Value Proposition
Beyond Food is a start- up fast food outlet in Oman which will provide a combination of excellent food at reasonable prices with fun atmosphere. Beyond Food will address the increasing demand for fast food in the market which is mostly consumed by the customers during shopping in a shopping mall. The establishment of one outlet in a prominent shopping mall is the main priority of the business. Later on, efforts will be made for further developing more retail outlets in the nearby areas. This business plan focuses on the identification of target market segment, market and competitor analysis, marketing, entry and growth strategies, financial projections, identification of needed resources and financing along with identification of risks and their mitigation.
Value proposition of Beyond Food is its defining characteristics which makes it different from all the other restaurants of the area. Unlike other fast food establishments in the area, Beyond food will provide a unique combination of a fun atmosphere with well- priced fast food. The Chefs who will work in Beyond Food will be hired from especially from China and Italy and the food will be prepared from high- end, freshest and finest ingredients. The food with original flavors from China and Italy will be prepared by the Chefs. In other words, the restaurant will offer the authentic taste of these regions to its customers. Beyond Food will offer home delivery services to the customers residing within 3 km of their business within a time period of 15 mins. The ordered food will be provided free of cost if Beyond Food will not be able to deliver the order within the specified time. Another unique selling proposition of Beyond Food will be that it will offer quality food to the customers and will meet their expectations; otherwise they will not be required to pay for it. A variety of fast food products from different parts of the world will be available in Beyond Food which will make it the choice of the entire family (Burns and Dewhurst, 2016).
The primary market of Beyond Food will be the young generation of Oman. The youth of Oman are involved in extra- curricular activities and therefore, it is common for the high- schoolers to have breakfast and lunch in the fast food joints in the shopping malls.
The working population of Oman comprises the secondary target market of Beyond Food. The shopping centre in which Beyond Food will be established is the work place of around 800 sales person and boutique staff. In the same area, there are 10 more shopping malls which employ nearly 5,000 workers.The area surrounding Beyond Food is also regarded as the tourist destination which is often hunted by the tourists for latest Oman fashion trends. They do not have time to stop for a full meal during their shopping. Beyond Food will act as the alternative for such tourists while shopping in the area (DiPietro, 2017).
In other words, a bulk of youngsters and teenagers will be catered by Beyond Food in Oman. This group has been selected due to a number of reasons. The goal of the business is to become an extraordinary food place and therefore the age of 15 to 25 years has been selected as the primary place where the brand building efforts can take place. This age group is mostly on fixed or limited income and therefore seeks a value/ price relationship that does not stretch their budgets. The secondary market of Beyond Food comprise of customers between the age group of 25 to 37 years which can often be regarded as the restaurant/ lounge user group. They mostly look for seeking more than a value/ price relationship as they have flexible budgets (Solomon, Dahl, White, Zaichkowsky and Polegato, 2014).
Identification of Target Market Segment
Market Analysis
Porter’s Five Forces-
The Bargaining Power of Buyers- In case of the food industry of Oman, the bargaining power of the customers is very strong. Quality food is demanded by them along with a great experience at affordable prices. Setting higher prices may lead to switching of the customers to some other fast food outlet thereby impacting the sales of Beyond Food.
Bargaining Power of Suppliers- The selection of the suppliers for providing raw materials will be based on the prices set by them. There are a variety of suppliers to choose from and therefore the switching costs are also low which will benefit the business.
Threat of substitutes- A number of alternatives are available for the customers to choose from such as drinks, pastries, or desserts. Convenience and opportunity are the major factors on the basis of which the specialty eateries depend. For the customer, it is a competitive choice rather than a substitute choice. Therefore, the threat of substitutes in the industry is moderate (Rehm and Drewnowski, 2016).
Rivalry among existing competitors- There are a number of rivals who are already established in the market such as Starbucks, Domino’s and Bread Talk. These competitors are already competing for the same set of customers with similar corporate goals. High rivalry is expected to affect the sales and profit of Beyond Food.
Threat of new entrants- The capital requirements are low in the context of the individual stores, however, if the business wish to compete with the national level stores then a lot of expenses will be required to be incurred thereby increasing the capital requirements. Favorable locations further increase the threat of the new entrants. The threat of new entrants is moderate in the fast food industry.
There is intense competition in the area where Beyond Food will establish its outlet. Within the radius of 400 meters, there are three similar outlets offering the same kind of food and services. The outlets of Bread Talk, Domino’s and Starbucks are situated in the nearby areas. One of their outlets is situated within the shopping mall while other is situated in the nearby area. This strategy is being adopted by the retailers as the area is supported by high volume of people. Furthermore, these retailers do not want to lose the sales opportunities since the competitors are also providing the similar product categories and substitutions (Barnes, Meyer and Kinard, 2016).
Domino’s, Starbucks and Bread Talk are the main competitors of Beyond Food. Oman has been significantly impacted by the Starbuck’s strategy of entering the lunch market. Light and healthy alternatives have been popularized by Starbucks such as lean sandwich and salad as an option for lunch accommodations. On the other hand, Bread Talk is also a successful franchiser operating in Oman and is becoming a threat for the food retailers. Bread Talk is also involved in the delivery of food items to the offices and nearby apartments. Huge see- through kitchen in Bread Talk allows the customers to monitor that unhealthy practices are not conducted by the chefs. Moreover, Domino’s target the every diverse population segment on the basis of lifestyle, on the basis of age and through special interest groups (festivals, celebrations, etc.) as well (Wellton, Jonsson, Walter and Svingstedt, 2017).
Market and Competitor Analysis
Marketing Strategy
The marketing strategy of the business will be based on serving the markets well. The first outlet of Beyond Food will be started as a market tester and it can act as the model of expanded number of outlets in the future. The basic motive of the business will be to maintain the quality of its products along with establishment of its identity in the local market (Kukanja, Gomezelj Omerzel and Kodri?, 2017).
The business will make the use of the combination of local media and local store marketing programs for the marketing of the outlet. In the context of Beyond Food, local store marketing will prove to be more effective followed by print ad. Broader media will be explored by the business after establishing the concentration of the stores in the market. The business is planning to become the talk of the town by way of providing energetic and fun environment along with unbeatable product quality at reasonable prices. The execution of this concept comprises the critical element of the business plan. The selling of supporting material such as promotional items, merchandise along with other marketing gimmicks will assist in building the brand (Ryu and Lee, 2017).
Beyond Food will enter the market in the form of a limited company having four partners with equal stake. As the part of its entry strategy, the business will initially focus on the area which has access to large number of teenagers, youngsters and tourists. It will automatically assist the business by giving it a push through higher than the expected sales (Teichert, Effertz, Tsoi and Shchekoldin, 2015). The outlet will be equipped with modern furniture and will aim at providing a clean and open environment to the customers at all times. The entry strategy of the business is focused on providing top quality fast food experience to the customers which will play an important role in establishing its brand image over the period of time (Crippen and Oates, 2015).
As a part of its growth strategy, the business will establish a brand name in the market that will allow it to stand out in the market from the other fast food competitors. For this purpose, it has adopted a logo which is energetic, distinct and playful with colorful elements which, in turn, makes it eye catching (McKeever, 2016). Moreover, the name of the products offered by Beyond Food will also be kept attractive in order to attract the target market i.e. teens and youngsters. Furthermore, the business will also plan to enter into strategic alliances by way of establishing long term relationships with partner vendors and raw material suppliers which will assist the business in its growth.
The financial projections of beyond Food are based on the assumption that $ 600,000 will be initially contributed by the four partners of the business as capital. The sale price of the fast food items offered by the business will be kept reasonable. It has been assumed that initially the sales will be low and it will increase slowly and gradually with the passage of time. This is based on the assumption that the business will gain popularity over a period of time. The financial projection of Beyond Food is based on monthly cash forecast, break even calculation, profit projection and balance sheet. The monthly cash forecast of Beyond Food provides that business will receive cash from the sales and will spend it in number of expenses such as rent, purchase of refrigerator, purchases, staff salary, etc. At the end of the year, the business will have the closing cash balance of $ 862,000 (Appendix 2). The balance sheet of the business depicts that at the end of the year, the capital will be increased to $ 878,910 (Appendix 4). The income statement of the business provides that sales is expected to be the only source of revenue for the company in the initial year. After considering the expenses, the business will be able to generate a profit of $ 135,200 (Appendix 3). The break- even calculation provides that break-even point in units is 410 and break-even point in dollars is $348717.95 (Appendix 1).
Marketing, Entry and Growth Strategies
There are a number of resources which will be required for the restaurant business ‘Beyond Food’. Some of them are mentioned below:
Human Resources- Still all the functions involved in a restaurant business cannot be performed by the owner itself, the staff will be needed who excel in the performance of such jobs. Staff for the purpose of preparing the food, serving it on the respective tables and a manager for ensuring the effectiveness of the business operations will be needed. Potential employees will be attracted towards the business through the advertisements that will be conducted by Beyond Food in newspapers and online classifieds (Jogaratnam, 2018).
Infrastructure- Infrastructure is one of the most important resources for a restaurant business. This will include finalization of the location i.e. the shopping centre where the business will be situated. Also, these days the restaurants are based on different themes for the purpose of attracting the customers. For the designing of such themes, specific staff can be hired in order to enhance the final appearance of the restaurant. Parking facility is also an important resource for the restaurant (Heasman and Lang, 2015).
Equipment- Certain equipment are very necessary for the restaurant business in order to ensure proper food safety and storage. Plenty of space for freezer and refrigeration will be needed in the kitchen for the purpose of keeping the food fresh. The quality along with the variety of food which can be made available to the customers by the business can be enhanced through the purchase of high quality food processors. Other equipment required for Beyond Food will include utensils for the customers to eat such as cups, forks and plates along with fryers, beverage taps, etc.
A number of costs are involved in the establishment of restaurant business which can be met effectively only with the help of adequate financing. The working capital needed for meeting the day to day expenses of the business will include expenses relating to advertising, groceries, supplies, etc. Other expenses involved in the business are location improvement costs, rent/ operating costs, marketing, miscellaneous costs, and advertising costs. Beyond Food can go for working capital loans for meeting these day to day expenses. There are also a number of financing sources available through which Beyond Food can acquire capital loans such as traditional banks, alternative funding, angel inventors, venture capital firms and even from friends and family (Wallace and Webber, 2017).
Risks are a part of each and every business. Identification of risks on timely basis allows a business to take the needed steps and actions thereby reducing the vulnerabilities (Gordon and Brezinski, 2016). Following are the material risks which are identified in case of Beyond Food:
Food Safety Concerns- The restaurant owners are basically concerned about food poisoning suffered by the customers after having food in the restaurant. However, the personnel working in Beyond Food will be trained in food safety but still there are chances that they may not take the measures seriously. The serving of previously contaminated food to the customers can result in food borne illness among them which can often hamper the image of the restaurant (McAdams, Deng and MacLaurin, 2018). The mitigation of this risk can be ensured by conducting training sessions for the personnel in order to make them understand their roles and responsibilities in the early identification and elimination of food borne illness and contamination (Weng, Gotcher and Kuo, 2017).
Fire Safety- The cooking conducted in Beyond Food will also suffer from the huge risk of fire. Higher temperature cooking is generally conducted by the restaurants. Therefore, if fire takes place, the risks are greater due to the fact that the restaurant is filled with diners. For the purpose of mitigating the risk related to fire, the kitchen staff will be provided the training for putting out fires. Also, fire safety equipment will also be equipped in the restaurant. These fire safety steps will result in production of fewer casualties and less damage within the business (Hopkin, 2018).
The Risk of No Access to Capital- Since the business is a start- up, it may face shortage of capital in the initial stage which may further lead it towards failure. Enough liquidity will be needed in the cash- intensive business for the purpose of covering supplies, employee paychecks and various other operating costs. In other words, cash can be regarded as one of the biggest risks involved in the establishment of a restaurant (Burns, 2016).
The mitigation of this risk can be ensured with the help of the creation of a cash0 crunch contingency plan. This plan will keep the sufficient cash resources with the business which can be utilized in the cases of emergency. Moreover, Beyond Food can also ensure keeping of good accounting records which can be presented for the purpose of credit and loan applications (Lee and Sozen, 2018).
The Risk of High Costs- There are different type of costs that will required to be incurred for the purpose of starting the fast food restaurant. Huge amount of money is involved in food, leasehold improvements, insurance, payroll, waste, etc. If proper control is not maintained on the cost then the cash resources suffer from a major risk (Meltzer, 2016).
This risk of incurring of high cost in the initial stages of the business can be mitigated by way of operating as lean as possible. The business will also exercise its discretions while dealing with the suppliers. The control over costs will also be maintained by becoming creative and being open to making changes in the service model, operating hours and menu for exercising such control (Self, Jones, and Botieff, 2015).
Conclusion
This business plan focused on the identification of target market segment, market and competitor analysis, marketing, entry and growth strategies, financial projections, identification of needed resources and financing along with identification of risks and their mitigation. Beyond Food is a start- up fast food outlet in Oman which will provide a combination of excellent food at reasonable prices with fun atmosphere. The outlets of Bread Talk, Domino’s and Starbucks are situated in the nearby areas which will provide tough competition to Beyond Food. Human resources, equipment and infrastructures are some of the resources which will be needed by the business for carrying out its activities.
References
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