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Session Report: Holidays (Singapore Edition)
Players: Terence, Keng Ho, James, Sng
Client: [Deleted due to Confidentiality]
From: Success Market Research Pte Ltd
Subject: Report on newly established tour agencies suitable for acquisition in Singapore
We note the client’s instructions to conduct market research on newly established tour agencies in Singapore for the purpose of potential takeover bids in order to consolidate the client’s market share. We set out below our report on the 4 best performing new tour agencies for 2006.
In early 2006, 4 tour agencies were founded in Singapore by 4 experienced businessmen, Terence, Keng Ho, James and Sng. Each company is named after its founder.
Each of them started the year by organizing a short holiday over the 1 January long weekend (a Cruise to nowhere, a short trip to HK Disneyland and two romantic holidays to Kosa Mui). As the tour agencies were newly established, these initial efforts only did moderately well, earning their owners about $20,000 each.
This was followed by a series of flops- Keng Ho’s romantic getaway to the Phi Phi islands was a wash out in the wake of the tsunami disaster rebuilding efforts, Sng’s package tour to Sunway Lagoon near Kuala Lumpur ran into some problems as the accommodations were overbooked during the Hari Raya holidays in January. Terence’s second Cruise failed to draw the crowds due to the rainy monsoon season. All in all, a disastrous season netting each agency only $10,000.
Sometimes, timing is everything. Keng Ho shrewdly capitalized on the Chinese New Year long weekend to organise a family weekend trip to Cameron Highlands, which was warmly received by the Singaporeans desperate to avoid the tedious traditional house visits during the festive season. As a matter of fact, that tour was a sell out, netting Keng Ho a whopping $40,000. This was the hottest tour in 2006 so far and Keng Ho’s tour agency was fast gaining a reputation for its fantastic tours.
Terence and Sng tried to cash in on the March school holidays by introducing a tour to Underwater World, Australia, and a Cruise to Perth respectively. Unfortunately, the government held the elections during this period, using the empty schools as voting centers and many of the children’s parents had to vote, so these tours did badly, netting each of these agencies only a measly $10,000.
The government offered lots of incentives and carrots during the election period, and Singaporeans were generally in a happy and relaxed mood after the elections. James had been keeping a low profile, quietly marshaling his resources to organize a hugely popular adults only tour to Bangkok. Excluding the children proved to be an astute move as the children were busy studying for their exams. James netted himself a whopping $50,000 on of this tour alone, the highest amount for any tour this season. James was now firmly ensconced as one of the top tour agencies in Singapore, and was competing neck to neck with Keng Ho.
Keng Ho tried very hard after that to secure his position as top tour agency in Singapore and pushed out tour after tour. First was a romantic weekend in Vietnam. Unfortunately, there were a number of newspaper reports about Vietnamese mail order brides during this period and Vietnam was given a miss by most couples. Running out of ideas, Keng Ho tried to imitate James’ earlier success by organizing an adults only tour to Thailand. Unfortunately, the recent political problems faced by the Thai Prime Minister came to a head and civil unrest broke out in various parts of Thailand. This series of unfortunate events put paid to Keng Ho’s retirement plans. However, these tours were not complete failures and managed to net Keng Ho a total of $20,000, leaving him only $10,000 short of his announced 2006 target of $100,000.
Terence made a last ditch effort at respectability was an ill fated tour to Underwater World (again). Disaster struck again when another Australian citizen was arrested smuggling drugs into Singapore. Under Singapore law, this warranted a mandatory death penalty and the Australians were protesting vehemently against capital punishment. The Singapore authorities refused to grant clemency and more frenzied Australian protests followed. In the midst of it all, Terence’ ill fated tour to Underwater World almost went under water and he was barely able to scrape together $10,000 after the costs had been paid.
Sng then cleverly organized 2 tours to HK Disneyland, both within the June school holiday period. The first was a huge success, as kids and their parents flocked to the amusement park right after the examinations were completed. Then disaster struck, as cases of bird flu were reported in Hong Kong and certain areas of mainland China. In spite of assurances by the Chinese authorities that the situation was under control, the conservative Singaporean public took no chances and asked for refunds. Notwithstanding this Sng raked it in during the school holiday season and netted $50,000 after paying all the refunds, catapulting him to the same level of success as Keng Ho.
However, the coup de grace belonged to James, who, remembering the success of Sexpo 2005, obtained the licence to hold it in Batam, Indonesia in 2006. With less restrictions and much more titillating content, this adult only event attracted the mostly male Singaporean visitors to Batam. The takings of this event, one of the most successful for the year, amounting to $40,000, catapulted James to victory.
Based on the Accounting Reports of these companies, the after tax profits of the companies are:
James - $110,000
Keng Ho- $90,000
Terence - $50,000
Based on our professional assessment, we feel that the profits of these companies accurately reflect their potential growth and should be acquired in that order, with the exception of Terence’s agency, which is not worth acquiring.
End of Report.