Entrepreneurship Development

CASE STUDY – CHULHA

By
Vignesh Babu.R
17BCC0052
 Viablity of any business is measured by its long term survival and its ability to have
sustainable profits over a period of time. If a business is viable it is able to survive for many
years, because it continues to make profit year after year. The longer a business can stay
profitable the better its viability. According to the case study Chulha emerged in the year 2007
now even after five continuous years as on date it is surviving means that their business is
heading towards long term.
Target market.

If we look into all the above components Chulha services has almost equaling 80% of all those.
There is a clear cut definition of their services saying that they want to give a quality food, to
satisfy the demand of all types of their customers, a clear cut feed back mechanism, maintaining
a website as a marketing tool etc. They have definitely having uniqueness in them and have a
clear cut costings and a thorough market segmentation study etc which are the main reasons why
their business is a viable one.

Chulha started in the year 2007 in Bangalore, that time the competition was also very less. Infact
at the time of chulha started, they also started like a Bombay dabbawals who carries tiffin boxes
to various individuals and companies/houses like a home based business. But later on they
developed.

Sotting the opportunity

As per the case study, Adesh and Nishant were the IT employees and emerged as entrepreneurs
later. They were from different parts of India (i.e.) one is from Bombay and the other is from
Calcutta basically north part of India who came to work in South India (Bangalore) as IT
professionals. While employed they were struggling and rather missing to get the home cooked
food in Bangalore city and the year was in 2007 during that time there were no good home
cooked food services available.

Identifying the Resources

Adesh and Nishant after finding the problem of their food thought of starting a small tiffin
services home cooked food business. Hence they left their IT jobs and started the business by
converting their individual problems into a main customer need based problem. This is were the
Brand mantra of introducing Chulha emerged. Their basic calculation was even a 10% of the IT
sector itself if they can cover they meet their profits very easily. But fortunately the customer
need scenario in Bangalore after sensing this excellent formula has increased like any thing and
more over the competiton was almost nil at that time. These guys took the maximum advantage
of this customer need which again converted as a major demand in that southern region.
Acquiring the resources and Managing the Venture

Chulha started in a small way. Their main mission is to ensure food being served to customers
not just in terms of taste but variety and maintain quality standards, and gaining recognition in
this business. It is practically serving hygienic and delicious food. Started with carrying food in
tiffin boxes and delivered to the customers in time having a minimal breakfast and mini thalis as
their startup menus in a limited areas in Bangalore during breakfast and lunch time and slowly
increased dinner also. In this they reached a very high standard of business viability due to their
extensive market segmentation ideas. This is to be noted for their high success degree.

The components of a business viability

Value proposition

Distribution.

Revenue model.

Upstart Funds

Production.

Customer

Competition

Cost structure.

Economic Mood

Timing

Unique selling proposition.

Marketing

Continuing Cash flow

Competition.

A clear definition of the product or service being developed;

A clear problem this is solving, and why this approach is better than existing alternatives;

Market size, growth, and share.

A clear idea of who needs it;

Sales/Marketing.

An idea of how and how much customers will pay for it;

Chulha’s Revenue Generation:-

At the starting time the margins were not very high since they were mainly seeing the
sustainability aspect. With the minimum amount of Investment, chulha started earning their
revenues in a very slow manner. From second year onwards they started a minimum margin (i.e.)
around 5-10 percent and slowly today they reached a 65-70% margins which is quiet good. For
at least they were just break evening during their first year operations.
Suggestions :

I would rather insist that they should have their own small R&D department person to implement
certain methodologies since the competition in the market is raising like anything.

Food based on Medical Prescriptions:-

Sugar, Blood Pressure, etc

Food based on modern Health consciousness:- Low fat diet, Low calorie calculated food,high
energy food for youth and sports personalities etc.

Segmentation:-

Chulha has to introduce certain segmentation in addition to their existing ones. They have to
introduce a morning breakfast segment. This will definitely bring additional revenue. Especially
cities like Bangalore, where the Industrial growth is booming like anything year by year, the
working population will also increase proportionately which will ultimately influence the
potential area for business like chulha to tap and develop.

Market Diversification:-

Chulha should try to tap the other cosmopolitan cities like Mumbai, Delhi, Calcutta and Chennai
etc. A critical market survery for diversification has to be conducted and accordingly modify the
business model plans especially the catering packaging systems. There are certain important
modifications like executive lunch, business dinner packages, corporate buffets etc to be
introduced. For this local area agents has to be appointed. Extensive financial planning is
required for this effort. But ultimately lead to high level revenue earnings.

Additional meal features for customer satisfaction/attraction:-

Chulha should introduce digestive food post meal like paan, a small banana fruit or a pack of
supaari varieties etc. This definitely impact a high level customer satisfaction, an edge over the
competitors in the market and also enables the business’s long term sustainability.

Major Tie ups:-

Chulha can have tie ups with Hostels, Corporate Offices, Business Management Schools, and
Engineering and medical Colleges.

Regional Meals:-

Since we are talking about chulha’s diversification business model, it is necessary that they
include regional meals like north Indian, south Indian, etc. in their menus.

Encourage Local home makers:-

Chulha should give franchisee to local house wives to do this business and promote Chulha in
the areas where chulha itself could not deliver food in time. This is a very important change they
should consider in their business model. By doing this the supply chain delivery problems can be
solved in a very systematic manner with out any problem. Also chulha’s management doesn’t
have to worry about the local taste of the region’s customers. since it is prepared by the local
house wives.

Associated Catering Services:-

Chulha should provide catering services to several parties, functions, and even to the Airlines and
Railways. This is one of the major change that I would suggest to introduce in chulha’s business
model. These associated catering services will definitely increase chulha’s market value and
revenue earnings to a maximum extent. They can have multiple organizational groups for
conducting marriage catering, party catering, corporate get-togethers , government functions
catering services etc by way of signing official contracts. They should enter into the railways and
airlines food catering services contracts also. Chulha should also have association with hospitals
for the catering contracts.

Cookery Competitions and award Ceremonies:-

Chulha should have annual or half yearly cookery contests in every regions and territories. This
will really boost customers involvement in chulha’s business as well as chulha can get some
great ideas to introduce/change in their business models.

In many countries the catering service business entrepreneurs got their chief chefs through these
type of contests and competitions.
Specialized Nutritional Services:-

This is a very special introductory idea for chulha’s business model. Chulha should concentrate
on this aspect of introducing specialized nutritional catering services with the help of doctors and
dietitians around. The services should be based on the following:-