The catering industry

The catering industry


The catering industry is a major industry with various sectors. Unfortunately, the national data for the industry has been merged with that of tourism and in-house catering services. For this reason, no working data on the specific productivity of the outside catering segment of the industry. Informal sources of data have indicated that the market was worth upwards of USD200 Million in the year 2012. The firm, having been in operation for three months has been able to average USD157, 000 per month. The firm’s main competitors average USD1, 000, 000 per month.

Part 2 – Profitability AnalysisOf the sales revenue earned by the company in the past three months, administrative costs have consumed 13.6%, direct marketing has been responsible for 21% of the total cost and other costs have accounted for 26%. The profit margin has been 39.4% of all revenues earned.

S.W.O.T. analysisStrength

Best services to all customers

Excellent service placement.

Owner and staff in the ;right’ age bracket

Complete product package Weakness

Inexperienced staff

Differentiation of product not absolute.

No economies of scale


Market is young and still developing

Owner has wide network of friends in upper and middle classes.

Partnership with food product manufacturers. Threat

Existing firm’s gone full throttle.

New licensing procedures for end consumption food producers

Increasing input costs.

The MarketThe NeedMost families would wish to hold parties or/and honour occasions with a party. Unfortunately, only a minority of them would have the resources and mostly the time to honour such undertakings. It is this gap that event management and outside catering firms have come to fill. The outside catering sector of the food industry is a fast growing segment of the economy (Fullen, 2005). As more and more people keep embracing outsourcing activities related to their events, so does this sector continue to grow? Wedding planners, parents planning birthday parties, house hold centred activities etc. all require food. Preparing food for a party is not only time consuming but also leaves the host tired to a very great extent. Additionally, the hosts are forced to deal with the worries associated with the right formula and recipe for whatever they offer. It also emerges that most of the occasion holders desire to hold their events at places other than their homes.

All this demands meticulous planning on the part of the hosts and often makes party planning a task and as such significantly reduces the opportunity for the hosts to have fun. This led to a situation where most people began to prefer hiring outsiders (in most cases close relatives, friends, relatives or plain professionals) to manage their events. Thus, the industry called event management grew and from it an outshoot called outside catering developed. As event management firms continue to develop, more and more people who are planning parties tend to opt for them. Event management firms mostly get their contracts away from their areas of operation. This means that they have to outsource some of their functions to residents of the area of the contract. The most outsourced business is catering owing to preparation times needed and the logistics required before, during and after the occasion (Fullen 2005).

The clients

Nina caterers will seek to provide event management firms with a cheap, flexible, mobile, malleable and quality assured outside catering firms. The firm will seek to satisfy all its clients’ needs and to make sure that each event they plan emerges as the best; hence, increased referrals and recommendations. Clients will be sourced through direct marketing through religious institutions as well as the legal state offices. Nina’s main and immediate clients are the couples wishing to hold weddings, party hosts and wake/ memorial services/ funeral organizers. These are the groups who might mostly need the services of any firm offering food delivery services. Being a localized business venture, Nina caterers will initially target the population in and around the area defined by the company’s physical address. This will be helpful since the entrepreneur is well known by the residents. In addition to being well known, the owner is within the age bracket of twenty five years and thirty five years. This means that most of the individuals that are having weddings are well known to him. In addition to the fact that the owner enjoys cordial relations with the residents; the plan is to be the lowest priced outside catering provider.

Though competitors are present, they do not hold much sway with the local community. The community either considers them overpriced or too alienated from the reality on the ground. It is thus envisaged that though the venture will start with a market share of Zero to none, the first month of operation will see it grow to at least twenty (20%) of the business that is locally generated. The company will also seek to open avenues for visitors to its neighbouring areas who might at one time or the other needs its services. It is thus envisaged that by the close of its first operational year, the company will have managed to take over twenty five (25%) percent of all outside catering services in its locality. This means that the growth in the initial month(s) will accumulate to more than three hundred percent of the initial market. The eventual target is to control sixty (60%) of all business (new or old). This will involve concerted marketing approaches as well as cutting down on ‘client directed costs’.


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