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Case Study Yalla Momos

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150 views13 pages

Case Study Yalla Momos

Uploaded by

Chandrima Manna
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Yalla Momos

Case Study
Navigating Growth
Challenges in Dubai's
Food Industry

Presentation by Vedant,
Simran, Aditya & Shyam
Introduction

As Prashant Goel, the owner of Yalla


Momos, was thinking about the future
expansion of his restaurant.

Goel's contemplation centered on


meeting his 2016 profit targets amidst
market pressures and the upcoming Expo
2020.
Business
Journey

Prashant Goel started his Business


Journey in 2012, founding Yalla Momos,
a momo restaurant in Dubai.

By 2015, the business achieved total


sales of AED 504,000.

Goel's strategic focus on offering


authentic and affordable momos attracted
a loyal customer base.
Yalla Momos
Timeline

2012 Prashant Goel started Yalla Momos.

Yalla Momos achieves total sales of


2015 AED 504,000.
Challenges with sales growth
2016 amidst escalating costs and
increasing competition

2020 Expo 2020 in Dubai


Market Analysis

• Dubai Food Industry: Estimated AED35 billion


consumption in 2016 with 5.5% per capita growth.

• Competitive Landscape: UAE had 6,021 F&B outlets,


expecting 19,000 more by 2019.

• Consumer Behavior: Average AED51-100 spent per meal


in 2015, influenced by word-of-mouth.

• Inflation and Prices: 2.4% inflation rate in 2016, slight


rise in food prices.

• Marketing Impact: Online reviews on Zomato and Time


Out influenced consumer choices significantly
Financial
Performance

2015 : Yalla Momos generated AED


504,000 in total sales with AED156,240
revenue. Average meal price was AED
20, including beverages accounting for
20% of revenue.

2016: With four locations, depreciation


costs were estimated at AED19,000 per
year, and advertising costs were set to
rise to AED12,000 per year.
Main issues

• Sales Growth Concerns: Goel was concerned about sales growth in


2016 due to increased competition and escalating costs.

• Expansion Dilemma: Goel debated whether to focus on the current


business or open an additional restaurant amidst market volatility and
competition.

• Advertising and Expenses: Goel planned to use advertising to boost


sales at new outlets, but was skeptical about its effectiveness and
worried about associated costs.

• Depreciation and Advertising Costs: With four locations, Goel


estimated annual depreciation costs of AED19,000 and advertising costs
of AED12,000.

• Competition and Market Volatility: Goel was aware of the


competitive landscape and the need to make a quick decision amidst the
expanding Dubai market and its uncertainties.
Current
Financial
Performance

• Growth Concerns: Despite 5% sales growth in 2015, Goel was


concerned about sales growth in 2016 due to increased
competition and escalating costs.

• Expansion: Goel opened a second branch in Dubai International


city and a third in Bur Dubai, moving the central kitchen to a
larger, cheaper space in Dubai International city.

• Financials: In 2015, Yalla Momos generated AED504,000 in


total sales and AED156,240 in revenue. Goel aimed to boost sales
by 10% in 2016 through advertising.

• Expansion Dilemma: Goel was considering opening a fourth


outlet in Al Barsha, a populated area with lower rent but stiff
competition from cafes and quick-bite outlets.
Factors For
Expansion

• Advertising Strategy: Assess the effectiveness and costs of


advertising for boosting sales.

• Cost Management: Evaluate the financial implications of


expansion, including increased expenses for rent, utilities,
administrative costs, and depreciation.

• Financial Projections: Analyze projected revenues,


depreciation costs, and advertising expenses for 2016.

• Competitive Landscape: Evaluate competition in the market


and the impact on profitability.

• Market Trends: Consider Dubai's expanding restaurant


industry, expected demand, and consumer spending habits
Benefit of
CVP Analysis

• Profit Planning: CVP analysis helps in setting profit targets


by analyzing the relationship between sales volume, costs,
and profits.

• Break-Even Analysis: Identify the point at which total


revenue equals total costs, indicating the minimum level of
sales required to cover all expenses.

• Cost Control and Pricing Decisions: CVP analysis helps in


understanding how costs behave in relation to changes in
sales volume.

• Scenario Analysis: Conduct scenario planning by assessing


the financial implications of different sales volumes, cost
structures, and pricing strategies.
Impact of
Expansion

• Increased Sales and Revenue: Expansion to new locations


like Al Barsha could lead to a boost in sales and revenue for
Yalla Momos.

• Cost Management Challenges: Opening a new outlet in Al


Barsha would bring about additional expenses, including rent,
utilities, administrative costs, and depreciation.

• Competitive Pressure: In Al Barsha, Yalla Momos would


face stiff competition from numerous cafes and quick-bite
outlets already operating in the area.

• Financial Performance Impact: The expansion to Al Barsha


and the opening of a fourth outlet would impact Yalla Momos'
financials, with projected depreciation costs, increased
advertising expenses, and expectations of higher net revenues.
Before & After
Estimates

Before Expansion:
Financial Performance (2015) :
• Total sales in 2015: AED504,000 with revenue of AED156,240.
• Average meal price: AED20, including food and beverages, with
beverages contributing to about 20% of revenue.
• Rent for all three locations: AED68,000 in 2015.
• Owners did not pay themselves a salary but shared profits

Projected Financials (2016):


• Considering opening a fourth outlet in Al Barsha, a populated area
with lower rent.
• Anticipated depreciation costs of AED19,000 per year with increased
advertising costs of AED12,000 per year.
• Expected net revenues to rise to AED 727,200 per year with the new
outlet
THANK YOU!

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