Kitchen Favourites (KF) KF was set up by Liam and Samir as a limited company. It operates a 'cloud kitchen' business. Cloud kitchens are facilities rented to catering businesses that operate a delivery service. KF rents out kitchen space and provides support workers. The catering businesses cook meals in the cloud kitchens which they then deliver to consumers. Liam and Samir's objectives are to exploit rapid growth in the sector and maximise the profits made by KF. Timeline of KF 2018 KF's first cloud kitchen rents space to five catering businesses (see Appendix 1). 2019–2020 Global pandemic drives up growth of the food delivery market. A second cloud kitchen is opened and all spaces are rented out. KF starts its own delivery service for the catering businesses in both cloud kitchens. KF employs delivery riders on zero-hours contracts. Approximately 45 riders on electric bikes are used each week. 2021 KF opens a third cloud kitchen. Delivery riders increase to 75. KF develops an app to track delivery riders and improve efficiency (see Appendix 2). Delivery riders are unhappy about the tracking data provided by the app (see Appendix 3). 2022 Orders for takeaway food from households decline. The government introduces legislation banning zero-hours contracts by the end of 2023. 2023 One cloud kitchen is closed as the delivery market continues to shrink. KF responds to the changes in legislation on zero-hours contracts (see Appendix 4). Developing a new business strategy Liam and Samir are concerned about the decline in the food delivery market and want to secure the future of KF. Liam thinks that Ansoff's matrix is the best approach to develop a business growth strategy. However, Samir wants to consider other approaches to develop business strategy. Appendix 1: Extract from KF's business plan 2018 – Human Resources • Two directors – Liam and Samir • One office manager – full time contract $21000 per year • 15 kitchen support workers – flexitime contracts $10.50 per hour Appendix 2: Extract from delivery app functionality report 2021 The app communicates between the kitchen, the delivery rider, and the consumer to provide real-time tracking. The map function provides the quickest routes across the target area for delivery riders to use. Management can track speed, time and efficiency of the delivery riders both on delivery and on return to KF kitchen through the data provided by the algorithms. Appendix 3: Feedback from delivery riders 2021 • The new delivery app has introduced time targets that are unreasonable. • We are getting abused by customers who claim food is late, but the app is not calculating times correctly. • Our performance and bonuses are not being judged fairly. Appendix: 4 KF's response to the government ban on zero-hours contracts 2023 New legislation banning zero-hours contracts meant that KF had to make a decision between the following two options: • 25 of the current 75 delivery riders would become full-time employees of KF or • all 75 would become self-employed and part of the gig economy. Liam and Samir decided that all 75 delivery riders should become self-employed and operate within the gig economy.