Authored by: Zihan Yu, Kaili Jin, Yixian Zhu, Dian Yu, Chao-hsuan Yu, Zheyu Zou
Identify the Topic
Topic Description
Urban memory is more about the memory of urban living space and way of life. For individuals, it is specific and full of pictures, sounds, smells, and tastes within the city. Among them, various snack bars and small restaurants be related to local life. However, as far as Shanghai is concerned, changes in the street, increased rent, vacancy for successors, and takeaway platforms have heavily affected the business of those traditional small restaurants. Under those impacts, in recent years, those food stores that carry the memories of countless Shanghai people have encountered a crisis of survival.
Due to the small business scale and weak financial strength of those small stores, it's difficult for them to withstand large-scale operating fluctuations. According to the survey of the State Administration for Market Regulation, "the main difficulty faced by small food stores is the pressure of hard expenditures such as rent, water, and electricity bills. These costs account for about 50% of the total cost for small restaurants". Furthermore, in the past ten years, the rent of stores has risen because of the continuous rise of domestic housing prices. According to survey data from CERIS ZhongZhi Data, "in 2019, the rental cost of 100 shopping centers in small and medium-sized cities across the country increased by 1.52% year-on-year, of which the rent of restaurants and gourmet shops increased the most year-on-year".
Here is where our project comes in, creating a business plan to "rescue" those stores. Small snack bars on the street, either exquisite and elegant, or smoky, are the constant "nostalgia" of this international metropolis. The project not only protects traditional Chinese food culture and city history but also makes Shanghai a city with more warmth and heritage.
Why It Is Important
This topic is important because those small traditional food restaurants represent the "city memory" or the unique characterization of each city. More importantly, some of those stores have cultural heritage, and those traditional ways of cooking might be lost forever. According to "Qichacha", a website that queries company information, "from January to November 2020, a total of 3.01 million entities such as self-employed individuals were revoked and canceled in China. This means that in the first 11 months of 2020, almost 10,000 small restaurants or roadside stands disappeared every day".
To look for explicit examples in my life, I went to interview one of those restaurants in person last week. Its name is "Nanyang Road Rice Balls". Its origin of it can be traced back to 1992. In that year, its rice balls on Nanyang Road were a famous brand. Its rice ball has been on the famous Chinese food show called "China's tongue". However, in the past few years, the small shop has experienced many relocations due to the rising rent, and it is closing due to the effect of the pandemic.
Another restaurant I interviewed is "The Alley Vermicelli Soup" on Pingshun Road which is closing up due to no successor of craftsmanship. The vermicelli soup there is full of ingredients, such as louver buns and gluten-stuffed meat. Only after I asked the boss did I know that she made every pot of soup by herself, so as to ensure the taste. That makes it difficult for her traditional way of making the soup to be passed on.
The influence of their closure is sad and pitiful. From a small perspective, we lose a unique taste that represents a period of time in the city's history, from a big perspective, we lose part of our traditional lifestyle.
Problem Diagnosis
Identify the Underprivileged
The group of underprivileged people in our project is generally traditional small restaurants and snack bars struggling to survive in today's world due to increasing rent, vacancies for successors, or other external reasons. For the beginning of this project, we only aim at stores located in Shanghai, later, as our brand gets more and more famous, we hope to spread our business over other big cities in China. To explain with data, we aim at street stores, roadside stalls, and small restaurants that operate on a relatively small scale. According to the "China Small Store Economic Temperature Map", 52% of those stores have less than 5 employees, and 90% of them have a daily turnover of less than 30,000 yuan. Most of them are small business operations. However, in order to make sure that this project is not aimed to help stores that are closing simply because they have a terrible business or their products are not favorable, we have narrowed the range of the restaurants and listed a few requirements:
More than 20 years of business precipitation. The probability that a small restaurant that does not rely on brand marketing can last for 20 years is very low, its existence, in fact, drives the memory of a city road. Furthermore, a store that has been open for 20 years has a certain fan base which will help us later when we generate customers for our brand.
Featuring iconic flagship product. An iconic product not only makes the restaurant memorable but also shows that there are certain unique traditional skills the restaurant carries when making that iconic product and its different from others.
There are some examples of the group of underprivileged we found that meet the standards above and are willing to join this project when we investigated offline: Dawang Potstickers, Changli Road No. 1 Fried Crispy Chicken, Mi Mi Desserts, Auntie's Small Meat Stall, Kong Hongluo and Kung Fu Pork Chop.
Identify the Product or Service
In this project, the underprivileged are within the production process so that they earn money from the product/service, and the services and products of this program include the following types:
Core Products/Services:
The core product/service of this project is a collective restaurant full of those different traditional food stores called "小店大集". This name in Chinese simply means small stores in a big collection. We chose this name because it fits with the main theme of the project and it's easy to read and remember. Our collective restaurant provides consumers with food and snacks that represent the characteristics of the city and make consumers recall and emotionally resonate. It consists of no less than 20 specialty food. The scene in the catering has an age-oriented decoration atmosphere and provides an immersive experience. The planned per capita consumption is 60-100 yuan, which is the most direct and core source of income for this project.
Communication Products/Services:
The communication product/service is pop-up foodfests all over the city (Shanghai). Since the outbreak of the epidemic in 2020, food markets with the goal of prospering the night economy have flourished in various places. According to Ma Ying Hao, an expert of Shanghai Night Economic Management Association, 90% of the market activities are funded by the government or sponsors to invite food merchants to hold. Therefore, we will organize and participate in the food fair under the brand of "小店大集", which will bring together those traditional food restaurants scattered all over the city, which is not only a promotion of our brand but it's also another way to help each store spread. The benefits of those pop-up foodfests include government or sponsor investment, sales revenue sharing, etc., but the greatest value lies in obtaining more opportunities for publicity and promotion and contact with consumers.
Value Products/Services:
The value product/service of this project is based on the successful operation of the "小店大集" collective restaurant. We could incorporate a 'new style' into the 'old product', bringing new elements that are more welcomed by the young consumers to old snacks or food. We will develop prepackaged food for them, make full use of modern advanced logistics and cold chain technology, to further expand the coverage of consumers, just like Changsha's "Dong Shun Tao Small Grain Stinky Tofu", with the help of "WenHeYou", has become the number one brand of pre-packaged stinky tofu in China.
Social Products/Services:
The social product/service of this project is the data of active fans obtained on our social new media accounts. These active fans are active participants in various online and offline activities, and they are also the main members of the consumer community owned by each small traditional food store. Those members themselves are self-media that are constantly spreading to the outside world. In conclusion, the construction, attraction, expansion, and maintenance of these active fan data will be the most important user management product of this project.
The Value-Chain Analysis
In order to help the underprivileged, we need to analyze the value chain and consider the business process in it. Our project standardizes the product and service those small restaurants originally provides and also improves the quality of the products.
To be specific, in our standardized plan, we first put these small restaurants that joined our business together, creating one big brand called "小店大集". In this case, we help those restaurants to use products at a lower cost way because previously, they need to import raw materials like meat, and vegetables by themselves which is inconvenient and costly. However now, we could buy all the raw materials needed for all of those restaurants which is a lot cheaper. We bring the idea of unified operation and management to those restaurants. This means that for example, when we operate a food collective restaurant as mentioned in sections before, all stores under our brand will be able to have all equipment needed for making the food. For example, we will provide unified electricity, water, natural gas, air conditioning, ventilation system and etc because all stores are located in one physical location which is our collective restaurant. By operating this way, we not only reduce the cost of those stores but also improve the quality and stability of their products, allowing the owner of the small store to only concentrate on making the product well, which will undoubtedly greatly control the above expenses.
In terms of marketing and selling, first, by having a food collective restaurant in Shanghai, our target audience becomes the residents around and people of the entire city or maybe even tourists. This expands the sales range and quantity of products. At the same time, we will also build online new media accounts with social attributes. First, we take the unique city memory as the emotional connection and make the rescue of the resurrection store the action goal, then through this internet traffic or social media traffic, we establish an exclusive fan group for each store. Finally, through the transformation of offline activities, a stable consumer group is formed.
Identify the Key Issue
In the value chain of those traditional snack bars and small restaurants, the underprivileged act as a producer. They are intermediate processors who turn raw materials like meat or vegetables into delicious food or drinks.
In order to form a successful and healthy business system, we need to analyze the reasons why the dilemma arises in the first place: The core operating cost of each small store consists of rent, labor (many small stores are done by the owner himself), operating expenses (including water, electricity, energy, and others), and product raw material costs, and the income comes from selling products. It turns out that the value chain of each small store is very fragile. According to our visit survey, all the cost items in the city are constantly rising, and the customer group of small stores is indeed a relatively fixed surrounding population, and the rate of the product price increase cannot keep up with the cost. The rate of increase, coupled with the increasing age of the boss, has led to bankruptcy and the disappearance of those stores.
Problem Solving
Generate Ideas
1. In order for those small restaurants to survive in big cities, they need to first encounter the biggest problem which is the cost of opening a store (rent, electricity bills, water bills). Therefore, we can collect many of those snack bars or restaurants that are facing the same problem and then have them operate as a whole under the name of our brand. We could use both online platforms like TikTok accounts and offline activities like foodfest to promote and attract consumers. We can open a brand new "restaurant" that is full of those stores that joined our project and spread this new type of restaurant all over China.
2. The customers of the store should be expanded, not only to the nearby residents or the online celebrities of the shop but also to the tourists from other places. At the same time, foreigners can also be included. Just as foreign countries have Chinatowns built according to Chinese characteristics, we can also build a street with national characteristics. There have been successful examples of this. For example, some cities have European-style streets, which attracted a large flow of people. After the customers are expanded, the economy will naturally grow.
3. For long-term operation and profit, the products of the store should be diversified and distinctive, otherwise, people will be bored soon after a period of time, which goes against the main purpose of our long-term business activities. In addition, the layout of streets and shops should have a sense of atmosphere. After the theme of streets or shops is determined, the owners of stores should decorate their stores according to the theme, giving people an immersive feeling, and making the streets attractive from products to the environment. We can offer some help in the early stages too.
4. How to create a perfect external environment is important, but the basic conditions that the store itself should have are also indispensable. Some legal certificates, such as operating licenses, must be prepared in every store. At the same time, food hygiene and in-store hygiene should also be ensured. Food safety problems must not occur. Otherwise, the long-term operation will be impossible and the image of streets and stores will be negatively affected.
5. Today's media are very diverse, and people's attention is also distributed in different places. We can choose the combination of traditional media and new media to make more people pay attention to this business activity. The styles of various media are also different. For example, traditional media tend to be serious and formal, while new media tend to be casual and humorous. This combination can also make our stores have both formal introduction and humorous recommendations.
6. In addition to receiving external media to help us publicize, we can also establish an official account to publicize. Special products of some stores, business hours, or when there are activities can be published on the official account. The advantage of establishing our own official account is that we can vigorously launch the products we want to create, and the published articles are more accurate, which can avoid inaccurate or untrue reports from some media.
7. The production process of some products is also eye-catching, such as Ramen, slicing, etc. We can encourage some stores to beautify the product manufacturing process to make it more enjoyable, and then select specific links for display, so as to attract some customers. We can even recommend a specific chef to improve the popularity of the store by increasing his popularity. Of course, some exclusive recipes will not be required to be displayed.
8. Since we are building stores related to urban memory, we can focus on displaying urban memory. Each store can introduce its own unique stories, such as entrepreneurial history, customer changes, how to develop brand products, and so on, so as to achieve resonance with customer memory.
Evaluation Criteria
1. Can we afford to carry on this project economically?
2. Is the project feasible and sustainable?
3. How do we attract and convince merchants to join us？
4. Can we attract consumers?
5. Will the project generate enough profit for all of the restaurants that join us?
Rating Sheet
Solution 1 has the highest point which is 38 points.
Solution 1 is: (In order for those small restaurants to survive in big cities, they need to first encounter the biggest problem which is the cost of opening a store (rent, electricity bills, water bills). Therefore, we can collect many of those snack bars or restaurants that are facing the same problem and then have them operate as a whole under the name of our brand. We could use both online platforms like TikTok accounts and offline activities like foodfest to promote and attract consumers. We can open a brand new "restaurant" that is full of those stores that joined our project and spread this new type of restaurant all over China.)
Scalability
This project has rich scalability, and the analysis is as follows:
1. Product Diversity
The core of this project is a group of specialty stores and the products they supply. We have designed the selected criteria, which can be adjusted, expanded, and replaced at any time during the project's operation to meet the needs of the consumers. When the scale of our brand gets bigger, we could invite and add in more small stores that are attracted by our business project. Additionally, our brand has the ability to decide what food we want to have in our collective catering or in our pop-up foodfests depending on the favor of consumers as long as it follows the criteria. For example, if Shanghai Mooncake certainly became very famous due to some unexpected reasons (Celebrity Influence, Festival Reasons), we could immediately go search for small stores that make traditional Shanghai Mooncakes that follow our criteria. By having product diversity, we could increase the utility of consumers which helps us to last long.
2. Sustainability
This project adopts the method of self-media operation and stimulates users to participate through activities such as visiting stores offline to inspire user engagement. We turn the simple act of eating delicious food into public welfare by protecting traditional food culture. In this way, we could turn consumers into fans. Fans have brand loyalty, therefore, they will become free publicity for our brand and is the most important data asset of this project. With this increasing fan database, our business will also be sustainable.
3. Profit channel Diversity
The very first profit we could earn in this project starts with self-media operation and participation in pop-up foodfests while we accumulate brand effect and user data, also helping the survival problem of those stores. On this basis, when we collect enough funds, we will open a collective food catering called "小店大集" that integrates urban culture, and upgrade the operation mode of those small stores. This is will be a big part of the profit we could earn both for our brand and for the stores. Lastly, as long as there are enough brand effects and a number of consumers, through mature logistics and cold chain channels, we could expand more industrialized business models such as branded pre-packaged food. This will again hugely increase the profit because we are selling products to consumers national wide or even worldwide by that time.
Action Plan
In order to operate a successful business plan, we divide the action plan into five big stages.
1. Preparatory stage (two weeks)
(1) Set up a working group with six people, set up tasks for each team member such as copywriting design, external liaison, and event execution, and seek cooperation with professional companies.
(2) Consider the business plan for the completion of the project, including the project background, analysis, cooperation methods, budget, etc., and form the following document:
■Shanghai Characteristic Store Solicitation Plan: The criteria of those snack bars or small restaurants are stores that have less than 5 employees and have a daily turnover of less than 30,000 yuan; More than 20 years of business precipitation; Featuring an iconic flagship product.
2. Resource Accumulation Stage (two months)
Through initial search, on-site visits, interviews, etc., conduct research on those snack bars or small restaurants that fits our criteria.
The number of research targets: no less than 30
Targets that agree to sign with our plan: no less than 10
3. Brand Building
(1) Comprehensively carry out the planning and design of the "小店大集" brand, including brand visual design, English design, brand registration, and brand story creating.
(2) Create a self-media brand of "小店大集". First, create a WeChat public account, followed by a WeChat video account, Douyin account, and Weibo account. The content includes the history of some of our stores, stories of their owners, etc. We will also post various activities such as "store discovering".
4. Phase One Market Practice
This stage is carried out from the following two aspects:
(1) To connect with the various foodfests and night market activities being held by the government, let our brand "小店大集" participate. We organize more than 10 stores to participate. We aim to be rent-free but share the revenue with the foodfest organizer which is the most common method of operating foodfests. We Plan to participate in foodfests more than 6 times a year.
(2) Use the self-media of "小店大集" to cooperate with public domain traffic platforms such as Douyin, Xiaohongshu, Meituan, and Dianping to carry out in-depth brand communication activities. Starting from the three perspectives of discovery, inheritance, and protection, a series of activities are held, including various forms such as "Traditional Restaurant Treasure Hunt" (store searching), "Apprentice Action" (craftsmanship inheritance), and "Internet Celebrity Endorsement" (Offline Store Visit) to quickly import traffic.
4. Second Stage of Market Practice
On the basis of the successful development of the market practice in the first stage, we look for long-term cooperation with commercial complexes. That is to open a local snack collection experience restaurant under the brand of "小店大集". We use the brand achievements and user traffic data accumulated in the first stage to obtain a low-rent cooperation method, reduce costs and expand profit margins. Finally, after a certain scale is formed, pre-packaged food with special traditional snacks can be further launched, and the market share can be further expanded through the currently developed online shopping and cold chain logistics system.
Note: The above action plan is an external business expansion plan, and for these cooperative small restaurants, we will launch a shared business model, that is, we will help these small stores to have unified packaging, unified management of food quality, unified development of service methods, Unified publicity and promotion, forming a common decision-making mechanism, setting an appropriate profit sharing ratio which allows our brand and those stores to grow together.
Financial Forecasts
Note: The chart above that shows the financial forecast is just one perspective of this business. This project also has a very valuable property: that is the fan base we build through self-media. The forecasts are as follows: On a one-year basis, the self-media attracts more than 100,000 fans, of which 20,000 directly participate in offline activities.
Risks
This project is constructed in a market-oriented way. Therefore, during the implementation process, there will be risks. However, we have mitigation plans to help with each risk.
1. The Risk of Choosing Traditional Snack Bars or Small Restaurants
The core of this project is to choose a traditional snack bar or roadside stand. Therefore the deliciousness, popularity, and story behind it are the basis for future business activities. Once there is a deviation in the selection, it will fundamentally impact this project.
Mitigation: Full Use of Social Media
Through our social media accounts, we will invite fans to vote and recommend on those online platforms and fully listen to consumers' opinions. On this basis, data-based statistics are carried out in order to achieve the purpose of reducing the risk of store selection.
2. The Risk of Brand Building
This project plans to gather more than ten characteristic snack bars or small restaurants to create an integrated "小店大集" brand. Since the brand involves several product categories and several business contents, it is difficult and risky to integrate into a brand with unified values and memory points.
Mitigation: Focus on Developing Brand Values:
We should dig deeper into the stories behind these specialty stores, including the founder's life experiences and stories, the secrets of its taste, and the connection between it and the city. We collect the contents of each small store to extract a unified value with memory points that could be accepted by consumers.
3. The Risk of Market Transformation
In addition to self-media operation, a very important activity in the early stage of the project is to use our brand as a unified unit to participate in various large-scale pop-up foodfests. At present, there are more and more similar activities in Shanghai, which means that the market attractiveness is declining, and the degree of homogeneity is high. This undoubtedly increases the difficulty of our brand in the operation of that foodfests, and there is a risk of market transformation.
Mitigation: Highlight Our Cultural Atmosphere
In order to stand out from all other foodfests, that are happening, we need to make our foodfest more than just a place where you eat. We are going to enrich our foodfest with city cultural designs and decorations. (I have added a model I made with modeling software that shows some idea of city cultural theme foodfest). Therefore we allow consumers to eat while taking pictures and visit those special elements that only belong to our food fest. We could also have small bands or small shows in our foodfest to form interactions between consumers and the foodfest.
Long-term Plan
This project does not only consider short-term benefits. Our team considers the long-term goals from the early stage of the design:
1. Help More Snack Bars and Small Restaurants (Mission)
The original intention of this project is to help these small restaurants with urban memory to survive in the present while protecting the craftsmanship and culture they carry. Therefore, as our brand "小店大集" develops, there is no doubt that we will help more of those restaurants as it's a win-win situation for both those stores and our brand. This is also the mission of our brand.
2. Replicate The Bussiness Plan of "小店大集" in Other Cities (Goal)
We start our business in Shanghai, if the plan is successful, we will spread our brand to other cities. Each city has its own variety of specialty snacks, which also represent the culture and spirit of the city. The brand could be replicated and promoted in various places, and eventually, it can be a local culture chain brand that represents each city's culture and spirit.
3. Build a New Business Model for IP-Based Operations (Vision)
The operational characteristic of this project at the start-up stage is that we do not lie in the initial investment of a large amount of capital, but in the ability to integrate resources and create IP. Through self-media and activities, we aim to create traffic, attract fans, and start the follow-up business mode with the support of user data. Our brand gradually transforms from having activities like pop-up foodfests to opening food collective catering and then developing branded pre-packaged food. This new business model which is sustainable will become the long-term operation goal of this project.
Review and Reflections
What Are Successful
I think we are successful in coming up with a unique perspective on the underprivileged group. The idea of helping traditional snack bars and restaurants is interesting and meaningful to everyone. I think the project overall meets the objective we set up at the very beginning because we not achieved to help the underprivileged in our project, but we are also profitable and follow the criteria of a business plan. Furthermore, we have a reasonable and realistic marketing strategy and our long-term vision is also creative and achievable. The action plan we made is very detailed and professional as we used many academic words and explained each step with reasoning and considered all factors in a realistic setting.
What to Improve
I think we are not good at making the format of the balance sheets, income statements, and cash flow statements. One inefficiency we observed is that because we have already formed a solution that we all agreed was the best, it was kind of hard for us to generate other ideas just to show the correct order and process of thinking.
Summarize Learnings
1. Communicate and collaborate with team members online when we are separated.
2. Instead of giving people a production or a result, it's better to create a system that allows them to benefit from it continuously.
3. In today's world, business is highly connected with technology such as social media.
4. Fans are better than consumers for firms because fans have brand loyalty and they could be used as free promotions for the brand.
5. You don't really need to have your own resource in order to start a business, you can just integrate resources and form new business. 6. Creating an IP is very important.
Comments from the Evaluation Panel
Overall, the clarity of your primary and secondary points is commendable, as is the balance you've struck between detail and brevity. The logical flow of your presentation is easy to follow, and the introduction of your solution is both engaging and tangible. Your adept use of data in problem analysis is evident, and the inclusion of real-world store examples adds a layer of practicality to your project. Your grasp and application of the project framework and methodology are notably strong.
Furthermore, your insights and reflections, such as the observation that "because we have already formed a solution that we all agreed was the best, it was kind of hard for us to generate other ideas," and the belief that "Instead of delivering a final product or outcome, it's more beneficial to establish a system that provides ongoing value," are particularly striking. These reflections underscore your heartfelt investment in the project and the depth of your learning experience.
However, there are areas for improvement. The financial forecasts could be refined to enhance their accuracy and reliability, a point you've also recognized in your self-assessment. Additionally, the action plan could benefit from further development to ensure its practicality and effectiveness.
Well done once again! Your effort and dedication are evident in the quality of your work.
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