.
Hotlines divide into two lines: regular customer hotlines provide information
about the company, service models and other customer inquiries. The VIP call
centre is exclusively for VIP customers to address needs as well as to appeal or
provide information about discounts or programs dedicated to loyal customers
of the company.
C. Key Activities
Driver training will ensure safety for customers when they use the company's
services. Moreover, when drivers drive carefully, the company will receive
excellent feedback from customers and the community, help to polish the
name of the company, and this will become an advantage for the company to
attract more potential customers
Marketing will support the promotion of this new business
model, promote the needs of the people through the new
benefits that the model brings and bring the company a new

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customer base. Moreover, the focus on marketing will

support market analysis, planning and control-related
aspects (e.g., setting prices).
Conditions of vehicle operation in Vietnam are relatively harsh: roads, climate,
dusty air, high temperatures, vehicles often run at low speed, start the engine
on the spot. So details, systems on cars affected by the quality change of
lubricant. Moreover, we cannot detect the damage, thus affecting traffic safety.
Therefore, during the periodic maintenance of cars, technicians will check and
promptly handle damages (if any). Regular maintenance checks will help
prevent unnecessary damage early and extend the life of the vehicle. Periodic
car maintenance helps prevent significant damage, and these costs often cost
much more than car maintenance costs.
Moreover, when the parts are severely damaged, it will cause unsafe for users
directly affecting the safety of customers. The vehicle maintenance
management supports data to be able to accurately calculate operating costs,
prolonging the quality and life of the vehicle. Avoid sudden damage to the
vehicle condition affecting the driving schedule as well as the source of income
and customer satisfaction.
Travel demand prediction makes it easy for the company to
evaluate routes with high service needs and to increase the
number of cars on those routes to meet customers' needs
and reduce those with low demand. Predicting the needs of
customers helps the company manage the operation of
vehicles on the roads more appropriately, saving money and
human resources.

Vehicle operation management supporting the implementation

of appropriate calculations to compare the available supply
with the company's needs. Based on this comparison, an
operational policy can reach in terms of frequency
recommendations. Determine the supply needed in terms of
the daily working time required to meet the expected travel
needs. Perform another suitable calculation to compare the
available supply, in terms of daily working hours, compared
to with provided request. Based on this comparison, the
fleet procurement policy can achieve in terms of proposing

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the number of newly added vehicles to provide the required

working hours and frequency of requests

Fare determination & subsidy computation is essential because

customers using the service are primarily affected by the
price. Fares calculate for all routes depending on the long or
short bus route, their customer tier in the membership
policy besides a specific type of service for a specific period
of the day. Fares thought to generate operating revenues
that can cover operating costs and cause operating financial
surpluses. However, in many cases, transit buses are
considered as a form of social service and fares are
deliberately kept below, even including operating costs. This
strategy is implemented more often in urban transit
systems.

On the other hand, most intercity bus transport systems are

deregulation or privatisation with an overall strategy to
maximise profits. The fare structure can be either a flat fare
structure (i.e. unit fare per passenger regardless of travel
distance) or a fare structure related to distance (i.e. unit
fare/passenger, passenger/kilometre). Subsidy usually
calculates for some particular objects like disabled people,
the elderly or children.

III. Describe appropriate testing methods

DETAILS TESTING METHODS

Customer Conduct a call to participate in the
Individuals
Segment survey. However, 100% manual surveys
conducted with paper, pens and
boards are rather slow, confusing and
consume much time and human
resources. Therefore, in order to
collect and organise data sufficiently at
a reasonable cost, direct interviews

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with the support of mobile devices and

computers (CAPI - Computer-assisted
personal interviewing) will be a
solution Ideal.
Small & Big Cooperate with advertising agencies to
Enterprise invite potential customers (large and
small businesses) to attend the
seminar to introduce the company's
advertising services and then invite
them to participate in the survey.
Channels
Web-base First, we need to use secondary data
communication through research to find out which
channels are most popular and
Offices
effective by customers. Although
Payment secondary data is often processed, it is
Stations difficult to assess the accuracy and
reliability of the data source. However,
Hotlines easy to collect in a short time with
relatively low cost. In other words,
secondary data has the advantage of
saving money and time; secondary
data is plentiful, varied and comes
from different sources. Next, using
CAPI to collect more accurate data
from customers, in other words, using
CAPI to do surveys to retest data from
secondary data research.
Key Activities
Driver training Use secondary data to find out which
way is the best way to train driver and
then test with action.
Marketing Again, using secondary data to analyse
the market (e.g. research competitors
to identify the target group,
competitors are pursuing to research
company target audience). Based on

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practical and practical factors (using

CAPI to survey), then studying the
psychology of needs, desires when
using the service, standing on the
position of customers to determine
what customers expected. After
identifying the target customers, what
they want. At this point, Marketer will
elaborate a detailed strategy.
Vehicle In the beginning, combine previous
maintenance data, secondary data from market &
management competitor to predict how much need
to spent in these activities (VMM &
(VMM)
VOM). Later, use the data obtained
Vehicle through the operation process for
operation accurate calculation.
management
(VOM)
Travel demand Combine secondary data from the
prediction market and CAPI survey to calculate
travel needs for each area, so it is easy
to determine the route the bus will
run.
Fare Base on the travel demand prediction,
determination VMM & VOM, and other variable costs
& subsidy to determine the fees. Moreover,
computation consult the ticket prices of the old
public bus business model to ensure
prices are neither too high nor too low
(to at least cover the total cost) for
both regular and disabled & elderly
ticket users.

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