A Project Report On IBM

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A Project Report on

Shambhus Cofee Bar

Submitted in partial fulllment of the

requirement

For International Business Management, Semester II

Prepared for Subject: (INBM 208

P!"#$%& '"!

Prepared By

Nirav K !"a #nro$$ment No% &'&()*+

,ayaPra-ash Bi--uma$$a #nro$$ment No% &'&((*+

.ohammed Sha-ee$ AhmedKhan #nro$$ment No%

&'(&''/

Project0or-

Semester122

Sep1'+3*


2/22

Company Pro4$e

Seeded in 1998 Shambhus Coffee Bar is today is the most popular hangout place of the

Ahmedabad. Over a decade ndias shambhu coffee has !ust got younger "ith ne" fans#

ne" flavours and ne" offerings. t said to be the favourite coffee bar not only for the

teenagers but also for business e$ecutives# couples % families.

Shambhus Coffee Bar is not only popular for its rich &uality coffee and other delicacies

but also for its value for money offerings. t offers the best &uality of products at economy

rates. 'heir commitment to &uality is reflected in a uni&ue operational style that is hands(

on and dedicated to best preparation practices ) a formula "hich has resulted in the

Shambhus Coffee Bar gro"ing from strength to strength.

Shambhus coffee bar has many franchisee in *u!arat and li+e in Ahmedabad #vadodara

#surat etc. and no" its being also famous in their country region li+e in ,umbai #-a!sthan

etc.

*oal /o"adays Shambhus Coffee Bar "ants to enter in international mar+et and

gro" their *eocentric business but no" they have plan to start business in Canadian

mar+et .

Milestone : 1

1.Market entry strategy: Franchising


3/22

Franchising is the practice of using another firm's successful business model. There

are two parties, franchisor and franchisee, in franchise model. The franchisor gives the right

for franchisee to use the franchisors trade names and now!how for a specific period of time.

The parent compan" also provides support for setting up a business. The initial and ongoing

support includes operating manual, training, #ualit" monitoring, and mareting effort such as

advertisement. $n the other hand, franchisee gives lo"alt" fee and initial fee for the

entrepreneurship of business model. %ue to the comple&it" of maret, the franchising in

international or foreign maret is often performed b" master franchising. ith this method,

the local franchise is given the right to sell the franchise to other within the countr".

Benefits for franchisor

ith franchising model, the Shambhus business can e&pand at a rapid rate. Brand

(ecognition is spread when franchisee set up the store in a new location. The franchise is

operated b" highl" motivated entrepreneur who has the nowledge of local culture as well as

customer needs and wants. )uge amount of investment is needed if the" want for opening

and operating on their own. Therefore, the ris of failure for opening the branch in another

countr" is minimi*ed. Furthermore, the franchisor receives the initial and ro"alt" fee whichcan be used as a capital to support and strengthen its business operation. The franchisee is

probabl" motivated to perform the business at highest level because the" invest in the

business.

Benefits for franchisee

+ local entrepreneur is also favored b" franchise model. B" purchasing a franchise,

the" have the right to operate the business under their parent compan"s brand. ith well!

nown business, the selling power is liel" to be high. The success is higher than sole

proprietorship. The startup cost is low as compare to opening their own business. o trial and

error learning is needed. The ris of failure is diminished because the business operation has

alread" been proven to be success b" the franchisor. Moreover, the franchisor also provides

support such as training, recommendation, and mareting activities to support the franchise

networ.


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For the franchisee of Shambhu, the" have the chance to be one of the ver" first to bring

Shambhu into -anada. It would be great for them because the potential health conscious

consumer is there hence, there is the possibilit" of maing huge revenue.

Risk management analysis for Shambhus franchisee:

For franchisor

/ven if there are lots of benefits, several drawbacs are also emerged. ith the

limited control, the #ualit" of franchisee might not be met which, in turn, can damages the

reputation of franchise. +mong of all disadvantages, the greatest concern is contributed to the

possibilit" of franchisee turning into a competitor. hen the technolog" and now!how is

given to the franchisee, the" might cancel the contract and operating on their own to earn

higher profit.

For franchisee

The franchisee is bounded to the legal contract and agreement with the franchisor.

The" must follow the standard and procedure from the head #uarter. Thus, there is a lac of

independence in operating the business. The cost of owning a franchise might be higher than

e&pect. The initial setup cost, ro"alt" fee, and some portion of the profits must be provided tothe franchisor. This ma" cause the franchisee to feel lac of motivation to continue the

business.

Milestone 2:

Methods of data collection of market research in Canada

Facetoface inter!ie"ing:

!Better e&planations

!%epth

!0reater accurac"


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!1roduct placements

#ele$hone inter!ie"s

!)igh speed, low cost

!2imitations

Selfcom$letion inter!ie"s

The factor that influences the response rate of a postal surve" more than an"thing else is theinterest that respondents have in the sub3ect.

+udience motivation is needed

%nline sur!eys

Thans to technological advancements, online surve"s 4 or e!surve"s ! have become the

preferred data collection method for man" customer satisfaction and staff satisfaction

surve"s, as well as product and service feedbac and conference evaluations within man"

business!to!business marets.

!Saves time, mone" and improves accurac"

Milestone &:

%ata collection regarding -anadian food culture5


6/22

+s per research and -anadian government also aware for health of their citi*en and b" an

surve" it also clearl" seems that their food pattern and health and choices are under as the"

are ver" health conscious people.

#his information "e could get from their go!ernments health site and other genuine

"ebsites and from a long sur!ey.

Vegetables and Fruit

Eat at least one dark green and one orange vegetable each day.

o Go for dark green vegetables such as broccoli, romaine lettuce, and spinach.

o Go for orange vegetables such as carrots, sweet potatoes, and winter squash.

Enjoy vegetables and fruit prepared with little or no added fat, sugar or salt.

o Have vegetables steamed, baked or stir-fried instead of deep fried.

Have vegetables and fruit more often than juice.

Grain roducts

!ake at least half of your grain products whole grain each day.

o Eat a variety of whole grains such as barley, brown rice, oats, quinoa and wild

rice.

o Enjoy whole grain breads, oatmeal or whole wheat pasta.

"hoose grain products that are low in fat, sugar or salt.

o ompare the !utrition "actstable on labels to make wise choices.

o Enjoy the true taste of grain products. #hen adding sauces or spreads, use

small amounts.

!ilk and #lternatives


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$rink skim, %& or '& milk each day.

o Have $%% m& '( cups) of milk everyday for adequate vitamin *.

o *rink fortified soy beverages if you do not drink milk.

(elect lower fat milk alternatives.

o ompare the !utrition "actstable on yogurts or cheeses to make wise choices.

!eat and #lternatives

Have meat alternatives such as beans, lentils and tofu often.

Eat at least two Food Guide (ervings of fish each week. )Health anada

provides advice for limiting e+posure to mercury from certain types of fish.

o hoose fish such as char, herring, mackerel, salmon, sardines and trout.

(elect lean meat and alternatives prepared with little or no added fat or salt.

o rim the visible fat from meats. emove the skin from poultry.

o se cooking methods such as roasting, baking or poaching that require little or

no added fat.

o /f you eat luncheon meats, sausages or prepackaged meats, choose those

lower in salt 'sodium) and fat.


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Milestone:'

1. (nalysis

2.1 )olitical and *egal factors

2.1.1 )olitical Factor

here is presidential election ever" 67 "ears in -anada, and the candidate that has been

chosen for the first period of 67 "ears can onl" be elected for the ne&t 67 "ears. It means thema&imum period to be the president of -anada for one person is onl" 67 "ears. The elected

1resident of -anada will be given a tas to create and build )is or )er own governmental

cabinet.

2.1.2 *egal factor

In terms of legal factor, -anada is a countr" with plent" labor forces. In order to

protect their labor rights, the -anadian government has set!up a law which is called 2abor

2aws +rticle. In this law it is stated that there is 8!hour wor da"s and 97!hour worwees,

with :7!minutes rest period for each : hours of wor is legal in -anada;. +nother polic" is

that there must be at least two da" of rest weel" in -anada. -anada has also signed the

Memorandum of


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2.1.' (nalysis

0iven the situation in which there is one election ever" A "ears and the ma&imum

period of an -anadian 1resident is 67 "ears, and also the cabinet is created b" the president,

which most probabl" will support the 1resident without an" ma3or opposition activities in the

cabinet. It will give -anada more stable political environment as long as the 1resident show

the charisma and do the right 3ob that )e or She has to do. So,political stabilit" will give

higher opportunit" in terms of investment to grow inside the countr". hen the investment is

growing, businesses are spread out through the whole countr" which eventuall" reduce the

number of unemplo"ment and mae better societ" in terms of welfare.

2.2 +conomical factors

2.2.1 Factors

-anada is a developing countr" with plent" natural resources spread out throughout

the countr". In recent "ears, -anada has actuall" made tremendous progress in terms of the

development of the economical factors on the countr" itself. Moreover, -anada also has a

good and strong agricultural sector it is supported b" the ver" fertile soil because there are a

lot of active and passive volcanoes. The agricultural sector is also supported b" the climate of

-anada which is a tropical climate with high level of humidit" and also high level of rainfall.

In terms of imports, it is increasing because of the change happen in the population.

hen people have more disposable income, the" are more willing to tr" something new so

the" will be interested new things thus creating new demands. Meanwhile, in e&port, because

of the rapid growth, the productivit" of the countr" has also increased. Ma3or e&port

commodities are oil and gas.

2.2.& (nalysis


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ith huge agricultural sectors, -anada is a good maret for Shambhu. (aw materials

that Shambhu needs are actuall" vegetables, meat which all come from agricultural sector. If

-anada provides a lot of suppl" in this case is those product come from agricultural area, the

possibilit" of having cheaper price of those ind of raw materials will be bigger compared to

those countr" who are not as huge as -anada in agricultural sector.

Increase in import indicates the increase in demand from the maret. hen demand is

increasing it means the people on that maret are willing to give out their mone" to bu"

certain things the" want. From there we can draw a line that the disposable income of those

people in that maret is also increasing. This is a good situation for Shambhu because

Shambhu is considered as new restaurant in -anada. ith the increase in the willingness to

tr" something new the chance for Shambhu to get new customers will be much higher.

2.& Social Factors

2.&.1 Factors

Social factor is defined as an aspect in which cultural aspects and social phenomenon

are taen into account, for e&ample populations health consciousness, population growth

rate, and age distribution. For instance, in a mature societ" where most of the population did

not belong to the woring age group an"more, it will affect the labor cost because the suppl"

and demand is not balance, the suppl" is less than the demand so in order to get the worers,

companies need to pa" more.

-anada is a multi!cultural countr" with a huge number of populations. It is considered

as a "oung countr" because the total median age is ?.C "ears. Moreover, more than half of

the population is still considered as woring age population. -anada recogni*es A religions in

the countr". hich are -hristian, )indu, Muslim, 1rotestant, (oman -atholic, and Buddhist.

)owever, the ma3orit" is -hristian.


11/22

In terms of health, we found that the data shows that most of -anadian is living in

high standard of healthiness. e also found that in terms of life e&pectanc", -anada is onl"

on the ran of 6Cth.

)owever, there is one thing that could be a challenge for Shambhu especiall" which is

most of -anadian are considering meat as their main meal. It means, whenever the" eat, the"

will alwa"s eat with meat.

2.&.& (nalysis

Its a challenge for Shambhu to open up stores in the maret situated lie this. The

reason is one of Shambhus signature menus vegetables. So in order to suit with the maret

demand, Shambhu has to change and adapt based on the customers. For instance, those meals

which are containing onl" vegetables actuall" can be changed b" Shambhu with the usage of

beef or chicen instead of using onl" vegetables.

+nother challenge for Shambhu is actuall" because of the culture of -anadian.

+lmost all -anadians has non veg eating culture. It means their primar" meal is an"thing

with meat. The challenge for Shambhu is how to convince -anadians that with 3ust eating

fresh and health" food, the calories that the" get is the same with eating one portion of meat.

For instance, Shambhu can actuall" advertise with brochures or TD advertising and show the

calories contained in one of the signature meal which Shambhu has.

$ne big opportunit" for Shambhu is that with the low level of life e&pectanc",

Shambhu can actuall" focus in advertising regarding to the health issue. For e&ample,

Shambhu can create one advertisement that shows most of -anadian conscious about their

health, and then shows that Shambhu provides a fresh and health" food with ver" good taste

on it.

2.' #echnological Factors


12/22

2.'.1 Factor

-anada is an archipelago countr" in which the development is not distributed e#uall"

in each island. Most of the development pro3ects are located throughout the $ntario rather

than in different island lie Manitoba,and etc. Therefore in terms of technolog", the

development is also not e#ual for each 1rovince. )owever the" have enough technolog"

because of its a neighbor countr" of


13/22

-anadians en3o" four ver" distinct seasons, particularl" in the more populated regions along

the


14/22

Healthy eating and obesity

Increased vegetarianism

Homogeneity

Social activities

technological innovations

Online transaction ,

payment and order.

(s an case study of S-B(/ and as before sur!ey of Shambhu it can $ro!e that a

franchisee also can be successful in Canada

Case study:Sub"ay

/ric )einrich decided several "ears ago to abandon the bright lights of Toronto, where he was

emplo"ed b" a national hotel chain, and go into business for himselfideall" in a smaller

communit" where he felt more comfortable and the cost of living was cheaper. )e bought his

first Subwa" franchise in 6@@9 in )anover, $nt., a communit" of about ,777. )e has since

added a do*en or so more of the popular submarine sandwich restaurants around the

province, focusing on similarl" small towns where there is little competition from rival fast!

food chains. That now includes locations in iarton =with ?,:77 residents, not including a

famous winter!predicting groundhog named illie;, Gincardine, ingham, +rthur, 1ort

/lgin, alerton, -linton, /&eter, 1almerston and three stores in his hometown of $wen

Sound, a relative metropolis with a population of ??,777)

+s a result, Subwa" franchisees lie )einrich are able to scratch out a living in towns and

hamlets that would otherwise be considered too small to sustain a Mc%onalds or Burger

Ging, but are starved for the e&perience of a big chain restaurant. In some wa"s, its the

perfect franchise recipe for a large and sparsel" populated countr" lie -anada, and is among

the reasons Subwa", which generated


15/22

Milestone : ,

Financials:

Startu$ e0$enses:

To start the -anadian diamonds business in -anada, the startup capital would be H67 million

-+%. The following are the assumptions for the -anadian diamonds business in -anada

)articulars +0$lanation (mount

Startu$ ca$ital nitial in!estment in Canada 1 million C(3

nitial ground "ork Business (nalysis n Canadamarket

145444 C(3

nsurance 146 of the nitial

in!estment

1 million C(3

Marketing )romoting and

ad!ertisement e0$enses

1445444 C(3

#rans$ortation Shi$$ing and other

trans$ortation costs

,445444 C(3


16/22

Bank charges Bank transactions and other

bank fees

145444 C(3

Business *icense Starting business licensing ,444 C(3

)artnershi$ e0$enses 3istribution and su$$lying 15445444 C(3

%ther e0$enses ,45444 C(3

1styear sales estimations:

The -anadian compan", at the end of the first "ear estimated sales would be H6.:A million pera store. The prices below is all in -anadian dollars =-+%;

#y$es of

Foods

Breakdo"n +stimated Monthly estimate (nnual #otal

Sand"iches &444

sand"iches

monthly

7 $er

sand"ich

&444879 2'5444 25775444

)ia 1,4 $er day 0

&49',44 $er

month

12 $er

item

2,482,449,'5444 ;5'75444

Cold drinks 2440

&49;444

items

monthly

, $er

item

;4440,9&45444 &5;45444

Breakfasts 2440&49;444

items

monthly

' $er item ;4440'92'5444 25775444


17/22


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advance market share into the near future. These marketing strategies are also

repeatable fundamental marketing strategies transcending the fast food market.

The Shambhu Franchisee Advertising Fund Trust will governs advertising. This

functions independently of Doctors Associates Inc., which is the franchisor of the

SHAMBHU business franchise concept, and its affiliates that trust manages funds

contributed by SHAMBHU franchisees. It was established to create advertising and

marketing programs that are designed to build restaurant sales and promote the

systems image.

SHAMBHU has a customer care team, dedicated specialists who are in constant

communication with consumers same way they can plan as global prospective.

Success factors for fast food franchisees will include products and marketing

targeted to healthier menu selections, brand consistency, low start-up costs,

franchisee support, and consumer convenience. Shambhu represents a

poignant example of a fast food franchisee ready for success in the future fast

food market. Their strategies transcend the fast food market and apply to

many other markets and products

Branded fast food continuing to move into other nontraditional venues such as colleges,

airports, military bases, hospitals, and amusement centers. Part of their marketing

strategy, Shambhu includes identifying which venues and retail chains would be most

amenable to quick-service brands.

Target Markets

The process of breaking down the total market for a product or services intodistinct sub groups or segments , where each segment might represent a distinct target

market to be reached with a distinctive marketing mix. A market segment consists of a

group of customers or consumers who share the same or similar needs

Segmentation Methods


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1.Demographics (Age, Life cycle , Gender , Income , Occupation, Religion ,

Education , Race ,Nationality )

2.Geographic ( Location , Regional , Urban , Density , Climate )

3.Psychographic (Social class , Life style , Personality )

4.Behavioral (Occasions , Benefit sought , User stages , Usage rate , Loyalty

status )

SHAMBHU Segmentations

Age group (18 39) Kids meals

Income level (c 1) worldwide

locations

Healthy Life style

Urban Areas (South east etc)

Halal sandwiches

Shambhu is always improving their geographic segmentation from their early

development ages. By studying Shambhus geographical expansion we can identify what

kind of segmentation they include their marketing strategies.

Market Development

This strategy involves finding new markets for the products a firm already makes.

SHAMBHU can develope a team specifying for market development.New Business

DevelopmentThis team works closely with potential franchisees who wish to open a

SHAMBHU restaurant in non-traditional locations--such as in a supermarket, movie

theatre or gas station

Shambhu restaurant sites are adaptable to any type of location. The simplicity of the

Shambhu Restaurant operation and the ability to fit into spaces that competitors


20/22

cannot enables them to open restaurants in many unusual and non-traditional sites,

such as:

Airports

amusement parks

business centers

coliseums and stadiums

colleges and universities

convenience stores

convention centers

hospitals

military bases

recreational facilities

elementary and secondary schools

supermarkets

travel centers/truck stops

Milestone ?:

e believe to start scope management and planning from maing a BS 4 -reate the

pro3ect's BS.

!)romotion:


21/22

The promotion method to be used for our services would be the use of %iscount coupons and

prospect of winning pri*e b" giving a uni#ue number on Shambhus bill when customer bu"

something and advertisement through various medium, television, and internet. The

compan" will be in attendance in different trade shows to displa" our products

e will have also plan to give mobile truc which can deliver food to industries as -anada

has man" factories and industr" whenever the" will have lunch brea there will be a mobile

truc from which -anadian can bu" sandwiches and shaes and coffee.

)ricing:

e would be using the penetration pricing strateg" to enter the maret this is because

-anadian alread" have a well nown brand a, the" are widel" nown for their reputation=e.g.

Subwa",Mc. %onald , 1i**a 1i**a etc;. +s mentioned earlier we estimated HAmillion -+% for

the start!up capital in order to meet up with certain standards

In order for our compan" to gain initial recognition in our target maret at some point we will

have to wor with fle&ible prices for our partners, and to enter in a maret and eliminate other

competitors

#ime :

To compete others and to mae it renown in -anada we have to mae a time schedule where

ever" goal should be fi& on a time for e&ample 5 If a customer complain in customer service

that service is ver" poor or #ualit" or ver" slow then to put these all in account we have to fi&

that problems time b" time . e have to improve our goals and budget planning where we

can cut the food cost and save some venture.

For e&, we can bu" vegetables,fruits, and all grocer" in wholesale so we can save some cost

and deliver it to each franchisee on time.

)otential $roblems :

There are lots of big!name fast food pi**a 3oints such as %omino's 1i**a =%1;, JumK

Brands' =J


22/22

! +s per our surve" , If a food #ualit" will be poor then TD and media can mae that a

huge matter as the" want a spic" news and those competitors can also will tae a

chance in this+s an solution , we have to precise in each and ever" matter related to food #ualit".

! -anadian government also ver" aware for their citi*en especiall" in food #ualit" so

our single mistae unconsciousness can 3eopardi*e compan"s future .! Foods and shipping problem can be also occur as the" now we are new in maret of

-anada and shipping companies can tae advantage as even we do not now the

budget and maret rates of delivering basic foods which we will need ever" da" to

mae sandwiches and pi**as.

! %istance and Time

Even with technologies such as video conferencing, executives in other countries may prefer

to establish relationships on a personal level. For a our company, this can mean a significant

investment in travel costs and having key executives out of the office for extended periods.

Time zone differences can make it difficult to coordinate projects where collaboration is

reuired. Executives on the !est "oast of the "anada. are just getting to work in the morning

when their #ndian counterparts are winding down for the day.

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