48980010 Lunching Oporto in India

Running Head: LAUNCHING OPORTO IN INDIA1

Business Plan Launching Oporto in India

(Student Full Names)

Business Plan

(Course Instructor)

(Date of Submission)

LAUNCHING OPORTO IN INDIA -2

Plan Outline

1.0 Executive Summary

1.1.0 Objectives

1.1.1 Mission

1.1.2 Keys to Success

2.0 Company Summary

2.1.0 Company Ownership

2.1.1 Start-up Summary

2.1.2 Locations and Facilities

3.0 Products

3.1.0 Product Description

3.1.1 Competitive Comparison

3.1.2 Sales Literature

3.1.3 Sourcing

3.1.4 Sales Programs

3.1.5 Future Products

4.0 Market Analysis Summary

4.1.0 Market Segmentation

4.1.1 Target Market

4.1.2 Market Trends

4.1.3 Industry Analysis

5.0 Strategy and Implementation Summary

6.0 Web Plan Summary

7.0 Management Summary

8.0 Financial Plan

8.1.0 Start-Up Funding

8.1.1 Break Even Analysis

8.1.2 Projected Profits and Losses

8.1.3 Business Ratios

10.0 References


BUSINESS PLAN

OPORTO FAST FOOD RESTAURANT INDIA

(GROUP DETAILS)

EXECUTIVE SUMMARY

Oporto fast food chain of restaurants has been in operation since inception of the original

outlet in 1986 as a single branch. In 1995, the company diversified its expansion strategies,

by opening the first franchise brand. Since then the company has opened over 100 more

outlets in locations across Australia, and recently China, the United Kingdom and the USA

(Judge, 2008, p. 27). The same strategies used internationally will be applied in India since

they have been highly successful in terms of revenue and sales. Oporto India will thus be

strategically positioned as a global franchise through the team’s creative approach to the

overall detail and presentation of the company. Oporto India will ensure provision of quality

foods at value pricing, in addition to entertainment and fun packaging. Due to India’s

growing economy thus an increase in the fast working population, businesses and spending

habits, Oporto’s will undoubtedly substitute the new lifestyle trends by answering the

increasing demand for snack-type fast foods amongst shoppers.

The company realizes the similarities among diverse fast food restaurants extant in the Indian

market, making it difficult for customers to differentiate one outlet from the next (Woodside

& Trappey, 2004). New Delhi’s economy and population is rising quickly not only in Asia,

but also around the globe. This is also attributed to the increasing tourist population settling

in the city or visiting (Industry, 2011).As thus, the city has become a metropolis for fast food

franchises from around the globe, especially from the US (Baek et al, 2006). Hence, Oporto

India’s priority will be to differentiate itself from the market of fast food restaurants through

establishing itself in one of New Delhi’s crowded malls. Later on, the company intends to

expand to other locations of India, preferably in an equally quickly growing city such as

Mumbai.


The company has a plan in place for securing a vantage location for the initial franchise.

Subsequently, it will seek additional financing to open up the subsequent outlets, which have

been forecasted to be in operation by the beginning of the second and third year respectively.

The expansion strategies will be substantiated by capital structure from shareholders and

bank loans. The preliminary capital investment will enable Oporto to afford its clientele with

value-driven enjoyable experiences inspired by the founder’s creativity.

The target clientele for Oporto India will be the young age group/ working population. Thus,

the company will entice them to bring their family and friends through ensuring an innovative

environment, delicious menu in line with Oporto tradition of Portuguese style Chicken or

otherwise known as Galinha a Africana, fresh-cut chips, burgers and a wide selection of

unique delectable spicy chilli sauce. (Nuitritional Information, 2011).

Objectives

The short-term objectives for Oporto India for the duration of three years include:

To establish the presence of Oporto fast food restaurant in India, and accrue the

market shares in the country’s fast food industry.

To transform Oporto India fast foods as the destination spot for those on shopping

sprees and mall goers.

To increase the presence of Oporto India by expanding the outlets to encompass other

states such as Mumbai and Calcutta

To stabilize the sales in the first year and increase the profits in the second year

Mission

The main goal of Oporto’s India is to establish itself as the most successful fast food

restaurant in India, with the first retail outlet located in Ansal Plaza, which is among the most

famous shopping malls of East Delhi, acting in capacity as a tester of the market trends and

preferences. Oporto India will strive to be different from its competitors in the fast food


industry by offering our customers the total experience, when they frequent the restaurant or

the website, whereby they will learn of the latest fascinating pop culture.

Moreover, the company intends to sell merchandise ranging from t-shirts, baseball caps and

pre-packaged sauce to potato cutters, wherein the official Oporto marker would be attached.

However, Oporto India’s focus would be rooted in serving high quality fast foods at a great

value to its customers.

Keys to Success

The fast food industry is among the fastest growing industries in India with estimates putting

the growth rate at 40 percent annually (Reynolds & Biel, 2007). Thus, in order for the

business to be a success, key considerations have to be put in place. These include:

Creation of an innovative, entertaining and unique menu that will differentiate Oporto

fast food India from extant competitors in the industry

Management and control of the budget is mandatory at all times, in every sector or

sub-sector. This conservative approach is to ensure the business is safe and the

liquidity and profitability level are at par. We aim to strike a balance between proper

funding of the Ansal outlet, and minimizing spending.

Ensuring standards are maintained to optimal levels to encompass all product types

from food to merchandizing in an attempt to ensure customer satisfaction and

retention

Provision of 100 percent customer satisfaction to our clientele and also maintain the

degree of superb services amongst other competitors

Developing the image and brand of the business as the two values are crucial

ingredients to driving the company into success. Maintenance of the two values is

achievable through, but not limited to aggressive advertising.

Accessing the high-traffic shopping malls that are in close proximity to the target

market through promotional

Through promotion of traditional Oporto values, philosophy and culture


COMPANY SUMMARY

Oporto Fast Foods

Oporto has traditionally served fast foods, and they are especially famous for their grilled

chicken, chips, bondi and otropo burgers, piripiri chilli sauce, wraps and rolls. The company

uses the Portuguese concept in preparation of a wide variety of delectable foods such as the

piripiri chilli sauce and burgers. Additionally, the chips are made from fresh potatoes and are

fried twice to ensure they are crunchy. Oporto provides a friendly customer service, which is

aimed at instilling an ambience of energy, fun and a youthful lifestyle.

Fresh and Youthful Surroundings

Oporto’s target market in India is the majority of the age group 18-35 years. Therefore, the

company will imitate its tried and tested strategies in the UK, US, China and Australia which

include display cooking of the Portuguese chips from cutting all through to cooking,

additionally, the customers will be allowed the chance to read the in-house brochures with

regards the piripiri sauce and chips. Lastly, the setting will be highly decorated with display

menus on the walls and bright colours.

Food Quality

The food stores will offer homemade fries that are freshly fried, burgers, grilled chicken and

uniquely blended sauces, all served under old-fashioned conditions and home-styled care.

Open-Every Day

The food outlet will be opened Sunday-Sunday 24 hours a day, bearing in mind that business

in India is open all week, and therefore shoppers demand food on all days of the week.

Variety

A huge selection of sauces will be featured, inclusive of Indian curry and flavours. These,

along with the flavours of soda will be changed every three months.

Company Ownership

Oporto fast food restaurant is a privately held fast food company thus; its registration will be

limited with equal ownership amongst the partners with each partner owning 25 percent.

(State the full names of the four-team mates).


Partners A and B have a combined experience of 20 years in the food industry. They are both

corporate employees of Starbucks. (Partner A) holds an MBA from Harvard Business School,

a true entrepreneur by merit and passion, her latest project is a platinum store in Victoria.

(Partner B) is a graphic designer with a degree from the Arts Academy. His projects range

from the development of brands of reputable companies and product design.

(Teammate C) is an MS degree holder from Massachusetts Institute of technology. He has

served variously as project manager for multinational companies in India and completed

various projects. Lastly, (Teammate D) is a BS degree holder from Cambridge University,

with a major in IT and management. Prior to joining the team, he was a manager in Verizon

wireless.

Start-up Summary

The Indian market has opened up its previously stringent culture to fast foods culture owing

to its fast growing economy and busier population (Rey & Ritzer, 2010). As thus, the locale

of Oporto has been strategically chosen in Ansal Plaza, in East Delhi, which is among the

busiest and most popular shopping malls in New Delhi. The requisite financials would be

from individual investments of the partners.

Locations and Facilities

The size of the store ranges will range from 60-80 meters square, with a seating capacity of

25-40 guests, however, the preliminary location will be on the higher range of the estimates.

Furthermore, the building will encompass building brand attributes and original merchandise

display. The location of East Delhi was chosen because:

New Delhi is a tourist location, with many cultural sites and artefacts located in the

states East side (Shah, 2010)

The working population has increased attributed to an increasing female workforce

(Prasad & Aryasri, 2011)

Access to the shopping mall is convenient, as it is near a bus station

The community has a large percentage of the targeted age group.

However, the company will be in competition with other fast food joints within Ansal Plaza.

These include American owned McDonald’s, KFC and Pizza Inn.


PRODUCTS

Oporto has traditionally served non-alcoholic drinks in its outlets. Therefore, Oporto India

will not break from this tradition, and will instead offer its customers diverse flavours and

brands of soda and juices. Moreover, the company will keep in line with the tradition of

selling grilled chicken, burgers and chips with the traditional Portuguese piripiri sauce, which

will be complemented by the drinks. In an attempt to preserve the lifestyle of the company

and enable the customers to enjoy Oporto products at home, the company will provide hats,

potato cutters, the signature piripiri sauce a and t-shirts, all with the brand name inscribed.

The piripiri sauce will also be availed for purchase in retail stores across East Delhi.

Description of the Products

Oporto primarily sells food centred on grilled chicken and the piripiri source. For example,

the bondi burger consists of breadcrumbs, grilled chicken breast, mayonnaise, lettuce, and the

piripiri sauce that consists of lemon, ginger, chilli and garlic. The burger ranges in sizes from

small, medium and large. Additionally, there are norm versions or chilli versions of the

burger. Other types of burgers in the menu will also centre on grilled chicken and include the

Otropo burger, Oprego burger, Veggie burger and the Kiddo burger. The main products sold

will be grilled chicken, wraps and rolls, chips and burgers. However, the fast food diet will

also incorporate some of the flavours form the local Indian diet such as hot chilli sauce in

making varieties of its custom dishes.

Competitive Comparison

Oporto fast food’s competitive advantage over its competitors lies in:

Its unique dipping sauce concept

Its friendly staff give the atmosphere energy and an enthusiastic air, which makes the

restaurant fun, reflecting the company’s culture and target market

The company’s supporting merchandise that aid the brand build-up

Unlike other fast food companies that use frozen potatoes, Oporto uses 100 percent

fresh potatoes. The same concept is inclusive of the dipping sauce, that is also made

from fresh fruits devoid of preservatives

Sales Literature


The company will use marketing and advertising strategies to promote and alert consumers as

to the new outlet and in turn increase sales. This will be done through aggressive distribution

of colourful brochures to shopping outlets around Delhi. The brochures will be inclusive of

promotions on the first visit to the restaurant. Additional advertising will be conducted via

magazines, the television and radio.

Sourcing

Raw products, which include fresh potatoes, fresh vegetables and fruits, healthy sized

chickens, and meat, will be delivered on a weekly basis directly from a supplier in Australia.

The piripiri source has been sourced to Delhi Pep for manufacture, while the merchandise

production has been outsourced to a partner office in Mumbai.

Sales Programmes

Exclusive opening will be done for all Oporto fast food chains in India. The opening will

encompass a grand opening whereby there will be outdoor signage; secondly, there will be a

point of purchase, which will include an explanation of the culture of Oporto, its philosophy,

awarding of gift certificates, and a mention of future franchise opportunities and job

openings.

Future Products

For now, the focus of the company will be on the sale of fast foods for example chips.

Nonetheless, future expansion will allow inclusion of new food categories into the menu,

especially those with an Indian or oriental background. Likewise, the anticipated success will

offer a chance the company to expand through franchising the brand name to food

entrepreneurs in India.

The sales will also be increased through offering value meals and combo meals that target

price sensitive consumers. Lastly, the brochures will inform the clientele of the chance event

of the company conducting private functions such as parties and banquets.

MARKET SUMMARY ANALYSIS

Fast food is among India’s fastest growing food types, with a 40 percent yearly increment,

and $1 billion dollars in sales. Foreign investments are attributed to a quarter of investments


in the industry. The country’s abundance of raw materials has seen the number of

internationally recognized brands flood the country (Sinha, 2003).

The increase in spending can be attributed to a growing economy, inclusion of more women

to the economy, customer confidence and satisfaction, paucity of time, double incomes in

families, population increase, laxity in regulations and rules, and diversification of menus

(Zeithaml, 2005).

Market Segmentation

The primary target for the company is the young Indian population. Because of the high

extra-curricular activities in school, the learners meet up for meals in the shopping malls.

Apart from the youth, the restaurant will benefit from the high number of workers in the

boutiques and shopping malls. Estimates have put the number of these workers to be as high

as 100,000 (Ghosh, 2007, p. 134). Lastly, the target will be the tourists who may be staying in

East Delhi or on transit. Ansal mall is strategically located close to tourist hotels such as the

Taj Mahal, the Hilton and Crown Prince Hotel. The tourists will flock these shopping malls

to shop and snack afterwards.

Target Market Strategy

Oporto India is targeting the youth of 15-25 years, as it is the age group with the highest

appetite for fast food. As thus, the company will ensure pricing strategies that does not strain

their budgets, in turn ensuring repeat customers. The secondary target will be of the age

group 25-37 years whose budgets are less strained.

The prices will be fair for both target markets, which will be $4 for the large sized chicken

and fries, slightly above the competition, but nonetheless, worth the service and fun

atmosphere that will be offered.

Market Trends

The market is dominated by McDonalds, Domino’s Pizza, Subways, Nirulas, KFC, Coffee

Day and Barista. The appetite for global fast food chains is mostly attributed to the fact that

India is a tourist hub, and tourists flock from around the globe whereby, fast foods may be the

only familiar food far from their home territories (Stone, 2007).

Industry Analysis


In spite of the financial crisis of 2007/8, the food service industry witnessed a growth of 12-

14 percent in terms of transactions and units. Competition among global players has been a

contributing factor to the increase in the number of fast food restaurants. Franchising in the

industry is a common phenomenon and many companies have grown considerably due to

this.

Indians have increased their spending habits, to include take-outs and eating out. The growth

has spurned due to an increase in the influence of those under 40, and the doubling of

expatriate settlers.

STRATEGY AND IMPLEMENTATION SUMMARY

Oporto India will use strategies in marketing, pricing, branding, marketing programs,

positioning statement, sales strategy, sales forecast, and strategic alliances to influence its

strategies and implementation towards growth and success.

The company successfully launch its strategies and their implementation through:

Firstly, maintaining the dipping piripiri sauce recipe. Secondly, by supporting the

franchising staff, maintaining good work environment with its employees, supporting

merchandise items, and through use of unique packaging. This is done to maintain its

competitive edge in the market.

The first outlet in East Delhi will serve as a tester for the subsequent outlets. Each

local store will be individually branded with the core values for the company stressed.

Additionally, the company will ensure quality of services and products offered to

maintain customers.

Thirdly, the pricing strategy of the company is part of the strategy. The medium

packed combo meals will all be $4.00

The company aims to stand out from the rest of the competition through use of its

globally recognized logo, which is fresh and gearing its products to the younger

segments with names coined to reflect the same


The marketing programs that will be used will include in store marketing, word-of-

mouth, the local media encompassing newspaper advertisements, web campaigns and

magazine campaigns.

The forecasted sales are anticipated to be highest in November and December; these

are festive holidays encompassing Christian, Muslim and Hindu religions.

Additionally, tourists increase in numbers during these holidays as they to escape

winter in a warm country such as India.

Oporto India aims to form strategic alliances and long-term relationships with

suppliers of raw products.

WEB PLAN SUMMARY

Web marketing is essential to the way business is conducted today. All successful businesses

have launched websites that are user friendly, easily accessible and navigate. Additionally,

the websites have public forums where customers can post questions and give suggestions.

The hotline numbers for delivery are accessible via the web and bookings can be done via the

web.

In addition to this, the websites will supply information on the culture of Oporto and

traditions under which their special delicacies are made. In short, the website will be a link

between the company and the customers.

In an attempt to increase the popularity of our website, aggressive advertisements of the site

will be carried out on the official pages of Indian Tourism board.

Essentially, in an attempt to popularize the company, the corporate colours of the company

will be prominently featured on the website. The design will be entrusted to (Partner 4), who

is an IT specialist.

MANAGEMENT SUMMARY

Currently, the organization structure is small, heavily depending on the founders. However,

future expansion will require more personnel to run the company operations for success. The

company intends to run its operations with lean endeavours, only hiring staff whenever


necessary. Presently, the management team consists of the four founders, adequately fit for its

organizational form. However, the expansion will see every location headed by a manager.

The future organizational structure will include, but not limited be to, store operations

director, included in the team when the expansion exceeds four outlets. A marketing

manager, controller, purchasing manager, human resources, and the administration support

team.

The initial personnel will include two cooks, two cashiers, and two bus boys in every

location. The working hours for employees will be in 12-hour shifts initially, of 40-hour

weeks. However, this is only temporary, as more employees will be brought to the team with

future expansion.

FINANCIAL PLAN

Presently, Oporto India is co-owned by four partners (State all their names). However, the

plan is to offer the company shares in an initial public offer after two consecutive tears of

operations.

Start-up Funding

The four owners will each contribute $200000 of their investments, as the initial capital for

the business.

Start-up Funding

Start-up Expenses to Fund $68,800

Start-up Assets to Fund $50,000

Total Funding Required $118,800

Assets

Cash Requirements from Start-up $50,000

Non-cash Assets from Start-up $30,000

Cash Balance on Starting Date $731,200

$50,000 Additional Cash Raised $681,200

Cash Balance on Starting Date $731,200

Total Assets $761,200

Total Planned Investment $800,000


Loss at Start-up (Start-up Expenses) ($68,800

Total Capital and Liabilities $731,200

Total Funding $800,000

Break-Even Analysis

Requisite unit sales needed to break even per month are over 10000 shown from the analysis.

Oporto India does not anticipate turning steady profits up until the third year.

Monthly Units Break-even 9,706

Assumptions

Average Per-Unit Revenue $3.31

Average Per-Unit Variable Cost $0.73

Estimated Monthly Fixed Cost $24,979

Profits and Losses Projected

Oporto India is expected to operate on losses for the first two years, thriving on the initial

capital structure. However an increase in sales will be countered with aggressive expansion to

increase the restaurants popularity. The expansion of the outlets will enable the company to

rent out in cheaper streets as the company’s brand would already be known as that of quality.

Pro Forma Profit and Loss

Year 1 Year 2 Year 3

Sales $279,163 $558,327 $1,116,654

Direct Cost of Sales $61,957 $123,914 $247,827

Gross Margin $217,207 $434,413 $868,826

Gross Margin % 77.81% 77.81% 77.81%


Expenses

Payroll $88,200 $262,000 $449,600

Rent $174,000 $248,000 $298,000

Marketing/Promotion $10,000 $10,000 $10,000

Total Operating Expenses $299,750 $575,000 $815,600

Profit before Interest and Taxes ($82,543) ($140,587) $53,226

Net Profit/Sales -29.57% -25.18% 4.77%

Business Ratios

The business ratios projected indicate statistics for Oporto India and the industry averages.

Analysis of RatiosYear 1 Year 2 Year 3 Industry Profile

Sales Growth 0.00% 100.00% 100.00% 8.67%Percent of Total Assets

Total Current Assets 100.00% 100.00% 100.00% 45.97%

Long-term Assets 54.03%

Current Liabilities 4.31% 6.60% 8.25% 17.94%

Long-term Liabilities 22.26%

Total Liabilities 4.31% 6.60% 8.25% 40.20%

Net Worth 95.69% 93.40% 91.75% 59.80%

Percent of Sales

Gross Margin 77.81% 77.81% 77.81% 59.05%

Profit before Interest and Taxes -29.57% -25.18% 4.77% 1.92%

Main Ratios

Quick 23.18 15.15 12.13 0.66

Current 23.18 15.15 12.13 1.04

Total Debt to Total Assets 4.31% 6.60% 8.25% 50.22%

Liquidity Ratios

Net Working Capital $648,657 $508,070 $561,296 n a


Additional Ratios

Assets to Sales 2.43 0.97 0.55

Current Debt/Total Assets 4% 7% 8%

Sales/Net Worth 0.43 1.10 1.99

References

Baek, S.-H., Ham, S., & Yang, I.-S. (2006). A Cross-Cultural Comparison of Fast Food

Restaurant Selection Criteria Between Korean and Indian College Students.

International Journal of Hospitality Management , 683-698.

Ghosh, A. M. (2007). Location Strategies for Retail and Service Firms. Lexington, MA:

Lexington Books.

Industry. (2011, January 5). US tops foreign tourist arrivals in India. Retrieved January 31,

2011, from The Economic Times: http://economictimes.indiatimes.com/news/news-

by-industry/services/travel/visa-power/us-tops-foreign-tourist-arrivals-in-india/

articleshow/7224787.cms

Judge, T. (2008). Culinary Delightss of the Southern Beaches: Dawes Journal of Fine Foods.

Sydney: New London publishing inc.

Nuitritional Information. (2011). Retrieved January 31, 2011, from Calorie King Australia:

http://www.calorieking.com.au/foods/category.php?

brand_id=532&category_id=20&subcat_id=-1&partner=

Prasad, C. J., & Aryasri, A. R. (2011). Effect of Shopper Attributes on Retail Format Choice

Behaviour for Food and Grocery Retailing in India. International Journal of Retail &

Distribution Management , Volume: 39 Issue: 1 .

Rey, P., & Ritzer, G. (2010). Conceptualizing Globalization in Terms of Flows. Current

Perspectives in Social Theory , Volume: 27.

Reynolds, D., & Biel, D. (2007). Incorporating Satisfaction Measures into a Restaurant

Productivity Index. International Journal of Hospitality Management , 352-361.


Shah, S. (2010, January 29). Culture for Peace Held in New Delhi. Retrieved January 31,

2011, from Times of Assam: http://www.timesofassam.com/headlines/culture-for-

peace-held-in-new-delhi

Sinha, P. (2003). Shopping Orientation in the Evolving Indian Market. Vikalpa , Vol. 28

No.2, pp.13-22.

Stone, K. (2007). Competing with the Retail Giants: How to Survive in the New Retail

Landscape. New York, NY: Wiley.

Woodside, A., & Trappey, R. (2004). Finding out Why Customers Shop your Store and Buy

your Brand. Journal of Advertising Research , .37-44.

Zeithaml, V. (2005). The new demographics and market fragmentation. Journal of Marketing

, Vol. 49 pp.64-75.

Date post:	27-Nov-2014
Category:	Documents
Upload:	zhalak
View:	728 times
Download:	3 times

48980010 Lunching Oporto in India

Documents