The Largest Segments of the Food Industry: Quick Pizza - Assignment Example

The Business Idea Quick Pizza is a proposed franchising concept for a line of genuine NY- Neapolitan style mobile trailer pizzerias. Quick Pizza is designed to provide the customer with a world class gourmet pizza experience at an affordable price. Unlike its competitors, Quick Pizza will be the first and only fast food pizzeria franchising model utilizing a high temperature oven for their pizza pies, all at the lowest turn-key cost for a pizza franchise, about $25,000 total. We have developed a proprietary custom built high temperature hybrid brick oven (900-1100F) capable of cooking the pizza pies in less than three minutes. Our exclusive patent pending oven provides the required high temperature baking environment for our pizza to develop the gourmet flavor profile, aroma, and level of caramelization that only a high temperature brick oven can provide. All our pies use the best natural ingredients, such as whole wheat in our flour blend and a 24 hour cold natural wild yeast fermenting process for our sourdough pizza dough utilizing our exclusive wild yeast sourdough starter. We also make our special recipe pizza sauce everyday fresh, using the best plum tomatoes from Italy and California and our pies use a special 4-cheese blend featuring, premium Provolone, Mozzarella, Muenster and genuine Italian Pecorino Romano cheese. Industry Related Issues Only a few high end pizza parlors in the United States actually use a real high temperature brick oven due to many operational factors, such as their huge size and weight, high purchase and operational costs. Quick Pizza has designed a fully equipped mobile Neapolitan style pizza parlor that incorporates three of our modular, lightweight, extremely efficient, high temperature patent pending gas hybrid brick ovens in a small custom designed modular pizzeria, all inside a 5’ x 6’ footprint trailer. The custom oven design of the exclusive pizza oven allow each unit to reach internal temperatures of over 1000F, while maintaining a extremely high level of thermal efficiency and very low operating costs due to our patent pending oven design. Our exclusive franchising concept will bring a world-class quality pizza experience at an affordable price for to all our customers. According to the 2011 Pizza Power Report, an annual analysis of the pizza industry published by the most respected trade publication in the industry PMQ magazine, over 90% of Americans on average eat pizza at least once a month with over 25% of Americans consuming pizza at least once a week. The latest count of pizza establishment determined there are approximately 71,856 pizza establishments in the U.S. (Barrett, 2013). Therefore the pizza industry is one of the largest segments of the food industry. The rise of commodity prices, such as gas and grain prices, indeed will have an impact an impact on the rate of growth of the pizza industry in the near future. If prices rise considerable, pizza franchises may have to consider increasing prices to offset additional costs or look for ways to increase productivity to offset increasing commodity prices. The pizza operators will have to device ways to maintain their profitability or simply accept a lower profit margin. Smart operators such as Quick Pizza have devised an innovative business model from inception that maximizes productivity, lowers operational costs and minimizes fixed costs. As a direct result, Quick Pizza provides to its franchise owners a significantly higher profit margin (over 30%) than the competition. Target Market and Customer Related Issues . Pizza is considered America’s favorite food with 13% of Americans eating pizza on any given day (Bhatt, 2014). Since pizza is such a popular food dish in America the target market of the company is the entire U.S. population. The population of the United States is 320.48 million (Census, 2015). Despite all the economic challenges the pizza industry has been able to hold its own. The economic downturn has caused the average consumer to become ever more budget-conscious with many consumers scaling down from upscale dining restaurants to more budget-friendly options. An issue for customers in the pizza industry is that after ordering they have to wait over 15 minutes for the pizza to be prepared and cooked. In Pizzerias with a lot of traffic customers often have to wait in excess of 30 minutes. Quick Pizza has resolved this issue by cutting cooking time by over 75%. The high temperature oven used by the firm cooks the pizza in less than three minutes. A constraint of the mobile business model is that the ovens are designed to only cook personal pizzas. Clients that want large pizzas have the option of buying personal pizzas in bulk offers. For example the company can sell four pizzas for $14 instead of the regular $5 price for a pizza. Founder Related Issues The founder of the company is a young college student that had the foresight to visualize this unique business concept. The founder is a college student that has plans once he completes his degree to pursue a master’s degree in business. There is a growing demand in the marketplace for professional with master’s degrees in business (Gallagher, 2014). If the first Quick Pizza started today the founder would have a conflicting schedule between college and work. To start the business requires that the founder spend long hours during the first six months in order to get the operation off the ground. A potential alternative solution to solve this time problem is for the founder to take a semester off school to start the business. After six months the founder would resume his college studies. To work in the business the founder will employ flexible time. Flexible working hours give employees some daily choice in scheduling arrival and departure time from his place of work (Schermerhorn & Hunt, Osborn, 2003). The initial phase of the project requires opening the first mobile restaurant. The founder will also be manager of the store when the business starts. He must recruit the first round of employees to work at Quick Pizza. Once the employees are hired he must then train them. Training employees is crucial towards organizational development and success (Managementstudyguide, 2013). Another duty of the manager is to implement a marketing strategy that will help attract customers to the pizza mobile restaurant. Marketing is a very important business function that directly contributes to the success of a business because marketing tools such as advertising help increase the sales of a company (Exforsys, 2009). The manager of the company has to manage and oversee the actions of the workforce of Quick Pizza. Any conflict between in the members of the staff has to be resolve by the managers. Another duty of the manager is to satisfy the needs of the stakeholder groups of the company. Some important stakeholder groups are the employees, government, suppliers, customers, investors, and the environment (Kotler, 2003). Financial Issues Quick Pizza is currently a conceptual business. The founder of the business concept does not have the require $25,000 to open the first mobile pizza cart. A lack of money is often a tough barrier to overcome when starting a business. Quick Pizza must obtain external financing to start the business. There are various options that can be used to obtain the capital. A potential solution is to apply for a business loan. The company is categorized as a start up business venture. ‘‘Start up business loans are difficult to come by’’ (Pritchard, 2015). The company can also seek to obtain financing by getting governmental help such as a grant or loan. Usually getting help from the government requires a long process. The organization can be organized as a corporation from the start in order to take advantage of this legal status. Corporations can raise money by selling common stocks to potential investors (Besley & Brigham, 2000). Getting an investor to buy stocks has its pros and cons. Investors purchase stocks of the company in order to acquire an equity stake in the company. Investors receive financial gain from the purchase of stocks through dividends and appreciation in value of the stock (Bodie, Kane, Marcus, 2002). A second option for a corporation is to sell commercial paper. The most common form of commercial paper is bonds. A disadvantage of bonds is that the company has to pay an annual interest to the bondholder called the coupon rate (Teweles & Bradley & Teweles, 1992). Business Potential The business idea of creating Quick Pizza is a venture that has a lot of potential due to the fact that the company has the capability providing a niche product in a large industry. A niche product is something that fulfills a certain need that others in the marketplace are not able to (Yahoo). The ability of Quick Pizza to provide faster service than the industry is a competitive advantage. Quick Pizza can provide profits for its owners in the short and long term. The first pizza cart will generate profits, but the true potential of this business is in the long term once Quick Pizza starts selling franchises. References Barrett, L. (2013). Pizza Power 2013 State of the Industry Report. Besley, S., Brigham, E. (2000). Essential of Managerial Finance (12th ed.). Forth Worth: The Dryden Press. Bhatt, V. (2014). Pizza is America’s Favorite Food. Bodie, Z., Kane, A., Marcus, A. (2002). Investments (5th ed.). Boston: McGraw-Hill Irwin. Census.gov (2015). U.S. and World Population Clock. United States Census Bureau. Exforsys.com (2009). Importance of Marketing. Gallagher, S. (2014). In Defense of the Masters Degree. Forbes. Kotler, P. (2003). Marketing Management (11th ed.). New Jersey: Prentice Hall. Managementstudyguide.com (2013). Training of Employees – Need and Importance of Training. Pritchard, J. (2015). How to Win Start Up Business Loans. Schermerhorn, J., Hunt, J., Osborn, R. (2003). Organizational Behavior (8th ed.). New York: John Wiley & Sons. Teweles, R., Bradley, E., Teweles, T. (1992). The Stock Market (6th ed.). New York: John Wiley & Sons. Yahoo.com. What is a niche product? Read More