Case

Soya Express Asian Journal of Management Cases

18(1) 34–40, 2021
© 2021 Lahore University of
Management Sciences
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DOI: 10.1177/0972820120978674
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Kalyan Bhaskar1, Vijayta Doshi2 and

Poojan Chokshi3

Abstract
Soya Express is a vegetarian chain of restaurants in New Delhi. It specializes in serving delicacies made
of soybean, and the business is modelled along the lines of McDonald’s and KFC. Soya Express has
recently expanded to Gujarat in West India and opened its first Ahmedabad outlet by partnering with a
local business partner. Despite the initial positive response, the Ahmedabad store has run into multiple
problems. This has affected Soya Express’ plans to expand to other cities and states. The owners now
need to address issues in Ahmedabad and also decide on future expansion plans.

Keywords
Chain restaurants, expansion, strategy formulation and implementation, cultural factors

Discussion Questions
1. Which factors were considered for strategy formulation and implementation by Soya Express?
2. What should Soya Express do about its Ahmedabad outlet?
3. What should Soya Express do about its expansion plan to other states and cities?

It was 23rd February 2012, late afternoon. ‘I still do not know whether it’s a mistake or we can recover
with time. Things were so smooth until this launch,’ said Sumeet Dhall, the Managing Director of SMA
Tasty Bites Private Limited in a meeting with Sukhwinder Singh, Director of SMA Tasty Bites Private
Limited and Vishal Bhatt, Head—Gujarat, SMA Tasty Bites Private Limited. SMA Tasty Bites Private
Limited was headquartered in New Delhi. Sumeet, Sukhwinder and Vishal were contemplating over the
launch of their vegetarian outlet, Soya Express, in Ahmedabad. The meeting was on the proposed plan of
action for shrinkage or expansion of Soya Express in Ahmedabad and other Gujarat locations.

1
Strategic Management Area, XLRI—Xavier School of Management Jamshedpur, Jamshedpur, Jharkhand, India.
2
Organizational Behaviour and Human Resources Management, Indian Institute of Management Udaipur, Udaipur, Rajasthan,
India.
3
Independent Consultant, Pittsburgh, Pennsylvania, USA.

Corresponding author:
Kalyan Bhaskar, Strategic Management Area, XLRI–Xavier School of Management Jamshedpur, Jamshedpur, Jharkhand 831001,
India.
E-mail: kalyanb@xlri.ac.in
Bhaskar et al. 35

Sumeet, a Chartered Accountant with more than two decades of experience, and Sukhwinder, a busi-
nessman with over twenty-two years of experience in the food and restaurants business, had been friends
for years before they set up Soya Express in early 2011 (see Appendix 1 for the organizational structure
of Soya Express). Soya Express was a vegetarian chain of restaurants. The founders named it ‘soya’
because it was different from conventional Indian food. According to them, the tagline of the firm ‘chalo
kuch naya ho jae’ (let’s have something new) was in sync with the customers’ expectations of trying new
and different items at Soya Express.
Soya Express served different delicacies of soya products and other varieties of vegetarian snacks and
meals targeted at youngsters and families. Close to 90% of the menu was the same across all restaurants
and the rest was provisioned for local flavours and taste. Regular revisions of menus and frequent quality
checks ensured that customers were not dissatisfied at any Soya Express stores. It also helped in making
the quality and variety of food uniform across stores, which was in line with the founders’ vision.
According to the founders, one of the main reasons for the establishment of Soya Express was the
absence of an Indian chain of restaurants similar to McDonald’s and KFC. Sumeet and Sukhwinder
wanted to make Soya Express the largest Indian restaurant brand in the country. The larger global vision
of the two founding Directors included expansion to other countries. Sumeet said, ‘We are getting que-
ries about owning franchise from London and Australia, but my hands are tight right now. In the coming
financial year, I will look at some of these options.’
Soya Express’s existing business model was along with McDonald’s and KFC’s lines, which included
the concept of centralized kitchens, franchisee-owned and company-operated outlets and home delivery
of products. The serving time was different from KFC and McDonalds’ model of limited-range-quick-
delivery. This was primarily due to the large variety of options available at Soya Express. However,
instead of keeping vegetarian and non-vegetarian items on the menu, Soya Express served only vegetar-
ian food in its outlets. This was specifically to take care of the religious sentiments of Indian customers.
Therefore, the target customers of Soya Express were primarily vegetarian people, and some non-
vegetarians who loved vegetarian food. For vegetarian customers (constituting approximately 90% of
the customers), soya chaps were substitutes for non-vegetarian food. On the other hand, for non-vegetar-
ian customers (constituting approximately 10% of the customers), soya chaps competed for non-vegetar-
ian food products.
The first Soya Express outlet opened in the Janakpuri area of New Delhi in April 2011. Since then,
the brand grew at a rapid pace. By February 2012, Soya Express had expanded to six states in India with
twenty-one stores in a short span of time. Sumeet said, ‘We had a vision but never anticipated such a fast
growth rate.’
Soya Express did not have any other competitor apart from a Delhi-based chain Waah ji Waah in the
soya category. Waah ji Waah, had been in the market for two years when Soya Express started operations
in April 2011. To deal with the competition, Soya Express worked on two fronts. Firstly, they attracted
existing customers (from Waah ji Waah) and new customers. Secondly, they tried to retain the customers.
Soya Express tackled these challenges by offering free food on the first day of its launch in all its restau-
rants. Through word-of-mouth publicity, their free food promotion brought in many customers who,
after tasting their products, often returned and rarely chose to the competitor.
Additionally, Soya Express maintained the products’ quality and added new or different items to the
menu while simultaneously offering the previous products. To differentiate itself from the competitor,
Soya Express regularly launched promotional schemes to attract new customers. It revised their menus
regularly to keep their customers’ interest alive, something which, according to Sukhwinder, Waah ji
Waah, never did. As confirmed by Sumeet, ‘We did not really consider Waah ji Waah as our competitor
36 Asian Journal of Management Cases 18(1)

because what they did in two years, we did in ten months. Also, we were confident that the taste and
quality of our products were better than anyone else’s.’
After September 2011, Soya Express started expansion outside Delhi. After making its presence felt
in some North India cities, including Delhi, Gurgaon, Ghaziabad, Noida and Chandigarh, Soya Express
opened its 17th restaurant in Ahmedabad, Gujarat in December 2011. In its aggressive expansion strat-
egy, this was the first restaurant the company had opened up outside Northern India. According to Sumeet
and Sukhwinder, Soya Express had limited its focus to large cities (Noida, Gurgaon and Ghaziabad being
satellite towns of the national capital Delhi, Chandigarh being the capital of Punjab and Haryana states)
and had not ventured into smaller towns. Ahmedabad was the fifth largest city of India, the largest city
in Gujarat, the fastest growing city in India and had a metropolitan population of 6.4 million (Census of
India, 2011; DNA, 2011). It, therefore, fit the existing large city strategy of Soya Express. Complementing
the large city and growth aspects of Ahmedabad was the fact that Gujarat had the sixth-highest per capita
income in India in 2011, after Maharashtra, Tamil Nadu and three much smaller states (Goa, Sikkim and
Haryana) (Indiastat, 2011).
Besides these, there were two more key reasons for selecting Ahmedabad. Demographics being the
first one; Ahmedabad had a large presence of Jains, known for a strict emphasis on vegetarianism. The
city had significantly a greater number of Jains (2.92%) compared to the national average of the total
population (0.36%) (Census of India, 2011). Other than the Jains, 84.62% of the Ahmedabad population
were Hindus, 11.4% Muslims and 0.72% Christians. The second key reason for selecting Ahmedabad
was the food culture of Ahmedabad.

Food Culture in Ahmedabad

The city of Ahmedabad was known for its rich culture and celebrations of various festivals during the year.
As part of such festive activities and even during the everyday life, Amdavadis (people of Ahmedabad)
were very fond of eating and they enjoyed their rich culinary traditions. Across localities, there were
numerous food outlets in organized as well as unorganized space. All eating places are equally crowded,
especially during weekends and on festive occasions.
There were more than 1,000 dining places in Ahmedabad in 2009. A variety of cuisines were served
in these outlets. Traditional Gujarati, Continental, Chinese, Punjabi, Mexican were in demand, most of
those cuisines were served by restaurants, which had a local presence in Ahmedabad and were owned by
local entrepreneurs. However, in recent times, especially during the past decade, rising incomes and a
growing cosmopolitan population led to the entry of many international food chains and franchises in the
city. Most of these were in the fast-food category. International giants such as McDonald’s, Pizza Hut,
Domino’s Pizza, Subway and Papa Jones established their presence in major city areas.
Due to the city’s demographic characteristics, most Ahmedabad restaurants predominantly served
vegetarian food in the city. Again, that depended on the locality, but a strong tradition of vegetarianism
maintained by the city’s Jain and Hindu communities was also reflected in the customized menus of
international food chains.
The Directors were aware that the Northern states and cities could be treated as one, but outside North
India, each city had to be treated differently in terms of food culture. At the time of opening, the company
was quite confident of their success in the Western part of India. The Directors were aware that the cities
would be different in terms of food culture from the Northern Indian cities.
Bhaskar et al. 37

Vastrapur Area
The Vastrapur area in Ahmedabad was well-known for Vastrapur lake, it was one of the two biggest
lakes in Ahmedabad and it was also one of the fastest-growing areas in Ahmedabad. Many educational
institutions and residential flats, colonies and bungalows were located in and around the Vastrapur area.
It was among the most elite localities in Ahmedabad. Only a few other localities such as Satellite, CG
road, SG road, Ambawadi, Prahladnagar and Anandnagar, to mention a few, could be considered similar
in stature of Vastrapur in Ahmedabad.
Vastrapur was one of the hubs with high traffic, footfalls and intra locality movement. That might be
considered good for growth, especially in the context of the restaurant business. However, the presence
of a large number of restaurants serving different food types presented a challenge to new players. The
presence of loyal customers, which many nearby food outlets and restaurants boasted of, would further
make the task challenging.

Soya Express’ Entry into Ahmedabad

After an initial in-depth market study of the city restaurants by its owners along with Mr Vishal, Soya
Express opted to select Vastrapur for opening up its first outlet in Ahmedabad. Their market study included
available restaurants, prices, portion size, local taste, locations, footfall and visibility. Compared to other
localities in Ahmedabad, the owners felt that a location in Vastrapur would serve as the perfect launchpad
for the company to open its first outlet outside North India. Their initial survey observed a multicultural,
cosmopolitan crowd with high footfall in the Vastrapur area. The advantage of the cosmopolitan crowd
was that most people had already tried their products in Delhi and other Northern Indian cities. They felt
that their product offering was suitable to attract such a crowd rather than typical Amdavadis.
Nevertheless, to cater to the local needs, they had added a Jain variety of food in their Vatsrapur res-
taurant. The eating pattern of the local customers was understood and accordingly, the price was quoted.
For example, the portion of dal (pulses) eaten by an Amdavadi was 60% compared to that eaten by a
North Indian. So, the serving size and price were reduced accordingly.

Problems Faced in Ahmedabad

Sumeet, Sukhwinder and Vishal were unsatisfied with the launch and the progress of the first Soya
Express restaurant outside North India. They were investigating the likely causes for it. However, there
were sharp differences in the Directors’ opinions, Sumeet and Sukhwinder and the head of Gujarat
Operations, Vishal, on the issue of what ailed Soya Express in Ahmedabad.
Sumeet and Sukhwinder outlined three reasons for their problems in Ahmedabad. According to
Sumeet, ‘Expanding from one city to another in the North was never a challenge.’ They thought that they
had conducted proper market research before launching their first store in Ahmedabad. However, given
the problems faced in Ahmedabad, they were having doubts about market research quality.
The second reason was a violation of Soya Express’s promotional scheme policy at the time of inau-
guration. Having great confidence in the taste and quality of their products, the usual promotional scheme
of Soya Express was to give free food to all customers on the opening day of the restaurants. According
to Sumeet and Sukhwinder, this promotional scheme was violated (free food was not given to customers)
38 Asian Journal of Management Cases 18(1)

in Ahmedabad. The footfall on the first day was much less than expected. They were convinced that this
had a major role in the less than desired word of mouth publicity at the time of launch in Ahmedabad.
However, the Directors said that they owned the responsibility for this because they felt they relied too
much on Vishal, the Gujarat operations head.
After talking to some of the customers in their restaurant, Sumeet and Sukhwinder observed that the
customers were confused by the name of the restaurant as the name was Soya Express. Sumeet said,
‘Ahmedabad people have the misconception that we provide only soya snacks. Whereas we offer a vari-
ety of other snacks and meals as well’. This, they thought, was the third reason behind the issues being
faced in Ahmedabad.
Vishal differed with Sumeet and Sukhwinder on the subject and considered reasons offered by them
as a poor excuse to blame Ahmedabad’s specific factors—Ahmedabad market study (in which Vishal
played a key role), Ahmedabad launch (which was handled by Vishal) and Ahmedabad customers. He
argued that the problems lay elsewhere. According to him, he had followed the promotional scheme as
discussed with Sumeet and Sukhwinder. In his defence, he also shared an article that had appeared in the
local newspapers the day after launch. According to the news article, the launch included a dance by
local dancers and was very well received by the customers. The real problem, Vishal thought, lay not
with the lack of promotional schemes but with the ego problems of the Directors and the operational and
financial mishandling in the sourcing of ingredients for the store.
According to Vishal, Ahmedabad customers could not relate to the products of Soya Express and, in
particular, what he considered to be the over-reliance of the Directors with soya chaap. Products like
soya chaap (a dish made by first flattening soybean chunks, then adding spices and salt to it and finally
roasting it in an oven), a well-known delicacy for North Indians, were unheard of by Amdavadis. There
was less likelihood of customers becoming regulars at Soya Express despite offering free food during the
inauguration. He claimed that he had alerted Sumeet and Sukhwinder that too much focus on one prod-
uct, soya chaap, may not work in Ahmedabad as local customers preferred options and were unlikely to
be turned into regular customers with a single product-focused approach. It was the ego of the Directors,
Vishal opined with a hint of bemusement in his tone that led them to discard his views and go ahead with
a single product-focused approach.
Vishal also countered Sumeet’s and Sukhwinder’s claims that the restaurant was severely underper-
forming in Ahmedabad. Citing evidence in terms of average daily revenues in the range of INR 20,000–
25,000, Vishal argued that the revenue figures were pretty acceptable for a new restaurant in Ahmedabad.
It was profits that were less than expected and for this, Vishal laid the blame on Sukhwinder. Vishal
alleged that the Directors wanted to exercise complete control over the supply of main ingredients, and
for this, they demanded payment upfront. Vishal claimed that he gave INR 25,000 to Sukhwinder to
source raw materials but did not receive the ingredients. He believed that this led to operational issues
and a lack of trust between him and the promoters.
Apart from the reasons outlined above, the Directors often felt that their expansion rate had been too
aggressive. Despite the unsuccessful launch of their first restaurant outside North India, the Directors
were unsure whether they wanted to move out of West/Ahmedabad or further expand. They had already
invested in Ahmedabad’s centralized kitchen (see Appendix 2), which was underutilized. Moreover,
Soya Express was slowly comprehending the local customers’ needs in Ahmedabad since this was the
first time they had come outside North India. The Directors did not have much time as they planned to
open another outlet in Ahmedabad and further down West in Pune. What if similar problems arose in
other cities? Besides, the Directors contemplated if they should slow down their expansion and focus
more on Northern India, which still had a lot of potentials. The time was running out, but the magnitude
of the problem in front of them was significant. They had to make a decision soon.
Bhaskar et al. 39

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of
this article.

Funding
The authors received no financial support for the research, authorship and/or publication of this article.

Appendix 1. Organization Structure of Soya Express

Source: Company documents.
40 Asian Journal of Management Cases 18(1)

Appendix 2
Centralized or base kitchen—a kitchen where 80%–90% of the food is prepared. A base kitchen supplies
food to all restaurants within a radius of 100 km. It can serve up to 30 outlets. Central kitchen ensures
uniform quality (across stores and across days) and cost control (economies of scale). Soya, dry spices and
some additives were procured directly from Delhi, while other ingredients were procured locally. Soya
was procured directly from the dealers of Ruchi Soya. There was no tie-up with the firm. Ahmedabad’s
base kitchen was designed to serve up to eight to ten outlets. The head chef decides on the menu.

References
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DNA. (2011). Cheers Ahmedabad! City is racing ahead. http://www.dnaindia.com/india/report_cheers-ahmedabad-
city-is-racing-ahead_1453361
Indiastat. (2011). Indiastat database. http://indiastat.com