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ASSIGNMENT ON CHULHA CASE STUDY SUBJECT: ENTREPRENEURSHIP SUBMITTED BY: R.S.

MAHADEVAN ROLL NO: 1235 BATCH NO: PGDBM IV SUBMITTED ON : 7TH FEBRUARY 2013

INTRODUCTION: In any entrepreneurial venture/business whether its an individual, a partnership nature or a corporate nature the success starts with a small trigger which induces an individual or partners or companies. It is not a overnight effect. But the success is depending upon its proper applications. In the given case study of Chulha a small partnership consists of two individuals namely Adesh and Nishant, it is evident that the momentary trigger which came into their minds of starting a tiffin service business (dabbawala type) in their area where they were working (i.e. in Bangalore) since they were missing their homely cooked food. Based on the given case study I would be analyzing two given questions in this assignment paper namely:i) ii) Do you think this is a viable business? Support your answer with reasons? Are there any changes you would like to introduce in their business model?

Question No.1: Do you think this is a viable business? Support your answer with reasons? Before I go into the depth of this analysis, I would like to analyse some basics of business viability and the reasons for why this tiffin services of chulha is a viable business. Business viability: Viablity of any business is measured by its long term survival and its ability to have sustainable profits over a period of time. If a

business is viable it is able to survive for many years, because it continues to make profit year after year. The longer a business can stay profitable the better its viability. According to the case study Chulha emerged in the year 2007 now even after five continuous years as on date it is surviving means that their business is heading towards long term. There is no doubt.

The details/components of a business viability checks are given below:A clear definition of the product or service being developed; A clear problem this is solving, and why this approach is better than existing alternatives; A clear idea of who needs it; An idea of how and how much customers will pay for it; And a plan how all this will be done. The Uniqueness Upstart Funds Customer Competition Economic Mood Timing Marketing Continuing Cash flow

If we look into all the above components Chulha services has almost equaling 80% of all those. There is a clear cut definition of their services saying that they want to give a quality food, to satisfy the demand of all types of their customers, a clear cut feed back mechanism, maintaining a website as a marketing tool etc. They have definitely having uniqueness in them and have a clear cut costings and a thorough market segmentation study etc which are the main reasons why their business is a viable one. Chulha started in the year 2007 in Bangalore, that time the competition was also very less. Infact at the time of chulha started, they also started like a Bombay dabbawals who carries tiffin boxes to various individuals and companies/houses like a home based business. But later on they developed. The Reasons for Chulhas Emergence which led to the success:- (By taking into consideration the Entrepreneurship Process)

Identification of Problem:- (Sotting the opportunity) As per the case study, Adesh and Nishant were the IT employees and emerged as entrepreneurs later. They were from different parts of India (i.e.) one is from Bombay and the other is from Calcutta basically north part of India who came to work in South India (Bangalore) as IT professionals. While employed they were struggling and rather missing to get the home cooked food in Bangalore city and the year was in 2007 during that time there were no good home cooked food services available. Converted to Customer Need:-(Identifying the Resources) Adesh and Nishant after finding the problem of their food thought of starting a small tiffin services home cooked food business. Hence they left their IT jobs and started the business by converting their individual problems into a main customer need based problem. This is were the Brand mantra of introducing Chulha emerged. Their basic calculation was even a 10% of the IT sector itself if they can cover they meet their profits very easily. But fortunately the customer need scenario in Bangalore after sensing this excellent formula has increased like any thing and more over the competiton was almost nil at that time. These guys took the maximum advantage of this customer need which again converted as a major demand in that southern region. Chulha Emerged:- (Acquiring the resources and Managing the Venture) Chulha started in a small way. Their main mission is to ensure food being served to customers not just in terms of taste but variety and maintain quality standards, and gaining recognition in this business. It is practically serving hygienic and delicious food. Started with carrying food in tiffin boxes and delivered to the customers in time having a minimal breakfast and mini thalis as their startup menus in a limited areas in Bangalore during breakfast and lunch time and slowly increased dinner also. In this they reached a very high standard of business viability due to their extensive market segmentation ideas. This is to be noted for their high success degree. Chulhas Revenue Generation:With the minimum amount of Investment, chulha started earning their revenues in a very slow manner. At the starting time the margins were not very high since they were mainly seeing the sustainability aspect. For at least they were just break evening during their first year operations. From

second year onwards they started a minimum margin (i.e.) around 5-10 percent and slowly today they reached a 65-70% margins which is quiet good. Strong Tiffin service viable Business Model :Let us not forget that the Concept of Chulha Tiffin service idea has got a very strong and viable business model also. Let me just like to mention some of the core points of it. They are:1. Key Partners - Adesh, Nishant 2. Key Activities - making good quality home cooked food 3. Value Propositions - Healthy home made food with cost effective 4. Customer relationship - one to one direct approach 5. Customer Segments - Individuals, office goers, paying guests and students 6. Key Resources - Individual investments, advance receipts from customers 7. Channels - delivery boys, small mobile vans, etc 8. Cost Structure - offordable minimal cost 9. Revenue Streams - Advance receipts, monthly payments schemes, mostly on cash basis with minimal credit periods. Viablity Proof allowing to accommodate some strategies:Chulha tiffin services business shows a clear cut viability by allowing us to suggest certain strategies for its future growth. They are as follows:1. Simple survival technique:Chulha, delivering hygienic and delicious food in time to customers was its sole aim. There are many competitors in the market, but amidst competition it had to create a niche for itself by applying for extensive strategies to offer customer Value for money product. 2. Economies of Scale:- Even though Chulha had less profit margins, as it made in bulk, but on the whole it did make a huge percentage of profit. 3. Technologies that can be adapted:- Appointing food inspector, who would conduct surveys in every week to ensure, the quality standards, hygienic condition of the food, cleanliness and disposal of wastes, separate usage of utensils for veg and non-veg items, proper maintanence of gas and pipe lines, and other safety paramerters (from employees prospective) etc,

4. Prestige and CSR activities:- Chulha should opt for different CSR activities like, to fund an NGOs working to educate poor children, active participant in the Green Movement, involve in planning trees in industrial areas to reduce pollution, donating food 1 Sunday of every month to organization having challenged people, packaging food in paper bags and other recyclable materials. 5. Expansion of Market:- Opening for party orgers, Opening for the education market and planning to open canteens in different colleges. 6. Government Policy:- Chulha can opt for an ISO certified standards set against its quality of food, quality of ingredients used to prepare food. Using these it can set a benchmark for other restaurant which have to qualify the standards of food served by them. The government can thus standardize the quality of food served by the other food chains. 7. Self sufficient:- Chulha has its own supply of raw materials and it can plan to be self sufficient in delivery of its products as well. It has its own restaurant space and has its own staff. Hence it is highly self sufficient. 8. Always do annual analysis of chulhas business with PEST, SWOT, AND PORTERS FIVE CHOICES business model analysis which enables them to make future progress without any hurdles. From the above all indepth analysis I definitely feels that the chulha tiffin services business is a viable business which can really with stand and sustain for a quite long time.

Question No:2:- Are there any changes you would like to introduce in their business model?
Chulha now in a developing stage should definitely adopt/introduce as and when is needed. I would rather insist that they should have their own small R&D department person to implement certain methodologies since the competition in the market is raising like anything. (example,Itsmymeal and Papas tiffin etc) Segmentation:- Chulha has to introduce certain segmentation in addition to their existing ones. They have to introduce a morning breakfast segment. This will definitely bring additional revenue. Especially cities like Bangalore, where the Industrial growth is booming like anything year by year, the working population will also increase proportionately which will ultimately influence the potential area for business like chulha to tap and develop.

Additional meal features for customer satisfaction/attraction:- Chulha should introduce digestive food post meal like paan, a small banana fruit or a pack of supaari varieties etc. This definitely impact a high level customer satisfaction, an edge over the competitors in the market and also enables the businesss long term sustainability. Market Diversification:- Chulha should try to tap the other cosmopolitan cities like Mumbai, Delhi, Calcutta and Chennai etc. A critical market survery for diversification has to be conducted and accordingly modify the business model plans especially the catering packaging systems. There are certain important modifications like executive lunch, business dinner packages, corporate buffets etc to be introduced. For this local area agents has to be appointed. Extensive financial planning is required for this effort. But ultimately lead to high level revenue earnings. Major Tie ups:- Chulha can have tie ups with Hostels, Corporate Offices, Business Management Schools, and Engineering and medical Colleges. Regional Meals:- Since we are talking about chulhas diversification business model, it is necessary that they include regional meals like north Indian, south Indian, etc. in their menus. Encourage Local home makers:- Chulha should give franchisee to local house wives to do this business and promote Chulha in the areas where chulha itself could not deliver food in time. This is a very important change they should consider in their business model. By doing this the supply chain delivery problems can be solved in a very systematic manner with out any problem. Also chulhas management doesnt have to worry about the local taste of the regions customers. since it is prepared by the local house wives. Associated Catering Services:- Chulha should provide catering services to several parties, functions, and even to the Airlines and Railways. This is one of the major change that I would suggest to introduce in chulhas business model. These associated catering services will definitely increase chulhas market value and revenue earnings to a maximum extent. They can have multiple organizational groups for conducting marriage catering, party catering, corporate get-togethers , government functions catering services etc by way of signing official contracts. They should enter into the railways and airlines food catering services contracts also. Chulha should also have association with hospitals for the catering contracts. Cookery Competitions and award Ceremonies:- Chulha should have annual or half yearly cookery contests in every regions and territories. This will really boost customers involvement in chulhas business as well as

chulha can get some great ideas to introduce/change in their business models. In many countries the catering service business entrepreneurs got their chief chefs through these type of contests and competitions. Specialized Nutritional Services:- This is a very special introductory idea for chulhas business model. Chulha should concentrate on this aspect of introducing specialized nutritional catering services with the help of doctors and dietitians around. The services should be based on the following:1. Age

based Nutritional Concept:- Pediatric (child/infants), Geriatric (old age) etc. 2. Food based on Medical Prescriptions:- Sugar, Blood Pressure, etc 3. Food based on modern Health consciousness:- Low fat diet, Low calorie calculated food,high energy food for youth and sports personalities etc. Note: To introduce the above, chulha will have to have a strong financial planning since it involves additional costs also. But taking into consideration chulhas customers base they can have the premium price for their customers and in turn their customers also will ready to take the additional cost with ease. This is purely my perception.

Conclusion:
From the answers I have given above for the two questions concerned with the viability and changes of new introduction in the business model of chulha tiffin service business it is clearly evident that the proper approach, attitude and controls can lead to great success of a small business and an entrepreneur.