Opening a Vegan Restaurant in London with Open Kitchen Concept

This report describes the start up idea of opening a vegan restaurant in London with an open kitchen concept. It discusses the industry profile, business model, point of differentiation, challenges, prospective customers, marketing plan, competitor analysis, sources of funding, and intellectual property.

BU6073 Innovation and
Entrepreneurship
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EXECUTIVE SUMMARY
In this report it has been described about a start up of opening a restaurant in old Street with
open plan kitchen concept. The product and services offered are vegan and green food. Also,
home delivery services is provided in 5 – 10 km. Moreover, challenges faced by venture are rise
in competition and change in customer needs. Furthermore, prospective customers are health
conscious people between age 18 – 45. The marketing plan of Veggies kitchen has been
explained with 4 P’s. also, the porter five force model is explained to do competitor analysis.
Besides that, sources of funding such as bank loan and financial institutions has been described.
At last intellectual property of venture has been discussed.
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Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
START UP IDEA............................................................................................................................4
INDUSTRY PROFILE....................................................................................................................4
BUSINESS MODEL.......................................................................................................................4
POINT OF DIFFERENTIATION...................................................................................................5
CHALLENGES TO BUSINESS IDEA..........................................................................................5
PROSPECTIVE CUSTOMERS......................................................................................................6
MARKETING PLAN......................................................................................................................6
COMPETITOR ANALYSIS...........................................................................................................7
SOURCES OF FUNDING..............................................................................................................8
INTELLECTUAL PROPERTY......................................................................................................9
REFERENCES..............................................................................................................................10
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START UP IDEA
Innovation is a key source for business and entrepreneur. This is because it provides creative
and new ideas of starting a business. With help of it, customer needs are identified and fulfilled.
Also, innovation leads to new product development which attract people in the market. Thus, a
new business idea is generated of opening a new restaurant in London with open kitchen
(Caneque and Hart, 2017). The restaurant will be opened in old street where there are many
shops and small cafes. The restaurant will provide variety of food dishes and snacks to people.
Moreover, it will provide facility of sitting and observing open kitchen that how food is
prepared. Furthermore, open plan idea is chosen as it brings all people together. There is a
kitchen and family room which will be combined.
INDUSTRY PROFILE
In present times there has been high growth in food industry. This is because of rise in
tourism and change in taste and preference of people. Also, it has been analysed that many new
types of food dishes are emerging along with some new restaurants. They are offering variety of
dishes to people. Beside that, with rise in come level of people their spending power has
increased. It has enabled them to spend more on food. Moreover, it has been analysed that after
Brexit there is high rise in small and medium businesses in UK. This has provided a platform for
them to enter in UK food industry (Elert, Henrekson and Stenkula, 2017).
In addition, in food industry almost 65-73% revenue is generated by SME’s they offer
variety of products and services as compared to others. Food sector is contributing around £28.2
billion in GDP of UK. There are almost 400,000 people employed in it. It is expected that around
140,000 more labour will be required till 2024. In 2018 UK food export was £22.5 billion.
BUSINESS MODEL
There are usually five stage in business cycle through which profits are generated. The
stages are launch, growth, shake out, maturity and decline. Likewise, Veggies kitchen will also
go through these stages. In this the profit will be generated in growth stage. Alongside, in
maturity stage as well profit will be generated by expanding opening new branches in different
areas and market of London and UK.
Launch- it is first stage in which start up is launched. Huge capital is invested and no profit are
generated.
Growth- at this stage start up grows. Sales is increased but profit generated is low.
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Shake out- here, business expands into other markets and more profits are generated. So,
Veggies kitchen profit will be generated in this stage (Etzkowitz and Zhou, 2017)
Maturity – this stage refers where business growth has reached to its highest level. The start up
growth is boosting and large profit is generated.
Decline – here, business growth starts declining as new entrants enter into market. With this
there is rise in competition and customer retention is not done.
POINT OF DIFFERENTIATION
It is necessary to differentiate Veggies kitchen with its competitors so that customers can be
attracted. Besides, it helps in creating a distinct image in minds of customers. However, each
start up is having its own point of differentiation. It can be either is product, service, price, or any
other. Generally, it depends on type and nature of start up. Likewise, Veggies kitchen point of
differentiation with other company is that it will provide vegan and green food items.
Furthermore, the services offered will also include home delivery but it will be only up to limited
range that is 5 – 10 km. Besides that, vegan food offered will be prepared fresh and offered at
low cost. The customers can easily sit with others and enjoy in open kitchen. Apart from it,
birthdays and parties will also be celebrated within kitchen. Within one month offers and
discounts will be offered to customers and they will be given membership cards as well
(Huijbens, Hjalager and Flagestad, 2017).
CHALLENGES TO BUSINESS IDEA
For every business there are various challenges which has to be faced by them. Due to these
challenges it becomes difficult for them to survive in market. Hence, it is essential to find out
those and develop proper strategy according to it. Similarly, in Veggies kitchen there are some
challenges which are defined as :
Rise in competition- it is main challenge which Veggies kitchen can face. As their idea is unique
so many other firms can try to copy that ide and enter in market. It will result in rise in
competition within food industry. However, they will not be able to attract customers and retain
them. It might leads to decline in profit and sales.
Failure of idea- there are high chances that idea can get failed due to certain reasons. The people
may not like idea or their needs might not get fulfilled. So, it is major challenge for it.
Change in customer needs- it is also a challenge faced by venture. In this due to shift in customer
taste and preference their needs might change (Lounsbury, Cornelissen and Grodal, 2019). It
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will led to switch to other food outlets. In addition, change in eating habits or lifestyle of people
will affect success of Veggies kitchen.
Insufficient supply of ingredients- this can be a challenge in which there might be shortage of
ingredients required to prepare vegan food. It is because as vegan food is mostly consumed in
season so any change in supply will affect growth.
PROSPECTIVE CUSTOMERS
For a start up it is important to identify their prospective customers so that they can be
targeted. It also helps in finding out their needs and offering products and services to fulfil it. In
order to find out that there is a framework available which is known as STP. This is described
below
Segmentation- it is the first thing which is done to find out target market. Here, in this market is
segmented on basis of several factors and criteria. They are like demographic, geographic,
psychographic, etc. this enables business to ease in selecting target people. Likewise, for Veggies
kitchen their target segmentation will be based on demographic. In this they will segment it on
basis of age
Targeting- It is second aspect on basis of which prospective customers are identified. Here, after
segmentation, target people are selected on basis of specific criteria mentioned above. Thus, as
company have segmented it on basis of age, so they will target people of age between 18 - 45.
Also, those who are health conscious. So, basically these are prospective customers of Veggies
kitchen. (Nambisan, Wright and Feldman, 2019)
Positioning- in this the product or services are positioned in market in order to attract people. It
also is useful in marketing of product. Positioning refers to placing product in such a way that
people are able to identify it. Hence, Veggies kitchen will position it as a health conscious
restaurant with open kitchen.
MARKETING PLAN
A marketing plan consists of activities and tasks that are implemented in order to attract
people. It provides a direction to firm on how to market their products and services. In this there
are basically 4 P’s which are applied. Therefore, Veggies kitchen also decided to developed a
proper marketing plan to attract people. It is as follows :
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Product – It refers to the tangible or intangible commodity or service which is offered to people.
It consists of combination of features or specifications included in it. So, Veggies kitchen
product will be food items. They will provide vegan food dishes to customers. There will be
various types of vegan dishes and green food. Along with it, services offered will be home
delivery of vegan food in limited range only (Richards, 2019).
Place- in marketing plan place refers to location or area where products and services are
available. So, place selected must be crucial so that it is convenient for people to visit and buy
products. So, as Veggies kitchen is restaurant in old street they will offer products in their
restaurant. It will be located in London. Customers will have to visit store to buy it. Moreover,
they will provide home delivery services within range of 5 – 10 Km.
Price - it includes the price at which product or service is sold in the market. Price plays crucial
role as it attract customers and help in generating profits. Furthermore, it helps in determining
value of product or service. Veggies kitchen will offer its vegan food items at low price. They
will follow cost leadership strategy at initial level. It will be done to attract customers to a large
extent.
Promotion- In plan the activities or tasks which are performed in order to advertise products in
the market. Veggies kitchen will promote vegan food items through various ways. For this they
will use social media platforms like Facebook, Instagram, you tube, etc. Apart from it, digital
marketing will be done to promote products. Through this, company will be able to reach large
number of people. They will make official page on all these social sites and upload images, data
and info of vegan food, etc. (Schmitz, Urbano and Guerrero, 2017)
Positioning- in this the product or services are positioned in market in order to attract people. It
also is useful in marketing of product. Positioning refers to placing product in such a way that
people are able to identify it. Hence, Veggies kitchen will position it as a health conscious
restaurant with open kitchen.
COMPETITOR ANALYSIS
The competitor analysis is useful in finding out current competition in market. Through that,
it gives insight about competitor products, strategies, target people, etc. in order to do so there is
a framework available. It is known as porter five force.
Porter five force
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Competitive rivalry- Here, it refers to the level of competition within industry. The more number
of firms means stiff competition and less firms means low level of competition. For Veggies
kitchen venture competitive rivalry is moderate as only three firms exists that are Enoteca Rosso,
Kitchen table and open kitchen. These all are situated in London, UK (Singer and Broersma,
2019).
Threat of substitute- It refers to the various types of products or services that is available to be
replaced with. This means substitute product that can be used by people in case of any non
availability of specific product. In food industry there are many types of substitute available. So,
customers can easily switch from vegan to other food. So, threat of substitute is high but as other
3 firms do not offer vegan food Veggies kitchen will have chance of gaining competitive
advantage.
Power of buyer- This means that more number of buyers then less is power to influence price of
products and if less buyer then company have to depend on them. As in food industry buyers are
more so power is high. But as Veggies kitchen and 3 companies is having small number of buyer
the power to influence price is low.
Power of supplier- If there are more numbers of suppliers than it becomes easy for company to
switch from one supplier to other. This means that more number of supplier then less is power to
influence price of products. So, there are only 3 similar firms thus they have to depend on
supplier. Thus, power of supplier is high in it (Wang and Tan, 2019).
Threat of new entrant - However, in food industry there are strict entry and exit barriers which
makes it difficult for new entrants to enter in the market. Moreover, it requires huge investment
and effective strategy to enter in it. Hence, the threat of new entrant is high in it.
SOURCES OF FUNDING
A start up requires huge capital at initial stage. The capital is needed to perform all activities
for setting up venture. Moreover, it is difficult for individual to acquire huge funds from his
personal saving. Thus, there are various sources available from where funding can be obtained.
Hence, for Veggies kitchen they can acquire funds from below discussed sources: (Sources of
funding, 2018)
Bank loan – it is the most common source available to obtain funds. Here, money is borrowed
for specific time and security is kept. Also, bank charge a particular amount of interest on loan.
The interest rate can be either fixed or variable depending on market. There is a agreement done
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between both. The fund is easily available in regard of security. Usually, interest rate in bank
loan is low (Caneque and Hart, 2017).
Venture capital- this is another source of funding from where funds are available. In this
investors invest particular amount of money within business idea and in exchange get share in it.
In return of it they get profits sharing. Basically, venture capitalist are those who are potential
investor and expect good return.
Thus, Veggies kitchen can opt for venture capital because it is a unique idea so there are
high chances that it will be successful. This will help them to get funds for start up.
INTELLECTUAL PROPERTY
Intellectual property is property of intangible creation of ideas and concepts. There are
various types of IP that are patents, copyrights, trade marks, of business which needs to be
protected so that it is not copied. For a start up it is important to protect their idea. This enables
in restricting other not to copy it. Moreover, it is a legal protected rights of business. Similarly,
Veggies kitchen should use IP and protect their idea under patent (Elert, Henrekson and
Stenkula, 2017).
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REFERENCES
Books and journals
Caneque, F.C. and Hart, S.L. eds., 2017. Base of the pyramid 3.0: sustainable development
through innovation and entrepreneurship. Routledge.
Elert, N., Henrekson, M. and Stenkula, M., 2017. Institutional reform for innovation and
entrepreneurship: An agenda for Europe. New York: Springer International Publishing.
Etzkowitz, H. and Zhou, C., 2017. The triple helix: University–industry–government innovation
and entrepreneurship. Routledge.
Huijbens, E.H., Hjalager, A.M. and Flagestad, A., 2017. Sustaining creative entrepreneurship:
the role of innovation systems. In Tourism and entrepreneurship (pp. 74-93). Routledge.
Lounsbury, M., Cornelissen, J. and Grodal, S., 2019. Culture, innovation and
entrepreneurship. Innovation, 21(1), pp.1-12.
Nambisan, S., Wright, M. and Feldman, M., 2019. The digital transformation of innovation and
entrepreneurship: Progress, challenges and key themes. Research Policy, 48(8),
p.103773.
Richards, T.J., 2019. Business Innovation & Entrepreneurship: Cross-Border Opportunities In
Mexico-Sonora And Athena Virtual Reality.
Schmitz, A., Urbano, D. and Guerrero, M., 2017. Innovation and entrepreneurship in the
academic setting: a systematic literature review. International Entrepreneurship and
Management Journal, 13(2), pp.369-395.
Singer, J.B. and Broersma, M., 2019. Innovation and Entrepreneurship: Journalism Students’
Interpretive Repertoires for a Changing Occupation. Journalism Practice, pp.1-20.
Wang, J. and Tan, Y., 2019. Social factory as prosaic state space: Redefining labour in China’s
mass innovation/mass entrepreneurship campaign. Environment and Planning A:
Economy and Space, p.0308518X19889633.
Online
Sources of funding, 2018. [online] Available through : < https://thetechpanda.com/seven-types-
of-funding-sources-for-your-startup/11238/ >
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