Food Delivery Company in Almaty, Kazakhstan - Case Study Example

Executive Summary

The main aim of this business is to provide a food delivery service to the people in their work place, offices, churches, learning institutions and any other destination point. This is a good business in Almaty since there are a lot of growth opportunities and the demand for the service is also very high. The expected returns are promising and it is bound to create employment opportunities for many people alongside helping people to have their meals by just making a call.

Coming up with this idea resulted from some key observations that was made for the people residing in Almaty. To begin with most people have an extremely tight schedule trying to strike a balance between works, family, social life and education. Some people fail to have time to even take a snack during the day and mostly starve themselves while they have enough money in their wallets.

Another significant observation is that there are various restaurants around the region none of which offers delivery service. This business is there for going to be the first one to be established in other the area. No initial competition will be offered to the business and hence during the time in which the business will be monopolizing the area it will have a good opportunity to establish customers and to enhance their experience in the food delivery business.

Kazakhstanis a first growing urban center with a population of more than 500,000 and various universities. This population are the main clients for the business. Since there are also major food restaurants around the town it is apparent that the supplier will be constant once the business starts and a good relation has been established between the restaurants and my business. One of the way that the business plans to get its customers is through advertisement in social media and in the restaurants. For example in each restaurants that the business partners with there will be a post for possible food delivery and the contacts for making orders.

Since the business does not require huge financial investments the main capital will come from personal savings and partnering members such as the restaurants that will be providing the food to be delivered. As the business advances and has more customers to serve then it will be necessary to purchase more cars to be used for food delivery. Financial assistance from banks will be consulted to provide loans in future development and also partnering with other financial supporters is a major aim for the company.

Future plans involve opening more subsidiary branches in major towns. The business also aims to in future be able to supply all kinds of food ranging from fast foods, traditional foods, beverages and snacks. In future customer will also be able to pay for theirorders using online wallet and any other online payment that would be efficient for them. The other future plan is for the business to be able to make its own food and not necessarily rely on outside food supplies except when the client make orders for food from a specified restaurant.

The company

Keltamak.kz food Delivery Company will be situated in Almaty, Kazakhstan. The owner of the business Prof. E. Sherman ZharmukhamedAppaz has hadexperience in delivery services and has also done enough research before settling on this idea. There will be a website where customers can log in and find the contact information of the company and the kind of food that can be delivered to them given with specifications on the restaurants from which they come from. For example KFC, McDonalds, Hardees and Burger King.

The main office for the company will be in Almaty, just a small office where customers can pass by and make their compliments, question or complaints. There will always be someone to attend to their demands and offer the nice service. All of the customers’ issues will be addressed satisfactorily so that the company can enhance good brand name which will in itself create trust and good relationship with the clients and the partners.

The company will start with five employed person who will play different role but work cooperatively to ensure that all customers have been well served. One of the employ will mainly have to act as a support center for the company. All the call, emails and any other form of customer contact will be made through him/her. After hearing from the customers the employee will then call another employee who can respond to the orders made by the customers. Each of the other employees will deliver the orders and return with the payment which the manager who is still the founder and the owner of the company will take and record. Weekly reports by all employees will also have to be submitted at initial stages of the company so that strategic plans can be implemented in developing the business.

The company will operate from on a twelve hour a day basis starting from 7am to 7pm. This is because there is a need to serve the meals from breakfast to early dinner. The long working hours is also relevant to make it more efficient for customers who go to classes early or walk out of the evening classes late and may need to have theirmeals after 5pm.

The business will also be licensed by the government and adhere to all the stipulated rules of small businesses. The startup cost for the business is as demonstrated in the table below;

Project Business Start-up Cost

Description

Amount

Cost of advertisement and creation of the company’s website

100000 KZT

Cost of purchasing a car motorbikes and hiring gypsy cabs

25430900 KZT

Cost of purchasing utensils

57000 KZT

Cost of Establishing an office and paying the initial salary of employees

80000 KZT

Total

25667900 KZT

The product

Since this is a delivery business there will be no manufacturing of any products by the company. The operations of the company will be such that they get the fast food from major restaurants in Almaty and then distribute them to the customers. The main products to be delivered for a start will be the fast food which are fresh and hot. Examples of the food to be delivered include hot dogs, pizza, chicken nuggets, hamburgers, fried chickens, French fries, onion rings and tacos.

The company will purchase hotpots, fridges and disposable utensils which can be used to transport the meals to the clients and also to serve them as they desire. The company will also take back the utensils used and either wash them to be used again for the non-disposable ones or dispose the wasted ones for the clients.For take away food products high quality wrappers such as the aluminum foil will be used in wrapping the foodbefore placing it in the paper where it can be easily carried by customers.

The customers will be expected to log into the company’s website and request for the food that they want specifying the restaurant also after which the food will be delivered to them after approximately forty five minutes during the week days and thirty minutes during the weekends. The approximated time will cater for the time used in collection of the food and the package. Initially the company intends to use one car, some hired local gypsy cabs and some motorbikes in the delivery of the food but later own there will be vehicles for this purpose.

The market

Almaty is one of the major cities of Kazakhstan with a population of about two million people. The urban area has around five hundred thousand people who reside and work in the city’s town. This population living in the urban areas are my major target groups. They are potential clients because the urban life demands for a tight schedule due to lots of work and demand and havingsomeone delivering food right where they are will be a relief to most of them.

Most of this people residing in the urban centers have their offices just within the town and therefore delivering food to them will be fast enough. It is also important to note that there are university students in the urban centers who may need to have their food delivered to the universities so they can eat as they wait for next lectures. The market from the workers and the student alone is very promising and there is a high possibility of future market expansion since the urban area is still growing because of many developments

There are also a number of restaurants in the city which partnering with will ensure that the business can have a constant supply of food to the customers. There are no other similar businesses in the market which gives this business a monopolistic environment that will enhance growth and establishment.

It is apparent that with strategic marketing and advertisement the market will be good and fresh for the business to kick off at a high note. One of the key ways of retaining the customers will be through earning of the keltamak points. This system operates in such a way that the customers are given some points for every delivery that the order for and on reaching one thousand points there will be a free delivery and twenty percent rebate on the next order. This system is bound to help in retainers of customers and especially the university students are likely to love and even compete for the Keltamak points.

Some of the marketing strategies that will be applied will be individual testimonies. This will work in such a way that the company will ask there established customers to also try food delivery service and for each customer brought in there will be an extra keltamark point to be added. This will encourage people to introduce their family members’ friends and colleagues into food delivery.

Advertisement will be done exhaustively and in various ways. The business plans to include some costs for advertisement via the televisions. This is due to the fact that many people living in the urban centers have televisions at home school and work and therefore the advert will reach many people. The other form of advertisement will be using of banners in the streets which will have attractive images of food delivery services. Some posters will also be placed in the major restaurants where the customers can see the advert when they come to purchase the meals. Email marketing for the clients who have accessible contacts can also be established so that communication can be made to them via emails. With all this marketing and advertising strategies the business is likely to experience tremendous growth just within a few years of being in the market.

The competition

The business at the moment is not practised by any other company in the city. However in some cities the restaurants that offer fast food have already started delivering the food to their customers to beat competition. The Food Deliver Company in Almaty if started now will not have direct competition. The indirect competition is as well going to have effect on the success of the company.

Since university students do not have much money and will tend to spend as little as possible they may find other alternatives. The students may settle for the restaurants outside the school premises and buy the same products cheaply. The company can strive to beat this by ensuring that they wrapping is improved. Students like classy things and prestige. Nicely wrapped fast food that is delivered on time is likely to entice them and they might not replace it with anything else.

The company is also bound to get competition from restaurants within the central business district. The best way they can try to outcompete other restaurants is to ensure that the food produced is of high quality. The company should observe hygiene while handling the food. The food delivery company in Almaty can also ensure that the food is delivered on time. Most people who order for food deliver do so because they are trying to conserve time. Delaying the deliver again is just pushing them to the other alternatives of getting the food faster if such opportunity presents itself.

The ultimate competition that the company can be faced with is if other restaurants decide to also deliver their products. The restaurants that decide to take part in this might be very rich and can easily market its idea and outdo the food delivery company in the long run. The best way the company can deal with this is to ensure that they create good relation with their existing customers. They can achieve the customers loyalty by good communication and the bonuses that they have set to offer to the most loyal and constant customers. They can ensure that they food is not delayed more than twice consecutively.

Despite the challenge of competition which is very imminent, the company can still prosper. With the different means of adapting to the problem of competition the company is set to prosper.

The people

Almaty city is very populated. At the end of January 2015 Almaty had already 2 million people living in both rural and urban areas of city. The outskirts of the city has the most number of residents of up to one million. The business involves delivering the food products to the residential houses and offices hence greatly rely on GPS for the locations that are not known. Most location in the central business districts where officers are located and some residential are on GPS and can be driven to easily. The drivers have easy access to CBD and hence can deliver to people in that area very fast. The peripheries of the city are not on GPS and hence not located easily. At the time of the start of the delivery business, the products will only be delivered to areas with GPS and those that the drivers are convenient with.

The university students are also the target for the business prosperity. The university students are the number one fun of fast food as they do not like cooking or eating in the mess. Most of the students prefer buying food outside the school premises. University students while still at school form the most part of the city population. The drivers can easily reach the university premises since all of them are on Google maps and GPS. Lectures and other staff from the universities can also order the food and have it delivered with time. University being easily accessed this makes the people residing around the universities to also be easily reached when they order for the fast food. University students and staff can afford the food delivery.

The most people that are targeted by the delivery business are those with average above incomes. The cost of the food is relatively high as the classic meal with soda and fries costs about $10. The $10 is even higher than in the United States of America. The average income of employees, according to statistical data of city Almaty, is $500 per month. Most of the people in the Almaty are internet literate. They can easily access the website and order for the food that they want. Those that are not internet literate are not left behind as they can make their orders through phone calls.

Financial picture

Income statement

The income statement provided in the appendix best depict the forecast for the firm’s earning during its operations. As shown by the various elements, it comes out that the firm can be much profitable to the extent of meeting the objectives of the individual investors. The forecast itself shows that the total revenues have exhibits a general upwards trend from the January upto December. With a starting revenue of 1,450 during the first month of operation, the company’s revenue is forecasted to be 10 times that when it reaches December of 2017. For the expenses, there is an insignificance difference between the various months with a starting expense of 9,900 which then decreases during the successive month then reaches its peak at 10,557. This shows that the company has the abiliy of managing its expenses to the minimal amount while ensuring an increase in revenue. These elements, put together, leads to an upward trend depicted by the company’s earnings from a loss of 9,900 in the first month to a profit of 6,287 in December.

Cash flows

The cash flow statement for the company was also forecasted on monthly basis, for the year 2017. This allows us to see the amount of money that would be used in the operations, to what resource it would be used in and the time when it will be used. As shown, the company projects a positive picture in its outflow with net cash flow from operations rising from negative value of $1800 in January to a positive value of $4,009. The total net cash flow forecasted for the year is $17,887. However, since it will be its first year of operation, the firm is forecasted to have few investing activities with net cash flow from investing activities being negative. This is because the firm would be spending much on establishing the investing activities. For financing activities, there are no elements that the company involves in to allow us to project the yield. Overaly, the company witnesses an upward trend for net increase in cash from January to December. This is best depicted in the income statement that shows a general increase.

Balance sheet

The balance sheet shows that the firm’s position is strong and can objectively meet its current obligations for the projected year of 2017. The totals assets have increased from January to December, despite the decline witnessed between February and April. This decline could be attributed to the fact that the company could have been still trying to establish itself hence less time and resources could have been spent on this. However, from April, the company’s assets project a steady rise. This is much illustrated by the working capital which also shows a positive rise from April. The company also shows less reliance on debts but with more concentration on owner’s equity. The long-term debts remain constant while the owner’s investment increases. This means that the company tries to steer away from having debts, which in real sense makes it self-sustaining. This is as shown by a declining debt to equity ratio from April.

The financial statements for the company are attachment: