Use the attached documents for instruction and guide to the paper.
This Marketing Plan section is apart of a Business Plan, the sections is "Target Market and Segmentation" Please see attached doc for business plan and further instruction and guide "Everything needed is in attached documents". All parts of the question MUST BE ANSWERED AND ****ORIGINAL WORK****. This is a Business Plan on a Drone Fast Food Delivery System/Service. Must include ONLY recent (2013-2016) cited references, must be Graduate level writing and a minimum of 2-3 pages including any graphs/flow charts etc, APA format.
Running head: CHOW CHOPPER INDUSTRY ANALYSIS Chow Chopper Industry Analysis 1 Page |1 CHOW CHOPPER INDUSTRY ANALYSIS
TABLE OF CONTENTS
Industry Review..................................................................................................................Page 2
Regulation Review and Legal Concerns.............................................................................Page 4
Competitive Analysis..........................................................................................................Page 6
SWOT Analysis..................................................................................................................Page 8
References..........................................................................................................................Page 14 Introduction
The Chow Chopper is a company that aims to deliver fresh food in minutes with care via state of
the art drone technology to the Portland, OR community. Currently, there are very few
companies offering food delivery via drones and both Amazon.com and Walmart are initializing
similar services in various cities. This company is different from competitors in that it will
specialize in the Portland locality and offer restaurants an option to deliver food faster than ever
before right to customer?s doorstep or to a location unreachable via car delivery. People want
their food fast and to get on with their day. The Chow Chopper is the solution. This on demand
delivery service provides customers fresh food in less than 30 minutes. Our drone delivery
service will deliver from local restaurants in an eco-friendly delivery container to your
1 Page |2 CHOW CHOPPER INDUSTRY ANALYSIS
designated delivery point within the Portland area. This gives our customer an eco-friendly
option to get their takeout rather than driving, saving our customers precious time, and
decreasing air pollution emissions. Chow Chopper is unique because it will be the first local
delivery service of its kind in the Portland area. Our delivery service caters to customers who are
environmentally conscious and want another resource for getting their breakfast, lunch or dinner
quick fast and in a hurry. Industry Review
Unmanned Aerial Vehicles, UAV?s, are about to change our lives. They are being used all
around the world. Some examples include, energy companies using them to inspect power lines
in the United Kingdom, Japanese farmers using them to spray crops, and the United Arab
Emirates is working on a prototype to deliver government documents [Gui15]. In the United
States, UAV?s are being used in a variety of industries from real estate to construction.
The first UAV created were mostly for the military. This industry required big budgets and
cutting edge specs. For instance, MQ-9 Reaper, which is a UAV used in battlefields, cost about
$12.5 million [Kay13]. The second UAV?s were created for children and hobbyists. This
industry had low budgets but enjoyed the advantages of using UAV?s [The16]. The UAV?s for
children and hobbyist prices ranged from $100 to $5,000 according to the level of technology
that the UAV was equipped. Both of these industries used some ideas in the advances of
technology to create both UAV?s for military and toys. The Chow Chopper is the drone we have
designed to deliver fresh food in minutes with care via state of the art drone technology to the
Portland, OR community. The cost for drone usage in delivering food is $50,000. The benefit 2 Page |3 CHOW CHOPPER INDUSTRY ANALYSIS
for starting the Chow Chopper Company is it has the advantage of being one of the first to enter
the market for this purpose. Currently we only have a dozen companies approved to operate
drones commercially in the United States resulting in low competition and the ability to acquire
more local businesses. This is a great opportunity for the Chow Chopper to set the standards for
food delivery via drone technology and establish a reputation in the industry that will inspire
others to follow. 3 Page |4 CHOW CHOPPER INDUSTRY ANALYSIS Regulation Review and Legal Concerns
For the business to operate the business must adhere to all the licensing policies from various
departments of the City of Portland and or State. The first we have to ensure that we register our
1. Office of Management & Finance Revenue Division will confirm and authorize us to
collect any city sales tax. So that we comply with all Portland City sales tax on food
and beverages we need to register our business in such. Everyone doing business in
Portland or Multnomah County is required to register. (Revenue Division ? Office of
Management & Finance ? the City of Portland)
Portland Bureau of Transportation (PBOT) for the following;
2. Parking Permits City Code 16.20.220; in order to designate specific locations around
the City of Portland to mark delivery locations our customers can pick up their food
delivery, we must adhere to PBOT Central City Plan District including any ordinance
restricting vending may not occur within 250 feet of any public library or park
grounds, any stadium or grounds. (Department of Transportation, The City of
3. Signs & Other Permits Title 32; Signs, A-Board and Banner; any signage, or
advertisement around the City of Portland we must file the appropriate permit request
through the Development Services Office and Portland Bureau of Transportation.
Despite the beauty associated with this modern day delivery system we intend to use, there are
also some challenges associated with the same. One of the limitations is with the Federal
Aviation Authority (FAA). The Federal Aviation Authority has made it mandatory to register
4 Page |5 CHOW CHOPPER INDUSTRY ANALYSIS
owned drones that is purchased and weighing over 55lbs. In addition, the FAA has enforced pilot
requirements including our pilots passing an initial aeronautical knowledge test at approved FAA
knowledge testing centers, they must also be verified by the Transportation Safety
The complete list of requirements are as follows;
To become a pilot you must: (Federal Aviation Administration ? Unmanned Aircraft Systems) Be at least 16 years old Be able to read, speak, write, and understand English (exceptions may be made if the
person is unable to meet one of these requirements for a medical reason, such as hearing
impairment) Be in a physical and mental condition to safely operate a small UAS Pass the initial aeronautical knowledge exam at an FAA-approved knowledge testing
center Pilot certificate Requirements Must be easily accessible by the remote pilot during all UAS operations Valid for 2 years ? certificate holders must pass a recurrent knowledge test every two
years Existing Pilots ? What to Expect
Eligibility: Must hold a pilot certificate issued under 14 CFR part 61 Must have completed a flight review within the previous 24 months Remote Pilot Certificate Requirements Must be easily accessible by the remote pilot during all UAS operations
5 Page |6 CHOW CHOPPER INDUSTRY ANALYSIS Valid for 2 years ? certificate holders must pass either a recurrent online training course
OR recurrent knowledge test every two years Other issues we may incur are our drones could be at risk in the hands of untrustworthy
customers who may damage them or hack their systems and use them to their advantage leading
to losses for the company. The introduction of drones in the market for food delivery will make it
possible for food to be delivered even to places where some road condition gets worse, and they
become impassable in inclement weather. They will also make it possible for food to be
delivered in much less time and help to avoid the compensation costs experienced earlier when
foods used to get cold on delivery by use of road transport. In conclusion, the use of drones to do
business will be the most efficient and reliable means for food delivery. Competitive Analysis
A complete competitive analysis shows that there are no direct competitors at this time.
Currently, in the Portland area there are no restaurants or fast food chains that provide drone
delivery as an option nor are there drone delivery businesses in this area. All the restaurants in
this area offer the standard dine in, carry-out and car delivery options which makes The Chow
Chopper a unique business opportunity. The world of unmanned aerial vehicles is improving
daily with drones that now come equipped with cameras and the ability to carry cargo (AlleyYoung, 2015). The companies currently testing and using drone delivery are limited to online
retail stores such as Amazon, Walmart and Google however that does not pertain to hot food
delivery (French, 2015). The UAV delivery services being offered by companies such as 6 Page |7 CHOW CHOPPER INDUSTRY ANALYSIS
Amazon are for items typically purchased on their website such as clothes or household goods
but not specifically for food. While Amazon is said to be ?experimenting with a restaurant
delivery service in Seattle? there is no evidence showing that they will use unmanned aerial
vehicles to do so (Demmitt, 2015). The restaurant industry has yet to fully embrace the concept
of drone food delivery which is why taking full advantage of UAV technology and cornering this
market in a small localized area such as Portland can be the start of a ground-breaking change for
the restaurant industry. Possibilities are endless and The Chow Chopper intends on tapping into
Although there are currently no direct competitors in the food delivery market in terms of the use
of unmanned aerial vehicles, there are many driving delivery services that pose potential threats.
Companies such as Grubhub and UberEats provide delivery options to restaurants that do not
typically offer the option to deliver food orders. Customers can get their favorite foods from any
restaurant with the help of these delivery service companies. Though a relatively new concept,
companies like Grubhub are established and have been in use for a few years now. Currently,
Grubhub is the nation?s leader in online and mobile food ordering. They provide customers with
the ability to ?order directly from more than 44,000 takeout restaurants in over 1,000 U.S. cities?
which is why it is just as important to consider our indirect competitors as it is to consider our
direct competitors (grubhub.com, 2015). The Chow Chopper must differentiate itself amongst all
competitors alike and the best method to establish itself is by appealing to the customers? needs
and wants in regards to food delivery. One of the most difficult aspects with our new idea will be
transitioning customers, who are comfortable using Grubhub, UberEats or traditional driving
delivery services to using an unfamiliar option like drone delivery. People are hesitant when
7 Page |8 CHOW CHOPPER INDUSTRY ANALYSIS
trying new things therefore The Chow Chopper must demonstrate exactly how it will supersede
all other delivery options. Customers want quick service, low cost and good food with no hassle;
The Chow Chopper can provide all of this and more by removing delivery drivers and using
drones to get food to their customers quicker than ever. To win over customers The Chow
Chopper must outperform the current competition and prove that it is a reliable and efficient
delivery service. SWOT Analysis
Chow Chopper is uniquely suited to offer restaurants an option for food delivery that is unlike
any other currently offered. According to the NPD Group, the average customer purchases 127
meals annually at restaurants for consumption elsewhere, compared to 81 meals annually at a
restaurant[Nat15]. The percentage of adults who are likely to use delivery from a full service
restaurant ranges from 52-68% depending on how frequent they are restaurant patrons, and over
half of all consumers purchase takeout once a week or more, utilizing home delivery 45% of the
time [Nat15]. What this data tells us is that the market for restaurant delivery is strong and an
entrenched part of the way Americans consume restaurant food. Given that takeout and delivery
split the market relatively evenly, we want to capitalize on saving restaurants and customers time
between food preparation and consumption by using drones to take food immediately when
prepared to the customers? location. This reduces time from production to delivery by allowing
the company to send the food out immediately when the order is complete without hiring internal 8 Page |9 CHOW CHOPPER INDUSTRY ANALYSIS
delivery personnel. For end user customers, they get their food faster than if they went and
picked it up themselves.
Chow Chopper is a strong concept due to its revolutionary use of brand new drone technology to
reduce delivery time for restaurants and deliver food to a precise location marked by customers.
It specializes in restaurant delivery, thus focusing on providing the best service to local
restaurants in the Portland area, providing true local service, and adjusting to customer needs
quickly since we are designed specifically for this purpose. Our delivery isn?t a part of some
giant corporation, but a commitment to improving restaurant customer service.
There are weaknesses to conducting restaurant delivery via drones. Chow Chopper is a small
business serving the Portland area. Should growth opportunities arise quickly or large
companies take over market share, Chow Chopper may not have the capital to outpace that
growth. Additionally, delivery time is paramount to competing in this sector. If the company is
unable to provide delivery service faster than car delivery and/or cheaper, it will be difficult to
gain market share. A potential weakness is the pending and continual development of drone
regulations in localities and by the FAA for nationwide drone use. Any change in these results
unfavorable to this type of business and could be potentially disastrous. Another challenge is the
effect of weather on drone delivery systems and their navigational components, which is an area
that is still under development. Restaurants would have to adapt from having a person pick up
the order from the restaurant to an employee placing the order in a designated drone delivery
container. This requires training and even simple actions can present a barrier to hiring Chow
Chopper for their food delivery needs.
9 P a g e | 10 CHOW CHOPPER INDUSTRY ANALYSIS
Chow Chopper is uniquely suited to take advantage of brand new drone technology and the
unveiling of new FAA regulations that allow for business use of drones. The restaurant delivery
business is a growing sector, and according to the National Restaurant Association (NRA) 2015
Restaurant Industry Forecast, America?s 365,000 independent restaurants sell about $70 billion
in takeout food a year, and the percentage of online orders continues to increase. Also, 3 in 5
consumers order delivery or takeout once a week [Nat15]. The food delivery service market is a
growing sector enabled by application technology that allows users to order food with their
cellphone for quick delivery. The biggest opportunity for a drone-based food delivery company
is the ability to deliver to remote locations and get food to the customer faster than a car could
while avoiding any effect of traffic on the time to deliver.
There are a number of competitors and large companies testing drone delivery systems, such as
UberEATS, Grubhub, and EAT24 to name a few [Don151]. Grubhub uses mobile application
technology to connect customers with a restaurant?s online ordering mechanism and contracts out
delivery to drivers. UberEATS uses its driver network that has been delivering people for years,
to swing by and pick up your takeout for you. As this sector develops and the legalities are
sorted out around drone technology, these companies will have the capital to invest in a drone
option and will likely seek to either contract drone delivery, which would benefit Chow Chopper
or directly compete in the drone takeout delivery business. Another potential threat is the
expansion of large companies planning to leverage drone delivery for their own products, such as
Amazon.com, moving that ability into the restaurant delivery sector.
10 P a g e | 11 CHOW CHOPPER INDUSTRY ANALYSIS
OTHER Drone delivery via the Chow Chopper would revolutionize restaurant food delivery by
offering takeout delivery faster than current methods to any location that can be set with a GPS-enabled device.
Obstacles to overcome to successfully operate include navigating FAA regulations,
finding an appropriate delivery vehicle, training restaurant staff to properly use the
delivery system, and the small scale of Chow Chopper restricts its operations to the Portland area.
Opportunities abound in the growing food delivery sector as more and more Americans eat restaurant food and are constantly seeking ways to save time.
Threats to the Chow Chopper can come from numerous large companies and the alreadyoperating car delivery services that provide online ordering and relatively fast delivery
via ground vehicle. RISK MANAGEMENT PLAN
Risk is inherent in any new endeavor and drone delivery is no exception. In fact, there are
numerous aspects of this business that must be taken into consideration. First, one must consider
the risk of success. What are the specific factors that must be planned for and maximize to
ensure Chow Chopper succeeds in this competitive market?
The possibility that drone food delivery will dramatically reduce delivery times for restaurant
food to customers is high. Given that, there are programs and processes that Chow Chopper can
put in place to increase the risk that their delivery is faster. These include an integrated
application that provides ordering and location services so that all orders arrive exactly where a
customer selects and a drone is dispatched immediately to the delivering facility.
11 P a g e | 12 CHOW CHOPPER INDUSTRY ANALYSIS
Other risks exist that would negatively affect Chow Chopper, and they must be planned for and
mitigated. This could include FAA regulations that negatively impact our ability to do business.
Mitigation efforts will be undertaken to lobby the FAA for favorable laws, ensure a presence in
local government to provide drone operators perspective to any local ordinances, and to submit
waivers for any ruling that would curtail our operations. Additionally, employees must operate
drones within current guidelines, and because of this there is always a risk of FAA violations.
Chow Chopper will mitigate this through the use of a comprehensive training program and
annual reviews to test employees? knowledge of regulations.
Delivery errors could also negatively affect consumer satisfaction and must be reduced to the
maximum extent practical. The delivery application must be simple to operate and be
continually adapted to better suit the needs of customers.
Risk is inherent in any new venture, but with integrated planning solutions, and the ability to
adapt and overcome any obstacle, Chow Chopper can lead the charge in delivery efficiency. Conclusion
Chow Chopper is a revolutionary new concept, and one that brings with it the possibility for fast
delivery of restaurant food to the customer, no matter where they may be. With any new
technology, growing pains and challenges can be anticipated, planned for and risks of all types
mitigated through detailed analysis and execution. The restaurant delivery sector has undergone
rapid transformation since the advent of application-based order and delivery systems. Chow
Chopper is another step in that evolution, taking existing ordering technology and adding the
efficiency of drone delivery, effectively reducing delivery times and increasing the flexibility of 12 P a g e | 13 CHOW CHOPPER INDUSTRY ANALYSIS
current delivery systems. Of course, this company does not exist in a bubble and many
companies compete in this sector and will attempt to maximize their own market share. Anytime
a new idea is introduced, running with it is a risk. With Chow Chopper, success would
revolutionize food delivery and create a new standard for convenience and speed of delivery. References
13 P a g e | 14 CHOW CHOPPER INDUSTRY ANALYSIS
Guillot, C. (2015). Drone's Eye View. Planning, 30-33.
Kay, R. (2013, December 4). Drawbacks of Delivery Drones May Outweight the Benefits.
Retrieved from Forbes: http://www.forbes.com/sites/rogerkay/2013/12/04/the-drawbacksof-delivery-drones-may-outweigh-the-benefits/#4770a0b16737
The Drone Revolution is Coming. (2016). Trends Magazine, 17-23. Portland Bureau of Transportation, City of Portland ? Parking Permits ? City Code 16.20.220
Revenue Division, Office of Management & Finance ? The City of Portland ? New Business
Unmanned Aircraft Systems ? Become a Pilot
Alley-Young, G. P. (2015). Drone (Unmanned aerial vehicle). Salem Press Encyclopedia,
French, S. (2015, December 15). Drone delivery is already here - and it works. Retrieved July
20, 2016, from http://www.marketwatch.com/story/drone-delivery-is-already-here-and-itworks-2015-11-30
Demmitt, J. (2015, August 26). Amazon expands Prime Now into Portland, will deliver food
from local groceries. Retrieved July 20, 2016, from
http://www.geekwire.com/2015/amazon-expands-prime-now-into-portland-will-deliverfood-from-local-groceries/ 14 P a g e | 15 CHOW CHOPPER INDUSTRY ANALYSIS
Overview. (2015). Retrieved July 20, 2016, from http://about.grubhub.com/aboutus/overview/default.aspx
Barnburry, D. (2015). Drones: Designed for Product Delivery. DMI .
Elzweig, B. (2015). Civilian Commercial Drones Are Coming; Are We Ready? Southern Law
Fenn, D. (2015, August 31). The (Almost) Complete Guide to Food Delivery Services.
Guth, D. J. (2016). Restaurants Take a Chance on Tech-Based Food Delivery. Crain's Cleveland
Business Vol. 37 Issue 10.
Logic Manager, Inc. (2016, July 17). Risk Assessment Template. Retrieved from Assessment Best
Practices and Free Download: http://www.logicmanager.com/erm-software/knowledgecenter/best-practice-articles/risk-assessment-templates/
National Restaurant Association. (2014/2015). Takeout and Delivery. Restaurant, Food &
Beverage Market Research Handbook.
Wehrspann, J. (2015, April 21). What You Didn't Know About Drones. Farm Industry News
Exlusive Insight. 15 P a g e | 16 CHOW CHOPPER INDUSTRY ANALYSIS 16
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