STRATEGIC MANAGEMENT (MBA 431)

BSUSINESS PLAN– CIA 3

SUBMITTED BY

GROUP NUMBER – 2

Adishesha Sairam K B – 1827901

Himanshu Malhotra – 1827913

Kunal Dubey – 1827917

Pranav Mittal – 1827922

Ria Chauhan – 1827951

Vaishnavi Sahu – 1827958

SUBMITTED TO

Prof. Sonia Mathew

Christ Institute of Management

CHRIST (DEEMED TO BE UNIVERSITY), Bengaluru

July 2019

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TABLE OF CONTENTS

1. Executive Summary
2. Company Profile
3. Generation and Evaluation of Idea
4. Macro Environment Analysis
a) SWOT Analysis
b) PESTEL Analysis
c) Porter 5 force Model
5. Marketing Mix: 4P
6. Segmentation
7. Marketing Strategies
8. Competitors Analysis
9. Business Model of Fresh Apron
10. Value Chain Analysis
11. Risk Mitigation
12. Critical Success Factors
13. HR Plan
14. Financials
15. Exit Strategy and Succession Plan
16. Recommendations

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EXECUTIVE SUMMARY

Ordering groceries online has become very popular amongst the consumers. There has been
massive shift in the consumer buying habits. In the present scenario consumer tend to spend most
of their time working or carrying out other important chores that has made going out and
personally purchasing groceries take a back seat. As a result the introduction of a platform of
providing consumers with two of the most precious commodities in today's modern society -
time and convenience was imperative. It is true that due to the perishable nature of grocery
products certain challenges arise, which make running online grocery stores/marketplace more
challenging than running e-commerce stores for apparels, electronics, home décor, and other
such products. Grocery consumption is the basic human need, and people are increasingly
relying on online shopping. So, online grocery business idea fits perfectly in the current
dynamics, despite above-mentioned challenges.

Keeping this in mind we introduce Fresh Apron that brings the comfort of ordering the best of
international private label products and some of the finest premium seasonal vegetables sourced
directly from the growers spread across the length and breadth of the world. Rare and premium
groceries we supply include the likes of hop shoots, wasabi root, pink lettuce, Yamashita
Spinach and many more, you name it we have it. We have also made sure that we just don’t limit
ourselves to delivering premium grocery but also fulfil the need of delivering everyday
vegetables. Being in a business of delivering premium food category even the daily vegetables
that are delivered by us are chosen and selected with utmost care and assiduousness that ensures
only the finest quality products are delivered to your doorstep.

Fresh Apron has embarked on this journey by establishing close connections with growers,
distributors and efficient logistics partners around the world who work together round the clock
to ensure timely delivery of their products. The customer base for Fresh Apron will not only be
confined to individuals or households but also to some of the best ranked restaurants and hotels.
The making of these top quality products available to your doorstep comes along with
incomparable service record with dedicated and well-versed service personnel available at your
disposal to handle any kind of queries or grievances.

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COMPANY PROFILE

Business Name: Fresh Apron

Logo:
Owners:

1. Adishesha Sairam
2. Himanshu Malhotra
3. Kunal Dubey
4. Pranav Mittal
5. Ria Chauhan
6. Vaishnavi Sahu

USP: Chemical and preservatives free, Premium grocery supplier at doorsteps

Address Line: BTM Stage, phase 2, Bangalore
Telephone: 011-25007xxx,
Registered Office: MSY Building, Near Jay Mart
Fax: 989789xxxx

Vision Statement: To satisfy the need of our customers by offering a unique shopping
experience offering quality, variety and dedicated service.

Mission Statement
i. To inculcate healthy living habits amongst Indian consumers and making farm fresh
organic vegetable easily available.
ii. To be a leader in distribution and merchandising for premium grocery, seasonal
vegetables and related products and services.
iii. To help people achieve their health and wellness goals by providing farm fresh produce.

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GENERATION & EVALUATION OF IDEA

Aspects of an online grocery business are:

 Identify Target Audience: Since the premium grocery sourced from around the world
fruits, vegetables, pulses and other grocery staples being highly perishable items have a
limited shelf life and more expensive than the regular ones the stock that needs to be
maintained should be decided beforehand in order to ensure the products are delivered
fresh.

 Tie-ups with professional growers and distributors around to world to source the best
products.

 Setting up a delivery system: Establishment of a robust delivery network to make sure

orders reach customers in a timely manner

 Method of Payment: Just offering the option of making the payment online would not
be sufficient. Allowing the option of COD or cash on delivery system for accepting the
payments is also imperative.

The source of income for Fresh Apron is that it deducts a pre decided percentage of the total
revenue generated through the order that acts as a profit for the business and uses the remaining
amount to pay for the goods procured from dealers and logistics delivery partners. Since the
business revolves around delivering products that are highly perishable, intended for immediate
consumption and display low shelf life features. It becomes imperative for Fresh Apron to tackle
delivery related issues, wrong order delivery and returns in an efficient manner to ensure
customer satisfaction and market standing.

Therefore we at Fresh Apron have put in a lot of effort and thought in choosing our delivery and
logistics partner that leave no stone unturned in ensuring that our customers do not suffer any
kind of delivery and order related issues when they use our services.

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Additionally, since perishable food products need to be stored & delivered in refrigerated
chambers, storage infrastructure would add up the business operations cost marginally. There are
certain steps need to take to combat these challenges. Some of which are:

 Integrate a robust, Just-in-time (JIT) inventory management system with grocery store
that automates things to reduce storage cost & wastage

 Partner with a reliable delivery service provider that can meet your customers’
expectations with assurance

 Segment the delivery network into hyper-local networks to manage deliveries better &
make them faster.

Today, people shop online not just for the convenience but also because they expect to get better
prices. Online grocers face the same challenge of offering competitive pricing. But with too
much money spent on building & maintaining the storage infrastructure & efficient supply chain,
keeping satisfactory profit margins might become difficult. Other than that, when it comes to
vegetables & fruits, most customers prefer to buy only after physically checking them for their
freshness & quality. When shopping online, such an option is not possible. So, to persuade
customers to buy groceries online remains a persistent challenge.

There are a bunch of steps taken to address the problems by Fresh Apron:

Adding more non-perishable categories to store, such as packaged foods from private
labels as their storage & delivery cost less.

Cut down on operating expenses due to low profit margins on online sale by ditching
the idea of acquiring own fleet of vehicles and delivery personnel. Instead sourcing
the above stated from a logistics company.

Keeping track of stock with dedicated and easily adaptive inventory management
software.

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MACRO ENVIRONMENT ANALYSIS
SWOT ANALYSIS
Strength
 Humongous variety of exotic fruits
and vegetables available all year
round.
 It offers weekly offers and discounts.
 24*7 delivery (delivery between 11
pm. – 6am is charged nominally)
 Ease of access and time saving with
express delivery in 45 mins.
 Target in tier 1 cities with focus on
work class and elderly couples.
Opportunity
 Many cities are still not covered. They
can gain the first movers advantage.
They can expand to tier-2 cities and
increase their market.
 They can start everyday delivery
schemes of fresh milk and few daily
essential groceries.
 E-commerce grocery is increasing year
by year and hence there is a huge
untapped market.
Weakness
 High Variable Cost: Cost of running many
delivery guys, delivery trucks, storage for
perishable items
 Minimum order quantity which prevents
consumers to order if they want only few
items
 It is necessary for customers to stay at home
to receive delivery which makes it
inconvenient to customers sometimes.
 Order Cancellations: Out of stock issues tend
to make the customers unhappy and
repetitive of such issues makes the customers
reluctant to reuse the service.
Threat
 Competition from other companies like
Grofers, Nature’s Basket, Big Basket, Aaram
Shop, Mera Grocer, etc.
 Bigger Players like Amazon, Flipkart and
Google have also entered this industry. This
may prove fatal for smaller players
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PESTEL ANALYSIS

1. Political Factors: Red Tape in India can become major difficulty in the way of new
businesses trying to extend their presence there. Political chaos can result to disruption of
business both online and physical. Overall, political issues can have a significant impact on
the industry and its growth.

2. Economic Factors: Economic factors are very significant in terms of business. Whether it is
an online business or physical, economic factors can have a significant effect on it. It is
because economic factors are directly related to business and their effect is also direct on
business revenue and profits. Higher and stable economy increases the disposable income of
consumers which favours the industry.

3. Social Factors: E-retail brands find it the easiest to flourish locally. In most societies the
mobile technology has been very popular and a larger number of people worldwide are now
using mobile gadgets for shopping and other purposes. This can be seen as a sign of
westernization which is a positive indication for the industry.

4. Technological Factors: Technological factors are very important in the context of the
ecommerce industry. It is because the industry relies heavily on technology. Everything is
based on technology in e-retail from sales to customer service. Every brand is investing a lot
in technology to find faster growth. Technology is a major influence on business and in case
of ecommerce technological factors, it acquires a very special importance.

5. Environmental Factors: While the direct environmental impact of this industry is very low
and nearly zero, it still focuses heavily on sustainability. From sustainable packaging to
waste reduction and renewable energy there are several areas where the e-retailers can invest
in sustainability.

6. Legal Factors: From sustainable packaging to waste reduction and renewable energy there
are several areas where the industry can invest in sustainability.

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PORTER’S FIVE FORCES MODEL (MICRO)

1. Degree of rivalry within the industry

 there are many new start-ups already existing

 there is very low switching cost for customers to other brands

2. The threat of substitutes

 high availability of substitute

 low cost of substitutes
 low switching cost

3. The threat of new entrants

 Entry barrier is very low

 Ease of doing business is moderate

4. Bargaining power of buyers

 Very small volume of individual purchases

 they have lot of information about the products they are buying

5. Bargaining power of suppliers

 High number of suppliers are available

 Suppliers for organic and natural foods are limited

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MARKETING MIX

Product Offerings
__________________________________

 Exotic Fruits and Vegetables

- Exotic fruits: Dragon fruit, blueberries, passion fruits, avocado

- Imported Fruits: Red Grapes, Water Apple, Imported Plums and seeds
- Exotic Vegetables: Broccoli, asparagus, dill leaves
- Diced Veggies: Pumpkin, Bitter gourd, sweet corn, peas etc

 Farm Fresh Condiments

- Pulses
- Spices
- Grains

 Organic Product line (future phases)

 Private Label (future phases)

We will continue to find new product lines that can be added to our inventory. We are able to
sell products at very low prices, because we are able to purchase items from producers who
produce only for us and that they cannot be sold to producer’s usual retail customers. Fresh
Apron will offer customers organic and locally grown produce chemical and preservative-
free groceries.

The products are:

 Free of artificial preservatives.
 Free of artificial colours.
 Free of chemical additives.
 The least processed or unadulterated version available.
 Non-irradiated.

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Price
__________________________________

 Fresh Apron will be a platform provider hence it would draw money from the transaction
between the merchant and the buyers.
 It will provide subsidies to the buyers in order to attract more buyers on its mobile app
platform and as the buyer’s number increases, due to strong and positive cross side network
effects the number of merchants selling through the Fresh Apron also increases.
 Fresh Apron will offer periodic sales discount on certain range of products to gain customer
orders in those product segment.
 The company would not price the product competitively as the offerings of other platform
providers offer low price.
 “Market Skimming” Pricing strategy is adopted which means the firm charges highest
initial price that customers pay and then lower it over time.

Place:
__________________________________

Fresh Apron will have its operations initially in Bangalore. Fresh Apron takes orders of items
which are available in local market of the buyers and then the company’s delivery personnel
provide the delivery to the customer’s doorstep.

Promotion:
__________________________________

 Media ads on websites, which consumer frequently visits

 Recommendation for consumer on apple store and play store when they download related
competitors application like big basket, bbdaily and grofers.
 Tie ups with corporate, to provide their employee with vouchers of Fresh Apron
 Banners on social media platform, like Instagram and Facebook
 Radio and television advertisement to create brand, Fresh Apron, in the minds of the
consumers.
 Cash back and other discounts for first time customers and for customer who had opted
for subscription model

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SEGMENTATION

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MARKETING STRATEGIES

Website Features of Fresh Apron: Fresh Apron website is quick to load, easy to use, mobile
friendly, and has following unique features:

Mobile friendly: A big part of having a responsive website. When we use a responsive design
there is, no need for a separate mobile app meaning any updates we make on our content
management system translate on mobile as well. Check the site on a Smartphone and various
mobile device types to be sure we are providing the best mobile experience possible.

Updated Content

 Maintenance Updates: To start, all the basics are also up to date, such as our phone
number and other contact information, events, company news, and pricing. Outdated info
hurts both our and our visitors so make sure we stay on top of it any time a change
occurs. Secondly, you want to make sure you on a regular basis with new things such as
marketing videos, testimonials, team updates, etc.

 Repeat orders: Many a time people take the same grocery items home. Keeping this
common consumer behaviour in mind, we provide customers with the option to save an
order to their profile, which they can re-order, instead of adding same items to the cart
time & again.

 Shareable cart: Grocery shopping is often a family activity, in which different members
can have different demands. So, Fresh Apron offers a feature that allows users to share
shopping cart with other registered users so that they can add additional products, and get
them all delivered in one single order.

 Recipes and Ingredients list: This would be like going the extra mile and will be totally
worth it. Adding some recipe ideas on website and recommend them on product pages (if

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 the product is one of the ingredients). This will definitely catch customers’ attention and
might even engage them to buy more items.

 Discount Coupons: These days, it is a common practice among businesses to send

discount coupons to make the most out of seasonal sales. So it is important that website
has the feature to receive & process these discount coupons.

 Shopper Module: In developed ecommerce markets, there is a trend catching up among

customers to hire shoppers. These shoppers take the list from customers and do the
grocery shopping online on their behalf. Fresh Apron will definitely look forward to it
and think about bringing in this market tool.

Other than these, make sure Greenapple also have these basic, but critical features &
functionalities:
- Product Categories
- Search Tool
- Customer Profile
- Merchant Module
- Social Commerce Features
- SEO Ready

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COMPETITOR’S ANALYSIS

 Bigbasket is the top competitor of Fresh Apron. Bigbasket is a Private company that was
founded in Bangalore, Karnataka in 2011. Bigbasket operates in the E-commerce
industry. Bigbasket has 2,883 more employees vs. Fresh Apron.
 Grofers is seen as one of Fresh Aprons’s biggest rivals. Grofers was founded in Gurgaon,
Haryana} in 2014. Grofers is in the Retail Distributors field. Compared to Fresh Apron,
Grofers generates $149.4M more revenue.

The two major players in the domain occupy the most of the market share and have a vast
influence on the customers. Both the players have deep penetration in the market and adopt
competitive pricing in order to increase sales and revenue. Some small players like Local Banya
also have a share and are still striving to increase sales and widen their scope and customer base.

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 BUSINESS MODEL OF FRESH APRON

Mobile
Application
Farm fresh and Website Just-in time
condiments procurement

Supplier
Exotic fruits
support
and
systems for
vegetables
farmers

Hyper-local Fresh Subscription

marketplace model
Apron

A. Hyper-local Marketplace: The hyper-local business model pertains to a limited geographical

reach and caters to the needs of local residents. Fresh Apron aims at providing a hyper-local
system for delivery of fresh exotic fruits and vegetables procured directly from the farmers. The
system aims at being technology driven throughout the chain, i.e. from procurement to delivery.
The system aims at providing deliveries at relatively faster speeds at the customer door-step and
reduces the waiting time involved. It is responsible for enabling local unorganized fruits and
vegetable segment into a more systematic buying environment.

B. Exotic Fruits and Vegetables: The major product offering of the company is fresh exotic fruits
and vegetables. Consider this as a Fruit and vegetable hut which offers freshly procured products
at the door-step. These product categories provide an extensive margin opportunity as well as
constitute major chunk of company’s revenue stream. Moreover, organically grown product line
can also be added in the following phases of company operations.

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C. Farm fresh Condiments: Other than exotic fruits and vegetables and organic offerings in the
future phases, other farm fresh condiments like pulses, grams and spices can be taken up in the
business offering. This would not only create a healthy consumer perception about the brand but
also pull the informed customer base towards a healthier approach in life.

D. Mobile Application and Website: This is the base of our overall operations and is a high
priority risk arena, failure of which can lead to bad customer experience and even seizure of
business. In order to enhance order generation experience and delivery dynamics, it is important
to have clarity about must-have features and interface of mobile application and website. It is
critical that the website and application are aptly compatible with the in-bound out-bound
mechanics involved in the backend. It acts as a spine for each management department in Fresh
Apron.

E. Just-in-time procurement: The initial business phases of Fresh Apron are largely dependent on
Just-in-time procurement in order to reduce dependency on inventory- based operations. A JIT
approach will help in delivering what is required by the customer. A highly dedicated order
mapping system and estimated demand from subscriptions can help improve upon aspects of JIT.

F. Supplier-support systems for farmers: It is important to deal with the supplier side dynamics
in a farmer-friendly way which is systematic, effective and efficient. For this, a company-wide
management system will be implemented which would process and communicate order
information in real time to the required departments, especially the farmer-directed department.
Farmers are crucial for procurement and maintaining relationships would play a pivotal role.

G. Subscription model: A subscription based model is built extensively for repeat customers who
order at least thrice a month. This not only helps in maintaining customer involvement in the
brand but also is responsible for raising adequate amount of money in a single shot which can
further be used for expanding operations. A subscription slab could be proposed in further phases
as the business progresses.

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VALUE CHAIN ANALYSIS

It is the process which helps the firm determine the Organizational Activities from purchasing
Raw Materials, Storing the Products and Marketing those products, and enables the firm to better
identify its own Strengths and Weaknesses.

Customer Value Proposition:

 Convenience and efficiency, with the Company offering a service that enables customers to
reduce the effort and time involved in shopping, ensuring that customers receive their orders
within a specified timeframe.
 Accessibility and ease of use, with the Company operating an online and mobile ordering
platform that can be used across multiple devices, and can be utilised quickly and easily by
customers.

At Fresh Apron, the Value delivered is just not about making it easy to place an order, track and
deliver, but it is about supplying all the Exotic Fruits and Vegetables that a customer needs,
every single time, maintaining high quality and delivering at the door step of the customer at the
Promised Time. The different components involved in this Value Proposition are:

 Warehousing
 Supply Chain
 Logistics
 Farmer Tie-Ups
 Buying

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 • Vendors such as farmers (growing fruits and vegetables)
Procureme • Importing from countries like Thailand
nt

• Storage of products in Warehouses

• A separate Distribution center
Storage

• Pick-up from Vendors i.e. First mile delivery

• Last Mile Delivery to customers
Logistics

The Drivers of Supply Chain:

1. Facility

 Easy and relaxed way of shopping

 Very convenient as well for perishable items
 On-time delivery and easy navigation through website

2. Information

 Two types: Data entry operators to business head and others are delivery boys,
segregators, pickers etc.
 Working in tandem to make the process of information flow efficient.

3. Sourcing & Inventory

 Buying in bulk from farmers to achieve economies of scale

 Also have tie-ups with mandis
 Keeping 7 days of safety stock
 Using single period inventory model

4. Pricing

 Competitive pricing
 Using farm to home model, prices are fixed in procurement
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  Using coupons, discounts and product bundling techniques to increase their sales.

5. Transportation

 Using both in-house and third party logistics

 Using their mini trucks to deliver products to customers through route optimization.
They have two types of delivery
1. Full service delivery
2. Express delivery

Fruits and vegetables are directly sourced from the farmers, eliminating middlemen. If they are
harvested today, they are delivered tomorrow with Fresh Apron’s own supply chain but building
a supply chain for fresh fruits and vegetables demands attention to detail.

In a cold supply chain, the challenge is to ensure that product reaches in the right state at the
customer’s doorstep. Cold storage items sensitive to temperature are not kept outside the cold
room during operational processes like billing, picking, and during transitions of receiving
stocks. The cold room maintains apt temperature as per the requirement of each SKU. In fact,
cold products are billed separately, packed in separate boxes in the last-mile chain. Once the
product reaches the aggregation centres, their system ensures these products don't stay at ambient
temperature for long.

Supplier Contracts:

Type of agreement between a seller and a buyer in which a seller promises to supply all the
needed specified goods and services to a buyer over a certain time and at a fixed price.

Supply Contract will include the following:

 Pricing and volume discounts.

 Minimum and maximum purchase quantities.
 Delivery lead times.
 Product or material quality.
 Product return policies.

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Customer Value Dimension:

Customer value dimension generally has four parts:

 Revenue
 Loyalty
 Sentiment
 Engagement

In-Bound: There are many SKUs in vegetable department which are directly procured from the
farmers. This helps Fresh Apron to be price competitive in the industry.

The farmers prefer to give their products to Fresh Apron because of the following reasons:-

 They can avoid going to the Sabzi Mandi.

 Farmers do not get the correct for their products from the commission agents
 The Fresh Apron pays the farmers within 3 days after the invoice is generated
 Exotic products are present in the inventory of Fresh Apron
 Cold storage in the inventory helps keep up the quality of products
 Fresh Apron has a software which automatically generates the list of items that needs to
be ordered to keep up the inventory

Out-Bound:

 4 time slots for delivery

 Multiple payment options:
- Cash
- Credit/ Debit card
- UPI
- Sodexo
 The company will pay 10% of the order value if the delivery doesn’t happen on time.
 If the customer asks for a return of product then Fresh Apron will not ask any questions.
 The customer will get 50% refund if all items ordered are not delivered.

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RISK MITIGATION

CRITICAL SUCCESS FACTORS

The success of Fresh Apron will depend on multiple factors that require to be taken into
consideration before undergoing actual launch of the business following will be the critical
success factors for to set up an online grocery in Bangalore.

 The business will have a unique merchandising in its operations also business will add
value as it will provide discount to regular customers.
 The company will have better efficiency of distribution as it will provide fast delivery to
customers.
 The business website would provide ease of navigation with fast site load times to its
customers.
 Multiple language option will be provided on the website that will enhance customer
experience.
 Fresh Apron will also provide its customers 7 day money back guarantee if the product
does not meet their need or is defected (in rare cases)

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HR PLAN

A. HR Strategies Adopted:
 Employee Stock Options (ESOPs) extended to ensure employees remain in the
organisation and develop belongingness.
 Periodic Training given to executives to maintain required standards in the industry.
 Incentives extended to recognise top performers.

B. Organization Chart:

CEO

CFO CTO COO CMO CHRO

Manager - Manager -
Manager - F & Software Manager - Manager - Marketing & Executive -
A Delivery Supply Chain Recruitement
Development PR

Delivery Purchasing
Executives Executive

C. Staffing Requirements:

Page23
FINANCIALS

A) INCOME STATEMENT AND PROJECTED SALES FORECAST

Year 1 Year 2

I. Revenue/sales 29,20,000 3212000

II. Variable Cost
Purchases 11,68,000 12,26,400

Gross Margin (I-II) 1752000 19,85,600

III. Fixed costs

Salary 2,65,000 2,65,000
Rent 3,60,000 3,60,000
Advertisement Expenses (radio) 1,09,500 1,09,500
Web Page/ App designing 3,00,000 3,00,000
Web page service 25,000 25,000
Delivery Charges 1,75,200 1,75,200
Office expenses 1,62,600 1,62,600
Petty Cash Expenses 60,000 60,000
Miscellaneous 10,000 10,000

IV. Total Fixed Costs 14,67,300 14,67,300

V. PBT 2,84,700 5,18,300

VI. Less: Tax @30% 85,410 1,55,490
VII. PAT 1,99,290 3,62,810

Hence, Profit after Tax for the respective projected years is Rs. 1,99,290 and Rs. 3,62,810.

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ASSUMPTIONS and RATIONALE

1. The office is located in BTM Bangalore, with an office space of 300 sq ft.
Therefore, rent = Rs, 30,000 per month
 30,000*12 = Rs. 3,60,000 yearly

2. Salaries have been calculated as per staffing requirements mentioned in HR Plan

Total Salaries = Rs. 2,65,000 yearly

3. Radio Advertisement expenses:

Slot of 300 seconds per day @ Rs. 30 per 10 seconds
 300*365 = Rs. 1,09,500 yearly

4. Delivery expenses @ 1.5/km

Expected delivery kilometres per executive= 8 km
Set number of delivery guys in initial phases is 10.
Hence, overall kilometres covered in a day = 80 km
 80*1.5*365= Rs. 43,800 for each zone
Considering that the operations will majorly be restricted to 4 high income group zones,
 43800*4 zones = Rs. 1,75,200 yearly

5. Office Expenses
 Stationary 5000
 Electricity 1,00,000
 Internet [1300*12] 15,600
 Water [2500*12] 30,000
 Maintenance (pest control and cleaning) 12,000

6. Revenue modelling
Considering that each order received amounts to INR 800 and average of 10 such orders
are received per day for 1 year
 800*10*365 = Rs. 29,20,000 yearly

7. Purchases
Assuming a 60% margin on sales orders
So, the procurement cost amounts to 40% of bill value
 40% of Rs. 800 = 320 per order
10 orders are received every day, so for 1 year
 3200*365 = Rs. 11,68,000 yearly

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 8. Trend Assumption for Next year

 Revenue increase by 10%

 Purchases by 5%
 Fixed costs are assumed same

EXIT STRATEGY AND SUCCESSION PLAN

Exit Strategy

There are a number of reasons why a startup like GreenApple might choose to close shop and
exit the game.

 Current market dynamics might make it extremely difficult for GreenApple to profit,
let alone break even.
 Investor Angle. Once the company has expanded and acquired good funding and big
investors, business slowly transfers from being fun and exploring to appeasing the
investors. Meanwhile, several investors come with various conditions and stake on the
company.
 Often times, timing and sheer market forces make it difficult to sustain the operational
aspect of a business even though the business model might be very good on paper.

There are several ways in which a full or partial exit can be made.

 Mergers are prevalent in the market, as well as acquisitions where usually a third person
decides the price of acquisition, making it profitable to the startup.
 A few companies do go IPO but that is feasible only when they are backed by huge,
professional investors who already own the majority of the company.
 Selling your startup at a good price to someone (sometimes, even an investor) is a good
plan although that may mean absolutely no eventual involvement with their own brand in
the future, a fact that would hurt any founder.

Just in case nothing works we will be forced to liquidate, pay off creditors and exit the market
with whatever dividends they can gather.

Page26
Like everything else a business is also subject to various forces that are beyond our control.
Having an exit strategy can actually help us cut our losses and gear up for the future.

Succession Plan

While transferring assets is a legal and financial operation, transferring control of GreenApple is
more psychology-oriented. The major concerns when handing over the reins to the successor will
include:

 Making sure that the successor is clearly seen by other employees as our successor, not
an interloper or pretender to the throne who can safely be ignored or discounted.
 Making sure that we are really ready to hand over control. If we lurk around our business
after ostensibly handing over the reins, it undermines the effectiveness of the person we
have chosen to lead the business. So when we leave, we actually leave.

Tax Angle: In addition to giving us an idea of what our business is worth, a valuation provides a
good starting point for projecting what our tax liability would be if we (or our heirs) were to sell
the business. Minimizing this tax liability is at the core of our succession plan. And, of course,
the succession plan must comply with the tax code.

If we decide to try to locate someone who'll run our business as we ran it, we won't focus solely
on skills. Instead, we would look at the candidates' styles. We want people who think like us and
feel like us, even if they don't necessarily have the same set of abilities. We won't restrict our
search for a successor to outside our company. In fact, we would try to find somebody in our
company who understood our goals and principles and who the other people of the company
would easily trust and have faith in. Grooming a successor isn't an overnight operation. We
would surely take some time in searching someone appropriate.

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RECOMMENDATIONS

Indian retail market is valued at more than approx. $550 million and grocery alone covers 60%
of this share. Hence it’s a huge market with many players to accommodate and customers to
cater. India is the 6th largest grocery market in the world. E-commerce grocery market is growing
with a year on year growth rate of 19%. In order to take advantage of such opportunistic market,
some of the features for Fresh Apron can be-

Expansion: Many cities are still not covered by the already existing startups and Fresh
Apron can target them and gain the first movers advantage. We can expand to tier-2 cities
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Cross selling and Value Packaging: Cross selling is a major advantage for us as it can
sell multiple products by product bundling.

Investing more money into facilities: After setting up facilities at different locations,
investments have to be made accordingly so that the facilities don’t run dry of money and
any case, don’t lead to shut downs.

Refining suppliers: Segregation of quality suppliers from the rest should also be taken up.
The ones aiming for quality should be made aware of the work culture that should be
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well as prosper themselves too.

Windows App: The competition already existing in the market has failed miserably in
looking after the ‘Windows Smartphone’ holders. So keeping them in mind, a windows
app for the same should also be launched along with iOS and Android applications.

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