Executive summery

Basic Idea and Project Background.

The success of the business depends on many issues where the main significant factor is
identifying the feasibility of the plan to be introduced in the market ( ). This project is to study
the feasibility of food items delivery service in Addis Ababa. This kind of service is a unique in
the city, which facilitates both business organizations and their consumers by picking up and
delivery of food items. Ultimately, the goal of this project is arranging the door-to-door food
item delivery service to save time, energy, money and to be solution for our customer. Providing
the best quality of food to the Addis Ababa people in their home as they want is the mission of
our project. After conducting a feasibility research it is found that the overall feasibility of the
business is quite satisfactory.

For sure it is challenging starting any business, but one business that you can start with minimal
challenges is a grocery home delivery business. A grocery home delivery business is a business
that involves helping your clients shop groceries and get it deliver to them in their homes.

Our major goal will be to provide fast and hassle-free delivery service in the city with fair prices.
We will offer home delivery services in wide range of durable goods and non – durable goods at
affordable prices from different place.  All our customer have to do is call us or to place their
order online by using our application. We will engage in retailing general lines of food products,
including fresh and prepared meats, seafood, and fresh fruits and vegetables and various dairy
products.

We will deliver order to our customer to the main entrance of the delivery address. Up on their
request, our driver may carry their order into the delivery address, for example, to a particular
floor in an apartment block or into your kitchen but only if: a. the driver has your permission and
b. our driver believes that it is safe and practical to do as you request. We always reserve the
right to deliver only to the main entrance of the delivery address.
Why we provide this service

Why door to door household items delivery service is required in Addis Ababa. This day’s
peoples are busy, and every day they make choices about how they spend their time. We think
that many people will spend their time in market to buy their household consumption. So, we’re
taking that stop off of this plate, so peoples can spend more time on the things that matter more
them.

Objective

The objective of the project is as follows:

 Deliver best quality products by providing fresh groceries to customers that will also add
value to the business
 Providing the best quality of food to our customers in their home as they want.
 Establishing a brand name by increasing the number of order in the local market
 Fast delivery of goods at their doorstep
 Affordable price -will not only provide free delivery to its customers, but also provide
customers to buy goods at affordable prices than the market. It will also provide great
customer service that will gain customer trust.
Market feasibility

Online grocery shopping Industry

The online grocery industry is rapidly expanding. Today more and more people have started
buying their groceries online in an effort to save time and energy. However while people are
getting attracted to getting the staples delivered to their doorstep, the industry date is a little
behind its time.

Apart from product choice, quality, availability of product, payment security, replacement of
product etc. there are many other factor which motivate customers to go for online grocery
shopping like to avoid visiting crowdie place , don’t want to go market, traffic and car parking
problem carrying of heavy bags till door steps, standing for longer waiting line at counters etc .
( Rupail Rajesh 2019)

Market analysis

In our market analysis we try to answer questions regarding online grocery shopping and
delivery in Addis Ababa such as:

 What area to Locate/Market Online Grocery Shopping and Delivery in the Addis Ababa
 What target group is the best population to market based on demographics?
 The best location for warehousing based on criteria (square feet, lease/rent/selling price,
and
 Which warehouse provides the most cost effective route from to the target area?

Whether we enjoys it or not, shopping for food is a vital part of our lives. Going to the
supermarket whether to pick up the necessities such as bread, milk, and eggs, or pushing a
shopping cart through aisles containing a wide and overwhelming spectrum of produce and
goods, is a stressful task that takes preparation, planning, and time out of our busy schedules,
even if it is just once a week.
Supermarket and grocery store business has been in existence for long period of time in Addis
Ababa peoples started trading goods, but one thing is certain, the supermarket and grocery store
industry is still evolving. The introduction of technology and subsequently homed delivery
options, online grocery cum retail store has indeed helped the industry.

According to population of [Link] the total population of Addis Ababa in 2019 is estimated to

be 7.178 Million. And there are about ---- household in the city. All most all household buy their
food item from different market. Now a day, Addis Ababa City is in fast paced environment
where most people who live in the area have careers, work late, have no need for vehicle
ownership, may have families, and utilize the interne. According to assessment current demand
for this service the high. Due to competing demands on their time from work and home, people
are more likely to shop for groceries online if the price is reasonable.

Target group and area

The proposed project focused area is Addis Ababa. This days Addis Ababa city become a fast
paced environment where most people who live in the area have careers, work late, have no need
for vehicle ownership, may have families, and utilize the interne Actually, most of the customers
having more income capacity may prefer to use grocery delivery service than peoples who have
lower income. Our main target customers are people who have higher incomes and less time.
These shoppers are usually technology-savvy, heavy internet users who are single or have a dual-
income family with kids. These big spenders prefer to pay someone else to do grocery shopping
for them. Young families with children are also our targets. They cover the largest number of
online grocery shoppers. They need to save time and avoid the hassle of dragging kids along for
grocery shopping

Competitive analysis

The competition among the existing companies is low as there are not many companies engaged
in this market. The main competitives who are dominating the market are: [Link] this
company is the first in providing online grocery shopping in the city and Kidame Gebeya online
grocery store. And we are well prepared to compete favorably with this leading supermarkets
and grocery stores in Addis Ababa by Our excellent marketing strategy such as good customer
service culture, timely and reliable home delivery services, online store, various payment options
and highly secured facility will serve as a competitive advantage for us.

Marketing strategy

Proper marketing strategy is also one of the reasons that make a new entrant of a given market to
stand the challenging competition exerted by the already established firms. Within this regard we
are planned to implement effective marketing strategy to penetrate in to the market and stay
competitive.

Some of the proposed marketing strategy for the intended project includes:

 Marking aggressive advertisement and promotion through different Medias to create

awareness in the public about the service uniqueness
 Providing high quality service with competitive price
 Enlarging the number of distribution channels for our service.
 Ensure that we have a wide range of groceries from different brand at all times
 Create a loyalty plan that will enable us reward our regular customers
 Engage on road shows within our neighborhood to create awareness for our grocery
home delivery services business

Publicity and Advertising strategy

Here are also the platforms we intend leveraging on to promote and advertise our Grocery Home
Delivery service in the city these are:

 Place adverts on radio stations and TV stations

 Promote on the internet and social media like; YouTube, Instagram, Facebook
 Advertise our grocery home delivery services business in our official website
 Distribute our fliers and handbills in our target areas
  Ensure that we position our banners and billboards in strategic positions all around the
city.
 Brand all our official cars and distribution vans and ensure that all our staff members and
management staff wears our branded shirt or cap at regular intervals

Technical Feasibility

Technology
Through online shopping, customers register personal information on the site such as their
frequent shopper cards and are shown lists of items they have recently bought, to speed selection
of the basics. Prices offered on the websites match those in the stores. The customer can view a
schedule of delivery times and choose the day and time they want their groceries to be delivered.

 Information about the Grocery shipments tracking system on the company owned web
site or via email or phone call.
 The firm in the head office will set up a company own web site and information system
to provide the shipment status information to customers timely. Each and every stages of
shipment movement, the information will be uploaded by our Data Staff. They will be
using Data Scanners and perform mass uploading time to time.

By necessity, all household units shop for food to sustain themselves. With the emergence of
new technology such as the internet, Grocery shopping can be changed over time. The Internet
has radically changed the way consumers shop. Online business has encouraged a revolution.
Customers have controlled access to computer systems and are able serve themselves shopping
websites using the internet to do business better and faster.

Website Design
Location, Site and Environmental Assessment
This project is calculated to be operating among two major areas in Addis Ababa. Site location
became a vital issue and market analysts recommended areas near department stores where the
target customer would benefit by reducing their shopping trips and save time.

The criteria of selecting the following sites are discussed below.

We choose jamo and megenagn because it is the location where most condominium and
residence found as we Centre Meganagn there are a lot of new site of condominium, apartments
and ye meheber house on the way to Gurd shola, Cmc Michael, Semit, Hayat, Bole Arabesa,
Yeka Abado, Tafo, Wosen, Kotebe, The ability to shop can become easier, faster, and certainly
more efficient. Lifestyles have dramatically changed we believe that this people are used to live
in the city and as a result of the changes they moved to this long distance area form the city and
we believed that they have tied time on the weekends preparing things at their home and our
service can provide them with door to door grocery delivery. For the same reasons the second
choose location are Jamo we try to cover the following areas Lebo, Meberat hayel, Garment
Ayer Tena Alem Bank, Betel.

We will have medium size grocery store located in two major place of Addis Ababa jomo and
Megenagna the office and call center will be located in the same location. We have been able to
lease a facility that is big enough to fit into the design of the kind of grocery store that we intend
launching and the facility is centrally located in the main place of city with easy delivery
network.

Jamo Head office and Store location

Megenagn Branch office and Store two location

Distribution Truck and Motor Cycle Drivers

 Assists in loading and unloading groceries

 Keeps a record of vehicle inspections and make sure the truck is equipped with safety
equipment
  Assist the transport and logistics manager in planning their route according to a delivery
schedule.
 Delivery drivers may be required to sell products or services to stores and businesses on
their route, obtain signatures from recipients and collect cash.

In order to do business, orders are taken and payments are processed. Customers simply find the
products they want, get in a line at the register, and pay the cashier. Orders have to be placed and
items shipped. Orders are handled through interactive, online forms. Customers in can pay by
check, cash, or credit or debit cards. Online customers cannot pay by cash or check, only through
electronic means. Also, there are issues of security that surround online payment that do not
come into play in the traditional retail store. Online transactions are processed through secure
electronic connections and special merchant accounts for accepting payment. Once payment is
processed, delivery of the product must take place.

Financial feasibility

Cost analysis

The total investment cost of the project is estimated at birr 10,000,000.00 The investment
requirement of envisaged project would be financed by long -term bank loan. The simple
payback period of the project is 5 years. And the total initial cost of the project is worked out as
follow:

Project cost

Investment item Total value

purchase of delivery vans and motorbike

 Lifan min van

 Zib star motorbikes
Total 2,500,000.00

Purchas of Groceries material for six month

  Vegetables
 Fruits
 Water, Soft drink and alcohol drinks
 Bakery and Bread 3,000,000. 00
 Meat and seafood
 Cooking Oils and sauces
 Dairy, cheese and eggs
 Snacks and cereals
 Cleaning material

 payment of rent for 6 month stores 420, 000

Launching a Website  and Web Page designing 15, 000.00

Total employee Salary for six month 759,000.00

Office material like

 Computers,
 Printers,
800,000. 00
 Telephone,
 tables and
 chairs

Storage hardware

bins,

rack,

shelves, 1,177,000

food case)

firige

Marketing promotion expenses

 Signage

Billboard rental for six month

600,000
Fliers

TV and radio commercial

Operating Cost

Total operating cost will reach 9,271,000 ETB (2020-2021) in the reference year and that amount
will occur in the remaining project lifetime. Among the operation cost items, raw materials cost
is recorded as highest cost accounting for 7,477,000 ETB in the reference year of operation
because we are new beginner for the business. Therefore buying of new row material is the
highest and it is the vital factor.

Net Income Statement

The project cannot expect to have high profit in the first years of operation. There will be net
profit starting from 2rd year of operation, The ratio of gross profit out of the sales revenue
accounts is 3% in the first year, but gradually goes up to (8.97) % in the reference year. The
ratio of variable margin of sales is (17.7) % in the reference year and after that it is constant
throughout the project lifetime.

Break Even analysis

The brake even analysis return on investment in two year. And phase on number of customer and
sales volume quarterly are as follow.

Phase Number of customer in each phase

Phase one 3month 3000

 Phase two 6 month 10,000

Phase three 9 month 20,000

Phase four 12 month 25,000

Phase five 15 month 35, 000

Phase six 18 month 50, 000

Phase seven 21 month 75,000- 125,000

Phase eight 24month 125, 200, 000

Organizational feasibility

Organization plan

The organizational plan of a business describes the structure of organization as well as

organization chart. The failure and success of a project mainly depends on the organization of its
manpower. The well-organized manpower, the most successful the project will be. Hence, this
project plan to have a well fitted organizational structure for its success.
 Human Resource
Secretary
Genral Manager Finance

Marketing

The above chart shows the organizational chart of our company. It shows hierarchy through
organizational structure. And the below table describes the key staff of Grocery and description
of their qualifications.

Key role and responsibility Number of stuff

General manager  recruiting, selecting, orienting,

training, coaching, counseling, and
Executive secretary
disciplining managers

 Responsible for fixing prices and

signing business deals
 Responsible for signing checks and
documents on behalf of the company
 Evaluates the success of the
organization
 Reports to the board
HR  Responsible for HR and 1
administrative tasks for the
 Recruitment manager
organization
 Responsible for training, evaluation
and assessment of employees
 Defines job positions for recruitment
and managing interviewing process
 Responsible smooth running of the
daily office activities

Store/Warehouse  managing the daily activities in the 6

store
 Warehouse team leader
 Ensures that proper records of goods
 Store keepers
are kept and control warehouse
 Control goods distribution and
supply inventory
 Control store facility and goods are
properly arranged and easy to locate


Marketing  Manages vendor relations, and doing 1

market visits
 Account manager
 communicate with clients
 doing and made good advertising
strategy to retain the organizations’
best customers and attract new one

Sales and Client Service  Documents all customer contact and 10

Executive information
 Helps to increase sales and growth
 Seles clerk
for the company
 Seles Administrator
 Develops new plans for expanding
  Call centers increase sales
 Responsible for supervising
implementation, advocate for the
customer’s needs, and communicate
with clients
 Contact customer with via website,
walk-In center, SMS or phone.
 Taking orders form clients

Information Technologist  Manages the organization website 2

 Responsible for installing and
 IT supporter
maintenance of computer software
and hardware for the organization
 Handles any other technological and
IT related duties.

Accountant / fiancé  Responsible for preparing financial 2

reports, budgets, and financial
statements for the organization
 Sinour accountant
 Performs cash management, general
 Junior accountant ledger accounting, and financial
reporting
 Responsible for administering
payrolls
 Ensures compliance with taxation
legislation
 Handles all financial transactions for
the organization
 Serves as internal auditor for the
 organization


Distribution Truck Drivers  Assists in loading and unloading 8

groceries
 Van driver
 Deliver orders to the clients
 Motorbike driver
 Obtain signatures from recipients
and collect cash.

Conclusions

According to our analysis, the project seems financially sound throughout the project life. The
project is relatively sensitive to changes in sales revenue and project’s commercial profitability
can be raised easily by improving the management on marketing and operation cost control.
Continuous efforts must be made to improve the business performance during the operation
period.

This Feasibility study consists of level consumption behavior and includes features such as
location, technology and products of purchased. This finding has huge implications for
increasing the understanding of online grocery consumption at the capital city of Ethiopia Addis
Ababa. Food retail has always been a tough business. Today’s major grocery chains have all
weathered repeated attacks from new competitors and new formats, and are always looking out
for the next wave of competitive threats. Online grocery retail is such a wave, and we believe
that it will be economically feasible in more markets than most people think and sooner than they
think. Just as with past waves of new competition, the best operators will adapt, survive, and
succeed. To meet the online threat, established retailers will need to upgrade their business’s
capabilities and those that succeed can gain at the expense of less well-prepared competitors.
Following the invention and production of the Internet, Web and mobile technologies, we have
seen a local uprising in retailing. Despite the rapid growth of e-commerce, the online grocery
shopping market has taken until now to gain purchase.