Business Expansion Assignment

Business Decision; Buy or Build

Student’s Name

Affiliation

Craft a brief strategy for a business concept that would directly compete with the small business you selected. Explain the rationale for the strategy in detail.

After years of eating at B-CHAMPS fast foods, an outlet in central Boston, subconscious knowledge and interest in the restaurant business has been acquired by the Mr./MRs XXX(insert student’s Name)XX. Since the late 90’s, concerns over obesity ensured public protests against poor eating habits (Schlosser, 2012). Such protest directly attacked the fast food industry and its supply chains. This was intensified by educational curriculums that broke down the effect of excess fats and unnecessary calories contained in most fast food industry products. Furthermore, a general concern for a healthy workforce also introduced an era where employers started investing in health programs for their employees (Schlosser, 2012). These included physical exercise programs, free healthcare consultation on dieting and other well being plans. Therefore, fast food joints were forced to provide healthy food options for the enlightened consumers or close business. Additionally, a healthy foods competition arose that promised consumers salads, plain fruits, vegetables and juices among other products rarely served at fast food joints. The situation was worse in Boston based on its thriving sports tourism industry (Sgan, 2009). Regular local, national and international events raised the healthy eating awareness of the residents thus ensuring declining sales in the fast food industry. Only large fast-food chains managed to cushion the original impacts. Small chains such as B-CHAMPS were hit hard by the change in consumer preference that is destined to be permanent.

The majority of fast food customers are children and young adults. Based on the minimum visits of the aged clients and adults, the projected consumer base is under-exploited. The purchasing power is majorly possessed by the adults and aged consumers. In order to attract more children and young adults, the healthy foods option is mandatory. The adults/ aged consumers will increase their visits in terms of volumes and frequency. This guarantees additional children and young adults company. Providing the healthy food option takes care of adults/ aged consumers impatience based on the lengthy food preparation in the mainstream restaurants and hotels.

The Umbrella Health Fast Center relies on engaging as many suppliers of vegetable and fruits to service the healthy foods counter. The customers will determine their preferred needs through questionnaires and feedback applications on the internet or mobile phones. Healthy food options provide a challenge in terms of variety in preferences (Sloan, Legrand, & Chen, 2013). However, a careful database of food combinations that complement the original fast food menu should narrow down to a standard healthy food menu. Furthermore, supplementary menus shall be implemented based on pre-order requirements by customers. Initially, regular customers will be tracked so as to impalement the sample phase. After successful sampling, UHFC will provide the offer and discount phase to establish standard menus.

Partnership with healthy food experts will be sought to provide UHFC with an opportunity to market its healthy food menus at social events, sporting events and internal campaigns that are part of our corporate social responsibilities. Based on the influx of small healthy food vendors, UHFC should engage them in outdoor events that will accommodate their unique menu under our portable/ movable stores. Successful vendors will be initiated and offered a franchising opportunity at their convenience as long as they embrace the established menus alongside their products/ services.

The expansion of the menu and absorption of small healthy food vendors is a strategy to retain existing clients and attract new clients based on changing consumer preferences. The expansion network through establishing new outlets and assimilating small vendors is a critical step in gradually resisting the competition from established fast-food chains such as MacDonald’s (Sloan, Legrand, & Chen, 2013). Since the UHFC strategy is big yet relies on a restricted budget, new suppliers will be acquired on consignment basis. A consignment relationship allows UHFC to manage a wide menu through supplies that will be paid for after sales are realized.

Determine if it would make more sense to open the new business you describe or to purchase the existing business you selected.

After a careful analysis of the fast-food industry and the dynamic trends in consumer preferences, the appropriate decision is to take-over B-CHAMP fast foods. The outlet is well-managed with loyal employees and enjoys a substantial regular customer base. However, the store has aged proprietors who have refused to embrace recent trends in the fast food industry. Furthermore, they have stuck to their trademark narrow menu that misses out on the expanding population that is highly diversified, unlike when B-CHAMP was established in the 1970’s. Increased competition and changing consumer preferences have seen massive declines in income. The increasing costs of supplies and taxes cannot guarantee viability of B-CHAMP. My brief can enjoy a massive head-start upon acquisition of B-CHAMP fast food store based on several advantages.

Taking over B-CHAMP eliminates over 50% of the start-up hustles. The problem of product placement and location is already eliminated since B-CHAMP has set a bulls-eye for the consumers. The plans and procedures are intact as well as successful over the years. The only hitch is the inability of the proprietors to appreciate minor adjustments to the routines that would enhance productivity. The loyal employees have established a good relationship with local customers thus a guaranteed marketing network. An existing business also promises immediate cash-flow that will be useful when initiating the consignment deals with suppliers. Purchasing a business that is running can provide excellent financial cushions for petty yet critical errands after the take-over is finalized. Accurate financial forecasts are easy to acquire because a historical trend can be authenticated from existing records. There is an existing track of spending decisions and the results which provides a reliable map for budgetary allocations. Such choices include considerations of further financing including loans from commercial institutions.

Discuss the most appropriate form of ownership for your new business

Based on the need for fresh supplies that must be of high quality at affordable prices, the appropriate form of ownership is micro-franchising. In order to have a reliable healthy food supplies requires a variety of suppliers and is seasonal in nature (Sloan, Legrand, & Chen, 2013). This is due to a variety of growing and harvesting seasons for different farm produce. The limited budget for the project would benefit from selling on a consignment basis. The choice is reasonable because the small-time suppliers are specialized and do not currently enjoy exposure as their established rival grocery stores. Therefore, the suppliers will benefit from a definite bulk delivery center that guarantees consistency in income. The Umbrella Health Fast Center will benefit from extended credit based on the consignment relationship with the suppliers.

Business Plan

1.0 Executive Summary

The Umbrella Health Fast Center is a casual restaurant that seeks to establish a balance between traditional fast-food joints and recent influx of healthy food providers. The target is addition of grilled meats and assorted vegetables or salads, on the contemporary fast food menu. The target population is 50,000 residents of Central Boston with forecasted annual revenue of $250,000. This paves way for a chain of outlets in north, east, south and west sides of Boston.

1.1 Mission

The UHFC is to become the premier provider of a mixture of fast food and healthy choices experience. This will be realized through reasonable prices that arise from a wide menu based on the expansive franchising network of unique suppliers.

1.2 Objectives

· To become the leading fast food and healthy food provider in Boston

· To open two outlets every year

· To offer a fun experience at affordable prices.

1.3 Success Principles

· Wide variety in menu

· Value every customer and provide unique experiences

· Invest part of profits in menu expansion and take-away/ delivery services.