GOOD MORNING: More Time, For a Better Breakfast
Take KMB buses to work and win your time back from busy traffics. With our proposed Bus&Breakfast apps (B&B), KMB’s passengers can utilize their smartphone or tablet to order a chef who will cook the passengers’ breakfast while they are sitting in our buses. Passengers no longer have to give in to queuing for just a cold sandwich or junk premade food which is the only breakfast that other means of transport can offer them to buy in crowded stations.
Using B&B apps, passengers become a member of a virtual gourmet union of office districts. The B&B beta 1.0 version is designed to cover a cross-harbor route, which passes through Sheung Wan, Central, Admiralty, Wanchai and terminates at Causeway Bay, frequently used by white collars who live in Tuen Mun and work in those districts. The fame and reliability of KMB (Kowloon Motor Bus) will line up the best HK-style cafes near the route’s bus stops to join B&B’s online ordering service. All our passengers need is just to download or update their current KMB mobile apps to the new B&B beta 1.0 which will be available for all iOS and Android devices. Once they step on a bus and get connected to KMB’s free-WiFi (or scan a QR code labeled near their seats with their only 4G mobile networks), they can open B&B to browse the cafe menus as well as customer reviews and place a direct breakfast order online to a cafe near where they will get off. While the passengers are then sitting back to catch some sleep or do their own whatever businesses in the 90-minute journey, the cafes indeed have already started preparing the breakfast ordered. The GPS equipped on the bus will update the cafe chefs about the passengers’ arrival time so as to make sure their breakfasts are freshly made-to-order and packed nicely, awaiting the passengers to come in and pay-pick-go once they get off the bus. Occasional traffic jams above the ground no longer hold passengers back from taking KMB buses to work. More transportation time does not mean no breakfast time anymore.
Who Our Company Is: Current Situation of Kowloon Motor Bus
KMB—The Kowloon Motor Bus Co. (1933) Ltd. has an average daily patronage of about 2.58 million in 2012 (LC06, 2013). It has already been providing a Route Map Searching service in its website and the service was extended to a mobile apps version since 2012. KMB also sets up electronic information panel in some of its 2432 bus stops (More about KMB, 2011, pp.1-3).
However, KMB’s average daily patronage actually dropped 4% in the five years before 2012 (LC06, 2013). It was mainly due to a continued shift of passengers, who needs reliably punctual transportation, to the expanding and jam-free railway network offered by our major competitor: The MTR Corporation.
KMB’s major innovation business was the establishment of RoadShow in-bus television channels while MTR earns a big profit from retailing and rental business by building increasing number of in-station shops. The latter’s new business model is hard for KMB to follow as most bus stops do not have the space.
Who to Collaborate With: Current Situation of Hong Kong-style Cafes
HK-style cafes are known for their eclectic and affordable menus. Most of them were originated from local people of the district as small family businesses. To offer the most number of seats without expanding space and rental costs, chefs and waiters are long trained for very fast services in order to increase the turnover of customers and earn more. However, the less comfortable dine-in experience which is not preferred by a wealthier new generation makes traditional HK-style cafes subject to a fierce competition with big fast food restaurant chains such as Maxim’s, Café De Coral and McDonald’s. The situation was worsen by the surging raw materials and rental costs. Many small-scale cafes of such are in risk of close down.Why Collaborate: B&B Promises a New Value to KMB, Cafes and Passengers
Ohmae illustrates what an innovation should create with Yamaha’s successful case. “When Yamaha faced the overload market, they created automatic playing piano. What Yamaha did is to create new value to their clients, but not only for the products itself” (1999, p.44).
Creating a value proposition is a crucial part of business strategy. Kaplan and Norton say, “Strategy is based on a differentiated customer value proposition. Satisfying customers is the source of sustainable value creation” (2004, p.10). A value proposition is a promise of value to be delivered and a belief from the customer that value will be experienced. Developing a value proposition is based on a review and analysis of the benefits, costs and value that a company can deliver to its customers, potential customers, business partners and other stakeholders within and outside the company.
In this proposal, we apply the Value Proposition Builder model (Barnes, Blake & Pinder, 2009, p.30) for KMB to analyze and create a value proposition in six facets of collaboration with HK-style cafes:
1. Market: B&B targets the fast-moving working class who needs to travel on every working day by limited means of transportation, among which KMB is one of them. There is a potential that KMB can increase its market share.
2. Customer experience: Hong Kong’s fast-moving working class value time the most. Without having enough sleep in the previous night, they often find themselves in a hurry to office and have no choice but sacrifice their stomach in order to catch up time amidst busy traffics. However, there is an increasing research evidence, medical advice and public awareness that an empty stomach can worsen health and lower work performance.
3. Offering: The value we can promise by a new customer experience is that the B&B apps can provide KMB passengers with a virtual real-time breakfast ordering platform on the bus to do parallel actions of preparing their breakfast and travelling to work.
4. Benefits: A better way of life of our B&B positioning “More Time, For a Better Breakfast” is achieved through repositioning of four constituent groups whom B&B concerns:
a. Product repositioning: B&B combines with KMB’s current Route Map Searching apps to turn it a habitual apps rather than a traffic apps only when needed. Users will find it a useful tool that brings convenience every day.
b. Company repositioning: B&B is a synergic collaboration which brings added values to both KMB and our allied HK-style cafes. With B&B, KMB means not only point-to-point transportation but also point-to-point quality lifestyle; With B&B, HK-style cafes means no longer rushing up but prioritizing orders in queue.
c. Competition repositioning: KMB’s passenger flow has no way to compete with those of MTR. The situation is becoming worse with MTR’s increasing frequency of train service. However, B&B will help KMB to turn the situation around by offering passengers a sit-back journey without worrying about their breakfast while MTR passengers still have to rush out the gate to grab cold food.
On the other hand, most decentralized small-scale HK-style cafes do not have the capitals to cope with surging rents. Its dine-in experience is uncomfortable and cramped as compared to dining in chained fast food restaurants. As a way out, B&B can help HK-style cafes to earn more from take-away business which is less subject to rental constraints.
d. Customer repositioning: Without their own cars, travelling to work means passengers can only make their personal itineraries go with the flow of bus schedules. To a certain relief, B&B allows users to remain their own choice in breakfast selection at their own pace regardless of traffic conditions. The construction of “a quality of life for us” is further strengthen when users write up reviews for B&B and cafes in their office districts’ virtual gourmet communities in the B&B apps.
5. Alternative and differentiation: Public transportation in Hong Kong is an oligopoly business, and currently no other competitor is providing mobile apps with breakfast ordering service. Talking about partnering with caterers, MTR is expanding their in-station shops constructions but the food variety which it can provide is restricted by venue and hygiene constraints while the extent of reach of B&B to HK-style cafes is unlimited along the designated KMB routes.
6. Proof: Hong Kong ranks the second highest in the world regarding smartphone penetration (Ahonen, 2011). Talking about apps usage, the current KMB Route Map Searching apps’ download rate has already reached the range of 0.5 – 1 million while that of another restaurant search and gourmet review apps OpenRice has reached 1 – 5 millions on Google Play. There is strong evidence to predict that our B&B apps will be easily and widely accepted by loyal KMB passengers and other commuters.
Why Go Virtual: Five Added Values
Why Go Virtual: Five Added Values
Virtual collaboration can optimize the use of
opportunities driven from market and resources. In B&B’s virtual platform, the
supply chain drivers and possibility of demand chain create five added values
to the value chain of our virtual collaboration.
2. Time-saving:
KMB passengers can save their precious time to have their breakfast ready
during their travelling time.
3. Space-saving:
As prospective users of B&B will order take-away food, both KMB and
HK-style cafes can enjoy an expansion of their market shares without a need of much
extra space to accommodate new customers.
4. Cost-saving:
B&B apps rides on the KMB Route Map Searching apps to develop as a new
function. The virtual platform saves much cost from manpower and infrastructures
by utilizing existing resources.
5. Ease
to manage and analyze: B&B’s virtual
platform can archive a huge database of clients’ contact, preference, ordering habits,
reviews, etc. They are valuable information for evaluating and providing further
services.
How to Go Virtual: Strategies for B&B
Virtual organizing requires specific strategies in order to maintain competitive
edge of the product and collaborating parties involved. Venkatraman and Henderson
(1998, p.34) view virtualness as a strategy that reflects three distinct yet
interdependent vectors, namely customer interaction, asset configuration and knowledge
leverage. Each vector has to go through three stages. Stage One targets at how task
units can improve operating efficiency while Stage Two targets at an organizational
level on how to collaborate for creating and enhancing economic values. Stage
Three emphasizes how an inter-organizational network can facilitate the development
of multiple communities for sustained innovation and growth. The below figure
shows how B&B applies this model to KMB’s virtual collaboration with
HK-style cafes.
 | ||
| Venkatraman - John C. Henderson, Real Strategies for Virtual Organizing, Sloan Management Review, Fall 1998 |
The customer interaction vector copes with the new forms of interactions
between companies and customers. B&B app allows the passengers who take a
KMB bus to choose breakfast along the bus route. Although users order their food
without actually seeing or tasting, they can rely on photos and previous reviews
from other users. Users can also add their reviews in B&B apps later. In a
sense, B&B app is building a gourmet community connected by the bus route.
Asset configuration focuses on acquiring critical assets and resources to
greater alliance. The first stage of asset configuration is sourcing module. It
deals with the benefits of efficiently sourcing standard modules or components.
When KMB sources collaborators for B&B, it considers cafes which are near the
bus stops along a designated route and connect them together. KMB create
process interdependence in the second stage by establishing apps technology which
can gather real-time traffic information through GPS and meal orders. The last
stage is building resource coalitions, in which B&B apps serves as a one-stop
platform which relates and analyze stored travelling time and food preparation time
for cafes to prioritize meal orders.
Knowledge leverage is how B&B can utilize knowledge assets to support
the virtual organizing strategies. Calculations based on bus route and meal
ordering systems and real-time GPS turns the work-unit expertise of bus drivers,
chefs and waitress to B&B’s corporate assets: fast reaction to customer
requests for providing made-to-order breakfasts. To arrive at the final stage
of building professional community expertise, KMB possesses technology
developers who can modify the B&B apps based on stored marketing research
data analyzed by marketing specialists online.
What Virtual Organizing Should Achieve: Knowledge Management
Knowledge management is regarded as recognizing and managing
organization’s intellectual resources to achieve business goals. There are five
steps in the knowledge management model (Davoudi & Fartash, 2012). The
first step is capturing. Capturing feedback from employees and customers is
critical to the development of a knowledge-based business. With B&B apps,
KMB can capture the users’ comments for marketing specialists to analyze
whether and how B&B needs to perfect its service. The second step is
storage. After capturing raw data, the storage key is to make it easy to
identify which data are relevant to any analysis. The third step is
interpretation and transformation. Analysts need to generalize conclusions from
customer reviews. Then it goes to the fourth step of dissemination. Other than
KMB marketing department’s promotion with the rating of B&B apps, users
will also generate noise in the community by word of mouth. The word of mouth
and users’ trial and error will bring the final step of auditing back to the
first step, capturing new comments which check the validity and reliability of the
old ones.
How to Go Further: Expanding the Pie
We collaborate, because we find benefits in
furthering our interests in virtual expansion. Through developing the B&B apps, KMB reaffirm its publicity in the virtual world (on mobile phones and
tablets etc.). Besides, it serves as a tool to help compete with MTR. Last but
not least, KMB is contributing to corporate social responsibility by preserving
the characteristics of HK-style cafes to supporting the small-medium size,
mostly family-run enterprises.
Having
a mature company structure is the strength of KMB.
During our negotiation, we made use of several skills to reach win-win
situation.
1.
Offer
package deal. We make use of our existing resources to help advertising the cafes’
breakfasts, for which the cafes would need to cost much more than simply doing
the same advertisement in the market. KMB can offer advertisement inside
(roadshow) and outside the bus (painting on bus surface). KMB generates attractive package to the cafes by utilizing resources
flexibly.
2.
Ask
questions about interests and priorities. In this
collaboration, KMB aims at utilizing the apps to turn over the current competing
situation with the major competitor, MTR. Although KMB is quite confident that
we will not be ruled out by MTR, we can hardly expand our market share if we
stay at the existing operation style without giving more incentives to the
passengers. In the process of finding collaboration partners, we target at
those who want to earn more but will lose to fierce competition with solely their
own effort. Finally we fix our target at the HK-style cafes who feel helpless
fighting against big fast food chains. However, the perspectives of cafes were
not totally in line with ours. They did not aim at earning big money. Rather,
they just want to survive in the market. In short, sustainability is their
goal. In their point of view, expanding their business is even a burden to them
because a number of cafes are running on a family basis (家族式經營), where manpower and capital are quite limited.
Therefore, we shifted our focus a bit to a more supportive style. For example,
we presented the advantages of the collaboration, not only to earn more by
expanding the customer pool, but also to assist the cafes to stay close to the
benefits from the societal and technological advancement (the use of electronic
device and installation of Wi-Fi system in the cafes).
3.
Perspective-taking.
Successful negotiation throughout the collaboration process cannot be achieved
without this element. At one moment we were to decide which bus route we should
designate. The two parties thought of a few bus routes which we thought they
can gain the most benefit, including route no. 112, 102, 970 and 962. On the
other hand, the cafe community has some target members in old industrial
districts whom they want to rescue first. We ranked our priorities in a hope to
reach an agreement. The final route selected may not be the most preferred
option for KMB, but we targeted at a long-term relationship with the cafes and
a fast buildup of user community who are easily adapted to new technology. In
the plan of KMB, the B&B beta version 1.0 which covers only one route is a just
trial. More routes are anticipated to be included in later version of the apps in
the future. Our concession to cafes’ wishes at one moment did bring out their
confidence in our sincerity of a collaboration and improve our relationship.
Though differences in values and goals exist
between KMB and HK-style cafes, win-win negotiation is achieved when we identified
both sides’ strengths and needs in order to move things around and offer an attractive
package which HK-style cafes are hard to get it from other service providers. These communication strategies expand the pie.
What Will Happen Next: Incentives for Customer Return
Nowadays, mobile phone is a necessity to almost all Hong
Kong people. We deal with our organizational and personal matters extensively
through electronic platform, whereas apps play a crucial role. Unlike websites,
apps are specially designed to fit the handy electronic device, ie. mobile
phones and pad. In short, the following summarizes the major incentives of using
our B&B apps:
- User-friendly platform: simple text supplemented by graphics, avoidance of long passages and guidelines.
- An interactive platform - exchange between the cafes and customers: having a comparatively smaller customer pool then large-scale chained restaurants, HK-style cafes can address the needs of customers better. Instead of responding by standard templates through formal but slow complaint channels, B&B apps can offer HK-style with a platform for one-to-one service and response to their customers (i.e., KMB’s passengers).
- Customized features: ordering record will be saved in the apps, so that customer can review their record easily. Since a record is created, bonus system or other awarding system is allowed. “Today’s Special” or “Breakfast for your Birthday” are examples that cafes can offer.
- HK-style cafes have their unique special menus which large-scale fast food chains cannot cater for: baked egg tart, “sweet pastry bun stuff with butter” (菠蘿油), coffee mix milk tea (鴛鴦) in customized ratio of tea to coffee, you name it.
Where We Will Arrive At: Future of B&B Apps
B&B apps has a great potential to expand. In the
preliminary stage, a few major bus routes running from big residential
districts (eg. Tuen Mun) to central business district (eg. Central and Wanchai
are incorporated into the apps. After that, more routes can be considered as
long as there are a number of cafes located along the route. When the apps
grows to a mature stage, it can finally be outsourced to become an independent
tool. This apps serves mainly the white collar, it is expected that this apps
will finally be become an everyday tool of this community.
1. Capital
/ Resources
As KMB already has an existing apps, we
need limited resources to develop B&B as an add-on ordering feature. We
think the investment will be at an acceptable cost and will be balanced soon with
the growing number of bus passengers attracted by the breakfast ordering
service. We estimate only a team of less than 10 employees needs to be
allocated to take up this development project for jobs include programming,
liaison with cafes and marketing.
In the long
term, we would need capital to sustain a more advanced B&B apps. Crowd funding
is one of the strategies that we will consider. When B&B matures, we may make use of an online payment
system and charge a negligible service fee to accumulate capitals. Other than
money, we may explore other resources that may be useful of redesigning cafes,
such as secondhand bus furniture as decorations to theme up some cafes.
2.
Support to the cafe
To encourage the use of B&B apps, we
can offer some support to the HK-style cafes:
a. Hardware
We
understand electronic devices are needed to make the whole thing works. For
those cafes which do not have the basic hardwares, we will subsidy part of the
costs. There are NGOs who provide renewal and redistribution of electronic devices.
We can communicate with these NGOs to explore the possibility of assisting
these cafes. We believe it is meaningful as the recycled electronic devices can
increase the competitiveness of minority: small-medium sized enterprises in a long
term.
b. Knowledge
The
new team responsible for this project will offer technical support to the
cafes. At the early stage, technical staff will pay site visits to our
partnering cafes regularly to ensure the electronic devices function properly
and the cafe workers operate them smoothly. Later on, telephone helplines may be
provided to solve technical problem over the phone by staff stationing in our
KMB office, which will help reduce operation cost.
After all, B&B apps will help the second generation (which is the younger generation) of the HK-style cafes increase their competitiveness. This will be another survival tool to supplement the traditional catering business.
References
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Smartphone penetration rates by country! We have good data (finally). Communities Dominate Brands: Business and
Marketing Challenges for the 21st Century. Retrieved May 7, 2013, from http://communities-dominate.blogs.com/brands/2011/12/smartphone-penetration-rates-by-country-we-have-good-data-finally.html.
2. Barnes, C., Blake,
H., & Pinder D. (2009). Creating and
Delivering Your Value Proposition: Managing Customer Experience for Profit.
London, Philadelphia: Kogan Page.
3. Davoudi, S.M.M.,
& Fartash, K. (2012). Knowledge Management in Virtual Organizations, International Journal of Engineering and
Management Research, 2(5), 22-28.
4. Kaplan, R. S., &
Norton, D. P. (2004). Strategy Maps:
Converting Intangible Assets into Tangible Outcomes. Boston: Harvard
Business Press.
5. LCQ6: Services of MTR
East Rail Line and Ma On Shan Line and KMB in North District. (2013). HKSAR Press Releases. Retrieved May 7,
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(2011). The Kowloon Motor Bus Co.(1933)
Ltd.’s Website. Retrieved May 7, 2013, from http://www.kmb.hk/eng/pdf/moreKMB.pdf.
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the Interlinked Economy (revised ed.). New York: Harper Business.
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& Henderson, C. (1998). Real Strategies for Virtual Organizing. Sloan Management Review, Fall, 33-48.
Blogged by Chopsticks in collaboration
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