INTRODUCTION

Food delivery market in India worth over 12.5 billion, Online food delivery is
contributing more than 7% to this market. More than 50,000 restaurants in
India provides home delivery, indicates a very high potential and untapped
market in online food delivery space.
Players in the industry broadly classified into three categories--o Fully integrated: Those who process food and delivers (Dominos,
McD etc)
o Delivery as a Service
o Aggregators: Provides a platform for customers where they could
discover

restaurants,

navigate

through

menus

of

different

cuisines, and select the food. Delivery made by the restaurant. In
short, aggregates information about food for customers and
function

as

an

order

generating

channel

for

restaurants.

(TinyOwl, Zomato, FoodPanda etc)

Reasons for growth in online food delivery industry :
o Increase in disposable income and deeper internet penetration of
customers (web/mobile).
o Restaurants tying up with online food delivery platforms claim to
get a profit margin of more than 2 to 3% than dine-ins.
These days’ people are prone to placing food orders online and capitalising
this trend a lot of restaurants are yielding good returns by registering
themselves on online ordering sites like Foodpanda, Tastykhana, JustEat,
Hyderabad Special etc and many local ordering websites are also following
suit.

DeliveryChef. says.” Major players Online food ordering is at an exciting phase now. or food similar to home cooked meals that too easy on the pockets is leading to the rise of online food business in the country. long working hours and erratic lifestyle are contributing online food ordering business. Many local and national players are joining the space.” Future of the business As per the industry experts. MD and CEO.Driving factors Greater awareness and disposable income along with deeper Internet penetration. . Nom Nom. with more and more people wanting healthy food. Foodpanda which started its business from Delhi-NCR is the major player in the segment followed by JustEat and TastyKhana. the overall food delivery business is more than USD 7 billion to which online food ordering contributes 5-7 percent and is growing 40 percent per year than dine-in culture. Nixon Dsouza. availability of more payment options. At the same time. In fact the foreign brand JustEat has also tied up with the Bangalore based HungryZone. MD and Founder Foodpanda. “Penetrating through every commercial aspect humans have started using technology for everything and food ordering is one such developments”. as we are trying to catch up with developed markets where 30 percent of delivery takes place through online channels. BigBite. According to Ritesh Dwivedy. JustEat. “The future seems bright for the online food business in India. Brand Manager. Titbit and eatallnite are the emerging players in the online food delivery market which is estimated to grow at 40 percent annually. a Pune initiative. The margin is however two to three percent higher in deliveries. believes. “Online ordering is convenient giving the customers a broader option to choose from the restaurants listed on the website. Rohit Chadda. Besides.

newspapers. Smokeys Barbeque & Grill. Dwivedy is of the opinion that. For consumers. television. “We have partnered with JustEat to explore new business opportunities and give a push to our already successful home delivery format but till now the response is not overwhelming. it is not only an easy and convenient tool but it is also a great platform to avail good discounts. restaurants and the food delivery players. For example. At the same time we have also organised several campaigns including the food gifting programmes and buy one get one free deals. said. Restaurant Manager. “The profit margin is 2-3 percent higher in deliveries as compared to dine-in these days” Marketing strategies Online food delivery platforms largely try to be present in all the channels that drive awareness. they advertise in all.” Tab l e 1 . “We give about 15-30 percent discounts on ordering through us. hoardings and billboards to the social networking sites like Facebook and Twitter. Vasul Chauhan.Benefits Placing food orders online benefits consumers. Chadda explained.” However.

Whole Foods Market faces the strong force of competition because of low switching costs. 3. In Whole Foods Market’s case. 2. the external factors that contribute to the strong bargaining power of customers are as follows: 1. To address this part of the Five Forces analysis model. the external factors that contribute to this strong force of competition are as follows: 1. High number of fi rms (strong force) High aggressiveness of fi rms (strong force) Low switching costs (strong force) Whole Foods Market is in the grocery and health food store business. Low switching costs (strong force) High quality of information (strong force) . Whole Foods Market differentiates its products based on high quality. The retail industry is saturated with many firms. quality and other variables. 2. This element of the Five Forces analysis model deals with the effects of firms on each other.PORTER’S FIVE FORCE MODEL Competitive Rivalry or Competition with Whole Foods Market (Strong Force) Whole Foods Market experiences the strong force of competitive rivalry. Bargaining Power of Whole Foods Market’s Customers/Buyers (Strong Force) The bargaining power of consumers is strong in impacting Whole Foods Market. Also. retail companies aggressively compete based on price. In addition. which is part of the retail industry. This element of the Five Forces analysis model refers to the effect of buyers on businesses. Consumers can easily shift from Whole Foods Market to other retailers. In Whole Foods Market’s case. service.

3. As a result. Whole Foods Market must address consumer concerns. However. However. regional and national wholesalers and producers in the U. Moderate level of supply (moderate force) Large size of individual suppliers (moderate force) High number of suppliers (weak force) Whole Foods Market has many suppliers. In addition. In Whole Foods Market’s case. 2. including local. corresponding to the low switching costs. (UNFI). Small volume of individual purchases (weak force) Most of Whole Foods Market’s customers are individuals whose purchases are small compared to the total revenues of the firm. they could move to other retailers. Whole Foods Market addresses this part of the Five Forces analysis model by expanding its supply chain. This external factor weakens the power of suppliers on the firm. Also. to address consumer demands about genetically modified organisms (GMOs). 3.S. which now has a global scope and emphasizes producers in . Otherwise. the limited supply of truly organic and natural non-GMO foods means that suppliers could impose demands on the company and expect moderate results. Bargaining Power of Whole Foods Market’s Suppliers (Moderate Force) Whole Foods Market faces the moderate impact of the bargaining power of suppliers. such as United Natural Foods Inc. these suppliers exert moderate pressure on Whole Foods Market. For example. and overseas. it is easy for customers to move to other retailers. Whole Foods Market addresses this part of the Five Forces analysis model by implementing new policies for product quality. Because of their size. Whole Foods Market plans to complete the implementation of a new labeling rule for GMO-containing products in its stores by 2018. Whole Foods Market’s customers have access to information they can use to properly evaluate the company’s products. the external factors that contribute to the moderate force of supplier power are as follows: 1. Whole Foods Market’s suppliers are mostly large wholesalers. This element of the Five Forces analysis model identifies the degree at which suppliers impose their demands on business and the industry.

it is easy for customers to shift away from Whole Foods Market toward these substitute products. The resulting diversification of suppliers in Whole Foods Market’s supply chain helps dilute the bargaining power of suppliers. It is also relatively easy to operate in the grocery and health food store industry. the external factors that contribute to the strong force of the threat of substitution are as follows: 1. the threat of new entry presents a strong force on the business. 2. Threat of New Entrants or New Entry (Strong Force) Whole Foods Market experiences the strong force of the threat of new entrants or new entry. As a result. which are products that are not classified as organic.developing countries. the company occasionally offers discounts to attract customers. High ease of doing business (strong force) Low switching costs (strong force) Moderate cost of doing business (moderate force) Whole Foods Market is in an industry where establishing a new business requires moderate spending. Thus. Threat of Substitutes or Substitution (Strong Force) Substitutes present a strong force on Whole Foods Market. Also. This element of the Five Forces analysis model pertains to the impact of substitute products on business and the industry. This element of the Five Forces analysis model deals with the effect of new firms in the industry. natural or GMO-free. High availability of substitute products (strong force) Low switching costs (strong force) Low cost of substitutes (strong force) Whole Foods Market competes with many substitutes. Most of these substitutes are cheaper. Moreover. To address this part of the Five Forces . substitutes exert a strong force on the firm. Also. the external factors that contribute to the strong force of the threat of new entrants are as follows: 1. In Whole Foods Market’s case. 3. To address this part of the Five Forces analysis model. 2. 3. new entrants have high chances of success because they can easily attract customers away from firms like Whole Foods Market. In Whole Foods Market’s case. Whole Foods Market focuses on high quality. Even small retailers can compete with the company.

analysis model. . Whole Foods Market focuses on quality to entice and keep customers.