MBA 531: ENTREPRENEURSHIP

CIA III

Feasibility Analysis

Submitted By

Sujith V 2027863

Submitted to

Prof Sirish C.V

 INTRODUCTION:-

BUSINESS IDEA

A well-organized company with a brand will be established to provide Ooty varikey

by providing the products in most of the places where they customers buy other FMCG
products such as Kirana stores, Super markets, Hypermarkets and other bakeries etc. across
India and globally and provide the products in Online with good quality products at
affordable price with many varieties of varikey with many flavors. So that customers can buy
the original Ooty varikey with satisfaction.
BUSINESS PROBLEM:-

There are many bakeries who depends on tourists. Most of the bakeries are
unorganized and the price of the product is not fixed and varies as per the season and most of
the visitors don’t get a quality product for the price they afford. Some bakeries, super market,
Kirana stores sell varikey under the label Ooty varikey in other districts and states. So, people
don’t get the original product and they are given some other product known as Ooty varikey.
People don’t get high quality product at their places and the price of Ooty varikey is very
high in E-commerce with bad quality.

TARGET USERS:-

Target users for this business would be in Kirana stores, supermarkets, hypermarkets-
commerce and other bakeries.

PRODUCT DESCRIPTION

The products will be available in all the stores and online. Customers can use website
to see all about updates through blogs and can purchase online. Through app the products will
be delivered to their location in any place of Nilgiris district before they leave the Nilgiris
check post.

EVALUATION OF INDUSTRY FACTORS:-

PESTEL MODEL:-
Political factors- The political arena has a considerable impact on corporate regulation as
well as consumer and other business spending power. Government stability, public awareness
of the need for a healthy population, and food safety regulations can all have a significant
impact on most economic activities, particularly in the food industry. For example, a
government and people are concerned about health policy will support the development of
quality products for consumption. Furthermore, any policy that is developed will seek to
promote healthy eating habits for segmented customers.

Economic factors- Economic conditions have a direct impact on the food products. People
who have jobs and spare income are more likely to spend more money on food than those
who do not. Similarly, my company caters to the needs of various customers with different
income categories. Basic and value products, for example, are for persons with low to high
financial resources, whereas premium products are for those who pay premium.

Social factors- Over the last few years, consumers have established online buying habits.
Many retailers have responded by introducing online shopping and home delivery services.
However, demand for bakery products is expected to decline slightly due to global lockdown
due to health conscious. Demand for nutrients and sugar free products is also on the rise,
providing with plenty of opportunities. People are becoming concerned about the nutrients,
sugar free products and the price of the products will be increased and can’t satisfy large
volume of customers.

Technological factors- The way the products are manufactured has changed considerably as
a result of technological advancements such as oven. Automated machines have taken the
place of human-served checkouts. Loyalty customers can be sustained using online
transaction and data’s available in public domain and real time data available within the
company. The packaging, labelling, baking can be done through automated machines and any
low maintenance in the machine leads to stoppage of the production.

Environmental factors- All the process in the production side is done through technologies
and equipment utilize a lot of energy and create greenhouse emissions. As a result, company
must constantly strive to lessen their environmental impact.

Legal factors- Countries have different rules and regulations which impact on the retailers,
hypermarkets differently. The appropriate authorities penalised several food safety
regulations for failing to follow standards for waste management, food safety, and selling
out-of-date goods. As a result, export business cautious in order to avoid lawsuits and fines.
FEASIBILITY ANALYSIS:-
PRODUCT FEASIBILITY:
Concept testing :

The product offered is Ooty varikey which is famous cookies in Nilgiris

for its unique taste which is targeted on all set of customers and used as an
alternative for biscuits which uses chemical in the product. The product is made
is traditional method which still gives same taste. The product is sold in all
kirana shops, supermarket and also online. The family business is running
successfully for almost 37 years.

INDUSTRY ANALYSIS

PORTERS FIVE FORCE MODEL

 Threat of new entrant- The threat of new entrant is the first factor, and it evaluates
how easy or difficult it is for competitors to enter the market in the industry under
consideration. The easier it is for a competitor to enter the market; the more likely a
company's market share will be eroded. Since more people are into food industries,
these days there are N number of establishment of startup, competition.
 Threat of substitute- When customers can easily locate substitute items with
appealing prices or superior quality, and when buyers may migrate from one product
or service to another with minimal expense, the second force, threat of substitutes, is
highly dangerous. There are other organized and unorganized companies who are
market leader in selling biscuits, cookies and direct substitute for Ooty varikey.
 Buyer power- The third force, buyer power, relates to customers' bargaining power
over a producer's or supplier's profitability. This is influenced by the following
factors: the number of buyers in the market; the value of each individual buyer to the
organization; and the cost of switching suppliers for the buyer. When buyers buy in
large quantities or control many access points to the final customer, there are few
buyers, switching costs to other suppliers are low, there are many substitutes, and
buyers are price sensitive, buyers have significant bargaining power.
 Supplier power- Supplier power, the fourth force, is a measurement of how easy it is
for suppliers to raise prices. The number of providers of each vital input when
purchased in bulk quantity with supplied butut, the distinctiveness of their product or
service, the supplier's relative size and strength, and the cost of switching from one
source to another all influence this. Suppliers with strong bargaining power might sell
higher-priced or lower-quality raw materials to their customers. This has a direct
impact on the revenues of purchasing enterprises since they must pay more for
materials. When there are few suppliers but many consumers, suppliers are huge and
threaten to forward integrate, replacement raw materials are scarce, and the cost of
switching raw materials is very expensive, suppliers have considerable bargaining
leverage.
 Rivalry- The competitive rivalry is the fifth force, and it depicts how the previous
four forces interact and shape the structure of competitiveness within an industry.
When these forces are combined, the amount of competition, profit potential, and
overall attractiveness and performance of an industry may be determined.
Competitive rivalry is directly influenced by a number of things. Competitive
competition will be intense if competing organizations are roughly the same size.
When the industry's growth rate is slow, competition is likely to be fierce. High fixed
costs of doing business in the market, as well as high exit barriers if a company wants
to quit, will fuel fierce competition.
i) Industry Attractiveness:

1. Number of competitors:
The competitors are huge in the business because there are many bakeries who
offer varikey.
2. Age of industry:
Its 35 years old
3. Growth rate of industry :
Moderate growth because there are alternatives for the product and competitors in
same product.
4. Average net income for firms in the industry:
Its very low. ₹3, 00,000 PA
5. Degree of industry :
 Its Neither concentrated nor fragmented
6. Stage of industry life cycle :
Its in growth phase. If the product has good brand and marketed properly. It can
grow.
7. Importance of industry’s products and/or services to customers :
People Would like to have product which are manufactured in Ooty because its give
correct aroma of varikey because of climate, water.
8. Extent to which business and environmental trends are moving in favour of the
industry :
There is a demand for Varikey and climate is the major factor for the uniqueness
of the product.
9. Number of exciting new product and services emerging from the industry:
Its high. varikey can be made in every flavour to increase the buying power of
customer.
10. Long-term prospects:
Its Neutral because the product is not an essential product for customer.

ii) Target Market Attractiveness

1. Number of competitors in target market:

Many competitors in target market because many snack, cookies, biscuit companies
are there.
2. Growth rate of firms in the target market:
Its very slow because of organised and unorganised sector.
3. Average net income for firms in the target market:
Its very low because the market is saturated with many bakeries, companies
4. Methods for generating revenue in the industry:
Its clear that good brand, quality, right price and marketing can increase the revenue.
5. Ability to create “barriers to entry” for potential competitors:
Its unable to create because the product is not an essential product.
6. Degree to which customers feel satisfied by the current offerings in the target
market:
Customers can be satisfied if they are given some add on discounts, coupon etc.
 7. Potential to employ low cost guerrilla and/or buzz marketing techniques to
promote the firm’s product or services:
Its moderate because its takes time to customer.
8. Excitement surrounding new product/service offerings in the target market:
New innovative products can be offered but also its moderate only.

iii) Market Timeliness:

1. Buying mood of customers:

Customers are in a moderate buying mood because same products can be purchased from
other place even there is taste difference.
2. Momentum of the market:
Slowly its gaining momentum because of the uniqueness of the product.
3. Need for a new firm in the market with your offerings or geographic location:
Its moderate because touristers prefer quality product and location matters a lot.
4. Extent to which business and environmental trends are moving in favor of the
target market:
The increasing growth of touristers in Nilgiris and increased no of cottages, stays etc.
5. Recent or planned entrance of large firms into the market:
No larger firms entered the market or are rumoured to be entering the market.

ORGANIZATIONAL ANALYSIS

i) Management Prowess:

1. Passion for the business idea:-

Work on understanding the customers' problems and find a suitable solution to solve
them continuously even if it takes time which should align with the vision and
mission of the business.

2. Relevant Industry Experience:-

It is a family business. Have a fair idea about the business and family members are
there to support.
 3. Prior Entrepreneurial Experience:-

Family members have a detailed understanding of business functioning and I have

MBA degrees. This combined knowledge and skills would help in developing the
business.

4. Depth of professional and social networks:-

The professional networks needs to be developed once work in the corporate and the
help from incubation Center. The social network is moderate.

5. Creativity among management team members:-

All members support and encourage creative ideas based on experience and MBA
skills also helps in giving creative idea.

6. Experience and expertise in cash flow management:-

Less practical exposure in this area of business management. Should be learned

properly from scratch.

ii) RESOURCE SUFFICIENCY:-

RESOURCE SUFFICIENCY 1 2 3 4 5
1. Office Space 
2. Space to launch a service business 
3. Outsourced Providers 
4. Key management employees (now and in the future) 
5. Key support personnel (now and in the future) 
6. Key equipment needed to operate the business 

7. Ability to obtain intellectual property protection on 

key aspects of the business
8. Support of local and state government if applicable 
for business launch
An explanation of the rating system used in the first portion of the table is as follows:

① Available

② Likely to be available: will probably be available and will be within my budget

③ Unlikely to be available: will probably be hard to find or gain access to, and may exceed
my budget

④ Unavailable

⑤ NA: not applicable for my business

FINANCIAL ANALYSIS

i) Total Start-up Cash Needed

Property: ₹ 10, 00,000

Machines: ₹ 20, 00,000

Other equipment: ₹5, 00,000

Vehicles: ₹5, 00,000

Legal, accounting, and professional services: ₹ 1, 00,000

Advertising and promotions: ₹ 3, 00,000

Deposits for utilities: Nil

Licenses and permits: ₹ 1, 00,000

Prepaid insurance: ₹ 40, 00,000

Lease payments: Nil

Salary and wages: ₹ 3, 00,000

Payroll taxes: ₹ 1, 00,000

Travel: ₹ 1, 00,000

Signs: Nil

Supplies: ₹ 10, 00,000

Starting inventory: ₹ 2, 00,000

Cash (working capital): ₹ 1, 00,000

Total Start up Cash Needed: ₹ 55,00,000

ii) Overall Financial Attractiveness of the Proposed Venture:

1. Steady and rapid growth in sales during the first one to three years in a clearly
defined target market:

It is in moderate potential because the market is unpredictable because already

there are many competitors are there. The market is saturated.

2. High percentage of recurring income—meaning that once you win a client, the
client will provide recurring sources of revenue:

Once the customer trusts the product and if product has a good image, the
revenue increases. It has moderate potential.

3. Ability to forecast income and expenses with a reasonable degree of certainty:

It has weak potential because the demand is unpredictable. So income and

expenses can’t be forecasted properly.

4. Likelihood that internally generated funds will be available within two years to
finance growth:

Unlikely because company will generate less profit within 2 years.

5. Availability of exit opportunity for investor if applicable:

Unlikely to be unavailable because it takes time to capture the market share and
generate profit.

OVERALL FEASIBILITY:-

CONCLUSION:

Product/Market Feasibility:
Overall Feasibility of the Business Idea is feasible. The suggestion is increase demand in the
product and bring innovation product into the market.
Industry/Market Feasibility:
Overall Feasibility of the Business Idea is Unsure. Overall study about the market should be
analysed. SWOT analysis should be done.
Organizational Feasibility:

Overall Feasibility of the Business Idea is Unsure. Because it’s difficult to hire trained
employees. Retain the employees and outsource the business to third party to expand the
business into another state, country.

Financial Feasibility

The margin of the product should be high. It can be done by reducing the overhead cost,
expenses. The working capital should be there to run the business effectively.

OVERALL ASSESSMENT:
The overall analysis is done to know the challenges faced by the business and identify the
steps to successfully run the business to fulfil the customer need. The analysis method used to
identify the status of the business and the alternative idea to increase the market share and
increase the revenue.

REFERENCE:

India Biscuits Market Size, Share, Growth & Forecast 2027 | BlueWeave (blueweaveconsulting.com)

India Biscuit Market 2026 Size, Share, Growth, Trend & Forecast | TechSci Research

Indian Bakery Market Size, Share, Report and Forecast 2022-2027 (expertmarketresearch.com)

INTRODUCTION:

Ooty varkey is a type of biscuit food, made out of wheat flour, rice, semolina, water, ghee, sugar and
salt. It can be either deep fried or baked. It is considered a local colonial era re-interpretation of the
French puff pastry.
Since the colonial rule, Ooty is famous for its Varkey. No one knows how or when it came in to
existence or how it came to be called Varkey.

The president of Ooty Bakery Owners Association informed that if they are given GI certification it
will be a boon to the bakers in Ooty. They obtain the raw materials domestically. The properties of
the water and weather in Ooty gives Varkey a distinct taste.

Ooty Varkey does not contain animal fat. There are more than 90 Varkey manufacturers in Ooty and
none of them use animal fat in its production is what the president of Ooty Bakery owners
Association claims.

The cookie’s crisp and crunchy texture gives a possible clue to the root of its name. The Urdu word
‘varq’ means ‘thin layer’. According to the GI application (available online), the biscuit was invented
in the hill station when it was the summer capital of the Madras Presidency. Confectioners in then-
Ootacamund employed local and migrant labourers from Kerala to work at their ovens, to churn out
large numbers of snacks to suit the tastes of the British Raj officials stationed there.

PRODUCT PHOTOS:

Segmentation-

• Rural and semi-urbàn àreà

• Àll àge groups àbove 5 yeàrs

• Middle clàss ànd lower clàss income groups

• Working people

INDIAN MARKET- give nice topic for this

India, world’s third largest economy by purchasing power parity (PPP) method, is growing with the
highest GDP growth among major economies. The country has witnessed a rise in its personal
disposable income and the consumption pattern has changed a lot in last decade, following surging
employment opportunities, increase in double income households and government’s effort to boost
rural income. Indian consumers are adding biscuits, cookies, sandwich biscuits and other products in
their monthly, weekly and daily shopping basket and the market for these products is burgeoning in
the country. There is a growing number of consumers who are brand conscious and they continue to
trade up for premium biscuits allowing companies to add more cookies in their product portfolio.
The market for these products is being accelerated by high marketing and promotion by celebrities
who continue to influence Indian buyers. Additionally, growing product flavours to cater to every
niche consumer segment has further contributed to double digit growth of the market. India is
world’s youngest nation with majority of consumers below 35 years, who are looking for biscuits
with better taste. Consequently, industry has enjoyed an appreciable performance owing to
favourable macro economic conditions and high demand from the Indian consumers. Moreover,
improvements in macro-economic policies such as low inflation and low interest rates have also
boosted consumers’ sentiments and industry has emerged as one of the beneficiary

MARKET RESEARCH DATA:

The global cookies market is projected to grow at a CAGR of 7.37% during the forecast
period (2020 - 2025).
India cookies market is expected to grow at a significant rate due to increasing demand for
on-the-go snacks which can be also stored for longer time. The changing consumption
pattern and rise in working population within the country are some key factors propelling
the growth of cookies market. Moreover, cookies are now considered as a healthier
snacking option. Due to this, increasing number of health-conscious people in the country
are opting for them, which is leading to high demand for cookies. Also, thriving retail sector
and government’s efforts to boost rural income are expected to boost India cookies market
during the forecast period.

Furthermore, rising disposable income of the country is leading to growing number of

consumers who are brand conscious. This is also creating the demand for premium cookies
in India, enabling manufactures to include more cookie variants in their product portfolios.
In addition to this, new product offerings, variety of flavors and use of safe ingredients are
further anticipated to fuel the growth of India cookies market in the coming years.

India cookies market is segmented based on product type, ingredient, distribution channel
and region. Based on product type, the market can be segmented into bar, molded, rolled,
drop and others. Among them, drop cookies are a favored choice in India and the segment is
expected to witness fastest growth during the forecast period. Manufacturers are also
coming up with more drop cookies in different flavors which are gaining traction in Indian
market.

Based on ingredient, India cookies market can be segmented into plain & butter-based
cookies, chocolate-based cookies, oatmeal cookies, coconut cookies and others. Among
them, chocolate cookies are expected to register high growth during the forecast period as
chocolate is considered as an evergreen flavor and these cookies are bought by both young
and old population in the country.

Indian Bakery Market Outlook

The Indian bakery market stood at a value of nearly USD 7.60 billion in 2020. The market is
further estimated to grow at a CAGR of 8.5% between 2021 and 2026 to reach a value of
USD 12.39 billion by 2026. The Indian bakery market is being supported by the thriving
biscuits and cookies industry in the region.
The biscuits and cookies industry in India accounts for nearly 72% of the sales in the Indian
bakery market. In comparison to other baked FMCG products, the penetration of cookies
and biscuits is quite high in both the urban and rural areas owing to their affordable price
and cholesterol-free nature. Currently, India is the world's largest biscuit consuming nation,
which will be worth nearly USD 4.65 billion by FY 2020. The region enjoys a comparative
advantage in manufacturing, with an abundant supply of primary ingredients, which
supports the growth of the industry in the region.

East and North India are the regions with the highest consumption rate of biscuits
and cookies in the country. Maharashtra and West Bengal, being the most industrially
developed states, hold the highest rate of biscuit consumption.
 Market size and growth industry segmentation

The biscuits and cookies industry in India has been growing at a CAGR of 10 per cent
for the last three years, and is currently valued at Rs 145 billion.

India is currently the world’s largest biscuit consuming nation. The industry is expected to
grow at a CAGR of 14 per cent till financial year (FY) 2019. It will be worth approximately Rs
279 billion (approximately $4.65 billion) by FY 2019.

Compared to other fast-moving consumer goods (FMCG) products, the penetration of

biscuits and cookies, in both the urban and rural areas, is quite high (94 per cent and 83 per
cent, respectively).

East and North India have the highest consumption of biscuits and cookies in the country.
Eighty per cent of the market is currently organised.

Strength:

The traditional way

GI Tag

Environment

Threat:

Competition from organized and unorganized brand, bakeries

Lot of Alternative products

Price of Raw material

New entrants and regional players

Weekness:

Increasing tax incidence and rising input costs are the main challenges that the biscuit and
cookie industry is currently facing. The implementation of uniform Goods and Services Tax
(GST) of 18 per cent across all biscuit segments in 2017 is likely to impact the overall growth
of the industry post-2017.
Giving Same taste continuously

Less automated machines.

Major Drivers of The Industry

The major drivers of the industry include rising disposable incomes, increasing population,
rising demand for biscuits and cookies, the growing use of online platforms, thriving
consumer demand for new and healthy food options, and the rapid advancement in
technology.

Opportunity:

Growth Drivers

Active lifestyle and Health Awareness of consumers

The active lifestyles of consumers, as well as their growing preference for convenient eating
choices, are propelling the demand for healthier biscuits. Consumers who are health-
conscious prefer biscuits with a high nutritional value.This has made manufacturers use
more fibrous and nutritious constituents like oats, decreasing the number of artificial colors
and additives and avoiding high fructose syrup altogether. Another variant for health-
conscious consumers is the low sugar or sugar-free biscuits that help with weight
management, cholesterol management, and much more.

The Rising demand for Ready to Eat Snacks:

The growing demand for ready-to-eat snacks among the people is further expected to boost
the biscuit market's growth in India. Furthermore, the unexpected outbreak of COVID-19
and the pandemic-induced nationwide lockdown has raised the demand for convenience
and healthy food items with longer shelf life, thereby driving the growth of the India biscuits
market.One reason for the rise in demand for ready-to-eat foods is that a growing number
of the working population have less time to cook, which in turn contributes to the demand
for biscuits. Biscuits are a snack for all occasions andtherefore, are highly preferred by the
working population who are always looking for convenient snacks.
THE CRITICAL SUCCESS FACTORS OF THE BISCUIT INDUSTRY IN INDIA ARE:

• India’s lower- and middle-class segment will continue to hold the key to success of the
biscuit industry in India

• Distribution (in rural markets), advertising (in urban markets, innovation) and launching
of new brands are being adopted by the companies to grab the market

• The companies have added new variants into their existing brands, including stylish
packaging

• The focus on urban markets has also contributed significantly to the growth of the
biscuit industry

• Standard grocers are the leading distribution channel, with one-third of the Indian
biscuit market by value. Traditional grocers are the only other channel to take a double-digit
share

• Alliances The biscuit manufactures able to maintain good relations with distributors,
wholesale suppliers and regional institutions will have greater market share due to word-of-
mouth publicity and media attention

• The industry players will try to lower the procurement, production and distribution costs
through programmes such as JIT, JITD, TQM and per stock-keeping unit (SKU) cost-revenue
analysis and will pass on these benefits to the end consumers in terms of lowered prices

Ooty Varikey Process Diagram:

SCOPE:
By Type

 Crackers and Savory

 Sweet Biscuits

By Packaging

 Pouches/Packets

 Jars

 Boxes

 Others

By Distribution Channels

 Convenience Stores

 Independent Bakery

 Online Retail

 Supermarket/ Hypermarket

 Others

By Region

 North

 South

 East

 West
ORGANIZATION STRUCTURE: