Retail chain/ quick-service restaurants branding roadside foodThe IdeaIronically, it wasn't the Mumbai-ite's love of the vada pav that initially inspired Dheeraj Gupta. Though biting into one of thepiping-hot treats, consisting of deep fried potato dumpling served in a lightly-buttered bun, may be elevating, Dheeraj'soriginal inspiration for Jumbo King Vada Pav was much more prosaic.While visiting London, Dheeraj stayed with a friend who owned a Burger King franchise. "That's when I saw how their business worked," he says. Dheeraj was fascinated by the fast food franchise business. "Back in India, I happened to comeacross a book about the person who set up McDonald's. It inspired me tremendously and I decided to follow the samemodel."But he wanted to give the business an Indian flavor. "Vada pav was the obvious food choice because Mumbai-ites love it,"he says. Vada pavs are one of Mumbai's favorite roadside fast foods.Dheeraj took his idea further - he was willing to bet that, for snacks they knew were hygienic, people would pay him morethan twice the price than they would pay for a vada pav from a traditional street stall.So in August 2001, Dheeraj set up an outlet called Chaat Factory close to Malad station, a suburb in Mumbai. "I wanted tosell hygienic chaats in the market. But I started with vada pavs only." His success selling this one snack focused hisattention, and he renamed the company Jumbo King Vada Pav.The OpportunityIt turns out that vada pavs are a young person's food. In fact, a feasibility study performed by Jumbo King showed that 75%of vada pav purchasers are 16 to 25 years old. Also, surprisingly, the majority of people purchasing the snack hail from thehigher income brackets.At Jumbo King, Dheeraj and his team are therefore playing into some important trends: more young people today havemoney to spend; and at the same time, they are increasingly health- and hygiene-conscious, wanting to know that they arereceiving good quality food. Jumbo King, explains Dheeraj, "is riding on this generation."Thousands of street-side vendors still dominate the quick food market, and placed among these, Jumbo King is distinctlydifferent. "Right from deciding to use paper to wrap the product in, having processes and systems in place, branding acommon Mumbai-ite's food, to running the business like the Western style fast-food giants, we have constantly innovated,dared and gone against the tide."In one area, Jumbo King maintains a more traditional outlook - like all retailers, they focus on location, location, location.Today, all Jumbo outlets are located near railway stations.By combining the elements above, Jumbo King seems to have come up with a successful "secret sauce". Today thecompany has 30 outlets in Mumbai, two in Surat, one in Ahmedabad, one in Baroda and one in Pune.The MoneyA loan of Rs. 2 lakhs kick-started the business. Growth has been helped by the fact that the business can generate quickcash flow: the first Jumbo King outlet at Malad made money from day one."All the money from the business was ploughed back into buying the second store," says Dheeraj, who used to take backhome a salary of only Rs. 5,000 a month.
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Vision, Mission and Goals Case Study
India�s Branded Vada Pav Chain Jumbo King�s Ambitious Plans
Publication Year : 2010
Authors: N Sharma, J Thadamalla, S Chaganty
Case Code: VMG0016IRC
Teaching Note: Not Available
Structured Assignment: Not Available
Jumbo King, a branded Vada Pav fast food chain which started its business in the Indian city, Mumbai in 2001 with a capital of INR200,000 decided to expand its business across the other Indian States. The company's business model was inspired by McDonalds and Subway and hoped to stimulate customers' taste buds with its INR8 ($0.16) Vada Pavs in line with 15 cent McBurgers. Most of the company's outlets were situated near the railway stations and busy places where a constant stream of commuters as potential customers was assured. Jumbo King's business focused on delivering good service, quality, cleanliness and value. But, presence of the multinational food chains, roadside vendors and Udipi restaurant etc proved to be a challenge for Jumbo King to attract customers. The case details the emergence and growth of Jumbo King and its strategy to expand nationwide. It remained to be seen whether Jumbo King would be able to deliver McDonald's and Subway's experience in the long run.
- To competitive dynamics of the Indian fast food industry
- To the emergence and growth strategy of Jumbo King
- To opportunities and challenges for Jumbo King in the Indian fast food industry.
Jumbo King, Brand building, Expansion strategy, Distribution network, Vada Pav, McDonald's, Burger King, Indian fast food industry, Ethnic foods, Brand image
- Indian Fast Food Industry: An Overview
- Jumbo King's Domestic Expansion Drive
- Road Ahead