FOOD DROP

College of business administration

Department of management

Fundamentals of Innovation and Entrepreneurship - 02E

Course Code - 033200

Group assignment - 02
Fall 2021/2022

Student ID Student name Tasks

U19200106 Khadeeja Hafiz Sales and Marketing Plan
U18102847 Mariam Moustafa Executive Summary, Business Canvas Model,
Operational Plan and Risk Analysis
U18104795 Reem Emad    Industry and Business Overview, Business
Strategy
U17101281 Suhair Ammar  Market Analysis and Competition
U20103821 Mahra Mohammed Ownership and Management plan
U19103261 Mahra Saeed Financial plan

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TABLE OF CONTENTS

Business Model Canvas…………………………………………………………. 3

Executive summary……………………………………………………………… 3

Industry and Business Overview……………………………………………….. 5

Business Strategy………………………………………………………………… 6

Market Analysis and Competition……………………………………………… 7

Sales and Marketing Plan……………………………………………………….. 9

Ownership and Management Plan……………………………………………… 12

Operating Plan…………………………………………………………………… 14

Financial Plan……………………………………………………………………. 15

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Business model canvas

Executive Summary
 
Overview
Our product is intended to reduce food waste and its damage to the environment by creating
an application that allows people to recycle from the comfort of their own homes and
proceeding to create bioplastic cutlery out of food that was going to rot.
 
Problem
Approximately 1.3 billion tons of fruits and vegetables are left to rot and create methane, a
greenhouse gas that is much more detrimental to the environment than carbon dioxide.
 
Solution
Our application is created with a familiar layout in order not to complicate things for the
users. Creating a simple and easy application with a reward system that will allow and
encourage people to recycle, as our application does not require much effort to use. Once
people use our application and donate the fruits and vegetables that were going to waste, they
will be rewarded with coupons and points that they can use in certain places. After the food
waste has been successfully collected, it will be transformed into bioplastics, which are

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alternatives to plastic, and modified into cutleries such as spoons, forks, knives, and straws.
This will reduce food waste and plastic usage.
 
Target Audience
People who care about the environment and who wish to put an end to their food-wasting
habits.
 
Business Model
The application will be free and available on every mobile device for anyone and everyone to
use. We also provide a free home collecting service in which our workers will arrive at the
user’s place and pick up the food waste.
 
Financial Highlights
Creating the application will cost around 18,364- 367,294 dirhams, and the process
development will take up to 12 - 20 weeks. On the other hand, in order to create the bioplastic
cutlery, it costs 20% - 100% more than regular plastic.

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 Industry and Business Overview

Biodegradable cutlery means the cutlery that is made up of various natural materials, and this
industry is widely popular for producing cutlery such as spoons, forks, straws, forks and
flatware. These eco-friendly cutlery products are made of materials such as bamboo trees,
wood, cornstarch, potato starch, and many other natural materials. Because biodegradable
cutlery is made of natural materials, it causes less pollution when thrown out either by
disintegrating and releasing nutrients into the soil or enhancing the quality of farming
produce by being transformed into fertilizers. According to IMARC Group, a leading market
research company, the biodegradable cutlery industry has shown exceptional growth during
the period of 2015-2021, and the industry is expected to grow by 5% during 2021-2026.

The international biodegradable cutlery market size in 2018 was valued at $33.9 million and
it is expected to rise even more in upcoming years due to the high demand of it globally.
Governments worldwide have encouraged the usage of biodegradable and eco-friendly
cutlery since both the government and private sectors started investing in developing and
producing more affordable biodegradable cutlery with innovative ideas. including spoons,
forks, and bowls.

Our company “Food Drop” aims to join the biodegradable cutlery industry and help decrease
the problem of food waste by turning almost rotten fruits and vegetables into cutlery such as
forks, spoons, knives, and bowls, and to make it affordable and extremely accessible to most
households. A similar company that produces eco-friendly cutlery is called “Biofase” where
it develops cutlery just from avocado pits. Another potential competitor is a company in India
called Bakeys Food Private Limited that launched edible cutlery including spoons, forks, and
bowls in 2015.

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 Business Strategy

Mission Statement
Our mission is to help our customers to steer away from plastic cutlery and favor
biodegradable and eco-friendly cutlery that causes minimal negative impact on our planet.

Vision Statement
Our vision is to encourage consumers to find new ways of helping the environment and to
choose more sustainable products and options that lessen the negative impact of plastic
products on our ecosystem. In addition to increasing our consumers’ awareness of the
problem of food waste and pollution.

Business goals
 to create new sustainable options for plastic cutlery
 to provide people with more affordable and attainable products
 to help make a difference regarding the food waste problem globally
 to reduce food waste produced by households

Values
 loyalty to our customers
 transparency
 working ethically
 determination
 innovation
 unity

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 Market Analysis and Competition

Market characteristics

Our target markets are supermarkets (e.g. Carrefour, Spinneys, Sharjah Cooperative Society,
etc.) and online shops (e.g. noon, amazon UAE, etc.). Disposable cutleries are used all year
round for various occasions such as parties, picnic trips, or simply for convenience.
Therefore, consumer range is wide and full of opportunities, that is why our products should
be available in popular markets to increase availability to customers.

Our competitors

Many competitors with the same motive and initiative as ours exist in UAE and all across the
globe. In the UAE, there are eco-friendly cutlery brands like Fun wooden that offer
biodegradable cutlery, Palmade cutlery which uses date palm waste, Eco maniacs which
produces corn-starch based bioplastics, and many other brands. Internationally, there is
Biopak, Vegware, Solia, Colpac, Enviroware, and others. While their products can be similar
in quality and some initiatives to ours, our products have some features that make them more
unique.

What makes our products special

To begin with, our products are very sustainable and not easily broken. Unlike the wooden
cutlery, they provide more convenience, such as when it comes to using the knife, because it
cuts efficiently without the risk of causing injuries if misused. Same applies to wooden forks;
some people complain that they have to apply a lot of pressure for the fork to pick a piece of
food (this sometimes causes the cutlery to break). Another significant feature behind our
products is the variety of resources available to produce them. Let us compare it with
Palmade cutlery. Palmade cutlery has very similar motivation to ours. They prepare their
products by blending the date palm tree biowaste with other biodegradable polymers. On the
other hand, our products are prepared using a variety of fruit and vegetable wastes combined
with other biodegradable polymers. This means that we are more rich in resources since

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everyone in this country buys and does not consume all the food at home. The final
characteristic compared is the initiative behind our products. Our initiative is not just to
decrease the harmful effects of plastic on the environment, it is also to recycle food waste that
can emit detrimental effects on the environment. So we are basically hitting two birds with
one stone with our product. Other brands like Fun biodegradable cutlery and Eco maniacs
corn-starch based bioplastic use synthetic biodegradable resources and unexpired corn-starch
to produce their product. Here, they are solving only one problem which is good but not as
great as our initiative.

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 Sales and Marketing Plan

In this section, we will be explaining our products or services, and then we will move on to
explain our price strategy. Price strategy refers to putting prices on the products, so the
customers can come and buy our products from purchasing alternative products or buy our
products from the rest of the products. Next, we will explain the sales and the distribution
process in which we will distribute our products. Last but not the least, we will move on to
promotion strategy we are going to implement. 

Product and service offering:

Our products are bioplastic cutlery created from food waste like fruits and vegetables and it is
made by bioplastics because they are eco-friendly, sustainable and will help in reducing food
waste. According to the needs, wants, and demands of the customers, we have to solve the
issue by using bioplastic products. This can reduce and solve many problems not only for the
environment, but for the people too. Not only that, we have a mobile application and our
products can be purchased online. Because the world depends on social media and
technology, we thought of making a mobile application. In this app, we have customers who
donate fruits and vegetables that are going to waste to recycle it, which is an easy process and
in return, they get rewards. This application instructs customers how to do it step by step.

Price strategy:

When the price is too high it's difficult because you miss out on valuable sales. And when it's
too low it's going to miss out on valuable revenue. So we choose a price strategy because it is
the best method for pricing the product. 

Production cost is the materials we are going to use during or for operating our products.
While operating the products have moved from one place to another we call that distribution
and we need to pay for it. There are two types of costs: fixed which are costs that cannot be
changed like taxes or rent bills. The second type of costs are variables, which are expenses
we need to pay for like electricity bills. Now, what we do after is calculate the markup price
by adding the fixed and variable and dividing by 100 percent. Then, we move on to the value
based pricing which is valuing the cost of the product according to the customers demand,

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wants and needs. Lastly, we move to the competition pricing where we put our prices after
observing the competitors price or comparing.

Let us see by including retail pricing strategy to increase our profitability:

The total fixed cost is 1,800 and variable cost is 2,760. So, the total cost is 4,560. The percent
of markup is 45.6 or 46%. Then the price is 5,000.

Price/ Retail price = [(4,560)/(100-46%)]*100 = 5,000

Or, Price = 4,560+46% = 5,000

Fixed cost Variable cost Total cost

Rewards 200 AED Electricity 300 AED 500 AED

Salary/Wage 1000 AED Transportation 1000 AED 2000 AED

s

Tax 3% Food waste expenses 1200 AED 1,200.03

Utility bill 300 AED Straw expenses 130 AED 430 AED

Rent 200 AED Cutlery expenses 130 AED 330 AED

Total 1,800 Total 2,760 4,560

It does not seem to be very expensive nor very cheap. Because we have chosen the best price
according to price strategy. From which we say that the customers can afford and those who
cannot but as we have said that we have rewards for them because they will apply on
application and get their rewards which is 200 AED.

Sales and Distribution:

We have both channels of distribution which are direct and indirect channels of distribution.
Direct channels means we directly give to our customers who come and want to purchase the
products directly from us. We have indirect because as we have a mobile applications, it is
going to be in different areas or places, which is why we need retailers, wholesalers or agents.
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We will use cardboard packaging, which is also used for food waste products for customers.
Payments will be made directly or indirectly. Like if we have to sell our products directly to
customers without any channel of distribution. If there is any application online then
payments are paid online.

Advertising and promotion:

We are going to use social media platforms such as Instagram, Twitter, Telegram, etc. We
will use advertisements so that customers can know who we are and what our purpose of
making bioplastic products is. Even in newspapers we are going to promote our bioplastics
products. We will use sales promotion, so that the customers can know about the bioplastic
products and to use them rather than causing harm to the environment and wasting food. The
materials we are going to use are flyers and brochures. The approximate product launches
and tradeshows budgets for advertisements and promotion will be 15,000 AED. 

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 Ownership and Management Plan

The structure of our business is a general partnership. We chose this structure since this will
offer assistance in collaborating with key accomplices like carrefour and spinneys and online
stores such as noon and amazon. There are many benefits that this structure provides, one of
them is that partnership implies that both side need to willingly work together, which means
that you simply would have agreements on everything. And having trade accomplices can be
so accommodating, they might help divide up tasks and get them done faster. Moreover you
would have less budgetary burden.

The hierarchy of our management team will be in the form below:

As you can see in the hierarchy of our management team above, we have our directors whose
responsibility is to make top level decisions to grow the business. Then comes the general
manager, who is expected to improve efficiency while managing the overall operations of the
business. Following the directors and the general manager are the 6 sub managers, each one
of them will help sustain this business.

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Managers would have skills that will make members of the team work in an efficient and
consistent way. First, they would have to set clear and strategic goals and break down the
work into clear and detailed tasks. Afterwards, they will delegate work to others and see who
is best suited to perform certain duties. Regardless of how well prepared you are, there would
come a time where you will face uncertainties and complications. But there is always a
solution if you take a step back and evaluate the situation and think reasonably and rationally
about possible solutions. Managers would be able to work out a response. Problem solving is
a great skill to have for everyone. Moreover, if managers are open minded and accepting, and
employees believe that they can reach out to them, managers will not be afraid to approach
and talk about their opinions and concerns.

We want to work with markets such as spinneys, carrefour and Sharjah cooperative society.
To have our products accessible in well received markets will not only benefit us and give us
many opportunities, but will also bring awareness to people and make them acknowledge the
issue we are in, which will furthermore cause individuals to put effort into aiding our planet.
To reach our purpose and accomplish our vision, we will hire suitable employees in every
sector of our company to help achieve our goals in each area.

 To make it easier for our customers, we will also hire staff that will provide free home
collecting services. Furthermore, we would obtain our materials to process it in our company
to sell it again in markets and stop food wastage and pollution.

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 Operational Plan and Risk Analysis

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 Financial Plan

To start any type of business there must be a business financial plan, studying and analyzing
the prices of every step in it, dividing the amount of money that’s going to be used in each
part of it. First, renting a lab space is a major factor in the financial plan. Second, comes the
application price, the technology, digitalizing and finding a high-quality work. The
application price incorporates software, a platform, wireframe and designing. The
international price of creating and developing an application can cost thousands of dirhams, it
depends on the cost of time that the application will take, months or a year. Also, technicians
are a huge part of the cost to develop the application, design it and form it into the internet
that costs thousands. The packaging used are the biodegradable for utensils they cost us
getting them every other month.

BUSINESS FINANCIAL PLAN

Product/Service AED

Digital application 45,000

Lab rent (4 months) 68,000

2 Recycling machines 17,000

Labor (3 employees) 6,000 salary each

Biodegradable 3,000
packaging

                    CASH FLOW STATEMENT

                  FOR THE YEAR ENDED DECEMBER 31, 2022

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Cash Flow from Operations

Net income                                                                            65,000

Adjustments for depreciation                                                 1,500

Adjustments for increase in inventories                             (20,000)

Adjustments for decrease in accounts receivable       (10,000)

Net Cash flow from Operations                                          61,000

Cash Flow from Investing                                

Cash receipts from sale of property and equipment       8,000

Cash paid for purchase of equipment                                (10,000)

Net Cash Flow from Investing                                              (1,000)

Cash Flow from Financing                                              

Cash paid for loan repayment                                               (4,500)

Net Cash Flow from Financing                                               (4,500)

Net Increase in Cash                                     

59,500

Projected Income/Profit Statement

Revenues                                                                       30,000

Cost of goods sold                                                        12,000

Gross Profit                                                                    17,000

Operating expenses

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     Commissions                                                 3,000

    Marketing expenses                                          4,000

    Office expenses                                                 14,000

Total operating expenses                                      26,000

Net Income                                                                   5,000

How do you plan to source this finance?

According to the finance statements, the source of money that the company could get is by
investors, banks and government grants and subsidies. An Environmentally friendly company
would support the business with no shares or investors. Also, huge companies that would
invest in it to get advertisements, shares and profit and funding. Bank loans are one of the
biggest finance sources for new businesses, the amount that the business needs is 400,000
AED. Government agencies provide financing by grants and subsidies that may be available
for the business.   
 

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