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MID TERM SUBMISSION, ENTREPRENEURSHIP MANAGEMENT, DFT-VII, NIFT CHENNAI

INTRODUCTION

Any business idea typically centres on a commodity or service that can be sold for

money, according to a unique model.

There are several methods for developing and testing a business idea. The ability to

come up with a business idea can be transformed into a viable business, where

ideas supported by feasibility and a business plan can then be sold to interested

investors, firms, and interested parties for a lump sum or a management contract, or

as agreed. Business ideas, if introduced at the right time, when demand for such

service or a product introduced by the idea is expected to surge, can lead to a very

profitable business. Business ideas are always available through different sources;

however, it is the application applied on these ideas, and timing makes all the

difference in failure or success.

Our Assignment:

This assignment requires us to formulate a probable business idea and evaluate its

idiosyncrasies based on the seven domain model presented by John Mullins, Chair –

Entrepreneurship Faculty, London Business School in his book “The New Business

Road test”. After this analysis, the feasibility of the business idea in the context of its

success or failure will be understood.

THE SEVEN DOMAIN MODEL – JOHN MULLINS

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The seven domain model of business can be expounded into the following steps:

1. Micro level market assessment

2. Macro-level market assessment

3. Macro-level Industry assessment

4. Micro-level industry assessmen t

5. The mission, personal aspirations and risk propensity test for

entrepreneurs

6. The “ c an you and your team execute?” test

7. The Connectedness test

Using the seven domains model requires a considerable amount of data. Mere

opinions that an opportunity is attractive will not suffice and will destroy the credibility

of the aspiring entrepreneur in the eyes of others. Where do we get all the data we

need?

Much of the data the model calls for can be obtained quickly from secondary

sources: trade and other business publications in the library or on the Internet,

government reports and so on.

Typically, though, some primary data - from interviews, observation, focus groups or

surveys of prospective customers and/or industry participants, or market experiments

- are necessary for the two micro-level assessments comprising the lower row in the

model and for understanding the industry's critical success factors.

OUR BUSINESS IDEA2




Description of the Business

The plan is to start a fast food joint “Snack Bar”. Snack Bar will provide acombination of excellent food at value pricing, with fun packaging. Snack Bar is the

answer to an increasing demand for snack-type fast food, to be consumed while

evening hours, while window shopping and walking around inside a shopping mall.

Targeted Market and Customers

Snack Bar intends to cater to the bulk of teenagers and youngsters in Chennai. We

have chosen this group for several important reasons. We believe that the age group

from 15 to 25 is the primary age where brand building efforts could take place. They

are on limited or fixed incomes and seek a value/price relationship that will not

stretch their budgets.

We will imitate successful establishments, such as Booster Juice and Burger Man,

which represent the majority of our core target market, between 18 to 35 years of

age. Our store will feature display cooking of our featured Chicken Rolls & “Paneer”

Rolls. Our customers will also be able to read our in-house brochures in regards to

all knowledge about Snack Bar and our featured sauces. Our store will be decorated

with fast food setting, such as a bright counter and display menu on the wall. Snack

Bar will entice youngsters to bring their friends and family with our innovative

environment, fresh cooked items, and selection of unique dipping sauces.

Growth Trends in This Business

In today's highly competitive environment, it is becoming increasingly difficult to

differentiate one fast food outlet from another. Our main priority is to establish one

outlet in a crowded mall, preferably nearby one of prominent shopping malls at OMR,

Chennai. Later, our effort will be a further development of more retail stalls in the

surrounding area

Objectives

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• To establish a presence as a successful local fast food outlets and gain a

market share in Chennai’s fast food industry

1. To make Snack Bar a destination spot for youngsters, mall-goers, window

shoppers.

• To expand into a number of outlets by year three, and sell the franchise to

neighbouring cities, such as Bangalore, Coimbatore, Pondicherry.

Mission

Our main goal is to be one of the most successful fast food outlets in Chennai,

starting with one retail outlet located inside a major shopping mall as a "market

tester."

Snack bar will strive to be a premier local fast food brand in the local marketplace.

Our main focus will be serving high-quality food at a great value.

Keys to Success

To succeed in this business we must:

• Create a unique, innovative, entertaining menu that will differentiate us from

the rest of the competition.

• Control costs at all times, in all areas and implement a conservative approach

to growth policy.

• Sell the products that are of the highest quality, as well as keeping the

customers happy with all of our product categories from food to store

merchandising.

• Provide 100% satisfaction to our customers and maintaining the level of

excellent services among other competitors.

• Encourage the two most important values in fast food business: brand and

image, as these two ingredients is a couple of main drivers in marketing

communications.

• Get access to high-traffic shopping malls near the target market.

• Promote good values of company culture and business philosophy4




Quality food

Each store will offer nothing but freshly cooked Vegetarian, Non – vegetarian and

Egg rolls, sandwiches, momo’s and variety of unique blend sauces, all served with

old-fashioned home-style care.

Open every day

Our store is open every day from 10 am to 10 pm.

Variety

A different selection of sauces will be featured every three months.

BUSINESS ANALYSIS THROUGH THE SEVEN DOMAIN

MODEL – JOHN MULLINS

The seven domain model of business can be expounded into the following steps:

1. Micro level market assessment

Micro level questions about target markets

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1. Is there a target market segment where we might enter the market in which we

offer the customer clear and compelling benefits, at a price he or she is willing to

pay?

TARGET MARKET

Snack Bar intends to cater to the bulk of teenagers and youngsters in Chennai. We

have chosen this group for several important reasons. We believe that the age group

from 15 to 25 is the primary age where brand building efforts could take place. They

are on limited or fixed incomes and seek a value/price relationship that will not

stretch their budgets.

2. Are these benefits, in the customer’s minds, different from and superior in some

way – better, faster, cheaper or whatever – to what’s currently offered by other

solutions?



age. Our store will feature display cooking of our featured Chicken Rolls & “Paneer”

Rolls. Our customers will also be able to read our in-house brochures in regards toall knowledge about Snack Bar and our featured sauces. Snack Bar will entice

youngsters to bring their friends and family with our innovative environment, fresh

cooked items, and selection of unique dipping sauces.

3. How large is this segment, and how fast is it growing?

With the increasing number of schools and college students mushrooming in the city,

our business idea will soon have larger numbers of pupils to cater to.

4. Is it likely that our entry into this segment will provide us entry into other segments

that we may wish to target in the future?

In case of any potential loss or misdemeanor owing to the business idea of Fast food

items, we may also venture into South Indian Parcel Meal System, that will surely be

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accepted in this part of the country. The location on the other hand has been chosen

where target customers from varied groups can be found in bounty.

Three ways to define market segments

1. Who the customers are? That is in demographic terms (age, gender, education,

income etc) if it is business to business, then it will refer to the industry in which the

customers do business, plus firm size and firm characteristics.



age.

2. Where the customers are in geographical terms?

The customers are based in the same city of Chennai, working or availing the

location of our enterprise on a daily basis.

3. By how the customers behave (life style terms) or in business to business how the

products may be used.

The product use will flourish as there are no competitors of the same arena, i.e,selling fast food. However, the targeted and comparatively young customer base

craves for more variety of food, especially fast food, instead of the mundane idly,

dosa and vada. Also the easy availability of fast food centers towards the north forms

a point of comparison among the youth of the south, especially Chennai.

2. Macro-level market assessment

Information from secondary sources – library materials, internet, newspapers, and

publications on recent industry trends should suffice to answer the following

questions.

The macro market test

1. What sort of business is sought? Is it one with potential to become a huge

business, or a small lifestyle operation?

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This along with the answers to the following question will determine the need for

venture capital. A high potential business in a huge, rapidly growing market will

require venture capital whereas a small lifestyle operation in a niche market will not

need any.

2. How large is the market?

The market encompassed all the college going students and teenagers and we know

this segment is very much into junk food and our business has a great potential due

to this.

3. How fast can it grow?

We are planning to have the business grow all across the city. The growth is possible

and will depend upon the acceptance on the business by the target consumers. The

possibility of the market getting attracted to our shop to high and hence the growth is

expected to be very rapid.

4. How quickly can it grown in the next six months or two/three/five years?

The business is foreseen to grow into 2 more branches in the next six months and

progressively in two years 5 branches in the Taramani, Adyar and nearby locations.

3. Macro-level Industry assessment

a) Five macro-level questions to assess your industry:

Michael Porter’s five forces

Questions

1. Threat of Entry

Is it difficult for companies to enter this industry?

Answer :

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No

2.Supplier power

Do suppliers to this industry have the power to set terms and conditions?

Answer :

No it is an independent enterprise and it does not give the power to any supplier to

our enterprise to set the terms and conditions.

3.Buyer power

Do buyers have the power to set terms and conditions?

Answer :

Yes, the menu and the service can vary as per the consumer’s demand and choices

of food.

4. Threat to substitutes

Is it easy or difficult for substitute products to steal the market?

ANSWER:

No. We will provide exclusive flavors and Indian spices which are exclusive at our

counters only.

5. Competitive Rivalry

Is competitive rivalry intense or genteel?

Right now the competition is nil because people have not ventured into this segment

of food.

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4. Micro-level industry assessment

The Micro industry test:

1. Do you require proprietary elements - patents, trade secrets and so on – that other

firms cannot likely duplicate or imitate?

Yes our recipes are trade secret and the name will be trademarked in future.

3. Is your business model economically viable i.e. can you show that your company

won’t run out of cash quickly? That depends upon the answers to these questions

related to working capital cycle:

Will your revenue be adequate in relation to the capital investment you need and the

margins you get?

Food being at the Physiological Need of Maslow’s Hierarchical Needs, the business

for it will exist and run today and always.

How much will it cost you to acquire and retain customers?

Initial investment will be required in making sales promotions and visual

merchandising to attract the target market segment.

Hoardings, newspaper advertisement and pamphlets will cost around : Rs 15000

Visual Merchandising : Rs 2,00,000

Menu Card : Rs 2000

Initial gift items : Rs 5000

How long will it take to attract customers?

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1-2 weeks

How much cash must be tied up in working capital (inventory or other) for how long?

Rs 10.00.000 for 3 months

How quickly will customers pay?

The ROI will be in about 6 months of the business.

5. The mission, personal aspirations and risk propensity test for

entrepreneurs:

What’s your entrepreneurial mission:

• To serve a particular market? The college( NIFT) and IT sector

• To market a particular range product? The fast food items not so prevalent

in South India

• Is the passion really there? YES

What level of aspirations do you have for your entrepreneurial dream:

• To work for yourself?

• To build something small or something big?

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• To do? To manage? To lead?

• To change the world in some way?

To LEAD

What sorts of risk are you and are you not willing to take:

• Will you risk a secure salary and the things that go along with your current

employment? For how long?

YES till the time we are bankrupt

• Will you put your own money at risk? How much? Yes

• Will you risk your home or time with your family or loved ones? NO

• Do those you love accept the risks you will take? NO

6. The “ c an you and your team execute?” test

• What are the few - only a handful, please – critical success factors (CSFs) in

your industry? What support can you provide to show that you’ve identified

them correctly?

• Location

• Customer Base

• One of its Kind

• Bengali Cook expert in Fast food item

• Can you demonstrate - in past deeds, not mere words – that your team taken

together can execute on each and every one of these CSFs?

• Customer Base : Social networking Sites, Peer groups and

acquaintances

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• Since we understand the pulse of the Students, what they want to have

and not, their likes and dislikes etc we can have a quick start in our

business.

7. The Connectedness test

• Who do you and your team know down the value-chain among

customers you will target, both today and tomorrow?

• NIFT Chennai Students

• Hindustan College Students

• People working in IT parks near Perungudi, like Prince, Tidel Park,

Siruseri

• Who do you and your team know across the value-chain among your

competitors and substitutes?

• All the Multinational Fast Food Chain like Pizza Hut, Mc Donalds etc

• Local Outlets like Adyar Ananda Bhawan, Sarvana Bhavan

• Indian Chain Food Outlets like Pupil, CCD etc

• Food Courts

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