Pizza Drone

Executive Summary

My company will deliver pizzas to consumers through an already established company by using drones. We will succeed because we will use hydrogen fuel as our power making the drone fly for two hours on the same weight of fuel and is refueled faster. . There are not patents on drones; however, there is no pizza company that has actively implemented this, giving me have a competitive edge. Drones can cut the price off the delivery and are much more versatile than cars. Also, paying for the daily expense of the pizza driver is more than the cost of a drone's daily expense.

Company Overview

This company will initially be in a partnership with Domino's, but I can branch out to other areas, like delivering Starbucks or Chinese food. My organization was formed when I wanted some pizza, and I wanted it as soon as possible. After half an hour, my pizza finally arrived and I paid the driver a tip. With a drone, it would be faster, cheaper, and cooler. I have made a three-dimensional model of the drone and have found out that hydrogen power is much more efficient and cheaper than using a delivery person.

Industry Analysis

There are 80,000+ people living in Goodyear at this time. According to a survey done by The Atlantic, 13% of Americans eat pizza on a given day. This means that 10,400 people eat pizza every day. Considering most people eat two slices, this makes about 2,600 pizzas sold every day. That number includes store bought and pizza bout from stores. Considering that pizza hut and Domino's are the bigger stores, they will garner more attention and have more people than the smaller stores. This leaves Domino's with about 600 pizzas to make and order every day; or 10 pizzas per hour. This is a new technology it will attract more people for the initial time frame. I would expect a 10% increase in the amount of pizzas sold over the first year. As the technology exists for longer more people stop buying pizzas just for the drone, and instead buy the pizza because they are hungry. I will most likely be the first major pizza company with this system, but eventually the other major companies will develop their own. I estimate this will take about a year, but I will be synonymous with pizza drones at that point, and be the first thing in people's minds. Since I would have a sole partnership with Domino's, pizza hut will lose some customers because people want to try out getting their pizza with drones.

Adjusting for the expected increase in pizza sales, we will sell approximately 2990 pizza per day. Also according to a statistic by https://www.ordello.com/stats pizza franchises get 50-75% of their orders online. Since you will only get pizza delivered if you order online, I will expect the percentage to be closer to 75%, making about 2240 delivered. Most Americans buy 14-inch pizza with pepperonis. The price of this pizza at Domino's is $14.69. Paying $17, the average revenue Domino's will make every day is approximately $50,830 making the relevant market size 50,830 for my town.

Customer Analysis

My intended customers are families or people who often eat pizza. The age group that I will be targeting is adults aged eighteen to forty years old. This is because this age group will most likely order pizzas using their phones instead of calling or driving. Millennials are the most likely to order pizza and I will target them the most. Considering millennials have the extra money for a small increase in the cost of the pizza, they will most likely be the majority of the market. People who make upward of 100k per year are less likely to buy pizza, but if they would, they would most likely deliver it with a drone. People who have a salary of 50k-100k or families are the most likely to buy pizza and get it delivered with a drone since they buy pizza the most and have some extra income. Geographically people who live in the suburbs would most likely get a pizza delivered since it is far to get some pizza, but not too much. People with a college degree would most likely buy a drone delivered pizza because they have the most disposable income.

Most customers care about how fast the pizza arrives to them. Using drones will cut down the delivery time because they do not have to follow the roads, they can just fly over everything instead. Another thing that customers care about is how their pizza arrives. When you see a drone flying above your head with your pizza, you enjoy that experience. The cost for the customers is a few dollars more, which comparing to a $15 pizza is insignificant enough to not change people's minds. The benefit of the drone is you get your pizza faster, and delivered in a more interesting manner. Most people who buy pizza have enough money to pay extra considering they did not buy off the dollar menu at McDonald's.

Competitive Analysis

There are currently very little direct competitors in this market. In the long run, there will be several direct competitors as different major companies make drones also. However when there will be direct competitors, Domino's will already be synonymous with pizza drone delivery. It will be more difficult for different companies to penetrate the market which I already have dominance in. also when other companies will enter the market I will have more restaurant equipped with drones making their attempt more difficult.

The main indirect competitor would be a pizza driver. Although the daily price of a drone is cheaper than a person driving, the initial cost is significantly different making it expensive to start with, but cheaper in the long run. In addition, when there is rain or strong winds, the drone may not be able to fly to well, but since rain is rare in Arizona, this will not be a major problem. Drivers also can carry more pizzas at the same time, but they only get a certain amount of orders in an hour, limiting this strength.

In the short run, it will very difficult to start the drone program. There is a high initial cost and not very easy to repair. Pizza drivers are cheaper, but they are often not as efficient and more expensive in the long run. When direct competitors will enter the market I will already have a large market share in the market making it difficult for them to compete with Domino's. Pizza drivers for other companies will go down in popularity, as millennials will favor the more high tech option.

Marketing Plan

While most drones currently operate on battery power, the pizza drone will operate on hydrogen. This is made by performing electrolysis with water making hydrogen gas. While the drone is flying, the hydrogen is combined with oxygen in the air and creates water and electricity. This method can let a drone to fly for two hours and go for much father distances. It will cost about $55.44 dollars to power the drone, while it costs $140 dollars o pay a pizza delivery person. The drone itself will have four propellers and be much larger than a regular drone. It will have winches attached to the pizza boxes to lower them to the people. It will have cameras on each side o monitor where it going and making sure it does not crash into anything. It will have a receiver on the top that signals to the Domino's where it is and whither it has delivered the pizza.

For the pricing, it would cost $55.44 per day of operation, which is lower than paying a pizza driver, which is around 140 dollars. I will not be selling these recreationally, so I will only be using these commercially. I estimate that it will cost around $500 since this will be on an assembly line. Research and development will be a small factor simply because he technology already exists we just need to edit it to our needs. It will be most likely make up of a sturdy metal like steel, and painted white. It will most likely not be needed to repair but if it does crash, you can replace some of the parts making it functional quickly. To land I will either ask to print out a barcode and put it on a flat surface, or show the drone he barcode to your phone.

I will promote this on the internet. I will advertise on YouTube ads, and other contemporary places on the internet. The commercials will be less focused on the pizza, and instead be focused on spreading the word. On the Domino's website there will be a new section devoted to drones. If people want, they can order the pizza to their house as easy as it normally is. I will also advertise on news articles further spreading the word and making people want to order pizzas like this.

My partner, Domino's, will sell the drone service directly from their website. I would be making the drones and receiving money for each drone. Although Domino's would figuratively own me it would be a symbiotic relationship with both of us benefiting each other. While I would start my partnership with Domino's, eventually I would branch out to different sectors of the market. The customers would be only buying the services, so I would not need a physical location or a website.

Operations Plan

The organization I am trying to make is very similar to a subsection to Domino's, but we will technically be our own company. We will research and develop a singular drone, which will be made for . We will both develop on each other, as I need the money and they need he drones. Legally we will be called "Kris Industries" and be our own company but our exclusive partner would be Domino's. We will sign a contract of exclusivity, and not branch out u until later. Our daily functions will consist of shipping drones to various Domino's around the country and make sure everything runs smoothly. We will also have a subsection, which will deal with salvaging or repair drones that were damaged. Another smaller part of our company which sells a machines which performs electrolysis with water forming hydrogen as which the drone can use.

I will go into talks with Domino's on whether they are interested in Kris Industry and detail the details of our arrangement. This will go on for a month until a contract can be made that we can both agree upon. From here, I will develop a drone, which can lift up multiple pizzas, and software that could fly the drone by itself. This will take two months because we will have a lot of people working on it and all of the technology already exists, we just need to apply it. From there we will find out how to mass-produce it in china. In another month, we will already have prototypes in America ready to take flight. From there we will figure out how many sores want to implement this and start sending out drones. When two thousand Domino's receive drones and are operational, we will start the program. Prior to this, we will be advertising the pizza drone. Two weeks from the companies requesting drones, we will start a nationwide opening of the program all on the same day. When my exclusivity contract expires, I can go into other fast food sectors making new and improved drones.

Management Team

The management team will be run with me at is head, but having some managers, which control the individual parts of the company. The managers will organize their part of the company, but all major decisions will be run through me. We will have managers on advertisement, drone repair, research and development, and the hydrolysis system. The people will have to be leaders, and have knowledge of what they are controlling.

At the beginning, the advertisement team will be nonexistent, but as the company gets more profit it will start making some commercials to educate the people. This will be lead by a millennials that knows the newest thing the millennials are doing like having a face book or an Instagram page.

My board at the beginning will consist of the individual mangers. Later on when the company branches out I will hire a board that help me find new opportunities and ways to make the company bigger. They must have experience with management and should be too old giving me valuable insights.

Financial Plan

Domino's will buy my drones and sell their services. I will operate on a profit with every drone, and as I am the only supplier I will a monopoly for a certain amount of time. As the company ages I will branch out o different companies, and maybe even to the consumer market. I will supply the drones and Domino's would buy the drones from me. We will have a partnership, with the prices be constant and only available to Domino's, while the exclusivity contract stands.

Each drone will cost approximately $200 to make and I will sell it to Domino's for $500. This price increase may seem very high, but his includes research and development, and the cost of starting this company. My primary expense will be making the drone, while research and development will also be expensive. I am estimating that I will make about $150 dollars of profit on each drone. I will make one million dollars of revenue on the first year, resulting in six hundred thousand dollars of profit. This is assuming we will sell two thousand drones. After a year our exclusivity contract will expire and I can branch out into more companies. Since I will developed a reputation for high quality drones, I will have drones for fast food places and eventually star bucks

I will be seeking funding of five hundred thousand dollars to start developing the company. I will borrow this money from Domino's and pay it back when I have enough profit (I don't want to give a percentage of shares because that could be worth a lot in the future). I will use the funds to develop the drone, on assembly costs, and to pay the employees.

My exit strategy would to sell my company to DGI or another big drone company, which has its interests on the drone business. Many companies want to acquire this type of company, because it could be very profitable. Alternatively, Domino's could buy my company incorporating it into their company.

Appendix

$55.44 Drone Daily (Fuel costs)

$140 Pizza driver daily (Salary)