ChulhaA Case Discussion

ContextTypical situation you will face in your campusStudents have an idea and eitherA) feel strongly about it but dont know how to go about it ORB) have already done some research work and come to you to vet the idea

Words of Caution for studentsIf you are fundamentally in a lousy business, you will not get very far irrespective of the efforts and the talent.No matter how talented you are and how much capital you have, if you have not given your idea a rigorous, critical examination before starting out, you could be heading for a disaster.When you buy a car, you take it for a test ride. Why not do the same for your idea?Source: The New Business Road Test , Prof. John W. Mullins (London Business School)

The Case Chulha is a case of two techies who recognized an opportunity in a problem faced by themselves unappetizing canteen food.

Is Chulha a viable business?Based on the opportunity evaluation framework you have been introduced to and with the help of the checklist, evaluate if Chulha is a viable business.

Case AnalysisMarketHave the customers been clearly identified?Is there a definite customer problem being solved?Will the customers avail this tiffin service at this price?Is the size of the target market substantial?Is there enough potential for growth?

Case AnalysisIndustryAre you able to understand how this product is going to be delivered to target customers?Are there substitutes for this product?Is there anyone else already doing it?Will it be difficult for others to replicate this business?Does the business employ superior organisational processes, capabilities or resources that others would have difficulty in duplicating or imitating?

Industry StatisticsFood products are the biggest consumption category in India, with spending on food accounting for nearly 21% of GDP and 31% share of the consumers walletIndias food industry is estimated at over USD182 billion, accounting for about two-thirds of the total retail sectorCAGR of 6.4% from 2004-08Expected to reach $300 billion by 2015Largely unorganised industry [Source: India Food Report 2008]

Case AnalysisTeamDo the entrepreneurs have the skills to execute the idea?Do they have a network that can benefit the business?

Case AnalysisRisk and RewardIs it a highly risky business proposition?Is the business profitable? Substantiate with calculations.

Did you do your math?

Assumed monthly income for an IT professional20000x 2 persons40000

VegNon-vegTotalSelling price of tiffin354580Cost price of tiffin152035Profit per tiffin set202545

Assuming 50 sets each of veg and non-veg sold per day (Total 100 sets)Total profit per day2250Total profit per month (22 days)49500

Chulha is a real businesswww.chulha.co.in

Where is Chulha today?Started in April 2007They have now expanded their operations, servicing more than 15 locations in Bangalore.They offer full tiffins as well as mini tiffins (both vegetarian and non-vegetarian), providing a non-standardised menu of variety of cuisines.They cater to corporates, PG accommodations, individual customers and private parties.Delivering Mouthwatering & Healthy Food to people in need of the same

Key LearningsAsking the right questions while evaluating the opportunityAssessing the three main domains Market, Industry, Team Quick back of the envelope calculation

NEN ResourcesAll materials used in this session are available in the NEN CD Kick-Starting the Entrepreneurial Campus under Inside the Classroom section Entrepreneurship Concepts, subsection How to evaluate opportunities

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