Project

Work
SemesterII
Sep-2015

A Project Report on

Shambhus Coffee Bar

Submitted in partial fulfillment of the
requirement

For International Business Management, Semester II

Prepared for Subject: (INBM 208)
PROJECT WORK
Prepared By
Nirav K. Oza Enrollment No: 4243850
JayaPrakash Bikkumalla Enrollment No: 4243350
Mohammed Shakeel AhmedKhan Enrollment No:
4234229

Company Profile
Seeded in 1998 Shambhus Coffee Bar is today is the most popular hangout place of the
Ahmedabad. Over a decade Indias shambhu coffee has just got younger with new fans,
new flavours and new offerings. It said to be the favourite coffee bar not only for the
teenagers but also for business executives, couples & families.
Shambhus Coffee Bar is not only popular for its rich quality coffee and other delicacies
but also for its value for money offerings. It offers the best quality of products at economy
rates. Their commitment to quality is reflected in a unique operational style that is handson and dedicated to best preparation practices a formula which has resulted in the
Shambhus Coffee Bar growing from strength to strength.
Shambhus coffee bar has many franchisee in Gujarat and like in Ahmedabad ,vadodara
,surat etc. and now its being also famous in their country region like in Mumbai ,Rajsthan
etc.

Goal:

Nowadays Shambhus Coffee Bar wants to enter in international market and

grow their Geocentric business but now they have plan to start business in Canadian
market .

Milestone : 1
1.Market entry strategy: Franchising

Franchising is the practice of using another firm's successful business model. There
are two parties, franchisor and franchisee, in franchise model. The franchisor gives the right
for franchisee to use the franchisors trade names and know-how for a specific period of time.
The parent company also provides support for setting up a business. The initial and ongoing
support includes operating manual, training, quality monitoring, and marketing effort such as
advertisement. On the other hand, franchisee gives loyalty fee and initial fee for the
entrepreneurship of business model. Due to the complexity of market, the franchising in
international or foreign market is often performed by master franchising. With this method,
the local franchise is given the right to sell the franchise to other within the country.

Benefits for franchisor

With franchising model, the Shambhus business can expand at a rapid rate. Brand
Recognition is spread when franchisee set up the store in a new location. The franchise is
operated by highly motivated entrepreneur who has the knowledge of local culture as well as
customer needs and wants. Huge amount of investment is needed if they want for opening
and operating on their own. Therefore, the risk of failure for opening the branch in another
country is minimized. Furthermore, the franchisor receives the initial and royalty fee which
can be used as a capital to support and strengthen its business operation. The franchisee is
probably motivated to perform the business at highest level because they invest in the
business.
Benefits for franchisee
A local entrepreneur is also favored by franchise model. By purchasing a franchise,
they have the right to operate the business under their parent companys brand. With wellknown business, the selling power is likely to be high. The success is higher than sole
proprietorship. The startup cost is low as compare to opening their own business. No trial and
error learning is needed. The risk of failure is diminished because the business operation has
already been proven to be success by the franchisor. Moreover, the franchisor also provides
support such as training, recommendation, and marketing activities to support the franchise
network.

For the franchisee of Shambhu, they have the chance to be one of the very first to bring
Shambhu into Canada. It would be great for them because the potential health conscious
consumer is there; hence, there is the possibility of making huge revenue.

Risk management analysis for Shambhus franchisee:

For franchisor
Even if there are lots of benefits, several drawbacks are also emerged. With the
limited control, the quality of franchisee might not be met which, in turn, can damages the
reputation of franchise. Among of all disadvantages, the greatest concern is contributed to the
possibility of franchisee turning into a competitor. When the technology and know-how is
given to the franchisee, they might cancel the contract and operating on their own to earn
higher profit.
For franchisee
The franchisee is bounded to the legal contract and agreement with the franchisor.
They must follow the standard and procedure from the head quarter. Thus, there is a lack of
independence in operating the business. The cost of owning a franchise might be higher than
expect. The initial setup cost, royalty fee, and some portion of the profits must be provided to
the franchisor. This may cause the franchisee to feel lack of motivation to continue the
business.

Milestone 2:

Methods of data collection of market research in Canada

Face-to-face interviewing:- Better explanations
- Depth
- Greater accuracy

- Product placements

Telephone interviews
- High speed, low cost
- Limitations

Self-completion interviews

The factor that influences the response rate of a postal survey more than anything else is the
interest that respondents have in the subject.
Audience motivation is needed

Online surveys

Thanks to technological advancements, online surveys or e-surveys - have become the

preferred data collection method for many customer satisfaction and staff satisfaction
surveys, as well as product and service feedback and conference evaluations within many
business-to-business markets.

-Saves time, money and improves accuracy

Milestone 3:
Data collection regarding Canadian food culture:

As per research and Canadian government also aware for health of their citizen and by an
survey it also clearly seems that their food pattern and health and choices are under as they
are very health conscious people.
This information we could get from their governments health site and other genuine
websites and from a long survey.
Vegetables and Fruit

Eat at least one dark green and one orange vegetable each day.
o

Go for dark green vegetables such as broccoli, romaine lettuce, and spinach.

Go for orange vegetables such as carrots, sweet potatoes, and winter squash.

Enjoy vegetables and fruit prepared with little or no added fat, sugar or salt.
o

Have vegetables steamed, baked or stir-fried instead of deep fried.

Have vegetables and fruit more often than juice.

Grain Products

Make at least half of your grain products whole grain each day.
o

Eat a variety of whole grains such as barley, brown rice, oats, quinoa and wild
rice.

Enjoy whole grain breads, oatmeal or whole wheat pasta.

Choose grain products that are low in fat, sugar or salt.

o

Compare the Nutrition Facts table on labels to make wise choices.

Enjoy the true taste of grain products. When adding sauces or spreads, use
small amounts.

Milk and Alternatives

Drink skim, 1% or 2% milk each day.

o

Have 500 mL (2 cups) of milk everyday for adequate vitamin D.

Drink fortified soy beverages if you do not drink milk.

Select lower fat milk alternatives.

o

Compare the Nutrition Facts table on yogurts or cheeses to make wise choices.

Meat and Alternatives

Have meat alternatives such as beans, lentils and tofu often.

Eat at least two Food Guide Servings of fish each week. *Health Canada
provides advice for limiting exposure to mercury from certain types of fish.
o

Choose fish such as char, herring, mackerel, salmon, sardines and trout.

Select lean meat and alternatives prepared with little or no added fat or salt.
o

Trim the visible fat from meats. Remove the skin from poultry.

Use cooking methods such as roasting, baking or poaching that require little or
no added fat.

If you eat luncheon meats, sausages or prepackaged meats, choose those

lower in salt (sodium) and fat.

Milestone:4
1. Analysis
2.1 Political and Legal factors
2.1.1 Political Factor
here is presidential election every 10 years in Canada, and the candidate that has been
chosen for the first period of 10 years can only be elected for the next 10 years. It means the
maximum period to be the president of Canada for one person is only 10 years. The elected
President of Canada will be given a task to create and build His or Her own governmental
cabinet.

2.1.2 Legal factor

In terms of legal factor, Canada is a country with plenty labor forces. In order to
protect their labor rights, the Canadian government has set-up a law which is called Labor
Laws Article. In this law it is stated that there is 8-hour work days and 40-hour workweeks,
with 30-minutes rest period for each 3 hours of work is legal in Canada). Another policy is
that there must be at least two day of rest weekly in Canada. Canada has also signed the
Memorandum of Understanding with the International Labor organization under the
International Program for the Elimination of Child Labor (IPEC), it is stated there that the
minimum working age is 14 years (Labor & Social Protection, 2009).

2.1.4 Analysis
Given the situation in which there is one election every 5 years and the maximum
period of an Canadian President is 10 years, and also the cabinet is created by the president,
which most probably will support the President without any major opposition activities in the
cabinet. It will give Canada more stable political environment as long as the President show
the charisma and do the right job that He or She has to do. So,political stability will give
higher opportunity in terms of investment to grow inside the country. When the investment is
growing, businesses are spread out through the whole country which eventually reduce the
number of unemployment and make better society in terms of welfare.

2.2 Economical factors

2.2.1 Factors
Canada is a developing country with plenty natural resources spread out throughout
the country. In recent years, Canada has actually made tremendous progress in terms of the
development of the economical factors on the country itself. Moreover, Canada also has a
good and strong agricultural sector; it is supported by the very fertile soil because there are a
lot of active and passive volcanoes. The agricultural sector is also supported by the climate of
Canada which is a tropical climate with high level of humidity and also high level of rainfall.
In terms of imports, it is increasing because of the change happen in the population.
When people have more disposable income, they are more willing to try something new so
they will be interested new things thus creating new demands. Meanwhile, in export, because
of the rapid growth, the productivity of the country has also increased. Major export
commodities are oil and gas.

2.2.3 Analysis

With huge agricultural sectors, Canada is a good market for Shambhu. Raw materials
that Shambhu needs are actually vegetables, meat which all come from agricultural sector. If
Canada provides a lot of supply in this case is those product come from agricultural area, the
possibility of having cheaper price of those kind of raw materials will be bigger compared to
those country who are not as huge as Canada in agricultural sector.

Increase in import indicates the increase in demand from the market. When demand is
increasing it means the people on that market are willing to give out their money to buy
certain things they want. From there we can draw a line that the disposable income of those
people in that market is also increasing. This is a good situation for Shambhu because
Shambhu is considered as new restaurant in Canada. With the increase in the willingness to
try something new the chance for Shambhu to get new customers will be much higher.

2.3 Social Factors

2.3.1 Factors
Social factor is defined as an aspect in which cultural aspects and social phenomenon
are taken into account, for example populations health consciousness, population growth
rate, and age distribution. For instance, in a mature society where most of the population did
not belong to the working age group anymore, it will affect the labor cost because the supply
and demand is not balance, the supply is less than the demand so in order to get the workers,
companies need to pay more.

Canada is a multi-cultural country with a huge number of populations. It is considered

as a young country because the total median age is 27.6 years. Moreover, more than half of
the population is still considered as working age population. Canada recognizes 5 religions in
the country. Which are Christian, Hindu, Muslim, Protestant, Roman Catholic, and Buddhist.
However, the majority is Christian.

In terms of health, we found that the data shows that most of Canadian is living in
high standard of healthiness. We also found that in terms of life expectancy, Canada is only
on the rank of 16th.
However, there is one thing that could be a challenge for Shambhu especially which is
most of Canadian are considering meat as their main meal. It means, whenever they eat, they
will always eat with meat.

2.3.3 Analysis
Its a challenge for Shambhu to open up stores in the market situated like this. The
reason is one of Shambhus signature menus vegetables. So in order to suit with the market
demand, Shambhu has to change and adapt based on the customers. For instance, those meals
which are containing only vegetables actually can be changed by Shambhu with the usage of
beef or chicken instead of using only vegetables.

Another challenge for Shambhu is actually because of the culture of Canadian.

Almost all Canadians has non veg eating culture. It means their primary meal is anything
with meat. The challenge for Shambhu is how to convince Canadians that with just eating
fresh and healthy food, the calories that they get is the same with eating one portion of meat.
For instance, Shambhu can actually advertise with brochures or TV advertising and show the
calories contained in one of the signature meal which Shambhu has.

One big opportunity for Shambhu is that with the low level of life expectancy,
Shambhu can actually focus in advertising regarding to the health issue. For example,
Shambhu can create one advertisement that shows most of Canadian conscious about their
health, and then shows that Shambhu provides a fresh and healthy food with very good taste
on it.

2.4 Technological Factors

2.4.1 Factor
Canada is an archipelago country in which the development is not distributed equally
in each island. Most of the development projects are located throughout the Ontario rather
than in different island like Manitoba,and etc. Therefore in terms of technology, the
development is also not equal for each Province. However they have enough technology
because of its a neighbor country of USA(Highly developed country) where any new
technology easily adapt by them.

2.4.3 Analysis
Given such a strong telecommunication system and huge number of users, it is a
benefit for a company like Shambhu to advertise using those technologies. Shambhu can
actually use SMS to actually send out their advertisement program through it. For instance,
Shambhu can actually give sales promotion like discount voucher for customers, and they can
show the message to get the discount from Shambhu. Moreover, TV is also playing an
important role in entertaining most of Canadians. TV is considered as the cheapest
entertainment media that people can have an access into it. Considering many Canadians live
on the poverty line, TV is a free entertainment media for them. To buy a TV is not so
expensive in Canada, as the market has already open to international trade; a lot of Chinese
product comes into Canada and offer very affordable price to Canadians. For Shambhu, given
this kind of situation, put Shambhu advertisement in TV will be an effective way because
most of Canadians watch TV.

2.5 Environmental Factors

2.5.1 Factors
An environmental factors cover all ecological and environmental aspects such as
climate, weather, natural disaster, and environmental concern as such pollution. These factors
will definitely have a huge impact for the business. Canada is often associated with cold
weather and snow, but in reality, its climate is as diverse as its landscape. Generally,

Canadians enjoy four very distinct seasons, particularly in the more populated regions along
the US border. Daytime summer temperatures can rise to 35C and higher, while lows of
-25C are not uncommon in winter. More moderate temperatures are the norm in spring and
fall.

2.5.3 Analysis
With all the data the natural disaster data that are given above, it has indirect impact
on the continuity of Shambhu business. For example, Winter atmosphere of Canada , it has
also distract every business in those affected area. Therefore in order to avoid those impact,
Shambhu need to open some stores in some different areas, in order to maintain the
continuity of the business and the existence of the business in Canada. For example ,Ontario
province where almost cities are well developed and temperature are low equal to other
province.

2.3 P.E.S.T. Analysis

Below table explain the by a survey some factors which can affect to Shambhu.

Political Factors

Health and safety guidelines

Labeling and GM foods
Animal rights campaigns

Economic Factors

Franchising facilities set

ups
Support

suppliers
Growing market
Perceived value for money
Increasing
disposable

from

major

income

Social Factors

Busy life styles

Technological Factors

Investments

in

Healthy eating and obesity

Increased vegetarianism
Homogeneity
Social activities

technological innovations
Online
transaction
,
payment and order.

As an case study of SUBWAY and as before survey of Shambhu it can prove that a
franchisee also can be successful in Canada
Case study:Subway
Eric Heinrich decided several years ago to abandon the bright lights of Toronto, where he was
employed by a national hotel chain, and go into business for himselfideally in a smaller
community where he felt more comfortable and the cost of living was cheaper. He bought his
first Subway franchise in 1994 in Hanover, Ont., a community of about 7,000. He has since
added a dozen or so more of the popular submarine sandwich restaurants around the
province, focusing on similarly small towns where there is little competition from rival fastfood chains. That now includes locations in Wiarton (with 2,300 residents, not including a
famous winter-predicting groundhog named Willie), Kincardine, Wingham, Arthur, Port
Elgin, Walkerton, Clinton, Exeter, Palmerston and three stores in his hometown of Owen
Sound, a relative metropolis with a population of 22,000.
As a result, Subway franchisees like Heinrich are able to scratch out a living in towns and
hamlets that would otherwise be considered too small to sustain a McDonalds or Burger
King, but are starved for the experience of a big chain restaurant. In some ways, its the
perfect franchise recipe for a large and sparsely populated country like Canada, and is among
the reasons Subway, which generated US$13.8 billion in global sales last year, is poised to
overtake industry icon McDonalds when it comes to global locations in the next few months
(Subway already has more restaurants than McDonalds in North America, although it still
trails Tim Hortons in Canada).

Milestone : 5
Financials:
Startup expenses:
To start the Canadian diamonds business in Canada, the startup capital would be $10 million
CAD. The following are the assumptions for the Canadian diamonds business in Canada
Particulars

Explanation

Amount

Startup capital

Initial investment in Canada

$1 million CAD

Initial ground work

Business Analysis In Canada $10,000 CAD

market

Insurance

10%

of

the

Initial $1 million CAD

investment
Marketing

Promoting

and $100,000 CAD

advertisement expenses
Transportation

Shipping

and

transportation costs

other $500,000 CAD

Bank charges

Bank transactions and other $10,000 CAD

bank fees

Business License

Starting business licensing

$5000 CAD

Partnership expenses

Distribution and supplying

$1,00,000 CAD

Other expenses

$50,000 CAD

1st year sales estimations:

The Canadian company, at the end of the first year estimated sales would be $1.35 million per
a store. The prices below is all in Canadian dollars (CAD)
Types

of Breakdown

Foods
Sandwiches

Pizza

Estimated

3000

$8

sandwiches

sandwich

monthly
150 per day x $12

Monthly estimate

per 3000*8= $24,000

Annual Total
$2,88,000

per 250*2500=$54,000

$6,48,000

per 6000x5=$30,000

$3,60,000

30=4500 per item

month
Cold drinks

200x $5
30=6000

item

items
Breakfasts

monthly
200x30=6000 4 per item
items
monthly

6000x4=$24,000

$2,88,000

Hot

200x30=6000

beverages

monthly

3 per item

6,000x3=$18,000

Total

$2,16,000
$18,00,000x

25%

food

cost($450,000)=13,50,000

Milestone :6

Marketing Strategy
Marketing strategies reflects the companys best opinion as to how it can most
profitably apply its skills and resources to the market place. It is invertible broad in
scope. Marketing strategies are the means by which a company achieves its marketing
objectives and are usually concerned with the four P s.
Shambhu's marketing program addresses health, fresh, custom-made sandwiches
,pizzas expectations of consumers through a number of approaches. The most notable
are the television commercials . These commercials emphasize the healthy aspects of a
Shambhu Food by highlighting the heaviest SUMIT (a person name) lost by eating a
Shambhu sandwich and

diet Food. Shambhu also markets through a national

sponsorship in events such as American Heart Association Heart Walks and local events
such as triathlons, and children's sports teams.
The Shambhu example represents marketing and product strategies that are classic
examples of focusing on market demand, consumer trends, product leveraging, and
innovation. The marketing strategies of creating clear brand recognition, brand and
product association, and market demands, have strategically positioned Shambhu to

advance market share into the near future. These marketing strategies are also
repeatable fundamental marketing strategies transcending the fast food market.
The Shambhu Franchisee Advertising Fund Trust will governs advertising. This
functions independently of Doctors Associates Inc., which is the franchisor of the
SHAMBHU business franchise concept, and its affiliates that trust manages funds
contributed by SHAMBHU franchisees. It was established to create advertising and
marketing programs that are designed to build restaurant sales and promote the
systems image.
SHAMBHU has a customer care team, dedicated specialists who are in constant
communication with consumers same way they can plan as global prospective.
Success factors for fast food franchisees will include products and marketing
targeted to healthier menu selections, brand consistency, low start-up costs,
franchisee support, and consumer convenience. Shambhu

represents a

poignant example of a fast food franchisee ready for success in the future fast
food market. Their strategies transcend the fast food market and apply to
many other markets and products
Branded fast food continuing to move into other nontraditional venues such as colleges,
airports, military bases, hospitals, and amusement centers. Part of their marketing
strategy, Shambhu includes identifying which venues and retail chains would be most
amenable to quick-service brands.

Target Markets
The process of breaking down the total market for a product or services into
distinct sub groups or segments , where each segment might represent a distinct target
market to be reached with a distinctive marketing mix. A market segment consists of a
group of customers or consumers who share the same or similar needs

Segmentation Methods

1. Demographics (Age, Life cycle , Gender , Income , Occupation, Religion ,

Education , Race ,Nationality )
2. Geographic ( Location , Regional , Urban , Density , Climate )
3. Psychographic (Social class , Life style , Personality )
4. Behavioral (Occasions , Benefit sought , User stages , Usage rate , Loyalty
status )
SHAMBHU Segmentations
Age group (18 39)

Kids meals

Income level (c 1)

worldwide

locations
Healthy Life style
Urban Areas (South east etc)
Halal sandwiches
Shambhu is always improving their geographic segmentation from their early
development ages. By studying Shambhus geographical expansion we can identify what
kind of segmentation they include their marketing strategies.

Market Development
This strategy involves finding new markets for the products a firm already makes.
SHAMBHU can develope a team specifying for market development. New Business
Development This team works closely with potential franchisees who wish to open a
SHAMBHU restaurant in non-traditional locations--such as in a supermarket, movie
theatre or gas station
Shambhu restaurant sites are adaptable to any type of location. The simplicity of the
Shambhu Restaurant operation and the ability to fit into spaces that

competitors

cannot enables them to open restaurants in many unusual and non-traditional sites,
such as:

Airports

amusement parks

business centers

coliseums and stadiums

colleges and universities

convenience stores

convention centers

hospitals

military bases

recreational facilities

elementary and secondary schools

supermarkets

travel centers/truck stops

Milestone 7:

We believe to start scope management and planning from making a WBS Create the
project's WBS.
- Promotion:

The promotion method to be used for our services would be the use of Discount coupons and
prospect of winning prize by giving a unique number on Shambhus bill when customer buy
something and

advertisement through various medium, television, and internet. The

company will be in attendance in different trade shows to display our products

We will have also plan to give mobile truck which can deliver food to industries as Canada
has many factories and industry whenever they will have lunch break there will be a mobile
truck from which Canadian can buy sandwiches and shakes and coffee.
Pricing:
We would be using the penetration pricing strategy to enter the market this is because
Canadian already have a well known brand a, they are widely known for their reputation(e.g.
Subway,Mc. Donald , Pizza Pizza etc). As mentioned earlier we estimated $5million CAD for
the start-up capital in order to meet up with certain standards
In order for our company to gain initial recognition in our target market at some point we will
have to work with flexible prices for our partners, and to enter in a market and eliminate other
competitors
Time :
To compete others and to make it renown in Canada we have to make a time schedule where
every goal should be fix on a time for example : If a customer complain in customer service
that service is very poor or quality or very slow then to put these all in account we have to fix
that problems time by time . We have to improve our goals and budget planning where we
can cut the food cost and save some venture.
For ex, we can buy vegetables,fruits, and all grocery in wholesale so we can save some cost
and deliver it to each franchisee on time.

Potential problems :
There are lots of big-name fast food pizza joints such as Domino's Pizza (DPZ), Yum!
Brands' (YUM) Pizza Hut and Papa John's (PZZA) have all invested heavily in new mobile
ordering technology and improved ingredient quality to snag customers in the competitive
fast-food industry which can be diminish the business of Shambhu fast food.

As per our survey , If a food quality will be poor then TV and media can make that a
huge matter as they want a spicy news and those competitors can also will take a
chance in this
As an solution , we have to precise in each and every matter related to food quality.
Canadian government also very aware for their citizen especially in food quality so
our single mistake unconsciousness can jeopardize companys future .
Foods and shipping problem can be also occur as they know we are new in market of
Canada and shipping companies can take advantage as even we do not know the
budget and market rates of delivering basic foods which we will need every day to
make sandwiches and pizzas.
Distance and Time
Even with technologies such as video conferencing, executives in other countries may prefer
to establish relationships on a personal level. For a our company, this can mean a significant
investment in travel costs and having key executives out of the office for extended periods.
Time zone differences can make it difficult to coordinate projects where collaboration is
required. Executives on the West Coast of the Canada. are just getting to work in the morning
when their Indian counterparts are winding down for the day.