Strategic and planning management assignment help Online: Innovation & entrepreneurship – Business plan (Woodfire Pizza)

Questions Asked??

Write a report on business plan for woodfire Pizza in India??

Solution Proposed:

Introduction

This project is an attempt to understand the many aspects of executing a business opportunity via developing a business plan. An idea is worth nothing if it is not backed by proper planning and research, and a business plan is like a map of execution. Other than helping the entrepreneur in deciding the course of action, it serves many other purposes like attracting investors for the purpose of loans and venture capital. In case the business is operated under partnership, the business plan acts as a parameter for working and often progress is measured against the goals stated in the plan. A business plan clearly states where the business should be after every financial year and if the objective is not met, remedial actions can be taken before things spill out of control.  Below stated is a business plan to introduce wood fire pizza in India; all important aspects like market summary, opportunity, goals, completion and financial plan etc have been elucidated in detail.

The concept

India is an emerging country and it is a fact that the people of India are accepting the western culture more readily than their own culture. (Chandra & Sharma, 2004) Westernisation in India is not limited to only clothes and language; Indians devour all foreign cuisine available and are not afraid to try new things.  Pizza is one Italian cuisine which is loved by Indians of all age, it is true that the locals have tweaked the recipe to suit their taste buds but it still is, Pizza.

The concept is to launch a wood fire pizza chain in India. The USP (unique selling proposition) of this idea is that it is not just any pizza baked in an electric oven; the pizzas are made in authentic Italian wood fire oven to make them tempting with a traditional touch. As stated before the USP is to add the authenticity which is only available in Italy, the wood fire oven adds a smoky flavour and the Italian pizza cheese will make it irresistible. Only fresh ingredients and dough will be used so that the aroma and flavour are intact.  The name of the joint is “Café Milano”

Mission Statement

Our mission is simple; we want every customer to say “I’ll be back”. We want to provide perfect Italian pizza in every city of India and be courteous and helpful at all times. We hope to be the best employer of the country and provide our employees a safe and healthy environment to work in. Our aim is to develop each employee along with the growth of the company.

As a business unit, one of our major objectives is to be profitable and give good returns to our investors. However, ethics and values will not be compromised in the process of being successful.

The Team

This idea was conceived by Mr. X, who already has a number of McDonald’s franchises across Mumbai. The entrepreneurial spirit in Mr. X always was not satisfied by taking up a franchise; he wanted to have his own chain of restaurants. Mr. X’s trip to Italy made him realise that he has never tasted authentic Italian Pizza in India and Indians would specially love the Smokey aroma from the wood oven. Mr. X owns 5 McDonalds in Mumbai and has been in this industry since 3 years.

Ms. V is Mr. X’s friend cum business advisor; she currently heads the marketing division of an Indian company. Ms. V will help Mr. X in setting up the business particularly from the marketing point of view, since a new restaurant will require aggressive marketing.

Another member of the top team in Mr. H, he is an MBA in finance from an Ivy League college. Mr. H was hired by Mr X to look after the financial aspects of the business; opening a restaurant in Mumbai is a costly affair and therefore it is important to attract as many investors as possible. Mr. H is to device a five year financial plan to show how profitable the venture is along with the amount of investment that will be required and the time needed to reach break even.

Mrs. Y, Mr. X’s friend has agreed to care over the job of hiring personnel to operate the first restaurant. The employees of Café Milano should keep up the name of the restaurant; the aim is to give customers a classy ambience.

 Last member of the team is Mr. J who is a chef at a very reputed restaurant. Mr. J always wanted to have his own restaurant and is a 50% partner in this venture.

Market Summary

Mumbai is the commercial hub of India and the population is humongous; which is why there are eating joints sprawled all over the city. The unfortunate fact is that even the smallest food vendor in Mumbai has Pizza in his menu and then there are major franchises like Pizza Hut and Dominos. Therefore, it can be safely concluded that Café Milano will face some serious competition; however, on the plus side none of these outlets offer wood fire pizza which is why Café Milano stands a chance at surviving and succeeding.

 A close analysis of the market depicts that Pizza have been a part of the Indian Menu since last 8-10 years and it has been accepted and cherished by people of all age. Indeed, the target market for continental food like Pizza and pasta is the youth, but the family crowd should not be overlooked while designing the marketing campaigns.

As stated before, if a customer goes looking out for pizza, he can find it everywhere, right from the small restaurant across the street to a fancy outlet in a big mall. This is to say that competition is cut throat and the only way to keep Café Milano afloat is by banking upon its USP of authentic Italian Pizza baked in traditional wood fire ovens.

Since Café Milano’s chief product is Pizza, It will face stiff competition from International outlets like Pizza Hut, Dominoes, U S Pizza, and Smith and Joes etc. However, none of them offer the wood fire pizza. It goes without saying that the prices are very competitive and therefore Café Milano will have to price its Pizzas in the price range offered by other outlets. The trick is to cut the overhead costs in order to be profitable; unlike commercial outlets like Pizza hut, Café Milano will be placed in the market as a small bakery selling only authentic pizza.

Opportunities

Although the market is filled with restaurants that offer Pizzas of various type, but there is very good chance that Café Milano will get accepted by the people as one of the “go-to” joints. The opportunity on which the whole business venture is based is the fact that people to try a new outlet when it comes to food.

Brand loyalty in food industry is very hard to come by, a customer who loves the cheese burst pizza of Dominos will still come to Café Milano just to see what new is being offered. The hard part in running this business is not to attract the customer but to retain them. When a new outlet is opened, customers can be easily directed towards the store by aggressive marketing.

 However; if the customer does not like what he sees or eats, it can be very detrimental for the business. Word of mouth publicity can either mar or make the business. (Armelini & Villanueva, 2010) Be it any business, if a new customer is heavily satisfied with the product or service, he will definitely talk about it amongst his friends and colleagues and if the reviews are positive it will attract more customers.  If the reviews are negative people will think twice for even visiting the new outlet; therefore, it can be deciphered that one of the most important aspects of establishing this business is to ensure that each and every customer has a great experience.

A great experience is a combination of great food, fantastic ambience, and courteous service. So in order to satisfy the customers, all these aspects have to be taken care of or else success will be hard to come by. There is always an opportunity in the food industry, success of a new venture depends upon how well it is executed.

Marketing Strategy

The importance of effective marketing to set up a new business needs to introduction. If the marketing is not strong enough, even the best product can fail miserably. This is the reason why companies spend millions of dollars just on advertising and promotion. It is necessary to understand that marketing is not a onetime expenditure; companies have to set up funds for marketing every year no matter how popular the product is. Coca-Cola for instance, is a product so popular that it is available even in the remotest areas of India; however, this fact does not make the company complacent. The Coca-Cola Company spends millions of dollars each year on advertising its already established product because they do not want the customers to forget the product. Once the product is off the media it loses significance in the eyes of the customer and this cannot be afforded by the company. (Tremblay & Tremblay, 2007)

   A seven point marketing strategy have been devised by the top team of Café Milano

1. Media and Billboards

In a place like Mumbai, hundreds of joints open and close every day; the only way to get distinguished from the crowd is by way of strong advertising. The strategy is to palce billboards and hoardings on every major street of Mumbai. Café Milano will first open in Colaba, but the hoardings will be spread across Mumbai.

1. Create an online presence

For any business to be successful, online presence is of utmost importance. Now days, even the smallest of business have a website of their own and engage in social media marketing like face book and twitter. Online marketing is both inexpensive and extremely effective way to promote business and attract new customers. The website should be such that after visiting it compels the customer to visit the store in person.

1. Attractive menu

There are two types of values that can be attached to product, one is actual value and the other is perceived value. As the name suggests, actual value of the product is related to the price and features of the product. On the contrary, perceived value is what the customer thinks about the product, if the customer has a very strong image about the product he will be willing to pay a premium for that product. (Silk, 2006)

The name of the game is to increase the perceived value of the product. The menu is like the face of the restaurant, a boring stereotypical menu will mar all marketing activities; which is why the menu should be very unique and attractive.

1. Word of mouth publicity

As stated before, word of the mouth publicity is the best form of publicity. It does not involve any direct cost and works well than all other forms of paid promotions. However, getting people to say positives about the restaurant is not an easy task in itself; for this to happen immense attention has to be paid to satisfy the customer.

 Host events   

Hosting events in malls and in the restaurant itself is another way to gain prominence. Different types of events can be held like parties, business gatherings, live music, and stand up comedian etc. Along with hosting such events, it is important to publicise them properly to attract crowd.

1. Promote Takeout and Delivery Service

The only way to increase revenue is by increasing the size of the customer’s bill and in order to save time many people like to order in. All marketing campaigns should include the fact that Café Milano offers home delivery service. Take outs and delivery can become a major source of income, if handled efficiently.

1. Go Green Initiative

Committing to environment is something which every top restaurant of the city is doing. Café Milano will adopt every eco friendly policy, so that it can lower its costs and get established in the league of top restaurants. Such little things might seem banal but they are extremely important.

Positioning Strategy

“Market positioning is the devising of a strategy to positively distinguish the product from its competitors; which is to say, to find a niche in the market place” (Cant, Strydom, Jooste, & Plessis, 2006)

The positioning strategy of Café Milano is to establish itself as the sole provider of authentic Italian Pizza baked in traditional wood oven. Since the top management aims to distribute franchises all over India, standardisation should appear right in the first store. The customers who enter Café Milano should feel as if they are entering in an international chain. All in all< Café Milano is a classy restaurant with a traditional touch.

Keys to Success

All the members of the top team either hail from a business background or have valuable knowledge about the same. The think tanks of this business have come up with a list of important aspects to be taken care of while setting up Café Milano. These key points will be followed while opening every new Café Milano.

è Customers should be 100% satisfied when they leave the restaurant, they should already start thinking about their next visit.

è The company culture should be ethical and employee friendly, we should be known for our high working standards.

è The brand should constantly try to involve itself with popular issue such as Go green, and child education etc. This will set Café Milano apart from its competitors.

è The two most important things in any business are: Brand and Image. The employees and the management should always aim at developing these two aspects. The bitter truth is that it takes years of hard work to establish a brand and only one mistake can ruin everything. This is the reason why, all the employees of Café Milano should understand the importance of having a good reputation in the market.

è Maintaining a very high quality standard is a part of keeping the brand intact. Come what may, the quality of the food should not deteriorate. Café Milano will be positioned as a classy restaurant and therefore hygiene is to be maintained at all times.

è Last but not the least; the cost should be kept under control. This is the toughest part since everything Café Milano offers is very classy but it cannot increase the price substantially because of strict competition. Two ways to be profitable are, a) increasing the volume of sales and b) curtailing all the extra costs.

Goals and Objectives

Stated below are the list of objectives and aims set by the top management

1. To be extremely successful in the Colaba region. The success should be such that people use Café Milano as a synonym to pizza.
2. After establishing the Colaba outlet, the next objective is to set up a company so that franchises can be doled out.
3. Along with the Colaba outlet, investors will be searched to open new outlets in other areas of Mumbai like Andheri, Goregaun, Linking road and Santa cruz etc. The ultimate aim is to have a Café Milano in every major area of Mumbai.
4. After Mumbai, the aim is to open stores in Delhi, Kolkata, and Chennai etc. Once the outlet is successful in all the metros then smaller cities aren’t much of a big deal.
5.  After covering pan India, the company might think of going international.

Financial Plan and Five year Projections

As stated before the idea was conceived by Mr. X and operational mastermind of the project is Mr. J, who is also a chef. Both Mr. X and Mr. J are 50% partners in the business and both are investing 75 lacks each.

The land is taken on rent for a year, the deposit for the same is 15 lacks and the rent per month is 5 lacks. Calculations show that Mr. X’s share will only be able to cover the land part of the deal. All other expenses will have to borne by Mr. J.

  Below stated is the list of initial investments and expenditure

è Ovens and equipments for the kitchen                      – Rs.25,00,000

è Furnishing of the store                                               – Rs. 20,00,000

è Marketing expenditure                                               – Rs. 15,00,000

è Back up fund to sustain the store                               – Rs. 15,00,000

Till it reaches breakeven point

Financial calculations project that Café Milano will at least take a year to reach the breakeven point and the net profit margin after deducting all the possible expense is 25%. Therefore, if everything goes as planned Café Milano will turn out to be a very profitable venture. During the coming five years, the top team plans to open Café Milano in every major city of India and establish it as brand which is synonymous to good authentic Italian Pizza. The taste should be so unique that it cannot be found anywhere else but at Café Milano. Easier said than done, these expectations take a quantum of efforts to get actualised.

 OH72

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