BIC REPORT - Cheema Transport Services

Views:
 
Category: Entertainment
     
 

Presentation Description

No description available.

Comments

Presentation Transcript

Cheema Transport Services 1st Intra-city Bus Transport System inBahawalpur “Aapke safar mein saath saath” :

Cheema Transport Services 1 st Intra-city Bus Transport System in Bahawalpur “ Aapke safar mein saath saath ” C T S

Slide 2:

A Business Idea of: Abdul Wahab Cheema Mohammad Taha Ataullah Muhammad Ali Taufiq Ovais Adil

CONCEPT:

CONCEPT The rapid growth in the transport sector worldwide The rise of a customer oriented business environment The combination of the above two factors led us to a new concept “A highly customer oriented transport service, targeting specifically those markets where customers are yet to avail modern conveyance with comfort and affordability”

Slide 4:

W h y in B aha wal p ur ?

:

Bahawalpur lacks in such basic service that is necessary for any modern city Present modes of public transport in Bahawalpur: Auto Rikshaws Motor Cycle Rikshaws Suzuki Pick ups Hilux (Daalas)

Why the vacuum?:

Why the vacuum? Failure of similar projects in other major cities like Karachi Dearth of entrepreneurial and operational skills

Why would we be successful?:

Why would we be successful? Local entrepreneurship Local support Support from Government of Punjab Support from World Bank Entrepreneurial and operational expertise

Services Offered:

Services Offered Intra-city bus service for the residents of Bahawalpur Comfortable and decent public transport at affordable fares

Unique Selling Points:

Unique Selling Points Spacious buses Air-conditioning Clean and Non-smoking buses Separate section for women Qualified and trained staff Safety through speed controls and well maintained buses High frequency of buses on main routes Affordable fares Environment friendly

Comparative Analyses:

Comparative Analyses

ANALYSIS:

ANALYSIS Industry Analysis The sector forms a large chunk of Pakistan’s GDP and enjoys a favorable growth rate Driving forces of this sector: Growth rate of the transport sector Growth rate of the market share Assistance from the Government of Pakistan A total funding of $365 million from the World Bank

Slide 12:

Market Analysis A population of 0.8 million and no organized intra-city transport system available Center of trading activities Present modes of transport are inconvenient for people Consumer base includes students, office lower staff and farmers Majority of the consumer base belongs to the lower and lower-middle class

Competitor Analysis:

Competitor Analysis Direct Competitors None Indirect Competitors Auto-rickshaws Motor-cycle rickshaws Hilux single-cabins Suzuki pickups

Shortcomings of Existing Transport Modes :

Shortcomings of Existing Transport Modes Overcrowding Uncomfortable Inconvenience with respect to timings and routes Accidents due to over speeding

Consumer characteristics:

Consumer characteristics Our target customers are those who may: Be dependent on transportation for their daily activities Not have their own mode of transportation Be facing parking problems Be Facing financial difficulties in managing their mode of transportation Be desiring a safe and comfortable mode of transportation Be desiring low transportation costs

Consumer categories:

Consumer categories Students Farmers Laborers Lower office staff Shop keepers Teachers House wives

Route 1:

Route 1

Slide 18:

SOLANG MULTAN MOD Bus# Departure Time Arrival in Multan Mod Bus# Departure Time Arrival in Solang 1 6:00 6:45 4 6:00 6:45 4 7:00 7:45 1 7:00 7:45 2 7:30 8:15 3 7:30 8:15 1 8:00 8:45 4 8:00 8:45 3 8:30 9:15 2 8:30 9:15 4 9:00 9:45 1 9:00 9:45 2 9:30 10:15 3 9:30 10:15 1 10:00 10:45 4 10:00 10:45 3 11:00 11:45 2 11:00 11:45 4 12:00 12:45 1 12:00 12:45 2 12:30 13:15 3 12:30 13:15 1 13:00 13:45 4 13:00 13:45 3 13:30 14:15 2 13:30 14:15 4 14:00 14:45 1 14:00 14:45 2 14:30 15:15 3 14:30 15:15 1 15:00 15:45 4 15:00 15:45 3 16:00 16:45 2 16:00 16:45 4 17:00 17:45 1 17:00 17:45 2 17:30 18:15 3 17:30 18:15 1 18:00 18:45 4 18:00 18:45 3 18:30 19:15 2 18:30 19:15 4 19:00 19:45 1 19:00 19:45 2 20:00 20:45 3 20:00 20:45

Route 2:

Route 2

Slide 20:

KARACHI MOD DERA BAKHA Bus# Departure Time Arrival in Dera Bakha Bus# Departure Time Arrival in Karachi Mod 5 6:00 7:00 6 6:00 7:00 7 7:00 8:00 8 7:00 8:00 6 7:30 8:30 5 7:30 8:30 9 8:00 9:00 10 8:00 9:00 8 8:30 9:30 7 8:30 9:30 5 9:00 10:00 6 9:00 10:00 10 9:30 10:30 9 9:30 10:30 7 10:00 11:00 8 10:00 11:00 6 11:00 12:00 4 11:00 12:00 9 12:00 13:00 10 12:00 13:00 8 12:30 13:30 7 12:30 13:30 5 13:00 14:00 6 13:00 14:00 10 13:30 14:30 9 13:30 14:30 7 14:00 15:00 8 14:00 15:00 6 14:30 15:30 5 14:30 15:30 9 15:00 16:00 10 15:00 16:00 8 16:00 17:00 7 16:00 17:00 5 17:00 18:00 6 17:00 18:00 10 17:30 18:30 9 17:30 18:30 7 18:00 19:00 8 18:00 19:00 6 18:30 19:30 5 18:30 19:30 9 19:00 20:00 10 19:00 20:00 8 20:00 21:00 7 20:00 21:00

Marketing Strategy:

Marketing Strategy Promotion through News papers Radio announcements Banners Billboards Inauguration by high government functionary Promotional products Loyalty cards Target audience People from all income groups Company Image Service for the whole family

Revenue Generation:

Revenue Generation Through operations Main revenue generation will be through fares that will be charged to the passengers. Through sponsors Revenue can also be generated through advertisements on our buses

Financial Analysis:

Financial Analysis To be discussed: Initial investment Growth rate for the company Expenses Net Profit Graph Lease Rental Payment Sensitivity Analysis Scenario Analysis

Initial Investment:

Initial Investment Assets: Down Payment on Vehicle to the leasing Company 78,00,000 Fixtures and Fittings 446,000 Computers and Accessories 30,000 Registration Fees 39,00,000 Cash 824,000 Capital Employed 13,000,000 Financed by: Shares to Partner 1 3,250,000 Shares to Partner 2 3,250,000 Shares to Partner 3 3,250,000 Shares to Partner 4 3,250,000 Total 13,000,000

Slide 25:

Financial Analysis Assumptions: The inflation rate is taken to be 7.92% (according to the CPI). For all the years we have assumed the rate of inflation to be constant. All Revenues and Expenses are Adjusted with Inflation

Slide 26:

Revenues (Predicted for the first year) Bus # Average fare Average no. of passengers/ one way trip No. of trips revenue generated per year 1 11 50 6 1188000 2 11 50 6 1188000 3 11 50 6 1188000 4 11 50 6 1188000 5 15 50 4 1080000 6 15 50 4 1080000 7 15 50 4 1080000 8 15 50 4 1080000 9 15 50 4 1080000 10 15 50 4 1080000 Total 11232000 Average Fare of the Buses is based Upon: Routes- 11 rupees for Route 1 and 15 rupees for Route 2 Density of population and Important Urban Centers on each Route Length of each Route- Route 1 is 16km long and Route 2 is 22km in length.

Slide 27:

Revenue growth rates are based upon growth rates of the transport sector the company’s market share Both of these growth rates are in turn based upon the increase in the average number of passengers. Weightage given: transport sector= 30% Growth in market share=70% The market share growth rate – as is evident from the figures mentioned - has a dominating impact on the total growth rate for CTS. Assumptions for Industry Model

Expenses:

Expenses Expenses are divided into three components: Operating Expense Fuel Consumption Maintenance Salaries and Wages of Workers Administration Expenses Rent on Land Insurance Premium (Atlas Insurance) Wages and Salaries of Staff Depreciation (every calculations are based on market research)

Lease Rental Payment:

Lease Rental Payment Calculation of Lease Rental Payments For the First 5 years Net Financed Amount= Cost of Buses – Down-payment (Deposit) Purchase Price of each Bus 3900000 Down-payment (20% of Cost price of the bus) 780000 Remaining amount to be paid by leases 3120000 per bus Remaining amount to be paid by leases 31200000 for all the buses

Lease Rental Payments:

Lease Rental Payments Lease Rental Payment (Orix Leasing Company) (per month per bus) 74,224 Terms 12 Total Lease Rental Payment per year per bus 890,688 Total Lease Rental Payment over 5 years 4,453,440 per bus Number of Buses 10 Total Lease Rental Payment over 5 years 44,534,400 for all buses Initially remaining amount to be paid by leases 31,200,000 for all buses Interest to the Leasing Company 13,334,400 Initial remaining amount to be paid by leases 6,240,000 each year for all buses Initial remaining amount to be paid by leases each year for all buses will add up the amount to the existing vehicle Fixed Assests--Vehicles will increase each year by 6240000rupees interest to the leasing company for all buses each year 2,666,880 interest to the leasing company for all buses each year 2,666,880 Capital expenditure on vehicles each year 6,240,000 Total amount paid to the leasing company for all buses each year 8,906,880

Calculations:

Calculations NPV 7,505,127 Payback Period 2 Years 11 months IRR 29.15%

Scenario and Situation Analysis:

Scenario and Situation Analysis

Situation Analysis:

Situation Analysis Situation One doubling market share growth rate, by increasing it to 20%. Effect: total growth increases from 9.31% to 16.31%, increasing the total revenues accordingly. Targeted market share captured well before the time.

Slide 36:

Situation Two Decreasing market share growth rate by 25%, to make it 7.5%. Effect: total growth decreases from 9.31% to 7.56%, decreasing the total revenue accordingly.

Comparison of Situations to Normal Circumstances NPV Payback Period IRR Normal Situation 7,505,127 2 years 11 months 29.15% Situation 1 10,038,159 2 years 8 months 32.49% Situation 2 19,143,981 3 years 27.50%:

Comparison of Situations to Normal Circumstances NPV Payback Period IRR Normal Situation 7,505,127 2 years 11 months 29.15% Situation 1 10,038,159 2 years 8 months 32.49% Situation 2 19,143,981 3 years 27.50%

Comparing Sensitivity:

Comparing Sensitivity

Scenario Analysis:

Scenario Analysis Scenario One In 2008, the terminal on Karachi mod catches fire. Damage: entire infrastructure as well as the three buses – number 5, 7 and 10 - parked at the concerned terminal. Atlas Insurance takes three months to compensate CTS for the vehicles lost.

Slide 40:

EFFECTS Deficiency of buses leads to three months of lost revenue. Increase in capital expenditure – four benches and a shed – of Rs.104, 000.

Slide 41:

Scenario Two In return of a reduction in fares from 11 to 10 rupees for shorter routes and 15 to 13 rupees for longer routes, the government offers us a tax rate of 15%

Slide 42:

Effects Decrease in fares increases the average number of passengers, stimulating demand and revenues in turn. Market Share growth rate increases to 20%. 80% of the Bahawalpur market captured. Net income increases when the increase in EBT is combined with the decrease in taxes.

Slide 43:

Comparison of Scenarios to Normal Circumstances NPV Payback Period IRR Normal Situation 7,505,127 2 years 11 months 29.15% Scenario 1 7,164,860 3 years 1 month 28.61% Scenario 2 5,062,008 3 years 30.16%

Comparing Sustainability:

Comparing Sustainability

SWOT Analysis:

SWOT Analysis Strengths Air-Conditioned Spacious buses Cleanliness and Safe Affordable fares High frequency of buses on main routes Environment friendly Weaknesses Customer mindset about previous modes of transport Personalized services offered by auto rickshaws Opportunities No direct competitor Support from government in form of subsidies Threats New direct competitors CNG Rikshaws

Countering the Threats:

Countering the Threats Reducing the fares (in case of new entrant) Discount on prepaid and student cards Excessive advertisements

Future Products :

Future Products Prepaid cards for frequent travelers Prepaid students discount cards Senior citizens discount cards

Future Prospects:

Future Prospects Introduction of new routes Induction of more buses on old routes Introduction of tourist bus Expansion into other cities which still need better intra-city transport services with potential market Expansion into tourism industry

authorStream Live Help