4.  Research and Development

The Company realizes of the important the related self development in
order to serve the consumer demand and able to cope with the competition
in the future, which, then, should result in the improvement of
performance by testing new ideas, developing working tools, working
system, measurement and assessment including continuous improvement as
listed below:

  1. Improvement of communication and information technology
  infrastructure : The Company has consistently invested in developing
  computer system both in hardware and software for the whole
  organization, particularly since the middle of 2000, to reduce the
  process and increase speediness in communication between work units,
  and between related staffs. Moreover, since the middle of 2002, the
  Company has purchased the whole new information system by appointing
  Deloitte de Touches Tohmatsu Jaiyos Co., Ltd. as software developer
  and installer, and also prepared the design and installation
  communication system between branch, distribution center, and the
  Company’s headquarters, paving way for further work improvement in
  each unit of the Company in terms of efficiency, reliability, speed,
  and cost-saving, capable of making around the clock online
  communication and extending service capability. The installation has
  been made since early 2003 and has undergone software development that
  allows the software to adapt to the Company's needs, until the system
  can be widely used for the whole organization in end of the year 2006.

  In 2008, the Company begins the project to improve information system
  called "Business Intelligence" to further improve the managerial
  efficiency. This will also help improve cooperative system among
  business partners and alliances named by "EDI (Electronic Data
  Interchange)" to improve working system among businesses in book
  industry.

  When the Company has right information with precision and speed, all
  staffs can make use of this information to search for products and
  services that customer are looking for the soonest possible, and also
  enable all data to be used to improve the work at the highest
  efficiency, by which all work process become valuable, resulting in
  the highest value-added system for all interest groups right from
  customers, staffs, shareholders, and society at large.

2.  Improvement of loss reduction system : As problem from product loss
    has become retail business problem, which result in significant
    decrease in profit. In the end of 2006, the Company began to invest
    in closed-circuit television (CCTV) at SE-ED Book Center branches
    and all network bookstores, distribution center, and headquarters,
    including the development of monitoring system at the headquarters.
    The department of Loss and Prevention was established in 2007 to be
    responsible for planning the preventive measures, work development,
    as well as tracking system to significantly reduce the loss. All
    instruments are almost fully installed in every store in 2007, which
    resulted in a huge decrease in the rate of loss, as compared to the
    sales figure.

3.  Communication with target customers and internet system : Since
    1999, the Company has set up specific work division to develop
    website www.se-ed.com and offered free email service, free hosting
    by the name of se-ed.net. This is to permit the future tools in
    communication with the target customers, the customers based
    expansion, new added service, sales system support, and several
    other services in the future through the internet and intranet.
    Currently, it is under the development of related work.

  This includes the effort to develop the purchasing system through the
  use of Electronic Commerce system. In addition, since 2001, the
  Company produced a television program named Book Variety which is on
  air via TTV 1 Nation Channel, which is regarded as another
  communication channel with target customers.

  In late 2006, the Company established Multimedia Production to develop
  marketing communication medium, by the name of ‘SE-ED Channel’ as a
  way to introduce products and services and other sales campaign
  through LCD panel in all branches while the contents are controlled by
  the production team at the headquarters. Such system has been tested
  in the middle of 2007 and is expected to fully installed and operated
  in the middle of 2008 onward.

4.  Improvement of management system and human resources : The Company
    has developed in-house training courses for many levels to help
    employees enjoy working, while maintaining better working outcome.

  Moreover, the Company has also reviewed and reformed the whole working
  process to improve quality in service and employee’s participation, by
  using new management tool “Balanced Scorecard” which help to connect
  work system and develop the indices tools that lead to the excellence
  in each business process that is vital to the survival, growth,
  competition, and service that create customer and partner’s
  impression. This plan will be ensured that the Company maintains its
  leadership in book business in continuous fashion in long term.

5.  Products : The Company has developed, studied, and found new media,
    including the product groups that have new innovative technology
    that play an important role in providing knowledge for Thais in the
    future, allowing them to catch up with technology in a globalization
    to respond to the customer's needs or the inherent needs which
    remain highly important.

6.  Chain expansion and various sales areas development : The Company
    has studied and tested the possibility of opening the store branches
    in different pattern by using the several products mix that is
    interesting and attractive, in different locations that are
    convenient to support the pick-up point service and payment service
    in the future. This includes the continuous development of new sales
    areas, in cooperation with business alliance who are the space and
    product owners. Moreover, the Company seeks to re-invent the store’s
    outlook to maintain its colorful modern look which is in line with
    the customer’s needs, while facilitate the customers as much as
    possible, by stimulating book market both in Bangkok and other
    provinces.