SWOT ANALYSIS ON FOODPANDA
As I mention above, in this particular blog we are going to deeply analyze the strength, weakness, opportunity and treat of Foodpanda. Thus, SWOT analysis represents both internal and external factors that affects the company's performace either in past, present nor in future. Therefore, without any delay let's discuss about Foodpanda SWOT analysis.
INTRODUCTION
Foodpanda is one of the subsidaries of Delivery Hero which is a Berlin, German based company. First of all, Foodpanda was started on May 2011 by Rocket Internet at Sweden. In December 2016, Foodpanda was sold to Rocket Internet competitor namely Delivery Hero due to the company's financial crisis and other factors. (A complete study report would be post soon regarding this matter in coming blog). Currently, Foodpanda is operating at total of 12 countries that is Paskistan, Malaysia, Singapore, Bangladesh, Thailand, Hong Kong, Taiwan, Philippines, Combodia, Laos, Mynmar, Bulgaria, Romania, and Japan. Additionally, Foodpanda presently collaborates with more than 115 000 vendors or so called restaurants with a strong support of more than 80 000 riders across 12 countries as stated earlier. Parallelly, Foodpanda broden their company service from merely food and beverage delivery to grocery product delivery through Foodmart. In contrast, Foodpanda concentrate in serving customers from Asian countries like Singapore, Thailand and Mynamar. Recently, Foodpanda begin their operation at few cities like Kobe, Yokohama, and Sappora.
STRENGTH
Strong financial and capital support
Foodpanda's parent company namely Delivery Hero is one of the leading company in the Food and Beverage delivery industry recently. For instead, in the year 2019 itself Delivery Hero successfully make a total turnover of 1.23 million Euro (1.4mil USD). This shows that Foodpanda had no issues in venturing into a new market or face any issues in existing market. Every company needs high investment or capital in developing their required infrastructure to communicate their employees, customers and also vendors or supplier. An efficient and high quality system is a mandatory requirement especially for company alike Foodpanda because a poor internal and external infrastructure might provide a terrible customer service. Therefore, most of the emerging companies commonly in e-commerce industries needs a huge investment amount to start up their company eventhough the future of the company is not so predictable. On the contrary, both existing and upcoming F&B delivery companies offering attractive discounts and price rebate to attract their customer in this highly competitive market.
For instead, Foodpanda offer 30% discount for customers who purchase the listed items using the promotion code as stated as above. Let's say if customer purchase a product which cost at MYR 100 (USD40) using the promotional code KFC30 then the customer would enjoy a price rebate of RM 30. Do you think KFC give you the price rebate? Actually Foodpanda pay the balanced RM 30 to KFC upon customer purchase. As a consequence, delivery companies needs more investment and capital to keep survive in the long run.
Strong Brand Image
Foodpanda is a widely known brand name in the food and beverage delivery service among customers at Southeast Asia region like Bangladesh, Thailand and Malaysia. The recent Covid-19 pandemic cause a seismic shift in almost all business sector especially in F&B industries where dine-in service becomes a wish list for many. Foodpanda plays a mojor role during this pandemic situation to deliver order foods and beverage items by users who can not get out of their respective shelters. Moreover, Foodpanda riders are consider as frontliners in most of countries alike Bangladesh and Malaysia. Besides, most of local influcers like politicians and celebrities came forward to create a thanks giving appreciation video assist Foodpanda to become a well-known service without any addvertisment costing. Therefore, most of Foodpanda ventured market region such as Malaysia; Foodpanda successfully creates a strong loyal customers.
Good external and internal infrastructure
Basically, Foodpanda have a very efficient infrastructure in both system and communication vise. On the other hand, Foodpanda system and database is quiet efficient compared than other Foodpanda rivals. Not to deny the fact that Foodpanda also undergoes multiple times of server incompetency or mulfunction due to some technical fault but the rate of frequent server down or malfunction is seems to be lower when compared than other Foodpanda rival's. Moreover, Foodpanda purchasing process via the application or website is very easy with simple steps where even a new users could able to use it easily without any difficulties.
Strong vendor support
As we mention above, Foodpanda is currently opperating at 12 different countries with offering various types of local dishes of that particular nation or market via local setup restaurants. Generally, Foodpanda act as a mediator which connects the end user and restaurants with extra delivery fee as their service operation profit. In fact, Foodpanda officially stated that the company have a strong vendor support acroos 12 different nations with more than 115,000 local restaurants partnership. By creating a large supplier chain enhance Foodpanda to offer more options with different varieties from various local restaurants to their targeted users as whole. Thus, Foodpanda not merely attarct their customers by offering discounts for purchase but also offers large varieties of menu to customers.
WEAKNESS
Dissatisfaction of service offerings
Foodpanda deliver Food and Beverage items in a condusive packaging via motorbike riders from one point to another point. Thus, many customers recently came forward to express their dissatisfaction over the company's service in social media platform such as Facebook and Instagram. Most common dissatisfaction over Foodpanda service is the condition of that particular product once consumer received it from the rider. Sometimes the condition of the order item would be bad such as less hot or over-melt whereas some customers felt dissapointed over late delivery period which is much more longer than the stated time period as at Foodpanda application. Additionally, customers also tend to critize Foodpanda eventhough vendor's prepared food items is not delicious.
Relationship setback
Foodpanda constantly strengthen their company position as a strong competitor in their respective industry for the past eight years. Presently, Foodpanda becomes one of the most preferable F&B beverage delivery service provider among most of vendors and consumers in most of Foodpanda ventured market like Pakistan and Malaysia. Although, Foodpanda successfully fit their position at most of their ventured market but not to deny that the company do have few misconception and relationship setback with some of their vendors locally. According to Pakistan Today, most of Karachi based local vendors claim that Foodpanda is merely affecting restaurant's profit earning rather than enhance the profit by connecting the demand and supply chain. In the year 2019, Foodpanda introduce a new payment scheme for their riders in Malaysia which creates a strong opposition among riders till the issue was brought to the attention of Youth and Sports Minister of Malaysia.
Lack of Protection
Particularly, Foodpanda rider does not bound to any life or accident based insurance. Therefore, Foodpanda riders does not receive any benefits in term of health or accident insurance coverage if any of the riders involve in road accident during carry out their job.
OPPORTUNITY
Artificial Intelligence (AI) dropshipping
Foodpanda could reduce the company costing by replacing the existing delivery method to a new modus operandi such as AI dropshipping via using drones. To be more precise, by using drone to deliver items from one point to another point regardless of using riders, Foodpanda could able to reduce the company cost drastically. Moreover, drone delivery service with advanced AI technology enhance the delivery service to be held more efficiently such as delivering items on time to customers beyond any obstacles alike weather.
Increasing demand during pandemic
During the CoVID-19 pandemic, most of nations urge their citizen to kept themselves save at home to break the chain of infection in the society. Thus, restaurants and hawker stalls are prohibited to serve dine-in service for their customers and only encourage customers to enjoy delivery food and beverage service. As a consequence, the demand towards food delivery service instantly hike among both customers and restaurants. Although, most of nations such as Singapore lift up some movement control restriction and allow people to enjoy dine-in service at restaurants but the fear of virus spread is still there. Based on my view of point, Foodpanda should come out with more menu's and items to their targeted customers because customers are expecting to receive various type of food items to replace their dine-in environment.
Potential Investors
Since, the CoVID-19 pandemic, most of the companies in the world shift their company routine activities into more technological related rouitine activities such as meeting through Zoom. Correspondingly, delivery service growth and attention had been increased since the virus outbreak that cause most of the companies to work remotely. Therefore, Foodpanda able to enhance their financial position even more stronger by encouraging potential investors around the world by proposing current business demand over delivery service.
Independent Software Vendors (ISV)
Foodpanda could reduce their tech related costing by collabrating with external potential ISV which could boost the company performance and accuracy in database. In additionally, most of well-known organization alike Amazon and Microsoft collabrate with few existing ISV to fulfil their needs. For example, Amazon's AWS enhance customers to enjoy a good service experince and satisfaction level. Thus, by collabrating with ISV could not merely reduce the company's expenses in tech development meanwhile ISV partnership also enhance customer satisfaction level and at the same time reduce the unemployment rate too.
TREAT
Aggresive War
Generally speaking, Foodpanda currently facing heavy competition from their competitors such as Ubereats, Grabfood and etc with exciting discounts and price rebate to capture the market share. As a result, Foodpanda requisite to come with additional discount and attractive promotion strategies to overcome their competitors which cause Foodpanda to make more investment into the market in order to sustain or capture the market share for their long term profit purpose. However, large investment also could turn bitter if the company fail to gain enjoyable profit income in the long term. For instance, Foodpanda forced to put a stop for their business operation at Vietnam due to the company's financial crisis (lack of profit in Vietnam) in 2017. Click here
Vendor delivery service
If we look back 10 years ago, some of restaurants serve dine-in and delivery service to their local and regular customers in a small scale. Since, the booming of smartphone usage among users widely in early 2011 create a new business sector company alike Foodpanda and currently this business sector receive a huge demand among customers after the virus outbreak. However, some of restaurants presently try to promote their owned restaurant delivery service to increase their profit margin and some restaurant owners afraid that Foodpanda's poor service delivery quality might affect the vendor's image and trust among their customers.
Investment requirement
In this competitive market, Foodpanda required to make high investment in both existing market like Malaysia and newly ventured market alike Japan. Obviously, Foodpanda investment ratio in exsiting market is low compared than the newly ventured market. Nonetheless, Foodpanda need to make additional investment in both in order to capture the market share in the near future, if Foodpanda failed to capture the market share then the company need to get ready to face the consequences later then.
Potential Jeopardy
Since, the CoVID-19 outbreak causes swift changes in most of sectors especially in payment method. The usage of cashless payment and implementation of new policies by many organizations and also encouraged by governments around the world since the CoVID-19 pandemic might cause serve dwindling in sales and profit due to high costing in building required infrastructure. Foodpanda need to making sure all of their begin and end process to be more hygienic and correlate with the government's SOP such as cashless payement. We can not expect all customers have a good understanding of those SOP and related equipment to perform cashless payment as per government SOP. These could make customer to be more caution about the food safety level and its hygiene which could affect the demand over delivery foods.
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