Food Truck Business - Case Study Example

FOOD TRUCK BUSINESS Technology Tullee’s food truck business focuses on delivering food into the as a way of expanding their restaurant business. The food truck business has enabled the restaurant to take the products and services to the location where the customers reside. This approach is bound to increase the customer base for the restaurant, through ensuring the services get closer to the customers. Since the truck business operates upon a limited space, the utilisation of technology remains an essential aspect in seeking to enhance quality of service delivery, while maximising on the limited space (Lin & Chang 2011). As opposed to the restaurant setting, the truck business requires customer service to be relatively quick since customers do not have the luxury of ordering food while seated. Automation of several services remains essential in delivering the services quickly and ensuring customer satisfaction. Food items which can be dispensed through automated machines will be dispensed through such methods to make service become quicker. The utilisation of these technological dispensing methods will enhance the service delivery and ultimately increase customer satisfaction. The utilisation of technological methods remains essential in increasing the customer satisfaction and improving the quality of service. Market Environment The target market for Tullee’s truck business will be the individuals residing within the city and the business will offer lunch and dinner menus for the various customers. The business targets the general population of customers who commonly have lunch and dinner outside their house. Having been involved in operating a food business in the form of restaurant, Tullee has identified the introduction of truck business as a viable approach in increasing the customer base for the business. Researches conducted regarding the customers received by the truck business, indicate that majority of the individuals visit the truck at least once every week. Having captured a considerable segment of the market, broadening the menu presents an opportunity for increased sales from the truck business (Fifield 2012). The target customers for the truck business will be the working individuals who commonly have limited time to have meals between work duties. The business targets to provide affordable food to different customers through moving closer to the people. The working class will benefit from getting food closer to their working stations, hence saving the time used when having lunch. The business targets customers residing within the city who either have extremely short durations of time for having their meals. The services offered will be quickened through automation of the different services including food dispensing. This will be a fundamental aspect for providing satisfaction to customers who generally appreciate quality of service (Fifield 2007). The business will focus on customer satisfaction through provision of quality services, which meet customer requirements. Competition Within the target market of Tullee’s truck business, there are other businesses providing services which might be considered as competitors to this new business. These generally include the various businesses providing food to the same target customers for the food truck business. Much competition will come from the following businesses. Restaurants – many of the working class customers commonly visit specific restaurants because of convenience. This is principally as a result of proximity to work location, or specific food items which the customers want. The truck business will be mobile and constantly moving close to the customer locations. This will enable the customers to reach the business easily. Fast foods – many individuals who visit these places commonly seek to have a quick meal or snack. The truck business will provide packed food services and adopt automated dispensing systems to ensure quick services. This will be targeted at ensuring customers take less than seven minutes within the restaurant. Quick service delivery will seek to ensure similar satisfaction for individuals who commonly visit the fast foods (Aaseng 2001). Industry The food industry has experienced tremendous growth resulting from the increased competition within the market. Many organisations have opted to specialise in certain food items in seeking to cut a niche, for themselves, within the market. Operating strategies aimed at ensuring quick delivery of services and differentiations have been the fundamental approaches utilised by many establishments in sustaining the competition (Daniels 2002). Improvement in the service delivery has been increasingly undertaken through the application of automation within the food industry. Many fast food outlets have emerged and introduced various innovations seeking to reduce the time taken during meals. When targeting the working class market of city dwellers, the fundamental issues has been providing convenience in the food delivery. Many restaurant have provided toll-free calling services, which customer can utilise to make food order, and free delivery services. Differentiation of the services has been the fundamental aspect for each business operating within the food industry. Tullee’s truck business has opted to adopt a differentiation strategy in delivering its products to the target market. As an established restaurant specialising in Caribbean cuisines, this restaurant has effectively established a brand within the industry. The food truck business seeks to enhance competition with businesses providing delivery services to customers. The mobility of the truck moves the entire restaurant to the target customers and eliminates the need to make telephone call, in which communication barriers might result in wrong deliveries (Weber 2012). Business Model The food truck business is an extension of the Tullee restaurant which has been operational for about five years. Despite the restaurant specialising in Caribbean cuisine, the truck business will provide different food items. The truck will operate as an independent unit owned by the same directors as the Tullee restaurant. The operations strategies will be adopted and managed together with the mother restaurant (Delfmann et al. 2011). The business has been developed as a move for the Tullee outlet to expand operations and target a different segment of customers, who are the working class people in North London. The business will be initially funded by capital from the Tullee restaurant before the operations begin making profits. The truck business will operate like a retail outlet for Tullee restaurant. The truck business intends to become an independent unit after becoming fully operational, and have its own strategies developed in line with the company operating strategies. Marketing and Sales Strategy The business intends to adopt different marketing strategies in maximising sales following start-up. Since the business seeks to become independent, generation of income remains essential in sustaining operations. Selling will be conducted through direct sales, through the internet and to the visiting customers. Visiting customers will be able to pay for the services directly through cash or credit cards, while internet orders will be payable through credit cards only. The business will adopt the following strategies in undertaking marketing and sales activities. Customer relationships – despite this being a new business, the clients who visit Tullee could become a potential source of income during the beginning (Ferrell & Hartline 2012). The restaurant has continuously maintained contact with its customers and they shall be notified about the new outlet and encouraged to visit the outlet. These relationships and communications with the existing customers will be maintained through the social media. Information regarding the availability of the truck services will be provided on social media to enable the existing customers to remain updated on the location of the truck. Booking – customers will be able to make bookings for various food orders through mobile phones and online services. This will be effective in reducing the duration taken in making food orders on site, and will also become a fundamental element in increasing the efficiency of the services. Partnerships – since the business will not provide delivery services, partnerships with other outlets will enable the organisation to reach many customers within the city. These partnerships will be essential during extreme weather conditions when food will be sent to other outlets for customers to collect. This information will be communicated through the social media. Production/Operating Requirements Much of the food sold within the truck business will be prepared at the Tullee restaurant and held within food holding equipment fitted into the truck. The truck will not have any inventories on-board because of the limited capacity. Only ready to sell products will be carried aboard the truck, when heading to different locations. This will maximise the amount of food available in the truck for sale (Kuo & Chen 2010). The food truck will be the basic equipment which the business must purchase as other operational requirements remain available within the restaurant operations. The business will have to get a licence for outside catering and the provision of food in different locations. The parking within which the truck will be located will mostly have to be leased on short durations, where applicable. The truck will mostly target highly populated locations like shopping mall, where the access to customers remains relatively easy. Management and Personnel Requirements The business will begin operations with only a limited number of staff, who will deliver the essential services to customers. The staffs will be added as the organisation continues to expand (Wilson 2005). The new business will have the following employee running the various operations within the truck Truck supervisor – this will be the person in charge of the truck and the different operations being undertaken by the truck. The supervisor will be responsible for allocating responsibilities and duties to other employees working within the business. He/she will be accountable for getting orders from clients and making follow-ups to ensure timely delivery. The supervisor will coordinate the different activities including making assessments to for the locations where the truck should move to. Food service staff – the truck will have three (3) food service staff, which will be responsible for ensuring the customer orders become delivered. They shall also assist the customers in operating some of the self-service machines, fitted within the truck. Intellectual Property The company will function as an autonomous unit, which will be an expansion of the Tullee restaurant and will operate as a branch of the business. The business name remains the intellectual property of Tullee restaurant and the business will operate as a franchise of the restaurant. The dealing will work under name of the Tullee restaurant because it will be selling products of the restaurant. There shall be no existing trade licenses between the truck business and Tullee restaurant. The business will operate as a selling outlet for Tullee restaurant and will remain part of the restaurant. Regulations/Environmental Issues There are various existing environmental issues which relate to the business operations of the food truck business. The business will undergo inspection from the health department regarding the safety of operations. The different health requirements will include health certificates for the service staff. The health regulations require food handlers to become certified by the health department. This is a regulation aimed at preventing occurrence of food contamination and poisoning, once the operations begin. There are various associations which seek to enhance environmental sustainability in waste management from food business operations (Henningsson et al. 2004). The Green Restaurant Association targets to ensure efficiency in water and other waste management from restaurant operations. The business must ensure that all the waste generated from the operations becomes effectively handles to minimise pollution and ensure environmental sustainability. The business will increasing utilise biodegradable disposable materials to package many of the food products sold from the business premises (Thomas et al. 2006). Critical Risk Factors Several risk factors need to be mitigated for the profitable operations of the food truck business. These factors will include the following elements Market and opportunity risk – this will be presented by the large number of existing food outlets within the same market (Hofmeyr 2008). The organisation will adopt intensive marketing strategies aimed at ensuring that the business becomes effectively marketed. Continuous marketing will be undertaken for the business to increase the market share available for the business. Market entry strategy – this remains a critical factor as the business requires to establish itself and ensure market recognition (Saul 2010). This will be effectively handled through maintaining customer relationships from the existing customers of the Tullee restaurant. Some of the customers will be transferred from Tullee restaurant to the new business as a market entry strategy. Financial risk – the financing of the business will come from Tullee restaurant finances. The utilisation of such financing and other services from the existing restaurant will effectively reduce the inventory cost, consequently minimising the financial risk for the organisation. References Aaseng, N., 2001. Business Builders in Fast Food, Minneapolis, Minnesota: The Oliver Press. Daniels, P., 2002. Restaurant business start-up guide: a complete guide to establishing your business, Los Angeles: Juice Gallery. Delfmann, W. et al., 2011. Concepts, challenges and market potential for online food retailing in Germany. Ferrell, O.C. & Hartline, M., 2012. Marketing Strategy 6th ed., New Jersey: Cengage Learning. Fifield, P., 2012. Marketing Strategy 2nd ed., London: Routledge. Fifield, P., 2007. Marketing Strategy: The Difference Between Marketing and Markets 3rd ed., London: Routledge. Henningsson, S. et al., 2004. The value of resource efficiency in the food industry: a waste minimisation project in East Anglia, UK. Journal of Cleaner Production, 12(5), pp.505–512. Hofmeyr, J.H., 2008. Risk and Opportunity: Transformation audit, Cape Town: African Minds. Kuo, J.-C. & Chen, M.-C., 2010. Developing an advanced multi-temperature joint distribution system for the food cold chain. Food control, 21(4), pp.559–566. Lin, J.-S.C. & Chang, H.-C., 2011. The role of technology readiness in self-service technology acceptance. Managing Service Quality, 21(4), pp.424–444. Saul, J., 2010. Social Innovation, Inc.: 5 Strategies for Driving Business Growth through Social Change, New Jersey: John Wiley & Sons. Thomas, C. et al., 2006. Measuring the resource potential in commercial and industrial wastes from food related businesses. In waste 2006 sustainable waste and resource management conference. Stratford, pp. 19–21. Weber, D., 2012. The Food Truck Handbook: Start, Grow, and Succeed in the Mobile Food Business, New Jersey: John Wiley & Sons. Wilson, J.P., 2005. Human Resource Development: Learning & Training for Individuals & Organizations, London: Kogan Page Publishers.  Read More