Business Plan Assignment: Business Case Analysis of INSTAFOOD

Question

Task:
Prepare a business plan assignment on the new business venture of INSTAFOOF identifying the vision, value, mission, and business.

Answer

Introduction
The business venture is the new business that can take to offer benefits to customers with an expectation to gain financial growth. The present business plan assignment focuses on the identification of the vision, value, mission, and business aim of INSTAFOOD. Identification of market conditions of INSTAFOOD delivery applications along with marketing strategy is also discussed in this report.

Evaluation of technical feasibility

Purpose, mission, vision, and values
The primary purpose would be the provide high-quality homemade and healthy food to customers. The mission would be to provide the highest quality product at lower prices so that customers can easily afford it to achieve the best customer experiences. The vision would be the keep the company abreast of the latest market changes and demand. As opined by Grover et al. (2018), the value proposition is the primary aspect that determines the way business helps customers to satisfy their needs. Promote the consumption of home food and avoid the waste of it, connecting users through the creation of a community based on transparency, trust, and satisfaction of our users.

Product/Service
Different types of homemade food would be served to customers to satisfy their needs and wants. Foods may include different dishes of breakfast, lunch, and dinner for customers from the age range of 15 to up to 60 ages.

Main purpose
The primary purpose of the firm is to help people with free time to generate some extra money and people without time by providing this homemade food service. Reaching out to each and every place in the city is the primary service providing the purpose of the company at all. Achievement of sustainability and providing satisfaction to customers would be the primary value of the company at all.

Functionalities
Preparation of fresh food that can satisfy the needs and wants of customers would be the primary function of INSTAFOOD. Getting constant orders and replacing and reverting back the order to customers would be the primary functionalities of the application. Taking orders online with checking for review and rating for further improvement will be a necessary part of the function taken by the application.

Schema

Figure 1: Development and service scheme of online food delivery application UK

(Source: Developed by author)

Market launch
There are certain necessary steps that help food delivery businesses to align their food delivery application (Cha and Seo, 2020). The steps that need to be required to launch the application of INSTAFOOD are as follows:

Table 1: Market launch activities of INSTAFOOD

(Source: Developed by author)

Risks Analysis
Development of food delivery applications of INSTAFOOD would be associated with certain forms of risks. The potential risks are as follows:

Table 2: Risks Analysis for the development of INSTAFOOD app

(Source: Developed by author)

Evaluation of market feasibility
From market analysis, it has been identified that the overall revenue of the food delivery application in the UK reached US$17,711m in 2022 (Statista.com, 2022). It has also been identified that the annual growth rate (CAGR 2022-2026) of UK food delivery applications has increased by 10.13%.

Figure 2: Market revenue of online food delivery application UK

(Source: Statista.com, 2022)

STP
Segmentation
The sector has been segmented by several factors like product type, geography, by needs of customers. INSTAFOOD application also segments its market based on demography, behavior and psychographic factors. INSTAFOOD will choose customers that would have a possible attitude towards the quality of online food delivery.

Targeting
In addition to this, people from the age group after 15 years to up to 60 years will be targeted to deliver quality food by the application. People that lead modern lifestyles and have a craving towards ordered food will be segmented as potential customers by INSTAFOOD.

Positioning
In order to position into the market, unique selling points (USP) will be used that can help the company to attract a large segment of customers. Providing unique value to customers like consumption of home food and avoiding the waste of it could be a better idea for INSTAFOOD.

Barriers to Entry
As the competition into the UK food delivery sector is very high, it creates pressure for new entry (Li et al. 2020). Hence, it will be the most important entry barrier for INSTAFOOD; the primary rivalries will be Deliveroo, Just Eats, FoodHub, Dominos, and Zomato.

Market share analysis
With the help of the TAM-SAM-SOM model, the market condition of a new venture can be analyzed effectively (Denault, 2020). The model could also be applied to the case of INSTAFOOD; these are as follows:

Competitors’ landscape

Table 3: Competitors’ landscape

(Source: Developed by author)

Intellectual property strategy
INSTAFOOD will have some common form of trade license along with all intellectual property strategy so that there is no barrier in doing the business operation. INSTAFOOD will focus on patent portfolio management so that no other business can steal its name and serve customers with relatively poor quality. An IP strategy will also be used so that there is no issue of harassment of doing business by taking the brand name of other businesses. Confidentiality and Invention Assignment is another important aspect that can help INSTAFOOD to engage their employees to manage the confidentiality of the business at all. The following copyright and assigning terms and conditions will also help the app to be secured from other apps with similar names and business operations.

Core functionalities

• On-demand food operation regarding taking orders and placing them to customers would be a necessary function of the delivery app.
• Providing contact information for the delivery person along with the GPS Tracking in Real-Time would be a necessary function of the application so that customers can check the time and location of the delivery person for getting the food.
• Collection of feedback and improving the operation as per the needs of customers would also be a necessary function of the app.

Marketing Mix
+ With the help of the 4Ps of the marketing mix, the marketing plan of a business can be easily identified (Pepels, 2021). The plan for the INSTAFOOD is as follows:

• Price: Lower price strategy will be used to deliver homemade food to customers.
• Place: Online distribution channels only be used to deliver foods to customers.
• Promotion: social media and online media channels will be used to protect the name of the brand after all.
• Product: Different forms of homemade breakfast, lunch dishes, and dinner dishes will be delivered to customers by INSTAFOOD.

Communication plan

Table 4: Communication plan

(Source: Developed by author)

Evaluation of financial feasibility
Business model
The business model of INSTAFOOD is characterized by a business model which is a multisided platform, on-demand, and aggregator. This business model involves three aspects- end customers, delivery agents, and food suppliers. The homemade food service provider shall enlist themselves in the INSTAFOODS app for the end customers to check the menu and place an order. Thereafter, Fooders will pick up the order from the food service provider and hand it over to the customers.

Revenue streams and pricing
The three primary sources of revenue chain for INSTAFOOD shall be the subscription model where the cost per sale method will be applicable, Fooders in terms of % of the commission received on every successful delivery, and Ads.

Subscription model: A subscription model shall include various plans starting from the 1-month plan, 3-months plan, 6-months plan, and 12-months plan. With the subscription model, the customers shall choose among the various plans and benefits wherein they shall get priority delivery service and no delivery charges at a minimal rate (Williams et al., 2020). This model will be the most prominent revenue stream for INSTAFOOD.

Commission on orders: This will be the second-largest revenue stream since INSTAFOOD shall earn a 30% commission from the homemade food service provider on the total cost of every order placed by the customer using the online platform.

Ads: Interested homemade food service providers shall sign a special contract with INSTAFOOD to offer an exclusive promotion on the websites and apps of INSTAFOOD for generating more sales. Therefore, these food providers will pay special commissions and fees based on the deal negotiated.

Cost structure
The cost structure of INSTAFOOD shall involve indirect expenses as in:

• Utility expenses
• Insurance deposits
• Sales and Marketing for £5182 excluding stationery, brochures, outdoor signage
• Website development
• Office, kitchen, and janitorial supply chain expenditure
• Leasehold improvement inclusive or contracts fees and licenses and permits.

Budget baseline

Forecast and sales growth
Based on the market research conducted, it has been found that it would be easy for INSTAFOOD to increase their sales over their first business years. It is viewed that from the first month, INSTAFOOD can reach 100 customers on an average to over 1000 customers within the first year of operations. Glovo and Uber Eat currently concentrate on a specific area, whereas INSTAFOOD shall target customers that are beyond the reach of these two market competitors (Hirschberg et al., 2016).

The table above shows the forecasted sales wherein it is anticipated that the sales shall increase every month for INSTAFOOD. Once the company achieves its first few customers, the sales will increase with the help of customer retention and gaining new customers through a line of networking. In the first year of business, INSTAFOOD expects a sales growth from 10% in Year 1 up to 25% by the end of Year 3. Based on the available data, and the size of the potential market, it is anticipated that the business will reach close to 1 million pounds by the end of 2027.

Conclusion
From the overall discussion, it can be said that INSTAFOOD will offer homemade quality food to its customers. Lower price tactics will be used so that they can help customers from different segments to adopt their services. Special media channels and websites will be the primary communication channel for INSTAFOOD. On-demand food operation regarding taking orders and placing them to customers would be the primary duty of INSTAFOOD delivery applications, after all.

Reference list
Cha, S.S., and Seo, B.K., 2020. The effect of food delivery application on Customer Loyalty in Restaurant. Journal of Distribution Science, 18(4), pp.5-12.

Denault, J.F., 2020. Situation analysis: MedLung and the TAM-SAM-SOM model. The Business & Management Collection.

Grover, V., Chiang, R.H., Liang, T.P., and Zhang, D., 2018. Creating strategic business value from big data analytics: A research framework. Journal of Management Information Systems, 35(2), pp.388-423.

Hirschberg, C., Rajko, A., Schumacher, T. and Wrulich, M., 2016. The changing market for food delivery.

Li, C., Mirosa, M. and Bremer, P., 2020. Review of online food delivery platforms and their impacts on sustainability. Sustainability, 12(14), p.5528.

Pepels, W., 2021. The 4Ps in Marketing-Mix. Research and development, 35, p.38.

Rahmawati, N., Ridwansyah, A.R., Dinata, C., Savitri, N. and Herdiana, N., 2022, January. Perancangan UI/UX Pada Aplikasi Nutrizecom Dengan Metode Design Thinking. Business plan assignment In MDP Student Conference (Vol. 1, No. 1, pp. 477-482).

Statista.com, 2022. Current Size of UK food delivery industry. Available at: https://www.statista.com/outlook/dmo/eservices/online-food-delivery/united-kingdom [Accessed on 15th January 2022]

Thamaraiselvan, N., Jayadevan, G.R. and Chandrasekar, K.S., 2019. Digital food delivery apps are revolutionizing food products marketing in India. International Journal of Recent Technology and Engineering, 8(2), pp.662-665.

Williams, G., Tushev, M., Ebrahimi, F. and Mahmoud, A., 2020. Modeling user concerns in sharing economy: the case of food delivery apps. Automated Software Engineering, 27(3), pp.229-263.