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Student Details ( Student should fill the content)

Name Makkalige Prageeth Anuruddha Fernando
Batch Number 85
Student ID (UWIC ID and ICBT Cardiff Met ID :20169108 ICBT ID :
ID) CL/CARDIFFMB/19/181
Scheduled unit details
Unit code MBA 7002
Unit title Strategic Management
Assignment Details
Nature of the Assessment REPORT (Exam converted to an individual assignment)
Topic of the Case Study GIVEN
Learning Outcomes covered YES
Word count 3000
Due date / Time As communicated in the assessment plan
Extension granted? (For Office use Yes No
only)

Declaration
I certify that the attached material is my original work. No other person’s work or ideas have been used
without acknowledgement. Except where I have clearly stated that I have used some of this material
elsewhere, I have not presented it for examination / assessment in any other course or unit at this or any
other institution
Signature Date 2020-11-14
Result (Assessor use only)
Marks by 1st Name & Signature of the 1st Agreed Mark
Assessor Assessor
Marks by IV: Name & Signature of the IV
For Office use only (hard copy assignments)
Receipt Received by
date
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Assignment Type & Title:

For student use: Critical feedback on the individual progression towards achieving the assignment
outcomes

For 1st Assessor use: Assessment feedback

Strengths

Weaknesses

Name & Signature of the Date

Assessor :
:
Comments by the IV

Date
Name & Signature of the IV:
:
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Contents
Vision and Mission Statements ........................................................................................... 7
Vision Statement ............................................................................................................. 7
Mission Statement........................................................................................................... 7
Evaluation of Expansion options ........................................................................................ 7
Introduce non-vegetarian food ........................................................................................ 7
Introduce a home delivery system .................................................................................. 7
Open second, third outlets on Kandy and Negombo roads ............................................. 8
Divest profits in agricultural ventures............................................................................. 8
Strategic Options to Expand Shelly’s Business .................................................................. 8
Strategic Capability of Shelly’s Food ............................................................................. 8
Value Chain within Shelly’s Food .............................................................................. 8
SWOT Analysis .......................................................................................................... 9
Segmentation and Targeting ........................................................................................... 9
Existing Targeted Segments ....................................................................................... 9
Targeted Segments for Expansions ............................................................................. 9
Ansoff Metrix for Shelly’s Food................................................................................... 10
Product .......................................................................................................................... 10
Price .............................................................................................................................. 10
Place .............................................................................................................................. 11
Promotion...................................................................................................................... 11
Online Ordering System ............................................................................................... 11
Drive Through Purchasing ............................................................................................ 11
Healthy Food packages (For Cardiac and Diabetic Deceases) ..................................... 12
Meal Packages for Family and Kids ............................................................................. 13
Online Feedback Mechanism ........................................................................................ 13
Expanding the food variety ........................................................................................... 13
Extra Premium with Organic Foods ............................................................................. 13
Home Delivery System ................................................................................................. 13
New Outlet in Negombo Road (Wattala)...................................................................... 13
New Outlet in Kandy Road (Kelaniya) ......................................................................... 14
Assessing Shelly’s approach ............................................................................................. 14
Shelly’s Segment Selection for Only Vegetarian and Higher Prices ............................ 14
Defining Segment Characteristics................................................................................. 15
Demographic ............................................................................................................. 15
Psychographic ........................................................................................................... 15
Behavioral ................................................................................................................. 15
Environmental ........................................................................................................... 15
Pricing strategy ......................................................................................................... 15
Viability Assessment of the Target Market .................................................................. 15
Differentiation ............................................................................................................... 16
Shelly’s promotion strategy .......................................................................................... 16
References ......................................................................................................................... 17
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List of Tables
Table 1 – SWOT Analysis .................................................................................................. 9
Table 2 – Targeted Segments in 1st Outlet .......................................................................... 9
Table 3 – Feasible Segments in Expansion....................................................................... 10

List of Figures
Figure 1 – Ansoff Matrix (Moussetis, 2011) ................................................................. 10
Figure 2 - Breakdown of Premature Deaths in Sri Lanka (www.who.int) ...................... 12
Figure 3 – Porter’s Generic Strategies (Tanwar, 2013) .................................................. 14
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Growth and Sustainability of Shelly Foods

Vision and Mission Statements

Vision Statement
Our vision is to be the Island’s premier vegetarian fast food caterer and be the
customer’s favorite place.
Mission Statement
Our mission is to gain sustainable growth by delivering superior quality food,
imperial customer service, and the best customer experience incorporated with
continuous improvement.

Evaluation of Expansion options

Introduce non-vegetarian food
“Market changes may erode differences between segments, leaving the
organization open to much wider competition. Customers may become unwilling
to pay a price premium as the features of ‘regular’ offerings improve” (Johnson,
Scholes, Whittington 2008, p.231). The target market group of Shelly foods came
through focused differentiation. They are rich vegetarian customers who have
very little concern about the price. So, the loyal customer base will be affected by
this decision. Then Shelly will have to change the existing strategy which works
well up to now.
“If you like exotic international food, the plot thickens: you can never be sure if a
sauce has hidden meat or other animal products” (Harlan, 2019). This is general
doubt on vegetarianism when the restaurants provide non-vegan foods and it
may lead to losing the customer base. Also, the popularity of Shelly Foods was
mainly due to word of mouth as she has not gone through Above the Line
promotions. So a clear majority should be vegan of the customer base.
Considering all the above factors, the introduction of non-vegetarian foods will
not be a good strategy for expansion for this outlet. It can be considered another
outlet in a different location.

Introduce a home delivery system

“While the food industry growing year by year, the online food delivery and
takeout sector will grow by at least 20%” (Hanet, n.d.). So, this trend shows very
positive signs to expand the fast-food business.
The home delivery system will stretch the customer base as the people who are
not able to visit the location will become customers. Covid19 lockdowns show a
clear picture of the advantages of having a delivery system.
Also, it is free of charge promotion that delivery riders with Shelly food T-shirts
and bags.
So, this option is a very good initiative to expand Shelly’s food as this expands
the market segment, increase revenue as well as contains additional promotional
features.
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Open second, third outlets on Kandy and Negombo roads

Kandy road and Negombo roads are 2 ideal locations for premium-priced
restaurants as the locations are in the Gampaha district which is the highest
populated district and borders the Colombo district. Lot of executives and high-
income earners passing these locations. Also, these areas are full of rich crowd
which is the target market. The supplies are easy, target customers are
concentrated around and easy access for them is the advantage of the location
of expansion projects.
Even though Shelly will have to allocate a considerable amount of capital for
infrastructure, the acquired reputation on high-quality vegetarian foods and befits
of the location will lead to a lower payback period on the investment.
But Shelly must be aware of selecting managers for the 3 locations as she must
overlook 3 business locations. Organizational change must be properly managed
and new managers must be capable to align with the culture created by Shelly.

Divest profits in agricultural ventures

In terms of supplying their own material, investing earned profit is not a justifiable
strategic decision as there are a lot of better options are available.
Considering the SWOT analysis of Shelly, she does not have enough strengths
in agricultural investments. Her accommodation and key business facilities are in
Colombo. But she needs to invest in rural areas and the unavailability of field
knowledge is a weakness her.
Rather than investing in supplies, it is better to enter into agreements with major
suppliers to ensure continuous supplies. Also, she does not want the cutoff
significant cost of supplies as the profit margins are high.

Strategic Options to Expand Shelly’s Business

Shelly’s fast Food outlet is sustained in southern Colombo and revenue is
remarkable as she is earning Rs.200,000 a day. So, this is a big opportunity for
her to expand her business.

Strategic Capability of Shelly’s Food

Value Chain within Shelly’s Food
Infrastructure: Lavishly Prepared customer waiting area of the existing outlet with
entertainment facilities.
Human Resources Management: The way she trained her staff, building a
relationship between employee and employer, and alignment of the culture within
the organization are strong values of Shelly’s food.
Technology Development: At present, there is a gap in utilizing existing easily
available technology for business enhancement such as online ordering system.
Procurement: Long term agreement with reliable suppliers are required to avoid
supply interruption and quality raw materials.
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Operations: Exiting operation systems provide superior customer service to

maximize customer satisfaction.
Marketing: Using non ATL marketing methods. (Google Plus, 2019)

SWOT Analysis

Table 1 – SWOT Analysis

Segmentation and Targeting
Existing Targeted Segments

Table 2 – Targeted Segments in 1st Outlet

Targeted Segments for Expansions

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Table 3 – Feasible Segments in Expansion

Ansoff Metrix for Shelly’s Food

Figure 1 – Ansoff Matrix (Moussetis, 2011)

Product
At present Shelly’s product portfolio is a narrow one. But with expansion, she has
to add some additional products for new and existing markets to increase
revenue.
Health Food packages (Heart friendly and anti-diabetes) are new product adding
to motivate a segment which resists buying outside foods. This product will
motivate them.
Organic food will add an extra premium version of the product for the niche
market portfolio of Shelly’s food. This will acquire a new market and build a
reputation for the brand.
Thai/Chinese menus will increase the variety of options for the customers and
will acquire an additional segment of customers.
Soups, appetizers, and desserts are newly adding to this product range to set
complete meal packages for family meal requirements.

Price
The prices of all these products may remain in the premium price category as
Shelly’s focus on a niche market which are not price-sensitive and their main
focus on the quality of foods and superior customer service.
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Place
For the 1st location, Shelly selected the southern Colombo area which is highly
urban, and the concentration of rich and upper-middle-income people is high.
Also, the 2nd and 3rd outlet locations are matching the same criteria as Wattala
and Kelaniya will be a better place to find the targeted customer.
Wattala is not suitable for the vegetarian-only concept due to the cultural aspect
of the area. So, Shelly will have to introduce nonvegan past foods in the Wattala
outlet.
Also, easiness for drive-through is vital as these are located on main roads. The
majority have easy access on their way home.

Promotion
Success and sustainability of 1st outlet were not due to above-the-line promotions
(ATL) and mainly it was due to word of mouth. For new 2 outlets, she can use the
success of her 1st outlet as a promotional factor.
Also, she can use FB as a strong media to do the promotions without any cost.
Before opening a few display boards near traffic lights and Infront of car parks,
expensive shops and shopping malls will do initial promotions. FB page of
Shelly’s food will play a vital role before opening and after opening.
She can select a few high salaries paid organizations to do promotions inside
their organization by providing a free of charge food sample. She can offer meals
for a few board meetings and the quality of the foods will create the rest of the
promotion.

Online Ordering System

Differentiation of the products has been done targeting upper middle income and
higher-income earners. Most of them in the segment are executives. So, all of
them are technology capable people and in a busy schedule. Online ordering and
picking through their drive will be adding a unique value proposition to the
products.

Drive Through Purchasing

By identifying the strategic customer will justify this option clearly. Rich urban
people with a busy lifestyle have very limited time for waiting. So, buying a simple
food item of a prepared item needs very limited time for delivery. Drive through
purchasing is only limited to a few items. Especially a fruit juice or any beverage
and pre-prepared food packs can be easily delivered. The customer will be
happy to buy such a thing through his drive without waiting time for stopping,
parking, and waiting until delivery.
For the complex food item which takes considerable time for preparation and
customized menu can be combined with both online ordering and payment and
the customer will pick it through his drive. This method adds a unique value
proposition for the products of shelly foods.
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Healthy Food packages (For Cardiac and Diabetic Deceases)

In recent years there is a significant trend of increasing heart-related diseases
and deaths. “The recent estimates for mortality from CVD (cardiovascular
diseases) for Sri Lanka were 524 deaths per 100,000 which is higher than that
observed in many high-income countries” (Anon, n.d.)

Figure 2 - Breakdown of Premature Deaths in Sri Lanka (www.who.int)

Also, diabetes became another major health issue in the country. Together
cardiovascular disease and diabetes contribute to 43% of total premature deaths
in Sri Lanka in 2016. And it is assumed that the rates are in increasing trend and
it will be more in future and major risk populations are concentrated in urban
areas. “One in five adults in Sri Lanka has either diabetes or pre-diabetes and
one-third of those with diabetes is undiagnosed. The rates are double in urban
than in rural areas. The projected diabetes prevalence for the year 2030 is 14%.
Both diabetes and pre-diabetes are accompanied by other risk factors like
dyslipidemia, obesity, and high blood pressure” (Anon, n.d.).
Above health issues existing in the urban segment create an unmet need that
can be addressed by the Shelly foods strategic plan. The risk is mainly existing in
urban areas. Already the existing location and 2 planned locations for new outlets
are the most potential locations to find the strategic customer.
Shelly can add specific food packages as heart-friendly and Non-diabetes. For a
heart-friendly food package, she can remove adding oils and with low salt
content. But she can introduce some other ingredients to increase the taste of
foods but healthy for the heart. Also, some heart-friendly appetizers and desserts
are optional to include in the package. Nondiabetic foods contain a very low
amount of carbohydrate and rick with vegetables and low sugar foods.
So, these packages will be popular not only with patients also the middle age
executives and businesspeople who do white-collar jobs as they are the next
potential generation for these diseases.
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Meal Packages for Family and Kids

Meal packages for targeting kids and families are a good option for online and
drive in customers. Through this package system, Shelly can expand her
business towards more segments. Especially gaining the segment of kids is a
more profitable segment by adding unique value proposition to kids’ meals.
Adding kids’ favorite desserts to the package will be one of the best options to
create interest for kids.

Online Feedback Mechanism

A forum for complaints on customer dissatisfaction and improvement ideas will
give inputs to Shelly for the continuous improvement of the business. Shelly can
reply to the customer personally, apologize for the dissatisfaction, and inform the
customer of her corrective actions. (Mellet et al., 2014)

Expanding the food variety

At the present, her product portfolio is a narrow one as it is only offering
Bangaloring, Punjabi, and Rajasthan fast foods. This narrow food portfolio
restricts potential customers who are interested in other vegan food categories.
By expanding the variety of options select Shelly will be able to attract new
customers as well as increase the buying frequency of existing loyal customers.

Extra Premium with Organic Foods

Shelly can provide only organic base food items for an extra premium price for
the smaller segment but with higher profit margins. She can enter into
agreements with organic food suppliers to keep her supplies without any
interruption.

Home Delivery System

As described above initiating a home delivery system will extend her customer
base. It will increase her customer base.

New Outlet in Negombo Road (Wattala)

The ideal place for the outlet which shelly prefer to start in Negombo road is
Wattala which has the access to people in Wattala and the people who travel
from Colombo to Welisara, Ragama, Kandana, Ja-Ela, and Negombo. Ideally
close to highway entrance as the people who travel to Negombo, Ja-Ela areas
using the highway and they will be able to come through Peliyagoda, pick the
order, and go around to highway entrance in Wattala.
According to (Census of Population and Housing of Sri Lanka, 2012) 57% of the
total population of the Wattala area are Catholic, Christian, and Islam. Also, in
Negombo more than 65% are catholic and In Ja Ela they around 50%. Even in
the niche market, shelly will hardly find these Christian and Islam based areas for
vegetarianism.
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So, it is better to consider this location as a fast food outlet without a vegetarian
specialty. But this will not affect the branding she has done with the southern
Colombo outlet as the customer base is different and they will not consider
Nonvegetarian outlet away from their respective outlet.

New Outlet in Kandy Road (Kelaniya)

Unlike in Wattala, in Kelaniya 75% of the people are Buddhist and the people
who pass the outlet belong to Biyagama, Kiribathgoda, Kadawatha areas are
mostly Buddhist concentrated areas. So there Shelly has the advantage of
vegetarianism. So, Shelly can open a copy of the 1st outlet with the same menu
and offerings. She can use her success and popularity of the 1 st outlet as a
marketing strategy.

Assessing Shelly’s approach

Shelly’s Segment Selection for Only Vegetarian and Higher Prices
As a new entrance to the market, Shelly’s approach was the least competition
and highest profit gaining markets and that strategy was successful as she has
been earned amazing profit during the1st year and it can be justified with Porter’s
generic strategies.

Figure 3 – Porter’s Generic Strategies (Tanwar, 2013)

Considering Colombo city and suburban areas of Colombo there is higher

competition for Non-vegetarian and cost-effective segments which is the perfect
competition segment. The non-vegetarian high-end fast food market is
oligopolistic as few players already dominated the segment. Most of them are
international food chains and their reputation already stated throughout the world.
The cost-effective vegetarian segment is also a very competitive and tough task
for a new entrance compete as the existing players provide exceptionally low-
cost options with a very low margin of profits as the handling volume per day is
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very high. To enter this market, she had to spend considerable capital as the
majority of that segment expect inside dining rather than take away.
But there is a gap in the market that has been identified by Shelly in the high-end
vegetarian segment.
So, these market conditions and their competition has been cleverly understood
by Shelly while defining her strategy.

Defining Segment Characteristics

Demographic
Income: Mid-high to High-income range selected.
Social status: High-level society which seeks prestige
Occupation: High-level executives, Managers, senior managers, Directors,
Businessmen
Geographic location: Urban and suburban
Psychographic
Brand Preference: Branded quality preferred segment and high-end brand
seekers
Price sensitivity: Very low-price sensitivity segment
Lifestyle: Busy with occupation and businesses and willing to spend for the
quality
Service preference: High level of service and hospitality is preferred
Behavioral
Where They Shop: High level of hospitality and exceptional and quick service
Type of Store Preferences: Lavishly prepared stores with exceptional service
Environmental
Country of Residence: Colombo and nearest suburban areas
Payment Methods: Credit cards, Debit cards, Cash
Languages Spoken: English, Sinhala, and Tamil (Google Plus, 2019)

Pricing strategy
Considering the characteristics of the segment, it is clear that pricing strategy
must be setting higher price levels as the segment seeks prestige pricing. Where
the lower pricing will enable access to lower-income level people will demotivate
the access of prestige seekers as they are highly concern in branding and
reputation. This is called image pricing and it plays a vital role in brand
perception (Investopedia, 2019).

Viability Assessment of the Target Market

Size of the market: This is a smaller size segment considering the volume of the
fast-food market. But the selected locations are the concentrated areas of the
strategic customers. As long as this is seeking a niche market the size of the
segment is enough to generate revenue and profit
Expected growth: The higher potential of growth by generating a set of loyal
customers as the purchasing power of them is high and they have very low price
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sensitivity. There is an opportunity to grow as a chain with the brand reputation

gain in the initial outlet.
Competitive Position: Due to lower competition on the target market, quality of
foods, and a higher level of customer service will bring on top of the market.
Cost of Reach: Initial capital is required for construction, land purchasing, and
internal resources. Also, construction cost is not so high as a dining restaurant.
So, the cost of reach is bearable.
Compatibility: Selected market expectations, growth opportunities, and goals of
Shelly are perfectly aligned. So, the target market is compatible with business
needs. (Google Plus, 2019)

Differentiation
Shelly has been selected urban, high income, and vegetarian segment for her
past food takeaway outlet. It was a very low competitive segment. But the
expectations of the selected market are very high and to establish her brand on
the market she had differentiated her products to match the demand.
Superior quality foods with exceptional customer service differentiate her product
in the market. The lavishly prepared lobby with entertainment facilities for the
shorter waiting time until received the order and elimination of ques in the
ordering process, differentiate Shelly’s food from the competitors’ products.
Welcome at the entrance and take orders while the customer sitting comfortably,
and stewardess bring the order and she does the cash collection or card
collection for payment too. These differentiations meet all expectations of the
high-end customers. (Arping and Loranth, 2002)

Shelly’s promotion strategy

In the past food industry above the line, promotions are most famous as
television and radio advertisements are frequent.
But in Shelly has been selected below the line (BTL) promotion strategy as the
selected segment is a narrow one. Also, their expectations are different from the
general audience. This promotional strategy was very successful for the selected
customer segment as the conflicts or questions of the customer can be answered
and with this approach, they will get a clear picture (Investopedia, 2019).
Marketing online, through emails and usage of Facebook pages, enable
customers to comment and Shelly herself can reply to these. With this
promotional strategy, shelly could reach her customers directly and she could
create better imagination about the brand on targeted customers.
After the business opening word of mouth was a very strong promotional strategy
that needs no effort but the way she differentiates, the high level of customer
satisfaction leads the promotional program. That is one of the secrets of her
success.
As a successful collective effort of strategies on vegetarian high-end market
selection, differentiation, and Below the Line (BTL) promotions, Shelly has been
gone through a very successful journey of her business.
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SRI LANKA RISK OF PREMATURE DEATH DUE TO NCDS (%)* SELECTED
ADULT RISK FACTOR TRENDS PROPORTIONAL MORTALITY* Probability
(%) of premature death NATIONAL TARGET SET DATA YEAR MALES
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[online] Available at: https://www.who.int/nmh/countries/lka_en.pdf.
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Business and Management, 15(1), pp.11–17.