Assignment 1, Bo Peng, 12872584 PDF

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48270 – Entrepreneurship and Commercialisation Assignment 1 Bo Peng

12872584

Table of Content Market entails.............................................................................................2 Comparison of market positions.................................................................2 Porter’s five forces analysis........................................................................3 Rivalry among existing competitors....................................................3 Threat of new entrants........................................................................3 Threat of substitute products or services............................................4 Bargaining power of suppliers.............................................................4 Bargaining power of buyers................................................................4 Analysis of Uber Eats.................................................................................4 SWOT analysis...........................................................................................4 Strengths.............................................................................................4 Weaknesses........................................................................................5 Opportunities.......................................................................................5 Threats................................................................................................5 Core process of value creation..........................................................................5 Recommendation...............................................................................................6

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Sydney Food Delivery Market Analysis Market entails Due to the impact of the COVID-19, restaurants do not allow sit-down meal, thus once again creating a viable market for the food service industry. It is a service for people who work and study at home and do not want to cook. Therefore, customers would consider user experience, which comes in the form of a variety of restaurants in the application, special offer, price of delivery and delivery time. For delivery companies, managing the delivery staff will ensure quality and receive the advertisement to make the company profitable.

Comparison of market positions Before 2006, Australian families had little choice in getting restaurant-quality food to their doorstep - until Menulog came to market, followed by Deliveroo in the second half of 2015, and then Uber Eats, EASI and Hungry Panda around 2018 and 2019. The most representative of these delivery companies are respectively Menulog, Uber Eats and the new delivery company Hungry Panda. Menulog has been defined as an older and established delivery company. For the Uber eats, the ordering software of Uber eats was released as its own application, separating from the app from Uber rides, which gave Uber Eats an adequate food delivery workforce, allowing them to pick up orders faster. Although Hungry Panda has only entered the Sydney market in recent years, it is popular among Asians due to its promotion, large variety of food options and cheaper delivery fees. The volume of search in Uber Eats increased by about 50 percent since July 2017, while the volume of search in Menulogs dropped 50 percent, to 2.5 Uber Eats searches for each Menulog search. All Uber Eats clients and restaurants earned the same search volume as Menulog in just 15 months because of their value proposition. This is possibly linked to Uber Eats 's supremacy in the densely populated city regions. The business model of Menulog was caught in the crossfire as restaurants either opted to return their orders online to save costs with the use of Free Restaurant Online Orders and particularly with 'Order Direct and Save' campaigns, or they received Uber Eats to deliver and did not care about the logistics components. These directly decreases the proportion of customers using Menulog as their food delivery Bo Peng 12872584

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service. In contrast, Hungry Panda, which focuses on Asian food, does not have much competition with these mature enterprises. However, due to the shortage of personnel or personnel management problems, orders often take a long time to arrive.

Porter’s five forces analysis Porter's five forces include the threat of new entrants, threat of substitutes or services, bargaining power of customers, bargaining power of suppliers and competitive rivalry. Threat of new entrants

Bargaining power of su Rivalry among existing competitors aining power of buyers

Threat of substitute products or services Fig.1 Porter’s five forces of analysis

Rivalry among existing competitors Many of the delivery companies mentioned above, there are about five or six well-known food delivery companies in the Sydney market. The most prominent ones that holds a strong market position includes Menulog, Uber Eats and the new delivery company Hungry Panda. They respectively represent the local food delivery and Asian food delivery. Apart from the service and the price, there is no difference between the food sold by Menulog and Uber Eats. Due to the high turnover of people in the food delivery industry, the method to gain customer loyalty is through good service and preferential activities. In addition, the food delivery industry has low switching costs and barriers to exist but still has exit costs, but higher price sensitivity, due to the shipping fee not being very expensive.

Threat of new entrants The current delivery system is mature enough that new entrants can learn from other companies' marketing strategies to reduce learning costs. However, due to geographical and manpower constraints, a more attractive salary is required to recruit riders to control the quality of service. This has invisibly increased the pressure to enter the market and new entrants must Bo Peng 12872584

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have sufficient financial support to gain market position.

Threat of substitute products or services The eat-in restaurant might be food delivery’s greatest rival. Despite the novelty that is experienced while eating in a restaurant is totally different to when customers choose food delivery; food delivery is also significant in which there is little substitute for it, especially for people who cannot cook or are busy at lunchtime. The delivery fee is worth it for people who just want to stay at home or at their desk.

Bargaining power of suppliers In the food delivery industry, suppliers could be the restaurant. Food delivery companies will still require the quality and punctuality of their suppliers – the restaurants – in order to ensure higher consumer satisfaction. Therefore the bargaining power of suppliers is high in this market.

Bargaining power of buyers The main consumer groups are office workers and students. When they are busy or unable to cook at home, food delivery is always the first choice. Since it is necessary for them, the bargaining power of buyers is low.

Analysis of Uber Eats In order to analyze the internal and external effects of the industry on a company, UberEats will be selected and several marketing strategies will be applied in order to recommend future strategies. Garrett Camp and Travis Kalanick founded Uber Eats' parent company Uber in 2009. In August 2014, the company started serving food in Santa Monica, California with the launch of the Uber FRESH application. The company was renamed UberEATS in 2015, and the food delivery application was published independently from the Uber rides application as its own device. The operation in London began in 2016.

SWOT analysis Strengths This company has strong promotion and aim at a variety of food market, such as Thai, Korean, American and almost all fast food. Cheap shipping costs have taken Menulog’s customers away from the same food delivery markets. UberEats also spend a hefty amount on advertisement, bringing in celebrities Bo Peng 12872584

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in a creative way in order to increase brand exposure. The company also maintain its workforce for its services separately, meaning that there is adequate labor to sustain both UberEats and other Uber services. Promotional activities such as timed promotions also entice customers to use their application to order food.

Weaknesses The management of the delivery staff is not very strict, there will be a situation that staff take more orders and will not finish the delivery on time leading to late. Uber Eats should develop the diversity of promotion activities, in order to attract a further diversified market rather than phasing out promotion activity or use unique activity, Deliveroo and Hungry Panda did well in this part.

Opportunities Due to COVID-19, more customers would like to consider using food delivery. Raising the price because it has a strong position on the market is not a good choice to get revenue but to maintain the original shipping price to promote their own brand. This will get good reviews from the media which will lead to further exposure.

Threats Due to the rigorous promotional activities, customers might only choose the app for its promotions. This translates into a possible trend where customers feel that the promotions are the norms of the app and thus the nonpromotional prices seem to be more expensive.

Core process of value creation Uber Eats changed their flat $4,99 shipping price in August 2018 to a fee dependent on distances. This fee ranges between a minimum of $2 and a high of $8. The shipping fee in the UK and Ireland is dependent on the order size. Uber Eats revealed that the price will decrease from 35% of the amount of the order to 30% in February 2019. In 2019 July, a dinner service in some cities was applied by Uber eats, where customers could order food in advance and then eat in the restaurant. Uber Eats had a 30 percent growth in new customers during the COVID–19 pandemic in March 2020. Time Event Explanation 2009 Uber founded. Occupy a place in the taxi market. 2014 Uber started to serve Develop the food delivery food named as Uber market with the Bo Peng 12872584

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FRESH. 2015

2018

2019

2020

Rename the application as UberEATS. Change flat $4,99 shipping price to the fee dependent on distance. customers could order food in advance and then eat in the restaurant. 30 percent growth in new customers during the COVID– 19.

advantage of the number of deliverymen Products that make their names more memorable and fit their services Change the way of charging, make the way of charging more reasonable Meet the needs of more customers so that they do not waste time waiting in the restaurant. People are safer at home than going outside, benefit of food delivery market

Recommendation Uber Eats could have a double assurance service to make sure the customer gets their food on time, which could be charged by the company. It could be fifty cents to a dollar. If the meal does not arrive on time, the company can send a coupon or other payment to customers as compensation and appropriately punish the deliveryman to ensure they take orders according to their own circumstances rather than ignore the delivery time and get the number of orders. This, in turn, ensures favorable user experience and increases revenue per purchase. Due to the casual nature of the delivery person's registration, the quality of delivery staff cannot be effectively guaranteed. Although companies can punish delivery workers if they make a mistake, it does not solve the problem at its root. Good management practices will make the delivery person happy to serve the company. if they work efficiently, it increases customer retention.

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