Example Of The Business Strategy Essay
BUSINESS PLAN: FAST FOOD STALL
Business Plan: Fast Food Stall
Fast food chains abound in the neighborhood, particularly in places where foot traffic is heavy. This paper attempts to outline a business plan for a fast food business. It also assesses sample strategies to make the business model successful against direct competition in the market.
For the business strategy, the approach to be utilized is the method discussed by Roger Martin (2010) in the Harvard Business Review website. It consists of five interlinked questions that must be answered step-by-step. The five questions are the following:
What are our broad aspirations for our organization & the concrete goals against which we can measure our progress?
Across the potential field available to us, where will we choose to play and not play?
In our chosen place to play, how will we choose to win against the competitors there?
What capabilities are necessary to build and maintain to win in our chosen manner?
What management systems are necessary to operate to build and maintain the key capabilities? (Martin, 2010, para. 3)
The answers to these questions will have a corresponding effect on the business plan to be made in the later section of this paper.
First is the broad aspirations and the concrete goals. The main aspiration of this business is to serve the customers with high quality food at an affordable price and in a comfortable environment making the dining experience truly delighting. There are two concrete goals used to measure the progress of this business venture. These are (a) achieving excellent customer reviews and, (b) getting positive customer feedback and addressing the negative ones. For this venture, we define the happy customer as having a rating of greater than four out of five. This is done through a dedicated tablet at the exit point wherein customers need to rate the service from 1 to 5 (with five being the highest) before going out of the stall. Another mechanism by which business is improved is through addressing customer feedbacks primarily the negative ones. There will be a Facebook page where customers can post their feedbacks. The stall will also have free Wi-Fi to encourage participation of customers in giving feedback while enjoying their meals.
Across the potential field available, there must be a scope and limitation of the business. This is done by targeting a niche market for the food stall. This stall will cater to students and young professionals. There will also be a menu for kids for variety of meals, but basically, the menu will focus on the target customers. The menu will consist of common American favorites such as potato fries, burgers and hotdogs, and the house specialty which is the pizza. The company is planning to introduce weekly pizza favorites (like Philippine Sisig, Meat Lovers, Cheese Supreme, etc.) each week. This will be the “Pizza of the Week”. For the drinks, there will be carbonated beverages, fruit juices, shakes, tea and coffee.
In our chosen place to play, how will we choose to win against the competitors there? This is the third question. To win against competitors, variety of menu will be the key, but customer service is also a deciding factor. The menu will be studied further. Perhaps, a feasibility study for the proposed menu can be done on the target market, in the target location. The target location is near a school facility such as a high school, college, or university. Choosing a location is very crucial for the business as it can make the business succeed or fail. Another is customer service. They have to be engaged with the system of rating the service. In the long run, this creates a good impression on the part of the business.
The fourth question asks: “What capabilities are necessary to build and maintain to win in our chosen manner?” The proposed mechanisms on customer rating and on customer feedbacks serve as check to whether the business is valuing its customers. This is termed as repeat business, and customers will be coming back if they are satisfied. They will also be working advertisers and marketers of the food stall.
Lastly, what management systems are necessary to operate to build and maintain the key capabilities? Quality is the keyword here. There must be a mini quality management system in place. Since this is still a startup, team coordination is the key in food service operations. Training and retraining of personnel has to be documented. Documentation on recipes needs to be done to ensure delivery of consistent taste and flavor for each product. Basically a quality management system promotes “say what you do, do what you say, and be able to prove it”. Thus, the needed recipes and documents have to be made beforehand to make it right the first time. In the long run, standardization of best practices will happen due to the attention to detail.
Open New Business or Purchase Existing Business?
Based on the above business strategy, there are advantages and disadvantages of opening this business. One primary consideration is the location. Most locations near the school are already occupied by food establishments. A food stall located far from its customer base will have difficulty in succeeding. Also, existing business already have a wide customer base. Systems are already implemented. The challenge is for innovation and continuous improvement from existing performance.
There are advantages to opening the new business (based on the business strategy made). Firs, the menu is unique. Aside from the common fast food items, the stall specializes in pizza. The “Pizza of the Week” will be served for the whole week at a special prize. It creates variety and try-something-new mentality for the adventurous taste buds. Second, there is this simple approach of rating program. Once implemented, personnel can assess how well they have served the customers. A happy customer would certainly go back, and repeat business is the name of the game in fast food restaurants. Furthermore, customer feedback is important. With the free Wi-Fi zone, customers can give their feedback directly to the Facebook page. This has to be attractively displayed in the restaurant walls. Lastly, there is this idea of originality of work. A good entrepreneur is willing to learn and integrates best practices he has observed to his business. Business planning is similar to art, but it is also a science. It needs careful study.
What are the disadvantages of opening a new business? First, it has to be thoroughly planned and researched. In this case, the location, the menu, and even personnel have to be thoroughly planned. The 4M+E (man, materials, machines, methods and environment) has to be considered. Second, the niche market has to be identified, and it will take time to pull this niche market from their existing preferred restaurants. Third is compliance to food safety laws and regulations. The food stall must run within the law. Appropriate permits have to be secured before starting the business. The manager has to be well versed on issues such as minimum wage, youth labor, taxes, and other legal requirements (Beesley, 2010). Lastly, consultation with experts in the field is needed. Government agencies such as the Small Business Administration (SBA) and Small Business Development Center (SBDC) give assistance to startup businesses.
Looking into these considerations and weighing the pros and cons, it is difficult to decide. From the current perspective, it is better to buy a business (or franchise) to lessen the risk to capitalize on the branding and system of the mother food business. This gives a feel of the basics of the business first. Or perhaps, start with a small stall first (semi-permanent location) before investing higher capital. The business strategy cited in the first part of this paper involves high amount of capital, which I currently don’t have. I will try to limit my marketing approach with the Facebook page for customer feedback. Later, with additional capital, I can add the rating tablet for the stall.
In terms of business ownership, a sole proprietorship might be too risky. For startups like this, partnerships can offer less risk. For individual and partner entrepreneurs, bank loans and microloans from government agencies are available. The business plan just needs to be ready and well-researched. In my current financial position, it is better for me to opt for a partnership with a friend who is willing to supervise its operation. I would like to start small. Perhaps, we would search for a local high school or college and do some simple market research to study and point out our niche in the total cafeteria setting.
1. EXECUTIVE SUMMARY
1.1 Product: Pizza and Fruit Juice
1.2 Customers: Middle and High School Students
1.3 What Drives Us: To serve the customers with high quality food at an affordable price creating a delighting dining experience.
2. COMPANY DESCRIPTION
2.1 Mission Statement: Let's Eat Pizza provides pizzas of exciting flavors at affordable costs.
2.2 Principal Members
Manager- Business Partner
1 Supervisor- Business Partner with Salary
3. MARKET RESEARCH
3.1 Industry: Fast Food Service Industry
3.2 Customers: Student, Teacher and School Staff, Young Professionals (Majority are teenagers and young adults.)
3.3 Competitors: Pizza Hut, Shakey’s, Mc Donalds, Burger King
3.4 Competitive Advantage:
Good Customer Service
Variety of Menu (different pizza flavors)
Offers crowd favorites such as potato fries, burgers, and hotdogs
Fruit Juices (for drinks)
Offers Coffee, Tea, and Carbonated Drinks too.
Food Safety Regulations
No Smoking Law
Minimum Wage Laws
4. PRODUCT/SERVICE LINE
4.1 Product or Service: Lunch, Afternoon Snacks, Dinner
4.2 Pricing Structure
30% Markup for Profit to Make the Cost Competitive
Approx. $3/ slice depending on flavor --> Pizza
Approx. $2/ glass or cup --> Juice/ Drinks
4.3 Product/Service Life Cycle
4.4 Intellectual Property Rights
4.5 Research & Development
Already have list of recipes from previous pizza-making activities; Customer feedback-response.
5. MARKETING & SALES
5.1 Growth Strategy
Start with online campaign on Pizzas (via Facebook)
Customer Feedback Forms or Suggestion Box
Interview with Customers
Online Facebook Page
5.3 Prospects: Direct Selling
Making a business plan similar to the one above involves careful planning and paying attention meticulously to details. One limitation of this paper, however, is that it did not include the preparation of financial projections from specific assumptions and gathered information. This is important to lenders, banking institutions, and investors. The original strategy was limited by budget. In starting fast food businesses, it is better to start small and invest at appropriate times to maximize returns and grow the business. Furthermore, compliance to government permits and laws is necessary to do business the right way.
Beesley, C. (May 17, 2010). 7 Tips for Starting a Fast Food Business. United States Small Business Administration. Retrieved February 6, 2015 from https://www.sba.gov/blogs/7-tips-starting-fast-food-business-its-not-just-fries-subs-and-pizza-anymore
Martin, R. (May 26, 2010). Five Questions to Build a Strategy. Harvard Business Review. Retrieved February 6, 2015 https://hbr.org/2010/05/the-five-questions-of-strategy/