Veg-tastic will be a fast food outlet that offers customers of all kinds with healthy vegetarian-styled cuisines. The cafe is founded on three fundamental concepts: transforming the food culture to a healthful one, overhauling the dull vegetarian tradition and making it tastier one, as well as serving healthy and tasty food at an affordable price. According to Bertels, Koen and Elsum (25), today’s business environment is highly competitive; thus, it will be critical for the enterprise to differentiate itself from other already established food chains. The core objective is to be the only vegan restaurant in the market that offers an assortment of food picks via self-mixed ingredients for meals. An emphasis will be on creating and raising awareness on the need to exercise healthy eating habits using a cost-effective and sustainable business. Nasir and Karakaya (265) noted that these are key elements for any business to create a value proposition similar to the one that will be advanced by Veg-tastic. Average price of the offerings will be set at a moderately low margin to attract more customers to the food stores. With a starting capital of £80000, the establishment will limit its operating expenses at a justifiable range by hiring a reasonable number of personnel, and optimizing word-of-mouth marketing. The business plan sets the basis of analysing environment within which the business will operate and the potential barriers of entry, while giving an overview of the direction the company is likely to take in the future.
Vision
The business vision is to transform overall perception of the fast food industry into a health-oriented sector that does not compromise on quality. Veg-tastic also envisions itself as being a vegan food of choice among students and working-class populations in the next five years.
Mission
Veg-tastic mission break down is to:
Conveniently offer healthy vegetarian-styled cookery to its customers.
Operate and expand at a steady rate and on a consistent basis.
Deliver high quality food on an exceptional value proposition.
Keys to Success
The business will be driven by the following:
Distinctive and quality products enhanced by a diversified menu that differentiates the enterprise from competitors.
Convenient locations that are effortlessly accessible through all modes of transport.
Exceptional customer service that proactively meets and exceeds customer expectations.
External Analysis
According to Marshall and Geoffrey (59), an assessment of the external business environment is necessary to determine influence of macro forces on business operations. Such analysis seeks to identify the opportunities and threats that could hinder successful implementation of laid strategies (Marshall and Geoffrey 61). For purposes of pinpointing these dynamics, PESTEL tool will be utilized to characterize level of competition in the industry and prevailing market trends that can be leveraged on by the business. Below is a representation of the PESTEL analysis framework.
Figure 1. PEST Analysis
Source: Eoin (2013)
PEST Analysis
Political Factors
As Yini and Wu (409) remarked, political state of a country is a key determinant that impacts on a firm’s growth and development. In the UK, the relative government stability is conducive for business (Mintel Oxygen 23). The government has developed a comprehensive health policy that encourages its citizens to observe a healthy lifestyle including their eating habits (Isobel 86). Given this goodwill and support from the political class, Veg-tastic has adequate incentives to successfully operate and grow in the country.
Economic Factors
According to Isobel (88), economic influences and occurrences that impact on food retail industry in the UK are concentrated in areas such as disposable income, inflation, taxation, interest rates and the recent Brexit. One of the major economic issues is the financial meltdown that negatively affected consumer’s purchasing power (Tim et al., 4). However, given the popularity of healthy eating, there have been tax incentives for production of organic farm products; this stands to benefit Veg-tastic by reducing production costs and maximizing profit margins.
Social Factors
As Nasir and Karakaya (272) remarked, cultures and consumer attitudes towards vegan-based
diets are complex, often associating food to health, individuality and ethical standards. In addition, location of the food chains in UK is of essence in promoting trust. Most people link the ambience of food chains and general environment to clean and quality food (Nasir and Karakaya 274). In a recent review conducted in the United Kingdom regarding vegan-related foods, it was found out that the perception that such foods are healthier and eco-friendly were key motivators for their consumption (Shi 378). Given this observation, Veg-tastic is strategically positioned to benefit from the shift in consumer attitudes.
Technological Factors
In the food industry, several technological issues have to be considered for businesses to remain competitive and profitable. Presently, the cycle from production to delivery has incorporated a technological component to facilitate efficiency (Youjae and Gong 1281). In the last five years, various food stores in the UK have taken advantage of digital channels that aid consumers in placing online orders, comparing prices, and paying for the products and services (Philip, Land and Seuring 136). Hence, food operators minimize on cost at every stage of the value chain. The introduction of digital technologies will be valuable to Veg-tastic’s business strategy as it will enable the organization to appeal to the tech-savvy young customers.
Industry Overview
In a report published by Vegan Society, it was revealed that number of vegan outlets in the United Kingdom was increasing at an unprecedented rate in the past decade, whereas people consuming meat and its products was drastically declining (Isobel 82). Such these trends represent an opportunity for operators in the food sector in the country. As Isobel (84) commented, there is a growing demand for meat and dairy-free alternatives owing to aggressive campaigns advocating for healthy eating habits. According to Shi (378), an estimated 10% of Brits claim that they have attempted to adhere to a vegan diet in the last year. Given these patterns, UK food retailers are responding to these changes in consumer behaviours by modifying their menus to cash-in on this new phenomenon (Tim et al., 7). Across major cities and towns, there has been a boom of food outlets serving these outlets, with some attempting to introduce products such as vegan cheese and pizza to woe more customers (Tim et al., 9). Currently, the UK vegan food market is valued at £17.4bn and is projected to grow further in future (Isobel 89). However, the main challenge according to Nasir and Karakaya (263) for new entrants in the business in the high cost involved in substitution. From the above summary, Veg-tastic will need to devise strategies that would appeal to customers having traditionally used meat and dairy products.
Competition
From a prior competitor analysis, among the major direct competitors identified include Leon, Zizzi and Pizza Hut. The only edge these food chains have over Veg-tastic is the pioneer advantage; however, this can be countered by increasing level of differentiation. According to the organizational theory and dynamic competitive strategy model, differentiated products and services guarantee a progressive market share in business (Philip et al., 133). After evaluating the above players in the market, none of them possess attributes of Veg-tastic as a fast food store. Consequently, there is an elevated level of confidence that the venture will be attractive to identified customer segments in the differentiated target market.
Target Market and Marketing Plan
Target Customers
The main target market of the business consists of individuals between 21-65 years. However, within this audience, there are three market segments.
Students form the major circle for vegan fast food customers, given their preference for experimentation of new and tasty food products.
Office employees with hectic schedules searching for to-go food.
Families with young children looking to strike a balance between kids craving for fast food and their health.
Marketing Plan
Marketing Mix
Pricing Strategy
Veg-tastic’s food and beverages choices will be priced to provide the business with an attractive margin even as it attempts to offer a high-quality service offering to customers. The enterprise will not only strive to retain repeat clients but also ensure that every experience is memorable for customers having their meals at the facility. Moreover, Veg-tastic will exploit the favourites and eliminate those not making the experience flexible. The price range of food will range from £4-£8, burgers will retail at £3-£5 while smoothies and other drinks will range between £1.5-£4.
Place Strategy
The business’s main distribution channel will be the food café strategically located along Cowley Road. At the food store, customers will make orders and be served within the shortest time possible by the highly trained staff consisting of waiters, chefs and cashiers. To make the experience more enjoyable for customers, a Wi-Fi internet connection will be installed at the café to enable clients’ stream music and access the latest news while having their meals.
Product Strategy
The café will have a diversified menu made up of cuisines from different parts of the country to meet needs of the cosmopolitan populace. Organic soy meat, vegetarian burger and smoothies are the main meals that will be offered. Furthermore, seasonal food products will be offered at specific times of the year for customers. The below represents a personalized menu that will be used by the café.
Source: (Isobel 86)
Promotion Strategy
Veg-tastic will promote its brand by creating awareness using multiple channels. As Krystallis, Athanasios and Chrysochou (142) stated, quality of an organization’s brand is essential in attracting and retaining customers. The initiative will be an attempt to portray it as a food store of choice by using creatively constructed healthy menus and an attractively designed interior. Traditional advertising approaches through newspapers, radio and television will also be utilized to market the entity. With growth of digital marketing, Veg-tastic will have a website dedicated to market various food and beverages. Facebook, Twitter and Instagram will be the main platforms the company will deploy to engage customers.
Operations Management
Operations Plan
Time Management
Veg-tastic will establish time-sensitive policies that will maximize on working hours. The food outlet will be open 6 days a week; Sunday will be an off-day. In Oxford, people tend to be less outgoing on a Sunday; thus, it is prudent to close during this day to allow the business reduce on costs and streamline staff scheduling. The working hours will run from 5 a.m. and 10 p.m. during weekdays and between 8 a.m. and 6p.m on Saturdays. Employees will take breaks between breakfast and lunch to have their meals before work. For those who would not have time to eat, such staff will make their orders and carry along to their workstations.
Location
As Katsikeas, Morgan and Hult (12) affirmed, location of a business is an important consideration. The enterprise will open its store on Cowley Road in the East of Oxford city. The area has a considerable student population who make up a majority of the target market. The location is suitable because of its high traffic capable of attracting many customers to the café. The area is also in close proximity to the local market and shopping centres with excellent infrastructural connectivity.
Staffing
Nine people will form Veg-tastic’s staff composed of one head cook, one assistant cook, two part-time cleaners, one headwaiter, three waiters and a delivery driver. For a start-up, number of these employees may be considered high; however, business attaches great importance to excellent customer service. Based on initial assessment and experience, this is the most appropriate number of personnel who will satisfactorily meet set standards. However, with rise in customer number in future, the business anticipates to hire more staff to match the growing demand.
Sourcing Strategy
There are several UK-based suppliers and manufacturers for utensils, ingredients and packaging materials identified by the business. Specific dealers for food store equipment will be selected on a competitive tendering process to ensure that suppliers meet set regulatory standards. The merchants have to supply high-quality kitchen equipment at a pre-negotiated price. For the business, keeping a minimum inventory will reduce costs involved in funding, operating and packaging.
Human Resources Management Issues
Personnel Management
Veg-tastic will be responsible for all employees considering that the business will train high-performing personnel, inspire their potential and enhance teamwork capacity to serve customers in a more professional and dedicated manner. As Boddy (10) acclaimed, employees are a vital human asset for any organization and should be well-equipped to effectively discharge their mandate. Veg-tastic will adopt an employee-oriented management approach that will align different functions with specific employee skills and interests. The organizational culture will be shaped to boost employee development to elicit enthusiasm from staff.
Compensation
As per Milkovich and Newman (75) research, compensation ranks among the most central HR issues in a business. The compensation strategy to be used by the organization will be designed in a way to motivate employees to work wholeheartedly. According to Maslow’s hierarchy of needs theory, the level of motivation is significantly improved if basic physiological and safety needs are met (Yi, Youjae and Gong 1283). In addition to the base pay for all employees, a merit pay system will be used to recognize and reward outstanding employees on an annual basis. Through the strategy, the business hopes to cultivate work behaviours such as flexibility, teamwork, rapport-building and efficiency.
Works Cited
Aslihan Nasir, V., and Fahri Karakaya. "Consumer segments in organic foods market." Journal of Consumer Marketing 31.4 (2014): 263-277.
Bertels, Koen, and Elsum. Business models outside the core: Lessons learned from success and failure. Research-Technology Management, 58(2) (2015): 20-29.
Beske, Philip, Anna Land, and Stefan Seuring. "Sustainable supply chain management practices and dynamic capabilities in the food industry: A critical analysis of the literature." International journal of production economics 152 (2014): 131-143.
Boddy. Management: An introduction, 7th Edition. Harlow: Pearson. (2017).
Hess, Tim. "The impact of healthier dietary scenarios on the global blue water scarcity footprint of food consumption in the UK." Food Policy 50 (2015): 1-10.
Katsikeas, Morgan, Leonidou, Hult. Assessing performance outcomes in marketing. Journal of Marketing, 80(2) (2016): 1-20.
Krystallis, Athanasios, and Polymeros Chrysochou. "The effects of service brand dimensions on brand loyalty." Journal of Retailing and Consumer Services 21.2 (2014): 139-147.
Lin, Yini, and Lei-Yu Wu. "Exploring the role of dynamic capabilities in firm performance under the resource-based view framework." Journal of business research 67.3 (2014): 407-413.
Milkovich and Newman. "Gerhart. B. (2014). Compensation."
Mintel Oxygen. Attitudes towards lunch-out-of-home- UK. (2018).
O’Sullivan, Eoin. "What is new in the new industrial policy? A manufacturing systems perspective." Oxford Review of Economic Policy 29.2 (2013): 432-462.
Tomlinson, Isobel. "Doubling food production to feed the 9 billion: a critical perspective on a key discourse of food security in the UK." Journal of rural studies 29 (2013): 81-90.
Van Alstyne, Marshall, Geoffrey. Parker, and Sangeet Paul Choudary. "Pipelines, platforms, and the new rules of strategy." Harvard business review 94.4 (2016): 54-62.
Wee, Shi. "Consumers perception, purchase intention and actual purchase behaviour of organic food products." Review of Integrative Business and Economics Research 3.2 (2014): 378.
Yi, Youjae, and Taeshik Gong. "Customer value co-creation behavior: Scale development and validation." Journal of Business Research 66.9 (2013): 1279-1284.
