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Assessment 2 Cover Sheet
Assessment Cover Sheet Issue No.2 Revision No. 7
Reference Number/Code: [ACK.FO.VPAC.10.01] Revision Date: March 2018
Page 1/2
School/ Department Name: School of Business
Course Name: Entrepreneurship, Innovation and New Ventures
Course Code: 15SMGB414
Instructor Name: Dr. Andri Ottesen
Assessment 2
Due Week 10
Student’s Name:
Student ID No:
Section:
Assignment 2 . – Business Ready Business Plan – Report and Pitching to Investors – Presentation.
Assessment 2: Group Report: Max 20 pages – 30%
Full 14 points business plan for new venture – itemized as listed in Assessment Matrix.
Section I: ½ page sales pitch to investors (uniqueness (IP), marketability, profitability, scalability 1 %
Section II: Business Description 5 Points
A. General description of business
B. Industry background
C. Goals and potential of the business and milestones
D. Key Assumption about time, cost, revenue and profit
Section III Intellectual Property
A. Current IP – Uniqueness and its value
B. IP Protection – Patent, Trades Secret, Exclusive Contracts
C. IP Generation – Knowledge Creation
Section IV: Marketing Background – 2,5%
E. Research and analysis
F. Target market (customers) identified
G. Market size and trends
H. Competition
I. Estimated market share
Section V: Marketing Plan– 2,5%
J. Market strategy—sales and distribution
K. Pricing
L. Advertising and promotions
Section VI: Operations – 2.5%
M. Specific operational procedures
N. Identify location advantages
O. Personnel needs and uses
P. Proximity to suppliers
Section VII: Management 2.5%
Q. Resume of Management team that inspire trust of investors – Technical & Business Managers
R. Legal corporate structure—stock and employment agreements, and ownership agreement, stock options
S. Board of directors, advisors, and consultants
Section VIII: Financial 5,5%
T. Financial forecast – Profit and loss 10 years into the future (hokey Stick – scale up story telling)
A. Cash flow – Month by Month for the first year and half (in and out of bank) – budget
B. Break-even analysis and payback time
C. Cost and time controls mechanizing
Assessment 2 Cover Sheet
Assessment Cover Sheet Issue No.2 Revision No. 7
Reference Number/Code: [ACK.FO.VPAC.10.01] Revision Date: March 2018
Page 2/2
Section IX: Critical Risks 2,5%
A. Risk Identification – permitting, marketing, financial, employee, IP,
B. Risk Management Procedures
C. Alternative courses of action
Section X: Harvest Strategy 2,5%
A. (IPO, Trade sale, MBO; LBO)
B. Continuity of business strategy
C. Identify successor
Section XI: Milestone Schedule – GANT Chart 2,5% – match with Cash Flow
A. Timing and objectives
B. Deadlines and milestones
C. Relationship of events
Section XII: Offer to Investors
Valuation of the Company support
Section XIII: Scale up Strategy for the 10 years ahead 2.5%
Section IVX: Appendix, List of Key Assumptions, Professional Image 1%
DO NOT WRITE IN THE AREA BELOW:
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Feedback: ________________________________________________________________
________________________________________________________________
Instructor’s signature: __________________________
Student’s Signature: ___________________________
BUSINESS PLAN
Invo Restaurant
By:
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Table of Contents
Section I: Executive Summary ……………………………………………………………………………………………
4
Section II: Business Description …………………………………………………………………………………………
5
General description of business ………………………………………………………………………………………………… 5
Industry background ………………………………………………………………………………………………………………… 5
Goals and potential of the business and milestones …………………………………………………………………….. 5
Uniqueness of product or service ……………………………………………………………………………………………….
6
Section III: Marketing background …………………………………………………………………………………….. 6
Research and analysis ………………………………………………………………………………………………………………. 6
Target market (customers) identified …………………………………………………………………………………….. 6
Market size and trends …………………………………………………………………………………………………………. 6
Competition …………………………………………………………………………………………………………………………
7
Estimated market share ……………………………………………………………………………………………………….. 7
Section III: Marketing plan ……………………………………………………………………………………………….. 7
Porter’s 5 Forces ……………………………………………………………………………………………………………..
8
Marketing strategy: ………………………………………………………………………………………………………………….
9
Marketing mix ……………………………………………………………………………………………………………….
10
Placement strategy ………………………………………………………………………………………………………..
12
Section IV: Operations …………………………………………………………………………………………………… 12
Specific operational procedures ………………………………………………………………………………………………. 12
Location advantages ………………………………………………………………………………………………………………. 12
Personnel needs and uses ………………………………………………………………………………………………………. 1
3
Proximity to suppliers ……………………………………………………………………………………………………………..
13
Section V: Management………………………………………………………………………………………………….
14
Management team—key personnel …………………………………………………………………………………………. 14
Legal structure—stock and employment agreements, and ownership ………………………………………….
15
Board of advisors …………………………………………………………………………………………………………………… 15
Section VI: Financial ………………………………………………………………………………………………………. 16
Entrepreneurship, Innovation and New Ventures
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Profit and loss ……………………………………………………………………………………………………………………….. 16
Cash flow ……………………………………………………………………………………………………………………………… 18
Section VII: Critical Risks …………………………………………………………………………………………………
19
Potential problems ………………………………………………………………………………………………………………… 19
Obstacles and risks ………………………………………………………………………………………………………………… 19
Alternative courses of action …………………………………………………………………………………………………… 19
Section VIII: Harvest Strategy ………………………………………………………………………………………….
20
Liquidity event ………………………………………………………………………………………………………………………. 20
Continuity of business strategy ……………………………………………………………………………………………….. 20
Identify successor ………………………………………………………………………………………………………………….. 20
Section IX: Milestone Schedule ………………………………………………………………………………………..
21
Section X: Valuations of the company ……………………………………………………………………………… 21
Section XI: Financing schedule …………………………………………………………………………………………
22
Loan and Investors Financing Schedule …………………………………………………………………………………….. 22
Offer to Investors ……………………………………………………………………………………………………………………
23
The term sheet ……………………………………………………………………………………………………………………… 23
References ……………………………………………………………………………………………………………………
24
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Section I: Executive Summary
Invo is a startup casual dining restaurant that will be located in Kuwait. It aims to catch the
interest of the customers and make them loyal by providing a faster service and a higher quality
of food that is fresh, delicious and hygienic than the other restaurants, but at the same price. The
restaurant is different and very unique, because it is going to have a special self-service app that
Invo’s customers can download, in order to reserve a table, order the food and pay for it. Also,
the food will be delivered to the customers in a new and innovative way, which is through the
food loops that help in providing faster service and add a beautiful touch to the design of Invo.
This allows the customers to have a different and memorable experience. In order to exclude
others from exploiting the creative process that Invo has, a patent will be acquired. Also, a
copyright for the unique name of the restaurant will be obtained. The restaurant will have the
best people, as the founders will focus on hiring high experienced business and technical
managers, who can manage Invo and make it successful. As well, Invo will grow up quickly by
opening different branches in Kuwait and then after ten years it will continue to expand
internationally and open around ten franchises in different countries.
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Section II: Business Description
General description of business
The business is a casual dining restaurant in Kuwait, that provides high quality food in terms of
freshness, hygiene and taste. Furthermore, Invo will provide fast service and convenience to
customers, as they can use the restaurant’s self-service application and the food will be delivered
from the kitchen to their tables directly through food loops in the restaurant.
Industry background
Oxford business group (2014) said that the food and beverage industry is a very big and busy
industry in Kuwait and it is expected to grow. This is because there is a big variety of different
restaurants in Kuwait (Kuwait government online 2018). However, (Restaurantsinkuwait 2016)
claimed that the most popular restaurants are the western fast food franchises. Also, according
to Oxford business group (2014) tourism is expected to grow resulting in an increase in the food
and beverage sector, as well. Furthermore, people have high demands and high incomes, as well
(Oxford business group 2014). Moreover, the trends in this industry show that the demand for
high quality food and restaurants is increasing a lot (Thebusinessyear 2016). Aaronallen (2017)
also mentioned that the food prices are low since 2016, and restaurants can get advantage out
of it, as they will have lower food cost. All of this shows that the food and beverage industry in
Kuwait is a wide and successful industry.
Goals and potential of the business and milestones
Invo’s goal is to deliver the food to people in a new, creative and fun way. Also, it aims to attract
three groups of people to be the main customers and make them loyal by providing them with
attractive offers. As well, the restaurant wishes to get trendy and expand by opening around four
branches in Kuwait in the first ten years and after that expand internationally by opening ten
franchises in the other five years.
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Uniqueness of product or service
What makes the restaurant unique is having an application that helps and provides fast service
as customers can order food, reserve tables and pay through it. Also, there will be two options in
the application, as customers can choose the cooking time either when they enter the restaurant
or the moment they place their order. Furthermore, there will be loops to deliver the food to
each table. Also, the restaurant will have only two waiters since it is mainly self-service based,
which is a new and unique idea. As well, the food will be supplied from local companies, which
makes it fresh and tasty.
Section III: Marketing background
Research and analysis
Target market (customers) identified
The restaurant will be targeting locals in Kuwait and they are divided into three segments, which
are families, business people and millennials. The characteristics of these segments are that they
are middle class, use smartphones and social media, food lovers, convenience seekers, and are
interested in innovation. The restaurant will provide different values for these different
segments. For example, hygiene and high quality fresh food for families. Fast service and easy
ordering for business people. Convenience and delicious food for millennials. Also, different
social media channels will be used to reach to these segments. As, Instagram will be used to
communicate with millennials, Facebook for families and Twitter for business people.
Market size and trends
The food market is very big in Kuwait, as there are many different types of restaurants like
Kuwaiti, Lebanese, Italian, English, Hindi, Egyptian, American, and Chinese (Kuwait government
online 2018). Also, Restaurantsinkuwait (2016) mentioned that the food and beverage market in
Kuwait includes 40% dine-in restaurants, 19% fast-food chains, and 41% cafe & sweets.
Moreover, around 5000 restaurants in Kuwait are being visited by 615,000 people daily.
Furthermore, some researches show that Kuwaitis are willing to spend their money on
Entrepreneurship, Innovation and New Ventures
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restaurants, as they spend around 10% of their income in restaurants on a daily basis
(Restaurantsinkuwait 2016).
There are some trends that affect the food and beverage market. For example, technological
trends like online ordering, kiosks and food trucks are so popular nowadays and it has a huge
impact on the market (Aaronallen 2017). As, it affects people’s decisions about what or where to
eat. Akl (2012) claimed that most of the population of Kuwait are young people, who are wealthy,
have high incomes, attracted to the western culture and open to try new things. Also, because of
the hot weather in Kuwait people prefer to spend their time in shops or restaurants. These facts
benefit the food and beverage industry a lot (Akl 2012).
Competition
The competition is big in the food and beverage industry. As, there are many casual dining
restaurants in Kuwait such as Chili’s, Applebee’s, T.G.I Friday’s, etc. Also, there is a threat of new
entrants, but it is weak because it is costly and time consuming for others to do it, there are lots
of permits and the restaurant will have a patent to protect its idea. As well, there is a medium
threat of substitutes, as people can either order food from home delivery apps, cook at home, or
eat in fast food restaurants. However, all these substitutes will not provide the uniqueness that
the Invo restaurant will provide to customers.
Estimated market share
The food and beverage market is so big and there are many dominating restaurants in the market.
So, the market share that Invo can have as a new restaurant in this big market will not be big. It
will approximately take around 2% of the market share.
Section III: Marketing plan
There are specific objectives in marketing which Invo would like to achieve and it requires
positioning, promoting and advertising. Invo is positioned as a self-service restaurant with a high-
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quality food at affordable prices. Discounts and promotions will be offered to the customers.
Also, Invo will be advertising through social media in different platforms, such as Instagram,
Facebook and twitter to reach wider customers and also through Billboards.
Porter’s 5 Forces
Invo will use the industry analysis such as the five forces to estimate if the beverage and food
industry is a good industry to enter or not by analyzing the power of some areas and how it will
affect the business.
Invo has 3 weaknesses in its business, which is the threat of new entry, supplier power and buyer
power. The competitive rivalry is strong, and the Threat of substitution is medium, so the
business is in a good industry.
The threat of new entry is weak as it is:
• Costly and time consuming for the competitor to enter
• Because the Invo restaurant has a patent, so others cannot imitate
• Lots of permits are required
Buyer power is also weak because:
• Having unique App which is self-service for customers
• Customers are not price sensitive
• Although there are other restaurants that customers can go to, they will be loyal for Invo
because it provides them with:
1. Higher quality of food
2. Faster service
3. Different experience, which is not for everybody
Supplier power is weak since there is:
• Availability of substitute
• There will be local suppliers, supplying fresh food
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• Invo will have two food suppliers
Threat of substitution is medium:
• Delivery and cooking at home
• Fast-food restaurant
Competitive rivalry is strong because:
• There is a big number of competitors (Like – Fridays, chili’s, etc.
Marketing strategy:
Invo follows a differentiated marketing strategy, because it serves a niche market that includes
businesspeople, millennials and families. This will help Invo to target its potential customers, who
would most benefit from the offerings. As the restaurant produces a variety of meals such as
family meals, kid’s meals and individual meals. The restaurant’s competitive advantage is having
a self-service app, high quality fresh food and loops for delivering the food. In addition, Invo is
going to follow the VRIO analysis to discuss how it will serve the targeted segments.
Value:
For the families segment, the value that will be provided is the high quality food and hygiene. As
for the business people, the value will be given by providing fast service and easy ordering, as
they always want to save time. Finally, the value for the millennials will be providing them with
convenience, and delicious food.
Rare:
Invo will be rare, as it‘s going to be the only restaurant in Kuwait, that will develop an app, for
self-service where customers will order from it. Tables can also be reserved, in order for the
customers to save time. Moreover, payments are going to be done through the app. Additionally,
the food will be delivered in special way to the customers through a well designed food loops.
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Imitate:
Invo’s products might be imitated, as competitors might offer similar products. However, the
service cannot be easily imitated, as Invo will have a patent for it. Also, it will be costly and
time consuming for the competitors to develop an app that is similar to Invo.
Organized:
The restaurant will hire experienced staff, such as an expert cook to prepare the meals, a
marketing officer to advertise on differernt platforms, an app developer for maintenance of
the app, and an accountant to manage Invo‘s finances. Invo owners will have different
connections with businesspeople to help them to get consultation. Invo will also hire an
experienced engineer to develop the loops in which the food will be served to customers.
Marketing mix
The marketing mix of Invo restaurant consists of 7P’s which are product, place, price,
promotion, physical evidence, people and quality process.
Products – Different items on the menu such as drinks, meals, desserts will be fast and
conveniently delivered through the app. Also, packaging will be specifically designed to be
delivered through the loop. Moreover, customers are going to order the food through the
self-service application.
Place – There is going to be only one branch at Salmiya in the gulf street and there will be
dine-in and takeaway options in the restaurant. The restaurant will open from 2:00 pm – 10:00
pm, daily.
Price – Invo will follow a competitive pricing strategy same as its competitors, but with a higher
quality of food. The prices are going to be affordable for different targeted segments like,
businesspeople, millennials and families.
Promotion – On certain events like National days, and Eid, Invo will have special promotions
on family meals, like buy 2 meals and get 1 for free. Also, loyalty stamp cards will be given to
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customers who regularly visit Invo, as this helps to retain them; and these loyalty cards offer
free meals. As well as, to encourage them to come more another promotion will be sending
a 10% discount codes for loyal customers. Furthermore, when the customer’s order the
signature meal for four times, they are going to get the fifth one for free. The restaurant is
also going to have a special meal every month that is going to be called “The meal of the
month” and if the demand for the meal was very high it will be included on the menu. As well,
special promotions will be provided for customers on their birthdays, as the app recognizes
the customers’ birthday when they sign up. For example, the promotion will be a free dessert
or a 10% discount.
As for the advertising, it is going to be through social media platforms like Instagram, Twitter,
and Facebook.
Physical evidence – The atmosphere is going to be casual and innovative, as Invo will be using
food loops and the menu is going to be on the application rather than a traditional
restaurant’s menu.
People – The niche market will be people of middle to high income, such as businesspeople,
millennials and families. Loyalty cards will be given to customers to retain them. Customer
surveys will also be given to customers before they leave the restaurant and it will be taken
into consideration, in order for Invo to offer a better service in the future.
Quality process – The food will be of a higher quality than other restaurants, because it will
be ordered from local suppliers, who provide fresh food and ingredients.
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Placement strategy
The placement strategy will be through direct sales from producer to consumer.
There are two suppliers who are Al-abrar, (will be supplying meat and food supplies), and Al-
Wafra farm (will be supplying chicken). They will be supplying the restaurant on a daily basis,
because both are local and Invo focuses on the freshness and the quality of the food. Once
the ingredients are delivered to Invo, the chefs’ assistants will stock and store the ingredients.
Then, the chefs will prepare and cook the food with the help of the assistants, after that, the
assistants will serve the food from the waiting line through the food loops to the consumers.
Section IV: Operations
Specific operational procedures
There are some operational procedures like the legal requirements that the restaurant needs
in order to be able to operate the business, which are the following:
• Registration of the restaurant’s name at Kuwait chamber of commerce and industry
• A commercial license must be issued from Kuwait chamber of
commerce and industry
• A health license must be issued from the ministry of health
• A civil number for the business must be issued from the public authority for civil
information
• Getting a permission for bank, municipality and firefighting from chamber of
commerce and industry
• Getting a permission for the number of employees, from the ministry of foreign affairs
Location advantages
The restaurant’s location will be in Salmiya, block 2, Arabian Gulf street, and from the other
side it will be overlooking to Salem Al Mubarak Street (Mourjan, 2018). A commercial lease
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will be negotiated for an initial term of three years. Under the lease, the rent is 1500 KD per
month.
The advantages of this location are that it is an accessible and visible place, as around it there
are some cafes and restaurants. Also, the American University of Kuwait will be close to it,
where young people can come to have lunch or snack during their break time. Moreover,
Salmiya is both a commercial and residential area. So, business people can conduct their
meetings or come to have lunch and families can come to spend their leisure time and have
delicious food, as well. Furthermore, there is a big area for parking in front of it.
Personnel needs and uses
The restaurant needs some personnel to be able to start and operate.
• App developer: To develop the app and maintain it.
• Interior designer: To design the restaurant and the loops.
• Accountant: To control the money and the finance of the restaurant.
• Marketing officer: To advertise and control the social media platforms (Instagram,
Facebook, Twitter).
• Two chefs in the kitchen: To cook and prepare the food.
• Two cleaners in the kitchen: To clean and help the chefs.
• Two assistants: To assist the customers in case if they need help.
• Two valet people: To park the cars of the restaurant’s customers.
Proximity to suppliers
Suppliers are a very important part of delivering high quality food to customers, so it is vital
that the restaurant chooses them well and sustains a good relationship with them. Invo
restaurant will deal with two different local suppliers in Kuwait to get the food supplies, meat
and chicken. This is because dealing with local suppliers help in both getting and providing
high quality fresh food. As well, it requires less cost than importing from foreign suppliers.
The first supplier is the Universal Al-Abrar company, which is located in Shuwaikh Industrial
and it provides meat and other food supplies. The other supplier is Al-Wafra Farm, which is
located in Al-Wafra and it provides fresh chicken.
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Section V: Management
Management team—key personnel
Invo needs a management team that consists of two different managers, who are the
business manager and the technical manager to manage it.
The technical manager (chef) will be Mr. Manoranjan Kumar. He has nine years of experience
as a central kitchen manager. He worked with Kuwait American food stuff company as a
supervisor central kitchen manager. Also, he worked with Hamborgeni burger as a kitchen
manager in Kuwait.
(Linkedin 2019a)
The responsibilities of the technical manager (chef) are:
• Cooking the food in a timely manner
• Ensuring the freshness of the food and removing any out-of-date items
• Making sure that the food plates have an appealing presentation
• Supervise and assist the kitchen staff
Another technical manager (engineer) will be Mr. Ahmed Khawanda, who is an experienced
Civil Engineer with a demonstrated history of working in the civil engineering industry. He is
skilled in strategic planning, structural engineering, and engineering drawings.
(Linkedin 2019b)
The responsibilities of the technical manager (engineer) are:
• Designing and building the loops
• Ensuring that the loops are well maintained and safe
• Resolving design and development problems
The business manager will be Mr. Mohammed Zakzouk. He has an experience in the
restaurant industry, as he worked in different restaurants:
• Brand manager in MMC Catering
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• Restaurant general manager in TG Fridays, Chili’s, Applebee’s and Hasta la Pasta Italian
Grill
• Store manager in Second Cup café
(Linkedin 2019c)
The responsibilities of the business manager are:
• Assess and find opportunities to grow in the markets.
• Create the goals and objectives of the restaurant.
• Make sure that all the restaurant’s activities follow the legal guidelines and policies.
• Evaluate the overall restaurant’s performance.
Legal structure—stock and employment agreements, and ownership
The restaurant will be operated as a general partnership, as the involvement in the business
and the profits will be divided equally between the owners, who are Fatemeh Davari, Lina
Morad, Talha Abdul Rahiman, Taiba Al-Maqate, and Sharifah Khalaf.
Also, there will be an employment agreement between the owners and the employees, which
includes the position title, compensation, vacation, benefits, probation period, performance
reviews, and termination.
Board of advisors
The following advisors will be helping the restaurant:
Accountant: Davud Basha
Insurance broker: Safenet Insurance
Solicitor: The law firm of Labeed Abdal
Bank: National Bank of Kuwait
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Section VI: Financial
Profit and loss
Sales Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Direct sales of food and beverages 45000 80000 87000 95000 99000 145000 190000 270000 310000 365000
Valet parking 2632 3264 3360 3400 3420 3000 3100 3050 3050 3010
Total Sales 47632 83264 90360 98400 102420 148000 193100 273050 313050 368010
COGS 15000 26700 29036 31705 33039 48390 63407 90104 103452 121806
Gross Profit 32632 56564 61324 66695 69381 99610 129693 182946 209598 246204
Operating Expense
Rent 16500 18000 18000 18000 18000 31200 32400 45600 46800 58900
Salaries 17184 29376 29376 29376 29376 44256 51696 66576 74016 88896
New equipment (assuming full
depreciation 10000 0 100 0 0 10000 0 10000 0 10000
Interest (2%) 300 306 312 318 324 331 337 344 351 358
Advertisements (Other than social
media) 2400 2575 2400 2900 2400 3000 2400 2575 2400 3000
Internet 91 156 156 156 156 247 312 403 468 559
Utilities 330 360 360 360 360 690 720 1050 1080 1410
Insurance 540 540 540 540 540 1040 1040 1540 1540 2040
Application maintenance 175 300 300 300 300 300 300 300 300 300
Total Operating Expense 47520 51613 51544 51950 51456 91064 89205 128388 126955 165463
Net Profit
-14888 4951 9780 14745 17925 8546 40488 54558 82643 80741
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-2000
0
0
20000
40000
60000
80000
100000
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Net Profit
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Cash flow
Month
one
Month
two
Month
three
Month
four
Month
five
Month
six
Month
seven
Month
eight
Month
nine
Month
ten
Month
eleven
Month
twelve
Cash at start of
month 35000 50000 48410 34820 26724 20896 17910 14982 12104 8776 5998 3340
Cash coming in
Food and beverage
sales 0 0 0 0 0 2500 2560 2570 2160 2650 2760 2800
Valet sales 0 0 0 0 0 342 340 380 340 400 410 420
Loans 15000 0 0 0 0 0 0 0 0 0 0 0
Total cash in 15000 0 0 0 0 2842 2900 2950 2500 3050 3170 3220
Cash going out
Rent 0 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500
Salaries 0 0 0 2148 2148 2148 2148 2148 2148 2148 2148 2148
Decorations 0 0 2000 2000 0 0 0 0 0 0 0 0
Supplying food 0 0 0 0 1812 1812 1812 1812 1812 1812 1812 1812
Legal permits 0 60 60 80 0 0 0 0 0 0 0 0
Utilities 0 30 30 30 30 30 30 30 30 30 30 30
Equipment 0 0 10000 0 0 0 0 0 0 0 0 0
App creation 0 0 0 2000 0 0 0 0 0 0 0 0
App maintainance 0 0 0 25 25 25 25 25 25 25 25 25
Advertising 0 0 300 300 300 300 300 300 300 300 300
internet 0 0 0 13 13 13 13 13 13 13 13 13
Total cash out 0 1590 13590 8096 5828 5828 5828 5828 5828 5828 5828 5828
Cash at end of month 50000 48410 34820 26724 20896 17910 14982 12104 8776 5998 3340 732
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Section VII: Critical Risks
Potential problems
The legal problems that may occur for the business is the paperwork taking too long. Limited
suppliers can also be a potential problem. Another problem that may occur is maintaining the
freshness of the food and excess food waste.
Obstacles and risks
Kuwait National Funds may be hesitant to lend money to a business that lacks experience.
Another risk could be, customers may pick other restaurants instead of Invo as the market
share for the food industry in Kuwait is big. Also, an identical app might be created by another
restaurant with the same features, if Invo does not have a patent for its application.
Alternative courses of action
Doing the paperwork early and establish connections with people, who can help Invo in
finishing it easily. As for the suppliers, there is going to be a backup supplier just in case that
problems occur, such as the quality of the food not meeting the standards of the customers.
Furthermore, managing the stock to reduce the wastage of the food by creating a sheet for
food waste in order to be aware of food spoilage before it occurs, by reusing the amount of
ingredients ordered for the food that wasn’t used, it can be incorporated for a new dish, also
by using past inventory insights to know how much to order for the next stock, which will help
in reducing the food waste.
As for the funding, Kuwait National Fund, will be convinced to provide loan for the business,
as the business will have experienced management team.
Moreover, to make the customers loyal, the business will advertise and send discount codes
for them. This will help the business to retain its market share in the food industry. In addition,
applying for a patent is necessary for the Invo restaurant so that no one can imitate or copy
the idea and the process of the restaurant.
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Section VIII: Harvest Strategy
Liquidity event
After five years, the restaurant will go to venture capitalist for getting help to grow nationally.
As, they can help in generating more money for expanding by their investment and their
knowledge. Then, after 10 years, when the restaurant has grown enough, the management
team will decide to undertake initial public offering. This is because the IPO has several
advantages for the business. Firstly, it helps in issuing more shares and extra financing,
because everybody can buy the shares. Secondly, it helps to increase restaurants’ public
image, so banks will trust the company and give loans easier.
Continuity of business strategy
After doing the IPO, the restaurant will have a succession plan, where the founders and
everyone can get a chance to exit. So, after ten years the founders will sell their shares
because the shares will be liquid and easy to sell and buy. Then, they can use the experience
and the money they have to do something new and open a new business.
Identify successor
After 10 years when the restaurant goes to the stock market, the early investors have a
possibility of exiting by selling their shares out to the stock market.
Entrepreneurship, Innovation and New Ventures
21
Section IX: Milestone Schedule
Section X: Valuations of the company
Valuation in year 10 94,771.44
Valuation in year 11 114,116.33
Based on the net profits in the profit and loss statement for the ten years of operating the
business, the valuation of the Invo restaurant will be around 95,000 KD in year ten. Starting
from year eleven the profit is assumed to be 90,000 KD, so the valuation will be around
115,000 KD. (with a 15% risk factor)
1 2 3 4 5 6 7 8 9 10 11 12
Get financing
Renting the location
Legal permission
Decorations
Purchasing equipment
Hiring staff
Creating the app
Supplying food
App maintainance
Advertising
Grand opening
Milestones
Starting month Months left for completion
Entrepreneurship, Innovation and New Ventures
22
Section XI: Financing schedule
Loan and Investors Financing Schedule
Loan Schedule
Amount of money 15000
Max years to pay 15
Interest 2%
Year 1 300
Year 2 306
Year 3 312
Year 4 318
Year 5 324
Year 6 331
Year 7 337
Year 8 344
Year 9 351
Year 10 358
Year 11 365
Year 12 372
Year 13 380
Year 14 387
Year 15 395
Owners investment 35000
Investors Financing Schedule 10000
The restaurant Invo will take a loan in the first year from Kuwait National Fund which will be
15,000 KD with an interest rate of 2% yearly. Each owner will pay 7,000 KD so the total will
be 35,000 KD. After five years, the business will ask the venture capitalists to help in
expanding and opening new branches of the restaurant, so Invo will ask them to invest by
10,000 KD for 20% of the shares.
Entrepreneurship, Innovation and New Ventures
23
Offer to Investors
The term sheet
Valuation of the company (KD) 115000
Amount of the offering (KD) 23000
Number of shares 23000
Price per share (KD) 1
The restaurant needs 10,000 KD from the investors for 20% of the company’s valuation, which
is 23000kd at the price of 1 KD for each share.
Entrepreneurship, Innovation and New Ventures
24
References
Aaron Allen 2017, Factors Affecting the Kuwait Restaurant Industry, viewed 1 December 2019,
https://aaronallen.com/blog/kuwait-restaurant-industry
Kuwait Government Online 2018, Restaurants in Kuwait, viewed 1 December 2019,
https://www.e.gov.kw/sites/kgoenglish/Pages/Visitors/TourismInKuwait/PlanningYouTripR
estaurants.aspx
Linkedin 2019a, Manoranjan Kumar Kumar, viewed 1 December 2019,
https://kw.linkedin.com/in/manoranjan-kumar-kumar-5b0921124
Linkedin 2019b, Ahmed Khawanda, viewed 1 December 2019,
https://eg.linkedin.com/in/civil-ahmed-khawanda-246090136
Linkedin 2019c, Mohammed Zakzouk, viewed 1 December 2019,
https://kw.linkedin.com/in/mohammed-zakzouk-75672538
Mourjan 2019, Apartments for rent in Kuwait, viewed 1 December 2019,
https://www.mourjan.com/kw/apartments/rental/en/
Oxford Business Group 2014, Kuwait: Appetite for growth in food and beverage sector,
viewed 1 December 2019, https://oxfordbusinessgroup.com/news/kuwait-appetite-growth-
food-and-beverage-sector
Restaurants In Kuwait 2016, Where To Eat In Kuwait, viewed 1 December 2019,
https://www.restaurantsinkuwait.com/eating-in-kuwait/
Saldanha, C 2014, ‘A promising food and beverage market still under the radar’, Hospitality
News ME, 21 July, p. 14. https://www.scribd.com/document/234678166/Food-Beverage-
Trend-in-Kuwait
The business year 2016, Appetite For Success, viewed 1 December 2019,
https://www.thebusinessyear.com/kuwait-2016/appetite-for-success/focus
https://aaronallen.com/
https://aaronallen.com/blog/kuwait-restaurant-industry
https://www.e.gov.kw/sites/kgoenglish/Pages/Visitors/TourismInKuwait/PlanningYouTripRestaurants.aspx
https://www.e.gov.kw/sites/kgoenglish/Pages/Visitors/TourismInKuwait/PlanningYouTripRestaurants.aspx
https://kw.linkedin.com/in/manoranjan-kumar-kumar-5b0921124
https://eg.linkedin.com/in/civil-ahmed-khawanda-246090136
https://kw.linkedin.com/in/mohammed-zakzouk-75672538
https://www.mourjan.com/kw/apartments/rental/en/
https://oxfordbusinessgroup.com/news/kuwait-appetite-growth-food-and-beverage-sector
https://oxfordbusinessgroup.com/news/kuwait-appetite-growth-food-and-beverage-sector
https://www.restaurantsinkuwait.com/eating-in-kuwait/
https://www.scribd.com/user/141562083/Conroy-Saldanha
https://www.thebusinessyear.com/kuwait-2016/appetite-for-success/focus
Techno store
(value innovation analysis)
Presented by:
TABLE OF CONTENT
Introduction.
The company’s present value proposition & value curve.
Applying ERRC.
New value proposition curve.
How the innovation is beneficial.
How the innovation is delivered profitably.
Business Model Canvas.
Five forces analysis.
VRIO analysis.
Product/Service trend analysis.
Conclusion
INTRODUCTION
There are around 10 major stores in Kuwait
The most famous of them are Xcite and eurika
Techno store is different from any electronic stores in Kuwait, it provides a lot of modern technology and services.
Technology is growing every year worldwide and techno store is looking forward for adapting these new technologies.
Value proposition of present companies
Cost reduction Service increase
Location
Space
Staff Quality of equipment
Hours of operation
Technology
Value curves of Xcite and eurika
Xcite location quality equipment staff price space hours of operation technology 4 4 3 2 5 3 4 eurika location quality equipment staff price space hours of operation technology 2 3 2 3 3 4 3
The new value proposition
Eliminate Reduce Raise Create
Shelves Staff Quality equipment App for pickup purchase and delivery
Café Interior decoration Hours of operation Security checks
Table counters Self service reception Vending machines
New Value proposition curve
Value curve of techno
Xcite location quality equipment staff price space hours of operation technology 4 4 3 2 5 3 4 eurika location quality equipment staff price space hours of operation technology 2 3 2 3 3 4 3 techno location quality equipment staff price space hours of operation technology 3 5 4 4 4 5 5
How the innovation is beneficial
for customers
Techno store aims to make a customer’s life easier by:
Providing service 24/7 open store
Fully automated self service counter
Creates more space for more modern tech products
Offering modern technology and smart solution services for customers.
Our delivery service is by drone, its faster and less cost.
How to be delivered
profitably
Current expenses New expenses
pace and location/ 1 branch (15,000 kd)
Atmosphere and decorations (8,000 kd)
Staff/ 20 (9,000kd)
Regular equipment (13,000 kd)
Hidden expenses (%5= 3,788 kd)
Total= 48,788 KD
Renting a studio 3 floors (7,000 kd)
Atmosphere and decorations (2,500 kd)
Staff/ 9 (3,000kd)
Vending machines (700 kd)
Self service automated equipment-
(10,500kd)
Hidden expenses (%5 = 1,200 kd)
Total= 24,900 KD Less by 65%
Profit = Total sales – Total expenses
Dropping the expenses by %65 leads to increasing profit while raising sales or retaining it.
Business Model Canvas
Key partners Key activities Value propositions Customer relationships Customer segment
Apple (supplier)
Samsung
Microsoft
dji
KFH bank (funding)
Zain telecom (investor)
Ooredoo (investor)
Finding 3 floor studio
Interior design in tech theme
Buying the equipment
Getting the fund agreement/license
Hiring staff (trainer manager)
accounting/engineer)
Creating marketing plan
Finding Software developer 24/7 in service
Faster delivery time via dji drones
Self service mechanical equipment
Product and guid via app
Software tips and measurements
New/fast & easy
Reasonable price
25% Discount for the first client
15% Discount for students
Membership promotions
Feedback and contact (tell, email, social media)
Community activities Busy lifestyle
Seeking modern technology
Seeking spare parts
Student/employee/ retired
Income (200 and above)
Key resources
Location
Capital
Staff / technology Channels
Mobile app
Social media
Direct sales
Cost Structure
Software
Advertisements and marketing
Rent/salaries/equipment and tools maintenance Revenue Streams
Vending machines
Direct sales 25% (1year package) starts at 50 kd
The 5 forces analysis
Competitive rivalry
Techno store for electronics and service operates is a highly competitive environment
This force is stronger in the industry because there are many players
Supplier Power
Suppliers of electronics may increase the prices depending on the economic situation
The suppliers of electronics have increased their prices during COVID-19 pandemic
The suppliers of electronics generally have limited power to change the prices of electronics
Buyer Power
The customers in electronics industry have high power to bring prices down because of there are many electronics stores in the market
Electronics products are not rare and are highly imitable and this gives buyers power to switch easily
Techno Company has been able to keep buyer power down
The 5 forces analysis
Threat of substitution
Threat of substitution in the electronics industry is minimal and this has given the company an advantage
With minimal threat of substitution, the company profits may not be affected
However, profitability of the company may reduce due to intrusion of alternatives which forces the company to reduce costs
Threat of new entrance
There is a high threat of new similar businesses coming up to the same market
Electronics stores have spread across the environs where Techno Company operates and new ones are opening every day
This will affect the profitability of the business significantly
VRIO ANALYSIS
Value
Value is created through quality electronics and services by the company
The resources in the company are used to establish value
The available resources can be used to exploit an opportunity and neutralize competition in the industry
Rarity
Electronics gadgets and products sold by the company is not rare as there are other companies selling the same products
There is value but no rarity
Imitability
The electronics products sold by the company are easily imitable, i.e., other companies may wish to trade the same products
Since the products are imitable, there is a need to focus on other strategies to stay ahead of competitors
Organization
The company has well organized management systems
Processes are well organized
Good management of resources
Summary of VRIO analysis
Core competencies Value Rarity Imitability Organization Advantage
Brand image Yes Yes Yes Yes Competitive advantage
Innovativeness Yes No Yes Yes Temporary advantage
Customer relations Yes Yes Yes Yes Competitive advantage
Product range Yes Yes Yes Yes
Product/service trend analysis
There has been an upward trend in the performance of electronics industry
Kuwait consumer electronics market size is increasing rapidly as a result of growth in the adoption of wireless connectivity requiring various electronic devices.
Currently there is high demand of electronics in Kuwait as a result of advancement in technology, thus Techno Company will provide a solution
Majority of the population in Kuwait are youth with high consumption of electronic gadgets. This will also favor Techno Company
Conclusion
Techno store brings the world between your hand.
It offers a lot of new technology that the customer will be hyped about.
The only store to deliver packages through drones.
Being the only automated store in GCC providing the experience for the customer to enter a modern world.
References
Porter’s Five Forces of Competitive Position Analysis. (2021). Retrieved 13 July 2021, from https://www.cgma.org/resources/tools/essential-tools/porters-five-forces.html
Electronics Industry 2021 – Kuwait Market Research & Statistics (2021). Retrieved 13 July 2021, from https://www.reportlinker.com/ci02311/Electronics.html/coverage/Kuwait
VRIO Analysis. (2021). Retrieved 13 July 2021, from https://managementmania.com/en/vrio-analysis#:~:text=Corporate%20Strategy-,VRIO%20Analysis%20is%20an%20analytical%20technique%20briliant%20for%20the%20evaluation,%2C%20Rareness%2C%20Imitability%2C%20Organization.
Thank you