Introduction
Theta Ltd. is a mid-size online food delivery organisation that currently functions in the UK market exclusively. Established in 2016 and with a yearly sale of 12 million (2019), a workforce of 45 employees (2019) and an ambition to be the leader in the online food delivery industry has plans for grandly magnifying their business.The online delivery market in the UK is at present estimated to be worth about £7.5bn. ‘These organizations are driving – and will keep on driving – a generational move in the manner people purchase their food’ the expert says, calling it ‘one of the last extraordinary digitalisation stories’ – Ascher D. (2019, 30 July)Theta Ltd. has big plans for expansion on a global scale and will use Pestle analysis and Porter’s Five Forces to congregate information and form a strategic plan to expand its business successfully in the local market of UK and in international markets using effective entry mode and internationalization strategy.Q.1)
PESTLE Analysis (UK environment): – PESTLE analysis is a strategic framework tool used to analyse and monitor factors that may impact on an organisation’s functioning. PESTEL analysis is used when an organisation needs to start a business or expand its reach internationally. PESTLE analysis is often used in association with other business strategy tools such as SWOT analysis and PORTER’s Five Forces. PESTEL is an acronym that stand for Political, Economic, Social, Technological, Environmental and Legal factors. – Scanning the environment: PESTEL Analysis. (2016, 18 September)
Theta Ltd. will consider the factors of PESTLE analysis to formulate the conditions of the UK market to help set up working strategy for expanding their business in the local market.Political –Britain’s companies are suffering a cascading drop in business activity post Brexit decision, yet some analysts believe that there will be new opportunities for local companies to expand their businesses as many doors will open. – David Jo (2019, 16 October)The shift of several business headquarters from UK to EU has caused a slowdown in the economic growth of the country which has also caused major unemployment. – Amadeo K. (2020, 7 February)The future is uncertain but a company such as Theta Ltd. can use this opportunity to take risk and use the opportunity to expand and fill the gaps of delivery services where the other companies lack behind in as there will be loads of resources available to Theta Ltd.Economic –The Pound Sterling had ascended to 5 cents against the US Dollar and the rate of foreign exchange was above $1.35 after Mr. Johnson’s victory.
127 our experts are availableright now
Nevertheless, the Pound descended back to $1.30 in the aftermath by statements declared by Mr. Johnson claiming that there will be no time extension for trade deal negotiations and the EU might be looking forward to a no deal, hard BREXIT. – Partington R. (2020, 30 January)46% of British investors believe that if handled smartly BREXIT can be beneficial to the UK economy.36% of investors believe that several opportunities will open, increasing UK’s chances of getting wealthier.30% declare while BREXIT has not affected their investment decisions but the government’s inefficiency to reach a decision is making them reconsider their decision.Despite the uncertainties of UK’s future investors would still like to invest their own funds to aid potential growing businesses.Some would finalise their decision come post trade deal between UK and EU. There is a tremendous amount of ambition and will to support businesses which is very important to the country’s economy in the future years. – Melvin J. (2020, 28 January)Theta Ltd. should use this opportunity to its advantage and carry forward expansion plans within the UK market as it has a big chance to contribute to the economy by providing employment opportunities and increase their own profits.Social –In the UK almost 60% of adults are delivery service users who order food on average 2 times per month spending as much £9.47 per order.This sums up to 851 million meals in 2018 and has showed next to no signs of slowing down. The MCA predicts the online food delivering market will be worth £8.1B by 2021. – Malley K.(2019, 25 February)Theta Ltd. has a dynamic and booming market.
The food delivery market is attaining high levels of growth as compared to other food markets. Expanding business in a growing market should be comparatively easier and should be highly pursued.Technological –The future of online delivery industry looks promising since the recent introduction of ‘virtual brands’ and ‘dark kitchens’. Existing restaurants create online brands with no affiliations with their physical part providing extra revenue to the existing brand, a new approach to consumers and being economical to the new brand. Dark kitchens solely operate on delivery basis with no physical restaurant. – Malley K.(2019, 25 February)Most of the delivery platforms loose customers because the app or website were not functioning, consumers could not customize their order and queries by consumers were not answered. – Daryna P. (2020, 11 January)Theta Ltd. can assess these problems and find innovative solutions to keep their consumer base satisfied by updating their technology regularly.Environmental –Annually, one-third of food ordered online gets wasted worldwide.
Food waste apps partake this problem by getting in touch with groceries and restaurants and assist them by getting rid of all the waste food and supplying them to people in need thereby decreasing the waste of food. – Daryna P. (2020, 11 January)Theta Ltd. should comply to the legally required environmental norms and make sure they don’t contribute in food wastage as much as possible and recycle their packaging take away boxes.Legal –Workers of the company are entitled to certain set of rights in the workplace:Employees should receive the wages as per the National Minimum Wage. They should have a safe working environment. They should not face any unlawful deduction of wages. They should not work more than 48 hours a week but can choose to if they deem to. They should be protected against discrimination of any kind. – Gov.UKPorter’s Five Forces (UK market): – Porter’s Five Forces is an analysing tool which helps a business asses its competition on an industry-based macro level. Understanding the competitors power and the framework of the industry are pivotal in productive decision making and constructing a riveting competitive strategy for the organisation’s future.
Porter’s Five Forces comprises of Rivalry, Threat of new entries, substitutes, Bargaining power of the buyers and the Bargaining power of suppliers. – Martin M. (2019, 3 December)Competitive Rivalry –The first force cites the number of rivals in competition and their ability to undermine a business. More the number of rivals with the equal services and substitutes, lower is the company’s power in a market.Competition is sought out when a business believes that they can offer better in terms of products or services at lower prices. Contrarily, when the competition is low, a business can have the upper hand and set the terms and price in the market to achieve profits. – Chappelow J.(2020, 22 February)Theta Ltd. faces rivalry against big service providers like Deliveroo, Uber Eats, Just Eat. To survive in a competitive market, Theta Ltd. has to set their prices and services to provide a challenge to the rivals.
Threat of New Entrants –New emerging markets with a promising future attract new entrants, which puts a dampener on profitability. Unless the holding players in the market have put out strong, competitive entry barriers or the capital requirement to enter is high and the government has restrictions, business profitability will decline to a competitive rate. – CGMA (2013, 11 June)Substitutes –The threat of substitutes depends upon the price and delivery of service it provides, the willingness of the consumers to switch over and on how good the relations of the company are with the consumers to maintain their loyalty. If there are threats from rivals the company must improve their services and lower their costs to keep their consumer base intact. – Riley J. (Tutor2U)Bargaining power of Buyers –This force acknowledges the power of the buyers in the market and how it influences the businesses to set competitive prices which are affordable to the consumers. Having a small consumer base gives the power to them but having a wide consumer base gives the businesses to set the rules of the market. – MindTools (2019)
Bargaining power of Suppliers –The amount of power a supplier has in dependent on how many suppliers there are in a market, how much they charge the buyers, how easy it is to switch to a new supplier and the availability of flexible suppliers for emergencies. If the suppliers have a small customer base they would easily give in to the demands of the buyers. – CFIQ.2) PESTLE Analysis (Indian environment) :- Political Aspect – Any organisation seeking to expand in a foreign market is highly susceptible to political peril. The Digital India campaign started by India’s Prime Minister, Mr. Narendra Modi will allow the company to have more seepage into the country’s market and broaden its consumer base. Theta Ltd. can use this opportunity in its favour to successfully expand its business in big cities of India as the government even encourages more foreign direct investment. Also, with India’s huge youth population, Theta Ltd. can provide with many employment opportunities. – BusinessTeacher (2016)
Economical Aspect – India is one of the fastest growing economy in the world. It has a potential to be as huge as China. It has a large number of youthful workforce with great knowledge in IT. It has large amount of resources with abundance of workforce with useful skills. This attracts lots of foreign investors into India’s market. The tax system of the Indian economy is considered to be one that works in favour of businesses. – UKEssays.(November 2018)Theta Ltd. should be one of those investors and expand its business overseas into the Indian market as its chances to expand successfully are better in India then anywhere else in the world.Social Aspect –With the trend of westernization spreading like fire among the Indian people, getting a foreign brand to grow in the Indian market is easy as there is 60% population between the ages of 15 to 59 and they like to mimic western culture and follow trends. This provides excellent opportunity to Theta Ltd., but they must keep in mind the differences in the cultures as India has a lot of cultures with abundant languages which divide the consumption patterns in each parts of the nation. – Essays, UK. (November 2018)
Technological Aspect –“India Stack” is a scheme started by the government and tech volunteers that provides businesses, start-ups and developers to build and develop a virtual, paper less, cash less service digital infrastructure.With Reliance’s Jio and the Aadhaar scheme the connectivity in India is growing at a quick pace with over 350 million smart phone user, all digitally connected. India has a huge consumer base with a grand scope for expansion. – Venkatesan R, Govindarajan V (2018, 16 February)Environmental Aspect –Approximately 62 million tonnes of waste is generated in India annually. It is estimated that the amount of waste produced will rise 5 % per annum due to increasing urbanization and the waste produced will be 436 million tonnes by 2050. The Indian government has made management of waste a priority and have started numerous schemes such as Swachh Bharat Abhiyan and Smart Cities mission to properly manage the waste produced. – India Services (2019)
India still has a long way to go in terms of recycling and waste management, Theta Ltd. can contribute its waste management policies and produce less waste to help the environment and share the knowledge of how it handles waste in UK to decrease pollution and help save the environment.Legal Aspect –The corporate rate of taxation is 35.88% in India. The Indian government has several laws and legislations enacted for businesses to run and one of them is the Companies Act which was implemented in 1956. It contains all the functioning mechanisms of organisational, functional, financial, managerial aspects of a company and how they should be regulated. Companies expanding in India should also be aware of the Indian Trade Unions Act. The Act takes care of registration of unions, its liabilities, responsibilities and makes sure that their funding is utilized appropriately. It also deals with civil and criminal prosecution so that the working class can be benefitted by their legitimacy. – Government of IndiaPorter’s Five Forces (Indian market): – Competitive Rivalry –The Indian market has 2 major delivery giants namely Zomato and Swiggy.
Uber tried to penetrate the market but failed and was bought out by Zomato. The 2 companies have made a market of $2 Billion but is still losing $15 million a month trying to gain new consumers and retain the existing ones. Swiggy and Zomato have expanded its business into more than just food delivery to Swiggy claiming to have the largest cloud kitchen service and Zomato investing in producing raw materials by farming. – Singh M. (2020, 26 February)Theta Ltd. can try to expand on a small scale as the Indian market is vast by learning about the culture and food habits, but it will take time to break even. Threat of New Entrants –Amazon has recently declared that it is going to enter the food delivery industry with its Prime services. While the work is still under process Amazon is constantly working its way by tweaking its technology and is testing its services by partnering up with a few restaurants in Bangalore. – Singh M. (2020, 26 February)Theta Ltd. will face enormous competition if it decides to expand its business in India.
Nevertheless its still recommended because of the vast size of the Indian market.Substitutes –In India the tiffin lunchbox concept is the best food delivery system. They deliver homemade hot lunch to the offices every day. Around 200,000 lunchboxes or ‘dabbas’ as they are known are delivered by the “Dabbawalas” regularly on a daily basis. The “Dabbawalas” are highly organised and are known to be one of the most efficient organisation in the world. Despite Mumbai being the central hub for westernization their business grows every year. Nothing beats the joy of a home cooked meal. – Henderson E.(2017, 14 August)Bargaining power of Buyers –
