Dream Inn is a grocery delivery service that strives to provide consumers with a wide variety of food items distributed to their residences, workplaces, and other places. The organization is laser-focused on its mission to offer outstanding customer experience through top-notch distribution and an unrivaled menu available in a single location or on the company’s website.
By 2020, the organization hopes to raise its market share to 25% by aggressively promoting and advertising on banners and media, especially through other promotion bundles such as discount vouchers to appeal to middle-income professionals. The firm, on the other hand, does not plan to limit itself to this sector and will sell its services to a wider market.
Home delivery, office delivery, Food for a Week, and other new and upcoming products will all be accessible.
From 2013, the group will be profitable, and it will seek to consolidate its position by growing recognition and market share. The corporation would develop distribution networks that will help it achieve a competitive edge.
Dream Inn is more than just a restaurant that offers tasty food to its clients. Dream Inn is a term, a concept that originated from the founders’ impressions of the nature of food and service rendered by other vendors. The designers had the foresight and vision to see that the Bahraini industry had a lot of unmet customer needs. While the food served in these restaurants was outstanding, some facets of the food order and delivery supply chain left a lot to be desired. For example, the designers understand that consumers are unique people who differ in several ways, including ordering times and purchasing habits. Dream Inn is available 24 hours a day, 7 days a week to serve clients at all hours of the day and night. Second, the founders found an unmet demand for consumers to provide home and workplace delivery at all hours, and they met the need by decentralizing activities and opening several locations, allowing the business to serve customers quickly. Another need that Dream Inn serves is with the usage of technologies, such as the development of a user-friendly platform that helps consumers to conveniently access the items on sale, position orders, and get their food delivered within the agreed-upon time frames. This is especially useful to professionals who spend the bulk of their time in front of a screen.
By 2015, the firm hopes to have a 10% market share of food distribution systems, with a goal of will that to 25% by 2020.
For the pleasure of its clients, Dream Inn offers a broad variety of facilities. Among the programs available are:
- Introduction of new value added services such as Food for a Week, which will enable consumers to see the different products on offer and place an order online for their convenience.
- Availability of 24/7 door to door delivery services in the world.
- Existing outlets for customers to place orders on their way from home or workplace.
- Creation of new value added services such as Food for a Week, which will allow customers to view the different products on offer and place an order online for their convenience This would be especially useful for consumers who work full-time and don’t have time to order on a regular basis, since they would be able to plan their weekly meal in one sitting. This commodity would also help single bachelors who are refugees who have come here to make a living who do not have the patience or knowledge to cook their own meals and cannot afford to order high-priced restaurants on a regular basis.
- The menu features dishes from fast food chains, Italian, Asian, and international cuisines. Dream Inn would be willing to buy these items at a substantial price from vendors to achieve a suitable profit in between when the products are bought from other restaurants because Dream Inn is assisting their sales profits.
Prices vary according to the menu selected by the customer. In order to gain market share, the company makes its purchases from the restaurant owners in bulk to avail quantity discounts that can be partially transferred to the customer. This helps the company in besting its rivals and gaining a competitive advantage. Furthermore, discounts are provided to customers who opt for the weekly menu and all charges are collected upon completion of the order, or the week for this specific product. Payments are not requested in advance for any order.
While the presence of actual stores for a delivery oriented firm might seem confusing and unnecessary, there have been numerous researches that show that although customers mindsets are changing towards technology, a significant percentage of customers still prefer an actual physical retail store to make their purchases. An example is the research conducted by Deloitte (2011) which shows that at least 28 per cent of customers want to see the actual products in their respective stores. This is why we have chosen to maintain outlets in order to maintain those customers who still prefer to purchase from physical brick and mortar outlets. We shall have multiple locations throughout the country for this specific type of customer.
Sales promotion is a key tool used to increase awareness of the product and consequently, sales and market share. Since the company is looking to provide its services on a national basis, the company shall choose a medium of advertising that can reach the entire nation. The obvious choice is advertisement through television channels. Professional advertising agencies shall be hired to create an advertisement that is suited for the target demographics and is able to connect on a national scale. The ad shall focus on the company logo and brand and try and bring a brand association in the minds of the customers that top quality food service is Dream Inn.
The market segments being targeted by Dream Inn include:
- Professional, office going people who require well cooked meals in office. This market includes males and females of the age group from 18-65 which is a very broad segment. This segment includes single, unmarried locals and foreigners who cannot cook and find daily dining out very expensive.
- Food for a week. This segment will be those people who purchase a weekly menu of items in advance. This service is catered to the needs of the above market and is suited to the needs of the customers. The customers do not have to pay in advance and they can cancel or change their order for any given day of the week by calling or visiting the website.
External Analysis Using Porter’s Five Forces
Bargaining Power of Customers
Customers hold medium level of power in bargaining and leveraging. This is due to availability of other companies that provide delivery services and customers can easily switch to rival firms if they are dissatisfied with the services offered by Dream Inn. The company looks to eliminate this threat by offering products at low prices with timely delivery. A vast range and multiple menu combinations will help ensuring that the customers receive premium satisfaction from the Dream Inn experience. In case of late delivery, the products shall be given free of charges to the customer to compensate for the dissatisfaction caused by late delivery. This will increase brand loyalty and switching costs for the customer.
Bargaining Power of Suppliers
As many suppliers are present in the food industry, the threat of suppliers is low. The company can purchase bulk quantities from suppliers at discounted prices and store them in their cold storages and reduce any threat posed by suppliers
Threat of New Entrants
Presently, there are no barriers to entry in this lucrative market and other firms can pop up and capture market share. This is a huge threat which the company will seek to eliminate by gaining brand loyalty through low prices and advertisement. First-movers advantage shall be utilized and the company shall market itself as the first company in the country to provide delivery of such a vast amount of restaurants and through online purchasing too. Over time, the company will gain market share and look to drive out potential entrants by setting up technological and distribution barriers by entering into agreements with suppliers.
Threat of Substitutes
Substitute to Dream Inn’s model of delivery is the traditional dining out experience which still prevails in the food market. Dream Inn has provided outlets for this very purpose to allow customers to dine out and enjoy the outdoors experience
Rivalry Among Competitors
Competitors include other food delivery providers such as Pizza Hut, Burger King, Subway and Starbucks (Agriculture and Agri-Food Canada, 2010). This is a high threat that shall be reduced by collaborating and partnering with these companies as the company will seek to sell the products of these companies to the customers. Eventually, the goal is to nullify this threat by becoming the choice of these companies for the purpose of delivery and convert these competitors into suppliers.
The company forecasts sales of an average of $1,000 per customer per year. The assumption made is that a customer spends around $10,000 for food per year and the company will seek to provide at least 10 percent or $1,000 of the customer’s food. A customer base of 1000, 1500 and 2,000 is projected for the three years 2013-15. Cost of sales is predicted to be 60% of sales, which will include the prices paid to restaurants for their food and other costs incurred in procuring the items. This is highly conservative as the company will look to seek further discounts from suppliers from bulk purchases in the future. Expenses include marketing and selling expenses, administrative expenses of head office, and rent expenses for outlets, labor and other miscellaneous expenses. A tax rate of 25% has been assumed. The company shall be profitable from 2013 and will look to increase profits by increasing sales and reducing cost of sales by gaining further discount from suppliers. Pro-forma statements of income, balance sheets and cash flow projections for the year 2013 are found below in the Appendix.
- Agriculture and Agri-Food Canada. (2010). Agriculture and Agri-Food Canada: Consumer Foodservice. Ottawa: Agriculture and Agri-Food Canada.
- Deloitte. (2011). The changing face of retail: The store of the future. Deloitte.