Table of contents
- 1.0 EXECUTIVE SYNOPSIS
- 2.0 DESCRIPTION OF BUSINESS
- 3.0 ANALYSIS OF COMPETITION (5 FORCES MODEL)
- 4.0 REPORT ON FINANCES
- 5.0 RECOMMENDATIONS AND APPRAISAL
1.0 EXECUTIVE SYNOPSIS
The name of our product is Cheez Chicken, and the slogan is “Even Chicken Recommend Us.” We get fried fowl from our source, Uncle Boss, in order to run this company. Our service provider is located in Batu Caves. We resell the chicken after purchasing it by putting some cheese and chili flakes on it and packing it in a lunch box. Our product has a unique cost of RM 5.00 for three pieces and RM 8 for five pieces. Those that sold 5 rooster parts will get one additional cheese.
Our goal with this firm is to increase our profit margin while still providing a high-quality, satisfying product to our customers. Customers’ pleasure is very essential to us, thus we prioritize them before proceeding with any decision-making process. This will result in a long-term partnership between us and our clients.
Nur Syahida, Shah Nur Aryana, Nur Hidayah, Elya Syafirah, and Malin are the members of a group of five people that started the firm. Each team member will play an active part in the company’s administration. Our first investment is RM 40 per participant. This money will pay for all business-related expenses. We’ve also put up a board of advisers to help with administration. Dr. Suharni Bt. Maulan is the tour leader.
From November through the beginning of December, we performed our business every Friday. Our business firm is located in Mahallah Nusaibah, Gombak, Malaysia, near the International Islamic University Malaysia (IIUM). We shall conduct all commercial business operations in the area. To get orders, we utilize social media platforms such as Instagram and WhatsApp. One day before our operation, we will offer a pre-order. Cheezchicken is our Instagram handle, and our phone number is 013-4957402. (Shah Nur Aryana). Any order may be made through Instagram or by calling our phone number.
2.0 DESCRIPTION OF BUSINESS
2.1 Structure of the Company
A total of five people make up the management team:
As the director of this commercial organization, Nur Syahida Binti Kharin Anuar will assist all departments, from operations to purchasing. She will be in charge of the company’s decision-making.
Operational Manager: Nur Hidayah Binti Asri will be in charge of all operational tasks, including work schedules, tasks, and production methods.
Shah Nur Aryana Binti, marketing manager Shah Jahan will use WhatsApp, posters, and social media to promote the event, and she will also keep our Instagram account updated on a weekly basis. She also oversees all of our social media orders.
Elya Syafirah Binti Baheruddin, the financial manager, would be in charge of all financial aspects, including budgeting, charges, and profit. After operating our company, she will also disperse earnings.
Purchasing Manager: Ma Lin will leave IIUM to deal with our Batu Caves dealer, as well as visit a supermarket and a shop to obtain supplies for our firm.
2.2 The Current Market Situation
Humans, especially students, preferred Western franchise eateries in the past. KFC and McDonald’s controlled the majority of the fast-food franchises at the time. However, with the popularity of locally developed businesses like Ayo Fried Chicken and Uncle Bob in recent years, the aesthetic seems to have altered. Many of these small-town businesses have grown into multi-billion-dollar franchises that now dominate our community. The current state of our economy, which is becoming more critical, is also a factor in this predicament. People are more likely to choose a similar product at a more realistic price.
2.3 Strategy for Promotion
Our strategy is entirely focused on providing excellent service to our customers. On Friday, November 8, 15, and 22, 2019, our team started this business. We chose Friday as the promotion day since it has a lot more enchantment because it is the day when most students relax in their rooms. To avoid people being bored with our goods, we open the order as soon as possible. It’s also to ensure that we’ll be able to devote 100% of our attention to this venture. First and foremost, we must promote ourselves as a “market tester,” since this will serve as a model for future orders. As a result, we begin our first week by receiving a 30-piece order. In order to grow the market, the orders have been focused on the Nusaibah hostel. The next week’s focus will be on maintaining quality and putting together a solid identification plan.
The majority of IIUM students will be served by us. For a variety of important reasons, we’ve picked this group. We believe that the 18-to-25-year-old age group is the most important for brand-building activities. This is due to the fact that social media has formed a strong bond between children and adults. Everything will be uploaded, whether it is correctly or horribly. If we serve the correct goods, we can easily develop a market there. Furthermore, youngsters like following trends, and one of the most current trends is to consume any cuisine containing cheese. Students, on the whole, have stable salaries and are looking for a charge that won’t break the bank. Because it is less priced, our product used to be a strong contender.
2.3.2 Service and product
The flavors of our Cheesy Fried Chicken come from a simple recipe passed down from our source, Bob, and his family. As we encourage a high-quality, inexperienced lifestyle, it was once packed in a paper sector. We glue the box with the quotations adhesive label in order to promote our good lifestyle. This may assist our customers to enjoy their meals in a better mood. We also provide free, door-to-door transportation to our clients, which is really handy.
Cheez Chicken is available in two sizes: a big portion (five pieces) for RM 8 and a small portion (three pieces) for RM 5. There’s also an RM1 cheese sauce option. We choose to prepare our own sauce rather than buying it from our source or the store since it saves us more money. Our product’s price is realistic and superior to those of comparable items such as Ayo Fried Chicken (AFC). AFC is made up of six parts and costs RM10. In summary, our product is the same in price, but AFC is smaller in size. Furthermore, since we do not include any transportation costs, our offering is more expensive than AFC’s.
To begin, we will divide each member among the Mahallah Nusaibah blocks and go from door to door. Furthermore, we do not have transportation and are attempting to minimize gasoline expenses while increasing output. On average, each of us wants to deliver three to four bins every day, depending on the order quantity. Prioritization is no longer given to hostels without Nusaibah since getting there takes longer. Typically, we start the procedure at 1 p.m. and subsequently move it to 12 p.m. We began our operation earlier to deliver the goods at the given time, which is sooner than three p.m. since the vast variety of orders increased.
3.0 ANALYSIS OF COMPETITION (5 FORCES MODEL)
3.1 Rivalry in the Business
Because we solely focus on Mahallah Nusaibah, our industry rivalry is extremely minimal. As a result, we don’t have nearly as many rivals as we had before. We have competitors, but there are a lot of them, and their products aren’t exactly the same as ours. We advertise spicy fried chickens and charge an additional cost for cheese delivery. Our competitors serve fried chicken with cheese as well, but with unique designs and varieties of chicken. For example, our competitors focus primarily on a few parts of the chicken, such as drumettes and wings, and sell them separately. We, on the other hand, do not have a distinctive portion, and instead sell and place unique phases at random for our clients. As a result, the resistance isn’t as strong since we’re no longer comparable in terms of product specifications.
We have greater freedom in setting the price since there is less competition. This is due to the fact that our clients are unable to compare pricing with our competitors due to the unique characteristics of our product. This includes the fowl’s own measurement. We still put our pricing within the range of our rivals’ prices, which might be seen as a weakness given the size of our chickens, which we should sell at a somewhat higher price. Aside from that, we only offer chicken on Fridays for a period of three weeks. We’ve seen that a few consumers have already committed to buying our chicken on a regular basis.
We advertised our product on Mahallah Nusaibah’s Whatsapp group, and for the first week, we only gave 30 roosters since we didn’t know what kind of reaction we’d receive. We began promoting our product on the day it was released, which was Friday since we did not yet have any images to utilize as part of our marketing campaign. So, after packing our goods, we took some photos and started shipping them along with the product description, and to our surprise, it sold within minutes. We are unsure of the reaction since our competitors’ commercials will be shown on the same day, but after viewing the results of our first day of sales, we feel it will no longer be the most difficult issue for us because each product has its own originality, specialties, and admirers.
3.2 New Entrants’ Potential / Entry into the Industry
The entry hurdle to the market is minimal, and anybody may participate if they so wish. This is because the cost of selling hens isn’t too expensive, and we can still keep it within our budget. Other motivations include food, which may be had anywhere and at any time. As a result, there are several options available outside, and it all relies on the preferences of the consumer. What will set us apart is the uniqueness with which we will strive to provide our consumers. We, on the other hand, endeavor to provide high-quality first-rate meals in terms of flavor. We provide the best element, and we also incorporate the cheese and chili flakes with the chicken. We also added a quotation to the top of the container, stating that it will give the consumer a positive attitude once they acquire it.
The feasibility of new market entrants is relatively high, particularly in the Food and Beverage business (F&B). This is because customers will always look for food, regardless of their current economic circumstances. We found what we, the students, enjoy and can afford while we were searching for products to sell, and then we came up with the notion of food. We recognize that owing to a variety of causes, college students no longer prioritize various items to purchase and instead spend the majority of their money on meals. One of them is due to the fact that food is a fundamental necessity that everyone must meet on a daily basis. As a result, the cost of meals, particularly at the University, is quite modest and inexpensive. As a result, we decided that marketing meals would be the most beneficial to us.
We are also conscious of the needs of the students since many of them do not have transportation to eat outside of IIUM. As a result, we provide a solution for those who spend the weekend in the mahallah. This is one of the reasons why the entry hurdles are low, given that meals are a top concern for students, particularly those who do not have access to transportation. Any food company will have a better chance of surviving, particularly if the meals are offered at a lesser price than they are outside. As a result, since the barriers to entry are low, we strive to provide first-class goods at a high-quality price for our clients in order to keep them loyal to us and entice more new customers to try our product. By doing so, we will be able to stay in the market even if the number of rivals increases in the future.
3. 3 Input Suppliers’ Power
In terms of suppliers, our suppliers have the ability to adjust the charge since we rely only on them. We don’t have a lot of options, thus we can only choose one supplier to work with. This is because it is difficult to find a supplier that gives the best pricing; most of them charge a higher fee, making it impossible for us to sell at a cheaper price to our last client. Even though our supplier no longer offers discounts if we buy in bulk, we are OK with it since the charge is already reasonable. Even yet, the cost we pay is modest when compared to other providers. Another reason is that the supplier with whom we work is located near IIUM. As a result, it will be simple for us to get the shares on any occasion we like, given our desire to reduce the shipping charge as much as possible.
Because we depend on them completely, it will be more difficult for us if they change anything like the pricing, the quality of the chicken, the types of poultry they sell, or their location. If they stop running their firm and go to another place that is far away from IIUM, major problems will arise. We need to maintain a precise connection with them in order to collaborate and work together for a longer period of time now that we don’t have any other backup providers on the list. However, given that we have only been in business for three days, we have yet to face any issues with our provider.
After trying and observing the goods, we concluded that they were the finest to deal with. Aside from the pricing, we liked the style and size of the chicken. We don’t need to be concerned about the source since we only sell for three days. However, if we wanted to keep selling this product, we’d need to look at new possibilities and choices to prevent any future issues. Let’s imagine our present supplier ceased operations on the day we wanted to sell; we don’t have any other choice than not being able to conduct our business on that day. It will have an impact on our business, and it will be difficult for us to find another provider if anything unforeseen occurs. This is because we want to maintain our finest items, which means we can’t simply obtain them from other suppliers since they can be different from what we’re selling.
3.4 Buyers’ Power
We want to offer our goods in Mahallah Nusaibah, which will provide us with a lower number of customers. Smaller groups of clients with a broader range of skills have the power to influence us in a number of ways, including pricing strategy. We can’t raise the price since we don’t have any other feasible clients who will buy if our current customers don’t want to buy our goods. Food is often seen as an elastic product since it has numerous replacements and is a non-durable item. For example, if we raise our pricing by 10%, we will see a 10% decrease in the number of consumers. We won’t be able to make this manifest because we want to ensure that we manipulate to sell our goods regardless of what happens. That is one of the drawbacks of concentrating on a single place. We must examine a number of factors, such as the fact that if we sell at a higher price, the possibility that our clients would not purchase is also greater, therefore we must choose the best price at which the majority of the potential consumers can buy.
This will also be related to industrial competition. We can’t just do everything except appropriate preparation since customers have the choice of purchasing from our competition. It will be different if we have a big target market; we will have more clients, so even if a few people do not want to purchase, there will be others. However, since we lack it, we choose to expose our competition and strive to provide high-quality service to our customers. This is to keep them loyal to us and purchase from us on a regular basis. Given that we are still new in the industry, maintaining a high level of service is critical to us. We want to earn the trust of our customers first. Customers are extremely crucial to us as a company, as well as ensuring that our firm is successful. As a result, we must ensure that customers are happy with our goods and services.
Our customers also have reduced switching costs. This is because they don’t want to spend any money in the first place. If we fail to supply accurate options and poor product quality, they are allowed to go to other replacements or our rivals.
3.5 Complement and Substitute
In this business, the threat of replacement is rather strong. We are aware that there are many others who can take our place. Because we offer food, our customers may replace us with a wide variety of foods. This is because there is plenty of food accessible here at IIUM, even in mahallah. We have a variety of meals to choose from at mahallah cafés, kiosks, and small businesses that sell through WhatsApp, just as we did. If our customers do not want to buy our goods, they may easily switch to another option since we are no longer the only option accessible, but there are many others.
First and foremost, our customer has the ability to replace us with one of our competitors. We cannot promise that our consumers will buy from us every time we sell since there are so few of them; nevertheless, they may always exchange their style and preferences whenever they want. That is why we strive to enhance our quality so that our clients would have trust in us and become loyal to us. Aside from that, as previously said, other alternatives on hand are also harming our operations. On the second and 0.33 day of selling, we began promoting our product in a Whatsapp group, and fortunately, we were able to meet our goal sales on that night for the second day, leaving just a few pieces of chicken for the third day. As a result, on Friday, we just begin packaging them and sending them to people who had already placed an order the night before.
Apart from our patrons replacing us with other meals that are available in mahallah, we are also aware that some may substitute a healthier choice for us. If someone is really concerned about their health, they may have passed by us in favor of better alternatives. Other than that, our customers may choose for other fast food options outside, such as McDonald’s or Kentucky Fried Chicken, to mention a few, since they, too, serve fried rooster. Clients will generally place them first since they already have the firm and location in the industry, regardless of how expensive their products are.
4.0 REPORT ON FINANCES
In IIUM, we had set up a Cheezchicken business for this endeavor. In this work, our goal is to generate money for as little money as possible. Apart from that, any losses should be avoided. The total cost of this assignment is RM200.00, with RM40.00 being provided by each individual.
strategy for pricing
Spicy Cheesy Fried Chicken
We start our business by looking for the materials we’ll need to make our goods. Our starting point for this project is shown in the table below.
PRICE PER UNIT (RM)
Lunch box packaging
Every third week’s product costs
For the third week in a row, we consistently provided our product, Spicy Cheesy Fried Chicken. Each third week, we invest the following value.
Lunch box packaging
Chicken (30 pieces)
Chicken (60 pieces)
Chicken (75 pieces)
Sales forecasted and actual
Every time we operate our company, we aim to make a sale of at least RM50.00. As a result, in the first week of operation, we made an RM50.00 transaction, which was our target. And in the second week, we sold more fowl for RM99.00 since our product was in more demand among students. The price rises to RM124.00 in the third week. As a result, for every third week that we ran the firm, we met our goal revenue.
The table below depicts the actual sales we track every three weeks.
Each group member will pay RM40.00 for the company Spicy Cheesy Fried Chicken. As a result, since our group comprises of five individuals, our total budget for our company is RM200.00. We obtained sales of RM273.00 as a consequence of this business. As a result, we made a profit of RM73.00 after fully covering our costs. Throughout the endeavor, we had experienced no losses. Surprisingly, we had met our project’s objectives, which included generating profit at the lowest possible cost. Apart from that, no losses have been sustained.
STATEMENT OF PROFIT AND LOSS
CHEEZCHICKEN STATEMENT OF PROFIT AND LOSS
|WEEK||TOTAL PER WEEK (RM)||TOTAL (RM)|
|SALES||WEEK 110 box (3pcs) x RM5 = RM50||50|
|WEEK 215 box (3pcs) x RM5 = RM75 3 box (5pcs) x RM8 = RM24||99|
|WEEK 320 box (3pcs) x RM5 = RM100 3 box (5pcs) x RM8 = RM24||124|
|COST||WEEK 1:Lunch box packaging: 8.40 Small Tupperware: 4.00Chili flakes: 2.60Cheese: 20.00Chicken (per piece): 30.00|
|WEEK 2:Chicken (per piece): 60.00||60.00|
|WEEK 3:Chicken (per piece): 75.00||75.00|
5.0 RECOMMENDATIONS AND APPRAISAL
Due to the fact that none of our team members have their own cars, transportation is the most difficult step for us. For a firm, transportation is one of the most important economic operations. Transportation offers the vital function of connecting a business to its suppliers and consumers by moving things from where they are supplied to where they are wanted. As a result of this issue, we are unable to provide our goods to various places, such as IIUM’s various Mahallah. This has a negative influence on our company since we have lost many potential customers from other places, as well as the ability to develop our business and create higher profit. It also makes it difficult for us to get outside and buy the supplies we need to run our company. So we dealt with the situation by borrowing a vehicle from everyone we knew.
Aside from transportation, we’re having trouble coordinating our work schedules. Having five people on a team with different schedules makes it difficult to decide when to run our company. Following considerable deliberation, we have decided to operate our business just on Fridays, when we are all available. This isn’t a great approach to start a business, especially for a newcomer like us. Customers should be able to identify our merchandise. Clients will find it difficult to track our goods if we run for just one day, and this would result in losses for us, but if we operate for more than one day, we will definitely benefit more.
The most crucial aspect of running a company as a reseller is the provider. It’s risky to rely on a single source. The company is a monopolistic commercial operation in which they offer a unique product and control the pricing. We want to finish this project since we don’t have transportation and can only find a supplier who is closest to our location; otherwise, we’ll have to abandon it. to invest more in order to identify a different supplier that is located a significant distance away from our location Furthermore, since we have a single provider, we cannot ask for a reduction because he sells at the lowest price and has the energy to charge us because he is the exclusive supply (monopolist). As a result, we’d want to accept his offer since we can’t discover any other assets for our business.
5.2 Execution of Strategy Effectiveness
The Internet and Social Media
Because of its fundamental qualities, social media is becoming more popular these days. Some argue that social media provides several advantages to humans at the current time, while others disagree. Social media, in our view, has several advantages, particularly for businesses. Marketing is presently disseminated via the usage of this network, as shown by the fact that numerous branded items are currently utilizing this platform. Not only that, but it also assists us as a new firm in marketing a product that is not yet well-known among IIUM students. Instagram is the only social media platform we utilize. We use Instagram to post photographs of our goods, miniature prints, and videos in order to attract buyers, and we’ve discovered that it works. We attracted a large number of visitors and consumers who ordered our goods based on the use of these structures.
We discovered that some people buy our goods because of the packaging. As we can see today, people like taking photos of unusual foods and sporting “hipster” appearances. This undoubtedly benefits us since when they promote our goods on social media, they aid us in marketing our product to a wider audience, thereby increasing the number of customers in the future. Furthermore, we put a phrase on top of our box that will provide a scholar an effective feeling after they acquire our merchandise. At the very least, people receive something valuable out of their purchases.
To attract clients’ attention, we employ attractive language and photos to market our goods. We discovered that the majority of them buy our stuff because of our appetizing photos. As a result, it is perfectly acceptable to employ anything visually appealing to attract people.
The product’s presentation
When customers buy our product, we give them a high-quality presentation. For example, if they buy the cheapest one for RM 5.00, we still give them the best element we can to make them feel comfortable with our product, and we make sure that when we deliver it to them, the product is still in proper presentation and served while it is still hot.
5.3 Future Improvement Suggestions
Analysis of Costs
Price analysis is the process of reviewing and assessing suggested pricing, as well as its individual price elements and profit potential. As we go through this company, we see that our earnings are no longer at their peak. Which possibility can we get more profit out of what we have now if we charge a greater price? We discover that our selling price is too low, despite the fact that we are still profitable. So, in the future, as we go ahead, we will look for a new charge utilizing a new pricing strategy, such as Competitive pricing or Sandwich pricing, and come up with a new markup for our product that is competitive with our competitors and may provide us with more profit.
is one of the brilliant methods that has brought us a slew of new customers. So, by enhancing our packaging with our own personal sticker and diagram container, we will make our goods seem more attractive and make it easier for customers to distinguish our product.
Bundling of products
We want to use the product bundling strategy to expand our product line in the future. Product bundling is a marketing strategy in which a large number of products are bundled together and sold as a single unit for a single price. This strategy is used to persuade customers to purchase more items. Instead of buying the chicken separately, why don’t they buy it in a package? For example, (Cheez Chicken + Drinks) / (Cheez Chicken + Drinks + Cheezy wedges) / (Cheez Chicken + Drinks + Fries) or and so forth.