Brief outline of business modelby Thorwald Westmaas

thorwald@expeditionyacht.org

ValueProposition

Cost Structure

Customer Relationships

CustomerSegments

DistributionChannels

Key Resources

Key PartnerNetwork

Key Activities

RevenueStreams

INFRASTRUCTURE CUSTOMERSOFFER

PROFIT EQUATION

Our business model describes the way we intend to make money by creating and delivering value to our various customers and

portrays the capabilities and partners required for creating, marketing, and delivering this value.

ValueProposition

Cost Structure

CustomerRelationships

CustomerSegments

DistributionChannels

Key Resources

Key Partners

Key Activities

RevenueStreams

Which of our client’s problems or needs are we solving and why will they choose us rather than a

competitor?

What key activities do we need to perform in our

business model and how easily

can they be done (by others)?

Through which means does our

customer want to be reached and

addressed by us? How do we bring the value proposition to

the market?

What key resources does

our business model require and

now difficult are they to copy by

others?

What type of relationships does

our customer expect us to establish and maintain with him?

What is the cost structure of our

business model and is it in harmony with the core idea of our

business model?

What value are our customers really willing to pay for

and how would the prefer to pay for it?

What are our customer’s

needs, problems, desires

and ambitions?

What can partners do better than us or at a lower cost

(and thus leverage our business

model)?

INFRASTRUCTURE CUSTOMEROFFER

PROFIT EQUATION

Describing our business model

Value Proposition

value proposition 1value proposition 2

…

OFFER

At less than 3 hours flying from major US gateways we offer an exciting, adventurous, engaging and educational travel experience at unique cruising grounds that can be tailored to the needs of the clients.

These experiences are offered with a higher level of comfort and convenience than any of the other small ship cruise or adventure travel company or dive charter operators and certainly well beyond anything offered in Panama and will be unmatched in attention to customer service

The versatily of our platform allows us to create a unique travel product to satisfy the need for even the most demanding customer(s): our capacity to go anywhere by sea, carry a helicoper (and refuel it) and launch a submarine is simply unique.

The privacy and secure environment offered by our operation allows certain client segments to enjoy visiting places they would otherwise be unable to visit

The small size of our platform allows unique niche marketing as we don’t need a big group to operate a tour. At the same time, our vessels’ capacity is much bigger than any mega yacht in its category and lot more affordable, making it for instance uniquely suitable for multi-generational family travel

Unmatched adherance to international safety standards (Lloyds Register), both structurally (vessel, equipment) and operationally (crew training and experience) provides total confidence to channel partners

The highest possible adherance to environmentally concious practices, exceeding all international standards (including those of Alaska). Is good for the environment and helps distinguish and sell our product

The affluent are becoming saturated with current travel product offerings and are looking for unique experiences and extraordinary getaways tailored to suit their individual tastes. Today’s increasingly well-heeled, well-traveled individuals want new and exciting experiences; they want to be intrigued, challenged, entertained, and enlightened. They will spend top Dollar to be the first or reach the most remote exotic places.KWE Group

value proposition 1value proposition 2

…

target customer 1target customer 2

…

CUSTOMER

OFFER

Experienced and well-traveled people, passionate about travel that includes a focus on education, conservation and care for the environment & sustainability

Affluent individuals or families looking for a (semi) private charters

Niche market groups looking for an adventureous, small-scale, educational or themed and somewhat private travel experience , possibly including volunteerism, community work and/or continuing education programs and niche markets like women travel, gay travel, history tours

SCUBA diving enthusiast looking for an excellent diving liveaboard experience at a new destination

Affluent locals (Panama) looking for a uniquely comfortable travel experience in areas they may never have visited before on a ‘premium brand’ vessel

Customer Segments

What are our customer’s needs, problems, desires

and ambitions?

Institutions/companies that need a vessel for scientific (marine) research, movie- making or any other special project need that requires the unique capabilities the Balboa Explorer offers

target customer 1target customer 2

…

CUSTOMER

OFFER

An engaging and easy to find website to create visibility for our products and helps customers evaluate them based on their particular needs. A site that also supports our sales force, charter brokers and travel agents and offers a transaction platform that integrates with our customer segment and channel partner’s routines for booking travel

Our sales force with experienced specialist for each key product range: private yacht charter, small ship cruises, diving charters & commercial charters

Yacht charter brokers that have their network of affluent private clients looking for private charters

Adventure travel agents, specialists in upscale, unique travel products

Dive shops that promote diving charters among their clients

DistributionChannels

Industry tradeshows and events, charter boat shows, familiarization trips

Partnerships with operators such as ourselves to reach out to each other’s clients

Through which means does our customer want to be reached

and addressed by us?

How do we bring the value proposition to the

market?

CUSTOMER

OFFER

In all cases, our relationships with our customers and channel partners will be based on the desire to establish a long lasting and mutually beneficial reslationship

Our direct sales force will focus on working with professional organizations (for instance, alumni groups, professional assocations to create unique, tailor-made programs for their members to encourage yearly repeat business

Sales staff dealing directly with clients will experienced/trained to effectively deal with demanding luxury travel clients. With our direct-booking individual clients we strive to go beyond a one-time-only cruise experience by engaging them with the expedition cruise activity before and after the cruise (so all become ‘ambassadors of our product)

Our website will allow a lot of self service research to educate our clients (or agents) on our product on all aspects of our operations, make bookings easy and convenient but always have the personal touch of sales person a click away

With our travel agents we listen carefully to their needs, are flexible to meet them an take excellent care of their clients in order to become their preferred adventure travel provider

CustomerRelationships

With charter brokers we aim to leverage our position in the growing expedition yacht charter niche and going the extra mile to take care of their clients

What type of relationships does

our customer expect us to establish and maintain with him?

Income will be mostly generated from the following activities

Per cabin bookings where each cabin or even berth is sold individually (expedition charter and dive charters)

(Semi) private charter tours whereby the vessel is (partly) chartered for a particular group or family

Additional activities such as helicopter or submarine tours (when available)

Short (1-2 day) group tours (20-40+ guests) to satisfy local demand for unique yacht based activities

RevenueStreams

Additional services like satellite Internet access, onboard movies, customer trip filming may bring additional revenue but mostly to cover its direcly expenses and may be included depending on the market segment

What value are our customers reallywilling to pay for

and how would the prefer to pay for it?

Clients will be encouraged to pay trip fees with check or bank transfer to cut down on credit card processing costs; agents will pay by bank transfer; charter brokers may pay using escrow accounts; on-board expenses will be paid by credit card

48 possible weeks yearly of operation will be divided in advance between per-cabin booking trips (expedition cruises and dive charters) and private charters, based on market forcecasts. Procedures will be in place to make adjustments when market conditions so require

Our key resource is a true ocean-going, extremely sea-worthy and multi-functional expedition yacht that is comfortable, safe , environmentally friendly and very affordable to operate thanks to its design where particular attention was paid to low-maintainance and maintainance ergonomics, reliability and crew comfort

Our second key resource will be our crew. Experienced and qualified, specially profiled to match our unique operational requirements and compensated in a way that rewards them when customer expectations are exceeded consistently

Our website will be a key sales resource to support our sales effort and offer an efficient transaction platform that allows us to focus on serving our clients need’s instead of handling administrative processes

Our on-shore operational support system will be a key resource to enable the efficient, safe, cost & time effective operation of our charters

Areas such as food & beverage logistics, laundry services, crew administration, tour support, maintainance administration & support, regulatory compliance can best be managed on-shore so the crew can focus on delivering outstanding customer service experiences

KeyResources

What key resources does our business

model require and now difficult are they to copy by others?

Panama, its indigenous people, its rich history (Spanish conquest, transistmian trail and railroad, pirates, etc.), its incredibly diverse nature, the fascinating Panama Canal, its safe and modern capital with excellent air-connections are a key environment in which we can develop our activities

Offer uniquely adventurous and engaging travel activities for our passengers/guests monitored by a friendly and well-trained expert staff

Offer a memorable food and beverage service

Operate and maintain the vessel in an efficient and safe manner to provide reliability needed for our activities

Create and maintain a very effective (visible) internet presence

KeyActivities

What key activities do we need to perform in our business model and how easily can they be done (by

others)?

Create and maintain a very effective and well managed sales operation to ensure the revenue streams expected by all stakeholders

Ensure the availability of an qualified and experienced, highly motivated crew for our vessel’s operation

Keep our key resource, our expedition yacht in an impeccable state of maintainance to ensure its availability at all times and meeting the requirements of the class society (Lloyds Register)

Our distribution channel partners (agents & charter brokers) which give us access to their network of clients and agents

Crew agency. We plan to partly contract our crew via specialized agencies to supply is with the crew we need

Internet marketing an technical logicstics will be partly outsourced to 3rd party supplier to implement our online strategy

Specialized (onboard) nature guides, activity specialist, lecturers, dive masters and history guides will be hired for each occasion (unless) sales volume justifies putting them on the payroll

Partner Network

What can partners do better than us or at a lower cost (and thus

leverage our business model)?

Our most important cost are the fixed overhead: crew & employees and insurance followed by marketing expenses

The main operational expenses are food and beverages, Panama Canal transits and fuel. Fuel is a relatively minor expense as the distances traveled are relatively short and the vessel is very fuel efficient given its size

Other operational expenses are commission paid to agents which is why we’ll focus strongly on having our own effective direct sales channel

While maintainance will be limited during the first few years as most high-maintainance items are new and the ship designed with low-maintainance in mind, it’s important to create a provision for this item

CostStructure

What is the cost structure of our

business model and is it in harmony with the core idea of our

business model?