To perform the internal analysis of the company, we can use the SWOT method. This way of analyzing permits us to summarize the elements developed earlier, and to gather the components that can, and will constitute an advantage against the competitors, but also what can represent a threat for the company.
Strengths
Low price: no delivery fees
Ability to supply any kind of products (including fresh food)
Effective logistical system
Easy supplier management: one only supplier with flexibility to buy in supermarkets when needed
Original concept: First company to develop it
Low promotion/marketing costs
Low ecological footprint because of the delivery system
Weaknesses
High initial investment: lockers, vehicle, office rental, ecommerce platform development
No brand awareness currently, no reputation
Reluctance of some customers to buy their groceries online (desire to select the products by themselves: to see the expiry dates, to select according to the maturity/look)
Dependence on the willingness of the companies to create the partnerships
Limited number of products provided (for management reasons)
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Constantly growing share of products purchased online
Growing need for this kind of service among the targeted customers
Awareness about the environmental challenges and the bad practices of the big retail groups
Opportunity to create a short-term exclusive contract with our supplier Metro, in order to become the only company organizing the delivery of their products (working with one of the main groups of the retail industry is also an advantage for the future)
Threats
Idea easy to copy, and it is possible to create exclusive partnerships with other companies
Big retail groups may have the power of investment to develop quickly a development of the project: We need workers to go to their office in order to have demand and to be able to start the operations
6.2. 6.2. Business strategy
From the previous internal analysis, we can develop the TOWS Matrix, with the objective of developing a strategy that minimizes the threats and weaknesses, and that takes advantages of the opportunities and strengths of the company.
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Work on partnerships and benchmarks to always be the cheapest and most convenient option offered to our customers
Insist on the socially and ecologically responsible aspect of the company
ST “Maxi-Mini” Strategy
Create more added-values with this specific service
Establish exclusive and effective partnerships with companies selected for their perfect fit with our strategy
WO “Mini-Maxi” Strategy
Create reputation based on the fair practices of PickItEasy and on its reliability
Possibility to increase the number of products offered thanks to collaborations with suppliers, and therefore to have an easier management
WT “Mini-Mini” Strategy
Investing early in qualitative and effective infrastructure to create differentiation from the potentially entering competitors
Ensuring constant demand from customers, adapting constantly the offer according to their needs, in order for them to gain more confidence in the service (more information about the products, stricter hygiene and safety rules in order to be a “safe” deliverer despite Covid-19, …)
6.3. 6.3. External analysis
Analyzing the external environment of the company can be done through the analysis of the Porter’s Five Forces Framework. Thanks to it, we can have an overview and summary of the power and threat of all the different external actors.
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6.3.1. Threats of New Entrants
On the short-term, the threat of new entrants is low. Indeed, the required investment is high, and the time of development is long. However, on the medium/long-term, some important retail groups could develop a similar idea and the threat would be high. This is why, having partnerships with companies that fit perfectly our strategy is important, in order to create as early as possible an exclusive link with them. We can talk about exclusive link, because the process of changing from one supplier to another would be highly time consuming and would be very inconvenient. On the other hand, we consider that the costs that we will be able to achieve in the beginning, and the costs that we plan to achieve in the future, working with a central purchasing agency, are very low, and our logistical techniques will always permit us to have a competitive advantage against competitors.
6.3.2. Threat of Substitutes
The threat of substitutes is maybe the most important one for our company. Indeed, most of the targeted customers already have their habits and customs of buying through a channel, or another. Most of the targeted customers are buying in the mini-market or supermarket that is the most convenient for them, and they sometimes go to the hypermarket to buy some products on which they can save significant amount of money, compared to the price they would pay at their convenient retail store. In addition, some other targeted customers are already used to buy online (drive or delivery at home), and this means that they have already found benefits from these services, and that this is more convenient for them, than buying physically in the stores.
This is for all these reasons that we consider that the threat of substitutes is high for us.
6.3.3. Bargaining Power of Buyers
Even if we could consider that the bargaining power of the buyers is high, because of the limited number of customers in each of the partner companies, and because of the ability to use a substitute easily, we think that their bargaining power is actually low. If we consider all the other delivery services, we already aim to offer the lowest prices. Also, given the proportion of lockers, compared to the number of employees in each company, we may face a demand that
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will be higher than the maximum capacity. Finally, given that we target workers in finance companies, and in big corporations, their price sensitivity will be relatively low. This is why, even if our buyers have a low cost of changing, we think that their bargaining power on the price is low.
6.3.4. Bargaining Power of Suppliers
On the short-term, our unique supplier is Metro, and it is a wholesaler store. We are planning to negotiate a partnership with them, but, even without any partnership, the prices they offer are very low and very advantageous for our company. Additionally, we always have the possibility to use any hypermarket to buy the products we need. There is then no cost of changing, except the difference in the products’ prices. This is why, the bargaining power of suppliers is low.
6.3.5. Competitive Rivalry
There is today no competitor offering the exact same service. However, we have many competitors in the retail industry, which are offering different services (online or in the stores).
Our main difference with them is that we offer an online service, at a relatively low cost, and delivering to the customers in one of their most convenient places.