EazyMeals: Not an Easy Task to Manage!

The summer of 2014 posed challenges for the food start-up, EazyMeals, which operated in the low-cost daily meals segment (lunch and dinner only), catering to the densely populated region of Indirapuram, in the Delhi National Capital Region. EazyMeals catered to the young millennial population of the area, who were looking for low-cost, fresh food that was served in a hygienic way. It also catered to local small businesses, who mostly ordered lunch, and senior citizens residing there, who mostly ordered lunch and dinner. The company’s founder was facing multiple challenges. First, he faced the problem of unit economics: his operating margins per order were barely sufficient to meet his operational fixed costs. Second, even though order volumes had surged, which could have cushioned the overall margins, the demand for quicker deliveries meant faster turnaround times in the kitchen, and this in turn meant investing more on staff and fixed costs to meet customer expectations. Third, he needed a way to bypass the food-ordering platforms (FoPs) that were providing a large chunk of his orders. They operated on a commission basis, which was further eating into his operating margins.

This case is for postgraduate students in master of business administration (MBA) or other postgraduate programs. It can also be taught in bachelor of business administration (BBA) programs. This strategy case provides financial data to discuss issues pertaining to unit economics. It can also be used in a pricing course to help participants understand economic estimation of value and can be a good resource for use in courses on entrepreneurship and small business management. The case helps participants understand the basic concepts of unit economics. After working through the case and assignment questions, students will be able to do the following:<br><br> <ul><li>Analyze the operations of a food business. </li><li>Explain the financial implications of the operational decisions made in a food business. </li><li>Outline the issues to be considered in evaluating the fixed and variable costs in a food business. </li><li>Distinguish the operational challenges of delivering fixed menus to customers from those of delivering variable food menus. </li><li>Evaluate the food business holistically, and identify the operational and financial pitfalls to avoid while running such a business.</li></ul>

• unit economics
• small and medium enterprises
• sustainable business
• fixed cost issues
• cost of goods sold