INTRODUCTION

COMPANY LOGO

PROJECT SUMMARY
The project, Waffle Time in V-Central Mall Molino, is a franchise business that
aims to provide affordable snacks with a wide variety of waffle flavors that fits in all ages
and in all occasions. The overall study as supported by the marketing, technical,
financial analysis proves to be feasible and satisfying in terms of profit and sales.
Moreover, a look into the management aspect determines the organizational and
operational elements essential in the development of this undertaking.

GENERAL BACKGROUND OF THE PROJECT

Due to economic crisis, many Filipinos will find their ways to earn income to
support their families needs. Today, one of the considerations is the food cart business
because it does not need a huge capital. However, in order to succeed in a food cart
business, one should have a good product and a perfect location for the food cart.

Ideally, food cart should be placed on traffic streets, malls, and in a public market or
grocery store wherein there are lots of people.
Mr. Johnny Que, president of Waffle Time, said that the main franchising lesson
Waffle Time learned was that an established business system is a prerequisite door a
seamless franchise program for it would then be easier for internal and controls to be
efficiently enforced. Once this is in place, the franchiser can go on to look for a
committed and dedicated franchisee that will take care of the brand. With franchisors
support and assistance to novice entrepreneurs, a win-win partnership is ensured.
Waffle Time is a business that was chosen by the fourth year students from
Cavite State University, who aims to provide accessible and affordable snacks for
children, students and busy persons. It is located at ground floor, V- Central Mall Molino,
is one of the best place to put up the business because of few competitor available and
there is a space available for lease. Aside from it, V- Central is a community Mall that
caters all the needs of its surrounding community. The mall is located along Molino
Boulevard, which is the main highway into Bacoor leading to and from Coastal road and
by extension, Macapagal, Roxas Boulevard, and Metro Manila. Molino Boulevard is
currently in the process of large- scale and subdivision developments, with large,
national developers such as Vista land and Filinvest. In line with this, years from now,
the growing community will be a great advantage for the Mall where we locate our
business.

BACKGROUND
Waffle Time started on September of 1998 in the province of Iloilo, Philippines as
a simple business venture. It is the first and original purveyor of delicious, nutritious and
reasonably- priced waffles in a cart, with a vast selection of exciting flavors to choose
from. The first outlet was in The Atrium Mall, Gen. Luna St. Iloilo City.
On June 2002, Waffle Time started to penetrate the Metro Manila market. After
which, they opened outlets in Cebu, Cagayan De Oro, Davao, Dagupan. Waffle Time
opened its door to franchising on March 2004.

VISION
Serving the best waffle in the world across all races beyond all borders.

MISSION

To establish a strong Waffle Time brand image.

To develop a creative and assertive human resource.
To continuously re-invent waffle
To delight customers
To achieve high level of efficiency

OBJECTIVES

The project intended to promote delicious and nutritious yet affordable waffles for
youths and adults of Molino 3 and surrounding communities.

SPECIFIC GOALS

To continuously re-invent at least two waffles every end of the month.

To achieve high-level of efficiency by improving the production and operation

process by the current month.

To increase sales by 5% on the two following consecutive months.
To establish strong brand image to the new market on the end of the first month
by means of advertising.

LEGAL ISSUES
Are there any legal requirements or issues we need to look at or attend to?
BUSINESS PAPERS NEEDED TO OPERATE THE BUSINESS:
1.
2.
3.
4.
5.
6.
7.
8.

Bureau of Internal Revenue (BIR)

Mayors permit
TIN
Securities and Exchange Commission (SEC)
Community Tax Certificate
NBI clearance
Police clearance
Court clearance

PROCEDURE FOR APPLICATION:

1. Submit application to the Franchise Officer or Area Manager.
o Franchise Application Form with 2pcs 2x2 picture
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o Sketch map of proposed outlet location

o Letter of Intent (indicates the complete address of the target site)
2. Upon submission, there will be a one-on-one Interview with Franchise Officer or Area
Manager.
3. Applicant will then receive a feedback if the application has been approved or
disapproved within one (1) week from submission of franchise application.
4. If approved, the applicant will then be oriented and will be required to conduct a foot
traffic assessment of the propose space.
5. Franchise applicant will be given a maximum of ten (10) days to submit the site
evaluation report. The submitted site evaluation report will then be evaluated and
verified.
6. On the 10th day, the following documents will be submitted together with the Site
evaluation report:
o Community Tax Certificate
o NBI clearance
o Police clearance
o Court clearance
o Authority to check bank account
o Processing fee of P5,000.00
7. Review and Signing of Agreement

8. Payment of 50% franchise fee.

9. Training / Orientation on Outlet Operations of both franchisees and their prospective
crews.
10. Full payment of franchise fee, security deposit and initial stocks.
o P5, 000.00 processing fee is deductible from the total franchise package cost;
but is non-refundable in the event that the application is not granted by the company for
whatever reasons.
11. Grand opening of franchise outlet.

ANALYZING THE ENVIRONMENT

ENVIRONMENTAL CLIMATE
1) What are the relevant social, political, economic and technological trends?
SOCIAL

People tend to look for budget wise foods or snacks to save earnings.
Today, the people are looking for healthier snacks, those that satisfy their

cravings yet will not destroy their diet.

A larger percentage of people today are employees or into business that they

prefer a 5 minutes quick snacks.

Foreign products are being patronized by the locals

ECONOMIC

There is a tremendous growth in franchising food cart business in the

Philippines.
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Food cart industry has brought in at least 1Billion Pesos in sales every year.
Increasing numbers of two-income households in the country.

POLITICAL

It is a must to undergo a legal process and comply by the needed requirements

when starting a business in the country.

Registering the business with DTI, IPO, BIR, and get the necessary business
permits in the barangay and municipal/city hall.

TECHNOLOGICAL

New designs of waffle iron are being innovated for better appearance of the
products

2) How do you evaluate these trends? Do they represent opportunities or problems?

Social- trends have a great impact on the success of waffle time because it
answers the need of its consumers. There is a positive impact on the part of waffle time
business to continue their way on achieving their goals. On the other hand, the more
foreign product being patronizes the lesser the local product become desirable.
Economic- the higher the income will be, the higher the purchasing power of
consumers. The food cart businesses will surely a choice of entrepreneurs as it gains a
higher income because it only need a small amount of capital.
Political- if the process of assessing all the documents needed become easy,
there is a big chance for the entrepreneurs to pursue this kind of business.
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Technological- since there is a new technology being used by the competitor;

consumers might catch their attention and eventually try the product. On the contrary, if
waffle time tries to use new waffle iron designs like animal shape or cartoon character,
this will surely patronize by the consumers especially the young ones.

BUSINESS ENVIRONMENT
The business environment of Waffle Time consists of many forces close to it,
which affect its ability to serve its customers, such as other channel members,
suppliers, competitors and publics. It also includes broader demographic, economic,
political, legal, technological, ecological, social and cultural forces.

1. Factors in the remote environment which will affect the industry are:
DEMOGRAPHIC:

Size of the family

Income level
Lifestyles

ECONOMIC:

Inflation rate
Deflation rate
Unemployment rate

SOCIAL:

Buying habits
Religion and beliefs
Population growth rate
Social responsibility

POLITICAL, GOVERNMENTAL, AND LEGAL:

Tax Laws
Patent Laws

TECHNOLOGICAL:

New equipment
Technological advancements

CULTURAL:

Attitude towards price

2. What will that effect be and when will it be felt?

Changes in external forces translate into changes in consumer demand for both
industrial and consumer products and services. External forces affect the types of
products developed, the nature of positioning and market segmentation strategies, the
type of services offered, and the choice of businesses to acquire or sell.
Identifying the demographic forces helps the organization to determine
appropriate course of action to better serve the unique needs and preferences of their
ideal customers. It will be felt after the segmentation has been created.

Economic factors have a direct impact on the potential attractiveness of various

strategies to be performed by the company. Limiting inflation and avoiding deflation
helps to keep the economy balanced. Moreover, increase in unemployment rate will
greatly affects business in the country. It can be an opportunity to provide jobs or it can
also be a threat to the sales of the company.
Political, governmental, and legal factors can represent key opportunities or
threats for both small and large organizations. Changes in patent laws, tax rates, etc.,
can affect firms significantly. The increasing global interdependence among economies,
markets, governments, and organizations makes it imperative that firms consider the
possible impact of political variables on the formulation and implementation of
competitive strategies. It can also have a major impact on the strategies of small, large,
for-profit, and nonprofit organizations. Many companies have altered or abandoned
strategies in the past because of political or governmental actions.
Technological advancements can dramatically affect organizations products,
services, manufacturing processes, marketing practices, and competitive position,
resulting to create new markets, proliferation of new and improved products, change the
relative competitive cost positions in an industry, and render existing products and
services obsolete.
It has changed the very nature of opportunities and threats by altering the life
cycles of products, increasing the speed of distribution, creating new products and
services, erasing limitations of traditional geographic markets, and changing the
historical trade-off between production standardization and flexibility. It can also reduce
or eliminate cost barriers between businesses, create shorter production runs, create
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shortages in technical skills, and result in changing values and expectations of

employees and customers.
3. Is the industry profitable now?
Yes, the industry is already profitable because food is a basic human need.
People love to eat foods that are easily available and particularly the ones that are
situated in convenient places.
4. Is it likely to be profitable in the future?
Yes, it is likely to be profitable in the future because food cart business does not
require huge capital to start-up. Moreover, considering its affordability and convenience
people will surely patronize the business.
5. Critical success factors required being in the industry
The critical success factors required to be in the industry are capital, suppliers,
promotion, consumers and physical resources such as a location of the business,
equipment, and the required documents to start-up a business.

6. Critical success factors to lead the industry

Some are the critical success factors required to lead the industry are strong
brand image, market shares, customer loyalty, strategic planning, research and
development teams, customer-oriented service, promotional strategies, and efficient
service and production process.

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7. Level of turbulence within the industry

There is moderate level of turbulence within the industry because of inflation rate
on the raw materials used for the products.

8. Factors that will push the industry towards being an international or global industry or
prevent it from becoming international or global
The factors that will push the industry towards being an international or global
industry are: market share and cost of overall expenses.

POSITIONING
Positioning is the art of defining how the product/service should be perceived by
customers relative to their perception of the competitors products. Positioning is
extremely valuable especially when the company is not the market leader because they
must establish the benefits of going with their lesser known product or service.

A. CATEGORY
Waffle Time is a micro-enterprise type of business that specializes in Food Cart
Industry, specifically waffles.

B. CLASS
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In terms of product quality, Waffle Time is considered as a high-end enterprise,

because of its carb-protein features that gives of a nutritious vibe to its customers.

C. FEATURES AND BENEFITS

One of Waffle Times mission is to continuously re-invent waffle. Adopting its
mission waffle time is having a fillings of the month, where in the featured certain fillings
every month for the delight of their customers.

FEATURES

BENEFITS

Carb-protein combination
Prices range from P12.00 to P25.00
Food cart type

Nutritious
Affordable
Convenient

D. PRICE
The business aims to maintain the products affordability by setting the price
range from 12 Php up to 20 Php depending on the flavor.
Pricing List
Savory
Cheese Delight
American Hotdog
Tuna Salad
Ham and Cheese
Canadian Bacon
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P14
P18
P20
P20
P20

German Cheese Franks

P20

Sweet
Pineapple Pleasure
Ultimate Ube
Mango Magic
Bavarian Cream
Swiss Chocolate
Belgian Chocolate

P12
P14
P14
P14
P16
P18

Drinks
Iced Tea (12 oz)
Bottled Water (500 ml)

P15
P15

PRODUCT POSITIONING
I. Customers will know they need our product because

People tend to look for budget wise foods or snacks that are convenient and

ready-to-eat.
Waffle Times products are delicious and a carb-protein combination that are

perfect for health conscious people.

The business offers wide variety of flavors of waffles, from sweet to savory

fillings.
The prices of Waffle Times products are affordable, ranging from 12Php up to
20Php only.

II. Our product/ service meet the needs of:

Students
Employees inside the mall
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Walk-ins and by passers

III. These customers will benefit from our product/ service because:

Students, because they are most likely to spend small amount of money and
tend to look for affordable snacks.

Employees inside the mall, because they are already earning their money so
they can afford to spend extra for snacks they want.

Walk-ins and by passers, because they are usually the one who were convinced
by the advertisement of the business and decided to buy because of its
affordability and ready-to-eat snack.

IV. Positioning Statement

Waffle Time products are for people who are looking for a delicious, nutritious
and budget friendly snacks.

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WAFFLE TIME

Waffle Times products are high-quality yet are low-priced type.

FEASIBILITY DEVELOPMENT CHECKLIST

A. LIST PRICE
Unit

per piece

Multiple Quantity

None

Volume Purchase

same price per piece

Special Packaging

Waffles on Box
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Limited Function Version

Maja Blanca Fillings & Fruit Salad Fillings

1. Determine whether or not you need a new or different name

A. New product or product line

Since, one of the companys missions is to continuously re-invent waffles; there

is the need for new products in Waffle Time.

B. New module/edition

none

C. Existing name is not working

Since waffle time become popular in the market there is no reason to create or
change its name.

2. Evaluate whether or not you are in a position to change name

We are in no position to change the name of Waffle Time for it is stated in the
package inclusions that as franchisee, we are given the privilege to sell Waffle Time
products using the Waffle Time trade name and trademark during the duration of the
franchise contract. The management has the whole rights to change its name or not.

UNDERSTANDING THE MARKET

GROWTH RATE OF THE MARKET

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Among the barangay areas of Bacoor City Cavite, Molino 3, as the target market,

has the highest number of population with the total of 58,663 inhabitants.
Waffle Time segmented their market as follows:
o Male and female students
o Working single male and female
o Non-working single male and female
o Working married male and female
o Non-working/ stay at home male or female

In the past, Molino 3 has 52, 470 populace as of 2010.

We assume that 75% or 43,997 of the population will be our potential customers.

CUSTOMERS AND POTENTIAL CUSTOMERS

Age
Sex
Family size
Family life cycle

10 years old up to 40
male and female
3 members and above households
students, working students, working single individuals,

non, working single individuals, working single parent, working married couples
without children, working married couples with children, non-working/stay at
home married couples without children, and non-working/stay at home married

couples with children

Income
Occupation
Education
-

20,000 below
70% are employees or workers
non-professional, professional, under graduate and

college graduate
Nationality

Filipinos

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BENEFITS THE CUSTOMERS AND POTENTIAL CUSTOMERS ARE SEEKING

Our potential customers seek to find low prices yet nutritious products, the quality
of product or service and the benefits that they can get from the product that will satisfy
their needs.

SIZE OF KEY MARKET SEGMENTS

By customer type
By product differentiation -

middle class and lower class

variety of products, price, packaging, order

type, advertising/promotion, product features

TYPE OF INDUSTRY
Waffle Times market type is Cyclical, wherein the type of industry that is
sensitive to the business cycle.

MARKET SENSITIVITY
COST VARIATIONS-

for the students being the target market, they are sensitive to

cost variations given that they are still studying and they can work to earn their money.
For those customers who are already working and not yet married, they can afford to
buy products that are little expensive because they already earning their own. For those

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customers that are married and have children, they tend to get very sensitive to price
because they are budgeting their daily expenses.
SERVICE LEVELS

most of the target market wants to purchase and get

the products as soon as possible so they can choose waffle time because they will not
spend hours to get it.
FEATURES

waffle time customers are considered sensitive to

features of the products like being low-priced, protein-carb combination, and

accessibility.
EXTERNAL FACTORS

the market are directly affected by the changes in

external factors, thus, making them sensitive to the economic, social/cultural,

political/legal, technological factors.
BUYER DECISION PROCESS OF CUSTOMERS -

There are needs arises from the

customers for a delicious and nutritious yet affordable snacks, making Waffle Time a
choice for them to purchase, because of its low priced products and its carb-protein
features.
PRICES SET

Waffle Time prices are set depending on its flavors/

fillings and also on its location.

STABLE INDUSTRY OR A BOOM AND BUST INDUSTRY - The said industry is stable,
with 18 years of operations and most of the Filipinos recognized the brand of the
business. Today, it has more than 400 branches nationwide.

SKILLS OF THE FIRM

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The skills of the firm effectively place limits on what they are capable of
accomplishing in different aspects. Waffle Time employees and personnels are fully
equipped with necessary knowledge, skill, and experience to perform designated task
for the ventures sustainability and success.

SKILLS NECESSARY IN THE BUSINESS

MARKETING SKILLS

the firm has the necessary skills and experience when

regards to marketing especially on marketing a product, how to promote it and persuade

the customers to buy the products.
PRODUCTION SKILLS

the firm is equipped with the needed production skills.

The employees make sure to be accurate in their work and maintain the total quality of
the production.
MANAGEMENT SKILLS

the firm has the required skills to run the business

naming planning, decision making, delegation, execution, good communication, risktaker, goal oriented, problem solver, etc.
FINANCIAL SKILLS

the firm is knowledgeable when it comes to financial

matters. They have the knowledge to monitor and control the inflow and outflow of cash
in the business.
RESEARCH AND DEVELOPMENT SKILLS

one of the firms mission is to

continuously re-invent waffle. In regards to that, they make sure to develop and create
new products that are up to date and will cater the needs and wants of the customers.

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SKILLS COMPARE TO COMPETITORS

Waffle Time make sure to be the number one waffle provider in the Philippines,
and to make it possible the company make sure to keep its competitiveness and to be
one step ahead on its competitors. Waffle Time conducts seminars and training for its
employees to fit for the task given to them. They also conduct research about their
competitors.

ASSESSING STRATEGIC CAPABILITIES

BUSINESS STRATEGIC OPTIONS
The business focus on its growth for them to acquire larger market shares and
make the brand know in the whole country as the firms vision is to become the one who
serves the best waffles in the world. The companys vision wont be possible if it cannot
penetrate the local market.
Differentiation Strategy is a big help for the Waffle Times growth. It is time
for the venture to focus on the other aspects like product quality and innovation, service
levels and distribution process. Differentiation strategy aims at producing products and
services considered unique industry wide and directed at consumers who are relatively
price-insensitive. Successful differentiation can mean greater product flexibility, greater
compatibility, lower costs, improved service, less maintenance, greater convenience, or
more features. It also allows the firm to charge a higher price for its product and to gain
customer loyalty because consumers may become strongly attached to the
differentiation features.
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Related products for the existing market is the best product and market strategy
for the firm to pursue because it enables them to develop new products related to
current range, add product features and refinements, expand the product range,
develop a new generation product, and develop new products for the existing market.

EVALUATING CAPABILITIES V. COMPETITIVE STRENGTHS

Below shows the perception of the organizations competitive strength relative to
the most significant competitors in the industry [5 represents the most competitive and
-5 the least competitive]

CAPABILITY COMPONENT

-5

-4

-3

-2

-1

+1

+2

+3

+4

+5

CULTURE
+5
1. Values and Attitudes
2. Skills and Knowledge
3. Management of Change
4. Risk-Taking
5. Management by results

+4
+5
+5
+5
+5

6. Organizational Learning
STRUCTURE
7. Organizational Form
8. Job Definition
9. Demands and Incentives
10. Information power
structure
11. Informal Power
12. Self-renewal

+4
+4
+4
+4
+4
+4

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PROCESS AND SYSTEMS

13. Informal decision making
14. Decision-making system
15. Environmental
surveillance
16. Problem/ opportunity
anticipation

-4
+5
+5
+5
+5

17. Problem prioritization

+5

18. Information system

19. Planning system
20. Implementation system
21. Control system
22. Management technology

+5
+5
+5

23. Computer application

+5

+5

HUMAN RESOURCE
CAPACITY
+5
+5
+5
+5

24. Top management

25. Middle management
26. Supervising staff
27. Staff
RESOURCES

28. Financial
29. Physical
30. Technologies
31. Products
32. Credibility with clients
33. Information

+4
+5
+4
+5
+5
+5

STRATEGIC CAPABILITIES
Listed below are strategic capabilities the organization possesses.
IN DISTRIBUTION
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Weekly deliveries
Adequate stock levels and efficient channels of distribution on Waffle Time
commissary

IN FINANCE

Strong cash management

Access to adequate financial resources
daily sales report, inventories

IN HUMAN RESOURCES

Strong recruitment skills and ability to attract key staff

Viable and relevant training and orientation program
Strong and developing company culture
Benefits for workers

IN INFORMATION SYSTEMS

Providing appropriate, timely and up to date financial and customer information

Continual development

IN MARKETING

High or low product consistency and quality

Wide product range
Branding, Image, and Reputation
Packaging
Design consultancy and conceptualization for customized marketing staff
Skilled, committed sales force

IN PRODUCTION

Flexibility in production and lead times

Highly productive labour force

IN PURCHASING
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Strong negotiating skills

Strong supplier relationships

IN RESEARCH & DEVELOPMENT

Continuous product design and improvement

Differentiation between products

ORGANIZATIONAL CULTURE
There is a good relationship being created by the top management of Waffle
Time Inc. as it makes a clear agreement with regards to the business on the part of the
franchisee. The rules and standards that will be implementing are passing down to the
colleagues and salesperson. The members maintain the trust to each other. When it
comes to dealing with stress and risk on the operation of the business, the salesperson
reports it immediately to the supervisor/owners so that they will get help from them.
Organizational culture on an organizational basis involves and includes the
structure of reporting relationships, management and supervisory styles wherein the
owner/s visit the outlet and talk to the salesperson giving them courage and
inspirational messages, company policy to maintain the smooth sailing business
operations, work flow and workloads, and personnel practices.

ROUTINES AND RITUALS

Waffle Time will be operating through the help of its personnel, on regular
business hours from 10:00 am 9:00 pm, Mondays to Sundays. Employee has s
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designated task given to them to maximize the production time while maintaining the
quality and customer-oriented service. The franchisee will use the business operations
system developed by the Waffle Time Inc.
The business operations system includes:
a. Outlet operation- product procedures, quality standards, food safety practices,
workplace safety and handling complaints.
b. Outlet accounting- daily sales report and inventories

SYMBOLS
The business uses the Waffle Time trade name and trademark together with a
well-designed and attractively made brand new cart that includes the familiar Waffle
Time signage.

STORIES AND MYTHS

Waffle Time is an established brand with thousands of satisfied customers. A lot
of people recommend franchising the company. The business received excellence
awards from different years. These include:
Most Promising Filipino Franchise (2006)
Outstanding Filipino Franchise (2008, 2009, 2010 and 2012)

LEADERSHIP AND POWER SOURCES

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Through the participative style, everyones opinions are taken into consideration
and there is an open door policy for every member of the business for whatever concern
they want to settle.

CONTROL MECHANISMS
People in the management provide rewards to the salesperson/ crew based on
performance results because employee satisfaction is also consider important. For the
daily operation, the product are maintain through the good hands of the crew and by
following the First in First out method where used by most of the food business.

ORGANIZATIONAL STRUCTURE
WAFFLE TIME INC.

Mark Erwin
Arciaga
General Manager

Angel Rynia Atienza

Marketing Manager

Liane Angela Gabriel

Finance Manager
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Eva Leila Gagap

Sales Manager

Salesperson

PERSONNEL

POSITION
General Manager

JOB DESCRIPTION

Marketing Manager

Sales Manager

Financial Manager

Food attendant/ Crew

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Should be responsible for all aspect of

the business
Will ensure that the personnel and
staff would do their jobs properly
Plan and implement marketing
activities
Monitor how target markets respond
to marketing efforts.
Goal is to increase profit and retain
loyal customers
To maintain a positive attitude that
promotes team work within the
company and favorable image of the
business
In charge of budgeting and cost
control
File and organize financial documents
and supports
Get the customers and serve
Reporting the sales of the business
Responsible for the sanitation of the
stall

STRATEGY DEVELOPMENT
THE CUSTOMER
The objective of this business is to manufacture and sell quality and affordable
waffles to our potential customers in V-Central Mall Molino, who are commonly the
students, children, employees and walk-in shoppers from Molino 3, Molino 2, Queens
Row Central and Queens Row West. They will most likely to buy snacks like waffles and
drinks such as Iced Tea, Pineapple and etc. Customer satisfaction will be our sole focus
by offering affordable, delicious and healthy waffles that everyone will patronize.
As the number of busy workers who dont have enough time to prepare proper
snacks the demand for ready-to-eat foods also increases. People love to eat especially
when there is something new, they would love to taste it as soon as they can. Food
stalls are everywhere and the cheaper the price the more the customers would buy.
Though there are many choices to consider when buying snacks, Waffle Time do
its best to best serve their customers by providing delicious, nutritious, very affordable
and convenient snack.
The business strengths are: do not require huge promotion, nutritious and
affordable products.

PERSONAL AND CORPORATE AIMS

PERSONAL AIMS

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To create a job for themselves

To build and run a growth company.
To make a better living than working for wages.
To build a business / job for family members.

CORPORATE AIMS
BUSINESS

To provide nutritious and yet affordable waffles for lower and middle classes.

To commence with a small range of products with objective of growing into a

market leader.
To be able to position waffle time business in the minds of the consumer as the
affordable yet nutritious snack

GROWTH

To open a new waffle time branch in location that will be owned by the four of us.

To increase the market shares of the company

STAFF

Build a dedicated team of high quality performers, with emphasis on loyalty.

Offer fair pay and conditions for high achievers, with no room for poor
performance.

CONSEQUENCES
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BUSINESS

Remain small with little growth and local orientation.

GROWTH

Little growth due to narrow focus and local orientation.

Take small, calculated risks to maintain / create conservative growth.

COMPETITORS
The checklist below, to know and understand who the competitors are, where the
company stand, and what to do about it

The objectives are:

To have a complete, objective listing of competitors showing exactly where the

business or proposed business stands.

To have a complete script for the sales and marketing people to use to
systematically defeat the competitors advantages, benefits, claims, features, and

dirty tactics.
To have a prioritized list of action items for the business department to help
develop undoubtedly the best product in your industry.

INTENSITY OF COMPETITION

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Threats of New
Entrants
(MODERATE)

Bargaining Power
of Suppliers
(MODERATE)

Intensity of
Rivalry among
Existing
Competitors
(HIGH)

Bargaining
Power of Buyers
(LOW)

Pressure from
Substitute
Products
(LOW)

INTENSITY OF RIVALRY AMONG EXISTING COMPETITORS (HIGH) where

there is one direct competitor near the waffle time which is the Famous Belgian Waffles
but this competitor has a higher price range.
THREATS OF NEW ENTRANTS (MODERATE) This is easy for new players to
enter especially if they consider the expenditure and small amount of capital
requirements of franchising food carts. As times goes by, many businesses related to
waffle will start to sprout like mushrooms and they have their new ideas to captivate
their market. People are always looking forward to what is new and change their
preferences for taste and for the value of their money.
BARGAINING POWER OF BUYERS (LOW) Customers can no longer demand
to drive down the prices. Since there are a few substitutes available, it influences the
customer not to switch.

33

BARGAINING POWER OF SUPPLIERS (MODERATE) most of their raw

materials for their production are possible for price increase thats why suppliers may
affect the availability of their raw materials.
PRESSURE FROM SUBSTITUTE PRODUCTS (LOW) Customers may choose
Churros City for their substitute to waffle since its price is not far from the price of Waffle
Time and also they are both pastry made snack.

PRODUCT IDEA RATING DEVICE

Product
Success
Requirement
s

(A)

(B)

Rating

Relati
ve
weight

Company Competence

(A x
B)

level
0.0

0.
1

0.
2

0.
3

0.
4

0.
5

0.
6

0.
7

0.
8

0.
9

1.
0

Company
personality
and goodwill

0.20

Marketing

0.20

Research
and
Development

0.20

Personnel

0.15

0.135

Finance

0.10

0.09

Production

0.05

0.045

Location and
Facilities

0.05

0.18
x

0.16

34

0.2

0.05

Purchasing
and Supplies

0.05

TOTAL

1.00

0.045
AxB=
0.91

Rating scale: 0.00 - 0.40 poor, 0.41 - 0.75 fair, 0.76 - 1.00 good.
Present minimum acceptance rate: 0.70
The first column lists factors required for a successful launch of the product to the
marketplace. The next column shows weighting factors which management may apply
to various issues. Thus management believes marketing competence will be very
important (0.20), and purchasing and supplies competence will be of minor importance.
The next task is to rate the organizations degree of competence on each factor
on a scale from 0.0 to 1.0.
The final step is to multiply the relative importance of the success requirements
by the corresponding levels of organizational competence to obtain a single overall
rating of the organizations ability to carry this product successfully to the market place.

GOAL SETTING
AREA

Finance

MEASURE

STANDARD- TARGET- GOAL

Profitability

40% profit margin

Return of Investment

15% of monthly profit

Market share

10% annual market share

Overhead Expenses

Less than 20% of sales

Advertising Expenses

8% of sales

35

Sales

Employee relations
Customer relations/
goodwill

Sales revenue

150,000 Php per month

Units Sold

300 units sold

New customers

20 per month

Lost customers

Less than 10 per month

Absenteeism

No more than twice a week

Degree of satisfaction

Zero complaint

NEW PRODUCT DEVELOPMENT

YES
1. Has the product been in developing for a year?

2. Does your company currently make a similar product?

3. Does your company currently sell to a related customer market?

4. Is the R & D at least one third of the product budgeted?

NO

5. Will the product be test marketed for at least 6 months?

6. Will the advertising budget be at least 5% of anticipated sales?

7. Will a recognized brand name be on the product?

8. Does the person in charge have a private secretary?

9. Would the company take a loss for the first year?

10. Does the company need the product more than it wants it?

11. Have 3 samples of Advertising copy been develop?

12. Is the product really new, as opposed to improved?

13. Can the decision to buy it be made only one person?

14. Is the product made in fewer than 5 versions?

15. Does the development team have a working code name?

16. Will the product need service and repair?

17. Will the CEO see the product leader without an appointment?

18. Did the project leader make a go of the last two projects?

19. Will the product be on the market for more 18 years?

20. Would the project leader quit and take the item with him if the

36

company refused to back it?

Scoring
YES answers to 11 or more, the idea should succeed.
YES answers between 8 - 10, the idea is borderline.
YES answers less than 8 times, look into a chicken shop.
YES answers less than 6 times, you couldnt run a chicken shop.
There is a need for a new product development for Waffle Time Products as per
the results are indicating.

SWOT and TOWS ANALYSIS

STRENGTHS

WEAKNESSES

(maintaining these
strengths)

(overcoming these
weaknesses)

More variants to
choose from

other products not

being patronize

Affordability in
terms on the price
of waffles

limited management
control

37

OPPORTUNITIES

Brand recognition

Good competitive
skills

SO

WO

(taking advantage of these 1. Market Development

opportunities)
(S1,O1)
2. Product innovation
New market to
(S1,O2)
penetrate
3. Promotional strategies
(S3,O3)
Diversify into

1. Minimize the production of

the less patronized
products (W1,O1,O4)
2. Re-develop less
patronized
products(W1,O2)

related products

Promote new
products

Adopt New
Technology

THREATS

ST

WT

(overcoming these threats) 1. Level-up competitive

1. Cooperation with the
strategies (S3,T1)
company owner
Growing competitive
2. Have several suppliers
(W1,W2,T1)
pressure
for raw materials (S1,T2) 2. Intensive advertising and
promotional strategies
Inflation on other raw 3. Up to date market
research (S1,S2,O3)
(W1,W2,T1)
materials

Changing customer
needs and
preference

1. BUSINESS GROWTH AND PERFORMANCE

For the growth of the business, we will continue to develop waffles that will surely
delight the customers. Waffle time shall concentrate on its promotion. Flyers and
posters shall be made available for viewing to attract more people coming in the mall.
Promotion will decrease in 50% for the succeeding years because we will focus more
on the promotion of our new varieties of flavors.
38

In line with our never ending drive to promote our customer with the highest
possible quality products, regular and periodic outlet quality compliance audits are
conducted by well-trained waffle time supervisors. To know whether there is a market
opportunity, customer suggestions are being considered.
We will use different strategies like product development, market development,
and market penetration for us to achieve our business objectives.

2. CUSTOMER SERVICE
We will continue to be customer-oriented and serve the unique needs and
preference or our ideal customers. Then, we will make it our priority to satisfy the needs
of our clients with our wide product variety and its unique features. Lastly, we will make
sure that their time will be our priority.

3. MANAGEMENT INFORMATION SYSTEM

We will make sure that our management information systems purpose is to
improve the performance of the enterprise by improving the quality of its managerial
decisions. We will gather data about marketing, finance, production, and personnel
matters internally, and social, cultural, demographic, environmental, economic, political,
governmental, legal, technological, and competitive factors externally. The monitoring of
internal and external issues and trends, identifying competitive threats, and assisting in

39

the implementation, evaluation, and control of strategies will be given a needed

attention.

4. FINANCIAL PERFORMANCE
The companys financial objectives will be to accelerate comparable store sales
growth, to continue to increase the companys profitability levels as a percentage of
sales to a level of 5% monthly, to effectively use excess cash flow through a
combination of strategic growth opportunities and stock buybacks, to grow earnings per
share while increasing return on gross investment.
Expenses that shall be incurred and the operating activities are purchase of the
raw material, equipments, store supplies, maintenance, rent space and salaries of the
employees.

5. STAFF DEVELOPMENT
For the development of the staffs there should be training and seminars. There
will be a staff suggestions every month for whatever they may think regarding to the
progress of the business.

6. RELATIONSHIPS WITH SUPPLIERS

40

To improve relation with our suppliers we will make sure to pay them at the right
time and be there loyal customer so they give back a good transaction with the supplies
needed.

7. BUSINESS STRENGTHS
The three strengths are the strong brand image and good reputation, proven
management and affordability.

MARKETING
SEVEN PS OF MARKETING
By using these seven Ps PRODUCT, PRICE, PLACE, PROMOTION,
PEOPLE, PROCESS, PHYSICAL EVIDENCE, countless different marketing strategies
can be formulated to gain sales, consumer interest, market share and market
acceptance for new products.

PRODUCTS
Waffle Time continuous effort to research and development efforts aims to
upgrade and to improve both the products and the waffle business.
SAVORY:

PRICE:

Cheese Delight

14.00

American Hotdog

18.00
41

Canadian Bacon

20.00

German Cheese Franks

20.00

Ham & Cheese

20.00

Tuna Salad

20.00

SWEET:
Pineapple Pleasure

12.00

Bavarian Cream

14.00

Mango Magic

14.00

Ultimate Ube

14.00

Swiss chocolate

16.00

Belgian Chocolate

18.00

DRINKS
Bottled Water

15.00

Nestea

15.00

PRICE
Waffle Time makes sure that their price list matches their customers capacity to
pay. The savory waffles prices range from 14Php to 20Php, while the sweet waffles
prices range from only 12Php to 18Php. The products affordability is one of the top
reasons customers patronize Waffle Time.

42

PLACE
Waffle Time chose the location at V-Central Mall, Molino 3, City of Bacoor,
drawing the targeted market to the residents of Molino 3. According to Philippine
Standard Geographic Code (PSGC) as of May 1, 2010, the population of Molino 3
reaches 52,470 making them the largest population in Bacoor. Focussing on the
number of populace of the said barangay, it is a great opportunity for Waffle Time to
penetrate the said market and gain new customers.

PROMOTION
Waffle Time may be small but it still can compete with other small enterprise in
town. In order to maintain its market share and be the best that sells waffles they
continue to level-up their competitiveness. Being situated inside the mall and being
seen by thousands of people every day helps to promote the business especially to new
market. They also focus on maintaining the aesthetic value of the cart, including the
familiar Waffle Time signage, making it attractive to customers. They also use flyers to
promote their products and the business as well.
PEOPLE
The business does not require huge space and multiple crews. To be able to
provide their customers with the highest possible quality of products and service, Waffle
Time conducts initial training for their personnel for free.

43

PROCESS
Waffle Times operations system include furniture, equipment and tools,
procedures, products, quality standards, food safety practices, workplace safety and
handling customer complaints. The business also conduct regular and periodic outlet
quality compliance audits by well-trained Waffle Time supervisors, and determine the
specific needs and address problems that may arise from day-to-day operations.

PHYSICAL EVIDENCE
Waffle Time promise to continue to deliver delicious and nutritious yet affordable
priced waffles for every customers who craves for them. They also have established
relationships with reputable suppliers for the materials they need to provide quality
products to their customers.

SEVEN STEPS MARKET SEGMENTATION

1. Broad product market: Residents of Molino 3, Bacoor City
2. Potential customers needs:

quick snack at affordable price

convenient location to eat
nutritious yet low-priced foods
affordable and delicious snacks
wide range product line

3. Submarkets:

students
44

working students
working single individuals
non-working single individuals
working single parent
working married couples without children
working married couples with children
non-working/stay at home married couples without children
non-working/stay at home married couples with children

4. Determining dimensions:

male
female
working
non-working
single
married

5. Nick names:
PRODUCT MARKETS

NICK NAME

Students

yippies

working students

wooppies

working single individuals

single lads

non-working single individuals

slackers

working single parent

tough lads

working married couples without children

love birds

working married couples with children

team mates

non-working/stay at home married couples slouchers

without children
non-working/stay at home married couples super slackers
with children

6. Evaluation:

45

Students they tend to seek a cheaper price for the foods or snacks they will buy
because they still dont earn the money that they have.
Working students customers under this category tend to save their salary for their
school expenses so they seek for products that are cost-friendly.
Working single individuals they tend to buy anything that they desired without
considering the price, including foods that they crave for.
Non-working single individuals these customers are either being financially supported
by their parents or still looking for a job. They usually seek for foods that are budget
friendly for them to save money for important things.
Working single parents in this category, the parents focus is solely on their children.
Their buying behaviour focuses the needs and wants of their kids. In result to that, they
tend to seek delicious and nutritious yet still affordable snacks for them.
Working married couples without children these customers seek for affordable and
delicious snacks with wide range of product lines. They are not much of a price
conscious customer.
Working married couples with children they based their buying behaviour to their
children. In result, they tend to seek nutritious and delicious yet affordable products.
Non-working/stay at home married couples without children in this state, its either
they are still looking for work or they still depends on the financial assistance from their
parents. As a result, they are looking for products that are delicious yet low-priced.

46

Non-working/stay at home married couples with children these customers are always
looking for low-priced products since they dont have a salary to depend on for their
expenses.
7. Estimated size of each product market segment:
Total population (Molino 3): 52, 470
PRODUCT MARKET SEGMENT
Students

ESTIMATED NO.
10,494

%
20

working students

5,247

10

working single individuals

7,870.5

15

non-working single individuals

2,623.5

working single parent

7,870.5

15

5247

10

10,494

20

2,098.8

524.7

working married couples without

children
working married couples with children
non-working/stay at home married
couples without children
non-working/stay at home married
couples with children
TOTAL:

52,470

INNOVATION AND THE ORGANIZATION

The identified highest scores points to the areas where the business is strongest
in managing innovation performance. The low scores suggest weaknesses.

Strongl
y agree
4
1. We have a good
track record
of innovation by

Agre
e

Neutra
l

Disagre
e

47

Strongly
Disagre
e
0

No
Opinion
?

comparison
with our competitors
and
industry
2. Our management
style does
not impede the
introduction
and development of
new
products or
processes
3. In this
organisation, the
forces
which favour the
preservation
of the status quo are
balanced
by enthusiasm
4. It is generally
accepted in the
organisation that
there is
outstanding creative
talent in
its ranks
5. There are
influential people in
the organisation
who support
new ideas entirely
on their
merits
6. The management
control over
activities is not an
inhibiting

48

factor for progress

7. There are efficient
mechanisms for the
flow of
information
necessary for
managers to carry
out their
jobs
8. The organisation
is attempting
to stimulate creative
thinking
through its training
programs
9. Entrepreneurship
is encouraged
10. There is a
positive attitude and
no defeatism where
new
ideas are concerned

STRONGLY
AGREE

AGREE

NEUTRAL

DISAGREE

STRONGLY

NO

DISAGREE

OPINION
?

DIFFERENTIATION
The perception of the products created by the differentiation can be such that the
unique features not only insulate Waffle Times products from a competitive challenge
but also create such a brand loyalty that a level of price insensitivity develops in their
customers enabling higher margins to be charged.
49

PRODUCT
S OFFER

BEVER
AGES

PRICE

Cheese
Delight,

Nestea
and
Bottled
Water

Ranges
from
12-20
Php

American
Hotdog,
Canadian
Bacon,
German
Cheese
Franks,
Ham
Cheese,
Waffle
Time

&

Tuna Salad,
Pineapple
Pleasure,
Bavarian
Cream,
Mango
Magic,
Ultimate
Ube,
Swiss
chocolate,
Belgian
Chocolate

50

PACKA
GING

ORDER
TYPE

ADVER
TISING
&
PROMO
TION

Uses
paper
bags
and
boxes

Can be
a single
order or
bulk
orders

Uses
flyers,
tarpaulin
, and the
internet

PRODU
CT
FEATUR
ES
It is a
Carbprotein
combinati
on, and
sweets
fillings

Famous
Belgian
Waffle

Churros
(In
direct)

Plain,
chocolate,
peanut
butter,
cheddar
cheese,
strawberry,
creamchees
e,
blueberry,
hazelnut,
ham
&
cheddar,
banana
peanut
butter,bana
na
chocolate,
chocolate
peanut
butter,
banana
hazelnut,
ham
&
creamchees
e, blueberry
creamchees
e,
strawberry
creamchees
e, tuna &
garlic ranch

Iced
coffee,
iced
milk
tea,
iced
choco,
coffee,
strong
coffee,
hot
choco

Ranges
from
35-75
Php

Uses
paper
bags
and
boxes

Can be
single or
bulk
orders

Uses
flyers,
tarpaulin
, and the
internet

It is a
carb and
sweets
combinati
on

Chocolate,
Cinnamon,
Mango
Cinnamon,
Mocha,
Cheese,
Churros w/
Chocolate

Hot
choco,
cocacola

Ranges
from
Php 3550 Php

Uses
paper
bags
and
boxes

Can be
single or
bulk
orders

Uses
flyers,
tarpaulin
, and the
internet

It is a
frieddough
pastrypredomin
atly
chouxbasedco

51

Dip,
Churros w/
Strawberry
Dip,
Churros w/
Dark
Chocolate
Dip,
Churros w/
White
Chocolate
Dip

mbinatio
n

STRATEGIC OPPORTUNITIES
OPPORTUNITIES TO
PURSUE
-

New market to
penetrate
Innovate new
products
Promote new
products
Adopt new
technologies
Improve the
business operations

RISKS TO TAKE
-

Entering new market

Advertising new
products
Conducting research
& development
Investing on new
technologies
Adopt and effective
business operations

RISKS WILLING TO TAKE

-

52

Researching needed
information about
the market to
penetrate
Allocating budget for
new technologies
Implementing better
production &
operation process
Advertising new
products to the
market
Allocating budget for
innovating products

SPECIALISATION

Being widely known across the country, Waffle Time

needs to break down its personnel and assign them to the production and operation
process for them to create an effective and efficient business operation.
INTEGRATION

This strategy gives opportunity to the business to

improve their organizational performance by facilitating the continues alignment of

business strategies within the ever changing business environment. It also expands the
business operation by acquiring its supply chain and distribution channel.
DIVERSIFICATION

This strategy, although risky, can help the innovation

of the business. Waffle Time can expand its operations by establishing a Cafe store that
uses waffles as the main products.

STRATEGIC OPPORTUNITIES
ADDITIVE

Waffle Time exploits already existing resources, which is waffle,

without changing the character of the business. One of the opportunities for the
business is to promote their products to the new market, which is V Central Mall Molino.

STRATEGIC PLANNING
APPROACHES TO STRATEGIC PLANNING
Waffle Time uses PROACTIVE approach to strategic planning. They design a
desired future for the business and then they invent ways to create the future state. The
business can also actively control the outcomes, by trying to get ahead of events
outside of their control.
53

KEY GROWTH STRATEGIES

EXPANSION OF VOLUME-

Waffle Time focuses on increasing sales to a single

new market or in existing markets. They invest their efforts in Research and
Development of new products, as well as promoting their products to target markets.
They also invest in adopting new technologies and improving the business process for
them to achieve a high level of efficiency in their overall operations.

BUSINESS WARFARE STRATEGIES

PRODUCT EMPHASIS

or be product/service orientate is one of the strategies

that we should adapt for the business to make more waffle according to its standard.
DOMINANCE

or dominate your corporate niche, Waffle Time

continuous to strengthen its niche in the franchise sector, establishing strong ties in the
industry and becoming the leading waffle brand and one of the most awarded franchise
concepts in the country.
FLEXIBILITY/OPPORTUNISM

change direction and move/adapt quickly. It

should be adapted because there are lots of opportunities that the business can
consider. Flexibility enables both individual and business needs to be met through
making changes to the time (when), location (where), and manner (how) in which an
employee works. Flexibility should be mutually beneficial to both the employer and
employee and result in superior outcomes.

54

EFFICIENT INNOVATION -

optimize new products, services and methods.

Whatever new product is being innovated it should be effective as possible or will catch
more customers preference.
LEADING

It is very important because top management directly deal

with the workers and staff who produce goods. They communicate the organizations
vision and yearly direction. Everyone needs to communicate and influence their peers
and workers to engage in correct work behaviour such as owning up to any customer
inquiry or complaint rather than passing the buck to the person in charge.

FUNCTIONAL STRATEGIES
Within each business unit more detailed planning will need to occur. The major
functional departments such as:
ACCOUNTING

The outlet accounting should have daily sales report,

inventories, P & L statement format. There should be a 5% monthly service fee from the
outlets monthly gross sales.
FINANCE

All the expenditures must be paid and achieve such as the

cost of site improvements or renovations, site security deposits, rentals and other
advance payments, cost of business/government permits and licenses, training
allowance or salary of prospective crews, and utilities- electricity/power, water, etc.
HUMAN RESOURCES

To attain effective and efficient production system,

Waffle Time shall take into consideration to human resources as one of the essential
factor that can affect the firms business operation. To assure the right operation
55

process is done simultaneous with production, the firm will hire qualified employees and
willing to undergo training and development. Service crew will be trained and hired to
undertake customers assistance.
MARKETING

Marketing collaterals, which include one (1) specially

designed streamer and bundles of flyers, are provided for free to the franchisee before
opening. These specially designed collaterals bring awareness and help promote
business in new areas.
Design consultancy & conceptualization for customized marketing stuff are for
free. However, additional and customized marketing stuff are for franchisees account.
PURCHASING

To control the quality of the product, all supplies are

purchased from the nearest Waffle Time commissary. These supplies include all raw
materials used in product preparation and all packaging materials. These supplies are
for pick up.
SALES

Sales are assumed to increase at the rate of 10% per annum

due to growing population and migration of people from other places.

STRATEGIC CONTROL
A control process should be used to evaluate the results of the action plan and to
enable corrective action to be taken if necessary.

SPECIFIC GOALS

56

To continuously re-invent at least two waffles every end of the month.

To achieve high-level of efficiency by improving the production and operation

process by the current month.

To increase sales by 5% on the two following consecutive months.
To establish strong brand image to the new market on the end of the first month
by means of advertising.

MEASURE PERFORMANCE
Customers tend to seek more affordable and nutritious snacks and its proven that
Waffle Time meets these needs. In line with this, many food carts are being established
and Waffle Time has become the market leader since it is established. Their branches
are continuously increasing in numbers around the country.

EVALUATE PERFORMANCE
The business gained a lot of awards that truly shows how they perform well and this
is because of the management and the loyal customers.

CORRECTIVE ACTIONS TAKEN

The business should maintain the good relationship from the management down to
the staff of the branch handled, all the standards and rules must be strictly followed,
there should be a product development, and the products features and benefits should
be maintained.

57

OPERATING CONTROL
Waffle Time checks its everyday operations and outgoing performance and takes
appropriate actions on the problems that arise to keep the smooth sailing day-to-day
business operations.

STRATEGIC CONTROL
The company takes a strategic control on the strategies whether it is matched to
the opportunities that are present in the market.

PRICING AND SERVICE STRATEGIES

Most organizations have pricing strategies in place to ensure that decision
making by their sales staff is consistent. The Sales department will often be involved in
various areas of setting pricing strategies- Product, Distribution, Pricing.

PRICING STRATEGY:
Pricing strategies may be set to take into account and reflect pricing:
1. RELATIVE TO COMPETITION -

Waffle Time is not minding to compete with its

neighboring waffle vendor to gain the trust of customers by regulating the price, thus it

58

offers a more competitive pricing scheme. The enterprise offers a lesser price compared
to other retailer.
2. RELATIVE TO COSTS

Waffle Time is has its own manufacturer of raw

materials and the Waffle Time commissary is strategically located near the outlets for
prompt and on-time deliveries to cut the supply chain, reduce its transportation costs
and to regulate a cheaper price to the customers.
3. UNIFORMITY OF PRICES FOR DIFFERENT CUSTOMERSpricing list that the customers can choose to.
4. LIST PRICES
Savory
Cheese Delight
American Hotdog
Tuna Salad
Ham and Cheese
Canadian Bacon
German Cheese Franks

Sweet
Pineapple Pleasure
Ultimate Ube
Mango Magic
Bavarian Cream

59

P1
4
P1
8
P2
0
P2
0
P2
0
P2
0

P1
2
P1
4
P1
4
P1
4

Waffle Time a fixed

Swiss Chiocolate

P1
6
P1
8

Belgian Chocolate

Drinks
Iced Tea (12 oz)

P1
5
P1
5

Bottled Water (500 ml)

5. GEOGRAPHICAL PRICING

The price of rice is predetermined depending

Waffle Time price range for their savory

where the outlet is located.

6. PRODUCT LINE PRICING

products are higher, from 14 Php to 20 Php, than the price range of their sweet
products, from 12Php to 18Php only.

STRATEGY OPTIONS FOR SERVICE RELATED ISSUES

COMPARABLE WITH INDUSTRY STANDARDS

Waffle Time supervisors

do quality audits and they also determine the specific needs of each outlet and address
problems that may arise from day-to-day operations. Waffle Time continuous research
and development efforts aims to upgrade and to improve both the products and waffle
business.

60

CARING AND PROMPT COMPLAINT HANDLING -

Waffle Time uses the steps

of apologize-listen-act, to address the certain complaint of the customer to recover their

trust and loyalty to the company.

BARRIERS TO ENTRY
Barriers to entry present in the market place
INTENSITY OF RIVALRY AMONG EXISTING COMPETITORS (HIGH) where
there is one direct competitor near the waffle time which is the Famous Belgian Waffles
but this competitor has a higher price range.
THREATS OF NEW ENTRANTS (MODERATE) This is easy for new players to
enter especially if they consider the expenditure and small amount of capital
requirements of franchising food carts. As times goes by, many businesses related to
waffle will start to sprout like mushrooms and they have their new ideas to captivate
their market. People are always looking forward to what is new and change their
preferences for taste and for the value of their money.
BARGAINING POWER OF BUYERS (LOW) Customers can no longer demand
to drive down the prices. Since there are a few substitutes available, it influences the
customer not to switch.
BARGAINING POWER OF SUPPLIERS (MODERATE) most of their raw
materials for their production are possible for price increase thats why suppliers may
affect the availability of their raw materials.

61

PRESSURE FROM SUBSTITUTE PRODUCTS (LOW) Customers may choose

Churros City for their substitute to waffle since its price is not far from the price of Waffle
Time and also they are both pastry made snack.

GAP ANALYSIS
Gap analysis, while highlighting deficiencies in the organisation, will also reveal
many competitive strengths and opportunities
DESIRED PERFORMANCE
-

ACTUAL PERFORMANCE

Serve the best waffles worldwide

Continuously innovate new
products
Adopt new technologies
Improve the business operations
Effectively promotes new products
to customers

Only penetrated the Philippine

market
Slow development on new products
Still uses the same tools and
equipment
Uses the usual business operation
developed by the franchisors
Only uses flyers, tarpaulin and
internet to promote the business

What does the organisation need to do to sell itself as a responsible provider of its
products or services to fill the role in the market place in which it perceives itself?

In order to get the customers attention, waffle time should offer another sets of
fillings for their sweets and savoury category. While offering another set of fillings,
the management must assure the quality of every waffle that they serve. And
also, in price setting they need to consider the buying capability of the customers.
Aside from serving quality yet affordable waffles, the management always assure

62

that the service of every employee are very good plus the fact that they serve ontime without having any complaints from the customers.

Gap analysis, while highlighting deficiencies in the organisation, will also reveal
many competitive strengths and opportunities.

RISK MANAGEMENT
Business risk is the threat that will adversely affect the organisations ability to
achieve its business objectives and execute its strategies successfully. It arises as
much from the likelihood that something good will not happen as it does from the threat
that something bad will happen. Business risks are pervasive and inter-related and the
action or interaction of individuals within the organisation may have a profound influence
on the organisations risk profile.

PURE RISK

SPECULATIVE RISK

Natural disaster
Terrorism
bankruptcy

Increasing number of competitors

Inflation rate

FOUR KEY SUCCESS FACTORS

Each organisation has its own unique moving target of constantly changing
business risks and should consider its objectives, strategies, culture, values and

63

financial strength when designing its business risk management process. Below are the
four key success factors for successful implementation of an integrated approach to
managing risk.

1. EXECUTIVE LEADERSHIP
In order to become successful over the management risk, waffle time assures
that they manage and guide their employees. And also, they oversee the organizational
goals, strategic planning development and overall decision making.

2. OWNERSHIP
The management should installed data gathering or early warning systems that
provide information to assess more accurately the impact, likelihood, or timing of risk.

3. COMMITMENT
The commitment and involvement of top management positively contributed to
the communication and understanding as well as the execution and integration of risk
management.

4. ENABLING FRAMEWORKS FOR CONTINUOUS PROCESS IMPROVEMENT

64

Each organisation has its own unique moving target of constantly changing
business risks and should consider its objectives, strategies, culture, values and
financial strength when designing its business risk management process.

RISK

ACTIONS

Service crew misconduct

Franchisor
wont
allow
the
franchisee to renew the contract

Out of stock raw materials

Provide qualified service crew if

necessary, the qualified crew must
be an acquaintance or close
relative of the franchisee.
Undergo orientation about the
rules and regulations
Communicate
well
to
management
Having a secured contract

the

Communicate with the franchisor

before the supplies run out

FEASIBILITY OF A NEW PRODUCT

OPPORTUNITIES

THREATS

Increased appeal of your product

Decreased appeal of products

Can provide affordable waffles

Market leadership
Continuous product innovation

competitors better method of convincing

Exploit competitors shortcomings

New strategies from competitors

Opportunities for increased market share

Less number of competitors

65

Can adapt to new technology

ANALYSIS AREAS AND QUESTIONS

1. How do buyers (consumers and industrial) currently go about buying existing
products or services? Describe the main types of behaviour patterns and attitudes.
a) Number of stores shopped or industrial sources considered.

RFC Molino, V-Central, SM Molino and Star mall Prima

b) Degree of overt information seeking.

There is a high degree of overt information seeking
c) Degree of brand awareness and loyalty.

There is a high degree of brand awareness and loyalty.

d) Location of product category decision.

V Central Mall Molino

e) Location of brand decision.

Customers decision in buying a product depends on the availability of the brand.

For example, if Waffle Time is the only brand that is available on that area, then
the customers will choose to buy on that store rather than going out on that mall.

f) Sources of product information and current awareness and knowledge levels.

Sources of Waffle Time products can be seen through internet or online as well
as on the location itself.

g) Who makes the purchase decision?

Young and Adult both male and female.

66

h) Who influences the decision maker?

The staffs of the store influence the decision maker and also the customers
choice itself.

i) Individual or group decision

Individual decision

j) Duration of the decision process (repeat, infrequent, or new purchase decision)

Customers may repeat the purchase since its affordable for example the
employee inside the V Central.

k) Buyers interest, personal involvement or excitement regarding the purchase

There is a buyers interest regarding the purchase and excitement when it comes
to trying the different fillings.

l) Risk or uncertainty of negative purchase outcome - high, medium or low

There is a low risk or uncertainty of negative purchase outcome, this may

because of serving the waffle by just reheating it.

m) Functional v. psychological considerations

The customer uses psychological consideration because they are being practical
in terms buying the product.

n) Time of consumption

For the time consumption, the customer can wait for at least 5 minutes and better
eat this as soon as it is hot for them to satisfy its great taste.
67

2. Can the market be meaningfully segmented or broken into several homogeneous

groups with respect to what they want and how they buy?
Criteria
a) Age

b) Family life cycle -

12 to 45 years old
students, working students, working single individuals, non,

working single individuals, working single parent, working married couples without
children, working married couples with children, non-working/stay at home married
couples without children, and non-working/stay at home married couples with children
c) Geographic location -

residence of Molino 3

d) Heavy v. light users -

Light user

e) Nature of the buying process

Since the customers need something to eat

especially an affordable and convenient snack, Waffle Time becomes a choice for them.
f) Product usage

To satisfy the customers who are in hurry and looking for

delicious yet affordable snack.

NATURE OF COMPETITION
STAGE OF PRODUCT LIFE CYCLE
The purpose of this section is to evaluate the present and future structure of
competition. The key is to understand how the buyer evaluates products or services
relative to his or her needs.
68

ANALYSIS AREAS AND QUESTIONS

1) What is the present and future structure of competition?
a. Number of competitors :

1 v. 2

b. Market shares

40 % of the market share

c. Marketing resources and skills

FAMOUS BELGIAN WAFFLE (DIRECT COMPETITOR)

PRODUCTS

Price

Plain
Chocolate
Peanut Butter
Cheddar Cheese
Strawberry
Creamcheese
Blueberry
Hazelnut
Ham & Cheddar
Banana Peanut Butter
Banana Chocolate
Chocolate Peanut Butter
Banana Hazelnut
Ham & Creamcheese
Blueberry Creamcheese
Strawberry Creamcheese

P30
P35
P35
P35
P45
P45
P45
P45
P45
P45
P45
P45
P55
P55
P55
P55

New Flavors
Butter Caramel
Choco Banana Peanut Butter
Banana Choco Caramel
Tuna

P45
P55
P55
P45
69

Drinks
Malaysian Coffee
Malaysian Strong Coffee
Malaysian Hot Choco

P45
P45
P45

PRICE
Famous Belgian Waffle price list are also depends on the flavors of their offered
waffles, its prices range from P30 to P55. They position to the minds of the customers
that their waffles is fresh and delicious.

PLACE
Famous Belgian Waffle is located at ground level of V-Central Mall Molino, their
target customers is also the people around Molino 3 and near barangays.

PROMOTION
Famous Belgian Waffle promotes their products using flyers and they also active
on social media that can have a big impact to their business image.

PEOPLE
They dont need a large number of employees because they business can
operate by one or two person only. They also have proper trainings & seminars to their
employees.

70

PROCESS
Famous Belgian Waffle must use standard process of creating their products and
they also have complete safety equipments in order to ensure the safety of both
employees and customers.

PHYSICAL EVIDENCE
Famous Belgian Waffles was continued the strong relationship between their
suppliers because they want to have a strong basis for their business. They
continuously serve a delicious and fresh waffle to their customer

CHURROS CITY (INDIRECT COMPETITOR)

PRODUCT

Price

Chocolate
Cinnamon
Mango Cinnamon
Mocha
Cheese
Churros w/ Chocolate Dip
Churros w/ Strawberry Dip
Churros w/ Dark Chocolate Dip
Churros w/ White Chocolate Dip

P35
P35
P35
P35
P35
P40
P40
P40
P40

Churros w/ Toppings
Mini nips

P50

71

Mini mallows
Crushed cookies
Crushed peanuts
Choco sprinkles
Rainbow sprinkles
White choco droplets
Chocolate droplets

Drinks

Small P40
Large P50

Ice Blend
Double dutch
Choco truffles
Mocha
Cappuccino
White chocolate
Micafe

P20

3 in 1 coffee
Hot choco mix
Coca-Cola
PRICE

In can

P25

Churros City price list depends on the flavours and variants of their products. The
Churros prices range from P35 to P50, they matches their priced based on their target
customers which is on the middle & high class type of people. The products are
expensive but they believe that their customers satisfy because their products are all
delicious and high quality.

PLACE

72

Churros City is located at 2 nd level of V-Central Mall Molino their primary target
customers are the people inside the Molino 3 and the near barangays in the area. It is
perfect place for that type of business because there are only limited competitors inside
the mall unlike to the other malls like SM Malls & Robinsons Malls.

PROMOTION
Churros City is new in the market but they make ways to become popular on the
market especially in their industry. They promote their stores in different ways, they
conduct an special treatment if they have new stores open, another one is promoting
using flyers and last is through social media and internet- the most powerful and helpful
promotion strategy today.

PEOPLE
Since the Churros City is also part of food cart industry they dont need a large
number of employees/ staff and they conduct trainings & seminars for their employees.

PROCESS
Churros City product must maintain the cleanliness, safe and standard
procedures of doing their products. The employees wear proper equipments and tools
in order to avoid problems that can cause damage in their business. And also the

73

managers/ supervisors in every cart should check the employees as well as the sales
per day in order to monitor the operations.

PHYSICAL EVIDENCE
Churros City would continue to operate and deliver a high quality and best taste
of product. They maintain good relationships to their suppliers in order to maintain
delivering a quality and best taste of Churros to their customers.

2) What are the current marketing programs of established competitors? Why are they
successful or unsuccessful?

Famous Belgian Waffle (direct competitor) has its Facebook and Instagram
where they post different products as well as their branches to be able to catch
the attention of the viewers. They make creative photos including their waffle
depends on the occasion like for National Heroes Day. They also have activity for
their customers which are posting their own pictures on Instagram account

together with the product.

Churros City( indirect competitor) do also have their Web site specially Facebook
where they show every step they make such as how they come up to different
places and by the help of their top management which is the Miguelitos
International Corporation, they become known by the customers.

3) Is there an opportunity for another competitor? Why?

74

Yes, there is an opportunity for another competitor but depends on the business if
they will become successful or not.

4) What are the anticipated retaliatory moves of competitors? Can they neutralize
different marketing programs you might develop?

The competitor might give false information about our product that can affect the
buying decision of customers. Another is the possibility for imitating our product
and sells it in lower prices. They can neutralize different marketing programs we
might develop because there are lots of ways to do it but still the result depends
on the customers choice.

ANALYSIS AREAS AND QUESTIONS

1) In what stage of the life cycle is the product category?

The product category is on the maturity stage of the product life cycle.

a. What is the chronological age of the product category?

Both young and adult are favorable with the product.

b. What is the state of the consumers knowledge of the product category?

The more complete knowledge about the waffles flavours and taste, the
customer will be favorable.

75

2) What market characteristics support your stage of life cycle evaluation?

Since the product the Waffle Time sells is in food category, the business will not
fall down because food is a necessity and it is already built for 18 years in the
industry.

TOP 20 QUESTIONS: ADDRESSING FEASIBILITY ISSUES

1. What type of business do you have?

The type of our business is food cart.

2. What is the purpose of this business?

It offers affordable waffles and one of their purposes is to reduce staffing cost.

3. What is the key message or phrase to describe your business in one sentence?

Nutritious and Delicious and yet affordable waffles this phrase serves as their
position in the minds of their customers.

4. What is your reason for starting your own business?

Food cart industry has now become one of the top choices of budding
entrepreneurs. It is lucrative and affordable to franchise the business because of
its low capital outlay and Filipino people have truly cultivated a keen interest in
this type of business.

5. What is your product or service?

76

A wide range of waffles, from desert to gourmet fillings.

6. Can you list three unique benefits of your product?

It is nutritious because of its carb-protein combination

It is convenient in terms to its location
It is affordable because it offers low-priced waffles

7. Do you have data sheets, brochures, diagrams, sketches, photographs, related press
releases or other documentation about your product/service?

Yes, Waffle Time distributes flyers and they used also the power of social media
in order to promote their products.

8. What is the product application?

We continuously innovating different variants of waffle because the customers

cannot satisfied in limited type of variants of waffle.

9. What led you to develop your product?

We develop our product by adding some unique variants of waffles because the
competition in our industry is high and continuously.

10. Is this product or service used in connection with other products?

Yes, because waffle time also serve Nestea for their drinks.

11. List the top three objections to buying your product/service immediately?

77

not satisfy with the products (waffles) because they cannot follow proper

procedures
employees dont know how to treat customers in a nice way
conditions of the location, as well as the image of actual stores

12. When will your product be available?

Our products is available depends on the place and capability of the stores to
offer those products.

13. Who is your target audience?

Our target audience are working adults, students who have hectic schedules and
people who prefer quick service food options.

14. Who is your competition?

In our location in V-Central Mall Molino, we will have one direct competitor only
which is the Famous Belgian Waffle and one indirect competitor which is
Churros.

15. How is your product differentiated from that of your competition?

Waffle Time is different to their competitors because they offer delicious,

nutritious and affordable waffles.

16. What is the pricing of your product versus your competition?

The pricing rate of waffle time is lower than to their competitors.

78

17. Are you making any special offers?

Yes, because they focus on innovating of their existing products.

18. What plans do you have for advertising and promotions?

Waffle Time is promoting their products using flyers, social media and also
sponsoring some seminars.

19. How will you finance company growth?

Since waffle time is a food cart business, the franchisees are the one who will
finance the stores that they will franchise. And for the company owned food cart
branch, the management can use their assets/money that they earned in order to
secure the growth of the company.

20. Do you have the management team needed to achieve your goals?

Yes, waffle time have their own management team that stick together in order to
achieve the corporate goals for their business.

ANALYSING YOUR COMPETITIVE POSITION

Indirect
Competitor

Competitive

Major Competitor

Indicators

Famous Belgian
Waffle

Churros City

Average

High

Market position
79

General trend in market position

Profitability
(low, average, high)
Financial strength
(low, average, high)
Product mix
(broad, narrow)
Technological capability
(strong, weak, average)
Cost outlook
(favorable, unfavorable)
Quality
(good, satisfactory)
Product development
(good, satisfactory, minimal)

High

High

High

High

High

High

Broad

Broad

Strong

Strong

Favorable

Favorable

Good

Good

Satisfactory

Satisfactory

FINANCIAL RESOURCES OF THE FIRM

ANALYSIS AREAS AND QUESTIONS
1. Do we have the funds to effectively support the project?
A capital budget has been developed for the purpose of supporting the business.
The source of financing came from personal money contributed by each partner.

80

2. Where are the funds coming from and when will they are available?
Waffle Time is a partnership business in which two or more persons share the
ownership, where partners have unlimited liability for the debts and obligation of the
partnership. Each partner contributes to all aspects of the business, including money,
property, labour and skills. In return, each partner shares in the profits and losses of the
firm.
PROBLEMS AND OPPORTUNITIES
Here we prepare a definite listing of key problems and opportunities identified
from the situation analysis which relate to the specific issues or decision questions
faced by management.
Key problem areas Key opportunities
KEY PROBLEM AREAS

KEY OPPORTUNITIES

Product spoilage
Unexpected damage of tools
and equipments
Employee misconduct
Increasing numbers of
competitors in selected
location
Low sales on other products

A. OBJECTIVES DEFINED
1. Target market segments identified:

Residents of Molino 3, Bacoor City

81

New market to penetrate

Promote new products
Adopt new technologies
Improve business operations
Established brand equity
Fast market growth
Enter new market
Diversify into related products
Increasing customer purchase
power

Employees inside the mall

Mall shoppers
Working adults or students who have hectic schedules and prefer quick
service food options.

2. Volume to be sold
Assumed customers per day

300 customers

Assumed average purchase

20 Php/buyer

Quantity produced

300 units of waffles

3. Profit analysis

B. MARKETING MIX/PROGRAM DECISIONS

The key to effective marketing decision making is to evaluate alternative
marketing programs using information from the situation analysis.
1. PRODUCT DECISION -

The business aims to develop and upgrade new

waffles that cater the needs and wants of the target customers and potential customers.
-

Waffle Time position its products by:

Waffle Times products are ready-to-eat and convenient.

Waffle Times products are delicious and a carb-protein

combination that are perfect for health conscious people.

The business offers wide variety of flavors of waffles, from sweet to

savory fillings.
The prices of Waffle Times products are affordable, ranging from
12Php up to 20Php only.

82

2. DISTRIBUTION DECISION

Waffle Time will approach each customer in a

way that they would actually come back for more because they would like not only by
physical means but also how it would taste. Each personnel will be very accommodating
so for the customers to feel that they are an important part of the business.
3. PROMOTION DECISION

Opening flyers and tarpaulin

No massive advertising and promotion effort is needed due to name already

established by Waffle Time itself.

The group utilizes technology as publicity tactic by using multiply account

announcing to friends and families to purchase in Waffle Time.

The budget for the promotion of the business is worth 1,000 Php a month.

4. PRICE DECISION

The prices of Waffle Times products are much

lower than its competitors. The price variation for waffles depends on its fillings. The
price range of the products varies from 12Php to 18Php on sweet flavours and 14Php to
20Php on savoury waffles.

83

CONTRIBUTIONS TO TOTAL COST

FACTORY
OVERHEADS

PRIME COST
Direct Materials

Direct Labour

Employee
13,500 Php /
month

Direct Expenses

Utilities 3,900
Php / month

Marketing/Advertisi
ng

Indirect Materials

Raw
Materials
23,312 Php /
month
Packaging
1,100 Php /
month

Other Overheads

Office supply
1,000 Php

Indirect Expenses

TOTAL
PRODUCT
COST

302,812 Php

Rent
10,000 Php /
month
Package cost
250,000 Php /
month

84

200 Php /
month
TOTAL COST

Administration

Monthly
service fee
(5%)
7,488 Php

Licenses/Re
gistration
6,000 Php

Security
deposit
50,000 Php

Taxes (30%)
44,928 Php /
monthly

411, 428 Php

DIRECT MATERIALS
Raw Materials:

Quantity

Unit Price

Monthly

Flour

180 kilos

25.00

4,500

Eggs

380 pcs.

4.50

1,710

Sugar

10 kilos

45.00

450

Salt

5 kilos

30.00

150

Butter

30 packs

45.00

1,350

Fresh Milk

15 litters

82.00

1,230

Swiss Choco

4 bottles

210.00

840

Belgian Choco

4 bottles

220.00

880

Pineapple

4 cans

73.00

292

Ube

8 kilos

50.00

400

Mango

8 kilos

120.00

960

Tuna

20 cans

35.00

700

Cheese

40 packs

45.00

1,800

Ham

56 packs

70.00

3,920

Hotdog

6 kilos

180.00

1,080

Bacon

1 kilo

360.00

360

Pineapple syrup

50 cans

40.00

2,000

Mineral bottle

70 pcs.

10.00

840

Total:

23,312

85

INDIRECT MATERIALS
Quantity

Unit Price

Amount

Office Supply

1,000

1,000

Packaging

1,100 pcs

1,100

1,100

Total:

1,000.00

ADVERTISING
Tarpaulin

200.00
Total:

200.00

BREAK EVEN ANALYSIS

CALCULATING THE BREAKEVEN POINT
Breakeven point is the point at which the business stops running at loss and begins making a profit by a simple
calculation, as follows:

Total fixed costs + Profit required

= -----------------------------------------------------86

Profit margin as a %
Or
Total fixed costs
= --------------------------------------------------------------Price of product being sold - variable cost
P

Profit

Total Fixed Cost = rent (10,000)+ wages(13,500) +

TR

Total Revenue

TC

Total Cost of Every Unit

service fee/12 = 2,583

VARIANTS
CHEESE DELIGHT

P = TR TC

= 2,583/14 7.75

TR= 14 X 413.28 = 5,785.92

= 2,583/6.25

TC= 2,583 + 7.75 (413.28) = 5,785.92

= 413.28

P= 5785.92 - 5785.92 = 0

CANADIAN BACON

P = TR TC

= 2583/20 9.25

TR= 20 X 240.28 = 5,166

= 2583/10.75

TC= 2583 + 9.25(240.28) = 4,805.59

= 240.28

P=4805.6 4805.59 = 0.01

HAM & CHEESE

P = TR TC

=2583/20- 10

TR= 20 X 258.3 = 5166

87

=2583/ 10

TC= 2583 + 10(258.3) = 5166

=258.3

P= 5166 5166 = 0

AMERICAN HOTDOG

P = TR TC

=2583/ 18 9.50

TR= 18 X 303.88 = 5469.84

= 2583/8.5

TC= 2583 + 9.50(303.88) = 5469.86

= 303.88

P= 5469.84 5469.86 = 0.02

GERMAN CHEESE FRANKS

P = TR TC

= 2583/ 20- 10.25

TR= 20 X 264.92 = 5298.4

= 2583/ 9.75

TC= 2583 + 10.25 (264.92) = 5298.4

= 264.92

P= 5294.4 5298.4 = 0

TUNA SALAD

P = TR TC

= 2583/ 20 9.75

TR= 20 X 252 = 5040

= 2583/ 10.25

TC= 2583 + 9.75 (252)= 5040

= 264.92

P = 5040 5040 = 0

PINEAPPLE PLEASURE

P = TR TC

= 2583/ 12 6.75

TR= 12 X 492 = 5904

= 2583/ 5.25

TC= 2583 + 6.75 (492) = 5904

= 492

P= 5904 5904 = 0

ULTIMATE UBE

P = TR TC

= 2583/ 14 7.75

TR= 14 X 413.28 = 5785.95

= 2583/ 6.25

TC= 2583 + 7.75 (413.28)= 5785.92

88

= 413.28

P= 5785.92 5785.92 = 0

BELGIAN CHOCO

P = TR TC

= 2583/ 14 9.25

TR= 14 X 543.79 = 7613.06

= 2583/ 4.75

TC= 2583 + 9.25 (543.79)= 7613.06

= 543.79

P= 7613.06 7613.06 = 0

BAVARIAN CREAM

P = TR TC

= 2583/ 14 7.25

TR= 14 X 382.67 = 5357.38

= 2583/ 6.75

TC= 2583 + 7.25 (382.67)= 5357.36

= 382.67

P = 5357.36 5357.36 = 0

SWISS CHOCO

P = TR TC

= 2583/ 16 8

TR= 16 X 322.88 = 5166.08

= 2583/ 8

TC= 2583 + 8(322.88) = 5166.04

= 322.88

P= 5166.08 5166.04 = 0

MANGO MAGIC

P = TR TC

= 2583/ 14 7.50

TR= 14 X 397.38 = 5563.32

= 2583/ 6.5

TC= 2583 + 7.50 (397.38)= 5563.35

= 397.38

P= 5563.32 5563.35 = 0.02

Flour

Cheese
Delight

American
Hotdog

Canadia
n Bacon

German
Cheese
Franks

Ham &
Cheese

Tuna
Salad

Pineapple
Pleasure

Bavarian
Cream

Ultimate
Ube

Swiss
Choco

Belgian
Choco

Mango
Magic

89

Eggs

Sugar

Butter

.5

.5

.5

.5

.5

.5

.5

.5

.5

.5

.5

.5

Fresh milk

.5

.5

.5

.5

.5

.5

.5

.5

.5

.5

.5

.5

Swiss
choco
Belgian
choco
Pineapple

3.00
4.25
1.17

Ube

2.25

Mango

2.50

Tuna
Cheese

4.75
2.75

2.75

Ham

2.25

Hotdog

4.50

Bacon

4.25

Bavarian

2.25

Total cost

7.75

9.50

9.25

10.25

10.00

9.75

6.75

7.25

7.75

9.25

7.50

Overheads

3.25

3.75

5.16

4.93

5.13

5.19

2.43

3.40

2.75

4.50

3.79

3.48

Mark-ups

2.50

2.78

2.88

2.46

2.25

2.36

2.15

2.25

2.25

2.50

2.73

2.17

Total

13.50

16.03

17.29

17.64

17.38

17.30

11.93

12.90

12.75

15

15.77

13.15

SRP

14

18

20

20

20

20

12

14

14

16

18

14

90

STOCK TURNOVER
Sales
149,760
STO = --------------------------------- = -------------------- = 8.57
Average stock at cost
17,484

30
DAYS OF INVENTORY = -------- = 3.5 days
8.57

Opening stock + closing stock

AVERAGE STOCK AT COST = -------------------------------------------2
23,312 + 11,656
= ------------------------2
=

17, 484

FEASIBILITY RATIOS
COLLECTION PERIOD
This measures the average age of your accounts receivable, and is an excellent
test which often surprises many businesses. The lower the number, the safer the
receivables is the usual measure for comparison. Instead of collecting money could you
be paid at the time of sale by credit card?

91

AVERAGE COLLECTION PERIOD

Receivables
= ---------------------------Sales per Day

0
= --------------5,000

= 0

PROFIT ON SALES
Net profit after taxes
48, 832
= ------------------------------------ = ---------------------Sales
149, 760

= 0.326 or 33 %

RETURN ON TOTAL ASSETS

Net profit after taxes
48, 832
= ---------------------------------- = ----------------- = 0.15 or 15 %
Total assets
323,312

RETURN ON INVESTMENT OR SHAREHOLDERS FUND

Net profit after taxes
48, 832
= -------------------------------------------------- = ------------------ = 0.11 or 11 %
Investment or shareholders fund
440,000

PROFIT, LOSS, DISCOUNTS

PROFIT AND LOSS
SP = selling price

PS = profit rate (or markup rate) expressed as a

CP = cost price

fraction of selling price

92

P = actual profit

PC = profit rate (or markup rate) expressed as

L = actual loss

fraction of cost price

LS = loss rate (or mark down rate) expressed as
fraction of selling price
LC = loss rate (or mark down rate) expressed as
fraction of cost price

The following relationships hold:

P = SP - CP
L = CP SP
P
PS = ---------SP

P
PC = ---------CP

Cheese Delight
American Hotdog
Canadian Bacon
German Cheese Franks
Ham and Cheese
Tuna Salad
Pineapple Pleasure
Bavarian Cream
Ultimate Ube
Swiss Chocolate
Belgian Chocolate
Mango Magic

ACTUAL LOSS
Cheese Delight
P= 12 7.75
= 4.25
American Hotdog
P = 18 9.50

L = 7.75 12
= -4.25
L = 9.50 18
= -8.5
93

SELLING
PRICE
14
18
20
20
20
20
12
14
14
16
14
14

COST
PRICE
7.75
9.50
9.25
10.25
10
9.75
6.75
7.25
7.75
8
9.25
7.50

PROFIT RATE
OF SELLING
PRICE
PS = 4.25/ 12
= 0.3542 or
35.42 %

PC = 4.25/ 7.75
= 0.5484 or
54.84 %

PS= 8.5/ 18
= 0.4722 or

PC= 8.5/ 9.50

= 0.8947 or

PROFIT RATE OF
COST PRICE

= 8.5
Canadian Bacon
P = 20 9.25
= 10.75
German Cheese
Franks
P= 20 10.25
= 9.75
Ham & Cheese
P = 20 10
= 10
Tuna Salad
P = 20 9.75
= 10.25
Pineapple Pleasure
P = 12 6.75
= 5.25
Bavarian Cream
P = 14 7.25
= 6.75
Ultimate Ube
P= 14 7.75
= 6.25
Swiss Choco
P = 16 8
=8
Belgian Choco
P = 14 9.25
= 4.75
Mango Magic
P = 14 7.50
= 6.5

47.22 %
PS= 10.75/ 20
= 0.5375 or
53.75 %

89.47 %
PC= 10.75/ 9.25
= 1.162 or 116.2
%

L= 10.25 20
= -9.75

PS= 9.75/ 20
= 0.4875 or
48.75 %

PC= 9.75/ 10.25

= 0.9512 or
95.12 %

L= 10 20
= -10

PS= 10/ 20
= 0.5 or 50%

PC= 10/10
=0

L= 9.75 20
= -1.25

PS= 10.25/ 20
= 0.5125 or
51.25 %

PC= 10.25/ 9.75

= 1.051 or 105.1
%

L = 6.75 12
= -5.25

PS= 5.25/ 12
= 0.43

PC= 5.25/ 6.75

= 0.7778 or
77.78 %

L = 7.25 14
= -6.75

PS= 6.75/ 14
= 0.4821 or
48.21 %

PC= 6.75/ 7.25

= 0.9310 or
93.10 %

L = 7.75 14
= -6.25

PS= 6.25/ 14
= 0.4464 or
44.64 %

PC = 6.25/ 7.75
= 0.8065 or
80.65 %

L = 8 16
=-8

PS = 8/ 16
= 0.5 or 50 %

PC= 8/8
=0

L = 9.25 14
= -4.75

PS= 4.75/ 14
= 0.3393 or
33.93%

PC = 4.75/ 9.25
= 0.5135 or
51.35 %

L = 7.50 14
= -6.5

PS= 6.5/ 14
= 0.4643 or
46.43 %

PC = 6.5/ 7.50
= 0.8667 or
86.67 %

L = 9.25 20
= - 10.75

BUDGET AND BASIC RECORD KEEPING

Monthly (or daily, weekly, annual) budget and deviation
94

Budget for Month

Actual for Month

Deviation for Month

Sales

180,000

149,760

30,240

Less - Cost of goods

40,000

36,812

3,188

Gross profit on sales

140,000

112,948

27,052

Advertising

1,000

200

800

Wages

13,500

13,500

Utilities

4,000

3,900

100

Office supplies

1,000

1,000

Monthly Service Fee

10,000

7,488

2,512

Licenses

9,000

6,000

3,000

Rent

10,000

10,000

Packaging

1,500

1,100

400

Total expenses

50,000

43,188

6,812

Net profit or loss

90,000

69,760

20,240

Income Tax

27,000

20,928

6,072

Net profit after Tax

63,000

48,832

14,168

HOW MUCH MONEY WILL YOU NEED?

Instead of just going by gut feels it is essential that projected funding requirements
be carefully considered and costed. Here is a simple table to assist with the process.
ITEM

PHP
323,312
Included in franchise fee
10,000
3,900
7,488

Working capital
Capital Works
Rent
Utilities
Monthly Service Fee
95

Staff training
Staff Salary
Research & Development
Advertising
Packaging
Licenses/Registration
Taxes
Office Supply
TOTAL

Included in franchise fee

13,500
Included in franchise fee
200
1,100
6,000
44,928
1,000
411,428

FORECAST - SALES AND PROFITS

Nov 2016

Dec 2016

Jan 2017

SALES

149, 760

157, 248

165,110.40

OPENING STOCK

23,312

23,778

24,253

LESS CLOSING STOCK

11,656

11,889

12,126

TOTAL COST OF GOODS

SOLD

36, 812

37,278.24

38,023.80

GROSS PROFIT ON SALES

112, 948

119,969.76

127,086.60

WAGES

13,500

13,500

13,500

RENT

10,000

10,000

10,000

UTILITIES

3,900

4,000

3,900

LICENSES

6,000

MONTHLY SERVICE
INCOME

7,488

7,862.40

8,255.52

PACKAGING

1,100

1,100

1,100

OFFICE SUPPLY

1,000

1,000

1,000

ADVERTISING

200

200

TOTAL EXPENSES

43, 188

37,462.40

37,955.52

OPERATING PROFIT

69, 760

82,507.36

89,131.08

LESS EXPENSES

SALES INCOME FORECAST

96

ASSUMPTIONS

5% increase in Sales every month

2% increase in COGs

Nov 2016

Dec 2016

Jan 2017

Working days

30

30

30

% of SALES

149, 760

157, 248

165,110.40

COST OF GOODS

36, 812

37,278.24

38,023.80

GROSS PROFIT

112, 948

119,969.76

127,086.60

Advertising

200

200

Power

3,900

4,000

3,900

Licenses

6,000

Monthly Service Fee

7,488

7,862.40

8,255.52

Office Supply

1,000

1,000

1,000

Packaging

1,100

1,100

1,100

Rent

10,000

10,000

10,000

Wages

13,500

13,500

13,500

TOTAL SALES INCOME

Cheese Delight
American Hotdog
Tuna Salad
Ham and Cheese
Canadian Bacon
German Cheese Franks
Pineapple Pleasure
Ultimate Ube
Mango Magic
Bavarian Cream
Swiss Chocolate
Belgian Chocolate

LESS EXPENSES

97

TOTAL EXPENSES

43, 188

37,462.40

37,955.52

NET PROFIT

69, 760

82,507.36

89,131.08

TRADING AREA

TERTIARY TRADING AREA

SECONDARY TRADING AREA

PRIMARY TRADING AREA

PRIMARY TRADING AREA

60% to 70% of our customer will come from subdivisions/villages of Molino 2,
Molino 3 and Queens Row West.
SECONDARY TRADING AREA
20% to 30% of our customer will come from subdivisions/villages of Molino 1,
Queens Row Central, Soldiers IV and Makrol.
TERTIARY LEVEL

98

The Probability that other customers will buy in our store will be come from the
subdivisions/villages in San Nicolas 3, Queens Row East, Mambog and Citihomes.

V-CENTRAL
MALL
MOLINO
3

MOLINO
2

10

546,154
sq. ft

15

5
minutes

20

20

SM CITY MOLINO

RFC MALL
5
minutes

364,151
sq. ft
151,215
sq. ft

QUEENS ROW WEST

5
20

Huff gravity model

99

Estimating Potential Sales Using Huff Gravity Model

Formula:
Pij= Sj / Tij
Sj / Tij

Where:

Pij = is the probability that customer i shops at location i,

Sj = size of the store at location j and,
Tij = travel time for customer i to get to location j.

MOLINO 3
V-Central Mall Molino &
SM City Molino
Pij= Sj / Tij

Pij= Sj / Tij

Sj / Tij
PA =

524300/15

2330.22
2330.22 + 13.11

PA = 0.99 or 99%

PA =

Sj / Tij
2

393225/20

393225/ 400+1310.75 /5 2
=

983.06
983.06 + 11.13

PA = 0.99 or 99%
100

SM City Molino & RFC

Mall
Pij= Sj / Tij

Sj / Tij

524 /225+131075 /10 2

=

RFC Mall & V-Central Mall

Molino

PA =

524300/15

524300/225+393225/52
=

2330.22
2330.22 + 983.06

PA = 0.99 or 99%

MOLINO 2
V-Central Mall Molino &
RFC Mall
Pij= Sj / Tij

V-Central Mall Molino &

SM City Molino
Pij= Sj / Tij

Sj / Tij
PA =

393225/8

Pij= Sj / Tij

Sj / Tij
2

PA =

393225/64+131075 /10

RFC Mall & SM City

Molino

Sj / Tij
2

524300/20

524300/400+131075 /8

PA =
2

6144.14
=
1310.75
6144.14 + 1310.75
1310.75 + 2048.05
Grainsmart and Christian
PA = 0.82 or 82%
PA = 0.39 or 39%
Pij= Sj / Tij

393225/5

393225/25+524300 /400
=

15729
15729 + 26215

PA = 0.92 or 92%

Sj / Tij
PA =

ROW WEST
112/QUEENS
12

112+116 /102
V-Central Mall Molino &
RFC Mall & SM City
SM City Molino
Molino
=
112
Pij= Sj / Tij
Sj / Tij
112 Pij=
+ 1.61
Sj / Tij

112 Sj / Tij
113.61
2
2
524300/
20
393225/5
PA =
PA =
PA =2 0.99 or 99%
2
524300/400+13175 /5
393225/25+524300/20
=

20972
20972 + 5243

PA = 0.80 or 80%

15729
15729
+ 1310.75
101

PA = 0.92 or 92%

V-Central Mall Molino &

RFC Mall
Pij= Sj / Tij
Sj / Tij
PA =

393225/ 5

393225/25+131075/5
=

1966612.5
196612.5 + 5243

PA = 0.97 or 97%

Store Location

Reserve for
WaffleTIme

102