ASSIGNMENT ON CHULHA CASE STUDY

SUBJECT: ENTREPRENEURSHIP AND NEW VENTURE CREATION

SUBMITTED BY: SNEHIL DIXIT
ROLL NO: C30
BATCH NO: MBA GENERAL SECTION C
SUBMITTED ON : 18
TH
AUGUST 201
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 efect but the success is depending upon its proper applications.
In the given case study of Chulha a small partnership consists of two
individuals namely desh and !ishant, it is evident that the momentary
trigger which came into their minds of starting a ti"n service business
#dabbawala type$ in their area where they were wor%ing #i.e. in &angalore$
was that they were missing their homely coo%ed food. &ased on the given
case study I would be analy'ing two given (uestions in this assignment
paper namely)*
i$ +o you thin% this is a viable business, -upport your answer with
reasons,
ii$ re there any changes you would li%e to introduce in their
business model,
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&efore I go into the depth of this analysis, I would li%e to analy'e some basics
of business viability and the reasons for why this ti"n services of chulha is a
viable business.
B"$&(#$$ .&-/&0&%*: .iability of any business is measured by its long term
survival and its ability to have sustainable pro/ts over a period of time. If a
business is viable it is able to survive for many years, because it continues to
ma%e pro/t year after year. 0he longer a business can stay pro/table the
better its viability. ccording to the case study Chulha emerged in the year
1223 now even after seven continuous years as on date it is surviving means
that their business is heading towards long term.
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clear de/nition of the product or service being developed4
clear problem this is solving, and why this approach is better than
e5isting
alternatives4
clear idea of who needs it4
n idea of how much customers will pay for it4
plan how all this will be done.
0he 6ni(ueness
6pstart 7unds
Customer
Competition
8conomic -ituation
0iming
9ar%eting
Continuing Cash :ow
If we loo% into all the above components Chulha services meets ;2< of all
re(uirements. 0here is a clear cut de/nition of their services saying that they
want to give (uality food, to satisfy the demand of all types of their
customers, a clear cut feed bac% mechanism, maintaining a website as a
mar%eting tool etc. 0hey are de/nitely having uni(ueness in them and have
a clear cut costings and a thorough mar%et segmentation study etc which are
the main reasons why their business is a viable one.
Chulha started in the year 1223 in &angalore, that time the competition was
also very less. Infact at the time of chulha started, they also started li%e a
&ombay dabbawalas who carries ti"n bo5es to various individuals and
companies/houses li%e a home based business. &ut later on they developed.
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s per the case study, desh and !ishant were the I0 employees and
emerged as entrepreneurs later. 0hey were from diferent parts of India #i.e.$
one is from &ombay and the other is from Calcutta basically north part of
India who came to wor% in -outh India #&angalore$ as I0 professionals. =hile
employed they were struggling and rather missing to get the home coo%ed
food in &angalore city. 9oreover in 1223 there were no good home coo%ed
food services available.
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desh and !ishant after /nding the problem of their food thought of starting
a small ti"n services home coo%ed food business. >ence they left their I0
?obs and started the business by converting their individual problems into a
main customer need based problem. 0his is were the &rand mantra of
introducing Chulha emerged. 0hey thought that even if a @2< of the I0
sector is covered they could meet their pro/ts very easily. &ut fortunately the
customer need scenario in &angalore after sensing this e5cellent formula has
increased li%e anything and more over the competition was almost nil at that
time. 0hey too% the ma5imum advantage of this customer need which again
converted as a ma?or demand in that southern region.
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Chulha started in a small way. 0heir main mission is to ensure food being
served to customers not ?ust in terms of taste but variety and maintain
(uality standards, and gaining recognition in this business. It is practically
serving hygienic and delicious food. -tarted with carrying food in ti"n bo5es
and delivered it to their customers in time containing a minimal brea%fast
and mini thali system as their startup menus in a limited area in &angalore.
=ith this they reached a very high standard of business viability due to their
e5tensive mar%et segmentation ideas. 0his is to be noted for their high
success degree.
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=ith the minimum amount of Investment, chulha started earning their
revenues in a very slow manner. t the starting time the margins were not
very high since they were mainly seeing the sustainability aspect. In the /rt
year they were ?ust earning brea% even amount with their operations. 7rom
second year onwards they started a minimum margin #i.e.$ around A*@2
percent and slowly today they reached a BA*32< margins which is (uiet
good.
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Cet us not forget that the Concept of Chulha 0i"n service idea has got a
very strong and viable business model also. CetDs mention some of the core
points of it)
@. Eey Fartners * desh, !ishant
1. Eey ctivities * ma%ing good (uality home coo%ed food
G. .alue Fropositions * >ealthy home made food with cost efective
H. Customer relationship * one to one direct approach
A. Customer -egments * Individuals, o"ce goers, paying guests and
students
B. Eey Iesources * Individual investments, advance receipts from
customers
3. Channels * delivery boys, small mobile vans, etc
;. Cost -tructure * afordable minimal cost
J. Ievenue -treams * dvance receipts, monthly payments
schemes, mostly on
cash basis with minimal credit periods.
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Chulha ti"n services business shows a clear cut viability by allowing us to
suggest certain strategies for its future growth. 0hey are as follows)*
@. -imple survival techni(ue)* Chulha, delivering hygienic and
delicious food in time to customers was its sole aim. 0here are many
competitors in the mar%et, but amidst competition it had to create a
niche for itself by applying for e5tensive strategies to ofer customer
.alue for money product.
1. 8conomies of -cale)* 8ven though Chulha had less pro/t margins, as
it made in bul%, but on the whole it did ma%e a huge percentage of
pro/t.
G. 0echnologies that can be adapted)* ppointing food inspector, who
would conduct surveys in every wee% to ensure, the (uality
standards, hygienic condition of the food, cleanliness and disposal
of wastes, separate usage of utensils for veg and non*veg items,
proper maintenance of gas and pipe lines, and other safety
parameters #from employees prospective$ etc,
H. Frestige and C-I activities)* Chulha should opt for diferent C-I
activities li%e, to fund an !KLs wor%ing to educate poor children,
active participant in the Kreen 9ovement, involve in planning trees
in industrial areas to reduce pollution, donating food a -unday every
month to organi'ation having challenged people, pac%aging food in
paper bags and other recyclable materials.
A. 85pansion of 9ar%et)* Lpening for party orders, Lpening for the
education mar%et and planning to open canteens in diferent
colleges.
B. Kovernment Folicy)* Chulha can opt for an I-L certi/ed standards
set against its (uality of food, (uality of ingredients used to prepare
food. 6sing these it can set a benchmar% for other restaurant which
have to (ualify the standards of food served by them. 0he
government can thus standardi'e the (uality of food served by the
other food chains.
3. -elf su"cient)* Chulha has its own supply of raw materials and it
can plan to be self su"cient in delivery of its products as well. It
has its own restaurant space and has its own staf. >ence it is
highly self su"cient.
;. lways do annual analysis of chulhas business with F8-0, -=L0,
!+ FLI08I- 7I.8 C>LIC8- business model analysis which
enables them to ma%e future progress without any hurdles.
7rom the above all indepth analysis I de/nitely feels that the chulha ti"n
services business is a viable business which can really with stand and sustain
for a (uite long time.
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Chulha now in a developing stage should de/nitely adopt/introduce as and
when is needed. I would rather insist that they should have their own small
IM+ department person to implement certain methodologies since the
competition in the mar%et is raising li%e anything. #e5ample,Its my meal and
Fapas ti"n etc$
S#:8#(%-%&'(:; Chulha has to introduce certain segmentation in addition
to their e5isting ones. 0hey have to introduce a morning brea%fast segment.
0his will de/nitely bring additional revenue. 8specially cities li%e &angalore,
where the Industrial growth is booming li%e anything year by year, the
wor%ing population will also increase proportionately which will ultimately
in:uence the potential area for business li%e chulha to tap and develop.
A55&%&'(-0 8#-0 9#-%"3#$ 9'3 7"$%'8#3 $-%&$9-7%&'(6-%%3-7%&'()* Chulha
should introduce digestive food post meal li%e paan, a small banana fruit or
a pac% of supaari varieties etc. 0his de/nitely impact a high level customer
satisfaction, an edge over the competitors in the mar%et and also enables
the businesss long term sustainability.
M-3,#% D&.#3$&?7-%&'(:; Chulha should try to tap the other cosmopolitan
cities li%e 9umbai, +elhi, Calcutta and Chennai etc. critical mar%et survery
for diversi/cation has to be conducted and accordingly modify the business
model plans especially the catering pac%aging systems. 0here are certain
important modi/cations li%e e5ecutive lunch, business dinner pac%ages,
corporate bufets etc to be introduced. 7or this local area agents has to be
appointed. 85tensive /nancial planning is re(uired for this efort. &ut
ultimately lead to high level revenue earnings.
M-C'3 T&# "2$:; Chulha can have tie ups with >ostels, Corporate L"ces,
&usiness 9anagement -chools, and 8ngineering and medical Colleges.
R#:&'(-0 M#-0$:; -ince we are tal%ing about chulhas diversi/cation
business model, it is necessary that they include regional meals li%e north
Indian, south Indian, etc. in their menus.
E(7'"3-:# L'7-0 +'8# 8-,#3$)* 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. 0his is a very important change
they should consider in their business model. &y doing this the supply chain
delivery problems can be solved in a very systematic manner with out any
problem. lso Chulhas management doesnt have to worry about the local
taste of the regions customers since it is prepared by the local house wives.
A$$'7&-%#5 C-%#3&(: S#3.&7#$:; Chulha should provide catering services to
several parties, functions, and even to the irlines and Iailways. 0his is one
of the ma?or change that I would suggest to introduce in chulhas business
model. 0hese associated catering services will de/nitely increase chulhas
mar%et value and revenue earnings to a ma5imum e5tent. 0hey can have
multiple organi'ational groups for conducting marriage catering, party
catering, corporate get*togethers , government functions catering services
etc by way of signing o"cial contracts. 0hey should enter into the railways
and airlines food catering services contracts also. Chulha should also have
association with hospitals for the catering contracts.
C'',#3* C'82#%&%&'($ -(5 -4-35 C#3#8'(&#$)* Chulha should have
annual or half yearly coo%ery contests in every regions and territories. 0his
will really boost customers involvement in chulhas business as well as
chulha can get some great ideas to introduce/change in their business
models.
In many countries the catering service business entrepreneurs got their chief
chefs through these type of contests and competitions.
S2#7&-0&D#5 N"%3&%&'(-0 S#3.&7#$)* 0his is a very special introductory idea
for chulhas business model.
Chulha should concentrate on this aspect of introducing speciali'ed
nutritional catering services with the help of doctors and dietitians around.
0he services should be based on the following)*
@. A:# /-$#5 N"%3&%&'(-0 C'(7#2%)* Fediatric #child/infants$,
Keriatric #old age$ etc.
1. E''5 /-$#5 '( M#5&7-0 P3#$73&2%&'($:; -ugar, &lood Fressure,
etc
G. E''5 /-$#5 '( 8'5#3( H#-0%+ 7'($7&'"$(#$$:; Cow fat diet,
Cow calorie calculated food,high energy food for youth and sports
personalities etc.
N'%#: 0o introduce the above, chulha will have to do a strong /nancial
planning since it involves additional costs also. &ut ta%ing into consideration
chulhas customers base they can have the premium price for their
customers and in turn their customers also will ready to ta%e the additional
cost with ease. 0his is purely my perception.

C'(70"$&'(:
7rom the answers I have given above for the two (uestions concerned with
the viability and changes of new introduction in the business model of chulha
ti"n 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.