Executive Summary:

This report discusses about the viability of a cloud kitchen setup in Bangladesh, where
traditional brick and mortar restaurant’s are still the norm. Riding on the wave of success
achieved by the food aggregator app companies, and an emergent tech savvy middle class,
cloud kitchen can be the next Amazon in Bangladesh. While taking a look on the fortune 500
companies, a trend can be observed that most successful companies, despite coming from
different sectors, are internet companies. But, in restaurant industry, traditional big names still
dominate the landscape. If cloud kitchen starts to come in vogue, then this last frontier will also
be conquered by internet tech. To that end, this is more than a simple business, rather it can be
described as a revolution, to change consumer perception of traditional restaurants. In the
report, a comprehensive industry analysis is shown to give a glimpse of the current market
condition. Furthermore, all the facets of running the business, like management, marketing
plan, and financial plans are covered. With the help of SWOT, the most popular method of
evaluating a plan, an unbiased review of the business plan is performed. In conclusion, it is
recommended that

 Bangladeshi entrepreneurs don’t fall behind others in taking advantage of this new form
of business.
 Food aggregators help incubate the startup cloud kitchen companies.
Industry analysis:

In Bangladesh, particularly in urban areas, dining out has become popular in

recent years. Country’s hotel and restaurant sector is going to post higher growth
in the ongoing fiscal year. Provisional estimation of the national income, released
by the Bangladesh Bureau of Statistics(BBS), showed that the sector may post
7.28 percent growth in fy18 which was 7.13 percent in the past fiscal year. But,
this numbers does not show us the whole picture, as with the advent of food
aggregators like pathao food, uber eats and shohoz, a new consumer base is
created, who did not or could not have the opportunity to dine out. Just 3 years
ago, if one wanted to eat authentic Sichuan cuisine, one would have to go to
china. But now, it is available in Dhaka. Similarly, the range of food option has
become more diverse and multi ethnic in nature. Along with that, dining out has
become an experience rather than just a commodity. But, along with rising
infrastructure cost, inability to grasp the current trend and lack of qualified
service population, many budding restaurants are closing shop. Still, this sector is
going to see more competition as not only local players, but prestigious foreign
brands want a slice of the pie. In spite of some hurdles, due to the food delivery
service companies, the market has seen a resurgence, and many new restaurants
are opening with a small physical exterior, depending on deliveries for cashflow.
SWOT analysis:
SWOT is a method to evaluate strengths and weaknesses of a business. Below, a
comprehensive SWOT analysis of the cloud kitchen named Nuage is given.

Strength:

 As cloud kitchen does not need any physical infrastructure to serve the patrons, the
sunk cost in building a restaurant or renting one is saved.
 It is really easy to incorporate new food items or even changing the whole food lineup in
a cloud kitchen unlike in a traditional restaurant as setting up a new eatery in cloud
kitchen format is just a matter of changing the name of the business, or creating more
than one entity, operating from the same kitchen.
 With the advantage of flexibility, a strategy of product market fit can be applied, by
using web based analytical tools to find out consumer preferences, and acting
accordingly.
 Traditional food businesses often fall in the trap of consumers associating that particular
brand with a particular type of food item, thereby blocking their path of expansion into
other food businesses. Cloud kitchen is immune to that weakness, as the consumer
perceives the different cloud restaurants as separate entities, even though they might
be operating from the same kitchen setup or owned by the same people .
 As food will be delivered to the consumer, so there is no need for service personnel like
a full service or even a quick service restaurant, thereby making a huge saving in unpaid
salaries and benefits.

Weakness:
 Cloud kitchen is heavily reliant on the internet for its day to day operation, so
any problem which causes an internet shutdown will cause it dearly
 Being a relatively new concept, there is not enough consumer awareness about
the concept.
 It may not appeal to consumers belonging to all demography.
 As the business is highly data driven, so it is susceptible to cyber attacks
 There is no clear government regulation regarding the operation of this type of
business in our country yet, which may cause confusion.

Opportunity:
 Despite having the technical knowledge and a lot of innovative culinary artists,
we have always been at the receiving end of aggressive maneuvering of foreign
franchises in our home market. With cloud kitchen, we will have the opportunity
to compete with global franchises with a home grown business.
 Food industry is the last frontier to be dominated by internet based companies.
By subverting the notion of traditional restaurants, our business has the
opportunity to grab the future market share of a sector yet in a nascent stage.
 By utilizing this concept, food can be delivered at a much cheaper price than
before, which will be helpful to tap into the previously untapped rural consumer
base.
 Ultimately, a nationwide supply chain system will be created which will also be
available to entrepreneurs looking to venture into this business. Additional
revenue will be generated by providing them with the knowhow of a cloud
kitchen operation.
 Traditional food aggregators are looking to invest on cloud kitchen to grow,
which can be taken advantage of.

Threat:
 Though food delivery is a popular trend recently, but many still prefer to dine out
in the old fashioned way, as to many eating out is more of a recreational event
than a necessity.
 Food aggregators are both the ally and arch nemesis of this business, and we will
face hard competition from them.
 After enjoying a relative monopolistic hold on the market due to the concept
being new, competitors will emerge with more innovations.
 Big franchises may choose to expand their business by setting up new brands
using cloud setup.
 A lack of investors as restaurants are seen as a risk intensive investment as it is,
and the concept being unproven in our country.
 Rebel foods in our neighboring country INDIA, is set to become world’s largest
cloud kitchen restaurant and may set its eyes on Bangladeshi market.
Marketing:
A complete marketing strategy, using the 4 p’s of marketing, that is product,
price, place and promotion is given below.

Product:
Although there are a lot of food delivery companies operational, none of the
restaurants are preparing food specifically with delivery in mind. As a result, the
end product fails to satisfy the consumer most of the time. So, at Nuage, our
focus will be to deliver the food to the consumer as it would be if he\she would
go out to dine. To that end, our USP (unique selling proposition) will be- “Food
delivered fresh from the oven to you”. Here, you refers to the target consumer.

Price:
As one of the strengths of a cloud kitchen setup is to offer food at a relatively
cheaper price than traditional restaurants, price is going to be a key factor of
marketing strategy. Irrespective of the food product belonging to a popular
category, or to a premium niche category, our goal is to grab market share by
keeping the prices lower than the competitors, but not as low that it may trigger
a price war.

Place:
Though, in the future, our business plans to reach the rural areas, as well as
compete globally, but for now our target market is the major cities in
Bangladesh. The reason behind this proposition is that, the populace over in the
cities are already familiar with the food aggregator companies which will be used
to promote and deliver our foods in the beginning. The other reasons behind this
strategy is that a culture of ordering take outs have already been well
established in this market and the consumers are relatively more affluent.

Promotion:
In order to promote our business, we are going for a two pronged approach, that
is promoting in the digital medium and promoting traditionally. As the business
is heavily reliant on internet, that is going to be the first ground to be covered.
Setting up a webpage, with an interactive digital menu, and with pictures of the
food is the first step. Facebook, Instagram and other social medias will also have
our presence. We will conduct live interviews with Popular food bloggers and
celebrities in Facebook live, as well as in YouTube podcast. An ad featuring the
services our businesses provide and our ethos is going to be aired in you tube. In
traditional promotion, we are going to hand out flyers in the surroundings of
universities and office areas, as the students and job holders are our primary
target consumers. With a target demography of consumers between the age
range of 18 to 35, we are also planning on sponsoring and participating in youth
culture related activities, like spots and concerts, for brand recognition. There is
a plan to organize a food eating contest and live stream it in you tube, which we
think will create a great buzz. Also, partnering up with the food aggregator
companies, we will push to place our product promotional offers, like discounts
and special offers, at the forefront of their user interface. We will also conduct
push marketing tactic, by approaching hostels and corporate offices, in order to
go in a long term business relationship with them by giving those affiliated with
those institutions a special discount, or by delivering food to them in a regular
basis.
 Management:
As the cloud kitchen restaurant is not so capital intensive, but still has a chance to benefit from
the complementary skillset of both a financial professional and an IT professional, so the
ownership of the business is going to be a partnership, with two general partners and four or
more limited partners. A tentative organogram of the organization is given below.

CEO(appointed by
consensus of the
partners)

Head of supply Head of Head of

Head chefH chain finance and
marketing
administration

Category
management Digital
Human
C marketing
Assistant resources
chef

ProcurementP
Brand
Line cook marketing

Finance
Shipping and
logistics(food
delivery) Affiliate
marketing

Facilities
WWarehouse(freezers
and dry food store)