ASSIGNMENT ON CHULHA CASE STUDY

SUBJECT: ENTREPRENEURSHIP
SUBMITTED BY: R.S. MAHADEVAN
ROLL NO: 1235
BATCH NO: PGDBM IV
SUBMITTED ON : 7TH FEBRUARY 2013

INTRODUCTION: In any entrepreneurial venture/business whether its an

individual, a partnership nature or a corporate nature the success starts with
a small trigger which induces an individual or partners or companies. It is not
a overnight effect. But the success is depending upon its proper applications.
In the given case study of Chulha a small partnership consists of two
individuals namely Adesh and Nishant, it is evident that the momentary
trigger which came into their minds of starting a tiffin service business
(dabbawala type) in their area where they were working (i.e. in Bangalore)
since they were missing their homely cooked food. Based on the given case
study I would be analyzing two given questions in this assignment paper
namely:i)
ii)

Do you think this is a viable business? Support your answer with

reasons?
Are there any changes you would like to introduce in their
business model?

Question No.1: Do you think this is a viable business? Support your

answer with reasons?
Before I go into the depth of this analysis, I would like to analyse some basics
of business viability and the reasons for why this tiffin services of chulha is a
viable business.
Business viability: 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. There is no doubt.

The details/components of a business viability checks are given

below:

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;
A clear idea of who needs it;
An idea of how and how much customers will pay for it;
And a plan how all this will be done.
The Uniqueness
Upstart Funds
Customer
Competition
Economic Mood
Timing
Marketing
Continuing Cash flow

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.
The Reasons for Chulhas Emergence which led to the success:- (By
taking into consideration the Entrepreneurship Process)
Identification of Problem:- (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.
Converted to Customer Need:-(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.
Chulha Emerged:- (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.
Chulhas Revenue Generation:With the minimum amount of Investment, chulha started earning their
revenues in a very slow manner. At the starting time the margins were not
very high since they were mainly seeing the sustainability aspect. For at
least they were just break evening during their first year operations. 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.
Strong Tiffin service viable Business Model :Let us not forget that the Concept of Chulha Tiffin service idea has got a
very strong and viable business model also. Let me just like to mention
some of the core points of it. They are:1.
2.
3.
4.
5.
6.
7.
8.
9.

Key Partners
- Adesh, Nishant
Key Activities
- making good quality home cooked food
Value Propositions - Healthy home made food with cost effective
Customer relationship
- one to one direct approach
Customer Segments - Individuals, office goers, paying guests and
students
Key Resources
- Individual investments, advance receipts from
customers
Channels
- delivery boys, small mobile vans, etc
Cost Structure
- offordable minimal cost
Revenue Streams
- Advance receipts, monthly payments
schemes, mostly on
cash basis with minimal credit periods.

Viablity Proof allowing to accommodate some strategies:Chulha tiffin services business shows a clear cut viability by allowing us to
suggest certain strategies for its future growth. They are as follows:1. Simple survival technique:Chulha, delivering hygienic and
delicious food in time to customers was its sole aim. There are many
competitors in the market, but amidst competition it had to create a
niche for itself by applying for extensive strategies to offer customer
Value for money product.
2. Economies of Scale:- Even though Chulha had less profit margins, as
it made in bulk, but on the whole it did make a huge percentage of
profit.
3. Technologies that can be adapted:- Appointing food inspector, who
would conduct surveys in every week to ensure, the quality
standards, hygienic condition of the food, cleanliness and disposal
of wastes, separate usage of utensils for veg and non-veg items,
proper maintanence of gas and pipe lines, and other safety
paramerters (from employees prospective) etc,

4. Prestige and CSR activities:- Chulha should opt for different CSR
activities like, to fund an NGOs working to educate poor children,
active participant in the Green Movement, involve in planning trees
in industrial areas to reduce pollution, donating food 1 Sunday of
every month to organization having challenged people, packaging
food in paper bags and other recyclable materials.
5. Expansion of Market:- Opening for party orgers, Opening for the
education market and planning to open canteens in different
colleges.
6. Government Policy:- Chulha can opt for an ISO certified standards
set against its quality of food, quality of ingredients used to prepare
food. Using these it can set a benchmark for other restaurant which
have to qualify the standards of food served by them.
The
government can thus standardize the quality of food served by the
other food chains.
7. Self sufficient:- Chulha has its own supply of raw materials and it
can plan to be self sufficient in delivery of its products as well. It
has its own restaurant space and has its own staff. Hence it is
highly self sufficient.
8. Always do annual analysis of chulhas business with PEST, SWOT,
AND PORTERS FIVE CHOICES business model analysis which
enables them to make future progress without any hurdles.
From the above all indepth analysis I definitely feels that the chulha tiffin
services business is a viable business which can really with stand and sustain
for a quite long time.

Question No:2:- Are there any changes you would

like to introduce in their business model?
Chulha now in a developing stage should definitely adopt/introduce as and
when is needed. 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. (example,Itsmymeal and
Papas tiffin 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.

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 businesss long term sustainability.
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.
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 chulhas 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 chulhas management doesnt have to worry about the local
taste of the regions 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 chulhas business
model. These associated catering services will definitely increase chulhas
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 chulhas 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 chulhas 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:1. Age based Nutritional Concept:- Pediatric (child/infants),
Geriatric (old age) etc.
2. Food based on Medical Prescriptions:- Sugar, Blood Pressure,
etc
3. Food based on modern Health consciousness:- Low fat diet,
Low calorie calculated food,high energy food for youth and sports
personalities etc.
Note: To introduce the above, chulha will have to have a strong financial
planning since it involves additional costs also. But taking into consideration
chulhas customers base they can have the premium price for their
customers and in turn their customers also will ready to take the additional
cost with ease. This is purely my perception.

Conclusion:
From the answers I have given above for the two questions concerned with
the viability and changes of new introduction in the business model of chulha
tiffin service business it is clearly evident that the proper approach, attitude
and controls can lead to great success of a small business and an
entrepreneur.