‘CHULHA’- A CASE STUDY

SUBJECT: ENTREPRENEURSHIP & BUSINESS PLANNING

INTRODUCTION: In any entrepreneurial venture/business whether it‟s an individual/, a

partnership nature or a corporate nature, the success starts with a small trigger which
influences an individual or partners or companies. It is not an overnight e f f e c t . B u t
t h e s u c c e s s i s d e p e n d i n g u p o n i t s p r o p e r application. In the given case study of
“Chulha” a small partnership consisting of two individuals namely Adesh and Nishant, it is
evident that the momentary trigger which came into their minds of starting a tiffin service
business (Dabbawala type) in their area where they were working (i.e. in Bangalore) since they
were missing their homely cooked food. We would be analysing the Case Study with two
given questions in this assignment.

I) Do you think this is a viable business? Support your answer with reasons?
II) Are there any changes you would like to introduce in their business model?

Question No.1: Do you think this is a viable business? Support your answer with
reasons?

Before we go into the depth of this analysis, we would like to analyse some basics of
business viability and the reasons for why this tiffin services of chulha is a viable business.

Business viability: Viability of any business is measured by its long term survival and its
ability to have sustainable profits over a period of time. If a business is viable it is able to
survive for many years, because it continues to make profit year after year. The longer a
business can stay profitable the better its viability. According to the case study Chulha
emerged in the year 2007 now even after more than a decade it is surviving means that their
business idea was viable undoubtedly.

The details /components of a business viability checks are given below:-

1 A cl ear d efi ni t i on of t he product or s er vi ce bei n g developed;

2 A clear problem statement & how it is going to solve, and why this approach is better than
existing alternatives;
3. A clear idea of who needs it;
4 An idea of how and how much customers will pay for it;
5 And a plan how all this will be done.
6 The Uniqueness
7 Upstart Funds
8 Customers
9 Competition
10 Economic Mood
11 Timing
12 Marketing
13 Continuing Cash flow
If we look into all the above components Chulha services has almost answered 80% of all
those questions. There is a clear definition of their services saying that „they want to give a
quality food, to satisfy the demand of all types of their customers‟, a strong feedback
mechanism, maintaining a website as a marketing tool etc. They are definitely having
uniqueness in them and have a clear detailed costing and a thorough market segmentation
study etc. which are the main reasons why their business is a viable one.
Chulha started in the year 2007 in Bangalore, that time the competition was also very
less. In fact at the time of Chulha started, they also started A concept like Bombay
dabbawals who carry tiffin boxes to various individuals and companies/houses like a home
based business. But later on they developed the Chulha.

The Reasons for Chulha’s Emergence which led to the success: - (By taking into
consideration the Entrepreneurship Process)

A) Identification of Problem: - (Identifying the opportunity)

Adesh and Nishant were the two IT employees and emerged as entrepreneurs later.
Initially they were from different parts of India (i.e.) one from Bombay and the other from
Calcutta, basically north part of India who came to work in South India (Bangalore) as IT
professionals. While employed they were struggling and rather missing to get their home
cooked food in Bangalore city and the year was in 2007 during that time there were no good
home cooked food services available in Bangalore

B) Transformation of the Customer Need into Business :-( Identifying the Resources)
Adesh and Nishant after finding the problem of their food, thought of starting a small tiffin
services home cooked food business.
Hence they left their IT jobs and started the business by converting their individual
problems into a main customer need based problem. This is where the Brand mantra of
introducing Chulha emerged. Their basic calculation was that even a 10% of the IT Sector if
they can covert, they would meet their profits very easily. But fortunately the customers
welcomed this concept in Bangalore After implementing this excellent formula, the business
increased like anything and still growing day by day. the competition was almost nil at that
time.
These guys took the maximum advantage of this customer need which again was converted as a
major demand in that southern region.

C) Acquiring the resources and managing the Venture

Chulha started in a small way. Their main mission was to ensure food being served to
customers not just in terms of taste but in variety and by maintaining quality standards, and
gaining recognition in this business. It is practically serving hygienic and delicious food.
Started with carrying food in tiffin boxes and delivered to the customers in time having a mini
breakfast and mini thalis as their start up menus in limited areas in Bangalore, during
breakfast and lunch time and slowly increased to dinner service also. In this they
reached a very high standard of business viability due to their extensive market
segmentation ideas. This is to be noted for their high success degree.

D) Revenue Generation:-
With the minimum amount of Investment, chulha started earning their revenues in a very
slow manner. At the starting time the margins were not very high since they were mainly
seeing the sustainability aspect. For at least they were just doing break even during their first
year operations. From second year onwards they started a minimum margin (i.e.) around 5-
10 per cent and slowly today they have reached a 65-70% margins which is quite good.

Strong Business Model:

Let us not forget that the Concept of Chulha Tiffin service idea has got a very strong and
viable business model also. Let me mention some of the core points of it. They are:
1. Key Partners - Adesh, Nishant
2. Key Activities - making good quality home cooked food
3. Value Propositions - Healthy homemade food with cost Effective & affordable price
4. Customer relationship - one to one direct approach
5. Customer Segments - Individuals, office goers, paying guests and students
6. Key Resources - Individual investments, advance receipts from customers
7. Channels - delivery boys, small mobile vans, etc.
8. Cost Structure - affordable minimal cost
9. Revenue Streams - Advance receipts, monthly payments schemes, mostly on cash basis
with minimal credit periods.

E) Viability Proof –
Chulha tiffin services business shows clearly defined viability by allowing us to understand
certain strategies for its growth. These are as follows:-
1. Simple survival technique:- delivering hygienic and delicious food in time to customers was
its sole aim. There are many competitors in the market, but amidst competition it had to
create a niche for itself by applying the strategies to offer its customers “Value for
money” product.
2. Economies of Scale:- Even though Chulha had less profit margins,, as the volumes were
bulk, it did make a huge percentage of profit.

Certain new strategies which can be implemented

1. Technologies that can be adapted: - Appointing food inspector, who would conduct
surveys in every week to ensure, the quality standards, hygienic condition of the food,
cleanliness and disposal of wastes, separate usage of utensils for veg and non-veg items,
proper maintenance of gas and pipe lines, and other safety parameters (from employees
prospective) etc.,
2. Prestige and CSR activities: - Chulha should opt for different CSR activities like, to
fund an NGO‟s working to educate poor children, active participant in the Green Movement,
involve in planning trees in industrial areas to reduce pollution, donating food one Sunday
of every month, to organization having challenged people, packaging food in paper bags and
other recyclable materials.
3. Expansion of Market:- Opening for party orders, Opening for the education market and
planning to open canteens in different colleges.
4. Government Policy:- Chulha can opt for an ISO certified standards set against its quality
of food, quality of ingredients used to prepare food. Using these it can set a benchmark for
other restaurant which have to qualify the standards of food served by them. The government
can thus standardize the quality of food served by the other food chains.
5. Self-sufficient:- Chulha should have its own supply of raw materials so that itcan
plan to be self-sufficient in delivery of its products as well. It ha s i t s o w n restaurant
space and has its own staff. Hence it is highly self-sufficient.

SWOT, AND PORTER’S FIVE CHOICES business model analysis

It enables them to make future progress without any hurdles.
From the above all in-depth analysis it is clear that the chulha tiffin services business is a
viable business which can really withstand and sustain for a quite long time.

Question No:2:- Are there any changes you would like to introduce in their business
model?

C h u l h a s h o u l d d e f i n i t e l y adopt/ introduce as and when needed, the following strategies.

I) They should have their own small R&D department person to implement certain
methodologies since the competition in the market is raising like anything.
(example, Its my meal and Papa‟s tiffin etc.)
II) Segmentation:- Chulha has to introduce certain segmentation in addition to their
existing ones. They have to introduce a morning breakfast segment. This will definitely
 bring additional revenue. Especially cities like Bangalore, where the Industrial growth is
booming like anything year by year, the working population will also increase
proportionately which will ultimately influence the potential area for business like chulha
to tap and develop. Additional meal features for customer satisfaction/attraction:-
III) Chulha should introduce digestive food post meal like paan, a small banana fruit or a
pack of supaari varieties etc. This definitely impact a high level customer
satisfaction, an edge over the competitors in the market and al so enabl es the
business‟s long term sustainability. Market Diversification:- Chulha should try to tap
the other cosmopolitan cities like Mumbai, Delhi, Calcutta and Chennai etc.
IV) A critical market survey for diversification has to be conducted and accordingly modify
the business model plans especially the catering packaging s yst ems. There are
certain important modifications like executive lunch, business dinner packages,
corporate buffets etc to be introduced. For this local area agents has to be
appointed. Extensive financial planning is required for this effort. But ultimately
lead to high level revenue earnings.
V) Major Tie ups:- Chulha can have tie ups with Hostels, Corporate Offices, Business
Management Schools, and Engineering and medical Colleges. Regional Meals:- S i n c e
w e a r e t a l k i n g a b o u t c h u l h a ‟ s diversification business model, it is necessary that
they include regional meals like north Indian, south Indian, etc. in their menus.
Encourage Local homemakers:- Chulha should give franchisee to local house wives
to do this business and promote Chulha in the areas where chulha itself could not
deliver food in time. This is a very important change they should consider in their
business model. By doing this the supply chain delivery problems can be solved in a
very systematic manner without any problem. Also chulha‟s management doesn‟t
have to worry about the local taste of the region‟s customers. since it is prepared by
the local house wives.
VI) Associated Catering Services:- Chulha should provide catering services to several
parties, functions, and even to the Airlines and Railways. This is one of the major
changes that would be suggested to introduce in chulha‟s business model. These
associated catering services will definitely increase chulha‟s market value and revenue
earnings to a maximum extent. They can have multiple organizational groups for
conducting marriage catering, party catering, corporate get-togethers, government
functions catering services etc. by way of signing official contracts.
VII) They should enter into the railways and airlines food catering services contracts
also. Chulha should also have association with hospitals for the catering contracts.
VIII) Cookery Competitions and award Ceremonies:- Chulha should have annual or half
yearly cookery contests in every regions and territories. This will really boost
customers involvement in chulha‟s business as well as chulha can get some great
ideas to introduce/change in their business models. In many countries the catering service
business entrepreneurs got t h e i r c h i e f c h e f s t h r o u g h t h e s e t yp e s o f c o n t e s t s
a n d competitions.
IX) Specialized Nutritional Services:- This is a very special introductory idea for
chulha‟s business model. Chulha should concentrate on this aspect of
introducing specialized nutritional catering services with the help of doctors
and dieticians around. The services should be based on the following:- 1. Age based
Nutritional Concept:- Pediatric (child/infants), Geriatric (old age) etc. 2. Food based on
Medical Prescriptions:- Sugar, Blood Pressure, etc 3. Food based on modern Health
consciousness:- Low fat diet, Low calorie calculated food,high energy food for youth
and sports personalities etc. Note: To introduce the above, chulha will have to have a
strong financial planning since it involves additional costs also. But taking into
consideration chulha‟s customers base they can have the premium price for their
customers and in turn their customers also will ready to take the additional cost with
ease.
Conclusion:

From the answers given above for the two questions concerned with the viability and
changes of new introduction in the business model of chulha tiffin service business it is
Clearly evident that the proper approach, attitude and controls c a n l e a d t o g r e a t s u c c e s s
o f a s m a l l b u s i n e s s a n d a n entrepreneur.