GO!RAKU AIRLINES
Waseda University Graduate School of Asia-Pacific Studies

Marvin Fuentes Leon-Michel Harb Benjamin Hong Vadim Korovin Ronnie Tham

The Entrepreneurial Experience at the
Asia Moot Corp Competition in Bangkok, Thailand
March 15 - March 17, 2005

Table of contents

COMING UP WITH THE BUSINESS PLAN
THE CONCEPT BEHIND THE BUSINESS PLAN
WRITING THE BUSINESS PLAN
THE COMPETITION
THE TEAMS AND EVENT STRUCTURE
OVERALL WINNING EXPERIENCE

COMING UP WITH THE BUSINESS PLAN - What does the market want?

In coming up with a new business idea, there are many factors that must be taken into consideration. Among the most important factors would be what type of business or industry do the incorporators want to be in. Upon deciding this, the incorporators must scan the market and find out what is lacking in the market or industry that it wants to participate in. Other factors include, studying the viability of the business and market growth potential, assessment of competitors, analysis of current and future market demands and finding out the chances of sourcing funds for the new venture. The business idea of our company - Go!Raku airlines was decided upon by our group with the factors mentioned above taken into consideration. Thus, the idea of proposing a business plan which will see a new discount airline being set up in Japan.

THE CONCEPT BEHIND THE BUSINESS PLAN

We studied the Japanese market and asked ourselves what are the market needs and wants. We found many of these needs and wants in many parts of the Japanese economy but eventually decided to focus on the domestic air transport industry. We wanted to do something big and something that will make a difference, not only for ourselves, but for the economy as a whole. Thus, the idea of Go!Raku - the low-cost airline of Japan was born. We believed that the cost domestic air travel was expensive due to the fact that an increasing number of travelers within Japan are opting to use air travel, yet competition is very limited. Competition is limited to between Japan Airlines (JAL) and All Nippon Airways (ANA) - who jointly control 97% of the domestic travel market. The remaining 3% of the market is divided by the token competition. These small competitors - Skymark Airlines, Hokkaido International Airlines (Air Do) and Skynet Asia Airways (SNA) call themselves discount carriers but in reality their prices are not much lower than the oligopolistic prices of JAL and ANA and these small competitors serve only certain regions and thus do not pose strong competition to the national network of JAL and ANA. Our group believes that Go!Raku - with its very low prices, network covering major points in Japan, efficient service, and well-planned operations would be able to provide a real alternative to customers who are basically left with no real choices in terms of domestic flights. Our main concept is to have an efficient, reliable, safe and attractive low-cost, great-value airline that will cater to its targeted segments in Japan and over time gain a loyal following, establish strong brand equity, enhance revenues, sustain profits and gain market share.

WRITING THE BUSINESS PLAN

Since we came up with a business plan that involved setting up a major company that would require a substantial amount of capital, this company would be set up on a big scale - that required significant amount of data and market research. Writing a business plan for setting up an airline required extensive research on the many aspects of business such as marketing, finance, human resources, operations and overall corporate strategy. For marketing, our group did an extensive study on the market size, market potential, market prices and market trends in Japan. We gathered data on the annual travel market, trends and the direction of domestic air ticket prices. This was done in order to make that the company will be able to first establish the proposed company's market viability then develop the necessary marketing strategies and brand positioning programs that will help establish the Go!Raku brand as a brand that is to be associated by the market with good, efficient, reliable and low-cost travel. As for finance, research was done on the amount of capital needed to successfully establish the company. Aside from this, costs relating to fuel, aircraft leasing, the setting up of operations systems, the acquisition and installation of the necessary equipments and facilities and advertising and marketing costs were all carefully calculated in order to come up with realistic financial statements. Of equal importance, were the financial projections that were made in order to determine the company's growth and long-term profitability. These projections were based on the costs, projected revenue inflow and other factors. In the end, we were able to come up with satisfactory break-even projections and profit targets which showed that the company, aside from having growth potential, can also achieve profitability after 3 years from the date of establishment. As for human resources, the appropriate ways and methods to recruit and maintain the right people were studied in order to ensure that the right methods were implemented and practiced. This is important to maintain high morale among employees and ensure a high level of productivity that will ultimately benefit the company. As for operations, current industry players' operations were studied. This was done in order to ensure that our company discards the inefficient and undesirable points of the operations of current industry players. In lieu of those things, we came up with better and more efficient points that will help our operations become more profitable, efficient and desirable. This is very important considering that we are a low-cost airline so that means that operations would be efficient and low-cost, yet reliable, safe and of good quality. When we were writing the business plan, our overall strategy for the corporation was to make sure that the airline succeeds in getting a good share of the domestic air travel market by catering to the needs and wants of its target market, make sure that the brand is well built and well marketed, that the company earns the trust and loyalty of the market and that company would be well positioned for sustained long-term growth and profitability despite expected retaliation from existing players. We anticipated retaliation from the likes of JAL and ANA, but we made sure that our business plan incorporated strategies that would make us stand out. We will build a brand that will be associated with a reliable, low-cost, great-value domestic airline in Japan and that our cost structure and pricing would be consistently low to make sure that the bigger players like JAL and ANA would not be able to match our prices - considering that these traditional airline have a high cost structure and have always aimed for the higher-end of the market in order to make sure that they earn the sufficient margins to boost their revenues and meet their high cost structure.

Writing the business plan involved a lot of research, studies and discussions among the group members. However, we made sure that lines of communication were always open and that the atmosphere to freely express one's ideas and thoughts was present. We believed that each of us had good ideas, thoughts and comments to share so we encouraged each of us to speak up and share his thoughts. This made sure that while writing the paper, we were able to even improve on our ideas by sharing what we thought. Each of us have different experiences, opinions and ways of thinking, but we do have a common goal - to make this business plan the best and the winning business plan for Entrepreneurship. Therefore, we welcomed ideas, comments and even criticisms from each of us because this would make sure that good ideas are taken into account and the bad things are weeded out. The result is a good and winning business plan that was a result of creative and critical thinking from all five of us.

THE COMPETITION

Our team was selected to represent Waseda University in the Asia Moot Corp 2005 Business Plan competition that was held at the Grand Hyatt Erawan Hotel in Bangkok, Thailand from March 15, 2005 until March 17, 2005. Aside from representing Waseda University, we were the only university to represent Japan in the competition that drew entries from universities from other Asian countries like Taiwan, the Philippines, China, South Korea, Malaysia, Singapore, Thailand, Hong Kong and India. Even a number of universities from a non-Asian country - the United States also participated in the competition. The Asia Moot Corp 2005 was hosted by Thammasat University - one of the top universities in Thailand and they proved to be an efficient and organized host for the event - with a helpful staff that assisted us in many occasions. Asia Moot Corp is an annual Asian business plan competition that has the following objectives:

• To provide business students from many Asian countries with the skills, knowhow and connections, through potential investors, to successfully launch new business ventures and companies.
• Enhance the learning experience for business students, since this competition provides valuable experience that cannot be taught inside the classroom.
• Provide new approaches and ideas to the way business courses are taught, especially those relating to entrepreneurship and the establishment of new business ventures.
• Expand the role and scope of entrepreneurial and business studies throughout the Asian region and in other countries as well.

We joined the Asian Moot Corp business plan competition with confidence and optimism, because we believed that our business plan involving the establishment of a true low-cost airline in Japan that will give the traditional airlines such as JAL and ANA a run for their money, was a truly viable business plan. Our aim was to present this business plan to participants in the contest, as well to the judges that included venture capitalists and investment bankers. This would provide us with the opportunity to build networks and to gauge the responses of the audience, judges and potential investors for our business proposal. Responses from the audience were encouraging, as many of them understood the need for this kind of business in Japan. A potential investor also liked our business plan and signified interest in our business. This goes to show that the Asia Moot Corp business plan competition is more than a competition - it is about testing the market in a certain way about your business plan and is about building networks among potential partners and investors.

THE TEAMS AND EVENT STRUCTURE

The Asia Moot Corp business plan competition saw entries from 20 different universities that presented 20 different business proposals covering a wide range of industries. The business plans covered industries ranging from air travel to natural sweeteners to perpetual batteries to web commerce applications and systems to funeral services to sanitary services to health drink products. The products ranged from doable products to products that were quite questionable, in terms of the ability to actually produce and put them to market. However this made the competition more interesting as this is one of the main purposes of a business idea contest - which is to draw the best and most creative business ideas from the participants.

The Asia Moot Corp business plan competition had a number of judges from notable corporate organizations and also had judges who set up their own businesses. This is not to mention the presence of judges who are venture capitalists and who attend such business plan contests in order to tap into potentially successful business plans being presented by the participating universities. The competitionﾕs judges were business professionals with extensive experience in the financial and venture capital sectors. A number of them were successful entrepreneurs who have established their own businesses in different countries, mostly in Asia. While the rest were mostly professionals connected with a number of big corporations who do business, mostly within Asia.

The Asia Moot Corp 2005 business competition had a total of three rounds. There was the first round - wherein all participating universities were divided into four groups. This was the so-called elimination round, because the winner in each grouping would be the team that would advance to the next round. In each grouping, the assigned university would present their business plans before the assigned judges and before a limited number of audiences. The so-called elimination round had a criteria in which each of the teams would be judged. The participating teams were judged according to three major points namely: written business plan, presentation of the business plan and the viability of the business, which we believed was the most important one for the judges of this contest. One of the characteristics of the first round which was in some ways invaluable for all teams is that after the teamsﾕ respective presentations, the judges gave advice to each of the teams on how to perform better and polish their business ideas. The feedback helped us, as well as the other teams, to understand which were our strengths and weaknesses and how our business plan was perceived by the judges in our round. Since the judges come from different backgrounds and have different experiences, their input was valuable in certain ways and we took note of what they advised us to do regarding our business plan and on how to further make our presentation better.

After the first round, was the so-called Mini MOOT competition which was the second round of the overall business contest. This round included teams which were not selected for the finals and were given another opportunity to present their business plan before a different panel of judges. This gave other participating judges the opportunity to listen to our business plan and this also provided another chance for us to listen to various feedbacks and comments regarding our business plan, since having a different set of judges meant different ideas and inputs from a different set of people with different viewpoints and varying experiences.

The second round was denominated Mini MOOT, where teams not selected for the finals had a second presentation with a different panel of judges. In this opportunity, a different panel of judges had the opportunity to listen to the ideas

The last and final round of the competition was conducted under extreme pressure for the selected teams. Questions were mostly related to financial figures and strategic objectives of the various companies. The chosen winner of the final round was going to be Asian representative in an even bigger business plan competition - which is the World Moot Corp business plan contest, which for the year 2005, was held in Austin, Texas, USA on May 2005.

Two side competitions were also featured during the contest. The first one, the 60-second pitch which as it name suggests, is that a team representative would give explain the business idea and make a pitch for his or her company before all judges, team members and the general public in only 60 seconds. The aim and objective of this 60-second pitch competition is that under the real venture capitalist world, most of the risk capital companies and venture capitalists do not have all the time to listen all figures and corporate data, meaning that they only listen to the most interesting parts of the project. Therefore, the 60-second pitch is a competition wherein each team representative should explain the business purpose and objective of his or her company with clarity, vivacity and in a very convincing and attractive manner. The second side competition involved each corporate display booth, which was called the booth competition. The participating teams had to set up and design their respective booths during the first day of the event where media and the public are given the opportunity to join the opening reception at the Grand Ballroom of the Grand Hyatt Erawan Hotel. The participating teams take much effort in designing their respective booths in order to effectively represent and show their proposed products and or services to the media, to the public and to the judges of the competition. During the opening ceremonies, the media and the public are would hear a brief description of each of the business plans through the 60-second pitch and would be able to visit each of the 20 corporate booths and ask more specific questions from the group members who are present in their respective booths. This also affords them the chance to try and see the real products and or services that are being offered.

OVERALL WINNING EXPERIENCE

Our team - Go!Raku participated in the Asia Moot Corp 2005 business plan competition with the aims of presenting our low-cost, great-value Japanese airline business plan, to represent Waseda University, to establish new friendships and connections and to learn and gain experience from participating in a major business plan competition. This is a very rare learning experience and we made sure that we learned and gained the experience and necessary insights from participating in Asia Moot Corp 2005.

We were able to put into practical use what we have learned, not only as Masters in Business Administration (MBA) students at Waseda University, but also what we have learned from our undergraduate studies and from what we have learned from our other experiences in life. The experience in Bangkok made us use what we learned from the academe and from the real world into practice and this, we believe, is the best way to succeed, not only in the business and corporate world, but also in real life. We found out that the real gauge of one's knowledge is by how one can critically and objectively decide which ideas, comments and suggestions given by other people would be most helpful for the business plan. Not all things suggested by other people, such as audience members and judges are right for the business. One should be able to discern which of these ideas are right for the company and take these ideas to improve the business plan. I believe that we were able to discern and between the good and bad suggestions and were able to use some of the good suggestions that were put forward.

During the Asia Moot Corp 2005 business competition, we were also able to build new networks and friendships that would be useful if ever we decide to pursue this business plan in the future. By interacting and exchanging ideas with people from different countries, we were able to enhance our international learning experience and gain more insights as to how people from other countries think and how they approach things. This is valuable knowledge one cannot learn from the classroom, but through actual interaction and communication with other people. During the competition, we were also able to learn more about the business plans and ideas of other groups who participated in the competition. This gave us more insights as to what are the other segments of the market that remain unfulfilled by existing manufacturers or service providers. It also broadened our knowledge about markets in other countries and also helped us get a better understanding of each of the countries' markets that were represented by their respective universities in the competition.

In concluding the experience, the business plan competition was a good experience for all of us. It provided us not only an avenue to present our business plan to a wider, more international audience, but it made us experience new things that will surely help us in our future positions as either entrepreneurs or corporate leaders. We will use what we have learned and experienced in this business plan competition in order to help us achieve success in the future.