3.3 - Market Analysis final

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1 Go-to-Market Strategy Online Grocery Delivery Service Marketing Management Workshop 3.3 : Market analysis Final Market Definition and description

2 As part of the project, this paper will focus on Online grocery delivery service : GroFast. The online grocery delivery system can be described as a platform where an individual can use e-commerce websites and applications to place online orders and opt for home-delivery. There is a huge demand for this service in the services market and there are various segments that can be focused on as well(Zolfagharian, 2014). There is an increased popularity in the current market that every business service is intending to adapt the online platforms (Das, 2020). With growing popularity, there is also huge demand for other factors such as logistics, labor costs and customized preferences for end customers. Market Sizing - Total revenue o The current market shows a total revenue of USD 334.5 billion with a calculation of 2020 as the base year. There is a prediction of incremental growth to USD 800 Billion by 2025 as per the projections (East, 2021). - Projected growth o The Grocery delivery service market is expected to grow to an extent by 2025. The current market has low competition and limited requisites. There are

3 many contributing countries such as China, Japan, United Kingdom, and India, where due to the working population and increased employments, most people are preferring online grocery delivery (East, 2021). Porters five forces analysis In 1979, Michael E. Porter identified a five forces model in order to be able to evaluate the market competition. This analysis will evidently identify and understand the competitive advantage, positioning and strengths of other organizations(Randazzo, 2014). Below is an illustration of the five forces model, that are currently used by every business before entering into the market. Competitive Rivalry Threat of New Entry Buyer Power Threat of Substitutes Supplier Power Competitive Rivalry • Medium • Instacart, Amazon Threat of New Entry • Medium • New Challenges Threat of Substitutes • Low • Existing, but different Supplier Power • High • Geo/Demo factors Buyer Power • Low • Local demand - Threat of New entrants : There may be a medium threat of new entrants into the market with similar market service. Although there are many regulatory requirements,

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4 based on existing frameworks of new challenges. However, if the distribution network is quite easier, there may be a high threat as it will be easy for new players to enter the service market. - Threat of Substitute Products or Services : A major threat of substitute service is already an existing service, which is in person store shopping. However, with the current market and Covid-19 situation, entering the market and gaining new customers is quite easier and flexible as well. - Rivalry among existing firms : The current market doesn’t have too many competitors in the United States. The products can be quite differences and different offers can be implemented to target all the segments. Therefore, it becomes easier to ensure that there are low barriers for exit(Ecola et al., 2020). - Bargaining Power of suppliers: The bargaining power of suppliers may and will be high depending on the geographical location and the local demand of products. It is important to have adequate knowledge and insights about the market to ensure that the service doesn’t lack price sensitivity as well. - Bargaining Power of buyers : The bargaining power of buyers can depend on how the local demand and market is nurturing. For example, if the buying power becomes week, there can be an expectation of low competition, further allowing the business to gain new opportunities and profits. Pestel analysis - Political factors : The political factors includes the segregation of political responsibilities, regulatory practices and government budgets. With regards to the online grocery delivery service, it is important to ensure that the regulatory practices like FDA approved products should be aligned with the global norms (Walden, 2021).

5 Alternatively, the international trade and treaties should be focused on and adhered accordingly. - Economic factors: Economic factors include inequality index, household income and savings, inflation and financial market structure. With regards to the online grocery delivery service, inflation ate and price fluctuations should be evaluated accordingly (Walden, 2021). There could be a huge negative impact if the inflation increases causing in increase in prices. Therefore, due to the increase in prices, the demand from customers and retailers will decrease. - Social factors : Social factors include demographics, social concerns and safety health regulations. With regards to the online grocery delivery service, it is important to understand the demographic trend. There are certain regions that would prefer traditional in-store shopping and the demand can be quite low in these regional areas(Ecola et al., 2020). - Technological factors: Technological factors include online payments, mobile application, e-commerce platform and technology disruption etc. This is one of the important factor to focus on, as the service itself is an online delivery service. The application should be built according the government technological norms and regulations. Subsequently, the application should be user friendly, especially with the UI interface and online payment’s portal (Walden, 2021). - Environmental Factors: Environmental factors include corporate social responsibility, waste management, and various regulatory elements. Maintaining the corporal social responsibility is very important when entering a new market and it helps in catering towards strengthening the service. - Legal Factors: Legal factors include intellectual property rights, patent rights, business laws, consumer laws, data protection laws etc. The first step before entering

6 the market is to ensure that the business name is patented and copyrights should be registered accordingly. Alternatively, as an online grocery delivery service, all the mandatory laws should be followed accordingly(Zolfagharian, 2014). Required Licenses, Patents and Rulings: The required licenses, patents and rulings generally differ based on different states and countries. However, for any e-grocery service like “GroFast”, it is critical to acquire the FDA license. Alternatively, a business operation license is also very important as it will help to legally run the ecommerce business. Subsequently, Grofast also requires a seller’s permit from the department of revenue in order to legally sell products online. References:

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7 Das, M. P. (2020). The influencing factors of online grocery shopping and associated risk - the role of delivery charges. International Conference On Contemporary Researches in Engineering, Science, Management & Arts, 2020 . https://doi.org/10.9756/bp2020.1002/43 East, R. (2021). Online grocery sales after the pandemic. International Journal of Market Research , 64 (1), 13–18. https://doi.org/10.1177/14707853211055047 Ecola, L., Lu, H., & Rohr, C. (2020). How is covid-19 changing Americans' online shopping habits? Five months into the pandemic. Global Business and Economic Review . https://doi.org/10.7249/rra308-9 Randazzo, G. (2014). Developing successful marketing strategies . EbscoHost . Business Expert Press. Retrieved August 25, 2022, from https://eds.p.ebscohost.com/eds/detail/detail?vid=0&sid=85ed336f-caac-42e9-aff5- 67885c5be57a %40redis&bdata=JkF1dGhUeXBlPXNzbyZhdXRodHlwZT1zc28mY3VzdGlkPXM4O Dc2MjY3JnNpdGU9ZWRzLWxpdmUmc2NvcGU9c2l0ZQ%3d %3d#AN=1055551&db=nlebk. Walden, S. (2021). A study on effective home delivery of commodities by online grocery stores. Journal of Contemporary Issues in Business and Government , 26 (02). https://doi.org/10.47750/cibg.2020.26.02.124 Zolfagharian, M. (2014). Strategic outcomes of market orientation and market segmentation. Revolution in Marketing: Market Driving Changes , 56–56. https://doi.org/10.1007/978-3-319-11761-4_29

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