Travel Switch: Venture Plan for Tourism Application in Australia

The assignment presents a venture plan for 'Travel Switch,' an online social media application designed to enhance the experience of tourists in Australia. The report analyzes the market opportunity, focusing on the growing tourism sector and the need for improved communication and informatio...Read More

Running head: INNOVATION
Organisational Creativity and Innovation
‘Travel Switch- Where tourists have an edge over others’
Name of the Student
Name of the University
Author Note

1INNOVATION
Executive Summary
The report will be dealing with the venture plan of launching an online social media
application known as Travel Switch that will help the tourists in visiting the places in
Australia. It will help the tourists in getting a better level of experience so that they can enjoy
their stay within the country both for leisure or business activities.
The opportunity that is present in the market has been provided so that the application can be
launched successfully. The value proposition of the product has also been given so that it can
help in understanding the profitability of the product in the market and the reason why the
customers will be opting for it. The success factors that will help the product to be successful
in the market has been provided so that it can result in understanding the reasons for the
customers to download the application.
The service also needs to be marketed so that the customers are aware of the new product that
is launched. This will help in increasing the demand in the market so that the level of profits
can be increased. The positioning of the company with respect to its quality and price has
also been provide and justified so that the customers can understand it. Finally, the financial
projections has been given so that it can help in understanding the level of profitability fo the
company.

2INNOVATION
Table of Contents
Introduction................................................................................................................................3
Analysis on possible market gap/opportunity............................................................................3
Develop value proposition of the innovative product................................................................4
Business Model Canvas.........................................................................................................6
Success factors.......................................................................................................................7
Marketing and channel strategy approach..................................................................................8
Competitive strategy and positioning.......................................................................................10
Market positioning...............................................................................................................11
Financial viability of the venture.............................................................................................12
Investment needs..................................................................................................................12
Break-even Analysis............................................................................................................12
Cash Flow Statement............................................................................................................13
Balance Sheet Projections....................................................................................................13
Reference List..........................................................................................................................16

3INNOVATION
Introduction
The modern times have seen that the business organizations need to undergo changes
in its strategies so that it can help them to be sustainable in the upcoming years. The failure in
adopting the strategies within the business may hamper the sustainability of the company and
the nature in which the business is being conducted (Dalmasso et al., 2013). The main
purpose of this report will be to highlight the usage of an online travel application that will be
of great help to the tourists who are visiting to the different parts of Australia. It will also act
as a common platform for the tourists to stay connected with each other and see the feedbacks
regarding the places they have visited. The application will be known as Travel Switch where
the tourists can get all the information regarding the places that they can visit in and around
Australia. The application will be very useful for customers who are frequent travellers both
nationally and internationally.
Analysis on possible market gap/opportunity
The business with respect to tourism has increased two folds due to the increase in the
spending capacity of the customers and their willingness to visit new places. This has made a
country like Australia very famous due to its breath taking scenic beauties with respect to
mountains and beaches. The pristine beaches have have allowed the tourists in enjoying the
sunsets in a better manner with a panoramic view of the oceans. Additionally, the
advertisements made by Tourism Australia have showcased the spots where tourists can visit
to enjoy their holiday in a better way. This has resulted in a huge inflow of tourists in the
country all year round (Christensen, Raynor & McDonald, 2015).
The major reason for the tourists to visit the country is that it allows them in exploring
new places so that the tourists can feel a greater sense of adventure. The national tourists also
visit their relatives and friends who may stay in other parts of the country, which also results

4INNOVATION
in travelling across the country. Another major reason is that many students also get
themselves enrolled in the universities so that they can pursue their higher studies to develop
a better future. This also results in increasing the chances of travelling to different parts of the
country (Bergvali-Kareborn & Howcroft, 2013). Another factor that attracts tourists in the
country is the happening of the events such as Adelaide Fringe Festival that is held in
February and March, Australian Grand Prix, Rip Curl Pro Surfing, Australian Fashion Week
and Darwin Beer Can Regatta. These festivals result in bringing more number of tourists in
the country, which leads to travelling to foreign locations (Luna, Ylinen & Salorinne, 2014).
In the modern times, it can be seen that there are numerous complications with respect
to the tourists who are travelling to certain destinations in the country. The primary reason
being the barrier in the communication power. Since most of the tourists may not understand
the English language, the application will help in communicating with the tourists in their
dialects. This is a major opportunity for the mobile application to capture the market, as it
will help in providing a platform to the tourists in locating the places where they can visit
(Pentikousis, Wang & Hu, 2013).
Develop value proposition of the innovative product
The launch of the new application will also be beneficial for the customers as the idea
of locating the attractive places will help in communicating with new people as well. The
mobile application can be used to connect with other people who have earlier visited the
places and take feedbacks of the place so that the tourists can have a better level of
experience. This will result in providing a common platform where the tourists can interact
with each other and get to know regarding the important places that they need to visit (Luna,
2016).

5INNOVATION
The idea to launch the mobile application will also help in solving the barrier to
communication and give a better experience to the tourist who are visiting the destination for
the first time. The feedback that will be given by the travellers will allow the new tourists in
getting a better overview regarding the type of environment that they will be visiting so that it
can guide them in a proper manner (Gronli et al., 2014). Another value that the application
will be providing is that it will help the travellers who belong to different backgrounds to
connect with each other so that it can result in making the experience better. The application
will be chargeable after the customer has used it for the first 2 months so that they can get a
better knowledge regarding the service. However, after the application has been installed by
the customers, their bank and personal information will be taken so that after 2 months of use,
the account cannot be deleted, which will prevent from misusing the service (Luna &
Tsombaljuk, 2013).
The customers who will be installing the application will be able to chat with other
travellers so that they can get a better information regarding the place that they are willing to
visit. Additionally, the members can be able to create groups so that it can enable them in
chatting among themselves based on a common interest. The application will not be
disclosing the number of the members to the third parties, which may hamper the secrecy of
the members. The application will be created with the help of a social media platform so that
it can only serve in the interest of the travellers (Briscoe, 2014).
The application will result in taking in to consideration the various issues that are
present with respect to the tourists who travel frequently, as it will be of great use. The
application will also be created as a venture capital with other organizations that are into B2B
business so that the services can be delivered in the market according to its demands (Luna &
Bott, 2015).

6INNOVATION
Business Model Canvas
Key Partners
The application
will be in a
partnership with
the government
and local travel
agents. The
application will
also partner with
online portals in
taking up the
method for paying
up for the
subscription fees
(Chan, 2013).
Key Activities
The application will
be focused mainly
towards the tourists
so that it can be used
in a proper manner.
The application will
also act as a social
media platform so
that members can
interact with each
other and decrease
the gap with the
members who are
from different
countries.
Value Proposition
The application can
be used by the
members who
belong to different
countries and region
so that they can get a
first-hand
knowledge of the
place before
planning their visit.
The use of the
application will
result in the rise of
brand loyalty after
the application is
launched in the
market.
Customer
Relationships
The travelers can
interact in a direct
manner with the
fellow members
with the use of the
application. The
application will be
free of cost for the
customers for the
first 2 months after
which they need
pay a nominal
amount to use the
service (Luna,
2016).
.
Customer
Segments
The application can
be used by
different customers
and who are fond
of travelling to
different places. A
minimum age
group of 15 years
will be applicable
for the customers
who are willing to
use the application.
.
Key Resources
The application will
be using the latest
technologies that are
available in the
market so that it can
be developed in a
better manner
Channels
The application
will be taking
the help of B2B
businesses and
media so that it
can advertise
the service

7INNOVATION
(Song et al.,
2014).
Cost Structure
The application needs to be purchased by the customers after
the first 2 months, as it will provided ample time to them to
understand the functioning of the application in a proper
manner. The customers can also enjoy premium services by
paying extra.
Revenue Streams
The customers will be charged a particular fee
in lieu of the services that will be provided to
them. The use of B2B model will also result in
the promotion of tourism activities within the
country and its associated places (Xu, Peak &
Prybutok, 2015).
Business Model Canvas for the venture
Success factors
Travel Switch has to manage the resources in an effective way so that the application
can be launched properly. The application will be using the technical and human resources so
that it can be formulated effectively and the marketing resources will be used so that
awareness regarding the services can be spread among the customers. The planning of the
different marketing techniques has to be done in a proper manner so that it can lead to a
successful venture in the market (Kim, Briley & Ocepek, 2015).
The market needs to be researched in a proper manner so that the launch of the
product can be done in an efficient way. The target customers can be identified in a proper
manner by researching the market effectively so that it can be easy for the company to sell its
service. Moreover, the company will also be taking in to consideration the feedbacks that are
being provided by the tourists so that it can be developed further in the future as well
(Mahaffey et al., 2016).
The business is with respect to the launch of a mobile application in the market for the
travellers so that they can get better level of information when they are visiting a new place.
The technological usage will result in launching the application in the market successfully so
that it can be used by the potential customers. The funds that will be sourced for developing

8INNOVATION
the application has to be done properly so that the start-up cost for the company can be
covered properly (Xu, Peak & Prybutok, 2015).
The organization that will be developing the application has to take up a contingency
plan as well so that the risks can be calculated that may hamper the functioning of the
application in the market. These accounted risks has to be calculated so that it can be
considered by the company with respect to the economic and technological risks. The
contingency plan may result in making the company overcome the risks so that the
sustainability of the service can be maintained in the market (Pantano, 2014).
Marketing and channel strategy approach
The channel strategy will allow the company in extending the reach of the mobile
application to more number of customers. The distribution has to be done in a proper manner
so that it can allow in spreading awareness regarding the brand among the customers, which
will allow them in using it and providing proper feedbacks. The channelization strategy can
be done according to the demand that is present in the current market so that it can target the
potential customers that are present. This will result in increasing the services to the
customers in an effective manner (Gronli et al., 2014).
It will also provide a competitive advantage to the company, as the product will be
used more by the customers than the ones that are available in the market. It will also help the
company in meeting its target in a proper manner so that the sales goals and objectives can be
achieved within the stipulated time period. The sustainable advantage that the company will
enjoy will result in using the resources in an efficient manner so that the activities can be
done accordingly, which will result in its growth and reducing the cost of operations (Briscoe,
2014).

9INNOVATION
The company needs to distribute the application among its friends and families, which
can be done involving a minimum level of cost and the return will be more. This is due to the
fact that the algorithm that checks for store rankings depends mainly on the number of
downloads that are being done. This can be influenced on a major scale by the immediate
relatives who can perform word of mouth for the service (Christensen, Raynor & McDonald,
2015). This will also increase the number of downloads based on the reviews that are being
given by the users. Another way of channelling the services in the market is by providing a
proper page for landing purposes. The page will help in describing the contents of the
application so that it can help in boosting the marketing campaign among the customers. The
website has to be done in an attractive manner so that it can help in getting a better rate of
return and reducing the cost of operations as well (Dalmasso et al., 2013).
The company needs to get its online application featured in the App Store of Apple
and Play Store of Google so that it can help in grabbing the attention of the customers. The
application can be featured as ‘Editor’s Choice’ within these application platforms so that it
can result in increasing the number of downloads among the customers. It will also help in
increasing the credibility of the application (Bergvali-Kareborn & Howcroft, 2013). The
company needs to contact with the editor of Apple and Google so that it can increase the
chances of being featured on their platforms with the help of new technologies. The company
can also encourage its own group of users to use the product and rate it so that it can be
featured under the application platforms. This is an effective marketing strategy, as it will
result in increasing the rate of downloads among the potential users (Luna, Ylinen &
Salorinne, 2014).
Another method of marketing the service can be by employing influencers and Public
Relations employees by the company so that it can help in creating an image for the brand.
The PR officials will be able to use the modern tactics so that they can influence the potential

10INNOVATION
customers in downloading the online application so that they can use it and provide proper
feedbacks. Another method of marketing the application is by using the app store
optimization, which will focus mainly on the keywords in the search engine. This will
increase the rate of visibility of the application among the customers and grab their attention.
This will also result in increasing the rate of competitive advantage for the application in the
online platform (Song et al., 2014).
The company can also take the help of content marketing, which is done with the help
of writing blogs and finding the suiting data points. These data are then compiled in a proper
manner so that it can increase the interest of the readers when they are going through the
content (Pantano, 2014). This also results in increasing the credibility and trust among the
users so that the content that are being posted can result in increasing the ranking of the
websites. The strategy of email marketing can also be taken up by the company so that the
service application can be directed towards the customers. The email id will be taken for the
customers so that the information regarding the application can be mailed directly to them.
This will result in increasing the connectivity between the company and the customers
(Mahaffey et al., 2016).
Competitive strategy and positioning
Cost
Leadership
Differentiatio
n
Cost Focus Differentiatio
n Focus

11INNOVATION
The cost leadership strategy will allow the company in increasing its rate of profit by
reducing the cost at which the product will be sold to the customers. This will result in
increasing the share of the market with respect to the online application, as the rate of profit is
being kept at a nominal for the company. The differentiation strategy is to make the service
different and more attractive than the competitors who are present in the market (Page, 2014).
This will result in attracting more number of customers based on the technology and the
friendliness of the mobile application with the customers. This can only be possible when the
company does extensive research and the process of innovation involves better level of
technology. The company also needs to deliver the products of a higher quality so that the
customers can benefit from using the services (Gutiérrez et al., 2013).
The cost focus strategy is where the online application is mainly concentrated on the
niche market and that they have a proper and in-depth knowledge of it so that the needs and
demands of the customers can be identified. It will also allow the company in building the
application that is solely focussed towards a certain segment of the customers so that they can
only be targeted (Ally & Tsinakos, 2014). The differentiation focus on the other hand is
where the company will be making the application based on the innovative strategies that are
present with respect to the online application. It will research the market in a proper manner
so that the company can get a better understanding regarding the needs and demands of the
customers so that the product can be utilized by the customers (Hielkema & Hongisto, 2013).
The company will be taking up the differentiation strategy, as it will help them in
researching the market in a better manner based on which the application will be provided to
the customers. The feedbacks of the customers will be taken in to account so that it can help
in designing the application in a better manner. The market research will help the company in
improving the features of the application so that its functionality and durability can be
improved extent (Kim, Briley & Ocepek, 2015).

12INNOVATION
Market positioning
The company will be positioning itself in the ‘high quality, low price’ segment so that
it can help in increasing the rate of customers within the market. Due to the low price of the
application, it will be downloaded by the customers more frequently. It will also help the
company in gaining a competitive advantage in the market due to the fact that the price will
be kept low and the product will be of premium quality. This will result in increasing the rate
of profits for the company as well (Page, 2014).
Financial viability of the venture
Investment needs
Summary Statement
Sources of Capital
Owners' and Other Investments $ 100,000
Bank Loans 250,000
Other Loans -
Total Source of Funds $ 350,000
Startup Expenses
Bldgs / Real Estate $ 50,000
Leasehold Improvements 15,000
Capital Equipment 175,000
Location / Admin Expenses 12,500
Opening Inventory -
Advertising / Promo Expenses 17,500
Other Expenses -
Total Startup Expenses $ 270,000
Break-even Analysis
Breakeven Sales
level =
$270,000.0
0 Year 1 Year 2 Year 3 Year 4 Year 5
Net income
(loss)
-
$270
,000.
00
$126,352.7
8
$130,298.1
7
$137,753.2
6
$149,060.5
9
$164,797.
51
Cumulative
income
-
$143,647.2
2
-
$13,349.05
$124,404.2
1
$273,464.8
0
$438,262.
31
Positive Cash
Flow? FALSE FALSE TRUE TRUE TRUE
Undiscounted 3 years

13INNOVATION
break even year
Actual break
even period 2.10 years
The break-even of the company will be achieved after 2 years and specifically in the
month of January, 2021 taking in to account that the venture will start from 1st January, 2019.
Cash Flow Statement
Year 1 Year 2 Year 3 Year 4 Year 5 Total
Operating activities
Net income $126,353 $130,298 $137,753 $149,061 $164,798 $708,262
Depreciation $48,000 $48,960 $49,920 $50,880 $51,840 $249,600
Accounts receivable $0 $0 $0 $0 $0 $0
Inventories $0 $0 $0 $0 $0 $0
Accounts payable $0 $0 $0 $0 $0 $0
Amortization 0 0 $0 $0 $0 $0
Other liabilities 0 0 $0 $0 $0 $0
Other operating cash flow
items 0 0 $0 $0 $0 $0
Total operating activities $174,353 $179,258 $187,673 $199,941 $216,638 $957,862
$0
Investing activities $0
Capital expenditures $0 $0 $0 $0 $0 $0
Acquisition of business 0 0 0 0 0 $0
Sale of fixed assets
($54,151
)
($55,842
)
($59,037
)
($63,883
)
($70,628
)
($303,541
)
Other investing cash flow items 0 0 0 0 0 $0
Total investing activities
($54,151
)
($55,842
)
($59,037
)
($63,883
)
($70,628
)
($303,541
)
Financing activities
Long-term debt/financing
($46,157
)
($48,003
)
($49,923
)
($51,920
)
($53,997
)
($250,000
)
Preferred stock 0 0 0 0 0 0
Total cash dividends paid 0 0 0 0 0 0
Common stock 0 0 0 0 0 0
Other financing cash flow
items 0 0 0 0 0 0
Total financing activities
($46,157
)
($48,003
)
($49,923
)
($51,920
)
($53,997
)
($250,000
)
Cumulative cash flow $74,045 $75,413 $78,713 $84,137 $92,013 $404,321
Beginning cash balance $80,000 $154,045 $229,458 $308,171 $392,308
Ending cash balance $154,045 $229,458 $308,171 $392,308 $484,321

14INNOVATION
Balance Sheet Projections
Assets Initial balance Year 1 Year 2 Year 3 Year 4 Year 5
Cash and short-term investments $80,000
$154,0
45
$229,4
58
$308,1
71
$392,3
08
$484,3
21
Accounts receivable $0 $0 $0 $0 $0 $0
Total inventory $0.00 $0.00 $0.00 $0.00 $0.00 $0
Prepaid expenses 0 0 0 0 0 $0
Deferred income tax 0 0 0 0 0 $0
Other current assets 0 0 0 0 0 $0
Total current assets $80,000
$154,
045
$229,
458
$308,
171
$392,
308
$484,
321
Buildings $50,000
$50,00
0
$50,00
0
$50,00
0
$50,00
0
$50,00
0
Land 0 0 0 0 0 0
Capital improvements
$
15,000 15,000 15,000 15,000 15,000 15,000
Machinery and equipment
$
175,000
175,00
0
175,00
0
175,00
0
175,00
0
175,00
0
Less: Accumulated depreciation
expense 0
48,00
0
96,96
0
146,8
80
197,7
60
249,6
00
Net property/equipment $240,000
$192,
000
$143,
040
$93,1
20
$42,2
40
($9,60
0)
Goodwill $0 $0 $0 $0 $0 $0
Deferred income tax 0 0 0 0 0 0
Long-term investments 0 0 0 0 0 0
Deposits 0 0 0 0 0 0
Other long-term assets 30,000 30,000 30,000 30,000 30,000 30,000
Total assets $350,000
$376,
045
$402,
498
$431,
291
$464,
548
$504,
721
Liabilities Initial balance Year 1 Year 2 Year 3 Year 4 Year 5
Accounts payable $0 $0 $0 $0 $0 $0
Accrued expenses 0 0 0 0 0 0
Notes payable/short-term debt 0 0 0 0 0 0
Capital leases 0 0 0 0 0 0
Other current liabilities 72,202
146,65
8
225,37
4
310,55
1
404,72
1
Total current liabilities $0
$72,2
02
$146,
658
$225,
374
$310,
551
$404,
721
Long-term debt from loan
payment calculator
25
0,000
$203,
843
$155,
840
$105,
917
$53,9
97 $0
Other long-term debt $0 $0 $0 $0 $0 $0
Total debt $250,000
$276,
045
$302,
498
$331,
291
$364,
548
$404,
721
Other liabilities 0 0 0 0 0 0
Total liabilities $250,000
$276,
045
$302,
498
$331,
291
$364,
548
$404,
721
Equi Initial balance Year 1 Year 2 Year 3 Year 4 Year 5

15INNOVATION
ty
Owner's equity (common)
$
100,000
$100,0
00
$100,0
00
$100,0
00
$100,0
00
$100,0
00
Paid-in capital 0 0 0 0 0 0
Preferred equity 0 0 0 0 0 0
Retained earnings 0 0 0 0 0 0
Total equity $100,000
$100,
000
$100,
000
$100,
000
$100,
000
$100,
000
Total liabilities and equity $350,000
$376,
045
$402,
498
$431,
291
$464,
548
$504,
721

16INNOVATION
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