Business Case for Global Hybrid Mail
Dr. Ben Livson
©
Copyright: Ben Livson 1998. All rights reserved.Commercial Secret - Document to be in kept safe custody at all times
Table of Contents
1. Executive Summary
2. Business Concept and Value Proposition to Customers
2.1 Business concept
2.2 Value Proposition to Customers
3. What is the reaction by National Postal Services?
SWOT Analysis of National Postal Services (PS)
4. The Business – History and Present
5. Technology Outline of the Product-Service – how does it work?
5.1 Intelligent Addressing
5.2 Distributed Nodes
5.3 Description of Authentication
5.4 Billing and Customer Care
5.5 SMTP Handler Billing Functions
6. Market Analysis – Breakdown of the major Users
6.1 Customer segments
6.2 Product service bundles, pricing and revenue, and costs
6.3 Critical Success Factors CSFs
6.4 Risks and Responses
7. Management and Organisation
8. Financial Plan - Pricing, Revenue and Cost
9. Industry Literature
10. Profile on Potential Business Partners
10.1 When and how to involve Global Business Partners?
10.2 What does it take to make it?
10.3 United Parcel Service - UPS
10.4 Federal Express Corp.
10.5 DHL Worldwide Express
11. Competitor Analysis
11.1 Microsoft - Royal Mail Relay One
11.2 Netscape-Sweden Post-Sun
11.3 AT&T Mail
11.4 International Data Post Hybrid Mail ePOST
11.5 IDP PC ePOST
11.6 Further development will be needed
11.7 EDI Post current and future
12 Where to from here?
Pricing Scenario 1: Penetration | |||||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | |
Volume | - | - | 30,000,000 | 240,000,000 | 750,000,000 | 1,444,000,000 | 1,890,000,000 |
Price of basic hybrid mail | - | - | $1.80 | $ 1.50 | $ 1.30 | $ 1.15 | $ 1.00 |
Revenue*2 for value added service | - | - | $ 108,000,000 | $ 720,000,000 | $ 1,950,000,000 | $ 3,321,200,000 | $ 3,780,000,000 |
Unit Gross Margin $ | - | - | $1.60 | $1.30 | $1.10 | $1 | $0.90 |
Gross Margin % | - | - | 45% | 43% | 42% | 43% | 45% |
Gross Margin $ | - | - | $ 48,000,000 | $ 312,000,000 | $ 825,000,000 | $ 1,444,000,000 | $ 1,701,000,000 |
Overhead | |||||||
Setup | $10,000,000 | $25,000,000 | $0 | $0 | $0 | $0 | $0 |
Maintenance | $0 | $0 | $5,000,000 | $500,000 | $500,000 | $500,000 | $500,000 |
Operations & support | |||||||
Management | $ - | $ - | $ 2,000,000 | $ 2,000,000 | $ 3,000,000 | $ 4,000,000 | $ 4,500,000 |
Hardware & software | $ - | $ - | $ 5,000,000 | $ 10,000,000 | $ 20,000,000 | $ 30,000,000 | $ 30,000,000 |
Customer care | $ - | $ - | $ 54,000,000 | $ 12,000,000 | $ 25,000,000 | $ 40,000,000 | $ 40,000,000 |
Marketing & promotions | $ 2,000,000 | $ 5,000,000 | $ 10,000,000 | $ 20,000,000 | $ 40,000,000 | $ 60,000,000 | $ 60,000,000 |
Billing | $ - | $ - | $ 1,000,000 | $ 3,000,000 | $ 6,000,000 | $ 9,000,000 | $ 10,000,000 |
Total Overhead $ | $ 12,000,000 | $ 30,000,000 | $ 77,000,000 | $ 47,500,000 | $ 94,500,000 | $ 143,500,000 | $ 145,000,000 |
Total Net Margin $ (1) | $ (12,000,000) | $ (30,000,000) | $ (29,000,000) | $ 264,500,000 | $ 730,500,000 | $ 1,300,500,000 | $ 1,556,000,000 |
Total Net Margin % | 245% | 101% | 67% | 47% | |||
Cumulative net cash flows (1) | $ (12,000,000) | $ (42,000,000) | $ (71,000,000) | $ 193,500,000 | $ 924,000,000 | $ 2,224,500,000 | $ 3,780,500,000 |