http://www.littleindia.com/news/123/ARTICLE/1445/2005-03-05.htmlGUPTA CHAAT CENTRE

BY

NEHA GOYAL (78)

RASHMI KADAM (83)

PUSHKRAJ PANDIT (109)

JYOTI RATHOD (118)

PGDM 2007-09 TRIMESTER VI (FINANCE SPECIALISATION)

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TABLE OF CONTENTS

SR.NO SUB NO TOPIC PAGE

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1 Executive Summary 1

2 Current Offering 1

3SWOT Analysis

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4 Survey Results 6

5 New Ideas for Implementation 10

6 Marketing Plan 12

7 Steps To Execution of the Plan 13

8 Financial Projections & Analysis 14

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EXECUTIVE SUMMARY

Mumbai food comprises a wide range of exotic traditional cuisines and spicy fast food. The local residents of Mumbai love to savour spicy chaat from the road side food stalls of the city. Bhelpuri, Pav Bhaji, Pani Puri and Vada Pav are some of the delicacies of Mumbai.  There must be something about chaats or street food of India that multinationals with their variety of chips and burgers have not been able to replace. Despite the sudden mushrooming of American fast food joints across Indian metros, churning out their monotonous fare of burgers and French fries and insipid coffees, the grassroots level street food and dhabas will always be there.

Mumbai’s chaat stalls are found in every corner of Bombay. Its an indispensable part of street food culture in Mumbai. Chaats are really light on the budget and can be eaten easily at anytime of the day and which is quite filling.

The business that we have chosen to work on is Gupta Chaat Centre which offers a variety of chaat items like  Sev Puri, Bhel, Sandwich (Cheese, Grill), Dahi Puri, Pani Puri and Cold Drinks Corn Dishes.

We think that Gupta Chaat Centre has a good potential to be an effective business. A number of parameters like networking, marketing, etc which are required for an effective business are missing in the way Gupta Chaat Centre is presently running their business either due to capital constraints   or underutilisation of the resources. 

CURRENT OFFERING

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SWOT ANALYSIS

Strengths

Space – They have space for seating area which they have not utilised properly.

Staff/Skills – The people working at Gupta Chaat Centre were mobile chaatwala prior to becoming an employee at this centre. So they are already experienced, skilled and efficient.

There are 3-4 people at the front and their roles are very clearly defined according to their skills and competencies. For example, there is one person responsible for collecting cash and taking orders.

Quick service and customer satisfaction is at the core of all their activities

Support activities - required for running this business are already in place. By support activities we mean:

Transportation of raw materials, pre-preparation work (chopping, peeling, etc) is all done with efficiency since the staff is already experienced.

Sourcing of raw materials - It is done in required quantities from optimal sources and prices.

Weaknesses

Location - Due to its location, not many people are aware of Gupta Chaat Centre.

Marketing – They have not worked on marketing. The only marketing this business has is word of mouth marketing.

Offerings – Currently their offerings are limited.

Working hours – Their working hours are from 2 pm to 10 pm. They are not making use of the space available before 2 pm. They are paying rent on a monthly basis for the whole day. 

Opportunities

Marketing –Marketing is one way in which they can make people aware of their chaat centre. They can start by distributing pamphlets outside the colleges in Matunga area since their budget is very low and the target audience will be college goers.

Forward integration – They can start catering business. They can send people with mobile chaat at kids birthday parties, small functions, etc. And at these

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functions or parties they can distribute pamphlets here as well.Also they can set up stalls at weddings.

Expansion – With the opportunities that we can explore by applying design thinking to the existing business model expanding it to include a larger customer base with diversified products.

Varieties/diversification – Introduce other items like nimbu pani, jaljeera, vada pav, ice cream, etc

Working hours (Presently 2 – 10) – They should start some other business in the same space which is idle before 2 pm.

Mobile chaat – At a particular time of the day maybe when the colleges or office gets over or during breaks they can send one of their staff members with mobile chaat

Threat

Increase in the number of competitors 

Since their centre is on rent, there is a possibility of the owner to impose certain restrictions 

Due to Low profits margins there is a lower reserve to compensate for a seasonal or accidental loss. 

Currently in this area there are 3 major colleges which form a major customer base for the chaatwalas. In these respective colleges there are canteens which have similar offerings. However, they fail to attract college crowd due to lack of expertise at making chaats. This is a major reason chaat centres outside institutes attract people. If the college canteens offer a similar offering as the chaat centre outside then there can be a considerable reduction in the customer base of these chaat centres which can seriously jeopardise their business viability.

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SURVEY RESULTS

1. How often do you have chaat (frequency)?

Weekly 29Once in 2 weeks 8Once in 3 weeks 7Once a month 6

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2. Where do you go for chaats?

Particular chaat 16Any chaat centre 34

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3. Rank the below according to your preference: - ( 1 being highest and 5 being lowest) . No two parameters can have the same.

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Price 43Taste / 26Hygiene 11Quantity 7Location 13

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4. How much time do you generally spend at a chaat centre?

Less than 10 min 310 mins - 20 min 26More than 20 min 21

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5. Do you avoid chaats because of the calorie content?

Yes 20No 30

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6. Would you be encouraged to have low calorie chaat?

Yes 38No 12

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7. Would you be tempted to spend more time at a chaat centre if there was sitting area?

Yes 31No 19

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8.Are you willing to pay more for a customised chaat?

Yes 33No 17

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9. If yes how much?

More that 3 Rs 19More that 5 Rs 10More that 10 Rs 4

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10. Are you willing to try new items at a chaat centre?

Yes 27No 23

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11. Which of the following do you eat most no of times?

Bhel puri 7Sev puri 15 Pani puri 13

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No of These 1550

Findings From the Survey1. Generally a Chaat is not preferred by  any criteria but the choice is adhoc most of the time 2. Generally price is the major factor influencing the customers 3. Most of the people spend 10 mins- 20 mins having chaat leaving a good window to sell more 4. There is low awareness of the calories related to chaat but this can be turned in an opportunity by making them conscious about calories 5. People come to socialize more than just have chaat when they come in aleast 2 or more 6. People like to customize their chaat as per their taste and preferences.7. New items have a good potential if they fair well in the initial phases of introduction as a good number of customers have shown interest in trying something new

NEW IDEAS FOR IMPLEMENTATION

1) DIET CHAAT

Obesity has reached epidemic proportions in India in the 21st century, affecting 5% of the country's population. India is following a trend of other developing countries that are steadily becoming more obese. Unhealthy, processed food has become much more accessible following India's continued integration in global food markets. Indians are genetically susceptible to weight accumulation especially around the waist.

With increase in the awareness of health and other health related businesses, there is an increasing trend of people in the urban areas that are becoming more aware of the diet and calorie conscious while having food.

Still there is a low level of consciousness among people for diet related restriction while having chaat ( we found from survey). This can be a real threat if people change their fast food habit w.r.t chaat and vada pav being calorie conscious

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To start with, this offering will be beneficial form two point of view (calorie values analyses what we include). Increase in awareness of the calorie intake when we have chaat will increase the customer’s comfort feel about having regular chaat 

Secondly it will attract people by clearing the perception of it being not healthy (as a part of fast food)

Baked puri replacing fried puri used in pani puri  , roasted boondi instead of fried boondi, using mineral water instead of tap water, no potato as they have high calorie content 

2) CUSTOMISATION  

In today’s world most of the companies are opting for customisation to attract customers. Companies are willing to go an extra mile to satisfy the customers since there is huge competition in every field.  

We at Gupta chaat centre are proposing to use this concept to not only retain customers but also attract new customers as they will be getting a lot of variety to choose from. In this concept we would be having a different counter wherein the customers would be allowed to choose from the vast varieties. These varieties would be different from the usual ingredients that are popular amongst all the chaat centres.  For eg:- when a person selects to have a plate of paani puri he can decide to have all 6 puris in 6 different ways.  This would also involve the customers in the entire process.  

Gupta chaat centre recently started new items like Punjabi bhel which has become even more popular than the regular bhel since people want to try something new every time.

          

3) SEATING ARRANGEMENT

We found from the primary research that many people spend reasonable amount of time at the chaat center and it can be used as an opportunity in the plan for business expansion

Generally at all chaat centres people stand and eat, but here we have space for sitting. This can increase the waiting time to 20 mins . Now the customer not only visits to eat and sit over there but also have a good time and chat with friends and hence it also becomes a socializing place. Same person does not eat the same thing twice. While they “Chat over Chaat” other items like cold drinks and ice creams can also be sold to them.

There can be a combo offering that includes a chaat and a cold drink (with some discount)

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For example, if bhel puri is Rs.13 and cold drink is 10, the total comes to Rs.23

But we can sell a combo offer with a discount for Rs. 21

This is similar to Mac Donalds Happy Meal

It can be improved by offering a beautiful designed lunch pack. However this can be feasible once it becomes widely acceptable and the sales pick up.  

4) Diversification of Offerings/Products

Currently their working hours are from 2 pm to 10 pm. The place is unutilised in the morning. During this time, we can set up a stall to sell cutting tea, nimbu pani and jal jeera. Though Cutting tea will be from 8 to 2 whereas nimbu pani and jaljeera will be sold throughout the day.

The cost of selling these items will be very low. So the investment required for this will be negligible.

Mumbai has a hot and humid climate for a major part of the year. Therefore, offerings like nimbu pani and jaljeera will always be in demand and they are cheap too. So we can sell them throughout the day.

Also there will be free home delivery of sandwiches between 8 am to 2 pm (Order size > Rs.30)

Since the chaat stall starts at 2 pm, there is an opportunity to set up a cutting chai stall from 8 am to 11 am which can be an additional source of income. Cutting tea is very famous in Mumbai. People generally have it when they are going to office, before starting their daily routine and during breaks from work.

5) MARKETING PLAN

Currently Gupta chaat Centre does not do much of marketing. The customers come to know about the chaat center by word of mouth.  The fame of this chaat totally depends on the performance with respect to the Quantity, Quality, Price and word of mouth marketing by regular customers. 

It is not feasible to advertise through sign boards or printing posters since the cost will be considerable. The cheapest and most effective way would be printing pamphlets and distributing that in front of colleges in vicinity, outside hotels like DP which are frequented by many customers.

Putting up a stall in fairs and college fests. And using this opportunity to distribute pamphlets as well. 

12Diversified products and offerings

STEPS TO EXECUTION OF THE PLAN

1) Hiring and Training Human Capital

For expansion of the business new people will be required with the setup of new processes. Currently they have 7 people, we are proposing to increasing it to 9 or 10. More human capital will be required to include mobile stalls and the setup of desk for customized chaat.

2) Purchase of new Instruments. Implementation of new processes will require investment in form of a fridge,

chairs, utensils, Tables, small stalls etc. This will be a fixed investment over time.

3) Building Supply Chain for new Items New offerings like Ice creams and the modification to the existing offerings like diet chaat require new raw materials which were not required earlier. To keep the business going a supply chain which is similar to the existing procurement model needs to be built.

4) Planning SOP’s (standard operating procedure) for the new products.

With the training of the new human capital there is a requirement for a new process plan in place, for the planning of an SOP of how the business will operate and how new functions are to be included in the current business model.

5) Advertising and marketing

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Gupta Chaat Centre

Customized chaatDiet Chaat

Seating arrangement Marketing

The new business plan requires marketing in form of distributing pamphlets, taking catering orders, participation in college festivals etc. There needs to be a shift of marketing by word of mouth to making their presence felt in the targeted locality/area.

6) Implementation of new unique selling proposition

The Unique selling propositions of business include setting up of sitting proper arrangement, offering wide range of products and diversifying the present offering by making customized and diet chaat.

7) Monitoring of new offerings

The success of the current business heavily depends on the monitoring of the new ideas that are to be implemented. It depends on:

If the customers are having other items while they sit at the chaat center for a longer time?

If the chaat center is getting acceptable as a socializing place? What are the sales of the modified offerings? What is the awareness of the people after the marketing efforts. Has it increased the

number of people visiting the chaat center?Financial Projections & Analysis

Sales Projections: Presently Year 1 Year 2 Year 3 Year 4 Year 5Volume/Day 200 250 300 350 400 450SP 15 18 20 22 24 26Total Sales daily 3000 4500 6000 7700 9600 11700Annual Sales 1095000 1642500 2190000 2810500 3504000 4270500

Costs (Annual):-                         RM 420000 525000 656250 820313 1025391 1281738Electricity 18000 30000 30000 30000 30000 30000Rent 180000 198000 217800 239580 263538 289891.8Fridge for ice cream 0 60000 0 0 0 0Depn @ 10%   6000 6000 6000 6000Salary 336000 504000 529200 555660 583443 612615.15Others 30000 30000 30000 30000 30000 30000Total Costs 984000 1347000 1469250 1681553 1938372 2250245PBT 111000 295500 720750 1128948 1565628 2020255Taxes as per slab system 0 14550 129100 243684 374688 511076PAT 111000 280950 591650 885264 1190940 1509179

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Our profit as a group   140475 295825      Individual profit   35118.75 73956.25      

Ratios            ROI   18% 188% 352% 526% 708%Projected Return   325000.0 720000.0  

Get out Point   zw 422500  

ROI = PBIT / Total investments

ASSUMPTIONS Presently they sell 200 plates per day.We assume volume/day will

increase by 25% each year for 5 years Presently avg SP is Rs.15. It will increase on account of inflation and the

changed rates of offerings Rent increases by 10% and Salary increases every year by 5% Due to the installment of new fridge for ice creams, the electricity cost

goes up 2500 per month (presently 1500 per month) RM cost increases by 25% each year We will be making an investment of around 2.5 lacs ( each one of us will

invest around 62,500). We will be entering into a 50:50 profit sharing model till the year in which ROI on our initial investment crosses 130% mark. We exit this year

Break even for us will reach in the 2nd year in the 9th or 10th month

Structuring of the agreement

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Rent: PresentlySq ft Area 350Rent per sq ft 42.8571Monthly Rent 15000Annual Rent 180000

RM Costs:  Weekly Raw Material Dry 16000Dialy Raw Material 19000Monthly RM cost 35000

Employees: Currently To beExecutives 6 9Owner 1 1

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Monthly Salary costs 28000 42000Annual Salary Costs 336000 504000Owner is also salaried (Rs.4000 equal to the other staff)In year 1, sal increases by 5% i.e. 4200 each

Initial investments  Deposits 180000License 10000Setup Cost 50000Fridge * 2 65000  305000

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Pani-Puri is a well known snack among every body (especially girls).Pani-Puri has different-different names in every state of India. Eating Pani-Puri is an Art. If you will not practice it you can never enjoy its taste. Its sweet & salty taste gives us refreshness, just like F5 on computer’s desktop. Bole too ‘maza aa gaya’. Me & my gang (group of girls, but I am not a college gabber) are a big fan of Pani-Puri, because the shop is situated just in front of my college gate, and the shop keeper very well knows the art of attracting customer.

So the 4 P’s of Pani-Puri are given bellow enjoy it:-Target Customers: Girls / boys accompany them compulsorily

Product : Pani-Puri with multiple varieties

Price : Depend on the Shopkeeper

Place : In front of the girls college especially/ in market where females often come for shopping

Promotion : WOM (Word of Mouth) “Bas Naam Hi Kafi Hai”

Segmentation : Micro Marketing (Customization: according to the demand of the customer)

USP : Customer Satisfaction

PLC Stage : Always on boom

Future of the Business : Immense Scope

The above detail explains the importance of the business of Pani-Puri. One can do a small project on it (MBA & PGDM). I don’t know why we like it. A common round shape snacks with salty- spicy liquid, which we eat without counting. After taking a number of pieces when we pay the bill, then only we came to know how many we have gobbled up.

So friends if you don’t remember the taste of Pani-Puri then leave your seat & find its shop & enjoy it right now no matter you are a boy or a girl. Of course monopoly is of girls here, but no compulsion that boys can’t eat it. So friends go for it …

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http://www.littleindia.com/news/123/ARTICLE/1445/2005-03-05.html

Pani Puri or McDonalds? A Look At Globalization

The Lonely Canadian

With Salman Khan rapping "East or West, India is the best" and my mother humming along in the background, I can't help but question the validity of the lyrics. Sure, Salman Khans words were probably scripted by some underpaid Bollywood writer, but the sentiment must have some sort of factual basis. I mean, it can't be that Mr. Khan or my mother, blindly believe that having 1/3 of their nation living in abject poverty that rivals sub-Saharan Africa makes it "the best".

Peering through a telescope - one fixated on the streets of Banglore or Mumbai gives limits our view of India. I'm going to guess that Salman Khan and his Bollywood kin have been bolstered by the events of globalization over the last two decades in making their musical claim.

Excluding Bollywoods attempt at hardcore rap, I'm going to say that globalization in its most basic form is benificial - economically atleast. Why? Thats simple - its the best system we've got.

Globalization is the international system that replaced the cold war system. It effects everyones domestic politics and everyones international relations. The cold war system was defined by the idea of division, symbolized by the Berlin Wall. It was like the Nile River delta, filled with dykes and damns. We could not go far without running into a wall.

Globalization is defined by a single word - integration - and all the threats and oppurtunities of this system flow from integration. It to is symbolized by an image, not a wall but a web. Globalization has blown up the dykes and damns of the Cold War System, and replaced the formers definitions of "First world" "second world" and "third world" with, that of a "fast world" and "slow world".

Thomas L. Friedman

Globalization levels the economic playing field. For most countries, it was clear the old system leaned heavily to Western (European and North American) economies. Globalization changes that. It allows countries like India and China to capitalize on their greatest natural resourse - their citizenry.

With both countries touting massive populations that surpass those of North America and Europe combined, globalization allows for the unique oppurtunity for these countries to promote competitive labor prices. Outsourcing is a product of this recent phenomenon. Most people I've spoken to accept that globalization has in general, been a good thing for developing nations. Yet the success of globalization seems to go hand in hand with the fear of "Americanization".

Most cry that value of a society can't be measured by material prosperity alone. They claim that the cultural cost of globalization does not justify the few rewards it offers. Is this true? Is India for example, becoming a mini-America? Is that such a bad thing?

India is one billion people living in seven hundred thousand villages. She is not

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represented on the streets of Mumbai, but in the rice fields of Vijayvada, the olive groves of Kerala and the fish markets of Manglore. Even with five thousand years of history behind her, several foreign rulers including both Arabian and British influences, many fear her daily "Americanization".

It doesn't take much to find an American touch in traditional India. What was once a pani puri stand has been replaced by McDonalds and Pizza Hut - Gap is competing with the local sari shops and Calvin Klein branded Kurta Pajamas are just around the corner.

Is this a bad thing? If we're talking about losing our identity as Indians, then yes. We do not want our countrymen to mimic the babboon like calls of the NRI youth, who shouts "I am DESI" not out of pride, but to remind himself that he isn't anything else. With its current run of prosperity, India should not forget its heritage. It should focus on a more Indian approach to globalization - it should g-localize.

G-localize? No, that isn't spelt wrong, its a new approach to an old idea. Rather than focusing on globalization as the sole provider of wealth and prosperity, countries should use it as an avenue to tap into local resources. The Indian animation industry does the phenomenally.

Rather than using animation to perpetuate the sorry excuse for cartoons we see on TeleToon or Nickleodean today, India has taken a page from the American guide to globalization, and g-localized. While Americans were fixated on GI Joe in the 1980's, catering toward their demographic, India is currently developing its own "GI Joe"-ish cartoon. The project is a 26 part animated series that follows the life and times of an eight-year-old Hindu deity, Krishna.

What makes this project a great example of g-localization isn't that it's inspired by the local religion, it's the team that animates it. The graphic artists were all former traditional artists and sculptors. Rather than having their heritage, and the heirtage of Indian art slowly die away, they were re-trained using the latest pieces of American software on American computers. They were offered a new medium to express their art. Thomas Friedman was right when he said globalization was a web.

What India has shown is that, it is clearly capable of g-localizing, yet it doesn't do so on a larger scale. She is still in the mindset that globalization = "Americanization". This doesn't have to be the case. What globalization is offering is the ability to synergize two radically different cultures and form something better, something that is more appropriate for the next generation, one whom thinks on a global stage.

So can Globalization make Salman Khan's claim that "India is the best" true? Probably not, but that doesnt matter - what matters is, at the end of the day it makes us all better off.

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