Healthy Food Trucks: Assessment 2 - Business Model Development Report

This report presents a comprehensive business model for healthy food trucks, addressing the growing problem of fast-food consumption and its adverse health impacts. The report begins by identifying the customer problem and the persuasive arguments for the benefits of healthy food alternatives, particularly in Melbourne, Australia. It then outlines the proposed business model, based on the Business Model Canvas, detailing key partners, activities, resources, value propositions, customer relationships, channels, segments, cost structure, and revenue streams. The report further discusses critical success factors, risks, assumptions, and evaluates the feasibility of the idea, including the analysis in the appendices. The aim is to provide a detailed plan for a business that offers healthy food options to consumers on mobile trucks.

Running head: HEALTHY FOOD TRUCKS
Assessment 2: Idea Generation and Business Model Development
[Healthy Food Trucks]
Name of the student:
Name of the university:
Author note:

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Executive summary
Launching an innovative idea requires a thorough analysis of the industry and its related contents
or else the idea may not live longer. This study also describes and identifies the suitability of a
chosen business idea from different perspectives. The perspectives in the concerns are the
Business Model Canvas by (Osterwalder & Pigneur) and the Feasibility Analysis of the idea. The
chosen idea in this study is about offering healthy foods to customers on mobile trucks. The idea
is a response to the fact that the consumption of fast foods is increasing globally.

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Table of Contents
1. Customer problem that needs a solution......................................................................................3
2. Persuasive argument of the customer benefits to be generated...................................................4
3. The proposed business model......................................................................................................5
4. Key elements in the business model............................................................................................5
5. Critical success factors to be managed during the execution of idea..........................................8
6. Identification of critical risks and assumptions...........................................................................8
7. Evaluating the feasibility of the idea...........................................................................................9
References......................................................................................................................................10
Appendices....................................................................................................................................13
Appendix 1: Feasibility Analysis of Idea..................................................................................13
Appendix 2: Business Model Canvas........................................................................................19

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1. Customer problem that needs a solution
This study is aimed at addressing a problem that is increasingly growing with passing
times and causing various adverse health impacts to happen on a human body. The problem to be
discussed is a common people habit to eat fast-foods whenever they are at offices, schools and
universities, homes and are on an outing. The problem is getting bigger with times. The rate of
fast-food consumption may vary for developing and developed nations; however, both are at risk
of developing critical health issues (An, 2016). This is problematic not just for a person who
consumes the fast-food but for their country as well. The growing cases of health issues due to
increasing consumption of fast-foods have forced the national governments in the world, and
public and private bodies to invest hugely in improving the infrastructure for health care services
(An, 2016). The developed nations, in particular, are at higher risk as compared to developing
nations. For example, an average American family used to invest approximately 38% of their
budgets on restaurant food (Oexle et al., 2015). The percentage of restaurant food has
dramatically increased over the years. Now, the average American family spends more than 50%
of their budget on restaurant food (Oexle et al., 2015). These figures clearly show the growing
dependency of people on restaurant food. Indeed, this is very difficult, close to impossible and is
very expensive also to spread awareness in people about the adverse impacts of restaurant food
and to encourage them to avoid it. On the contrary, this is comparatively more feasible to attract
people towards healthy alternatives than stopping them from consuming the fast-foods (Burgoine
et al., 2016). Hence, the idea stuck into the mind to offer people living in Melbourne the healthy
foods on trucks. Notably, Melbourne is amongst the most affected city in Australia from fast-
food consumption (Adelaidenow.com.au, 2019).

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2. Persuasive argument of the customer benefits to be generated
There are adequate pieces of evidence on the fact that Australians need to switch to
healthy foods. The global research company “Euromonitor” and the Australian Bureau of
Statistics (ABS) have more or less similar reports on the growing obese cases in Australia from
consuming the fast-foods. According to these reports, each one of the four Australians aged over
18 was found suffering from obesity in 2007/2008 (Adelaidenow.com.au, 2019). The World
Health Organisation (WHO) has also published more or less similar figure. According to the
WHO, Australia is the 39th fastest nation on the earth to switch to fast-foods
(Adelaidenow.com.au, 2019). The fact came as no surprise to Jane Martin who is a senior policy
advertiser in the Obesity Policy Coalition (Adelaidenow.com.au, 2019).
There are more pieces of evidence on increasing adversity from fast-foods. Studies
suggest that fast-food is a response rather a cause. For instance, McDonald’s won’t mind selling
the soft drinks as long as they make profits. They probably won’t even care whether the soft
drink is harmful. Australians normally work for long hours. This is according to Thomas et al.,
(2017) one of the habits due to which they are often stressed and deprived of adequate sleeping.
As a result, there is an approximately 25% drop in the metabolic rates. This means instead of
using 1000 calories to get energized again people could only gain 750 calories (Czeisler, 2015).
The busy work schedules in offices and reduced sleeping both result in increased stress. As
observed by Jensen et al., (2015), stress increases hunger because the hormone produced during
when a person is stressed is cortisol, which makes people hungry. There is no better option than
the fast-foods, which can quickly fulfill the purpose of a hunger person. Hence, the numbers for
such people having increased dependency on fast foods are increasing. There are more chances
of an obese person influencing its foetus as well. As studied by Marchi et al., (2015), due to

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intergenerational obesity an obese person will also train its foetus to become an overweight
child.
The arguments presented as above give sufficient reasons to think of the alternatives of
the fast-foods. Hence, the idea to offer healthy foods on moveable trucks should indeed be a
good business idea.
3. The proposed business model
The proposed business model will address the problem being faced by mass people in
Melbourne from consuming the fast-foods. The business model will not be as complex as a
model for a fast-food restaurant. However, this will still involve the key elements of a business.
These are Key Partners, Key Activities, Value Propositions, Customer Relationships, Customer
Segments, Key Resources, Channels, Cost Structure and Revenue Streams. The concept of the
key elements is being adopted by the Business Model Canvas (Osterwalder & Pigneur, 2010).
The Sample Breakfast and Meals-to-Go foods will be sold on the proposed mobile food trucks.
4. Key elements in the business model
As stated above there are 9 different elements in the proposed business model. These are
as listed below (Osterwalder & Pigneur, 2010):
 Key Partners
The new idea will require suppliers for food ingredients and trucks. The business at its early and
the later stage also cannot afford to have less strategic suppliers. The business will require

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someone trustable with its supply capacity. Notably, when the business grooms the business will
require more supplies from the supplier (Bocken, 2015). Hence, increased demand should not be
affecting the relationship between the business and its suppliers. In addition to food ingredients,
the business will have to rely on one supplier for availing mobile trucks. It helps to get the
benefits on more next purchases (Kohler, 2016). Indeed, as the business grows there will be the
needs for more new mobile trucks.
 Key Activities
The list of key activities at the earlier stage will include resourcing the required materials and the
trucks from the respective list of suppliers. Few people will be employed to take care of the
cooking. They can be paid daily or as agreed. Once the business expands more people will be
needed at the different mobile trucks to take care of the cooking and to deal with the suppliers.
On expanding to multiple locations, advertisement and promotion of the concept will also
become a part of the idea (Lee & Shin, 2018). Hence, with the business grows in size more
people will be needed to take care of cooking, supplier-relationship management, and
advertisement and promotion of food truck business.
 Key Resources
In terms of physical resources, the business will require the trucks, cooking utensils, appropriate
location for the truck and others. In respect to Human resources, workers will be hired daily or
as agreed to take care of cooking, dealing with the suppliers, and for advertising the concept. In
regards to Capital resources, the startup will require money for doing all these activities. This
will come probably in the form of loans to be availed from a bank.
 Value Proposition

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The biggest resource to value propositions will be offering quality and meaningful foods at a
very justified rate. Besides, an official website showing multiple reasons to switch to healthy
foods can also be used for promoting the concept. However, this could only happen once the
business grows in its existence or else people will show less keenness to a business that rarely
has an existence (Sequeira, Wang & Peyrefitte, 2016).
 Customer Relationship
Customer relationship is one of the critical success factors for the business (Saukkonen et al.,
2016). The relationship will grow only if the business manages to look different in terms of food
quality, pricing and its nutritional benefits.
 Channels
The distribution channel for the business will be pretty simpler; however, this will still create
challenges. One of the problem areas is a demand forecast (Wang & Chugh, 2015). If there is no
effective measures of rising and falling demand, and that there is no timely communication
between the suppliers and the business, the business might struggle to live up to customer
expectations. The distribution channel will include elements such as receiving materials from
suppliers, cooking and serving it to customers.
 Customer Segments
Under Geographic segmentation, areas close to schools, offices and other gathering places will
be preferred for this business. Under Demographics, people of mature age groups those who can
reach to mobile trucks will be targeted. Under Psychographic, people who already are an addict
to fast-foods will be targeted. Under Behavioral, those who are very mindful with their food
selection will be targeted.

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 Cost Structure
$415-$825 as the commissary costs, $1995-$3895 per year for insurance that varies with
coverage levels and $14,000-$90,000 for a food truck.
 Revenue Streams
Sales figure will be the only source of income in the early days. With business grows in size,
revenue can also be generated from writing a blog, creating a cookbook, distributing the
homemade items like sauce and consulting service to other food trucks.
5. Critical success factors to be managed during the execution of the idea
A food truck business needs to take care of its two critical success factors during the
execution of the idea. These are Customer Satisfaction and Supplier Relationship Management.
Growing customer satisfaction will indicate that the business is into the right directions or else.
Similarly, an effective relationship with the suppliers will help meeting the demand irrespective
of the market behavior (Fisher, Kotha & Lahiri, 2016).
6. Identification of critical risks and assumptions
Critical risks could include the vehicle-related dangers, operational risks, car accidents
and food hazards. It is, therefore, important to insure the food truck to avoid monetary losses in
case of a critical risk (Kuratko & Hornsby, 2017). This can be assumed that Entrepreneurs living
in other parts of Australia and the worldwide countries will be motivated for a food truck
business to serve humanity.

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7. Evaluating the feasibility of the idea
(See Appendix 1)

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References
Adelaidenow.com.au. (2019). Australia's takeaway bill to hit $37bn. Retrieved 7 September
2019, from https://www.adelaidenow.com.au/news/national/obesity-levels-show-
australia-is-the-chubby-country/news-story/7e4b8198e68a0761a9d0a886ca8dc8c6
An, R. (2016). Fast-food and full-service restaurant consumption and daily energy and nutrient
intakes in US adults. European Journal of Clinical Nutrition, 70(1), 97.
Bocken, N. M. (2015). Sustainable venture capital–catalyst for sustainable start-up success?.
Journal of Cleaner Production, 108, 647-658.
Burgoine, T., Forouhi, N. G., Griffin, S. J., Brage, S., Wareham, N. J., & Monsivais, P. (2016).
Does neighborhood fast-food outlet exposure amplify inequalities in diet and obesity? A
cross-sectional study. The American journal of clinical nutrition, 103(6), 1540-1547.
Czeisler, C. A. (2015). Duration, timing and quality of sleep are each vital for health,
performance and safety. Sleep Health: Journal of the National Sleep Foundation, 1(1), 5-
8.
Fisher, G., Kotha, S., & Lahiri, A. (2016). Changing with the times: An integrated view of
identity, legitimacy, and new venture life cycles. Academy of Management Review, 41(3),
383-409.
Jensen, T. K., Fjermestad, K. W., Granly, L., & Wilhelmsen, N. H. (2015). Stressful life
experiences and mental health problems among unaccompanied asylum-seeking children.
Clinical child psychology and psychiatry, 20(1), 106-116.

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Kohler, T. (2016). Corporate accelerators: Building bridges between corporations and startups.
Business Horizons, 59(3), 347-357.
Kuratko, D. F., & Hornsby, J. S. (2017). New venture management: The entrepreneur’s
roadmap. Routledge.
Lee, I., & Shin, Y. J. (2018). Fintech: Ecosystem, business models, investment decisions, and
challenges. Business Horizons, 61(1), 35-46.
Marchi, J., Berg, M., Dencker, A., Olander, E. K., & Begley, C. (2015). Risks associated with
obesity in pregnancy, for the mother and baby: a systematic review of reviews. Obesity
Reviews, 16(8), 621-638.
Oexle, N., Barnes, T. L., Blake, C. E., Bell, B. A., & Liese, A. D. (2015). Neighborhood fast
food availability and fast food consumption. Appetite, 92, 227-232.
Osterwalder, A., & Pigneur, Y. (2010). Business model generation. New Jersey: John Wiley &
Sons.
Saukkonen, J., Nukari, J., Ballard, S., & Levie, J. (2016). Start-up entrepreneurs and university
students in a co-learning mode: Learning effects of a collaborative entrepreneurial
coaching programme. Industry and Higher Education, 30(3), 224-238.
Sequeira, J. M., Wang, Z., & Peyrefitte, J. (2016). Challenges to new venture creation and paths
to venture success: Stories from Japanese and Chinese women entrepreneurs. Journal of
Business Diversity, 16(1).

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Thomas, C. M., McIntosh, C. E., Lamar, R. A., & Allen, R. L. (2017). Sleep deprivation in
nursing students: The negative impact for quality and safety. Journal of Nursing
Education and Practice, 7(5), 87-98.
Wang, C. L., & Chugh, H. (2015). Entrepreneurial learning: past research and future challenges.
In Entrepreneurial learning (pp. 11-44). Routledge.

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Appendices
Appendix 1: Feasibility Analysis of the Idea
Part 1: Strength
Low Potential (-1) Moderate Potential
(0)
High Potential
(+1)
1. Extent to which the
idea:
 Is
advantageous
to people
 Address a gap
in the
marketplace
Strong
2. Timeliness of entry
to market
Very timely
3. Extent to which the
idea “adds value” for
its customers
High
4. Degree to which
the idea requires
customers to change
their food habits
Substantial changes
required
Table 1: Strength

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(Source: created by author)
Part 2: Industry-Related Issues
Low Potential (-1) Moderate Potential
(0)
High Potential
(+1)
1. No. of competitors Few
2. Stage of industry
life cycle
Emergence phase
3. Industry growth
rate
Strong growth
4. Industry operating
margins
Moderate
Table 2: Industry-Related Issues
(Source: created by author)
Part 3: Target Market and Customer-Related Issues
Low Potential (-1) Moderate Potential
(0)
High Potential
(+1)
1. Identification of
target market
Identified
2. Ability to create
“barriers to entry” for
Unable to create

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potential competitors
3. Purchasing power
of customers
High
4. Ease of making the
customers aware of
the new concept
Moderate
5. Growth potential Moderate
Table 3: Target Market and Customer-Related Issues
(Source: created by author)
Part 4: Founder-Related Issues
Low Potential (-1) Moderate Potential
(0)
High Potential
(+1)
1. Founders’
experience of the
industry
Experienced
2. Founders’ skills Skilled
3. Extent of the
founders’
professional and
social networks in the
None

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industry
4. Likelihood to
launch and grow the
venture
Very likely
Table 4: Founder-Related Issues
(Source: created by author)
Part 5: Financial Issues
Low Potential (-1) Moderate Potential
(0)
High Potential
(+1)
1. Initial capital
investment
Low
2. Revenue streams One
3. Time to break even Less than a year
4. Financial
performance of
similar businesses
Strong
5. Ability to fund
initial expenses
Low
Table 5: Financial Issues
(Source: created by author)

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Overall Potential:
Part 1: Strength High potential Extensive promotion of the
concept is required at the later
stage of the business
Part 2: Industry-Related
Issues
High potential
Part 3: Target Market and
Customer-Related Issues
Moderate potential
Part 4: Founder-Related
Issues
High potential Connecting with people
through an official website
and by being on social sites is
required
Part 5: Financial Issues High potential  Revenue streams
should be boosted
such as by distributing
the homemade sauces
 Increased sales figure
will increase the
investment capacity as
well
Overall Assessment High potential
Table 6: Overall Potential
(Source: created by author)

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Summary
The overall assessment of the business in respect to different terms as above is done
considering that though the business is an emerging trend, it has the potentials to grow. Once,
customers have less barriers to look for a better alternative to fast foods they will expectedly
throng to the concept. It is just the matter of realization they need to respond to the concept.

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Appendix 2: Business Model Canvas
Figure 1: Business Model Canvas
(Source: created by author)