Business Plan on Ready Meal

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Business Plan on Ready Meal

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Executive summary

This business plan is prepared based on the idea of establishment of a business of ready meal in UK. Based on the future prosperity of this market (Ashgate.com, 2014) it is decided to establish a business that is recognized as “BhanchaGhar”.

Providing the best quality of food to the UK people in their home as they want is the mission of BhanchaGhar. After conducting a feasibility research it is found that the overall feasibility of the business is quite satisfactory.

Actually, the business will establish the product lines of ready meal of Nepalese, Japanese, and other Asian Cuisine in the UK market by conducting local small and medium sized stores. By his way people can get variation in their tastes. Raw materials of the production will be provided from the local Nepalese and Indian wholesaler. In London the food development centre will be established. In case of providing foods, they mainly focus on the delivery of quality and healthy foods with rationale price. Again, BhanchaGhar offers its services to its customers throughout 24 hours seven days in a prompt manner. In this concept, it decided to have a good distribution channel to provide services its customers. The target market of BhanchaGhar is the male customers and higher income level customers as they prefer more ready meal.

Based on the undertaking of both researches, that is primary and secondary research of the plan, it is assessed that the business proposal is viable (Finch, 2010). So successfully it can be implemented. The business proposal of BhanchaGhar fits with the glove in that case, by going target market demographics, their preferences, food habit as well as pricing expectation. With the establishment of suitable operating process BhanchaGhar may sustain in the market which is saturated and competitive in nature.

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List of figures

FIGURE 1: PROCESS OF MARKETIGN RESEARCH ... 14

FIGURE 2: GENDER OF THE RESPONDENTS ... 17

FIGURE 3: RACES OF THE RESPONDENTS ... 18

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FIGURE 4: AGE OF THE RESPONDENTS ... 18

FIGURE 5: EDUCATION LEVEL OF THE RESPONDENTS ... 19

FIGURE 6: ANNUAL INCOME LEVEL OF THE RESPONDENTS ... 19

FIGURE 7: MARITAL STATUS AND PROFESSION ... 20

FIGURE 8: EXPECTATION OF THE CUSTOEMRS ... 21

FIGURE 9: CUSTOMERS PREFERENCE ... 21

FIGURE 10: BUYING BEHAVIOUR OF THE CUSTOEMRS ... 22

FIGURE 11: MALE RESPONDENTS BEHAVIOUR ... 23

FIGURE 13: INCOME LEVEL AND THE UYING BEHAVIOUR ... 24

FIGURE 12: FEMALE RESPONDENTS BEHAVIOUR ... 24

FIGURE 14: INDUSTRY LIFE CYCLE ... 27

FIGURE 15: CURRENT MARKET POSITION ... 28

FIGURE 16: LOYALTY OF THE CUSTOMERS TOWARDS THE MARKET ... 28

FIGURE 17: WHIC ONE SHOULD BE DEVELOPED IN THE READY MEAL ... 29

FIGURE 18: CAPITAL STRUCTURE ... 32

FIGURE 19: FORECASTED SALES VOLUME ... 33

Figure 1: competitive strategy of bhanchaghar ... 37

FIGURE 2: CHOSEN SOURCES OF RECOMMENDATION TO SELECT THE READY MEAL ... 43

FIGURE 3: ORGANIZATIONAL STRUCTURE OF BHANCHAGHAR ... 46

FIGURE 4: STARTUP CAPITAL OF BHANCHAGHAR ... 51

FIGURE 5: CAPITAL STRUCTURE OF BHANCHAGHAR... 52

FIGURE 6: TOTAL BREAK EVEN ANALYSIS OF BHANCHAGHAR ... 53

FIGURE 7: MONTHLY FORECASTED PROFIT OR LOSS OF BHANCHAGHAR .... 54

FIGURE 8: YEARLY FORECASTED PROFIT OR LOSS OF BHANCHAGHAR ... 54

FIGURE 9: PROJECTED TOTAL NONCURRENT ASSETS& EQUITY OF BHANCHAGHAR ... 55

FIGURE 10: PROJECTED CASH FLOWS OF BHANCHAGHAR ... 56

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List of tables

TABLE 1: DEMOGRPAPHIC POSITION OF THE SAMPLE ... 16

TABLE 2: CUSTOEMR BUYING BEHAVIOUR IN DIFFERENT GROUPS ... 22

TABLE 3: ORGANIZATIONAL POSITION OF BHANCHAGHAR ... 30

TABLE 4: START UP CAPITAL ... 31

TABLE 5: FORECASTED SALES VOLUME ... 32

TABLE 6: AVERGAE PROFIT PERCENTAGE ... 33

Table 1: summary of bhanchaghar’s business model ... 34

Table 2: SWOT ANALYSIS OF BHANCHAGHAR ... 37

Table 3:requirED RESOURCES FOR BHANCHAGHAR ... 38

TABLE 1: SCHEDULE OF BUSINESS PLAN... 44

TABLE 2: RELATED RISKS OF BHANCHAGHAR ... 48

TABLE 3: GENERAL FINANCIAL ASSUMPTIONS OF BHANCHAGHAR ... 52

TABLE 4: BREAK EVEN ANALYSIS FOR EACH PRODUCT LINE ... 53

TABLE 1: GENERAL ASSUMPTIONS ... 60

TABLE 2: CALCULATION OF PER UNIT WEIGHTED AVERAGE SELLING PRICE & VARIABLE COSTS ... 60

TABLE 3: TOTAL BREAK EVEN ANALYSIS ... 61

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1. INTRODUCTION

This business plan is prepared based on the idea of establishment of a business of ready meal in UK. This report is prepared as a document of business proposal that is useful in case of collecting funds from owners and bank loan as well as providing operational plan for the operation of this business. All of the information in this report is compiled with great care through analysing and mentioning reference of the analysis.

1.1 Rationale

Now days the demand of ready meal is increasing in UK as people want the best quality of food in their home. As people are getting busier, they are now depending on ready meal for the best quality of food in their home. Increasing number of single family also causes the increasing demand of ready meal in UK. At present, worth of the market of ready meal is 38.8 billion pound with a compound annual growth of 3.1% after 2007. And the consumption volumes is increasing with a CAGR of 1.7% between 2007 and 2011(Gov.uk, 2014), that indicating the overall rising market consumption. So, in future the expected growth of the market will lead an optimistic number as well. Here, in case of business plan, I have decided to start a ready meal business among a lot of business plan, because of the future prosperity of this market. And as the name of

“BhanchaGhar” all ready meal will be recognized.

1.2 Mission

The mission of BhanchaGhar is as follows:

 Providing the best quality of food to the UK people in their home as they want.

 Establishing a brand name by increasing the number of order in the local market.

 Developing its employees through the proper training as well as proper motivation (Bach, 2005).

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In future, the aspiration of BhanchaGhar is to increase its product line as well as customer base by communicating its product with outsized supermarket chain.

1.4 Design and structure of the report

There are mainly four parts in this report, they are:

 Description of Business concept: this part is included with the identification of the core business concept, products and services proposed to be delivered, the target market of the business, specific features of the business and delivered products as well as the window of opportunity.

 Feasibility research: this part is related to the market research. This is done based on both qualitative and quantitative studies through which can be found the key areas of feasibility research, such as, product or service, industry where the company belongs, market feasibility, organizational structure, financial feasibility etc.

 Development of the business model: defines the identification of appropriate business model, its related elements, core strategy of the business, its competitive advantage etc.

 Business plan: this refers to the step-by-step approach to deliver the business model, viability of the plan as well as its required budgets & investment etc.

1.5 Relevant models and Information sources used

In order to gather data for the development of the business model, here is used both primary and secondary data sources, such as, questionnaire, focus group where the different people of London were asked about their habit and demand for the ready meal, journal, websites, news papers and pervious research. The survey method is used to research about the ready meal business. SWOT analysis also performed.

1.6 Assumptions

These are the assumptions of BhanchaGhar those are estimated in the beginning of its operation, within four years, it would obtain:

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 The sale growth will be approximately 20% for the first 4 years. Then the growth will be assumed constant at 4% for the rest of the year or life cycle.

 Here, on an average profit would be more than 15%. So, within short time this profit can be contributed able to recover the investment.

 Product related other costs will be declining over the time period.

1.7 Timescales for achievement

After considering the feasibility research of the business it is needed to identify the model of the business. Then required to look for a suitable location where the business will be set up, to buy Plant and equipment, machinery for its operation. It may require minimum ten months to activate the business.

2. BUSINESS CONCEPT

2.1 Description of Business Concept

Now days the demand of ready meal is increasing in UK as people are getting busier and the number of single family is also increasing. In future the expected growth of the ready meal market will lead an optimistic number as well (Ashgate.com, 2014). Based on the future prosperity of this market it is decided to establish a business that is recognized as

“BhanchaGhar”. Providing the best quality of food to the UK people in their home as they want is the mission of BhanchaGhar. Actually, the business will establish the product lines of ready meal of Nepalese Cuisine in the UK market by conducting local small and medium sized stores.The company is planning to provide four items to its customers, such as, BhanchaGhar Dry Meat Curry, BhanchaGhar Chicken Curry, BhanchaGhar Dumpling and BhanchaGhar Frozen foods. Raw materials of the production will be provided from the local Nepalese and Indian wholesaler. In London the food development centre will be established.

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2.2 The Concept Statement

2.2.1 The Product / Service

Based on the demand and expectation of customers BhanchaGhar is trying to offer the product lines of ready meal of Nepalese Cuisine in the UK market. The company is planning to provide four items to its customers, such as, BhanchaGhar Dry Meat Curry, BhanchaGhar Chicken Curry, BhanchaGhar Dumpling and BhanchaGhar Frozen foods.

2.2.2 Target Market

Actually, most of the customers having more income capacity prefer the ready meal than other income level. Again the male customers are more likely to prefer the ready meal foods than female customers as they are too busy to make their own foods. So, target market of BhanchaGhar is the male customers and higher income level customers as they prefer more ready meal.

2.2.3 Value Added

BhanchaGhar will provide different products that are superior to others with special diversification. Along with the product lines of ready meal of Nepalese Cuisine different country foods like Japanese, Chinese and Other Asian foods with ready meal item will also be delivered by the business. It will be specialized in delivering quality foods. At the same time, it will deliver foods in a rapidly manner with 24 hours services.

2.2.4 Specific Features

The main objective of BhanchaGhar is to provide healthy foods with rationale price. It is dedicated to serve its customers throughout 24 hours seven days in a rapidly manner. In this concept, it decided to have a good distribution channel to provide services its customers (Bach, 2005).

2.2.5 Who Is Involved

In order to operate the business, BhanchaGhar have decided its organizational plan which is related with various activities and departments. In this case the business may needs to have employees of Operation Department, Production department, marketing department, customer Service Department, Financial department and HR department etc. To get financial support from

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the bank loan, it is required to get help from financial advisor. Besides, in order to set up the business, it is needed to get help from a lawyer also.

2.3 The Window of Opportunity

In future, the aspiration of BhanchaGhar is to increase its product line as well as customer base by communicating its product with outsized supermarket chain, such as, Tesco, Iceland and Sainsbury throughout UK. This may be challenging for the business as the market is already saturated. So, this will be happened BhanchaGhar by providing unique service and product quality that is specialized on the healthy value of foods. Besides these, improving the quality of management, customer services and effort of the team will help to make the business to become successful (Barrow, Barrow and Brown, 2008).

3. Feasibility research of the business plan

3.1 feasibility research plan

The success of the business depends on many issues where the main significant factor is identifying the feasibility of the plan to be introduced in the market. So, identifying the needs of the customers, the existing products, industry, the wants and expectation of the customers, and the overall macro variables should be properly done before launching the products in the market.

In this case the business organization tries to do the market research constantly to track the trends of the market and the perception of the customers properly (Siegel, 1993). So, the market research is always recommended to be followed before going to finally launch the products and here the MR should be done for several reasons like to identify the potential customer for the proposed products or services, evaluating the industry and its prospect in the future, setting the objectives and targets for the future, identify the gap in the market, have an idea about the perception and motives of the customers and finally to make some strategies (Weiers, 2004).).

So, an effective marketing strategy should be done in the following ways that will be followed in this research;

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FIGURE 1: PROCESS OF MARKETI GN RESEARCH

Source: Pinson (2008).

So, the marketing research always should be followed in such a way so that the information is collected properly so that the desired outcomes and the objectives are met. Here, for collecting the information for the feasibility study of the product, market, industry will be done through the different process (McDaniel and Gates, 2005). First of all the objectives of the research will be met then the proper information will be collected from both the secondary and the primary sources for the analysis. After analysis of the collected research and findings the proper decisions will be made.

3.2 primary and secondary data needs

Both primary and the secondary data are required for this research. The primary data were collected through the questionnaire and the focus group where the different people of London were asked about their habit and demand for the ready meal (Burns and Bush, 2000). While collecting the primary data some issues were considered here so that the data can be collected

determining the problems and research objectives

developig the research plan

methodologies build up

collection of information

analysis of the information

present the findings

making the decisions

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properly. The primary data were collected within limited time and considering the sample of 100 that can properly represent the full population. There were some disadvantages of primary data faced by the researcher like the primary data is more costly, time consuming, and require more effort. However, primary research is more relevant and accurate as the data are collected by the researcher that is more reliable for the research.

In this research and feasibility study for the ready meal business, the secondary data is also used where most of the data were collected from the journal, websites, news papers and pervious research. The major disadvantages of the secondary data are it may be less reliable and unfit for the research. However, the secondary data can easily be collected by the researcher within short time and limited cost ((Burns and Bush, 2000).

Here, data are collected from both the primary and the secondary sources and some issues like Irrelevant Data, Age of the Data, Quality of Research and Inadequate Facts were properly considered by the researcher.

3.3 research methodologies

Marketing research can be done in five ways like survey, focus group, interview, observation and field trials. Here the research about the ready meal business was done considering the survey methods. The respondents are provided different questionnaire then the data were collected both in the numerical and qualitative form. So the research was done in the mixed methods.

3.3.1 Data collection methods

Data can be collected both in quantitative and qualitative form and in both ways that is mixed method (Blackwell, 2008). Here the data were collected through the questionnaire and the semi structure interview methods that mean the research was done in the mixed method. However, the quantitative data were collected through the questionnaire where the respondents were asked different questions to respond under 5 scales to collect the data in the numerical form. On the other hand, interview was made to find out the perception and opinion of the customers about the ready meal in the market.

The interview was done to ask the question to the customers where they were asked about their background and what is their perception of the ready meal and whether the current market is able

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to provide the healthy foods and other requirements. The sample of 100 respondents was asked about the ready meal and all the respondents were selected randomly.

Finally the secondary research was done to analyze the industry and the market where different data were collected by the researcher considering the published data from different secondary sources like article, news papers, website etc.

3.3.2 Sample description

The demographic position of the sample is shown in the following figure and table;

TABLE 1: DEMOGRPAPHIC POSITION OF THE SAMPLE

Diameters Range Valid Respondents Percentage

Gender Male: 62 62

Female: 38 38

Races British 30 30

Other European 25 25

Asian 24 24

African 11 11

others 10 10

Age >20: 7 7

20-30: 20 20

30-40: 28 28

40-50: 25 25

50-60: 15 15

60 ABOVE 5 5

Education High School/College 26 26

Undergraduate 34 34

Postgraduate 23 23

PhD: 17 17

Income £8,000 and bellow 45 45

£8,001-12,000 20 20

£12,001- 20000 21 21

£20,001-25,000 9 9

£25,001 and above 5 5

Profession Business 19 19

retired 14 14

Job holder 67 67

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Marital status Single 30 30

Married 52 52

Divorced 18 18

FIGURE 2: GENDER OF THE RESP ONDENTS

Source: made by author.

The total gender respondents were 38% female and 62% male. So, the most respondents of the sample was male and the female number

62%

38%

Gender of the respondetns

Gender Male:

Gender Female:

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FIGURE 3: RACES OF THE RESPONDENTS

Source: Author

Though the sample size was 100 and the location was mainly in London city there were different races. Here, 30% were British, 25% were European, 24% were Asian, 11% were African and 10% were others.

FIGURE 4: AGE OF THE RESPONDENTS

Source: Author

There were different age group to find out which age group should be targeted for the business of ready meals in London. Here, among 100 respondents 7 were below 20, 20 respondents were

30%

25%

24%

11%

10%

Races of the respondents

British

Other European Asian

African others

7

20

28

25

15

5 0

5 10 15 20 25 30

>20: 20-30: 30-40: 40-50: 50-60: 60 ABOVE

Age of the respondents

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between 20 and 30, 28 respondents were between 30 and 40, 25 were between 40 and 50, 15 were between 50 and 60 and rest of the was 60 above.

FIGURE 5: EDUCATION LEVEL OF THE RESPONDENTS

Source: Author.

The 26% respondents were from high school, 34% from undergraduate, 23% from post graduate and 17% from PHD. This was done to measure whether education level has the effect for the demand of the ready meal in London.

FIGURE 6: ANNUAL INCOME LEVEL OF THE RESPONDENTS

Source: Author

26%

34%

23%

17%

education level

High School/College Undergraduate Postgraduate PhD:

45

20 21

9

5 0

5 10 15 20 25 30 35 40 45 50

£8,000 and bellow £8,001-12,000 £12,001- 20000 £20,001-25,000 £25,001 and above

Income level

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There were different income level of the respondents were 45 respondents earn less than 8000 pound, 20 earns between 8000 and 12000, 21 earns between 12001 and 20000 and 5 earns more than 25000 pound per year.

FIGURE 7: MARITAL STATUS AND PROFESSION

Source: Made by author.

The above figure represents that from the 100 respondents total 19 were engaged with for their own business, 14 were retired and 67 were job holder. On the other hand, in case of marital status 30 were single, 52 were married and 18 were divorced.

3.4 feasibility research

3.4.1 Product/ service feasibility

BhanchaGhar is trying to offer the products that customers prefer more considering their demand and expectation. Customers have different preferences but BhanchaGhar tried to find out the most common things that customers prefer more from the ready meal company. Here, the survey report is shown below;

19

14

67

30

52

18

0 10 20 30 40 50 60 70 80

Business retired Job holder Single Married Divorced

Profession Marital status

marital status and profession

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FIGURE 8: EXPECTATION OF THE CUSTOEMRS

Source: made by author

Here, from the above figure, it is clear that the customers consider the quality of the ready meal more than other features. Her, 56% customers highly consider the quality of the ready meal then the price, packaging and distribution system of the company is preferred by them. The customers consider a standard preferable distribution channel for the ready meal.

FIGURE 9: CUSTOMERS PREFERENCE

Source: Made by author

2 8

13 21

56

5 21

34 25

20

5

20 22 32

21 8

20 19 30

23

0 10 20 30 40 50 60

1 2 3 4 5 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

quality low price good packaging distribution

what would you expect from a ready meal business organization

0 5 10 15 20 25 30 35

ready meal home made meal fast foods restaurants

which foods do you prefer more

more unlikely unlikely neutral likely more likely

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Before launching the foods, BhanchaGhar tried to find out how many customers prefer the ready meal foods. Here, maximum customers prefer the ready meal foods shown by the more likely column. Then they prefer the home made foods more likely. The biggest challenge is the customers avoid the fast foods shown by the fast foods section. So, the demand for the ready meal is high in the market.

FIGURE 10: BUYING BEHAVIOUR OF THE CUSTOEMRS

Then BhanchaGhar tried to measure how the customer prefers buying the ready meal form different shops. Here, the customers’ respond was like the following where the customers less want the daily meal in their food menu though it is easy for them to have the ready meal. In this case BhanchaGhar tried to segment that should be targeted for the ready meal. The following table will be helpful in this regards.

TABLE 2: CUSTOEMR BUYING BEHAVIOUR IN DIFFERENT GROUPS

Ready meal buying

Gender income level

male female £8,000 and bellow

£8,001- 12,000

£12,001- 20000

£20,001- 25,000

£25,00 1 and

0 5 10 15 20 25 30 35 40 45

more unlikely

unlikely neutral likely more likely

what is your buying behaviour about the ready meal

I prefer ready meal in my daily food menu

I will be using the ready meal in the future

I would like to buy regulary My full family member prefers ready meal

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above

F % F % F % F % F % F % F %

Daily 3 8

0.6129 03

1 4

0.36 8

9 0.2 5 0.2

5

7 0.3333 33

6 0.6666 67

3 0.6

Weekly 1 1

0.1774 19

1 8

0.47 4

1 4

0.3111 11

6 0.3 7 0.3333 33

2 0.2222 22

1 0.2

Irregul ar

7 0.1129 03

5 0.13 2

1 3

0.2888 89

5 0.2 5

4 0.1904 76

1 0.1111 11

1 0.2

never 6 0.0967 74

1 0.02 6

9 0.2 4 0.2 3 0.1428 57

0 0 0 0

total 6 2

1 3

8

1 4

5

1 2

0

1 2

1

1 9 1 5 1

Here, it is found that the customers preferred the daily meal in different ways. The male and female difference is shown in the following figure;

FIGURE 11: MALE RESPONDENTS BEHAVIOUR

From, the above figure, it is clear that most of the male customers prefer the ready meal foods as they are too busy to make their own foods. In this case the male customers should be more targeted as they buy the food more frequently.

18% 61%

11%

10%

male

Daily Weekly Irregular never

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Here, female customers, buy the ready meal more less as they prefer the home made foods than the ready meal from the market.

FIGURE 13: INCOME LEVEL AND THE UYING BEHAVIOUR

Finally, in case of the income level the customer with more income capacity prefer the ready meal than other income level. So, BhanchaGhar should focus more on the male customers and higher income level customers as they prefer more ready meal. On the other hand, they prefer the

0 0.1 0.2 0.3 0.4 0.5 0.6 0.7

£8,000 and bellow

£8,001-12,000

£12,001- 20000

£20,001-25,000

£25,001 and above 37%

47%

13%

3%

female

FIGURE 12: FEMALE RESPONDENTS BEHAVIOUR

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better distribution system that also should be considered for the male customers and others. So, there is gap in the market and the demand will increase in the future.

3.4.2 Industry feasibility

The industry of ready meal that means it belongs to the food industry and the ready industry of UK is more competitive as there are many big players in the market. The ready meal market of the UK is going high daily as the number of the single family is rising and the people are getting busier. The market is worth of 38.8 billion in 2012 that represents the compound annual growth of 3.1% after 2007 (Pseltd. 2014). This rate is expected to be 6% in 2016. The overall market consumption is rising where the consumption volumes with a CAGR of 1.7% between 2007 and 2011, to reach 5.2 billion kg in 2011. So, the expected growth of the market will lead the total value of the market to 53.4 billion dollar (Agency, 2014). The full industry can be analyzed through the Porters five forces analysis;

 Bargaining Power of buyers: In UK most of the ready meal provider companies are imposing the almost same price hence the switching cost is lower. As switching cost is lower in the market the bargaining power of the customers is lower and the products are sold with fixed price and no negotiation.

 Bargaining power of suppliers: As there are many competitors striving to capture the market and the customers prefer the healthy foods with some attraction and special taste it is tough for the manufacturer to get the ingredients of the foods easily hence the bargaining power of the suppliers is high (BBC News, 2014). However, the long term contract with the suppliers can reduce the bargaining power of the suppliers.

 Competition among the existing companies: the competition among the existing companies is high as there are many companies coming in the market but the growth rate is not so high so the only way to increase the growth of the firm is to switch the customers from other competitors that pushed the market towards the severe competition.

The major competitors who are dominating the market are; Bartholdi Ltd, Look What We Found!, Cauldron Foods Ltd, Chesswood Foods, COOK Ready Meals, Creative Foods, Quattro Foods Limited, Crispy Snacks Ltd, Dalepak Foods, S&L Catering Limited, DelishDish Foods, Dragonfly Foods, Gluten Free Foods Ltd, Goodlife Foods Ltd,

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Kettleby Foods, Lodge Farm Kitchen etc (BBC News, 2014). These companies are the top leader of the market where the market is more competitive.

 Threat of new entrants: The market requires more capital and the existing firms have already made many loyal customers in the ready meal industry where the new firm will face difficulties to face the competition and make many customers (Euromonitor.com, 2014). Though the threat of new entrants is low, still now there are many companies operating the business just recently and made a good place in the market. However, the threat on new entrants is moderate for the ready meal industry.

 Threat of substitute products: the major substitute products for the ready meal are the fast foods, homemade foods and other restaurant foods. However, as the customers of fast foods is decreasing and the customers are now switching to more healthy foods the threat of substitute products is not high (FoodManufacture.co.uk, 2014).. But other foods can capture the markets if they provide better promotion and quality foods in this case the threat of substitute products will be high.

So, form the analysis the industry is increasing and the competition in this industry is high where the many companies are doing the business with almost same competitive advantage.

Ready meal industry Life cycle:

The ready meal industry is not matured now but the market is growing. But the market will soon be saturated where the companies have to make different policies like product penetration, new product development, diversification or new customer development for the business. So, now the industry is in the growth phase and it is going to be more saturated.

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FIGURE 14: INDUSTRY LIFE CYCLE

Source: Kumar and Day, 1998.

3.4.3 Market feasibility

As BhanchaGhar is planning to start the ready meal business the biggest challenge is realising the trends and position of the market. Here, both the primary and the secondary research is shown in the following;

Primary research:

The customers are asked about the current market position of the ready meal industry of UK.

Here, the most of the customers disagreed with the effectiveness of the market and they think the market should be developed more. On the other hand, the customers think that the price is not stable and they market should emphasize more on the healthy foods. Hence, the ready meal market needs to be developed and some new products should be brought.

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FIGURE 15: CURRENT MARKET POSITION

Source: Made by Author

The following figure states the liability of the customers in the ready meal market industry. Here, most of the customers think that though the market is not properly providing the products still now there are many issues to be developed. They think that still now they are satisfied and will be buying the foods from the ready meal market. This is because the ready meal market is a demand able market but requires more changes.

FIGURE 16: LOYALTY OF THE CUS TOMERS TOWARDS THE M ARKET 13

24

29

18

22

7 31

25

9

20

15

0 5 10 15 20 25 30 35

strogly disagree

disagree neutral agree strongly agree

The current ready meal market is effective

They provide the healthy foods the price is rationale in the ready meal market

the destribution channesl and other facilities is available

0 10 20 30 40

I am happy with the current ready meal

I will recommend others to buy the ready meal

I will be buying the ready meal in the future

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Then customers are asked to find which one should be developed to improve the market and to meet their demands. The quality of the foods and the new products development gets more priority. So, customers in the ready meal market want more quality foods and items from the market.

FIGURE 17: WHIC ONE SHOULD BE DEVELOPED IN THE READY MEAL

In addition in the above it is shown that the ready meal industry is more perfect for the high income level customers and the male customers prefer the ready meal foods more where the female customers prefer the home made meal. So, the customers should be given priority considering their preference for the ready meal.

Secondary research:

UK ready meal market is more growing market here the customers prefer the ready meal as the number of the single family is increasing who wants the ready meal. Besides that most of the citizens of UK are too busy to make their foods at home and the fast food industry is not preferable due to its health risk (MarketWatch, 2014). Here, in the ready meal market, the chilled ready meals are considered 50% of the total market this sector grew more than twice the rate of the frozen ready meals in 2012 (FoodManufacture.co.uk, 2014). Here, customers prefer the

0 5 10 15 20 25 30 35

Quality Availability New product

Online Sales More items

more likely likely neutral unlikely more unlikely

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flavour of the foods besides the quality of the foods and in that case new recipes and items inspired by various ethnic cuisines are being launched into the market. I addition, there is a niche in the market for children's ready meals. 70% of the customers prefer the vegetables and agro based foods who are the buyer of the ready meal market (Euromonitor.com, 2014).

3.4.4 Organizational feasibility

As the ready meal industry is more competitive the success of the business lies more on the successful service providing to the customers. Hence a strong organizational structure should be developed. BhanchaGhar will divide the activities of the full organization under the few departments where different departments will have different activities that are shown below;

TABLE 3: ORGANIZATIONAL POSITION OF BHANCHAGHAR

Departments Personnel responsibilities Operation

Department

11 One head of the department will supervise it and the overall operation of the ready meal manufacturing will be supervised by the team.

Production department

15 The production and its effectiveness will be monitored by this team and the leader will help to produce properly.

Marketing department

8 The products of BhanchaGhar will successfully be promoted by this department to the customers with appropriate strategies

Service Department

5 The complain and other services like online ordering and procession will be done in this department

Financial department

6 The feasibility of the products and different financial plans will be made by this team

HR

department

6 The full human resources will be controlled and monitored by this department and all the employees will get proper training and practices here.

The full team will be controlled by the CEO of the company where under his supervision every team or department head will control the full department. There will be democratic leadership and organizational structure to control the full activities but the department head wills manage the team. So, the organizational structure will be more feasible for the success of the business.

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Business process:

BhanchaGhar will do the business in different ways where the major business activities and process are shown below;

 Raw material collection

 Procession the materials

 Manufacturing the products

 Packaging the products

 Bringing the products in the store room

 Sending the products in the local branch

 Marketing the products

 Selling and serving the customers

 Taking orders from the customers

 Delivering the products to the customers with home delivery

All of these activates will properly be managed to monitor the full system and increase the efficiency of BhanchaGhar.

3.4.5 Financial feasibility

The start of requiems and costs for starting the ready meal business is shown below;

TABLE 4: START UP CAPITAL

Items Costs in pound (000)

Plant and equipment 10

Machinery 8

House rent 3

Marketing 5

materials 3

Packaging machine 2

Working capital 4

total 35

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The total cost required for the initial time is 35,000 pound. The full capital will be managed by the following ways;

FIGURE 18: CAPITAL STRUCTURE

The 60% capital will be managed by the owner then rest of the business funds will be managed by the bank loan. BhanchaGhar is planning to offer the following four foods items for the customers at the initioan time;

1. BhanchaGhar Dry Meat Curry (P1) 2. BhanchaGhar Chicken Curry(P2) 3. BhanchaGhar Dumpling(P3) 4. BhanchaGhar. Frozen foods (P4)

Based on this the forecasted salesand volume of the sales is shown below;

TABLE 5: FORECASTED SALES VOLUME

Products Year 1 Year 2 Year 3 Year 4

Forecasted sales quantity P1 50000 60000 72000 86400

P2 70000 84000 100800 120960

P3 30000 36000 43200 51840

P4 20000 24000 28800 34560

60%

40%

own capital Bank loan

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FIGURE 19: FORECASTED SALES VOLUME

Source: Made by author

Here, the growth of the sales is forecasted assuming the 20% growth every year for the first 4 years. Then the growth will be assumed constant at 4% for the rest of the year or life cycle.

TABLE 6: AVERGAE PROFIT PERCENTAGE

P1 P2 P3 P4

Total cost 0.8 0.7 0.4 0.55

sales per unit 1 0.9 0.55 0.72

Percentage of profit 0.2 0.2 0.15 0.17

Here, the average profit would be more than 15%, so other costs will be made considering the net profit of the product. So, the profit can be easily managed and the firm will be able to recover the investment within short time.

3.5 ambition Vs Ability

The ambition for BhanchaGhar is to provide the different products that are superior to others with special diversification. The company will provide the different country foods like Japanese, Chinese and Asian foods with ready meal item to capture more customers. The major issues related to this are BhanchaGhar will be specialized to deliver the foods more quickly and there will be 24 hours services. So, the ambition of the company is to capture a lot of customers and making the better place in the market making a good brand image. The growth is assumed to eb

0 20000 40000 60000 80000 100000 120000 140000

Year 1 Year 2 Year 3 Year 4

P1 P2 P3 P4

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20% for the first 4 years. Here, the problem is that the market is already slightly saturated and there is many companies offering the products to the customers. Hence, the 20% growth for hte first 4 years may be challenging. However, with unique service and product quality specialising on the healthy value of the foods will be preferred. The better quality management, customer services and effort of the team will help to make the ambition more reliable.

So, the overall feasibility of the business is quite satisfactory as the products to be offered by BhanchaGhar would be more focusing on the healthy foods with rationale price. The market is growing and the startup capital for this business is not so high. So the feasibility is satisfactory and there will be more potentiality in this sector.

4. THE BUSINESS MODEL

4.1 Business Model

BhanchaGhar is a business of ready meal that will provide the best quality of food to the UK people in their home as they want. And, the business will establish the product lines of ready meal of Nepalese Cuisine in the UK market. Here is the depiction of business model of BhanchaGhar:

Table 7: summary of bhanchaghar’s business model

Key partner

 Myself

 Expert

Key activities

Serving best quality of food at home in a prompt manner

Value

proposition

 High quality food

 Customer services

Customer relationships

Customer order by phone call or e-mail and promptly they will serve based on their order

Customer segments

 Male custom ers

 Higher income level custom

Key resource Channels

ers

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 Experts &

advisors

 Marketing

&

manageme nt team

 Machinery, plant &

equipment

 Marketing campaign

 Visit of in- store

 Online marketing

 Offline marketing

Cost structure

From the revenue streams all of the costs, that is fixed and variable costs are recovered

Revenue streams

From the delivery of food at destination

Source: made by author. (Cross and Richey, 1998) 4.2 Core Strategy

Through the identification of core strategy of a business, its sustainability and competitive advantage can easily be understandable. There are three basic elements to identify the core strategy of a business (Finch, 2010): mission of the business, scope of product/market and differentiation basis.

4.2.1 Business Mission

The mission of BhanchaGhar is as follows:

 Providing the best quality of food to the UK people in their home as they want.

 Establishing a brand name by increasing the number of order in the local market.

 Providing improved services to its target market in order to raise the number of order in the local market.

 Developing its employees through the proper training as well as proper motivation (Cohen and Cohen, 1995).

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4.2.2 Product/Market Scope

Recently UK ready meal market is more growing market. This is because of the increase in number of single family as well as their busyness. Moreover, people are so much health conscious as they do no prefer to have fast food.

However, considering the demand and expectation of customers BhanchaGhar is trying to offer its products. Now, BhanchaGhar is trying to offer the product lines of ready meal of Nepalese Cuisine in the UK market. Along with the product lines of ready meal of Nepalese Cuisine different country foods like Japanese, Chinese and Other Asian foods with ready meal item will also be offered by the business.

4.2.3 Basis of differentiation

BhanchaGhar will provide ready meal of Nepalese, Japanese, Chinese and Other Asian foods in the UK market. By his way people can get variation in their tastes. In case of providing foods, they mainly focus on the delivery of quality and healthy foods with rationale price. Again, BhanchaGhar offers its services to its customers throughout 24 hours seven days in a prompt manner. In this concept, it decided to have a good distribution channel to provide services its customers.

4.3 Competitive Advantage & Sustainability

Competitive Advantage & Sustainability of BhanchaGhar can be understandable through the understanding of its Competitive Positioning, SWOT Analysis and its value proposition (Osterwalder, Pigneur and Clark, 2010).

4.3.1 Competitive Positioning

It seems that Bird’s Eye, Tesco, Sainsbury, Iceland and Findus etc. are the direct competitors of BhanchaGhar (Harvard Business Review, 2014).

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Figure 20: competitive strategy of bhanchaghar

Source: Porter’s generic strategies (1985)

BhanchaGhar will provide broad categories of ready meal with a reasonable price, which means it is, will be a cost leader in the market.

4.3.2 SWOT analysis

Table 8: SWOT ANALYSIS OF BHANCHAGHAR

S- Strength W- Weakness

 Efficient management

 Presence of expertise

 Democratic leadership

 Location of the business

 Prompt delivery system

 Proper trained employees

 Diverse menu

 Unavailability of bank loan

 Absence of brand reputation

O- Opportunity T- Threat

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 Innovation of product lines

 Expansion of the business throughout the country

 Rivalry among existed firms

 Competitors strong competition

 Departure of the expertise

 Depression in the economy

4.3.3 Superior Value Proposition

Providing high quality food to customers at their home in a prompt manner is the proposition of BhanchaGhar.

4.4 Resource Needs

Table 9:requirED RESOURCES FOR BHANCHAGHAR

S U P P O R T I N G

A C T I V

Infrastructures  Acquiring loan form bank, attaining feasibility research on product and services, market, industry, organization and financials.

Human Resource Management

 Managing and administrating collector of raw materials, personnel of kitchen, advertising personnel, delivering personnel, job applicants

Technology Development

 Using their own websites can get order

 Using IT systems may ensure the In-time order and delivery as well as consumer research

 Technology based new methods of promotion can be discovered for example, launching mobile applications

Procurement  Purchasing logistics vehicles for

 Controlling the supply chain as well as its quality

 Purchasing equipment of kitchen & bar, ingredients of cuisine etc.

 Attachment with media

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T I E S

 Going green

PRIMARY ACTIVITIES

Providing ready meals at the home of customers

Marketing campaign

Visit of in- store

Online or Offline marketing

Delivery in a prompt manner

Highly customer oriented service

Clean environment

Accuracy of order

Employee training &

motivation In bound logistics Operations Outbound

logistics

Marketing and Sales

Service

From the above table, it is clear that in case of operating business of BhanchaGhar, it needs to have such types of resources that may support its primary activities as well as supporting activities (McKeever, 2002).

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4.5 Partnership Network

In the section 2.2.5, it is described who is involved with BhanchaGhar. Actually, it is a sole proprietorship business, where, 60% of financial support will come from bank loan. So, if their occurred any loses in the business, firstly it should meet up the bank loan, then remaining would go to the proprietor.

4.6 Value Deliverables to the Customers

Functional: providing marketing campaign, visit of in-store, online or offline marketing, introduction of technology based new promotional methods (Osterwalder, Pigneur and Clark, 2010).

Emotional: delivering products at desired destination in a prompt manner, and serving 24 hours seven days.

Competitive: competitive strategy of BhanchaGhar cost leadership in nature

Price: Pricing strategy would be competitive and reasonable comparing with others in the industry

Ethics: BhanchaGhar uses different utensils for the cooking utensils of vegetarians & non vegetarians. Religious beliefs are also considered. Local raw materials are used in order to support the local economy (Pinson, 2008).

5. BUSINESS PLAN

5.1 Approaches to deliver the business model

5.1.1 Industry, Company and Products

Ready meal business of UK mainly belongs to the broad category of food industry and in specifically the ready industry. Market of ready meal is growing popularity as the number of the single family is increasing as well as their busyness is also increased. Popularity of ready meal can be gauged from its market worth. At present the worth of ready meal market is 38.8 billion which is growing after 2007 in a compound rate of 3.1%. Consumption rate of this market is also

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rising after 2007 (Tagetik.com, 2014). Bartholdi Ltd, Cauldron Foods Ltd, Chesswood Foods, COOK Ready Meals, Creative Foods, Quattro Foods Limited, Crispy Snacks Ltd, Dalepak Foods, S&L Catering Limited, DelishDish Foods, Dragonfly Foods, Gluten Free Foods Ltd, Goodlife Foods Ltd, Kettleby Foods, Lodge Farm Kitchen etc. are the major competitor that dominating the market. However, ready meal is now a growing market. And in this industry competition is very high where the many companies are doing the business with almost same competitive advantage (Pinson, 2008). Companies’ policies like product penetration, new product development, diversification or new customer development for the business may bring success of them.

It is decided to establish a ready meal business by considering on the future prosperity of this market named as “BhanchaGhar”. This business will provide best quality of food to the UK people in their home as they want. To establish a brand name it will increase number of order in the local market. This can be happen through providing improved services to its target market by developing its employees through the proper training as well as proper motivation. Local Nepalese and Indian wholesaler will provide raw materials. And in London the food development centre will be established.

However, BhanchaGhar will provide the product lines of ready meal of Nepalese Cuisine as well as Japanese, Chinese and Other Asian foods. it is planning to provide four items to its customers, such as, BhanchaGhar Dry Meat Curry, BhanchaGhar Chicken Curry, BhanchaGhar Dumpling and BhanchaGhar Frozen foods. It will provide its products in the UK market by conducting local small and medium sized stores (Tagetik.com, 2014).

5.1.2 Key to Success

 BhanchaGhar creates differentiation from other business through providing various ready meals of Nepalese, Japanese, Chinese and Other Asian foods in the UK market. By his way people can get various tastes of foods.

 The main focus of this business is to delivering quality and healthy foods.

 They provide various items of foods with rationale price in this competitive market.

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 Again, BhanchaGhar offers its services to its customers throughout 24 hours seven days in a prompt manner. In this concept, it decided to have a good distribution channel to provide services its customers.

 Having expertise in each of the segments of business, such as, finance, production, marketing, human resource management etc. (Swedroe, Grogan and Lim, 2010).

5.1.3 Market

The ready meal market of the UK is highly demand able market. Here, the customers prefer the ready meal as the number of the single family is increasing and most of the citizens of UK are too busy to make their foods at home. Henceforth the fast food industry is not preferable due to the risk of health. Due to this causes the overall market consumption is rising. In this market, the chilled ready meals are considered 50% of the total market. Basically, customers prefer the flavor of the foods in which, new recipes and items inspired by various ethnic cuisines are being launched into the market (Taylor, Gartside and Taylor, 2004). As a demand able market it requires some changes. Here, most of the customers disagreed with the effectiveness of the market and they think the market should be developed more. Again, customers in the ready meal market want more quality foods and items from the market.

However, considering the market feasibility of BhanchaGhar, providing in the section 3.4.3, it is found that, the ready meal industry is more perfect for the high income level customers and the male customers prefer the ready meal foods more where the female customers prefer the home made meal. So, target market of BhanchaGhar is male customers’ and also customers belong to higher income level. In this case, competitive strategy of BhanchaGhar is to be cost leader, which is, providing broad categories of ready meal with a reasonable price (Swedroe, Grogan and Lim, 2010).

5.1.4 Marketing Plan

In order to get success from the inception, it is important for BhanchaGhar to adopt a successful marketing plan. There are different marketing approaches to adopt the awareness of customers, for example, word of mouth strategy, in store visiting, advertisement in newspapers, website reviews, marketing campaign, online and offline marketing etc. However, from the

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recommendation of customers BhanchaGhar decided these following approaches (Taylor, Gartside and Taylor, 2004) in order to create awareness of its customers:

 Marketing campaign

 Word of mouth marketing

 Visit of in-store

 Online marketing

 Offline marketing

FIGURE 21: CHOSEN SOURCES OF RECOMMENDATION TO SELECT THE READY MEAL

Source: made by Author

Here, by dealing with marketing campaign the company can get chance to show its products to targeted customers. And based on this customer can find out the differences and may decide whether to go or switching this business’s products.

Again, most of the people rely on the word of their nearest and dearest ones(Taylor and Gartside, 1998). It is important to keep happy customers to increase the business that may provide appreciated words to others. As word of mouth publicity is a trustworthy source of information for the higher socio-economic group, which is also an important marketing tool.

0 10 20 30 40 50 60 70 80 90

Very insignificant Insignificant Neutral Significant Very significant

No. of people chosen

friends Family Advertisements in newspapers

Offline promotions In store visiting Internet promotions

food blogs Newspapers reviews Food websites reviews

Marketing campaign Others

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In store marketing is marketing tool where BhanchaGhar will distribute brochures in the local store to distribute its target market, which may create awareness to its customers.

BhanchaGhar will develop a website that provides entire information of its product lines, which may play an important role to make customer awareness in this techno based world.

Advertisement in local newspapers, newspaper reviews etc. are also some marketing options of BhanchaGhar. But these are not initially practicing because of the cost (Taylor, Gartside and Taylor, 2004).

5.1.5 Design and Development Plan

The following table represents time schedule of this business plan, which provides the planning and execution of the business plan from its beginning to end:

TABLE 10: SCHEDULE OF BUSINESS PLAN

Sl.

No.

Name of the activity

Bi-week

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 1. Idea generation

2. Preparation of business plan 3. Secondary

research 4. Primary research 5. Research

assessment 6. Risk

identification 7. Risk analysis 8. Risk mitigation 9. Waiting for

loan approval

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approval from the authority 11. Taking house

rent

12. Coordination of required

equipment 13. Local

distributor selection 14. Recruitment 15. Utility setup 16. Employee

training 17. Inauguration

From the above mentioned schedule, it is found that the business plan of BhanchaGhar will be launched within 10 months if there is no interruption or occurrence of any unexpected situation.

5.1.6 Management Team

BhanchaGhar is a sole proprietorship business, where the owner controlled his business as well as enjoyed entire profit or loss.

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FIGURE 22: ORGANIZATIONAL STRUCTURE OF BHANCHAGHAR

In order to get success in this business the owner hired some specialist of each business segment (Young, 2007). At the same time it is needed some employees to operate the business, such as, employees required for cooking, raw material collector, managing the business, delivery of products, marketing, consulting with customers etc.

Here, the key personnel are mainly chefs based on which quality of products can be updated, sales and marketing employees from which customer get knowledge about the product and distributor and deliverer who are responsible for providing the ultimate services to its customers.

5.1.7 Operations Plan

Supply Chain Management

In order to make purchases BhanchaGhar will use electronic data exchange (EDI) system. This system allows keeping entire records from purchase to sale. Category wise (BhanchaGhar Dry Meat Curry, BhanchaGhar Chicken Curry, BhanchaGhar Dumpling and BhanchaGhar Frozen

OWNER

General Manager

Assistant Manager Production

Manager Employee

1

Employee 2

Sales

&Marketin g Manager Employee

1

Employee 2

Employee 3 Finance Manager

Account

Manager Human Resource Manager

Supply Chain Manager

Employee 1 Employee <

Business Plan on Ready Meal