BDP final report 1

BusinessDevelopment Plan

Sna

xatac

(An Italian Halal

food restaurant)

Qaisa

r Shah

L0085BABA0612

Submitted in fulfilment of the requirements of

the Masters’ degree to the Cardiff Metropolitan

University, for the degree of Master in Business

Administration (MBA)

Supervisor: Dr. K V Shenai

September 2013

1

Acknowledgements

I would like to take the opportunity to say thanks to my

respected supervisor

Dr. K V Shenai, for his excellent guidance to write my

business development project.

I would like say thanks to our entire college librarian

who helped me to get all the magazine, journals and text

book which assist me to prepare my project.

I would like to give special thanks to my parents who

helped with the finance for my studies in the UK.

2

Executive SummaryThis report aims to outline the plan to start up a

restaurant. The report has been subdivided into various

chapters with each chapter targeting a different aspect

about the operation of the business. The business

concept, the business model, the idea, the marketing

3

strategy etc. along with a detailed s analysis of the

primary and secondary data has been outlined in this

report. A feasibility study has also been carried which

involved a market as well as a financial feasibility as

well. Interviews and market surveys provided the market

feasibility while other tools were used to come up with

the financial analysis. A budget plan with an extensive

plan of action and timeline for the execution of this

proposed plan has also been detailed. We have also used a

SWOT analysis, PEST analysis, Porters five forces

analysis along with forming balance sheets, cash flow

statements and various other tools to analyze the risk

involved with the venture.

4

Table of Contents

Page

Acknowledgements

1

Executive Summary

2

Chapter 1: Introduction 4

Chapter 2: Business Concept 8

Chapter 3: Feasibility 11

3.1 Primary and secondary Market Research

3.2 Feasibility

Product/service Industry/market Organizational Financial feasibility

3.7 Resource Requirement Evaluation

Chapter 4: Strategic Analysis and Business Model34

4.1 McKinsey 7s strategy for Business Model

5

4.2 Sources of competitive advantage and sustainability 4.3 Business Strategies4.4 Development of Business Model

Chapter 5: Business Plan 44

5.1 Overview of the Business Plan5.13 Proposed plan of action5.15 Critical Success / Failure Factor

References56

Appendices60

6

Chapter 1: Introduction

1.1 Background of the ReportThe global restaurant industry is forecasted to increase

at an exponential rate of over the next three years. Its

total revenues are said to increase from 2,457.1 billion

in 2011 to a value of 3,482.5 billion by the end of 2016

(King, 2013). With the food demand rising with the

increase in world population, there has also been an

increase in urbanization and a change in lifestyle habits

with less emphasis upon preparing food at home. Consumers

are under time constraints and often opt to eat outside

in cafes and restaurants that offer an economical meal.

Hence the market demand is growing and so is this

industry which provides unique opportunities in this

field for those who are able to position themselves

uniquely.

However lately there has been an emphasis upon healthy

eating with many restaurants removing trans-fats laden

items from their menu and opting to put salads and fresh

cut meats and displaying nutritional value on their

products and menus. So the restaurant choices are also

based upon not only the quality of the food items but

also upon the nutritional value of the food as well.

7

Hence the aim of this plan is to focus upon the venture

which will balance the profitability of the venture while

maintaining the quality and health of the products

offered to the consumers.

1.2 Scope of the ReportThis report is about the business plan of an Italian

Halal Food Restaurant. The structure of this report is

such that it will cover all the various aspects which are

necessary in the start up and up keep of this new

venture. The SWOT analysis will not only analyze the

internal strengths and weaknesses of the company but also

analyze the external environment to see any hidden

opportunities that can be used for our advantage and any

threats that should be minimized to prevent loss.

With the recent European football championships having a

big positive impact on UK restaurants and cafes, trade is

likely to be positive. (Ernst & Young, 2012) With such

potential, this report aims to clarify all questions

about feasibility, timeframe, scope of the market,

profitability while addressing the risk involved with the

venture in a structured and systematic manner.

1.3 Structure of the Report

8

There are six chapters in this reports that are further

divided into various sub chapters and topics. The format

of the report is as follows:

Chapter 1: Introduction

This chapter will give details as to why this venture was

selected, what the aims and objectives of this report are

and what sources and business models have been used

during the course of this

Business plan

Chapter 2: Business Concept

This second chapter will describe the business venture

and provide basic information of the various concepts of

the business. It will focus solely on the business itself

and all the variables involved with it such as the target

market, the products being offered, the value

proposition, the specific features of this company etc.

Chapter 3: Feasibility Study

The feasibility study will focus on the general industry

itself. The primary and secondary data as well as the

research methodologies will be focused upon. The

marketing mix, product life cycle, competitor analysis,

target market analysis will be done in this part of the

9

chapter to understand the entire industry in a better

light.

Chapter 4: Strategic Analysis and Business Model

In this chapter we will be discussing various business

models such as the McKinsey 7s, Porters Diamond Model for

sustainable competitive advantage and the Osterwalder

model and its application in the value chain for the

business.

Chapter 5: Business Plan

In this chapter we will be covering the external and

internal factors of the venture via SWOT and PESTLE

analysis. This will further clear out the viability of

the plan and smoothen out the factors that are needed for

its success. A business strategy, HR plan and a financial

and budget forecast analysis will be included in this

part.

Chapter 6: Conclusion

The conclusion will give a summary of this report along

with a overall view of this business plan.

1.4 Scenario ChosenThe venture selected for this business plan is one in the

Fast Food Industry. Essentially it will be an Italian

10

Halal Food Shop named ‘Snaxatac’. In this report we will

be analyzing the various factors related to the startup

of this venture along with the complete description of

its business model. For any entrepreneur it is necessary

that all the information be available for scrutiny before

any move is made so that risk and loss is minimized and

profitability is maximized.

Also for the venture to have a sense of direction and be

able to compete in a highly competitive market, all the

external and internal factors must be analyzed carefully

be it financial or related to other aspects of the

business.

1.5 Aims and PurposeThis business plan’s main objective is to carry out an in

depth analysis of the new venture by analyzing the risk

involved with the start up as well as the market

conditions involved. The feasibility report will show the

probability of success of this venture in the industry

and it will also show us the measures that must be taken

to ensure that variables and risks are minimized and

taken care of.

The objective of this report is to:

Explore the target market and its expectations

11

Analyze the external and internal factors of the

business via a SWOT analysis

Form a marketing plan for the new venture

Understand the dynamics of the industry and its

impact on the business.

Calculate the profitability of the venture via

market analysis and financial forecasting

12

Chapter 2: Business ConceptThe concept of this business is to cater to a niche food

market by providing them with health and variety in their

food choices. The target market mainly consists of the

Muslim community of UK who prefer their food to be

prepared under Islamic rites and often face a lack of

choice in the variety of food that is offered to them in

restaurants and cafes.

2.1 Business IdeaThe Halal restaurant industry is expanding and growing at

a high rate and many companies and restaurants are now

investing in this industry due to the high demand in this

sector. It is estimated that Britain has approximately 3

million Muslims out of which 95% claim to be Halal

consumers. The Halal food Authority estimates that the UK

market for Halal food grew by 30% in 2006. European

Muslims are now looking for easier eating out options

that are in accordance with their religious rites and

seek out restaurants which offer Halal pizzas, lasagnas

etc. The London’s World Food Market Exhibition estimates

the UK halal market to be worth 2.8 billion pounds.

(Taher, 2010). Here are some figures which lets us

analyze the opportunity that is available in this market:

13

2.7 Million = Number of Muslims in the UK, and 1

million of them are in London

£20.5 Billion = spending power of Muslims in the UK

£700 Million = Overall value of the UK halal market

12% = Proportion of all meat sales in the UK that is

halal (Muslims are 4.8% of the UK population)

8.2% = Estimated UK population of Muslims by 2030,

up from 4.8% in 2011

16% = Annual growth in consumption of halal food

(Halal Food Festival, 2013)

SNAXATAC hopes to tap into this growing market and offer

a unique menu to the target market in question. The

restaurant will be an Italian Halal eatery that will

specialize in Halal Italian Items along with ethnic food

choices as well. It will combine global and local

cuisines to provide a complete menu in a casual

establishment that has quality customer service to

complete the package.

2.2 About UsSnaxatac is an Italian Halal Food Restaurant in the UK

with the aim to provide a variety of Halal food items to

its customers under one umbrella. It aims to be an

efficient and quality service provider for its valuable

customers.

14

2.3 MissionThe mission of this restaurant is to provide variety in

Halal food items in a clean environment to our customers.

2.4 VisionTo tap into the growing potential market of Halal Food

market and cater to this niche in an effective and

efficient manner so as to become a market leader in the

industry.

2.5 Corporate GoalsThe goals of Snaxatac are based upon short term and long

term profitability and sustainability. Some of the goals

of this venture would include:

Variety in the choice of Halal Food Items

Quality customer service

Quality in food items being provided

Becoming a market leader by keeping up with market

trends and gaining competitive edge.

2.6 Business Description Snaxatac is an Italian Halal foot restaurant based upon

the concept of providing Halal food items alongside

various other dishes that are targeted towards the niche

market. The restaurant also provides all types of

beverages including various teas, coffees and smoothies

15

making it a versatile, one stop convenience shop. The

restaurant will be located at Kings Cross or Central

London and will be targeting the 6 million Halal food

consumers that are present in the Britain. (British

National Party, n.d.)

2.7 PositioningTesco’s ethnic food buying manager Steve Ewels was quoted

as saying that “We know from our own sales data that

there is a high growing demand for halal food..” (Lever,

n.d.) This goes to show that with the rising demand for

Halal Food, there is potential in this sector for a

restaurant that is offering variety the kind of food that

is prepared under Islamic rites. Apart from its menu, the

store will also be focusing upon the ambience of the

place by offering quick and easy service which would

complete the package of becoming a one stop solution for

the food problems of the Halal food eaters being

targeted.

The waiters and receptionists can be trained to provide

quality customer care to establish long term

relationships and loyalty with the consumers so that a

foothold is set in the market and Year

2.8 Sales Growth Anticipation

16

The first investment will be out of the owner’s capital

and loans will be taken from the bank to establish the

business which will be eventually paid off once the

business becomes profitable. Once the initial venture is

tested and proves to be successful, further expansion

plans will be carried out to tap into the market. The

projected sales growth that is anticipated based on the

data available is given below in table 2.1

Sales Growth Anticipation 2.1

Year Date Number of outlets Expected Growth

Rate

1 January 2014 1 5%2 January 2015 1 5%3 January 2016 2 10%4 January 2017 2 12%5 January 2018 3 15%

Chapter 3: Feasibility Study

3.1 Industry Porter Five Forces AnalysisPorter has identified five factors that determine the

nature of competition within an industry and when

analyzed give us an idea about the aggressiveness in the

industry. These factors are:

Threat of new entrants to a market

17

Bargaining power of suppliers

Bargaining power of customers (“buyers”)

Threat of substitute products

Degree of competitive rivalry

Threat of new entrants to a market

The threat of new entrants to the market is high mainly

because this is a market that is still in its growth

phase. Many restaurants local and multinationals such as

KFC, McDonalds and Domino’s Pizza are working on trials

offering Halal items on their menu. Options for Halal

dining have been limited but then trend has recently been

changing as numerous cafes place halal items on their

menu in order to tap into this market. (Qureshi &

Smithers, 2009)

Bargaining power of buyers

The bargaining power of buyers is low mainly due to the

fact that switching costs are high and customers and tied

into buying their suppliers products. Halal food can only

be bought from selected outlets that have been certified

by a halal certification authority. Hence there are

limited numbers of suppliers of Halal food as it is a

growing industry in the UK which further decreases the

bargaining power of the customers.

18

Bargaining power of the suppliers

Bargaining power of the suppliers can be high since at

the moment that market is in the growing phase with not

many suppliers in the industry. The industry is not

concentrated at the moment and due to the uniqueness of

the Halal product being supplied in a dining package, the

bargaining power of the suppliers increases.

Threat of Substitute products.

The threat of substitute products is slowly increasing as

most restaurants have Halal food items on their menu but

most don’t offer an exclusively Halal menu and many

Muslims don’t order Halal items from partially halal

restaurants since it conflicts with their religious

beliefs. So the threat of substitute products in the

current industry is still relatively low. In the

following table we can see the number of fast food

outlets that offer Halal food and we can see that

majority of the fast food outlets also don’t offer

exclusive Halal food or if they do it’s in selected

stores:

Availability of Halal food items Table 2.2

19

Source: (Mail Online, 2010)

Degree of competitive Rivalry

The degree of competitive rivalry depends upon many

factors. One factor is the number of competitors in the

industry. Since the Halal restaurant industry is still in

its growing stage, the number of restaurants that

exclusively sell Halal food items is still relatively low

so rivalry in that regard is less. Competition is intense

in stagnating markets however this market is growing so

this is again not the case with this sector and prospects

for profit look good. The buyers have lower bargaining

power and hence the restaurants have little incentive to

compete and this lowers the competitiveness of the

industry itself. Exit barriers however are high due to

20

the high fixed costs attached to the running and

maintenance of a restaurant which means that these

eateries must stay in the industry and add to the

competitiveness but looking at the general trend, the

market is not moderately competitive since it is still in

its growing stage.

3.2 Analysis of Market Research

Primary Analysis Questionnaire: Analysis of Demographics

Question 1: Gender of the Participant

Gender

MaleFemale

In this questions the participants were asked about their

gender, Majority of the respondents were male (68%) while

the rest were female (32%).

Question 2: Age of the participant

21

Age bracket18-2425-3030-4545+

Analysis of the result showed that 30% of the

participants were in the 18 to 24 age bracket, 35% of the

participants were in the 25-30 age brackets, 15% were in

the 30-45 age brackets and the remainder were in the 45+

age group.

Question 3: Religion of the participant?

Religion

MuslimsChristiansNo religion

Analysis of the survey showed that 37% of the respondents

identified as Muslims while the rest identified as as

22

Christians and only a minority tagged themselves as

having no religion.

Question 4: How often do you eat out?

One a weekOne a monthEvery dayMore than twice a monthmore than twice a week

The result showed that 25% of the respondents dine out

once a week, 38% dine out once a month, 8% dine out every

day, 12% dine out more than twice a month, 22% dine out

more than twice a week.

Question 5: How important are Halal restaurants to you?

23

Very importantNot important at allWont eat in a halal restaurantNeutral

The results showed that 35% of the respondents replied

that eating at Halal only restaurants was very important

to them. 52% it was not important at all and 8% claimed

they would not eat in a Halal only restaurant since it

conflicted with their religious beliefs and 5% claimed

they were neutral regarding the subject.

Question 6: Please rate the following factors in terms of

importance on a scale of 1 to 5 with 1 being the least

important and 5 being the most important.

24

Halal Food

Customer Service

Hygiene Price Variety Décor0

10

20

30

40

50

60

70

12345

Halal: 32% respondents rated it 5 while the rest

rated it 58 % rated it 1. The remaining number of

participants rated it 3.

Customer Service: Majority of the participants (54%)

rated it very important at number 5. 26% rated it 4.

5 % claimed it was not important at all by rating it

1 and the remaining respondents rated it somewhat

important at 3.

Hygiene: 47% of the respondents stated that hygiene

was highly important by rating it at number 5. Only

3% of the respondents mentioned that they find

25

hygiene of the restaurant to be the least important

of the overall factors

Price: Majority of the participants (38%) claimed

price was 4 on the importance scale, while the other

participants were rather divided in their opinion

about the importance of this factor.

Variety in food Items: 56% of the respondents

claimed that variety in food items is important by

rating it at number 4. 10% rated it at number 5.

Décor: Ambience and décor was rated highly important

at number 5 by only a small minority of people

(12%). Majority claimed it was somewhat important by

rating it at number 2 and 3 (75%).

3.3 Analysis of the factors

If we look at the factors in order, we find that at least

42% of the population surveyed find that the restaurant

they are dining in must offer some Halal food items by

rating it very important or important. This goes to show

that there is a definite demand for Halal restaurants in

the market. Alongside this majority of the respondents

also claimed variety in the menu was important. Customer

Service and Hygiene was also rated highly important on

the scale whereas Price and Décor was rated lower

26

relative to the other factors stated in the

questionnaire.

This shows us that there is a definite demand in the

market for Halal products that offers variety with good

quality customer service, hygienic food and good ambience

all in one package. Another key aspect here worth noting

Close ended Questions

Statement 1: The restaurant should offer variety in Halal

food items

SA A N D SD0

10

20

30

40

Halal food items

Halal food items

27

The results showed that 29% of the people strongly agreed

that there should be Halal food with variety on the menu.

12% agreed with the above statement whereas the rest of

the participants disagreed with the statement or were

neutral about this factor regarding their dining

experience.

Statement 2: Service should be quick and efficient

SA A N D SD020406080

Service should be quick and efficient

Service should be quick and efficient

62% of the respondents mentioned that they strongly agree

that service should be quick and efficient. 15% agreed

with the above statement whereas only 10% said they

disagree with the above statement. The majority mostly

agreed mainly because quick efficient service is the

order of the day in restaurants. With people being

pressed for time, efficient service is appreciated

everywhere and hence this was rated highly by the

participants.

28

Statement 3: The restaurant should offer good value for

money without compromising on quality

SA A N D SD01020304050

Good Value for Money

Good Value for Money

45% said that they strongly agree that the restaurant

should offer good value for money without compromising on

quality. 20% agree with the above statement whereas only

10% disagree with the value for money proposition.

Statement 4: Halal certification of the restaurant is

very important

29

Halal Certification is important

SAANDSD

Halal certification of the restaurant was only important

to 28% of the respondents who ticked strongly agree. 9%

agreed with the statement whereas 45% disagreed with the

above statement. They believed that a halal certification

from an authentic regulatory authority instilled a sense

of trust that the restaurant was following industry

protocols in selling Halal food items.

Statement 5: The food should be tasty and hygienic

30

SA A N D SD01020304050

Food should be tasty and hygienic

Food should be tasty and hygienic

Approximately 43% strong agreed with the above statement,

35% agreed with the above statement whereas only a small

minority of 2% disagreed with the statement given above.

Statement 6: Customer satisfaction should be the core

ethic of the restaurant

SA A N D SD010203040

Customer Satisfaction should be the core ethic

Customer Satisfaction should be the core ethic

40% of the participants strongly agreed that customer

satisfaction should be the core ethic of the restaurant,

35% agreed with this statement whereas only 20% were

31

neutral and 5% disagreed with the statement. This goes to

show that customer satisfaction is necessary to complete

the package in the dining experience of the customer and

without it, value for money is not considered compete.

Statement 7: A casual establishment that offers a good

environment with good quality good and fast service is

preferred.

SA A N D SD0204060

Casual establishment is preferred

Casual establishment is preferred

Majority of the respondents at 48% said that they

strongly agree with the above statement. 12% said that

they agree where as 5% neutral and the remainder

disagreed with the statement. The reasons for this

phenomenon were due to the fact that sample that had been

surveyed consisted of young adults that were mostly

pressed for time and preferred eating out in casual

establishments that offered quick service.

Statement 8: The staff should be friendly and polite

32

Staff should be friendly and polite SA

ANDSD

Majority of the participants (46%) strongly agreed that

the staff should be friendly and courteous. 15% of the

participants agreed with the statements. 5% disagreed

with the statement and the remainder were neutral about

the statement. This was partly due to the fact that

customers expect the complete package and good service

from the staff when they walk into a restaurant.

Recommendations offered for improved servicesSome recommendations were given so that Snaxatac can

offer better and efficient services to its valuable

customers. These recommendations included:

The staff and receptionists should be properly

trained and be courteous to ensure that customer

handling is done professionally.

33

The kitchen should be state of the art to ensure

that food is made quickly and reaches the customers

table quickly.

The restaurants should later expand into e-menus and

take orders online to cater to another niche market.

There could be a separate children’s menu full of

their favorites to ensure they have something at the

restaurant as well

A delivery service could be introduced eventually

which would help it further expand into the market.

The environment should be kept clean and neat with

consistency in services to build customer loyalty

and build long term relationships with the

consumers.

3.3 Secondary Analysis Interview Analysis

Factors that are important in the Restaurant and Food

services Industry

The interview was conducted from 6 people. These people

included the restaurant manager, the owner of the

restaurant, 2 members of staff and the receptionist

present in the restaurant. The central theme of the

interview was to get an idea about their thoughts on this

industry and what is required to be successful in the

34

market. Using Porter’s model of competitive edge as the

foundation of the questions, the aim of this interview

was to try and find out the long term sustainable

strategy their restaurant had adopted and what their

unique differentiating factor was.

Long Term Strategy for Sustainable Growth

According to the collective opinion of the staff and

manager of the restaurants, to remain competitive in the

market, it is necessary to have to a long term strategy

that focuses on growth that can be sustained. Normally

this strategy revolves around the differentiating factor

of the restaurant. The manager stated that this

differentiating factor is usually the unique food, the

theme based décor of the restaurant, the quick delivery

or even the good customer service. The restaurant then

tries to use the rest of the factors to accentuate its

core proficiency. The manager also stated that this

allowed for growth and expansion in the market since the

differentiating factor sets you apart from your

competitors and keeps your customers coming back for the

uniqueness you are offering. The members of staff said

that it allowed for building long term relationships with

the customers since many customers came specifically for

35

those very items or those very features and brand loyalty

is crucial if you are to survive in the market.

Differentiating Factor and its role in Competitive Edge

The owner stated that, “A good restaurant should have a

competitive edge in the sense that it follows a strategy

of keeping up with market trends and plans in advance”.

This allows for a long term competitive edge in the

market and to keep up with the rest of the competition.

According to the manager the food industry is one that is

dynamic and the restaurant must adapt to the market to

ensure that it remains profitable.

Condition of the market and profitability

According to the interviewees, the profitability of the

market can be gauged by the revenues generated and their

performance after a few years spent in the market. Most

of the time is spent building long term relationships

with the customers and in active brand activation and

brand management. The manager added that after this a few

years, the breakeven point is reached and only after this

point does the profit increase.

3.4 Product/ Service Feasibility Analysis

Product/Service Life Cycle

36

The product life cycle consists of 4 core stages. It

starts with the initial product design that is achieved

after research and development of the core idea. There

are also various other stages like introduction of the

product into the market, maturity, decline, innovation

and discontinuing the product etc. The 4 stages in the

product life cycle are: (Rodrigue, 2013)

Introduction: This stage consists of developing the

product. The company will usually develop upon the

innovative idea and improve upon the product or service

using market research or their own research and

development departments. This stage lasts till the

introduction of the product into the market.

Growth: If the product is successful in the market, its

sales will grow and there will be increased competition

in the industry by companies who either replicate the

product. This stage is known as the growth stage and is

generally characterized by increase in competition and

increase in improving the product which leads to fast

diffusion of the product. There are also high profits in

this stage of the product life cycle. (Rodrigue, 2013)

Maturity: In the maturity stage, the product is widely

spread in the market and its distribution network is well

established. In case of the service, the brand name is

37

well established and its presence in the market well

known. There is now less innovation over the product or

service feature and more emphasis upon lowering

production costs.

Decline: As the product and service falls out of favor

with the customers, production slows down and as soon as

profit margins become too low, the service is eventually

retired and that is the end of the cycle. (Rodrigue,

2013)

According to a report by Halal Market Economy

Specialists, the Halal Food Market is growing at 15% with

Nat Average of 1%. This goes to show that this service

is in the growing stage of its product life cycle so

there is opportunity to bring in innovative ideas.

Snaxatac will also be in its growth stage of the cycle.

Hence it is feasible for Snaxatac to enter to market

since it will be characterized by innovation and high

profits. (Imarat Consultants, 2012)

3.4 Market feasibility

Market description

38

The restaurant industry is part of the hospitality

industry and is integral to the country’s economy. It is

estimated that UK spent 18.81bn pounds on food and 7.37bn

pounds on drink in the market in 2011. This brings the

total market value to approximately to 26.18 bn pounds.

This marks a 1.7% rise in the market value compared to

2010 (Key Note, 2012). Figures from 2012 state that

consumers have reduced spending in other areas to ensure

they can still regularly dine out despite a reduction in

disposable income. A report from Deloitte release in

December suggests that people are in eating out more

often and spending more when they do so and this is a

trend that is expected to continue in 2013. "The slow

return of consumer confidence is reflected in the gentle,

yet constant, pace of growth in the eating and drinking

out market," said Ben Perkins, head of consumer business

research at Deloitte (Berkely Scott, 2012). Further

analyzing the market we find that, the Halal Food Market

is growing at 15% with Nat Average of 1%. Hence Snaxatac

will be operating in an industry with a lot of potential

and one that is growing. (Imarat Consultants, 2012)

Demographics and Trends in the Restaurant Industry

and their significanceThere are various trends and demographics in the

restaurant industry that can have a significant impact on

39

the way restaurants adopt various differentiating

factors. These trends include:

Being able to tailor the dishes and customize the menu

Customization gives the customers a new sense of control

over the dishes. They can control their portion size to

the flavor combinations on the flexible menu which gives

them value and convenience. Made to order meals as well

as mix and match combo meals are now more in fashion with

the customer since it gives them the option to get more

value out the variety that is present and it the best way

to get the maximum benefit out of a large menu present.

(PR News Wire, 2012)

Having local and global foods on the menu

Having local foods and authentic local foods on the menu

is a trend that is fast catching up in UKs restaurants.

Many restaurants are now having authentic British cuisine

alongside Middle Eastern falafel and Mexican tacos. This

is done to entice the customers with new flavors and

create new flavor combinations that are different and

unique.

Healthy Eating

Healthy eating is now becoming an established trend with

many restaurants now displaying the nutritional value of

40

their food items on the menu along and serving salads and

other healthy options without sacrificing the flavor. (PR

News Wire, 2012)

Having Snacking options on the Menu

Restaurants are now offering snacking options on the menu

to cater to the younger consumers and boost traffic

between the day parts. These snacking options include

ethnic snacks, bite sized offerings and are usually made

of high quality ingredients and consist of innovative

flavor combinations that entice the younger crowd. (PR

News Wire, 2012)

Having swift service for hurried customers

Today’s customers want fast paced diners with quick

portable means that offer value for money that do not

sacrifice upon quality. This has led to a resurgence is

fast casual establishments with takeaway options and meal

deals for on the go customers. (PR News Wire, 2012)

3.5 Organizational feasibility An organizational feasibility study is to define a legal

and corporate structure of the business which includes

the professional background information and the

41

principals of the business and the skills they contribute

to the business. This can be done via an organizational

feasibility chart given below:

YEAR 1 YEAR 2 YEAR 3

Managerial staff 1 2 3

Kitchen staff 4 4 6

Waiters 4 7 12

Receptionist staff 2 2 3

Finance Staff 1 1 2

Marketing staff 1 2 3

3.6 Financial Feasibility

Sales Forecast

42

Breakeven AnalysisBREAKEVEN ANALYSIS

Figures in '000 x axis Revenue Contribution Fixed expenses Profit

387,868 193933.92 258,579 -64,645517,157 258578.56 258,579 0646,446 323223.2 258,579 64,645775,736 387867.84 258,579 129,289905,025 452512.48 258,579 193,934

average fixed expenses258,579

200,000 400,000 600,000 800,000 1,000,000-100000

0

100000

200000

300000

400000

500000

ContributionFixed expenses

43

Depreciation Schedule

(3) DEPRECIATION SCHEDULEYear 0 1 2 3 4 5Building 120000 115,200 110,400 105,600 100,800 96,000Furniture 70000 63,000 56,000 49,000 42,000 35,000Vehicles 10000 8,000 6,400 5,120 4,096 3,277Plant and M achinery 30000 24,000 19,200 15,360 12,288 9,830total book values (ie net fixed assets) 230000 210,200 192,000 175,080 159,184 144,107

Annual DepreciationLand-0%Building-4% straight line 4,800 4,800 4,800 4,800 4,800Furniture-10% straight line 7,000 7,000 7,000 7,000 7,000Vehicles - 20% reducing balance 2,000 1,600 1,280 1,024 819Plant & m achinery-20% reducing balance 6,000 4,800 3,840 3,072 2,458total annual depreciation 19,800 18,200 16,920 15,896 15,077

44

Cash flow Forecast

45

(2) CASHFLOW FORECAST Preop

Year 0 1 2 3 4 5

CASH INFLOW SCash from Sales 660,000 720,000 959,000 858,000 998,000

Directors loans 100,000Share capital 400,000Other external finance/loansOther cash inflows

TOTAL CASH INFLOW 500,000 660,000 720,000 959,000 858,000 998,000

CASH OUTFLOW S

Payments for materials 330,000 360,000 479,500 429,000 499,000operating expenses ( ) 0Prem ises (rent, rates) 88,000 88,000 88,000 88,000 88,000W ages and salaries 0 42,000 42,000 42,000 42,000 42,000General expenses 0 95,000 95,000 100,000 100,000 100,000Interest and bank charges payable 0 7,000 7,000 7,000 7,000 7,000Lease paym ents 0 0 0 0 0Corporation Tax 39,000 56,395 44,026Market survey costs 12,000Other preliminary expenses 20,000capital expenditurePlant and other capital expenditure 230,000financing repaymentsLoan repaym ents 20,000 20,000 20,000 20,000 20,000Dividends 20,000 25,000 35,000 27,000TOTAL CASH OUTFLOW S 350,000 582,000 632,000 800,500 777,395 739,026

Cash flow summaryNET CASHFLOW FOR PERIOD 150,000 78,000 88,000 158,500 80,605 258,974OPENING CASH BALANCE 0 150,000 228,000 316,000 474,500 555,105CLOSING CASH BALANCE 150,000 228,000 316,000 474,500 555,105 814,079

46

Profit and Loss Projection

(4) PROFIT AND LOSS FORECAST Preop

Year 0 1 2 3 4 5

Revenue 0 660,000 720,000 959,000 858,000 998,000

Cost of sales 0 330,000 360,000 479,500 429,000 499,000

Gross profit 0 330,000 360,000 479,500 429,000 499,000

Expenses/overheadsPrem ises (rent, rates) 88,000 88,000 88,000 88,000 88,000W ages and salaries 42,000 42,000 42,000 42,000 42,000General expenses 95,000 95,000 100,000 100,000 100,000Interest and bank charges payable 7,000 7,000 7,000 7,000 7,000Lease paym ents 0 0 0 0 0Depreciation 19800 18200 16920 15896 15077Other expenses 32,000

Total expenses/overheads 0 283,800 250,200 253,920 252,896 252,077

Profit before tax 0 46,200 109,800 225,580 176,104 246,923Tax @ 25% 39,000 56,395 44,026 61,731Profit after tax 46,200 70,800 169,185 132,078 185,192Dividends 20,000 25,000 35,000 27,000Transfer to reserves 46,200 50,800 144,185 97,078 158,192

47

Investment EvaluationINVESTM ENT APPRAISAL

TVAnnual NCF 150,000 78,000 88,000 158,500 80,605 258,974 82,376Sub Equity 400,000Sub loans 100,000 20,000 20,000 20,000 20,000 20,000Dividends 20,000 25,000 35,000 27,000Interest 7,000 7,000 7,000 7,000 7,000 0Free Cashflow -350,000 105,000 135,000 210,500 142,605 312,974 82,376

NPV(10) 353,409 (currency)NPV(20) 175,204 (currency)

IRR 37%

3.7 Resource Requirement Evaluation Resources are an integral part of any business and with a

restaurant business; the resource requirements are vast

as well as important. Human resources will be required

since staff will be needed to cater to the customers.

Training will be given to the human capital so they are

well equipped to provide quality service. Food stock and

kitchen appliances along with décor and silverware will

be needed to complete the kitchen operations and the dine

in facilities.

48

Chapter 4: The Business ModelOsterwalder states that a business model describes the

foundation of how the company creates, delivers and

captures value. Hence a business model is essential for

the functioning of an organization as well as its growth,

development and its sustainability (Osterwalder, 2010).

In this section we shall be analyzing the business model

that is applicable to Snaxatac.

4.1 McKinsey’s 7S strategyThe 7S strategy of McKinsey provides for a foundation for

aligning the various strategies of a business. It core

function is to improve the performance of the business by

also studying the impact of future events on the

functioning of the business and also providing a clear

view of the companies departments (Michalski, 2011). It

is a useful tool to use to implement various business

strategies. The 7S as per Snaxatac are:

49

( Mbaknol.com, 2011)

Strategy: The strategy of Snaxatac is to benefit from

the Halal Food demand and offer variety to this niche

market. Its core aim will be to build long term

relationships with the customers and gain competitive

edge in the market. This would boost profits and allow

for expansion in the local as well as global market.

Structure: Snaxatac will be a casual/ fast eating

establishment set to cater to approximately 80 people

initially in its first restaurant. The

responsibilities and duties of all the employees will

be clearly defined in their job description to prevent

any miscommunication and confusion. This will also

50

ensure that the job is done with the utmost efficiency

and dedication.

Systems: The focus of Snaxatac will be upon fast

service and providing quality Halal food items to its

customers. This can be done by using state of the art

technology in food preparation and using automated

management systems to record delivery, customer

service complaints, maintaining business operation,

employee records etc. This would ensure smooth

functioning of the branch and seamless flow of

operation.

Shared Values: The core value behind Snaxatac is the

emphasis upon offering quality Halal food and good

customer service all under one umbrella.

Style: Snaxatac will have a top heavy company with

most managerial powers residing with the branch

manager and owner. The hierarchy will be vertical with

the branch staff, waiters, and receptionists at the

bottom of the hierarchy. The manager of Snaxatac will

be one that communicates with the rest of the

employees and is actively involved in the day to day

managing of the branch.

Staff: The staff will be hired from the local populace

due to easy access and will be screened for their

51

people’s skills as well any other training they might

have had in the hospitality industry.

Skills: Snaxatac employees should have good

interpersonal relationships; good people skills and

training in the hospitality industry would be

preferred. Human capital is the core of Snaxatac since

good customer service depends upon the quality of

human capital employed. Hence training sessions that

impart the necessary skills in this field will be made

mandatory upon all the staff members of Snaxatac.

4.2 Value Chain AnalysisA value chain analysis helps a company identify the

main activities which create value and bring economic

return for the organization. It reveals how the

product or services is taken through the various

stages of production and reaches the final consumers

while noting down the key components during the

process that add value (Porter, 1980). A value chain

was a term used by Micheal Porter in his book

“Competitive Advantage: Creating and Sustaining

superior performance (1985). Essentially a value chain

describes the activities of the company and joins them

to the competitive position of the company in the

market (Recklies, 2011). It analyzes the value of each

52

particular production process. Porter distinguishes

between primary activities and support activities.

Primary activities are concerned with the creation of

a product or service. They can be grouped into five

main areas:

Inbound logistics

Operations

Outbound logistics

Marketing and sales

Service.

There are four main areas of support activities:

Procurement,

Research and Development

Human resource management,

Infrastructure (Porter, 1980)

Primary Activities

53

Operations

To ensure that quality Halal food is served to its

customers and that halal certification standards are

complied with. Good relationship with the suppliers will

ensure the quality of the food improve the supply chain

of the restaurant. Exploring ideas and keeping up with

market trends will ensure that there is always something

new to offer in the restaurant and entice customers with

new deals and combos.

Inbound Logistics

The quality control can be managed by a separate

department formed specifically for this purpose. The

quality of the supplies from the growing of the produce

to the end product ensures the quality and taste of the

product is up to high standards. This department can

ensure that quality control is taken care of every step

of the way. Effective IT management systems can also

ensure that quality control is maintained in a database

that can be easily updated.

Marketing and Sales

One of the integral components of marketing and sales is

to ensure effective brand launch and brand management. A

long term strategy ensures that the brand evokes loyalty

54

amongst the consumers and helps the restaurant gain a

competitive edge in the market. A marketing campaign that

focuses upon all forms of media would be designed. This

could be outsourced to a advertising company and PR

specialists. Market surveys and following market trends

will ensure the advertising relates to the consumers and

forms a strong brand image of the restaurant.

Service

Being a part of the hospitality industry, the restaurant

must follow the strict health and safety regulations that

have been imposed on the restaurants etc. The restaurant

must also follow the standards set upon by the halal

certification authority. This also improves the quality

of the service and helps in the restaurant achieve its

goals and objectives.

Outbound Logistics

Outbound logistics refers to the storage of the materials

and good during the supply chain. For Snaxatac this

refers to the various freezing units, storing cabinets,

cold rooms and other storage units that will be required

for safe storing of the food materials. This will also

55

ensure that the quality and safety of the food items

being served is maintained.

Secondary Activities Human Resource Management

A HR manager will be hired for the restaurant who will

focus upon effective training of current employees and

screening potential employees who can add further value

to the restaurant in terms of their customer management

skills. The manager can make use of management systems to

create a database of current employees to maintain

records of their skills and training development. This

will ensure that all records are easily maintained. This

will ensure that employees that can add good value to the

company are hired and this in turn will help build long

term relationships with the customers and hence improve

brand loyalty.

Infrastructure

In the initial stages, the very basic departments will

form the core infrastructure of the facility. It will

involve the functional departments and the production

oriented departments. As revenues rise and expansion

takes place, further streamlining of the departments and

delegating of tasks will take place to ensure smooth flow

of operations.

56

Research and Development

The research and development in the restaurant business

ensures that state of the art technology is used in the

production processes as well as in the management

systems. This will ensure that automated records are

maintained and the production processes are fast and

efficient which would reduce the production time and

ensure quick service.

Procurement

Procurement of the supplies from trusted suppliers is

necessary for high quality food items to be served to the

customers. For Halal compliance only selected suppliers

that meet the necessary requirements will be used. This

will also ensure that the quality of the supplies is of

good quality and meets the high standards of the

restaurant.

Sustainable Competitive AdvantageSustainable competitive advantage was discussed by Porter

in 1985 when he discussed the various low cost or

achieving differentiation strategies to achieve

sustainable competitive edge in the market. Barney (1991)

has offered the closes formal definition of this concept

by stating, “A firm is said to have a sustained

57

competitive advantage when it is implementing a value

creating strategy not simultaneously being implemented by

any current or potential competitors and when these other

firms are unable to duplicate the benefits of this

strategy.”

Competitor Analysis To analyze the external environment and competition of an

organization, it is necessary to do competitors analysis.

This allows the restaurant to explore the competitor and

strengthen the company based on the analysis and

formulate their own strategies. It also allows tapping

into potential opportunities and handling any threats in

the market.

The Major Competitors of the business that have been

selected on the basis of closes of the food items offered

and halal menu on the items; are as follows:

Dominos: The chicken offered in the 580 outlets

across the UK is halal

Pizza Hut: Some chicken used in toppings is sourced

from halal abattoirs abroad

Subway: 119 outlets are halal in UK

58

Nandos: 61 Halal only restaurants in UK (Taher,

2010)

It should be noted that all these competitors indirect

competitors and this is due to vast array of items being

offered at Snaxatac, there is no one menu that directly

matches that of Snaxatac.

Dom inos PizzaHut Subway NandosFactors W eights Rating Score Rating Score Rating Score Rating ScoreVariety in food item s 0.05 2 0.1 3 0.15 2 0.1 3 0.15M arketing 0.05 3 0.15 3 0.15 2 0.1 2 0.1Price 0.05 3 0.15 3 0.15 4 0.2 2 0.1Brand Nam e 0.1 4 0.4 4 0.4 3 0.3 3 0.3Financial Position 0.15 3 0.45 3 0.45 3 0.45 3 0.45Sales 0.13 3 0.39 3 0.39 2 0.26 2 0.26Distribution network 0.05 5 0.25 2 0.1 3 0.15 1 0.05CSR 0.1 3 0.3 4 0.4 3 0.3 3 0.3M arket Share 0.1 4 0.4 2 0.2 3 0.3 2 0.2Innovation 0.1 3 0.3 3 0.3 1 0.1 2 0.2Value Chain 0.12 4 0.48 4 0.48 4 0.48 3 0.36Total 1 3.37 3.17 2.74 2.47

4.3 Business Strategy Porter theorized that to manage a business, it must adopt

a business model that’s core is centered on any of the

following four factors:

Cost leadership: reducing costs by making production

processes more efficient. Snaxatac can achieve cost

leadership by ensuring that its supplies are bought

in the most economically feasible manner. This would

59

ensure that the end impact is not on the price and

cost leadership would be maintained.

Focus strategy: A strategy that focuses upon one

single core proficiency. The core proficiency of

Snaxatac will be upon its menu and food items.

Quality ingredients along with unique flavors and

mixes with the added bonus of being halal to tap

into that growing market, will ensure that Snaxatac

will flourish if it follows its strengths from the

get go.

Differentiation: A strategy where the company

differentiates itself from its competitors by coming

up with a unique product that offers different

value. Snaxatac can achieve differentiation due to

the fact that it will be offering halal food to its

customers. It will be catering to a growing market

and has a unique value proposition that has not yet

been fully tapped into by the restaurant industry.

Innovation: A strategy in which the business

innovates to achieve differentiation or cost

leadership and hence come up with better and

efficient services that can help it gain competitive

edge. Innovation is the key if Snaxatac is to not

only maintain but to gain market share. To entice

customers with new services and products that offer

60

more value will be essential in forming long term

relationships with its customers.

With these at the center of the business model, the

business will be able to achieve sustainable growth and

competitive edge in the market. Snaxatac will be focusing

on a business strategy that has focus, differentiation

and innovation at its core. This will ensure that a large

market share is part of Snaxatac since the innovation

driven stage will ensure that new products, new deals and

new unique flavors will entice more customers. This will

ensure that a relationship is built with the customers

that will help them gain brand loyalty. This brand

loyalty will then lead to gaining sustainable competitive

edge in the market.

4.4 Business ModelA business model is a tool that is extremely useful to

organizations in terms of explaining the value of an

organization, its structure, its vision and it forms a

system for marketing and other various functions such as

delivering value, generating capital, profits and

sustainable revenue. Hence it can be said that a business

model gives direction to a company and allows for its

core strategies to be enhanced and turn into a

competitive edge for the company. The business model also

61

allows for the company to position themselves in the

market strategically and in a strong manner that can

maximize growth. In the following table, we have analyzed

the business model for Snaxatac

INFRASTRUCTURE MANAGEMENT PRODUCT CUSTOMER INTERFACE

Key

Partners

The major

partners

of

Snaxatac

will be

halal meat

suppliers

along with

halal food

suppliers

that

provide

the goods

at cheap

and

economical

rates.

Establishi

ng strong

relationsh

ips with

Key Activities

Tap into the

growing market

by being

proactive

Forming long

term

relationships

with the

customers to

form brand

loyalty

Constantly

enhancing the

value and

supply chain to

ensure smooth

flow of

operations.

Value

Propositions

Offering a

wide variety

of Italian

halal

products to

its customers

Innovating

and coming up

with new

variation and

combinations

to keep the

customers

coming back

for more.

Offering

quick

services in a

casual

establishment

Customer

Relationship

Providing

good quality

services to

its customers

Solving

customer

problems in a

quick and

efficient

manner;

Customer

Segments

Muslim

population

of all age

brackets

specially

generation

Y.

Middle-

Middle

Class;

Middle-Lower

Class;

Generation Y

62

the

suppliers

ensures

that

business

can have a

steady

supply

chain and

the

business

can expand

into the

market

easily.

with good

customer

services;

Offering good

quality food

that offers

value for

money;

Key Resources

Economies of Scale;Quality control;

Strong supply chain control

Management Database for all records;

CSR Management;

Strong supply of Halal Food items

Channels

Social media marketing

Digital Media Marketing;

Print Media;

e-Media

Cost Structure Cost leadership via having good supply chain

management.

Having good storage and inventory management by

using a better automated record system

63

Vertical integration

Revenue Stream The idea of Halal food in casual food establishment that

offers quick service is one that will cater to a new

market that is quickly growing and it will generate

revenue for Snaxatac Restaurant. These will be the key

revenue streams for the restaurant.

64

Chapter 5: Business Plan

5.1 OverviewSnaxatac is an Italian Halal Food Item Restaurant located

at Kings Cross. It will be a quick service casual

restaurant aiming to provide quality food items with good

customer service all in one package. It aims to cater to

a predominately muslim, middle class and generation Y age

bracket. The halal food market is a growing market with a

lot of potential and hence Snaxatac can enter gap in the

market and generate a lot of profit and revenues.

5.2 Objectives Offer a wide variety of Halal food items to its

customers

Provide good quality service to its customers

Offer fast and quick service with good quality of

food items

Ensure the value and supply chain is efficient to

ensure smooth flow of operations

Become a market leader

5.3 Ethical and Legal ConcernsTo ensure that the business operates in an ethical and

moral manner, the following practices should be followed:

65

Ensure the litigation of the restaurant is properly

followed and maintained

Become a socially responsible restaurant that takes

part in initiatives that benefit society

Operate in an ethical and moral manner in all

aspects of the restaurants

5.4 SWOT Analysis

StrengthsThe strengths of the restaurant would center on a wide

variety of food items, good CSR and HR management. The

restaurant will also emphasize upon making production

processes quicker and cost efficient to achieve cost

leadership. A good marketing campaign along with a supply

chain that is stable will ensure that the foundation of

the restaurant is solid. These can be the core strengths

of the company

Weaknesses The fact that some part of the population might have a

problem with the Halal food items since it might conflict

with their religious beliefs is a weakness for the

restaurant. It will also be difficult to innovate and

differentiate constantly to entice new customers.

Opportunities

66

The Halal food market is growing at a rapid pace. Here

are some figures to give an idea of the potential in this

market:

2.7 Million = Number of Muslims in the UK, and 1

million of them are in London

£20.5 Billion = spending power of Muslims in the UK

£700 Million = Overall value of the UK halal market

12% = Proportion of all meat sales in the UK that is

halal (Muslims are 4.8% of the UK population)

8.2% = Estimated UK population of Muslims by 2030,

up from 4.8% in 2011

16% = Annual growth in consumption of halal food


This goes to show that the market has a lot of

opportunities for new competitors to tap into. It also

allows for an aggressive market expansion strategy that

can focus on the core strengths of the company. This will

also allow for a better marketing strategy as well.


ThreatsSince the market is growing at a rapid rate and many new

entrants are entering the market, it allows for stiffer

competition in the industry. This might stifle profits

and revenues and growth might slow down for the company.

67

Changing tastes and trends in the UK market especially in

the generation Y age bracket might also adversely affect

the restaurant. Changes in taxation laws or government

regulation might also be a threat to the revenue stream.

AnalysisThere are various strategies that can be followed based

on these factors. A strength/Opportunity strategy would

be one where the restaurant follows an aggressive

marketing campaign to promote its products to break into

the market. The wide product range can also allow for

innovation which would tackle the problem of changing

tastes and continually entice the customers. A

weakness/opportunity strategy would be based upon strong

innovation to ensure that the restaurant enters the

innovation driven stage to help it expand into the

market. A strength/ threat strategy involves cutting cost

by making all production processes efficient. This would

ensure that all threats in the market would have minimal

impact on the restaurant. Brand management and loyalty

will ensure the threats are handled in an effective

manner.

5.5 Pest Analysis

Political

68

The political situation is relatively stable in the UK.

The current government is very pro employment at the

moment specially in the wake of the global financial

crisis, hence it is taking active steps to strengthen the

economic position of the UK market and to provide a wide

variety of jobs opportunities to the lower paid and

locally based jobs to highly skilled higher paid jobs

(Gov.uk, 2012). This also shows us that at the moment

there is a wide pool of potential applicants to hire at

highly competitive rates. This would be a good factor for

the restaurant as it would mean that the labor employed

would not only be cost effective but will also be from a

highly skilled pool of applicants.

Economic FactorsThe global financial crisis of 2008 did have some impact

on the UK economy. Unemployment is high however the

economy is set to grow by 2% in 2013 according to CBI

director John CridLand (CBI, 2012)Banks are also set to

increase the rate of interest by the end of 2013 which is

bad for business as it means that getting the loans for

the initial investment will be more costly and will put a

heavier burden on the business (Lambert, 2013).The

decrease in disposable in income also is also bad for the

business as it effectively means that people will spend

less money on restaurants and outings however, separate

69

studies have shown that people have cut down their

spending in other areas so that they may continue eating

out; so the economic conditions are not so bad for the

business. These factors are largely out of the control of

the business however their impact can be minimized to

certain extents.

Social Cultural FactorsConsumer trends are now moving towards quick services and

one stop shopping due to lack of time on their part.

These changes combined with a decline in home cooking

means that the trend of casual restaurants is on the rise

(Berkely Scott, 2012). Restaurants that offer value for

money along with quick service are now all the rage with

the customers and with the young population specially the

generation Y. According to demographic trends,

“Generation Y – those born since 1978 – tend to eat more

often at quick-service and pizza restaurants” (Frisch,

2012). Snaxatac offers them exactly this option and a lot

more all in one place and under one umbrella. Hence it

aims to target this demographic in an effective and

efficient manner.

Technological FactorsTechnology is the key to making Snaxatac achieve cost

leader and have an efficient value and supply chain. In

70

the age of technology and convenience, consumers prefer

to have a high tech experience even in restaurants in the

form of self-checkouts, in store media and other

innovations in retailing. With the advent of web 2.0 the

restaurant industry must take advantage of the booming

internet and android industry to further its marketing

campaigns. This can ensure that the restaurant is always

at the forefront with its target market of the younger

age bracket that frequent the social media and are fonder

of the android apps.

5.6 Marketing Plan

Marketing strategyThe marketing strategy of Snaxatac will be one that

centers around its core strength and communicating that

to its target audience. This will ensure that brand

loyalty is cultivated customers frequent the restaurant

due to its strong brand image. Effective brand management

will require a strong marketing campaign and this can be

done using several different marketing Medias such as

social media marketing, digital marketing, use of

hoardings and billboards along with print media, TVCs and

viral videos. In the age of web 2.0 marketing is not only

fast and efficient but also effective if done using the

right methods and tools.

71

Consumer buying Behavior Consumer buying behavior is defined as, ““consumer

behaviour…… is the study of the processes involved when

individuals or groups select, purchase, use or dispose of

products, services, ideas or experiences to satisfy

needs and desires.” (Solomon, 2006). Hence at Snaxatac,

the restaurant will emphasize upon fulfilling the needs

and desires of the consumers and conveying the value for

money to them in an effective manner. The objectives of

the restaurant will be communicated to the consumers in

the form of direct service and that is how consumer

behavior will be influenced in a direct manner.

Market Segmentation and Targeting AnalysisDemographics

Age: Over 16 to 50+ age bracket with emphasis upon

generation X( Born in 1965-1967) and generation Y

( Born since 1978)

Gender: Male and Female

Family Size: All Family sizes

Income bracket: People earning 1000 pounds and

above.

Religion: Emphasis on Muslims

Race: Mostly Asians but will target all races

including Caucasians, Hispanics etc.

72

Targeting

Based on the demographics and the market research

conducted, Snaxatac will be offering a wide variety of

products to the target market. In order to become more

effective in our marketing strategy and conveying the

value to the customers, Snaxatac must divide its market

into various sub categories and target them in a more

tailored manner. To better describe this, "the act of

segmenting a market in order to understand it better,

rather than to describe one particular policy out of the

three that the company may adopt" (Wright & Esslemont,

1994) is a better approach. Snaxatac will target the

middle class market and the generation X and Y market and

tailor its marketing approach according to their

preferences.

5.7 PositioningThe positioning of Snaxatac will have a three pronged

approach. These cores involve:

Wide menu that offers Halal items

Quick service with quality customer care

Easy restaurant environment with comfortable décor

The wide menu will be the core strength of the

restaurant. It will feature Italian items that are Halal

and also offer good value for money. Quick service and

73

casual establishments are now trending with the

demographics we are targeting hence training the staff

about providing quality customer service that is not only

fast but also satisfying will be key. The restaurant

environment must also be comfortable and this can be

achieved by combining the right mix of décor, music and

other factors.

5.8 Promotion Strategy The promotion strategy of Snaxatac will be tailored to

appeal to the target market and one that keeps up with

the latest in marketing tools and techniques. The various

tools that will be used to convey the value of the

restaurant on offer are:

Social media marketing: the restaurant will make sure

that it uses Facebook, Twitter and android apps to

advertise and promote the restaurant. In this way it will

be able to reach a wide market in a matter of minutes in

an efficient manner as well. It will also be a better way

to keep in touch with the customers and let them know of

new offers and changes in the restaurant.

Media advertising: This advertising will make use of

various print media. Hoardings as well as newspapers will

carry advertisements and promotional offers to target the

74

market. Television commercials will also be used along

with advertisements on the radio to ensure that a wide

market is reached. However, care will be taken to

advertise on relevant medias so that only medias that is

frequented by the target market is advertised upon.

5.9 Unique Selling PropositionA Unique Selling Proposition usually outlines and

distinguishes a brand from another competing one.

(OlajideTalabi, et al., 2012). Hence USP of Snaxatac will

focus upon its objectives which are:

Wide menu of Halal items

Quick service

Good customer care

Comfortable ambience and décor

Good value for money

5.10 Marketing Mix

ProductsThe products have been selected keeping in mind the value

for money, the demand for quick service and the over

75

theme of casual establishment. Below is a list of the

items that will be available at Snaxatac:

Panini

Sandwiches

Pastas

Spaghetti Bolognese

Hot Pies

Various Wraps

Jacket potatoes

Burgers

Pizzas

Biryani

Smoothies, Coffees, Teas

As is evident, it is a mix of Italian, local and global

cuisine that is keeping in line with the trend according

to the market research we have conducted.

PriceSince our target demographics have an income rage of over

1000 pounds, the prices will offer value for money and

hence will not be in the high range of the spectrum. All

efforts will be made to ensure that quality and value for

money are maintained.

Place

76

The restaurant is centrally located at Kings Cross. This

is done so that it is easily accessible to a wide range

of people. The location is also known to be one that is

relatively stable which is an added bonus for the

restaurant itself since it allows for smooth flow of

operations.

PromotionAs discussed before, the promotion of the restaurant will

involve various marketing tools. The tools will make use

of digital and social media and mostly print media to

convey its message to the target audience. However since

this is the age of modern technology, the aim will be to

not only convey the message but also to keep in touch

with the customers via social media and inform them of

any upcoming deals and offers while making note of their

feedback etc.

PeopleThe people hired by the HR manager will be trained to

offer quality customer service that is fast, efficient

and satisfies the needs of the customers. The operations

team will be hired on the basis of their skill and hence

this will ensure that the operations are smooth and

handled by a highly skilled staff.

77

5.11 Pricing Strategy As we have already shown before, the market is currently

growing and Snaxatac needs to tap into this market. Hence

the strategy it must follow is one of penetrating the

market and increasing market share. Such a strategy will

involve products that offer value for money and hence are

not highly priced, promotional offers and discounts.

5.12 Human Resource PlanThe HR plan is one that will showcase the management

hierarchy in the restaurant. As mentioned before, the

hierarchy will be top heavy but the management culture

will be one that is inclusive and takes in the ideas and

viewpoints of all the departments involved. The

recruitment of the employees will be handled by the HR

managers and will be stored on the database. It will done

on a purely merit basis and hence no favoritism will be

allowed in the restaurant. The following chart outlines

the management hierarchy:

78

5.13 Budget and Financial Plan

Startup Funds The startup funds required for the restaurant will be

well over 150,000.00 pounds. This will involve the

building purchase price, remodeling, kitchen equipment

and silverware along with the permits required. Labor,

wages and food stock will be required and this would all

be included in this start up fund.

Working Capital The working capital required by Snaxatac is 270,000

pounds. This is assuming that there is a two year tax

subsidy and a latter 25% tax rate.

Proposed Plan of Action Snaxatac will be operating from a property in Kings

Cross. The employees will be hired from the local

79

Branch Manager

Marketing Manager

Marketing assisstant

HR Manager

HR Assisstant

Operations Manager

Operations Assisstant

Kithen Operations Manager

Chefs

Finance Manager

Finance Staff

populace and the produce will be from locally sourced

suppliers that meet the halal specifications.

Future Business PlanOnce Snaxatac has reached its desired market share and

has become stable market force, it will aim to expand

into the various other markets that are abroad. This

global expansion will be followed by various CSR or

corporate social responsibility initiatives to improve

the brand image of the company. According to Porters

Mode, it will be wise for the company to enter back into

the innovation driven stage with the revenue it would

have amassed from the increase in market share. This

would allow for better innovation and better product

development causing the restaurant to become a market

leader and not only a passing name in the market.

5.14 Action Plan TimelineThe timeline for bringing the plan into action is given

below with the relevant dates:

ID Task Start

Date

Finish

Date

Durati

on1 Developing a BDP 01/01/20

14

13/01/20

14

13

days2 Conducting Market Survey 14/01/20 20/01/20 7 days

80

14 143 Conducting Feasibility

Study

21/01/20

14

27/01/20

14

7 days

4 Industry Feasibility

Study

21/01/20

14

22/01/20

14

2 days

5 Financial Feasibility

Study

23/01/20

14

24/01/20

14

2 days

6 Organisational

Feasibility Study

25/01/20

14

26/01/20

14

1 day

7 Marketing Feasibility

Study

27/01/20

14

28/01/20

14

2 days

8 Pilot Study 01/02/20

14

02/02/20

14

2 days

9 Funds Arrangement and

Resource Allocation

04/02/20

14

17/02/20

14

14

days10 Identifying Resources 04/02/20

14

11/02/20

14

8 days

11 Equipment Setup 12/02/20

14

17/02/20

14

6 days

12 Hiring Human Resources 18/02/20

14

30/02/20

14

13

days13 Hiring and Selection of

Staff and Employees

18/02/20

14

23/02/20

14

6 days

14 Training and

Development

24/02/20

14

30/02/20

14

7 days

15 Advertising Campaigns 03/02/20 03/05/20 90

81

14 14 days16 Social Media Marketing 03/02/20

14

03/03/20

14

30

days17 PR Plan 03/03/20

14

03/04/20

14

30

days18 Promotions and BTL

Activities

03/04/20

14

03/05/20

14

30

days19 Future Plan 03/05/20

14

08/05/20

14

5 days

20 Contingency Plan 08/05/20

14

15/05/20

14

8 days

21 Evaluation Checklist

Completion

01/06/20

14

07/06/20

14

7 days

22 Finalising the Business

Plan

08/06/20

14

10/06/20

14

2 days

5.15 Success and Failure Factors There are various critical success and failure factors

that determine the operational success of a business. The

factors that are integral for Snaxatac depend upon the

target market, demand for products and changing consumer

trends. Some of these factors include:

Value for Money: Value for money is an integral

feature for the target market we are catering to

hence the pricing of the products is key. The

82

pricing strategy to be followed must always be such

that it is in line with true needs of the consumers.

Products: The products are what the consumers need

at the end of the day hence they must be of top

quality while not compromising on their price or

value.

Customer Service: Top quality customer service under

one umbrella is the objective of the restaurant and

also a core feature in the marketing program hence

it is necessary that top quality customer service be

provided to the consumers by keeping ensuring that

the staff is well trained.

ReferencesBerkely Scott, 2012. Berkely Scott: What does 2013 have in store for

UKs restaurant industry. [Online]

Available at:

http://www.berkeley-scott.co.uk/hot-plate/what-does-2013-

have-in-store-for-the-uks-restaurant-industry

[Accessed 11 August 2013].

83

British National Party, n.d. BNP: “Six Million” Halal Meat

Consumers in Britain, says Meat Trades Journal. [Online]

Available at: http://www.bnp.org.uk/news/%E2%80%9Csix-

million%E2%80%9D-halal-meat-consumers-britain-says-meat-

trades-journal


CBI, 2012. CBI: UK Economy will pick up. [Online]

Available at: http://www.cbi.org.uk/media-centre/press-

releases/2012/05/uk-economy-will-pick-up-through-2012/


Ernst & Young, 2012. Pubs and Restaurants Outlook, London: Ernst

& Young.

Frisch, E., 2012. Demographics for Restaurants. [Online]

Available at:

http://www.foodservicewarehouse.com/restaurant-equipment-

supply-marketing-articles/restaurant-marketing/

demographics-for-restaurants/c28060.aspx


Gov.uk, 2012. Gov.uk. [Online]

Available at:

https://www.gov.uk/government/policies/helping-people-to-

find-and-stay-in-work


84

Halal Food Festival, 2013. Halal Food Festival. [Online]

Available at: http://halalfoodfestival.com/why-

exhibit.php


Imarat Consultants, 2012. An Overview of the Global Halal Market.

[Online]

Available at: http://www.halalrc.org/images/Research

%20Material/Presentations/overview%20of%20global%20halal

%20market.pdf


Key Note, 2012. Key Note: Restaurant Marketing Report 2012.

[Online]

Available at: https://www.keynote.co.uk/market-

intelligence/view/product/10589/restaurants


King, M., 2013. Yahoo Finance: Global restaurant industry to be worth

$3.5 trillion by 2016. [Online]

Available at: http://uk.finance.yahoo.com/news/global-

restaurant-industry-worth-3-000000195.html


Kotler, P., Armstrong, G., Agnihotri, P. Y. & Haque, E.

u., 2010. Principles of Marketing. 13th ed. s.l.:Pearsons.

85

Lambert, S., 2013. Mail Online. [Online]

Available at:

http://www.thisismoney.co.uk/money/news/article-1607881/W

hen-UK-rates-rise.html


Lever, D. J., n.d. The development of Halal and Kosher meat markets

in the UK. [Online]

Available at:

http://www.academia.edu/2290093/The_development_of_halal_

and_kosher_meat_markets_in_the_UK


Michalski, A., 2011. The McKinsey 7-S Framework: Invented in the

1980s and Still a Possibility for Success Today. s.l.:GRIN Verlag.

OlajideTalabi, F., Chile, S. T. & Abubakri, O. R., 2012.

Making Slogans and Unique Selling Propositions (USP)

Beneficial. New Media and Mass Communication, Volume 3.

Osterwalder, A., 2010. Business Model Generation: A Handbook for

Visionaries, Game Changers, and Challengers. 1st ed. s.l.:Wiley.

Porter, M. E., 1980. Competitive strategy. s.l.:The Free Press.

PR News Wire, 2012. PR News Wire. [Online]

Available at:

http://www.prnewswire.co.uk/news-releases/technomic-

identifies-five-uk-restaurant-trends-for-2013-

86

180953041.html


Qureshi, H. & Smithers, R., 2009. The Guardian: Halal Food no

longer a minority Taste. [Online]

Available at:

http://www.theguardian.com/lifeandstyle/2009/sep/18/halal

-food-taste


Recklies, D., 2011. Value Chain. [Online]

Available at:

http://www.fao.org/fileadmin/user_upload/fisheries/docs/V

alueChain.pdf


Rodrigue, D. J.-P., 2013. Product Life Cycle. [Online]

Available at:

http://people.hofstra.edu/geotrans/eng/ch5en/conc5en/prod

uctlifecycle.html


Solomon, M. R., 2006. Consumer Behaviour: A European Perspective.

s.l.:Prentice Hall.

Taher, A., 2010. Mail Online. [Online]

Available at: http://www.dailymail.co.uk/news/article-

1315278/Top-supermarkets-secretly-sell-halal-Sainsburys-

87

Tesco-Waitrose-M-S-dont-tell-meat-ritually-

slaughtered.html


Wright, M. & Esslemont, D., 1994. The Logical Limitations

of Target Marketing. Marketing Bulletin, 5(2), pp. 13-20.

88

Appendices

Appendix IQuestionnaire

Please tick one of the following:

Q1. Your gender:

Male

Female

Q2. Your age: ______

Q3. Religion:

Christian

Muslim

Hindu

Other

Q3. How often do you eat out?

Once a week

One a month

Once a day

89

More than twice a month

More than twice a week

Q4. How important are halal restaurants for you

Very important

Not important

Won’t eat in a halal restaurant

Neutral

Q5. Rate the following factors in order of importance

with 1 being the least important and 5 being the most

important:

Halal Food: ___

Customer Service:___

Hygiene:___

Price:___

Variety:___

Décor:___

Section 2: Close Ended Questions

Q1. The restaurant should offer variant in Halal Food

items?

Strongly Agree

Agree

90

Neutral

Strongly Disagree

Disagree

Q2. Service should be quick and efficient?

Strongly Agree

Agree

Neutral

Strongly Disagree

Disagree

Q3. Good value for money?

Strongly Agree

Agree

Neutral

Strongly Disagree

Disagree

Q4. Halal certification is important?

Strongly Agree

Agree

Neutral

Strongly Disagree

Disagree

91

Q5. Food should be tasty and hygienic?

Strongly Agree

Agree

Neutral

Strongly Disagree

Disagree

Q6. Customer satisfaction should be the core ethic of the

restaurant?

Strongly Agree

Agree

Neutral

Strongly Disagree

Disagree

Q7. Casual establishment is preferred?

Strongly Agree

Agree

Neutral

Strongly Disagree

Disagree

92

Q8. Staff should be friendly and polite?

Strongly Agree

Agree

Neutral

Strongly Disagree

Disagree

Appendix IIInterview

Q1. What are the main factors that must be kept in mind

when entering the Restaurant and Food services Industry?

Q2. What is a good strategy for a restaurant to follow

for long term sustainable growth?

Q3. What should a restaurant do to set itself apart from

the competition?

Q4. What is the current situation of the market?

Q5. What is the current break even scenario?

Appendix III

Balance Sheet

93

(5) BALANCE SHEET

Year 0 1 2 3 4 5

ASSETSFixed AssetsBuilding 120,000 115,200 110,400 105,600 100,800 96,000Furniture 70,000 63,000 56,000 49,000 42,000 35,000Vehicles 10,000 8,000 6,400 5,120 4,096 3,277Plant & m achinery 30,000 24,000 19,200 15,360 12,288 9,830Net Fixed assets 230,000 210,200 192,000 175,080 159,184 144,107

Current AssetsStock 0 0 0 0 0 0Debtors 0 0 0 0 0 0Cash 150,000 228,000 316,000 474,500 555,105 814,079other - 0 0 0 0 0Rent 88,000 88,000 88,000 88,000 88,000 0M arket survey costs 12,000other prelim inary expenses 20,000subtotal 270,000 316,000 404,000 562,500 643,105 814,079Current LiabilitiesTaxation 39,000 56,395 44,026 61,731

subtotal 0 0 39,000 56,395 44,026 61,731

Total assets less current liabilities 500,000 526,200 557,000 681,185 758,263 896,455

LIABILITIESShare cap 400,000 400,000 400,000 400,000 400,000 400,000Reserves 46,200 97,000 241,185 338,263 496,455Total equity 400,000 446,200 497,000 641,185 738,263 896,455

Loans 100,000 80,000 60,000 40,000 20,000

Total 500,000 526,200 557,000 681,185 758,263 896,455

ROEI=PAT/(original equity investm ent) 11.55% 17.70% 42.30% 33.02% 46.30%

Cash flow Statement

94

(2) CASHFLOW FORECAST Preop

Year 0 1 2 3 4 5

CASH INFLOW SCash from Sales 660,000 720,000 959,000 858,000 998,000

Directors loans 100,000Share capital 400,000Other external finance/loansOther cash inflows

TOTAL CASH INFLOW 500,000 660,000 720,000 959,000 858,000 998,000

CASH OUTFLOW S

Payments for materials 330,000 360,000 479,500 429,000 499,000operating expenses ( ) 0Prem ises (rent, rates) 88,000 88,000 88,000 88,000 88,000W ages and salaries 0 42,000 42,000 42,000 42,000 42,000General expenses 0 95,000 95,000 100,000 100,000 100,000Interest and bank charges payable 0 7,000 7,000 7,000 7,000 7,000Lease paym ents 0 0 0 0 0Corporation Tax 39,000 56,395 44,026Market survey costs 12,000Other preliminary expenses 20,000capital expenditurePlant and other capital expenditure 230,000financing repaymentsLoan repaym ents 20,000 20,000 20,000 20,000 20,000Dividends 20,000 25,000 35,000 27,000TOTAL CASH OUTFLOW S 350,000 582,000 632,000 800,500 777,395 739,026

95

Documents

BDP final report 1