New business idea - Mandatory assignments for the 201960 PDF

Preview

Summary

Mandatory assignments for the 201960...

Description

Executive Summary Entrepreneurship is the major innovation form, in which drives the business towards success. However, opening up a business is not easy task to perform, as it requires various steps to be taken and to be researched, before opening up the business. The major aim of the report is to provide in depth analysis of a newly developed business idea, while taking steps to launch the developed idea. The newly developed business idea was to launch a café to provide organic healthy food to customers, since majority of customers are in the need of healthy lifestyles, and the trend is changing so fast towards healthy lifestyle. Thus, the café named, Green House café will be launched in Melbourne CBD, while focusing highly on its e-commerce platform in terms of providing online ordering and delivering services to cater with the busy life conditions f target customers. The target market of the business is identified as cooperates age between 20-45. The report consists with various sections, in which business model canvas, market of the business, operations and technology, human resource and finance aspects have been examine in a broader way in terms of starting up the business. Furthermore, it can be defined that there is a favorable opportunity to perform the business in a recognized market. A secondary research has been performed in terms of gathering information for the report.

1

Contents Executive Summary.........................................................................................................................1 1.0 Introduction................................................................................................................................2 2.0 New Business Model Canvas....................................................................................................5 3.0 Market........................................................................................................................................7 3.1 Feasibility of business............................................................................................................7 3.2 Target Market of the business................................................................................................7 3.3 Current competition exit in the market..................................................................................8 3.4 Market Attractiveness............................................................................................................9 3.5 Location of the business......................................................................................................10 4.0 Operations and Technology.....................................................................................................11 4.1 Development of technology.................................................................................................11 4.2 Product Development..........................................................................................................11 5.1 Managerial and technical experience required....................................................................13 5.2 Ownership Structure............................................................................................................13 5.3 Growth Strategy...................................................................................................................14 6.0 Finance.....................................................................................................................................15 References......................................................................................................................................18

1.0 Introduction The lifestyles of the people in Australia are restructuring more towards healthy lifestyles through providing more effort on having healthy food as their eating habits. As the life get busier in 2

current context, people usually get no time to invest on making healthy food, in which makes them to go for fast food outlets to serve their hunger. The fast food outlets does not provide healthy foods to customers, as the name suggests, fast food is just a unhealthy meal, which serves better with busy schedules of the customer. However, currently, majority of people have changed their dining patterns to healthy food due to the requirement of having a healthy lifestyle. Therefore, this can be identified as a change in consumer preference, in which provides a market opportunity o lean on. Moreover, when analyzing on the Melbourne city region, consisting with large number of workplaces and various fast food shops, it will be beneficial to open up a healthy food outlet, while allowing the delivering services as well to certain location, and further obtaining the help of food delivery services such as Uber eats and Menulog. Thus, the business name of the new business idea is as follows.

Moreover, the business will be providing services to cater with the busy conditions of people’s lives, where customer will not have time to visit and buy foods, but they will be happy to make the order online and receive the food at the doorstep. Therefore, online ordering through the websites, and further including food delivery services such as Uber eats and Menulog, who provides online ordering and delivering services to pitch the right market conditions and consumer characteristics. Furthermore, catering to market trends can further improve the demand for the business, in which provides successful results in the long run. Therefore, as the name of the business suggests, “The Greens House Cafe” will provide healthy organic food including various juices as well, in order to provide the healthy food requires for healthy lifestyles. 3

“

As the startup of the company, the outlet will be located in Melbourne CBD, however, the major attention is on online ordering and food delivering services, whereas Website and mobile phone application will be build to provide easy food ordering and delivering services. Furthermore, the major reason behind opening up a outlet in Melbourne CBD is mainly of the large office crowd and high population to be addressed exist in the city. IN addition, the restaurant will be providing services starting from 6am -10pm, in order to cover all three meals of the day.

4

2.0 New Business Model Canvas Key Partners Key Suppliers  Fresh Food and Vegetables suppliers  suppliers of environmental friendly cups and boxes to serve food Key input resources  

Vegetables Food

Key Vendors  

Key activities   





Uber Eats Menu Log

Delivering Meals on time for customers Delivering quality food Providing the customers with best organic fruits and vegetables Maintain good reputations with customer

Value Propositions 

  

Providing organic fast food with the advantage of customizing the meal. Make your meal online Online ordering services. Online delivering services

Customer Relationships Customer Segments 



Retain and attract more customers

Key Resources    

Loyalty cards have been given for customers in which provides discounts for their next purchases. Facebook can be used as a method to keep in touch with customers by posting regular updates.

Experienced Award winning Chefs Highly trustworthy Stewards and other staff Highly attractive restaurant atmosphere State of the art kitchen equipment

Channels 









Melbourne CBD customers are considered as the main key customers for the business due to the purchasing power and busy lifestyles. The age group of 20-45 can be identified as most effective target group.

B2C (Business to Customer) business will utilize a Direct Marketing Channel approach where there are no intermediary levels. B2C direct distributional channel can be utilized. E-Commerce

5



Cost Structure    

Raw materials such as vegetables, fruit materials and labor costs can be identified as the main costs of the business. Machine costs, electricity and water costs, land costs can be identified as another main expensive sources of costs. Management of mobile application and online platform can be identified as another cost occurred annually. Delivery charges can be identified as another least source of costs, in which can be reimbursed from the customer.

platform will be utilized as a competitive method to attract customers. Delivery service agents such as Uber eats and Menulog will be utilized in the distribution channel

Revenue Streams

 



The main revenue comes from the sale of organic healthy food. The most favorable new product pricing strategy for this portfolio could be recognized as Market Penetration strategy. Accordingly a low price can be set for the product in order to attract a large number of buyers and hence a larger market share. High Value Strategy is used together with value pricing and market penetration strategy, in order to deliver high quality products at medium prices for customers.

As per the above model, various value propositions and importance factors have been explained in regards to the newly developed business idea. The overall factors have provided favorable implications in regards to the providing healthy food to customers.

6

3.0 Market The market factors will be discussed in this section.

3.1 Feasibility of business

3.2 Target Market of the business As mentioned before, the target market of the business will be customers’ age between 15-40 years, and further have the need for healthy lifestyle and relevant purchasing power. The following table explains the various characteristics of the target market group of the business. Students

Corporate Customers

Households

16 – 22 Lower-Upper middle class High Class Low

21- 40 Lower-Upper middle class High Class Average and High High

22 - 40 Lower-Upper middle class High Class Low to High

Demographic Age Social Class

Income level IT Literacy

Average High

Geographic

Melbourne CBD

Melbourne CBD

Psychographic Lifestyle Personality

Free time

Busy lifestyle

High experimental

Experimental

Low Average High Melbourne CBD Free time and busy Less Experimental

Behavioral Price Sensitivity Purchasing power Quality of product Service quality

High Low

Low Average /High

Low and High Average

Average

High

Average

Average

High

Average

When analyzing the above table, it can be defined that corporate customers are most relevant category, who stays busy life style and further need the requirement of healthy food towards healthy lifestyle, and further has purchasing power. Moreover, online ordering and delivering services will add more value to this segment as well.

3.3 Current competition exit in the market The major competitor for the business can be defined as Calorie Counter, who provides organic healthy food to the current market. However, when considering about the price factor, Calorie counter is in little higher position since the target market of the company is more towards high class people. The perceptual mapping will demonstrate the above scenario and current business mapping in an effective way.

3.4 Market

Attractiveness

As per the

market trend, there

is

increasing

market

trend

an

towards

healthy

lifestyles, in

which makes the

high

demand

for

the

organic

healthy

food,

in

which result in the need of supply to market in accordance with the increasing demand.

8

Examining porter’s five force analyses will provide broader demonstration of current market trend and its attractiveness.

Source: CGMA, (2017) 

Current competition – The current competition exist in the market is very low since only one firm, which s known as calorie counter is operating the market. Furthermore, the firm targets more of high class customers due to the higher prices, in which make opportunity for Green House Café to target its target base of customers.



Threat of new Entrants – There is a high risk of entering new business due to the increasing demand, however, Australian quality standards should be met in order to open up a restaurant.



Threat of substitutes – Fast food outlets who provides food for heap prices can be defined as a threat since it will attract customers to their shops.



Bargaining power of Suppliers - The prices of organic food in considerably high when compared, and further quality differs. Therefore, high impact can be caused by suppliers to the business through various activities.



Bargaining power of customers –Customer can cause high impact to the business, if 9

they do not receive value to the money they paid. Customized menu will provide advantage o the business in terms of delivering value.

3.5 Location of the business The most suitable location would be Melbourne CBD due to the access available to larger corporate crowd, and further to high number of customers. Furthermore, people who work in the Melbourne CBD have a very tight life schedule, and furthermore, they have the requirement of spending a healthy life style, therefore, the business can cater its products and services to the people, who need it. In addition, there are various food delivery services available in the Melbourne CBD.

10

4.0 Operations and Technology 4.1 Development of technology The technology for the business will be developed mainly in regards to the customer preference. Thus, the business will be focused highly on designing effective and accurate website and mobile Application since the target market of the business will be using those platforms rather than visiting the physical store. The website and Mobile application will be designed by MarkIT, therefore, the developing the technology is outsourced. The current business world in changing its trends and preferences due to the advancements of technology and busy life schedules. Majority of customers have a smartphone, which allows them to perform online ordering facilities, in which make their lives’ easier. Therefore, busy lifestyles and emerging technology change can be defined as the factors affecting the business.

4.2 Product Development The products, which is known as organic healthy food products will undergo an in-house production, with the assistance and inspection of highly qualified Chefs, in order to meet the quality and safety standards. The sales process will be performed in house, and further in house and external delivery services will be associated with the food delivery services. Therefore, delivery services will be performed directly and further including intermediaries as well. The following table provides the resources required for the business.

11

The inspection and supervisory support from the experienced and qualified Chefs will be included in the production, while state of art technology equipments will be utilized for the production as well. The legal and regulation requirement of providing safety food for customers should be met. Therefore, food permit will be obtained by the food regulation before opening up the café. Furthermore, a training should be provided for the staff, in which is inspected by the food safety supervisor. However, all the business activities should be complied with the regulations provided in The Food Act 1984. In addition, business should be complied with all the environmental protection standards, when performing its business activities. The trademark licensee should be obtained for the business logo. The business should always consider to be ethical when performing its activities as well.

12

5.0 Human resources

5.1 Managerial and technical experience required The company should be recruited a senor managerial employee with the right experience in hospitality industry, at least 10 years to have a better impact on the business. Furthermore, it will enable company to recruit other relevant staff due to the knowledge and skills of the Senior Manager. Another person will be recruited to manage all the supplies side in order to have right inventory system. Thus, this person will be mainly have experience on supply chain management side in large food company. Furthermore, the focus of the business is mainly on digital media platforms, therefore, a person should be recruited with a high class experience and knowledge to manage the digital media team consisting two employees. Moreover, Senior Manager will be given the authority to manage overall business process as well. Furthermore, two experienced and well qualified chefs will be recruited for the food manufacturing unit. In terms of technical resources, the development of website and mobile Application will be outsources to MarkIT company, and further state of art billing machine and food processing machines will be utilized for the production, while maintenance will be outsources to the external companies.

5.2 Ownership Structure The owners of the company are an entrepreneur, and who will work as the General Manager of the business, who will look after every business operation. The business structure is mainly a sole proprietorship business, with 8 employees have been employed to perform the businesses. 

Senior Manager



2 well qualified Chefs



Digital Media Manager



Digital media consultant



Front office supervisor



2 Delivery riders

The interviews will be conducted in order to find the right employee to the company. The interview for the senior manger will be outsourced to the external company, and the other interview will be conducted with the assistance of recruited senior Manager. The compensation would be paid as an hourly rate for the employees except senior Manager and 2 chefs. While 13

those three positions will be get annual package. The employee training will be provided and further training will be arranged to improve employee skills and knowledge. Furthermore, bonuses will be provided for hard working employees as well, in order to motivate them.

5.3 Growth Strategy As per the below Ansoff Matrix, market penetration will be selected as the growth strategy since the business provides food for lesser price when compared to its competitors.

Source: Authors work based on Jobber (2010) Furthermore, Quality standard will be checked by the General Manager very often with the help of an external agency to keep the high quality towards its business operations. Moreover, with the growth of the company, it will change its structure to the PLC in terms of opening up and franchising its business towards other regions.

14

6.0 Finance Startup Capital Description Managing Directors personal funding Bank Loan Total startup capital Sales Volume and Suggested Price Estimated sales (per

600 orders

month) Total cost + Mark up 15% Total sales Revenue

$ 10,000 $1500 $1500

(Both services) Average price

12...