- 120 words in an "elevator pitch" format. My business is an app powered food delivery business in Beijing, which allows businesses that do not deliver offer their food with our delivery service. The business name is Fast Food. This company will hire people for delivery, so there is no necessary for restaurant staff to deliver the food. People will order through the app on phone or website; there are menu and picture on that app and website. Our profit is from top parties, the restaurant and customers. 15% delivery fee of the order from customers, 10% of the order price from restaurant. Our main advantage is that with our partnership with restaurants, we can customers their food very fast, with need to be waiting for the food. As the restaurant receives our order, they will prepare our order first in line. It will save a lot of time for customers and our delivery employees. The site will offer Groupon type deal on our app and websites, which we will work out with the restaurants that we are partnered with. Third advantage is that there are a lot of people in china, so our market share is very huge. It is a new business in china; there is no other company like us.
- Validating Trends
China’s Growing middle class has been well documented. The Chinese middle class has been defined as families earning between $10,000-$60,000 in annual income. (CNN Money, 2012). As CNN Money points out, “In China, the middle class is all concentrated in big cities, not like in this country, where a lot of the middle class are in the suburbs.” This creates a group of Chinese people with discretionary income concentrated in a small area. For a delivery business, this is important, since the cost for transportation will decrease and the time it will take to deliver will be shorter than covering a larger space.
CNN Money points out that this is a relatively new group of consumer spenders, “The New middle class emerged in the last 15 to 20 years. Fifteen years ago, people didn’t have cars yet. But in the last seven, eight, or nine years everyone has a car” (CNN Money, 2012). Most people working in jobs in the city have a college education. Also, the situation for government employees has improved propelling many to the middle class. In the last 15 years, their income has tripled. Big cities also have a lot of multinationals who employ college graduates and pay relatively better than most Chinese companies. The younger generation has the income to eat restaurant food, but in many work environments they do not have a long period for lunch.
The Daily Mail points out that the average lunch break in the world has been reduced to just an average of twenty-nine minutes (Daily Mail, 2014). As the country shifts to a service economy, the amount of time given for lunch breaks decreases. Fast Food will help address the need of workers no longer having as much time for lunch and be a way for them to order from restaurants that would otherwise be too far away for them to eat.
As China shifts from a rural to an urban culture, part of the change will be in lunch eating habits. Meals that were once an important moment of the day will now be a necessary break in between a grueling office schedule. This market has not just grown in the last ten years; it is expected to continue to grow. Mckinsey & Company estimates that by 2022, more than 75 percent of Chinas urban consumers will earn between $9,000 and $34,000 a year.
Everyone needs to eat, and a food delivery app has the potential to be very repeatable in other cities and to continue to grow with relatively low startup capital due to it not needing a physical office.
- Direct and Indirect Competitors
Jin Shi Song (JSS) is a direct competitor. It is a website and app that allows users to order from restaurants online and make reservations. It has an easy to use interface, and a design that is elegantly laid out. Like Fast Food, JSS also has pictures of food online.
The basic difference between how this operates, is that this app and website connect consumers with restaurants that already offer delivery options. Fast Food will connect consumers with food from their favorite restaurants, which do not deliver.
Another Direct competitor is the website and app Sherpa’s Food Delivery Service. This service operates in Beijing, Suzhou and Shanghai, three major cities in China. Likely, they will continue to expand into other markets. Sherpa connects people to their favorite restaurants. TO date they have registered with 307 restaurants and can offer costumers 91m405 different dishes. While the interface is not as sleek as JSS, the company offers the same service that Fast Food will be offering and will be a serious competitor as it tries to become the most popular such service.
One major weakness of the current Chinese applications and websites for ordering food delivery is that they have dated interfaces. One indirect threat to Fast Food is if the Western companies upon which it is modeled, such as Groupon or Eat24 begin to operate within the Chinese market.
- Factors from the business model canvas.
Key Partners
One of the most important aspects of the business will be our relationship with the restaurants who are using are service. Without their competency and corporation, Fast Food would not have a product to sell. Restaurants can be stressful work environments, especially around lunchtime. Fast Food will have to have conclusive arrangements with them in order to not interfere with their business and also in order to communicate the orders effectively and to coordinate that with the pickup of the delivery drivers from Fast Food.
Key Activities
The key activities of the management of Fast Food will be to supervise and dispatch and the delivery unit. Both of these units must work in tandem to operate an effective business. IF they are out of sync, costs per unit increase substantially.
Key Resources
The key resources are personnel, technology, partnerships and brand recognition. Personnel can further be broken down into sales people, dispatch units [dispatch and delivery], IT personnel, web design and public relations and marketing.
Customer Relationships
The design of the application, the usability, and the menu options will all have to be written with the costumer in mind. The key factor that will decide the success of Fast Food is whether or not costumers will continue to use the interface. The marketing can convince people to try the product, but if they try it and are unhappy, then they will no longer use the product and no matter how much they see media advertising the service, they will be unlikely to give it another try. Customers will be incentivized to continue to use the Fast Food app.
Value Proposition
As people’s time becomes a more and more precious commodity as China because increasingly westernized, there will be an advantage for employees who decide to order in food rather than spending the time to go out and eat it. This will be the value proposition that costumers will be presented within Fast Food’s marketing plan.
- competitive advantages, operation management method and marketing strategy of my company
The marketing strategy for Fast Food is simple, grassroots and proven effective. Cornelius de Kluyver in his book “Fundamentals of Global Strategy: A Business Model Approach has written about the effectiveness in grassroots marking campaigns in bicycle sales. Kraft was able to successfully pair milk with cookies using a simple image marketing campaign (Kluyver, 2010).
The marketing strategy for Fast Food is to reach out to potential customers in three ways. The first is to market by putting flyers in our partner restaurants. This way we know this is a market segment that enjoys the food of these restaurants. The flyers will entail how even when they do not have time they can order this restaurants food and have it delivered. This marketing provides a win-win for Fast Food and the restaurant, which will likely be selling more products as a result of it.
The second part of the campaign is a sticker campaign. Stickers are very popular even among professionals in China, and it is not uncommon to see notebooks adorned with them. Fast Food will produce 1 million stickers and employ 100 people to distribute them key areas. If each can give away 1,000 stickers a day, it should take two days to deploy 1 million stickers in neighborhoods where Fast Food delivers.
Online targeting. Fast Food will do an ad buy in key online website markets that young professionals in Beijing are known to visit. Fast Food will do Ad Buys for the morning leading up to lunch and emphasize the convenience of the service in a time-strapped environment.
Management will be two tiers, executive and then department. There will be an IT department, a delivery department, sales and marketing and a systems integration department.
The systems integrations department will ensure there is proper communications between the departments and will be a special department tasked with unique operations management. The IT department will be tasked with ensuring that the technology runs efficiently.
The competitive advantage is that Fast Food is targeting a growing market segment and is entering the market at a time when there are few competitors for a potentially very large market. The systems interface will be user-friendly, and the outreach will be direct grass roots, a relatively inexpensive. Fast Food will hire freelancers when needed, through sites like the oDesk, and it will be operated out of a virtual office, saving extensively on operational costs.
Costs will be kept extremely streamlined in the first year. The sales department will also have the duties of managing the marketing of the company. The dispatch department will be started at a minimum and added to as sales pickup.
In this paper, you also need to search for financial information. Please project and predict financial information. forcaste the income, cost and so on. In this part, i need income statement and balance SHEET. YOU CAN PUT THEM AFTER REFERENCE LISTS
- Customer Discovery
1. What is your biggest frustration in ordering food online?
The first is that I often forget my password when logging in. For security reasons many establishments do not record passwords, customers do not remember their passwords, and so they have to retrieve them through a forgotten password system.
2. Are you able to get your favorite food by ordering online? No, some of my favorite restaurants do not currently deliver. This means that the only way I can get to them is by physically going there.
3. How could we make the current food ordering services you know about online better?
One way that my company could solve this is to encourage users to sign in with their already signed in social networks. Many leave these networks logged in on their devices and so they would not need to enter a password to access a service that would have their information saved.
4. What is the most important consideration for you when ordering food online?
Costumers did not want to have to enter credit card information every time they ordered food. But they did worry that if a system remembered their payment information then it might not be secure. The best solution that Fast Food could offer is to store payment information but to have it only accessible by a password such as, “what is your favorite pet.” The password would need to be something that was easy for the customer to remember.
5. How much more would you be willing to pay for your favorite food if it could be delivered?
For such a service, I would be happy to pay 15% of the total price.
References:
Hills, S. (2013, January 25). Whatever happened to the lunch hour? How breaks have been reduced to just 29 minutes because we're too busy. Mail Online. Retrieved September 29, 2014, from http://www.dailymail.co.uk/news/article-2268092/Whatever-happened-lunch-hour-How-breaks-reduced-just-29-minutes-busy.html
Hungry?. (n.d.). Food Delivery. Retrieved September 29, 2014, from http://denver.eat24hours.com/restaurants/index.php
Jin Shi Song. (n.d.). Food Delivery App . Retrieved September 28, 2014, from http://www.jinshisong.com/
Kluyver, C. A. (2010). Fundamentals of global strategy a business model approach. New York, N.Y.] (222 East 46th Street, New York, NY 10017): Business Expert Press.
Luh, T. (2012, April 25). The powerful middle class in China. CNNMoney. Retrieved September 28, 2014, from http://money.cnn.com/2012/04/25/news/economy/china-middle-class/
Mapping China's middle class. (n.d.). McKinsey & Company. Retrieved September 29, 2014, from http://www.mckinsey.com/insights/consumer_and_retail/mapping_chinas_middle_class
Sherpa. (n.d.). Food Delivery Service . Retrieved September 28, 2014, from http://www.sherpa.com.cn/citySelect.shtml
