Finlatics IBEP Project 1

1. The suitable profile-idea combination can be an economics graduate, an MBA having work
experience and managing the food order application business.

Benefits of the suggested combination:

Understanding of Markets:
Having done an MBA and worked in management consulting, Arjun would have a fair idea of the
functioning of the markets and would know the key segments he needs to focus on while
coming up with short and long term plans for the business. Also, being an economics graduate
he will be able to understand the functioning of the market so as to implement his pricing and
other strategies more effectively.

Prior Experience from Similar Cases:

Having worked in management consulting, Arjun would have possibly worked on cases similar
to the one he is in now. He would at least have some idea about how to go about with things.
Also, he could apply the learnings from his case studies on similar grounds that he might have
worked on during his MBA.

Increased Efficiency:
One of the major tasks Arjun has to accomplish is the application of efficiency while conducting
his operations. This specifically would apply to reducing his costs with the given level of
resources in hand. Coming from an economics and MBA background, he could use the
learnings practically and help in improving the efficiency.

Networks and Contacts:

Being an MBA and having worked in the corporate sector, Arjun would be having a wide array of
contacts and networks that could play a very useful role in helping him in making decisions.
Although he might not necessarily spend on outsourcing services, his networks and contacts
could help in several ways.

Standing out:
One of the major goals for Arjun’s business is to beat the competition and appeal to the masses.
In order to stand out from the competitions, Arjun might be able to come up with his brand’s
USP, given his qualifications and experience, that might help him beat the well settled
competitions and stand apart.
 2. Benefits to be emphasized on:

Financial Benefits:
One of the most important areas Arjun would be emphasizing would be to attract financial
benefits while looking for investors. Major reasons for this requirement are:

➢ High Competition: Given that there is high competition in the sector of food delivery, Arjun
would have to put in extra efforts in order to attract all the stakeholders and resource towards
his business. This would require substantial capital balance.

➢ High Standard Application: One of the most important area of application based consumer
business is how user friendly the application is. With some big players in the market, like Swiggy
and Zomato, constantly upgrading their app and UI, it is important for Arjun to at least match
their standards. This would require investment in the software development and related areas.

➢ Stock of Reserves: Given that most of the startups in the online consumer delivery business,
especially Swiggy and Zomato, are loss making, it is important for Arjun to have a large stock of
capital reserves to fund his business in the initial periods when it is not able to generate profits.
The major costs involved in the food delivery business is the customer acquisition costs along
with the deep discounts given by the apps. After a particular period, when the company is able
increase its revenue and turn up profits, the reliance on external financing would go down. But
as of now, Arjun would be in need of funds to carry his operations smoothly.

➢ Choice of Debt or Equity: Arjun would have to raise funds either from debt or equity. But given
his situation, his choice should be look for investors in exchange of equity. This would not only
decrease the business’s dependency on debt, it would also bring in some passive inputs and
contributions from the investors. Investors, who have backed and invested heavily in the
business, would bring in their experience and advisory when they join in the company as
shareholders. This would also help Arjun gain confidence and not feel directionless when stuck
in any roadblocks.