Lean Business Start-up Idea Frutine Ice Cream

1. Introduction

Leans start-up is the process of finding a new company or launching a new product in the market by the existing company. Lean start-up develop the product that consumer demand in the market has a desire to purchase as soon as the product is launched (Bocken, Snihur, 2020). Lean start-ups hire the employee who can learn, work, and adapt quickly in the organisation. Frutine is a lean start-up, and developing a new product for the market addressing the needs and satisfaction have been considered the key objective to attain the presence of the consumers in the market. The targeted customers of this new product are individuals who are planning to diet to reduce the intake of calories in their daily life. The production of Ice-cream is done by utilization of protein powders and fruit-based ingredients that produce a minimum amount of fats and carbohydrates. The main aim of this business is to provide low calories ice cream so that individuals utilize this ice cream without having any fear of intake of high calories.

The new ice cream contains 15g of protein per 100g, fat 1g for 100g and carbohydrates 2g per 100g. Frutine has used the application of Xanthan gum declared by the producer, which helps the company to produce high quality of ice-cream which contain low calories. This product helps the company to gain those customers who prefer ice cream as a dessert which is in large proportion.

2. Business objectives

 The main objective of Frutine ice cream is to provide better and more qualitative products or services to customers so that it can easily attract more and more customers to the firm.  The basic aim of the organisation is to bring some innovation in ice cream production by adding fruit-based ingredients and protein powder so that people can have better health and lifestyles. It has more focused on nutrient content with the objective that people have healthy and more tasty ice cream to fulfil their respective requirements (Apostolopoulos and et al., 2018.).  Some of the main objectives of this organisation in terms of market share, profitability and sales revenue which can be illustrated as follows:

• To increase its market share by 12% till 2021 by adding more healthy ingredients to the products.
• To enhance profitability and sales revenue to 10% by enhancing customers’ satisfaction level.
• To bring innovation in its products continuously to retain customers’ loyalty and gain competitive advantages.

The business objectives are attained by proper planning and maintenance of customers’ needs because without consideration of customers’ needs and values, these business objectives cannot be achieved. The objective to increase the market share is done by introducing more healthy ingredients in the products of this organisation because customers always prefer their health. The health of customers is maintained by utilizing products that have natural and healthy ingredients in them. The objective of high profitability and sales revenue of this Frutino is attained by developing a strategic plan in which all goals and objectives of the organisation are achieved (Santos, 2018).

3. Value creation: customers value proposition canvas

Value proposition canvas is a tool that is used to determine that the products and services of an organisation meet the needs and values of customers. The value proposition canvas of Frutine is developed by understanding the needs and expectations of the customers. The value proposition canvas of Frutine determined that newly developed ice cream resolves the issues of individuals who tried to control their calories but due to consumption of high calories ice-cream or dessert after their meal. The use of this low-calorie ice cream decreased the production of fat, carbohydrates, and proteins during metabolism, which helped the individuals in the minimum intake of calories.

Appendix A CUSTOMER VALUE PROPOSITION CANVAS – FRUTINE ICE CREAM

3.1 Gain:

 Frutine has focused on product uniqueness, and reduced the cost of manufacturing to provide quality ice cream products at a reasonable price. The main focus of this innovation is to deliver quality products at a reasonable price as most of the time, customers want to have ice cream but they don’t just because of financial problems. Frutine focused on the pricing of ice cream so that the financial problems of customers may be reduced.

3.2 Products and services:

The company, to attract more and more customers, has planned to introduce zero fat ice cream, hovered ice cream and natural ingredients ice cream. Enterprises, by offering several products or services, can fulfil the requirements of diverse individuals, thereby gaining competitive advantages in the external environment.

3.3 Pain relievers:

Pain relievers are an important part of the value proposition canvas, and the pain relievers of this low calories ice cream are a calculated of overall profit and attain automated, sustainable prediction. There are multiple factors that enhance the customer’s attraction towards this new product, are low-calorie ice cream, effective decision-making strategy of the organisation, and satisfaction of customers (Horst and Murschetz, 2019). Like most of people wants to have a dessert or healthy, tasty ice cream to satisfy their needs, so the company helps in fulfilling their needs.

3.4 Value proposition:

It is a statement which clearly specific to why any particular customer needs to prefer specific product and service rather than other competitors for the fulfilment of their respective wants. The way Frutine ice cream has created a value proposition can be explained as follows:

3.5 Gains: 

The way the company has created maximum value for customers can be stated as it has added tasty flavour, provided varieties of options and ensured healthy nutrition products so that the needs of individuals can be satisfied (Dutta and Sobel, 2018). A company by continuously launching new products or services, adding tasty flavours can create a value proposition and thus get competitive advantages in the external environment.

3.6 Jobs to be done:

There are several jobs that have been completed by Frutine ice cream to create value for people, like cost control and optimum utilisation of resources so that maximum outcomes can be delivered to key individuals.  Time management is another point that has been considered by the company so that services can be delivered to customers in the limited time frame (Abuzjarova, 2018). Therefore, cost, resources and time management are three jobs which have been performed by the company to make customers happy and satisfied.

3.7 Pain:

The pain that is bear by the company by ensuring value proposition is store-based business and more demand during peak season that resulted in a problem for an organisation to deliver better services to customers. Unavailability of products is also a pain as customers must wait to get ice cream, which might lead to dissatisfaction. So enterprise has tried to do it in a better manner so that the end objectives of the company can be achieved.

4. Business Model canvas

Appendix B BUSINESS MODEL CANVAS-Frutine Ice Cream

4.1 Key partner of Frutine:

Dairy industries which provide the milk and other dairy products to the company. Fruits and nuts provide fresh fruits and high-quality nuts for the ice cream. Ice cream producer, which manufactures the final product and dispatches from the factory.

4.2 Key activities:

Market analysis of new product showing their specification of Frutine ice cream, which attract the customers and create a willingness to purchase the product, and in-depth analysis of the market where the demand can be fulfilled and customer satisfaction need is completed. Product differentiation of ice cream with the existing competitor to create demand for the product to customers by highlighting the key factors which are new for the customer and the quality of the product, which make differentiate from the existing competitor.

4.3 Key Resources

The key resources of this organisation are given as follows

4.4 Human resources:

Human resources is an important part of any organisation, so the HR department of Frutino focuses on the hiring of employees, training, and development of employees to enhance their working efficiency in achieving the goals of the organisation. Human resource management is very important in the proper building and development of an organisation, such as HR managers hiring the appropriate people and also doing the onboarding process.

4.5 Collaboration with stakeholders:

Collaborating with stakeholders like suppliers, customers, bankers, investors, and others for the smooth flow of work in the organisation. Stakeholders are important in proper working and development of an organisation. There are three main types of stakeholders such as internal stakeholders, connected stakeholders, and external stakeholders. The internal stakeholders of an organisation are comprised of employees and managers, the connected stakeholders are comprised of distributors, retailers, shareholders, financiers, customers, and suppliers; and the external stakeholders of an organisation comprised of government, society, press, professional bodies, pressure groups, and local communities. Investors such as banks and other organisation: These helps the company to run smoothly with adequate funding that meets day-to-day expenditure.

4.6 Raw material suppliers:

They provide the raw material to produce the final goods and make them available to the customers. The management of raw material suppliers is very important in proper working because if the raw material is not supplied appropriately, no product is formed, and thus the productivity and profitability of an organisation decrease.

4.7 Product marketing licence:

It is permission from the licensor to manufacture or sell the product in the market; An organisation doesn’t start the manufacturing of any product when it doesn’t have a manufacturing license of that product, so that’s why the manufacturing license of low calories Ice-cream is important for proper growth and development of Frutino.

4.8 Value Proposition

Consumers who are on a diet and want low fat and calories-based product would highly prefer this due to its low fat and carbohydrate content as the product is for the diet-conscious people who love ice cream as a dessert and would highly prefer this product and which are in large number in the market. The affordable price of the product so that every individual can take advantage of using the low-fat product and can be affordable for every class of income.

4.9 Customer relationship

            As the product is new, the company offer with discount for the customers to attain the market share, which attracts the customer and makes them wish to purchase it. Whereas, if the customers orders the product, they benefit from the coupon that avail the discount for the next purchase and make effective marketing in the market (Mansoori, 2017).

Channels

            The marketing of the product is done through social media, which influences the people most and reaches the wider market. This is also cost-effective marketing, where results are better than other marketing. While offline media of marketing is also referring such as leaflet for gaining the local market.

Customer segment

            The customer segment is based on three major factors, which are age, taste, and health. Where old age people and mind age younger are more preferred this product as they are free from fat and calories, whereas young sporty students can also prefer them as they are full of healthy nutrition and suitable for all.

Cost structure

            The cost for the new product is differentiated as follows:

Cost of Market analysis is £1200, Employee remunerations £560, Supplier costs £1000, Equipment’s £3000, Social media advertisements £100, Stakeholder engagement £500 and Time of productions: £700

The total cost is £7060

Revenue stream

            The product is available for the consumer from the store market and online food delivery channels. The company is grabbing all opportunities to capture the market by providing online and offline stores for the purchase of ice cream.

6. Evaluation of the plan

            The evaluation of this business plan is important to evaluate the impact of this idea on the growth of business. The critical business evaluation of Frutino is done to explore how this business plan affects the customers’ needs and customers’ satisfaction with the brand. The business evaluation is also done to focus on different facts that how these facts affect the future development of the business. It also needs to focus on improving its services by making more and more use of digital technologies so that a large number of customers can be influenced in the minimum time frame. The evaluation determined how this change affects the competition of this organisation within the market, demand projections, customer preferences, and market size.

The evaluation of this business plan determined how this business idea imparts an important role in changing and altering the strategy of its competitors because the customer rate of competitors decreased as compared to Frutino. There are several competitors of Frutine ice cream that has made use of different strategy in order to attract and retain customers; therefore company has focused on its product ingredients to maximise its brand image and profitability. Furthermore, it must diversify its business operations in the international market so that it can attract a maximum number of people to the enterprise (Chowdhury, Audretsch and Belitski, 2019).

The evaluation of this plan also determined that the enterprise needs to focus on building a strong relationships with suppliers so that it can easily get products or services in the minimum time frame possible. Therefore, the company, through such further development, can enhance its overall profitability and market share in the external environment. 

5. Detailed Developmental Plan

There is a detailed plan for introducing of new ice-cream product of Frutino to determine how this business plan affects the market rate and customers’ preferences in the market. A marketing plan of Frutine is an organisational document that sets out an advertising strategy to provide guidelines and meet the target market of a company. A marketing strategy provides information about information strategies and how the organisation can assess the impact of these programs over a period of time. The value proposition of a company is considered in a marketing strategy. The value statement is the global value commitment to be made to the consumer and is a statement that appears in front of the website of the Frutine. The value proposition should demonstrate how a product or brand addresses the dilemma of the consumer, the product or brand benefits and why the customer should purchase it, not another. This value proposition for the consumer is the foundation of the marketing strategy. The marketing plan is developed by understanding some key factors such as marketing objectives of Frutine, market research to understand the key values of customers and business strategy of competitors, marketing mix, marketing strategies, marketing budget, and monitoring and performance mechanism (Kadekova, Z. and Holienčinova, 2018).

The main purpose of marketing of Frutine is to attain the targeted customers, and the main key factors of the marketing plan are given in detail. There are different factors included in this development plan, such as market size, market growth, customer preferences, channels, ley partners, customer preferences, and customer preferences.   Market Size – Generally, market size refers to the specific no. of individuals in the market segment who can become the potential customers. So, for a lean start-up like Frutine Ice Cream, it is very essential to determine the market size of the potential ice cream buyers before their launch of ice-creams (Donchenko, 2020). The market size of the UK ice-cream industry is £510 m, and as per the need and consciousness towards health considering those factors, it can succeed.

Market Growth – Basically, market growth is defined as the increase in the demand for a product or service in the market. Frutine has analysed and researched about the defined all the attractive pricing strategies for its growth with the help of its talented marketing professionals. The company will promote the differentiated and unique features of its products that will increase sales, and this will contribute to its growth (Behrens, Pokrovsky, and Zhelobodko, 2018). Customer Preferences – Frutine Ice Cream have hired the best talents who regularly research and analyse customer preferences related to ice creams in the UK market. Customers are nowadays growing conscious towards health, so their preferences are towards sugar-free ice-creams which provide health benefits (Kinabo, 2020). Companies can add those food ingredients such as dry fruits, which are protein and rich vitaminsin . Frutine mentions all these rich vitamin ingredients that is used in its ice creams on its packaging of the products and has decided to promote with the help of content marketing showcasing the benefits and speciality of its ice cream.

 Segments – Through market segmentation, the company divides the target market into smaller and defined categories on various basis such as their needs, age group, demographics, and interests etc., for example, such to target youngsters through digital media and to offer them ice-cream flavours that they like and offering the sugar-free ice creams to the age group above 40.  Competitors – Frutine has to face a few big competitors, which will give the business good competition such as R&R Ice Cream, Unilever UK Limited, New Forest and Mackie’s Limited (Asada, 2017). If the company succeed in competing with them and is able to make a good market share in the UK industry, then it will obviously flourish, and the chances of its existence will increase. With the help of professionals and experts’ the company has formulated such strategies which will help them in catering for the ice cream market.

 Key partners – Frutine’s key partners involve the investors and shareholders who have invested in the success and growth of its business. These partners have shown their trust in the company and its plan and are also eligible for the profits that the company will earn. Channels -Distribution channels help in determining the way and no. of intermediaries that are involved in the way of reaching or making the product available to the ultimate customers. Frutine Ice-cream chooses multiple distribution channels through which it will provide its various ice creams to ultimate customers. This involves B2C delivery through the help of distributors, sales teams, retailers, resellers, websites, and apps.

Technologies – The company has invested a huge amount in the adoption of technologies and software that will make the work easier for them, and their customers such as innovative features on its websites such as customers can customize and order the ice-cream as per their preferences, digital technology such search engine optimization and various tools to attract and promote their products (Aliaga and Aliaga Robles, 2019). Use of social media platforms helps in increasing the customer’s reach and make the public aware of its products and benefits and target the young generation. Frutine’s marketing teams use the available tools provided by social media platforms to recognize their potential customers and their preference by doing a survey to know about customer expectation and interest in social media

6. Future development of business idea

The future development of business idea depends on the success of current business development. The vision and mission statement of a business idea also imparts an important role in the future development of the business idea. The business idea of Frutine is to give the low-calorie ice cream to customers so that they can control their calorie intake even with the use of ice cream. Most people are diet and health-conscious, so they like the business and support this idea so the development so the future development of the business ideas is also done. The future development of business ideas is done by introducing some new low calories products in their menu that people can consume easily.

Appendix C JOB DESCRIPTION

7.  Labour Market Information

This is a useful tool that helps the Frutine ice cream company to research future jobs in the UK and to understand the specific roles and future employment demand. With the help of this labour market information, Frutine decides to consider the right talents and offers them jobs accordingly. As a company needs to hire a different delivery persons for fast delivery to its customers by understanding it can provide full-time and part-time employment and reduce through which the company can contribute to the reduction of unemployment in the country.

Sources of Finance – There are various sources of finance that are available for the Frutine ice-creams to build a strong market share by coming up with innovative and differentiated ice-creams. Ice cream companies can opt for several sources of finance, such as bank loans, angel investing, venture capital, overdraft, financial bootstrapping etc. But by analysing the complete business, bank loans will be the most appropriate option for the company as the rates of interest are low, and initially, it can be good for the start-up as they must invest in various other things.

APPENDIX D

Cost of Finances –

7, Recommendation

            From the above report, it can also be concluded that the company can beat the competition by focusing more on innovating its product or adding more nutritional ingredients to the ice cream so that customers can feel happy and satisfied. At the same time, value-creating lean is also another best method that is used by Frutine ice cream to expand and grow its market share.  Investors or key individuals need to invest or provide loans or finance to start-ups as these firms emphasise satisfying the specific needs of customers by making optimum utilisation of resources.

Lean methodology is working effectively by making the best use of resources so that qualitative products or ice cream can be delivered to end users. With the development in technology and an increase in a number of customers, the entrepreneur has more opportunities to grow and develop new venture to enjoy huge profitability. At last, it can also be summarised from the above report that an enterprise, through continuously adapting its method or techniques to external environment changes, can enhance customers satisfaction and thus achieve its goals in a better manner.

Therefore, it can be concluded that lean-creating investment is important as the company is developed a short product life cycle to manufacture ice cream that is as per their existing taste and preference.

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APPENDICES

Appendix A

Appendix A CUSTOMER VALUE PROPOSITION CANVAS – FRUTINE ICE CREAM

Appendix B

BUSINESS MODEL CANVAS- FRUTINE ICE CREAM

Appendix C

JOB DESCRIPTION

APPENDIX D Cost of Finances –