CQUni MGMT20132 Business Case: Drone Delivery at Burger Urge

This case study examines Burger Urge's potential implementation of drone-based delivery services to enhance its operations and gain a competitive edge in the Australian fast-food market. The analysis includes a business model canvas outlining key partners, activities, value propositions, customer relationships, resources, channels, customer segments, cost structure, and revenue streams. The innovation aims to reduce delivery times, improve environmental impact, and enhance customer loyalty. The report also evaluates the strategic response, SWOT analysis, project options, and cost-benefit analysis of adopting drone delivery. It concludes that while Burger Urge is a smaller organization compared to multinational e-commerce companies already utilizing drone delivery, this innovation could lead to a larger customer base, increased customer loyalty, time savings, and a competitive advantage, ultimately driving revenue growth in the coming years. The case study suggests a phased implementation, starting with trial runs and customer feedback campaigns to ensure successful adoption and scalability of the drone delivery service.

Innovation and
Sustainable Business
Development

Business Case and Innovation in Nutshell
Burger Urge sells burgers, hamburgers, fries, alcoholic beverages and soft drinks.
The organisation faces competition from other burger sellers and restaurants in
Australia.
Drone-based delivery of the products is not new in the international sphere as
larger e-commerce and food chains are using this to reach the customers before
their expected time.
In this paper, business model canvas has been provided and the benefits of drone
service are the saving of time and it is safer than the person-based delivery.
In addition, the customers who live in the radius of 11 kilometres will get the
drone-based delivery and there will be a range; the customers need to give the
order more than the range provided by Burger Urge.

Introduction of the business case and
innovation
There are many organisations promising to keep up sustainable development
towards achieving the business growth.
The organisations in today’s world are following the growth that makes the
businesses sustainable in long-run.
The organisations need innovation to implement new organisational method to
undertake the business practice, external relations and workplace organisation.
This report focuses on the innovation idea of Burger Urge to increase the sale of the
organisation in long-run.
The innovation that Burger Urge can take is drone delivery of the products so that
the customers can get the delivery faster. In this paper, the concept of the
innovation, benefits and recommended solutions is given.

Overview of the Burger Urge
Burger Urge started its journey in the year 1920 in a building on
Brunswick Street in New Farm.
The restaurant of Burger Urge was established in the year 2007 in
Fortitude Valley in Queensland.
Burger Urge has been making delicious burgers for the customers and
the organisation uses only fresh, premium, gluten-free raw materials
to make the burgers sourced from the local Australian farmers.
Burger Urge also sells alcoholic beverage, soft drinks, chips, salads,
wings, fries and hamburgers (Burgerurge.com.au, 2018).
The competitors of Burger Urge are MOS Burger, Burger Project, Ribs
& Burgers and Burger Theory.

Identification of the innovation
Burger Urge can take the support of drone-based delivery network to serve the
nearby places of the restaurants.
This drone-based delivery can promise to reduce the waiting time for hungry
customers by flying the orders directly to the place of the customers’ residents.
In order to make this dream come true for Burger Urge; the organisation need to
make partnership with Software Maker Company.
Burger Urge will be making partnership with Skymax Australia to start the drone-
based delivery in Australia.
Drone is basically unmanned aerial vehicle and the drones will be used to transport
the food packets and Burger Urge is expecting to reduce the food packets delivery
to the customers by 20 minutes at least.

Evaluation of the business model
Key Partners
Advertisers
Green markets
Waste Management
Investors
Drone controller
Key Activities
Develop customer relationship
Monitoring drone
Build brand
Organic waste control
Website development
Value Propositions
Drone delivery
Delicious burgers
More than 26 restaurants in Australia
Reduce cost of waste management
Good website
Customer Relationships
Build brand
Through social media
E-mail service
Telephonic contact
Third party app
Key resources
Brand value
Financing
Contact in the industry
Channels
Direct restaurant selling
Website
Third party app
Drone delivery
Consumer segments
Young customers
Customers all across Australia
Cost structure
Website and app development
Salaries of the employees
Drone activities
Marketing and PR
Revenue Streams
Selling of the burgers
Membership in the restaurants
Upfront fee and end-to-end process

Problem that the innovation can solve
• The process of drone-based delivery will be simple as UAV flies to
the customers’ space above the designated delivery zone. The drones
will lower the payload with the help of winches.
• The drones will be light in weight and they will be capable of
providing deliveries in the radius of 12 kilometres.
• The staffs of the Burger Urge take the address from the customers
and deliver the products within 30 minutes to the customers.
• Drone-based delivery will solve the problem of delays due to the
heavy traffic on the road. Most importantly, Burger Urge's delivery
persons take other orders at the same time and this process makes the
delivery a little late also.
• In this case, if the customers select ‘fast delivery' option; the
customers have to pay for the products before they take the product
at hand as there will be no ‘cash on delivery' service through the
drone.

Contd…
In addition, the delivery persons of the food products sometimes
face the infuriated customers.
Drone-delivery will solve this issue also as customers cannot be
rude and get infuriated when a drone will deliver the food
packets on time (Kogan et al., 2017).
Delivery persons fail un-optimised the routes as there will no such
options to change the track when they deliver the products.
However, drone-based delivery can be optimised the speed if the
customers want the food delivery sooner. The customers need to
provide the exact address along with payment must be made
before to access the drone-service.

Benefits of the innovation
• Burger Urge will be benefitted from the drone delivery services as the
waiting time of the customers to get the products will be reduced to one-
third.
• Burger Urge will get a high competitive advantage through the drone-
based product delivery.
• Drone delivery will be better for the environment as the drones do not
harm the nature. Drones are single, battery-powered; whereas, the delivery
persons use the cars or the motorcycles that emit large noise and smoke
harmful to the environment.
• Drones will not make the roads more crowded as the whole process will be
done aerial.

Contd…
• A recent survey stated that if the customers get the products before the time; the
customers will be loyal to the restaurant.
• Moreover, the customers can order more next time if their needs get fulfilled.
The customers can suggest other customers take the food delivery from Burger
Urge as they can get the delivery done within a stipulated time.
• Delivery drones permit human counterparts to focus on other significant
delivery procedures. Delivery of the drones gets faster as the controllers of the
drones must be accurate to locate the programme and location.
• Drones can promote safety as drones can prevent accidents as drones go aerial
and there will be no such physical delivering of the commodity to the
customers. Therefore, delivery personnel will no longer be needed who can
expose to the accidents.

Strategic response or plan
• Burger Urge will use strategic intelligence before they start discussing with the Skymax
for controlling the drone services and make the software for drone-based product
delivery.
• Burger Urge will formulate the strategy of how the organisation will use drone-based
delivery..
• Burger Urge will make strategic master project planning and at this stage; the
organisation will develop the implementation of the drone-based service.
• Burger Urge will modify some of the planning and projects will be amended based on
the needs of the restaurant. Burger Urge will discuss this with state governments about
drone delivery.
• Strategy monitoring will be done by the CEO and a team to examine the review that
must be still and robust for the organisation.

SWOT analysis
Strengths
More than 26 restaurants across Australia
Strong product line
Sell alcoholic beverage
Local suppliers
Weaknesses
Less capital
Branding
Unstable employee line
Opportunities
Market expansion
Market penetration
Health conscious eatables
Threats
Competition in the market
Changing consumers’ eating habits
Raw material prices

Project options analysis
Year 2018 2019 2020 2021 2022
Discount factor (mid-year) 0.96225 0.89097 0.82497 0.76387 0.70728
Discount factor (start of year) 1.00000 0.92593 0.85734 0.79383 0.73503
Benefit 1 225000 225000 225000 225000 225000
Benefit 2 150000 150000 150000 150000 150000
Benefit 3 95000 95000 95000 95000 95000
Total Benefits (mid-year) $470,000 $470,000 $470,000 $470,000 $470,000
Present Value of Benefits (mid-yr) $452,258 $418,757 $387,738 $359,017 $332,423
Present Value of Benefits $1,950,193
Cost 1 -$22,000 -$22,000 -$22,000 -$22,000 -$22,000
Cost 2 -$22,000 -$22,000 -$22,000 -$22,000 -$22,000
Cost 3 -$15,000 -$15,000 -$15,000 -$15,000 -$15,000
Total Costs (mid-year) -$59,000 -$59,000 -$59,000 -$59,000 -$59,000
Capital Costs (at start of year) $0 $0 $0 $0 $0
Total Costs -$59,000 -$59,000 -$59,000 -$59,000 -$59,000
Total Capital Costs $0
Total Whole of Life Costs -$295,000
Present Value of Costs (mid-year) -$56,773 -$52,567 -$48,674 -$45,068 -$41,730
Present Value of Costs (start year) $0 $0 $0 $0 $0
Present Value of Costs (by year) -$56,773 -$52,567 -$48,674 -$45,068 -$41,730
Present Value of Costs -$244,811
Net Cash Flows $411,000 $411,000 $411,000 $411,000 $411,000
Net Present Value (by year) $395,485 $366,190 $339,065 $313,949 $290,693
Cumulative NPV $395,485 $761,675 $1,100,739 $1,414,688 $1,705,381
Chart data only:
Year 0 1 2 3 4
Present Value of Benefits ($million) 0.452$ 0.419$ 0.388$ 0.359$ 0.332$
Present Value of Costs ($million) 0.057-$ 0.053-$ 0.049-$ 0.045-$ 0.042-$
Cumulative Net Present Value ($million) 0.395$ 0.762$ 1.101$ 1.415$ 1.705$
1 2 3 4 5
-$1
$0
$1
$2 Cost Benefit Analysis: Option 1
Present Value of Benefits ($million)
Present Value of Costs ($million)
Cumulative Net Present Value ($million)
Year
Todays Dollars ($ millions)

Delivery of the recommended solution
• Burger Urge will adopt the drone-based delivery services to the
customers; however, Burger Urge will not offer a full range of the
products through drone-delivery.
• Skymax will start the drone-delivery in trial basis in the first week and the
success rate of the delivery will ensure the further expansion of the drone-
based delivery in Australia. Burger Urge will offer drone delivery from
morning to evening and they are planning to extend the dimension with
distance.
• Burger Urge will start a campaign to understand the feedback from the
customers and their reviews based on the drone-delivery. Deliverability of
the campaign and products need to be done with the help of social media.
• The deliverability will be done through emails to start the campaign into
subscribers’ inboxes. Deliverability will help Burger Urge to get the
recommendations about the needed change of the drone delivery.

Conclusion
It has been observed that large multinational e-commerce companies are
using the drone delivery to reach the customers on time and this delivery
saves the time of the customers. Burger Urge is relatively small
organisations to start the drone-based delivery.
However, this innovation will provide the benefit of having a large customer
base and having loyal customers.
The organisation can save time to deliver the products and this innovation
will provide revenue in coming years as it can create competitive
advantage.

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