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.  Product development : In the world of globalization, whether the
    economic growth rate will be, the level of competition will be more
    severe and the customers’ expectation towards products will also be
    increased. Therefore, value creation and customers’ satisfaction is
    the top-list. The Company must stress the important of improvement
    and development of product quality and service to serve the
    customers’ need.

  The Company attempts to develop new products or new services to
  penetrate market that is essential to the country, and response to the
  behavior of target group, in which the direction is geared toward
  making Thais more competent, such as outside reading publishing
  project to boost reading skill for young children, increase products
  diversity, and increase the capability for service in the store
  consistently to have products and service that serve customers the
  best.

2.  Developing book production system to meet the market demand with
    cost control : From the present economic situation both inside and
    outside the country, resulted in higher competition. The Company has
    initiated guideline for book production system to achieve faster
    pace that meet the target group’s demand and suitable for different
    occasions while allows cost controlling measures during the
    production. However, the Company maintains the quality of each book
    through production process from printing press and also supports the
    editorial team to use materials produced within the country.

3.  Developing various forms of sales space management : 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.

4.  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.

5.  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 2008 to be
    responsible for planning the preventive measures, work development,
    as well as tracking system to significantly reduce the loss. The
    whole systems were finally installed in the early part of 2008 which
    helped to reduce the rate of product loss quite significantly.

6.  Developing ordering system, distribution system, return system, and
    adding capability to the distribution center : As these systems are
    the core of book business which is necessary for development in the
    more efficient manner to reduce the opportunity cost to sell, damage
    books, stepping up the effectiveness in creating profitability at
    the branch level, reduce the related expenses in long term.
    Therefore, the Company has the project to develop in continuous
    manner through the use of all available database to develop the
    decision system in each step of the work and use the technology to
    help increase the efficiency and reduce work redundancy,
    streamlining working process and support the every-increasing
    workload.

7.  Communication with target customers and internet system : Since
    1999, the Company has set up specific work division to develop
    website www.se-ed.com. Which 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. The Company has
    developed related working system, including improving the system of
    book ordering through e-commmerce. Today, website www.se-ed.com has
    been quite popular. The rate of visit to our website has been ranked
    number 1 in the area of book business since 2008 onward.

  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 and sound system in all branches while the contents
  are controlled by the headquarters. And the testing has already begun
  in the middle of 2007 which were installed and actually operated in
  the middle of 2008 and in 2009 the Company has the project to develop
  communication system in a consistent fashion to allow efficient
  marketing channel in a sustainable way. The system will also support
  the development and training of staffs at the branch level.

8.  Improvement of management system and human resources : The Company
    has developed “in-house” training courses for many different levels
    in the organization to help employees enjoy working, through
    focusing on the knowledge necessary for the work improvement along
    with the mind development in a continuous manner.

  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.

9.  Developing PDA Scanner system to serve the reception and return of
    products and inventory checking at the store front : The Company has
    developed software on PDA which has the Barcode Scanner to enable
    more accurate and convenient working on the receipt-and-return of
    products including the product counting at the branch level. This
    machine will work in tandem with the i-Pos system, an “in-house”
    computer system to help facilitating the sales system through
    Wireless LAN and send out the information to the head office and
    distribution center automatically, reducing the steps and burdens of
    staffs as well as reducing the chance of making mistakes along the
    working process.

10. Developing the computer back-up system : Presently, the Company is
    in the process of development and testing of Fail Over system and
    Diaster Site to support in case of emergency where problem may occur
    with the Company’s ERP (Enterprise Resource Planning) system as well
    as other related system. The system must be ready to substitute
    workload within 10 minutes and is ready to be moved to other work
    place so that the system can still be functioned in case there is a
    problem with headquarters or distribution center. This also enables
    bookstore branches to keep on selling without regards to how system
    malfunction may occur at the headquarters and distribution center to
    ensure the an uninterrupted workflow.