Hot Dog Mania is a start-up company that will be come ining the Rumanian food-service industry with a worldwide known merchandise that is non used by any of the 10 large companies in this industry – the hot Canis familiaris. The competitory advantage of this merchandise is that it will utilize different culinary formulas from celebrated hot Canis familiaris states and it will offer its clients the possibility to custom-make their ain hot Canis familiariss from abrasion, while being able to savor different universe spirits.
A Gallic company named Gira Foodservice ( Ionescu, C. ( April 22, 2009 ) , Radiografia pieA?ei foodservice blare Romania ” [ Radiography of the Rumanian nutrient service market ] , hypertext transfer protocol: //www.foodandbar.ro/actualitatea/1481-radiografia-pieei-foodservice-din-romania, Retrieved January 05, 2010 ) published a Rumanian state study sing the food-service industry, in which it stated that the market gross for 2008 is about a‚¬3.4 billion, and it predicts that the market will increase yearly with a two-digit per centum. The domestic market of the company is Romania, and in the hereafter, after a state development to at least five major metropoliss, it will turn to to other Balkan states like Bulgaria.
The primary clients of the hot Canis familiaris merchandises are people populating in the urban countries, which have a high value for clip and mobility, and prefer to eat fast nutrient in order to be able to save clip for other activities. Other clients that will be targeted by HDM will be people who will see big touristic resorts in the state. The last client type that HDM marks is the 1 that is acute on societal events like concerts, assorted exhibitions, carnivals, and athletics games, and would wish to hold a bite during a short interruption.
The chief precedence of this concern program is to put up a fast-food company that will set up assorted mercantile establishments, get downing with one on the seaboard, with my personal equity. Later on, between three to six months, there will be a farther development, were other concern spouses will be required.
The company name will be Hot Dog Mania, and it will be a registered hallmark together with the company logo and motto at the Romanian State Office for Inventions and Trademark. The cyberspace sphere name will be http: //www.hotdog-mania.com and it will hold legion links that will airt clients to it, depending on the state. For illustration, the Rumanian clients will entree the website hypertext transfer protocol: //www.hotdog-mania.ro and they will be outright redirected to the.com site, with the Rumanian linguistic communication interface.
Hot Dog Mania will be a in private held company, registered as a Limited Liability Company, with myself as a exclusive stockholder. Upon farther development to other states, when the trade name will go a franchise, the company will be a franchisor and will hold franchisees as spouses in other locations.
We will concentrate on selling chiefly hot Canis familiariss and drinks. The hot Canis familiariss will hold different fluctuations from the original Franks and Norbert wieners to the hot Canis familiariss eaten in assorted counties in the US like Alabama, New York State or in Seattle Washington, or even the Patsos ” from Turkey. Besides the preset hot Canis familiariss, the clients will hold the chance to custom-make their ain hot Canis familiariss from abrasion, by taking the sausage, the roll type, the condiments, veggies, and spices. The drinks will change from the well knows juices, mineral H2O, and some beer mixtures.
HDM will besides hold a little ware activity, where it will offer its clients chapeaus, badges, Jerseies or assorted hot Canis familiaris vesture, in order to stay in the client attending at all clip.
Besides the merchandises, the company will seek to supply the best quality services in the fast nutrient industry, utilizing the Just in Time method in order to ever function its clients as they make an order.
Our chief aim is to supply the high quality tasty nutrient to our clients faster than a regular fast nutrient. This mission is sustained by some values like: extremely trained professionals, quality nutrient, and faster than fast.
The staff will be ab initio trained for two hebdomads, and so the shop directors will for good oversee the staff in order to do them supply the best services. These directors would hold a higher success rate in the supervision activity because there are a few staff members necessary to run a location.
The quality nutrient will be assured by the providers, which will be chosen by one-year auctions, so the providers with the best nutrient quality will be selected.
Faster than fast – the generic service name that HDM chose for stand foring the Just in Time nutrient fixing scheme, used by McDonalds. This manner, there will be computations of nutrient demand depending on some factors like location, month, day of the month, hr, events or Holidays, and media. The Just in Time method implies that every employee will hold its ain activity, and it will be absolutely related to the other employee ‘s activity, in order to hold no clip loss between merchandise preparing and provision. When there will be high client waiting lines, one member of the staff will utilize a Palm PDA to roll up orders from the waiting line, and it will automatically direct it to the nutrient processing show, so other employees will be able to do the nutrient before the clients arrive to the hard currency registry, in order to do the waiting clip lower.
The mission of the HDM company – providing high quality tasty nutrient to the clients faster than a regular fast nutrient, will be accomplished by this three chief activities.
The initial direction activity will be conducted by me, and after the gap of another location, two of the staff members will be promoted as shop directors – one for each location. This means that in the first months I will necessitate to work a small harder in order to both pull off the first location, and the company as a whole. After set abouting an ambitious enlargement program, there will be country directors, which will oversee five different direction locations in order to guarantee the right operations between shop directors and employees.
Possible direction places will be added subsequently after development, when it will be indispensable to hold a Marketing Manager, a Gross saless Manager, a Store Operation Manager, Human Resources Manager, and Purchasing Manager.
Sing the forces program, each location will hold two cooks, two tellers and one shop director that will manage every state of affairs required.
Hot Dog Mania locations will be represented by medium and big trains, that are both nomadic and infinite sufficient for this sort of activity. The first location will be at the seaboard, aiming a big figure of possible clients, closest to the beach as possible. The fact that the company is utilizing trains offers the high mobility, which allows us to make new locations in merely a few hours. One twenty-four hours the shop can be at the seaboard, and the other twenty-four hours at a concert event in Bucharest. The location will utilize big LCD screens to expose the merchandises and bill of fare, and it will hold its ain originality in exposing the tasty hot Canis familiariss.
We will fit the shops with modern engineering, and we will take for maximal cleanliness in order to pull the clients to keep it. Another installation is to fit the shop with umbrellas and tall saloon tabular arraies, to let them to eat the nutrient merely in forepart of the shop.
The nomadic locations will be settled with precedence to major events, like association football games, concerts, exhibitions, carnivals. There will besides be seasonal locations, on the touristic countries, and fixed locations in the major metropoliss, near to business district.
The initial financess will be covered from my ain capital, and it will make and come close investing of a‚¬50,000. The start-up support necessary is shown in the tabular array on the following page:
Start-up Expenses to Fund
Start-up Assetss to Fund
Entire Support Required
Non-Cash Assetss from Start-up
Cash Requirements from Start-up
Extra Cash Raised
Cash Balance on Get downing Date
Liabilitiess and Capital Liabilities
Other Current Liabilitiess
Extra Investment Requirement
Entire Planned Investing
Loss at Start-up
Entire Capital and Liabilitiess
The mileposts and timelines of the company have been made on a five-year clip interval, and they represent aims of the company. They are shown on the tabular array below:
Make a gross revenues volume high plenty to make the interruption even
Reach interruption even
Acquire the necessary licences to put locations on events
Obtain location licences
Set up the 2nd location of hot Canis familiariss
Acquire 2nd location
Set up the 3rd location of hot Canis familiariss
Acquire 3rd location
Expand the company to fixed locations in other major metropoliss
3 old ages
Develop in other metropoliss
Make a franchise to the company to hold franchisees countrywide
3 old ages
Make a Rumanian franchise
Expand the company to other states in the Balkans country
5 old ages
Industry Analysis and Tendencies
The chief features of the fast-food industry are the undermentioned:
Low cost in comparing to a traditional eating house ;
The mobility that it offers to its clients, holding them the chance to eat the nutrient as they go ;
Specific demographic individualities for clients: normally immature people, sometimes households, driven by kids ; populating in urban countries, and holding medium or lower average income, although late immature people with high income have developed a understanding for this sort of nutrient ;
Faster times in the nutrient preparing, up to a few seconds after the order has been taken ;
Development in many locations, which are really of import for this sort of activity ;
High fight among companies, based on the fact that clients are non ever loyal to a trade name, and will devour the merchandises based chiefly on the location of the constitution ;
The fast-food industry in Romania has developed sensitiveness to seasonality. In this regard, the industry rhythm has fluctuations particularly during the Holidays. For illustration, at the terminal of December, during the Christmas Holiday, the Romanians have developed a nutrient cult, when they prepare specific Rumanian dishes, which they eat for about two hebdomads. During this clip, the fast-food industry suffers a dramatic gross revenues bead. The same phenomenon occurs during the Easter Holiday, when Rumanians have a extremely valued faith vacation. Although these industry rhythms are happening every twelvemonth, the companies in the market are cognizant of it, and they are non really affected by it, holding clip to fix for these seasonality rhythms.
The industry life rhythm has non yet reached the adulthood phase, being in a changeless growing for the last 10 old ages. This is go oning because the immature people, like pupils, prefer to eat fast nutrient in order to tie in to a societal tendency. Afterwards, even if they have matured and have occupations, they still feel attracted to this nutrient because of the high mobility that it offers.
However, the province will hold a high influence on this tendency in the old ages to come, since they have assorted runs against fast nutrient. Future ordinances will enforce a frailty revenue enhancement to hike the fast-food monetary values, and the Ministry of Health is working together with the Ministry of Finance to increase the VAT for this economic sector. Since now, no jurisprudence like such has been approved in the Rumanian Parliament, and it will necessitate the consent of the European Commission.
The Rumanian fast-food industry is holding an speed uping rate of addition, harmonizing to a study made by Euromonitor International ( Stoica, A. ( May 24, 2007 ) , Fast-food-urile inghit doua miliarde de euro ” [ The fast-foods are eating two billion euros ] , hypertext transfer protocol: //www.romanialibera.ro/bani-si-afaceri/a96203-fast-food-urile-inghit-doua-miliarde-de-euro.html, Retrieved January 05, 2010 ) . Harmonizing to them, the mean growing rate is about 26 % every twelvemonth, and in 2005 the industry reached entire grosss of $ 2 billion, and in 2007 it reached more than a‚¬2 billion. Bucharest is the Rumanian metropolis with the highest gross in this market.
The fast-food industry is consisted on many types of nutrient, from the well-known beefburgers, to chicken, pizza, french friess, hot Canis familiariss, and the Turkish kabob, called Shaorma in Romania. There are a sum of more than 900 fast-food mercantile establishments in Bucharest entirely, so there is a ferocious competition.
Harmonizing to a local newspaper called Romania Libera ( TOP 10 fast-food-uri in Bucuresti ” [ Top ten fast-foods in Bucharest ] ( November 10, 2007 ) , http: //www.romanialibera.ro/a110940/top-10-fast-food-uri-in-bucuresti.html, Retrieved January 05, 2010 ) , there are 10 major rivals on the fast-food market in Bucharest, among them being McDonalds, KFC, Pizza Hut, Gregory ‘s, Snack Attack, Burger King, Spring Time, and there is a instead new rival, on a retail shop specialized in furniture, Ikea, that offers nutrient at competitory monetary values. We will do a elaborate analysis of these rivals on the undermentioned pages.
All of these major rivals can offer merchandises that represent substitutes to the HDM hot Canis familiariss, but they have some differences.
McDonalds represents the most of import rival that can offer utility merchandises, being the most apprehended fast-food company in Romania. Their merchandises are non similar to hot Canis familiariss, but they have many shops all across the state. Their merchandises have a high demand from clients because of the quality of the nutrient and service. The lone drawback of this company is that their nutrient is standardized, and they seldom bring new merchandises on the market. Having the nearest monetary values to the HDM nutrient, and the same bringing velocity, McDonalds is the most important rival that can offer permutation merchandises.
KFC and Pizza Hut are other rivals that can offer permutation merchandises, although their merchandises are wholly different from the hot Canis familiariss. In fact, they are really different from another, excessively. One of them offers lily-livered formulas, and the other one offers pizza. The lone chief advantage of these merchandises is that they have a really good gustatory sensation, and they have assorted options to take from. Besides that, the service type is different. Their companies offer clients experiences closer to eating houses, taking long times to fix, and because of the nutrient type, the clients need to stand at a tabular array in order to eat them, and it takes rather some clip to make so. Another drawback represents the high monetary values of their nutrient, being at least three times more expensive than a traditional hot Canis familiaris. The lone ground that we can state that these two companies offer permutation merchandises is the fact that they are major participants in the fast food-industry.
Gregory ‘s and Snack Attack are two fast-food companies offering cold sandwiches with salami, jambon, cheese and some veggies. They have a few mixtures, but their nutrient is cold. The queue clip is low, but the monetary values are well higher than a hot Canis familiaris. Snack Attack has late developed and is now providing nutrient to supermarkets, mini markets, and other shops that might hold entree to events.
Ikea has a fast-food division that returns one-year grosss worth of a‚¬5 million. Although they are specialized in another industry, they have created a fast-food in every shop to develop a distinction competitory advantage, and this scheme has proven to be really efficient. Their nutrient is really inexpensive, and they are the lone rivals that can offer a similar merchandise to HDM. Their hot Canis familiariss have the most competitory monetary value on the market, with a monetary value of lone a‚¬0.25 per unit. The lone ground why Ikea can non go a really strong rival is that they merely build fast-food mercantile establishments inside their shops, and at this clip, there is merely one shop in the state.
Spring Time and Burger King are two other rivals that can offer permutation merchandises for the HDM hot Canis familiariss. While Spring Time has reached a company life rhythm of impregnation and diminution, Burger King is non appreciated by the Rumanian consumers, and therefore they can non develop, as they register changeless loss every twelvemonth.
Other fast-food houses that are selling hot Canis familiariss are undistinguished, holding merely a little base in the street, with no schemes and development programs, being managed by merely one ego employed individual in general.
After this analysis of the rivals, we can detect that the fast-food industry has multiple market sections. These market sections are shown in the chart below:
As shown on this empirical made graph, the hot Canis familiaris section in the Rumanian fast-food industry is non yet developed, and a strong rival on this market section would be able to profit from this chance.
McDonalds has had a uninterrupted market portion growing because the clients want to eat faster every twelvemonth, and they were able to supply that. But a hot Canis familiaris merchandise can be eaten even in another mode, which would non necessary involve fast feeding: making it on the street. As anyone can see in socially developed states like USA, Germany and Austria, the hot Canis familiaris merchandises are bought in the center of the street, and are eaten on the street. This would supply the Rumanian clients an even bigger mobility. The merchandise customization will offer them a bigger flexibleness. These two advantages combined with the fact that there are no major rivals in the section, offers to the hot Canis familiaris merchandise every requirement necessary to go a successful trade name in the Rumanian market.
Even if the market tendency shows uninterrupted growing every twelvemonth, the Government ordinances might take down the industry growing rate in the approaching old ages. But offering a comparatively new merchandise in the market, which have non been exploited by other major rival, will increase the client involvement to it, and will let a fast development.
Expansion is a job which every development company it ‘s inquiring to itself. Because there are assorted methods of spread outing a company, the fiscal hazards are take downing, and therefore leting turning companies to believe about such steps.
The first advantage that HDM would profit from enlargement is the fact that it will make an economic system of graduated table. By increasing the entire figure of clients, than it will increase the order volume that it will do from its providers, and so the power of dialogue will increase, and therefore, the costs with natural stuff per unit will be lowered.
Another advantage that the company will hold is a broad entree to the clients, through more fast-food mercantile establishments. This should be identified as an chance, because at this point a selling run would hold expected consequences, pulling more clients to the shops, and making a public consciousness. If the clients are content with the merchandises and services, so they will go devoted to the trade name, although in general this happens to a comparatively little figure of clients.
Higher grosss can be expeditiously transferred into direction budgets, and let the company to engage professionals to pull off activities with broader instruments and more clip than one individual director for all the operations. A Selling Manager, a Gross saless Manager, a Store Operation Manager, a Human Resources Manager, and a Purchasing Manager will be cardinal places to make a professional scheme of merchandise betterment and enlargement.
By accessing a big figure of clients, than the grosss will turn, and the net incomes will be increased every bit good, leting the company to hold future enlargement at higher rate, because of the increasing capital.
One other advantage that enlargement brings to the company is the entree to lower cost work force, and particularly in Bulgaria, lower natural stuffs.
Expansion to more than ten different locations can convey in an optimistic fiscal hypothesis the possibility to make a production mill, where the company will hold complete entree to the natural nutrient processing and it will get a complete quality control of the nutrient. Besides, a perpendicular development can considerably lower the company fixed costs.
There is a high chance to spread out a hot Canis familiaris company in Romania and even in the Balkans, because the markets have non reached their adulthoods, and being emerging states, the in-between category will spread out in the approaching decennary. This manner, the merchandise lifecycle will be extended to at least five to ten old ages.
The major chance of enlargement to Bulgaria is that the state has similar fast-food industry cleavage as Romania, where the major rivals are turn toing different sections, while the hot Canis familiaris section is merely represented by little companies with low revenge power.
Another chance of enlargement is represented by the financial steps regulated in the foreign states. Bulgaria has lower revenue enhancements than Romania, and it will let Hot Dog Mania to increase its gross net incomes.
Hot Dog Mania will hold two different methods to come in foreign markets. The first method is the foreign direct investing which consists in utilizing the company ‘s ain capital to spread out to foreign markets. The chief advantage is that the enlargement will hold a high net income potency, while it will hold a full control of the operations.
The disadvantage of utilizing the foreign direct investing is that the company will hold higher fiscal hazards than if it had used other enlargement methods. In the foreign state, the company will hold exposure to political hazard, macroeconomic hazard, authorization maltreatment hazard, and Government ordinances. Puting up new central offices besides involves a managerial investing, but with a higher complexness because of two chief grounds: if the director is Rumanian, than it will hold to go accustomed to the foreign state civilization, wont and steps of communicating ; and if the director is foreign, so it will likely hold a different position over the place state vision, which will be adjusted in a big period of clip.
The other method that HDM will utilize to come in foreign markets is the franchise. This is a really easy and fiscal hazard free method to come in other states. HDM will inquire for a monthly franchise revenue enhancement, and will provide the franchisee with the natural stuffs as a subcontractor, in order to keep the nutrient quality and higher income. The company will measure the state potency and will obtain cognize how about the foreign market, which will let the company to widen to the state with hazard free foreign direct investings.
However, the franchise method besides has some disadvantages. Even if it will move as a subcontractor to the franchisee with the nutrient supply, it will still hold low borders to let the franchisee to hold competitory monetary values on the market. These low borders will offer a lower net income than a net income potency of a FDI. Having a franchisee creates dependance with him, because the place company will ever necessitate to oversee and look into if the quality is maintain at the company criterions. Another hazard is that the franchisee could larn the know-how of the hot Canis familiaris company, and make a new company adapted to its market, and act as a rival.
In the first enlargement phase, the HDM company will choose the franchise method, because it ‘s less fiscal risky than a foreign direct investing, and it will supply every necessary information that will let the company to make a future FDI.
The primary legal issue of HDM ‘s mark state, Bulgaria, is that the judicial system is non to the full independent. Harmonizing to the Heritage web site, in Bulgaria Weak belongings rights, lingering corruptness, and inefficient bureaucratism hold down the state ‘s overall economic freedom ” . Harmonizing to the same web site, The non-salary cost of using a worker is high, but disregarding a excess employee is complimentary ” . Even if these ordinances are negative to the legal facet of Bulgaria, the Investment Promotion Act offers equal intervention to both foreign investors and local 1s. Another ordinance that represents a good chance to widen to Bulgaria with a foreign direct investing method is the fact that EU members can purchase land in this state. This manner, opening new locations will let HDM to hold entirely owned subordinates. Get downing a concern in Bulgaria takes about 50 yearss, in comparing to the EU norm of 38 yearss.
Harmonizing to the Heritage web site, Bulgaria ‘s economic freedom mark is 64.6, which is good above the universe norm. This is chiefly because they have high financial freedom, with a level corporate revenue enhancement of merely 10 % .
The general clip lines for traveling planetary represent a jutting program, being subjected to different alterations in the approaching old ages, due to alterations that may happen in the fiscal position. As in the timeline for the company description, I will utilize some of the mileposts in order to project appropriate timelines for the distant hereafter. The first two mileposts that will take to the extension of the company will be the expanding of the company in other major metropoliss of the place state as a entirely ain subordinates or franchises, to let our direction to garner adequate experience and know-how for future, more complex enlargements. After spread outing to Bulgaria, the Hot Dog Mania will seek other possible locations in the Balkans, with similar people forms, and similar Government ordinances. Sing the fact that the start-up twelvemonth of the company will be in 2012, the enlargement to other states will take topographic point in 2017. This information is shown on the following tabular array and graph, shown below:
Event / Name
Expand in Other Rumanian Cities
Make a Franchise
Expand to Bulgaria
Search for Other foreign States
Expand to Serbia
Expand to Slovakia