2004/10/4
This is a make up version for today, as I am out for the strategic meeting in the suburb of the town – Spring resort , this is an over night meeting to cover 2 major items – “ Q3 Strategic CTQ – “ and New Business “ the 5 years mid-range plan for our company “, I set a vision in year 2007 which is by then, the non access business shall accounts for 50% of our total business, this is an aggressive yet must achieving goals, otherwise, there’s no point to run a flat access business with a slim margin. Currently we only obtain 10% of the revenue contribute from non Access business, a 5 holds growth is gigantic development for the company, before the strategic meeting, I had coffee with a few mangers to elaborate how important this meeting is and in the near future, the company will be in your hands, you should think from now, how you wish the company to be and begin to renovate or redesign it.
To encourage attendee to speak more, share more and think more, I provide an incentive which is the wine rewards, I prepare 3 different Italian wines to the meeting place and told everyone by end of today, you should vote for 3 best attendee in the category of courage, construction and concentration. The conversation in the afternoon is pretty healthy, I can see the interactive flow traveling in the venue and no one falling asleep, thanks God that I just wrote the prelude for one book “ Death by meetings “ and learn a few tips from it.
Send out a mail to my secretary about my feeling toward her late for the office a few times. I rather be honest with her than feel bad and picky on her performances, this is a healthy communication, as least, the mail sent to her have been seen as a feeling of her working concerns, even she is close to me, I shall deliver the frank opinion, this is for the mutual growth of us, I hope one day she will understand.
Lunch with K. my driver on my way to the meeting venue, we pick one Korean restaurant for lunch, this is the second lunch I did with him after examine both of our feeling last time, he told me that he went to a cooking institution and prepare to apply for cooker’s license, he enjoy learning it and told me if we are OK, he is fine to cook at our house one day. The lunch cause me 10 minutes late for the opening of the meeting, wine brought me a good excuse to explain to everyone, a white lie, but a good one.
The strategic meeting covered this afternoon is critical, Churn and the relationship with Retention will be deem as sub topic to be discussed in separate meeting; OS performance ( the non Access business ) is another key area we pay attention to; the discussion is more dynamic and in depth than before, my concentration on the meeting is a good feed back to me, I am glad the pick up of the mood mean something for me.
Wife is worried about Sound’s friend making in Forest Elementary School, he is associate with a boy who we saw have big problem in behavior, he beat the other boy, run away from class and don’t listen to teacher’s advise, even hit the principal one day; we were afraid that Sound will be influenced by him and behavior in odd, he is not a stable kid, if this develop further, we may consider to transfer him back to the normal education system; I will take time to preach it to Sound on Sat. and to take the opportunity of “ Parent’s day “ to communicate it with the teacher the week after.
He invited me for a private breakfast, why? I always thinks too much, I should treat it as a thank you meal and “we are the same in certain issues “, otherwise, sleepless night will hit me again.
Complete my Oct chat during the meetings, this time, I set the tone in “ Management “ and to tell all our employee what “ management “ is and how it reflect to our business and diary life; I should create another incentive and I don’t have an answer yet.
Open discussion really dig out a few issues with history – the years old issue is the burden created by all the members, now everyone looking at them seriously and try to find a suitable solution to apply, this is a good sign too, we were late for 2 hours, scheduled dinner by 7:00 pm, I am afraid that we may miss it – well, hotel won’t let you, they are the last frontier to keep you follow the itinerary, the remaining issues may find their solution after the dinner in some casual drinking time. I like the way people don’t escape from the problem they facing, I also afraid that it will result to an increasing work load for employee, a dilemma occurred again, we run into the cross road of “ priority setting “ and “ resource optimization ‘, if anyone can handle it well, he is the best CEO in the world.
It’s only 30 minutes delay from the original schedule, probably this granted favor was due to the coffee break, the hotel didn’t do it decently, the chess cake is a freezing one, so, we raised our voice and complain, it gave us additional 30 minutes free for extended meeting time, we complete 3 CTQ be 7:30 pm, I decided to equally split the wine to each rooms, I think all of them shall win some prize and to save time for the distribution of the wines. The last CTQ from the meeting today is “ voice of employee “, it related to employee himself, so the discussion of benefit and perspective is different from other items. How to well represent the entire company’s voice wasn’t easy, the cleaning toilet is the main issue, so, “ your mother doesn’t work here “ is a good story to tell again.
After dinner, it’s about 9:30, I don’t have time to enjoy the hot spring, but simply take a shower than join the men’s talk in one of managers’ room, as I brought 15 half bottle of red wine, they bought some snack to the room, we talked and drinks, I didn’t finish my glass of wine but to conduct a very intimacy conversation with mangers, when talking about “ emails “ and ‘ team spirit “, I express my personal definition and having them to think about it, to me, email communication it to build a castle to protect oneself and told the world, he is “ working “, but how come a communication flow can be treated as work and why people who receive your mail must response to you ? think about pick up the phone ? why whenever the phone rings, you will always tried to reach them ? the mail community is not a healthy working attitude, especially when people send out mail in odd hour ( such as 3 in the morning , why PC recorded the time for sending ?); as for team spirit; my interpretation is : to form a consents of ‘ agree “ or “ disagree “ is much more important than “ no response “, as long as the communication party agree upon their disagrees, this is a healthy consents as well; my view points did bring these manager to think, to digest , and to review their own version of communication, we have to do it right instead of do it alright. Return to my room by 1 am and call my wife for another 30 minutes bad time sweets. She must be happy about it.
J. came back from the State and called to say hello, he mentioned that we should meet sometimes, as I told him that I will call him to confirm the meal, it seems he is fragile, he told me if I am too busy, I can wait until he calls me next time, don’t need to secure time for the chat, I feel strange about his reaction and asked him not to worried about my schedule, friends should act as natural as possible.
The spring bath is overheated, I burned my toe when testing water last night, you need to pour at lease half of the cold water into the bath tub, otherwise the hot water will boil you, the dilute of hot spring won’t make you feel bathing in the real hot spring, I think the hotel doing this intentionally to save the hot spring water. But why? Is it related with cost and profit?
2004/10/5
1. Strategic meeting day 2, ADSL market is different from Broad band market, when we conduct such an market forecast, we didn’t counting any new format of access technology, such as FTTX which may turn the switchers’ market and account for fat revenue? If we passively watch the market in single format, we may lose sight of the grand picture.
Switch market : DSL to abandon any broadband access; DSL to DSL with same access configuration ( churn to other ISP’s with same product ) ; DSL to DSL with different access configuration ( churn to other ISP’s with up and down grade product ); DSL to Cable or FTTX ( churn to other ISP’s access mode ).
We predict the market in the lab environment which means no factors are counting in our estimation, any change of varies will change the figures we came out from the meeting, any strategic implantation shall not stagnate in one conclusion, should always be reviewed and adjust to the varies and factor impact on the market. Base on rationale assumption is a road map, yet an action plan.
Price erosion and free upgrade to new product format will then increase the cost and decrease the revenue, we suffer from this experience this year from April to June, any forecast on this will significantly change our map again, this predatory pricing strategy can only be initiative by dominate player like H. company.
Churn cycle is on an average of 13 –15 month of subscription, this is the expiration of bundle sale and premium, the peak come at the month of 13th, the more acquisition, the higher churn rate predicted, in the following years, we forecasted on the decline of new market, hence, the churn rate shall reduced due to the overall subscribers base will increase on the same growth rate as before.
New Technology, such as FTTH will result to an additional investment on broad band equipment.
Acquisition cost is estimated on per subs’ base, retention cost was calculated on 1.2% of revenue, as the existing subs will exceed new subs more, the complain and unfair voice may raised, we must be careful about the per sub’s base for both AC and RC.
The assumption for 5 years mid-range plan in ISP business , result arrived by 9:15 am, we did a table to highlight major revenue / cost items and come up with a number we feel comfortable.
How much does a service base entity need to re-investment on their existing customers? 20 – 25% of the Gross Margin is what we guessed, someone said the average cost for obtain one new subscriber is 5 times higher than retain one loyal customer. Does the Marginal profit before SGA at the level of 25% can support a service company? As service industry heavily counting on man power, the increase of subscriber will lead to a certain percentage of service front man, this is a marginal cost; the escalation shape will keep the slim net profit for all the service base company, in this sense, economical of scale is very important and it can multiple the margin. We then figure out the ISP business is an always break even business if we hit the break even unit…….. is it a “ Good business “, everybody doubt it; then we come to stage 2, the non-access business zone. So, we at the session exercise on mathematic mechanism and did a lot of calculation, regret ion and statistic methodology, I am wondering if other ISP other than H. did the same study as we did.
Assumption: MR Keep at 28% for 200,000,000 profits.
2. Non-ISP: the first round is to roughly come up with the revenue / profit from bandwidth re-sale, co-location for sister company, call center outsourcing income and hardware sales commissions; the balance will than go to another business Unit – application, value added service and value creation services. Hardware sales. Jay did a good table to fill in items / columns / box in the goals I announced yesterday, we allocate all the income / revenue / profit to each other and to check if the percentage fit the goal, if not, we come up with other scenario to support our goals, a very constructive and efficient method to draw our 5 years plan.
--EC discussion base on benchmarked PC Home on line, a leading online shopping community portal in Taiwan, we estimate the overall performance should be calculate on pro-rated base to justify the overall target setting. The correlation between EC performance and manpower is the key issue in the discussion table. Or do we use other portal to hosting our shopping site and pay them commission? Or to buy the second biggest EC site to build our EC development? Support or drop, this is the question, we leave time for attendee to interactively talk about it. I raised the iPod / PS2 / AP economy to gain attention of future market, product and exclusive offering to customer, but we need a plan and a commitment of implementation. The conversation ended by confirms we will go for the EC market and to ride the wind of growth.
Lunch break take place by 12:00, the set menu was great, I can’t help take more than I should, I did a review on my 2004 resolution last night, to reduce weight to 70 kg is a critical goal for health management, I can’t be too obesity, distinguish the desire for gourmet is on my top agenda.
--Hardware sales followed after lunch, the profit level is very slim, not to include the renovation on yearly base and to be amortized by 12 months; the percentage for fix and variable cost direct reflect to the profit status in the P and L analysis. The key issue fall in : shall we open more shops or to increase revenue for each existing shop, it seems our direct ship hit the bottleneck and the break through is not yet been identified. The discussion hit the wall now, by far, 2 major sales business go for a break even status, ISP itself is another break even, so, why don’t we propose to put the investment in the bank and rewarded by the interest gain instead of running a very difficult business ? original product is a new development direction and win strong welcome by attendee as this is a brand new business and the level of excitement is relatively higher. But it take time and the risk is higher too.
-- Micropayment : for content, a commission of 20% is the average, online game points varies between 9 – 15%, a history high is from Hi-net who collect the payment for Kuro and the revenue up to 30 million / month for a 20% ( 6 millions ) commission range. As the billing system is a decent investment, telecom operator and ISP win the trust among subscribers for sending physical billing statement, we should take it as an core competence to entry this collection market. A reference from Hi-net is only 0.13% of subs sign up for the collection service. This is a very minor portion for margin generation.
-- Artist Club : now we have competitor, Jay release his fan club right before his concert, Gogorock and other artist community is following our road map to go, but we may consolidate with them and doing Application Service for them to eliminate the potential competition. Critical points: to obtain less expensive streaming service, well plan the manpower allocation. This is by far the highest profit margin service among all the non ISP business, but the roll out should be speedy as the artist cycle may change dramatically, how to sustain this brand and how to keep the artist popularity are the keys.
-- Streaming content :sign up streaming service among ISP is around 2% with ARPU 180 , but we are 1.6% with ARPU 133, The gap must be sealed, how “? We don’t provide pornography program, did it impact on our margin level. Our target is to meet the standard with other ISP (a conservative version), an aggressive version is to run our own content library with a much anticipated result. A very good communication take place when J. raised his commitment and ambitious to propose this “ multi-media “ development and foresee a great development for this new area, me and COO were so exciting, we jointly agree to name him the Product Manager and assign him to draw the map to the success. We take decent time in this session, almost all the attendee raises their voice and the ambient is so positive. If we may achieve this and garner the exclusive right for streaming content business, we will be the outstanding player in the new era. We may even act as an agent to license it to CHT for MOD business development.
-- Applications (Value Added Service): a good presentation to guide a user experience in maximizes the 500M storage, varies of service can be developed further, a one storage concept to educate / lead the user to exercise it. As “ Storage “ is the highly interest function from our customer survey finding. A good introduction process and think hard outcome.
Taking some photos at the conference scene, may post them to the CEO chat. Digital camera, a camera to leave your image in a storage area and to release it among varies devices, if not print out or file doesn’t send out, the character of the photo will never know what you do about the photos you taken, same as the camera phone, ( spy camera / phone ), shooting anyway , without waning or pre-caution, it may make people feel uncomfortable.
-- Advertisement : Hi-net outbid the web AD for 12millions, so Gigigaga will never enjoy a 20 millions ad income ( but Giga’s ad income include the ads in retailing operation – Rose and Ta-chung record outlets ), we identified Artist Club, Flash animation channel to place or re-sale banner, bottom, footer. For this new income stream, a investment of publishing platform, server is required. Target for 0.2% of the web ad market by FY07. The profit sharing with vendor is 10% only, we should enter this market earlier.
-- PS2 Online / PSP : A fuzzy and blur situation, as a service platform, we are facing an uncertainly of the core product, so manager is tried to come out with a road map instead of a revenue chart; the old version of PS2 set which use to sale the network access module for online gaming will then terminate; the new PS2 will be the only device for user to play online. The termination of network adaptor will impact on half of millions for current PS2 buyer; they will not enjoy PS2 online unless you buy a new set of PS2 new model. PSP support WI-FI , this means the PS2 online gaming may not launch in Taiwan. How to secure the partnership with SCN to be the authorized Wireless Len operator is another key issue.
-- VAS ( Network Product ) : introduction of FTTX is the first session, I feel sleepy now, need a black coffee. The initial investment will be a negative revenue driver, in addition, FTTB need to find buildings to access, since CHT, Cable operator and 3 private fix line operators tried this building sales before, 100 building as the target is a big challenge, we put this development on hold and to monitor whether public sector will make it a issue to follow. WLAN Taipei: will that impact on our services? Roaming service for our customer is the solution we made in order to accommodate it, according to the plan, the completion of the WLAN TAIPEI is scheduled by end of 2005 – 15 months from now. Other VAS services enjoy a much better profit margin, it up to 67% of revenue, shall be an area to further examine, hopefully to increase the base.
-- Call Center outsourcing market development : an overview of the market and where we are, then follow with a SWOT analysis. A comprehensive step by step introduction of how and why. C. is profession in deliver the message again. A investment return chart also very mature, as the stage one investment shall not done at once, a near break even should arrive earlier than the forecast. Non banking area account for only 28% of the call center market, among them, only 10% required the outsourcing services, which means 2.8% is the market for us to pursue. For 72% of total banking market, only 7% of them go for outsourcing service, which is the area we may not touch upon, it come up with only 40 millions of market size in FY06. such a minor market, should we wave our flag and give it a go?
-- Bandwidth Market forecast: use the residual bandwidth / buying in local / buying from international to combine with a mixture of sale underlying. J. said there are tones of assumption to be Clearfield before drawing the performance estimation. Residual bandwidth is the cushion for them to estimate the total sales, the in-out even principal is the consideration of buying outside. The definition for total amount of residual bandwidth is the discussion point at the table, I don’t know why ? Anyway, every discussion should be treated in positive direction. So beat it. In the flexible sales pattern, the negotiation party shall determinate who will be the “ stick “, the other party based on it and to figure out the numbers, otherwise, you will never hit the target. The floating target is hard to shoot.
posted by Roger @ 10/06/2004 08:30:00 上午
0 Comments:
張貼留言
<< Home