Create a Dog
Create a Dog is a forthcoming business that allows customers to create their hotdogs within its premises. The customers would choose their preferred type of bun, hotdog type, and their toppings. The target market entails the residents of New York City, primarily the working class and students. In the present society, globalization trends and technological advancements have influenced the eating habits and type of food eaten (Sena, 2015). Such trends have resulted in the popularity of fast foods, especially among the youth and the working class. The popularity is illustrated by the growing number of fast food outlets in strategic locations such as sporting arenas, educational institutions, and shopping malls. Regarding such trend, the paper proposes a business plan for a unique fast food outlet specializing in hotdogs. The current proposal also outlines the strengths, weakness, opportunities, and threats to the business.
Name of the Business
Create a Dog
The initial setup would be situated in downtown New York to attract the working middle class and students. The business will rent a front shop, previously a coffee store, that ceased operations. Outdoor sitting will entail circular and sheltered tables located outside the main entrance.
Description of the Product/Service
The primary restaurant will be based in downtown New York and will be offering primarily hotdogs on a self-service basis. The venture aims at offering a range of hotdogs and considerate support to customers in need of specialized services. The fast food industry is competitive and profitable owing to the fact that there are few competitors and many customers in the targeted location (Sena, 2015). There are some large enterprises that have invested in the fast food business, but only few of them specialize in hotdogs at low prices that are affordable to many customers. As a result, Create a Dog will offer self-serviced hotdogs at affordable prices and exploit such unique aspect of the business to leverage the entity’s competitive advantage in the fast food industry. Soda, food, and snack items will be provided to diversify the offerings. Soda from Pepsi and Coca-Cola will also be sold in the shop. Local reputable suppliers will be procured to ensure freshness of the food. The business will operate Monday to Sunday from 9:00 AM to 12:00 midnight, with an exception of Sunday from 10:00 AM to 9:00 PM. The operational hours are subject to change based on customer demand and sales.
Analysis of Environmental Factors
Environmental analysis is achieved through analytical frameworks such as SWOT and PESTEL analyses (Goh, Tang, Lam, & Gao, 2006). Both frameworks are used because they identify industry forces: the positive forces that align its resources and capabilities of the business, and negative forces that should be addressed promptly.
The U.S. fast food industry is globally known for Quick Service Restaurants (QSRs) such as KFC, Starbucks, and McDonalds. In competing for customers, fast food outlets, hotels, recreational sites, and food service operators in schools have continued to increase their food expenditures. Some supermarkets, such as Wegman’s Food Markets, have expanded the variety of meals and ready-to-eat entrees to challenge QSRs for business. Restaurants continue to market the idea that their food is healthier and of higher quality than the products offered by fast food outlets (Stuckler & Nestle, 2012).
The U.S. is a leading economic power with highly diverse industrial and technological advancements. Technological advances and entrepreneurial skills make the US a leader in global commerce. The food service sales were projected to grow by a 3.2% CAGR at the end of 2015 (Global Strategy, Inc, 2013). At the same time, food consumption is projected to reach $968 billion by the end of 2016.
Legally, the United States has laws that protect small businesses from aggressive competition (Global Strategy, Inc, 2013). Additionally, the legal framework is mature to promote business operations. However, fast food businesses are bound by food and safety regulations costing new entrants a fortune.
Socio-Cultural & Demographic
Native American food and beverage include bread, green salads, and soups. Moreover, food is considered a reflection of cultural diversity. Linguistically, most Americans speak English, with roughly 10% speaking Spanish (Global Strategy, Inc, 2013). The share of expenditure for fast food is high in rural areas and among lower-income household. Changes in consumer preferences and improved household incomes also impact the fast food expenditures.
Primary and Secondary Target Markets
The current business plan will employ the marketing management framework that addresses 5Cs (customers, context, company, competitors, and collaborators), STP (segmentation, targeting and positioning) strategy, and the marketing mix or the 4Ps (Iacobucci, 2014).Target marketing employs the 4Ps of marketing: promotion, price, place, and product, where the product is the item marketed. The place is where the marketed products are consumed or sold. Price is the exchange value of the product offered. Promotion entails digital marketing, sports sponsorship, TV advertisements, concerts, and billboards. The 4Ps work together in segmentation, targeting, and positioning (STP) of the product. Create a Dog will employ target marketing strategy to attract customers and increase its sales. The main goal of target marketing is to make the customers feel that the products are created for them. At the same time, the objective is to attract more customers and create a positive brand image, while competing with other brands.
The primary market for hotdogs is the working class in New York. The market location is very important due to the high population of residents, as well as the commuting of workers and students. For that reason, commuters will be able to make stops and pick up their hotdogs at lunch time or on their way home. A reasonable price will be determined compared to the prices offered by the competitors in the market. The primary products to be offered at the restaurant will be foot-long and regular hotdogs, sausages served on special buns.
Besides the hotdogs, the business will also offer deserts and side dishes such as French fries, potato chips, cookies, and coleslaw. They will be sold to students and other residents in the city.
The enterprise intends to expand to three outlets within the first 12 months. Initially, the business will offer hotdogs on a to-go basis. It is meant to serve as many commuters as possible. The other goal is to standardize food and ship them to kiosks and stands across the city. In the short-term, the main menu items will be foot-long and regular hotdogs, constituting to approximately 60% of gross sales. Other condiments that will be availed include onions, ketchup, and green peppers. To diversify the menu, chili and barbecue sandwiches will be provided.
To expand its customer share and improve the value of its products, the business will offer free Wi-Fi and seating for on-site consumption. The business also intends to operate as a franchise across the United States. As a fast food franchise, the business will focus on low cost, high volume, and high-speed products. Additionally, the business intends to own its outlets and lease the premises where necessary.
SWOT analysis is an analytical framework used to audit the internal and external environment of a company with the aim of highlighting its strategic position. SWOT stands for Strength (S), Weakness (W), Opportunities (O) and Threats (T) (Goh, Tang, Lam, & Gao, 2006).
Strengths are aspects or features of a business that allow it to operate more efficiently and effectively compared to the competitors in a given market. Consequently, strengths are things that Create a Dog will do well or the advantages that it will have over its competitors. The business will service market dynamics due to some strongholds, including standardized menu, diversified products, and excellent brand reputation. By standardizing food within cities, the business will enjoy customer loyalty in the sense that the customers like to have familiar menus within their locations. Customer service will become the key aspect of Create a Dog’s ability to attract potential customers and retain the existing ones. Employees will regularly be trained on how to produce quality products and how to satisfy customers. As a strategic initiative, excellent customer service alongside with a high quality and affordable prices will make the business competitive. As a new entrant, the business will use advanced technologies such as Google Analytics and the social media platform to market its brand.
In the business context, the term weakness refers to the underperforming areas of entity (Goh, Tang, Lam, & Gao, 2006). One of the weaknesses will be an overdependence on revenue from its first outlet. The overdependence on revenue from the first outlet in New York implies that price shocks will have a significant impact on the net revenue and long-term goals. As a new entrant, the company may face stiff competition from the existing fast food franchises, including MacDonald, KFC, and Subway. The central weakness is linked to the observation that the company will have a low capital base to compete in terms of market promoting and low prices.
Opportunities are business platforms, trends or avenues that can be exploited to expand its presence or operations. Examples include participation in local events, changes in markets and technology, and the use of cheap and effective marketing techniques to improve sales (Iacobucci, 2014). Instead of avoiding challenges facing the industry, the business has an opportunity to offer new products and adopt new business practices. Franchising opportunities exist in the conventional spaces live pizza and burgers. The business intends to adapt its offerings to meet the tastes and preferences of local markets. Create a Dog will embrace technology as the disruptive changes induced by technologies will be treated as opportunities for the entity’s growth.
One of the key threats for the business is competition from key industry franchises that are capable of competing on the ground of pricing and advertisements (Global Strategy, Inc, 2013). Despite growing popularity of quick-service restaurants (QSR), the fast food industry in the United States faces numerous challenges. They include economic recession, rising food costs, and changing perceptions regarding healthy eating. Rising commodity prices may crunch the business. With beverage and food inputs constituting approximately 33% of the cost, high prices of wheat, corn and livestock may decrease the profit margins of the business (Sena, 2015). In such highly competitive industry, it is challenging to force price increases on loyal customers. An economic recession may reduce consumer spending at each visit to the QSR. The market success of QSRs depends significantly on the tastes and preferences of consumers (Global Strategy, Inc, 2013). Consumers’ tastes and preferences change in very fast. For such reason, changes in consumers’ tastes and preferences regarding fast foods can drop the demand for Create a Dog’s products and services, and adversely affect its profitability. Further, changes in consumer consumption habits, as well as health concerns may affect the demand for the company’s products, the cost of operation, and the revenue generated from its outlets (Stuckler & Nestle, 2012).
Create a Dog will specialize in a variety of hotdogs served on various buns. Create a Dog’s special chili sauce will make its offering unique and give the business a competitive advantage. The primary demand drivers for the business include consumer trend and demographics, particularly trends in disposable income, youth population, and commuting worker. Profitability drivers include superior customer service, efficient operations, effective marketing, and good product mix (4Ps). The identification of the weaknesses and threats to Create a Dog is a vital step to counteracting its negative forces with a set of strategies that are based on opportunities and strengths. A SWOT analysis identified the strengths, weaknesses, opportunity, and threats of the business, assisting the owners to make strategic decisions and plans. Despite the challenges, the company’s strengths and growth opportunities outweigh its weaknesses, as well as threats to its creation and expansion.