Business PlanESPERIENZAYour Innovation Our Taste

Submitted by:Group 9Abdullah MajeedBalawal ArifHassan SajjadBSc III A

Submitted to:Sir Salman EhsanOperations ManagementSummer I 2015

EXECUTIVE SUMMARYAt Esperienza our mission is not just to be any food chain, which provides you with pizza, burgers, cakes and delicacies but a chain provides you with an experience, which is worth remembering. Our slogan is Your Inventions Our Taste, which shows we put great emphasis of catering to exactly what customers demand, whether it being for a special occasions or a tough day after work, we have everything for everyone. Esperienza will operate through website, app, mobile vans, and telephones. However, its primary location where it operates for telephone, website and app orders is on Jail Road Lahore.ENVIORNMENTAL ANALYSIS

SEEKING CORE COMPETENCIESThe core competencies for Esperienza are the customization of meals by the customer and the online ordering. Customized meals will attract the customers specially youngsters and teenagers as they will be able to design the meal of their choice satisfying their needs. Whereas online ordering and timely homely deliveries will make it easier for the customers to order the desired meals and this will also increase the customer base. CORPORATE SOCIAL RESPONSIBILITYEsperienza is very well aware of the social responsibilities it owes to the society. For that matter all of the packaging of boxes and other items will be made of renewable materials.

OBJECTIVES AND MISSION STATEMENTThe title Esperienza means experience in Italian. As the name implies, the sole purpose of this service is to provide people with a one-of-its-kind opportunity to experience mass customization in their food by serving a wide variety of high quality food at a great value. The mission statement Your Invention Our Taste clearly describes our objectives. As this is a new venture, Esperienza aims to keeps its costs as low as possible to earn revenues in the shortest time possible. The strategic objectives are to increase profit margins and to keep the company in a good form financially and to compensate owners and investors for theirinvestment and risk. Conforming to the quality standards and employee health and safety laws of Pakistan, our business aims to provide a creative, respectful and healthy environment for staff and employees to ensure learning and efficiency at every step. Furthermore, Esperienza plans to attract customers by marketing and advertising and retain them by providing them quality. MARKETINGMarket SegmentationWe have divided the mass market into distinct groups on the basis of residential areas in which people live and in which we are planning to serve. For example Gulberg, Cantt, Defence etc. Target MarketingGeographically, as our first mobile van would be located in Liberty, Gulberg so our initial target market would be the residents of Gulberg. The geographic target market would increase as we expand our services to other areas as well. DIFFERENTIATIONProduct Differentiation: Esperienza is providing differentiated/customized products based on customers choices of ingredients. Service Differentiation: Esperienza aims to provide a differentiated service in the form of quality food from the start of the process till the end i.e. when the order comes in through website, call or mobile app till the preparation, the total time will be minimized to 10-15 min. The customer can either pick up the order from the mobile van or it will be delivered to their homes within additional 10-15 min making sure that the food is warm and fresh upon delivery.Positioning StrategyThe main focus is to increase awareness about the concept of customized meals among the people in the city of Lahore, initially Gulberg. This involves the techniques and strategies of describing who we are, what are we all bout and what are we offering. Therefore, we have price our products fairly, aim to keep our quality and standards high and execute the concept so that word-of-mouth will become one of our main marketing force.

MARKETING MIX STRATEGIESProductEsperienza is providing a wide range of food products from delicacies like pizza to desserts like cakes etc. Along with a standard menu, we provide a one-of-its-kind opportunity to people to customize the food according to their own choices from scratch using our high quality ingredients.PriceInitially, the products are priced in such a way that the cost is covered but prices are still less than the competitors. Market & CompetitorsEsperienza has a lot of competitors in this industry like Cone Heads, McDonalds, KFC, Hardees, Redolence, Mini Treats etc but none of these brands are offering the customized food opportunity to their target market. Our aim is to provide all the services at one place at the prices which would create a competitive advantage for our brand in establishing its name and image in the market.PromotionTotal promotion mix also referred to as marketing communications mix will consist of the specific blend of the following Advertising, Sales Promotion, Billboards, Social Media Marketing, Direct Marketing and Word of Mouth. Advertising would be done through billboards in the main areas of the city and brochures would be distributed and put up on the cash counters of the major stores like Al-Fatah, HKB, Hyperstar etc. Social Media Marketing is very crucial nowadays as almost all of our target market is very active on internet. After the venture is launched, word of mouth becomes the most important tool of marketing as people try and test the products and then further recommend it to friends and family. These marketing tools will be used to persuasively communicate customer value and build customer relationships.PlaceEsperienza is an online food chain so orders can be made online through mobile app, website and phone calls. The mobile vans situated in different areas will serve as the pickup points from where people can pick their orders or they can avail the home delivery facility in Gulberg. First mobile van will be located in Liberty, Gulberg. The expansion plans include the locations like Fortress and Defence. SERVICESWe at Esperienza are offering our customized services through mobile app, website, phone calls and mobile vans. There is no other brand in Pakistan which is offering such services through such online means. Offering different services means we have to tackle different challenges like special personnel training to handle and process online orders.

HR Hiring and PersonnelEsperienza wants to delight its customers through service and quality food. For outstanding services, it is necessary for any organization to have a very good personnel force that can interact with customers in a professional way to build long term customer relationships. For this, staff will be recruited through a preset criterion which fulfills the quality and employee working laws of Pakistan. First the need will be identified and positions will be developed like chefs for kitchen, phone operators who will receive orders, computer software specialists who will maintain the app and website etc. Professional people will be appointed to train all the recruited employees depending on their prior skills. A proper corporate culture will be developed to create a respectful and friendly environment for the staff so that the efficiency is maximized at every step. A code of conduct would be developed for the entire staff; any employee who does not follow or violate the code would be penalized. Proper uniforms would be designed to ensure consistency in all aspects. Monitoring and evaluation will be on regular basis to identify and improve any problems to avoid any major consequences.Customer Care ServicesCustomer Feedback is very crucial for improvement in the organization. We at Esperienza plan to gather customer feedback after every order or transaction. That will be done through easy-to-approach complaint boxes available at the mobile vans or feedback forms if customers are ordering online through website or mobile app. Every order will have a follow up procedure that will ensure that the food is delivered to the customer within the specified time range. OPERATIONSLocation DecisionEsperienza will operate through both a physical location as well as a non-physical one. Esperienza will have a dual channel. First, would be via telephones, websites, apps and second would be from a mobile van. The mobile van would be situated in liberty gulberg that is a population dense area and therefore, would provide us a good exposure to customers. The Via telephone etc. channel would involve receiving orders and processing of these orders will be done in a premises which is located on jail road, Lahore. Layout DecisionsThe premise need not be large as it a place where orders will be taken (telephone operator to receive the orders), processed (kitchen), and then packaged for delivery (by delivery guy on a motorbike). The mobile vans on the other hand would consist of a built in kitchen for the processing of orders on the spot. The kitchen would have fryers, pizza ovens, microwaves, refrigerators, cold drink refrigerators, and utensils, cleaning area. This applies both to the mobile vans and premises. The premises would also have an area for receiving customer orders via telephone, and computers for automating orders and sending supply information to our suppliers.ProductsThe items that Esperienza deals in are diverse. We have a regular menu which compromises of beef and chicken burgers as well as beef and chicken pizzas, chicken wings, lamb ribs and fries. We also have a variety of cakes, which we deal in from a basic dessert to a wedding cake, birthday cake we have them all. We also have a cold menu, which is compromised of different variety of beverages, ranging from the classier Pina colada to an ordinary soft drink like cola. For our burgers, pizza and cakes we allow for customization or a degree of process focus. The customization will be explained in the The process aspect of operations.The ProcessThe process involves calling on our helpline, where a customer contact employee will receive the customers offer send it further for processing, tell the customer the amount, ask him for where to be delivered and the estimated time for delivery. Meanwhile, once the order is received it is assigned to one of our qualified chefs, which makes use of the state of the art technology of a pizza oven and fryers and a microwave to make the order. Once the order has been made, it is placed in a box, which preserves the heat to give it that freshness people desire. The order is put in a heat preserved box, which is then delivered to the relevant address via the delivery guy on a motorbike. If the order is done through our website or app where people want to customize their orders, by making use of a java software inbuilt in that website or app people can customize the order the way they want i.e. it allows the customer to choose a base then fillings, and also allows them to decide how to place those fillings. When they are customizing the cost is automatically updating. Once they have customized, they can submit their order by providing their details and then the process is the same through the kitchen. If the order is done on a mobile van, the process is the same but now it involves a more face-to-face interaction.Managing QualityWe at Esperienza believe in doing things right the first time. Esperienza follows a concept known as total quality management (TQM). To achieve TQM, Esperienza will look to be ISO certified, mainly ISO 9000, 14000 and 22000. ISO 9000 would involve the overall quality of our process, whilst ISO 14000 would be to achieve an environmental friendly process so that to fulfill a part of our corporate social responsibility. To achieve ISO 14000 the boxes that we will use will be made from recyclable material and our equipment will let off the lowest emissions possible with a proper waste management system whereby waste would not be dumped, but sent for recycling where possible. ISO 22000 provides us with food safety, which is ideal for our business as we are dealing in food. To ensure we our quality and hygiene we will encourage inspections from Punjab Food Authority to obtain a certificate of hygiene levels. Owing to the fact Pakistan is an Islamic nation, it is essential our food is certified Halal. We will obtain the Halal certification from PNAC (Pakistan National Accreditation Council). Key tools, which we will use from TQM, are Employee Empowerment, where we will be open to suggestions from employees via quality circles held every Friday to encourage new ideas. Another technique would be JIT that I would like to discuss in more detail when I go to supply chain and continuous improvement where we would look to improve our process from taking the order to delivery more efficient. Tools that we will use from TQM involve a histogram to ensure that the boxes for holding the burgers, pizzas and cakes are of the right size by looking at the frequency of bad boxes and customer complaints. A service blue print will explain the whole process in more detail. Check sheets will be used to record the number of complaints we receive from our customers based on specific defects. Customer feedback is appreciated and will be done via providing a questionnaire, on the telephone or on a card from the mobile vans or on our website or app. The Questionnaire would involve asking customers to rate the service on a scale of 1 5.

CHECK SHEET

12 3 pm3 6 pm6 9 pm9 2 am

Defect (Taste issues)IIIIII

Defect (Order burnt)IIIIIIII

Defect (Order Delays)IIIIII

Defect (Packaging damaged)III

* Frequency entered is only an example of how the problem will be identified.

Supply Chain IntegrationThe suppliers of Esperienza would be K&N and Zenith for the meat. We will go into co-branding with Pepsi by ensuring we provide only their products and not coca colas. The supply process would be of a JIT with supply chain automation. JIT is preferred so that to keep our inventory holding costs low and to identify flaws in our supplies such as bad quality batch of meat. In this way not only do we keep costs low but also ensure top quality for our customers. Supply chain automation implies that we will allow K&N and Zenith to receive our inventory levels via computers and once they drop to a low, an automatic order would be placed for fresh supplies. Building a good supplier relation is a key to success in todays world and therefore, we will also take suggestions from our suppliers for the best supplies to meet our products. Example, Zenith might tell us people demand Angus meat, so we should incorporate it into our menu. Taking suppliers as your equal is a key to success for Esperienza.MaintenanceEsperienza will hold periodic maintenance of its equipment such as kitchens equipment for new technology, as well as maintenance of our mobile vans to improve productivity and efficiency and also maintenance of our telephone networks by replacing lines, new operator equipment, choosing a helpline number which matches with one of our most selling menu to ensure easy remembrance. Maintenance of our website as well for new offers or changes.Human Resources The HR of Esperienza would include qualified chefs that have an experience in professional cooking. Customer Interactive operators, which have a good control over the English as well as Urdu language and have a customer friendly character to charm them. A website moderator, which would update the website for new offers, maintenance and changes. The website moderator would also be responsible for managing the Social media pages for promotion. An app designer would be needed for creation of Esperienzas app. Mobile van operators would be needed to ensure operation of these vans. Motorbike delivery people would be needed to provide order to customers. The financing department would involve skilled individuals who are experts in forecasting and financial analysis. Similarly, in the marketing department we would have personnel such as a brand ambassador and the whole creative and promotion team that would convey Esperienzas image. To manage recruitment, training, interviews and other HR aspects, we will have a HR department led by a HR manager.FINANCIAL PLANEsperienza is based on a business concept your innovation our taste. Esperienza is an online concept where we take orders via telephone, internet and mobile applications. We also operate through mobile vans with fully equipped kitchens. We have approached the financial plan as follows:It is estimated that in order to launch and start up our concept we will need almost 15 million Rupees (including legal costs, advertising and other related expenses). In case of this venture the owners will contribute Rs 7 million towards startup capital and secure a loan of Rs 8 million to complete their required start-up funding. The breakdown of the total budget is as follows: Marketing and advertising-Rs 1.5 million. Operations- Rs 9.75 million Human resource department- Rs 2.25 million Other departments- Rs 1.5 million.

Start-up ExpensesAmount (Rs)

Graphic logo and name creation50,000

Office furniture542,250

Equipment & Machinery (Mobile vans inclusive)9,150,000

Raw material supplies750,750

Brochures7,000

Utilities Expenses100,000

Advance rent for six months2,000,000

Preliminary Expenses750,000

Hats & Merchandise50,000

App creation150,000

Maintenance Cost100,000

Wages & Salaries600,000

Boxes & Packaging Expenses500,000

Miscellaneous Expenses250,000

Total start-up Expenses15,000,000

Revenue Stream %age of total sales

Home Deliveries70%

Take away from mobile vans 30%

BREAKEVEN SALES Projected fixed costs=2,640,000 BREAK EVEN SALES VOLUME (Rs) =FIXED COSTS/ (1-(VARIABLE COSTS %)) Break even sales= 2,640,000/(1-0.60)=6,600,000 BREAK EVEN SALES IN UNITS=BREAK EVEN SALES IN RUPEES/UNIT SALES PRICE Break even sales in units=6,600,000/600=11,000 units60% Variable costYear 1 Projected EstimatesYear 2 Projected EstimatesYear 3 Projected Estimates

Break even salesRs6,600,000Rs5,000,000Rs5,750,000Rs6,612,500

60% variable costsRs3,960,000Rs2,410,000Rs2,651,000Rs2,916,100

Gross profitRs2,640,000Rs2,590,000Rs3,099,000Rs3,696,400

Fixed costsRs2,640,000Rs2,640,000Rs2,640,000Rs2,640,000

Net IncomeRs0.00(Rs50,000)Rs459,000Rs1,056,400

The above calculations indicate that in order to be profitable Esperienza will have to sell in excess of 11,000 units. Assumptions Dealing in one product only. Average price per unit assumed to be Rs. 600.00 Variable cost is assumed to be 60% of sales. Sales increase by 15% per year. Total variable costs (raw materials, salaries, utilities, rents) increase by 10% per year. Ratio Analysis

Year 1Year 2Year 3

ROI=Net Profit/Cost of Investment-50,000/15,000,000=-0.33%459,000/15,000,000=3.06%1,056,400/15,000,000=7.04%

In the first year the company will have a negative ROI as the projected sales are less than the breakeven sales which results in a negative net income of Rs 50,000. However, in the following years (Yr 2& Yr 3) sales are in excess of the break-even sales and the variable costs have been somewhat controlled which yields a ROI of 3.06% and 7.04%, respectively.

SERVICE BLUE PRINTCONTROL-CRITICAL PATH ANALYSISCRITICAL PATH METHOD FOR MOBILE VANS

ACTIVITYIMMEDIATE PREDECCESORACTIVITY TIME (days)

A Purchase van-2

B Install basic kitchen foundationA3

C Install EquipmentB2

D Set up power and electricityB2

E Paint Van in Esperienza ColoursA1

F Design the kitchenC, D1

G Test run the vanE, F2

Critical path1: A, B, C, F, G = 10 daysCritical path2: A, B, D, F, G = 10 days

FUTURE DEVELOPMENTSThe future developments at Esperienza involve expanding our mobile vans to different areas such as fortress stadium for targeting people in Cantt and DHA Y block for targeting people in Defence Housing Authority. We will also be looking to expand our menu by going into a diversity of other food i.e. continental, Thai and so on.

PROPOSED PRODUCT MIXThe proposed project is assumed to provide customers with a variety of fast food items as outlined in the following menu:Standard Burgers Price (Rs) Standard PizzasPrice (Rs) Standard Cakes Price (Rs)

Angry Angus (Beef)425Smoky Chicken BBQ Pizza575Malt Heaven (Chocolate)700

Uncle Bills Chicken Burger375Smart Veggie Pizza425Vanilla Delight550

Lamb and Mint Burgers450Beef Tango Pizza500Nutty Red Velvet625

Design your own burgers:Add a Bun of your choice (Rs 125): Plain White Bun, Brown Bun, White Bun with Sesame Seeds, Oregano Bun, English muffin, Wheat Bun, Brioche.Choose your Pattie: Beef Angus (Rs 250), Beef Simple (Rs 200), Chicken Mince (RS150), Chicken Steak (Rs 175), Lamb (Rs 250), Turkey Bacon (Rs 225).Include as many veges as you like (Rs 75): Cucumbers, Green Bell Peppers, Lettuce, Red Onions, Tomatoes, Jalapenos, Olives, and Pickles.Add your own flavor with these delicious sauces (Rs100): Chipotle Southwest, Light or Regular Mayonnaise, Mustard, Vinegar, Sweet Onion, Tomato Sauce, Mushroom Sauce, BBQ Sauce, Thousand Island dressing.

Build your pizzas: [large (Rs750), Medium (Rs 600), Small (Rs 350)] Choose the Crust: Hand Tossed, Deep Pan, Thin Crust, Stuffed Crust Vege Toppings: Black olives, Mushrooms, Onions, Peppers, Pesto, Pineapple, Spinach, Eggplant, Tomatoes, Garlic, and Sweet Corn. Meat Toppings: Beef, Chicken, Pepperoni, Sausages, Shrimps. Seasoning: Red Crushed Chili, Thyme, and Oregano, Basil, Mixed Herbs. Cheese: Parmesan, Mozzarella, Cheddar, Goats Cheese.

Design your way to the perfect cakes: (Rs 899 per pound) Flavors: Chocolate Malt, Chocolate Fudge, Double Chocolate, Triple Chocolate, Chocolate Mud, Chocolate Mousse, Red Velvet, Strawberry Mousse (seasonal), Mango Mousse (seasonal), Vanilla Cream, Chocolate Chip, Mocha Coffee, Death by Chocolate, Cookies and Cream. Shape: Round Tall, Round Broad, Square Tall, Square Broad, maximum 3 tier cake. Add-ons: Any text and Decorations.Combo dealsCombosItems Price

Combo deal 1Uncle Bills Chicken burger/fries/drink425

Combo deal 2Standard smart veggie pizza/garlic bread/drink475

Family deal 12 Uncle Bills chicken burger/1 angry angus beef/ Fries (4)/Drinks (4)1799

Family deal 21 large beef tango pizza/ 1 medium smart veggie pizza/garlic bread/Picture (1)1799

Jumbo deal5% discount on purchase of above Rs 2000