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Nirulas Case Study

A case study on Nirulas by Sushant Kumar.
Contact: Email: sushant.kumar@iiml.ac.in Web: www.domainofhope.com

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Contents
Nirulas History ....................................................................................................................................... 3 Brand Positioning ................................................................................................................................... 3 Tagline .................................................................................................................................................... 3 Quality Statement .................................................................................................................................. 3 Nirulas Business ..................................................................................................................................... 4 Recent Developments ............................................................................................................................. 4 Nirulas Menu .......................................................................................................................................... 4 SWOT Analysis ....................................................................................................................................... 4 Strengths ............................................................................................................................................ 4 Weaknesses ........................................................................................................................................ 5 Opportunities ...................................................................................................................................... 5 Threats ................................................................................................................................................ 5 Way Ahead for Nirulas ........................................................................................................................... 5 References and further readings ............................................................................................................. 5 Disclaimer ............................................................................................................................................... 6

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Nirulas History
Nirula's is a well-known brand in the hospitality industry. The Nirula's Family came to Delhi in 1928. The Nirula brothers began "HOTELINDIA" in 1934 at Connaught Place, Delhi with 12 rooms, a restaurant and a bar license. 'Chinese Room' Restaurant and espresso coffee was first introduced in India in the 1950's by Nirula's. In the 60's two specialty restaurants came up- La Boheme a modern restaurant serving Hungarian food & Gufa an Indian specialty restaurant. The company ventured into the fast food business in 1970's with the Pastry Shop, Snack Bar, Hot Shoppe,Potpourri restaurant (with the first Salad Bar) and Ice Cream Parlour. Today, the production facilities in Noida, Uttar Pradesh, India include the Bakery, Confectionery, Cheese Plant, Ice cream Plant, Food Processing Unit and Hot Kitchen. Nirula's has increased its presence in North India with the opening of restaurants in Panipat, Dehradun, Chandigarh, Lucknow, Jaipur, Meerut and Pathankot. Its association with Indian Oil Corporation (IOCL) in 2005 has seen the opening of new Outlets at fuel stations in New Delhi and Chandigarh. Its tie-up with HPCL and has opened more projects in Delhi, Jaipur and Pathankot. The company plans to venture into a large number of quick service restaurants in every major city in India with an aggressive expansion strategy.

Brand Positioning
Nirula's is warm, contemporary, accessible, eating place for families including children and young adults, serving the widest variety of Indian and International food, beverages and desserts, at affordable prices.

Tagline
its desilicious!

Quality Statement
Quality consciousness is the foundation of our business and every employee of the company is responsible for delivering the same in terms of good quality of product, service and an overall experience.It is a measurable and continuous improvement process with long term returns in terms of goodwill and revenue growth.

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Nirulas Business

Hotels

Pastry Shops

Potpourri

Nirulas
Ice Cream Kiosks

Pegasus Bar

Family Style Restaurants

Recent Developments
Navis capital bough Nirulas from its founders for Rs 90 crore in 2006 Navis Capital has hired Deloitte for improving operations Implemented SAP at backend Facility upgradation Total investment of 50 crore on modernization

Nirulas Menu
Nirulas menu contains over 500 items to choose from

SWOT Analysis
Strengths
Nirulas is a strong brand. A very old name in the food and hospitality industry. A strong presence in Northern India, especially the NCR region Tie ups with IOCL and HPCL improve its reach Operational effectiveness with Deloitte as consultant Page
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Weaknesses
A weak brand differentiation. Wide menu with wide range of price levels. The lowest being Rs 15 and the maximum Rs 4299. Lack of brand positioning rather an unclear product positioning. Ineffective utilization of high demand outlets that result in long queues.

Opportunities
Increase in buying power of youth. Exploring markets in Haryana, Punjab, and North East.

Threats
Aggressive players in fast food segment like KFC, Mc Donalds , Pizza Hut, Dominos with a strong product differentiation and renowned niche products such as burger, pizza, chicken. Competition from gourmet restaurants such as Sagar Ratna, Not Just Paranthas etc. Competition in Ice cream segment from Gianis, Baskin Robbins etc. Competition in Caf segment from caf Coffee day, Barista.

Way Ahead for Nirulas

The basic problem in Nirulas case is weak product differentiation. By standing for quick service they have increased the number of competitors. Fast food is a highly segmented industry with strong brands in every segment such as KFC for chicken,Mc Donalds for burgers, Baskin Robbins for ice creams or Sagar ratna for gourmet food. Hence, rather than improving network, Nirulas needs a differentiated product. Being a very old brand, it has a name in the minds of north Indian people and it can capitalize it differentiating its product from others. In terms of service and quality, all its competitors fair very highly. Hence differentiation is not possible. Indianization of food is again done by almost everybody, be it the Mc Aloo Tikke burger of Mc Donalds or Chicken Thali of KFC. Hence Nirulas needs to look into what it is best at, focus on a niche product, have a small price level range rather than a highly diversified menu and cater to the needs of a smaller set of people so that they identify the brand with a product.

References and further readings

Nirulas website - http://www.nirulas.com/ Suggest read and reference o Business Today case study. [Suggested read] http://businesstoday.intoday.in/index.php?option=com_content&task=view&id=12153 &Itemid=1&issueid=73&sectionid=45&limit=1&limitstart=0

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Disclaimer
The contents of this report are based on information generally available to the public from sources believed to be reliable. No representation is made that it is timely, accurate or complete. I have taken due care and caution in compilation of data as this has been obtained from various sources including which it considers reliable and first hand. However, I do not guarantee the accuracy, adequacy or completeness of any information and it is not responsible for any errors or omissions or for the results obtained from the use of such information and especially states that it has no financial liability whatsoever to the subscribers / users of this report. The information herein, together with all estimates and forecasts, can change without notice. This report does not purport to be a solicitation of any advice pertaining to trade and business and readers are advised to consult experts or study / evaluate individual business prospectus and other relevant legal documents before taking any decisions based on information provided in the site. I do not accept any liability whatsoever nor any responsibility for any financial consequences arising from the use of the research or information provided herein.

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