Core purpose of this report is to critically evaluate the process of Food Panda to expand its business operations from Germany to Bangladesh which is identified as an emerging market for the company to move into. The company has been able to expand its business operations to the Asian market such as Malaysia, Philippines, Pakistan and so on where emerging to Bangladesh accumulates numerous benefits to the company expansion in terms of revenue improvement, profitability growth and so on.
Moving towards a host country would be challenging as well as creating numerous opportunities to the company. Therefore, strategic partnership with a local partner has been identified as the most appropriate strategic decision in order to coop up with local business environmental consequences as well as to utilize the resources effectively and efficiently.
Therefore, the evaluation was undertaken based on SOSTAC model where industry analysis was carried out to analyze the retail industry in Bangladesh. Moreover, PESTEL as well as SWOT Analysis were utilized to evaluate environmental implications towards the business while applying Uppsala model to evaluate the internationalization process of the business. Hofstede cultural dimension model was utilized to evaluate the cultural implications towards the business in Bangladesh context. 7Ps analysis and Porter’s Diamond was used to evaluate the strategy development as well as creation of competitive advantage by the company in the home country. Moreover, STP analysis was also considered for the determination of desired target market and market positioning.
Foodpanda can be identified as a renowned business organization which is into online food and grocery delivery platform where it is owned by Delivery Hero. The company is based on Berlin, Germany where the company has been able to expand its business operations towards Asia as well, being the largest food and grocery delivery platform in Asia (deliveryhero.com, 2021).
The company commenced its business operations in 2012 with the emerging demand for online based delivery platform around the globe where the company expanded the business operations towards 14 distinctive countries. Foodpanda emerged to Bangladesh in 2013 and it is considered as the largest delivery platform established within the country. Food culture of the host country was a major stimulator for business expansion where delivery orders are obtained through website as well as through Mobile APP. Deliveries are arranged from the restaurants, supermarkets and other groceries which are registered with the website or the application based on customers’ requirement i.e. express deliveries, town based delivery schedules and so on (foodpanda.com.bd, 2021)
As far as Food and Grocery delivery platforms in Bangladesh are concerned, there is an extensive competition in the market which can be evaluated using Porter’s Five forces analysis.
Source: (Dobbs, 2014)
|Bargaining power of customers||High||Customers have a higher range of delivery options which can be used for the fulfillment of their delivery needs. Therefore, their switching cost is zero where they can switch to another service provider without incurring a cost. Therefore, there is a higher bargaining power for customers where it is vital to introduce attractive promotions packages loyalty customer base maintenance and so on.|
|Bargaining power of suppliers||Large suppliers – High|
Small suppliers – Low
|As far as larger suppliers are concerned, they have their own delivery systems. Therefore, they have a higher bargaining power. In contrast, there is a lower power for the smaller suppliers as they do not possess any delivery arrangements.|
Therefore, this instance, should be evaluated when deciding on the supplier margins and supplier relationship management activities.
|Threat of new entrants||High||There is a high tendency of entering new rivalries into the market due to the availability of market demand, lower initial investment and infrastructure requirement. Therefore it is vital to introduce strategies to ensure high customer retention.|
|Threat of substitutes||Low||Direct customer purchases with physical visits can be regarded as the substitute to an online delivery. There is no direct ability of substituting the on line service.|
|Industry Rivalry||High||There is an extensive market rivalry where all market participants i.e. Food Panda, Pathao Food, Shohoz food, Hungrynaki, Efood and so on are keen on attracting customers with promotions, discounts and so on.|
Therefore, marketing strategies needs to be strengthen (Srabony, 2021).
Current status quo of the business is evaluated using PESTEL and SWOT analyses for Food panda.
It is significant to evaluate the external environmental consequences in Bangladesh and its implications to Food panda operations using PESTEL Analysis.
|Political||There is a major support from the government for the enhancement of international trade. However, current political uncertainty and governance implications has affected in terms of tax policies and the political index and governance index of the country is 4.47 and 4.5 respectively, being at 87th and 83rd position (bti-project.org, 2021).|
|Economic||Bangladesh can be identified as a booming economy where there is a rapid increasing in the per capital income of households has increased up to 5,200 which enhances the overall consumption patterns as well (worldbank.org, 2021).|
|Social||Food culture of Bangladesh, sharing and preference to eat creates opportunities for the business growth. Further, individuals are not supposed to leave without having food if they visit any home as per Bangladesh Tradition which is a major stabilizer of business of Food panda (deliveryhero.com, 2021).|
|Technological||Retail e-commerce in Bangladesh is growth at a rate of 72% on a monthly basis where there are more than 100 million users are available with ecommerce. This will enhance the opportunities for the business growth. Further, vitality over transforming business operations towards digital aspect can be emphasized (khan, 2020).|
|Ecological||Preferences of sustainability business practices, reduction of polythene usage, sustainability marketing activities and so on can be identified as emerging implications in the ecological environment where Food Panda should also focus on ecofriendly food packaging, sustainable marketing avenues and so on.|
|Legal||Established ecommerce policies and regulations in terms of IT infrastructure, payments and transaction security, customer data protection and so on are identified as main perspectives to be looked at by Food Panda when managing their customer data, assurance of the highest security of the transactions and so on (E-Commerce Association of Bangladesh (e-CAB), 2020).|
Further, it is vital to focus on the food regulations as well to ensure food is in the highest quality and condition without having any contamination.
Based on the industry analysis as well as PESTEL analysis to evaluate the environmental consequences, SWOT analysis is demonstrated as follows.
Source: (Shaw, 2020), (Shaw, 2020)
The business has focused on internationalization process with organic path based on the franchised model where based on Uppsala Model, the company does not engage with any exporting or running the business with more business representatives. Conversely, business model is passed from one country to the other while selecting a collaborative partner to operate the business on behalf of the parent company in line with their principles while adopting to the specified cultural implications in the host country (Hollensen, 2011).
Therefore, the company has selected the segment of “Foreign production and Sales subsidiary” for internationalization and to enhance their autonomy to operate the business.
There are several cultural implications exclusive towards Bangladesh with the comparison with Home country which can be evaluated through Hofstede model.
Source: (hofstede-insights.com, 2021)
There is a higher power distance in Bangladesh while having a higher collectivism vis-à-vis Germany. Therefore, introduction of hierarchical method for the business were carried out while introducing several collective based marketing campaigns to enhance customer preferences and attraction (hofstede-insights.com, 2021).
Both countries are in par with masculinity and uncertainty avoidance which discusses regarding quality of life. Moreover, two countries have medium level of responses towards threats created for their beliefs. Therefore, standardization concepts in terms of branding is to be identified.
When there is an impact for the brand, there is a tendency of medium term impact for the business in Bangladesh. Therefore, it is vital to focus on brand management with the highest quality assurance to eliminate any detrimental implications.
Further, handling of food verities should be in line with Muslim based culture and their business hours and working conditions should be flexible to recruit more employees. Therefore, avenues of standardizing as well as adopting customized strategies can be demonstrated as follows.
Source: (Hollensen, 2011)
|#||7Ps||Standardized functions||Adaptation||Standardization vs. Adaption|
|1||Product||Delivery schedules||Introduction of Biriyani to adapt with rice culture||Standardization|
|Products||Product selection based on Muslim culture||Adoption|
|Mobile App/ Website||Standardization|
|3||Price||Pricing Ranges||Price level to match with middle income level||Adaption|
|4||Place||Urban / Suburbs||Standardization|
|5||Promotions||Marketing Promotions||Based on market conditions and competitor actions||Adaption|
|Digital marketing||Social media engagements advertisements, online offers based on economic conditions such as salary, social events, celebrations, impulses such as online offers and so on.||Adoption|
|7||Processes||Food Panda Procedures||Standardization|
|8||Physical Evidence||Staff Uniform||Standardization|
Home country Competitive advantage was the key determinant of business success of Food Panda which can be evaluated using Porter’s Diamond Theory.
Source : (Vlados, 2019)
|Factor Conditions||Availability f adequate financial resources, infrastructure for online based operations, innovative technology usage such as cloud operations and so on has favourably affected to enhance the business efficiencies.|
|Firm’s Strategy, Structure and rivalry||Visionary leadership, motivated management has a higher stimulation for market expansion where appropriate strategies are developed in order to enhance overall business performance compared with rivalries.|
|Demand Conditions||There is an immense support from German government to expand internationally where flexible and supportive polices are regulations are developed with the intention of overall national growth.|
|Related and supportive industries||Availability of rivalries such as Uber has created positive energies and performance enhancements of overall business industry and since Food Panda operations facilitates restaurants to ease delivery options of them creating competitive advantage over others.|
Following segments are focused by Food Panda Bangladesh.
|Demographic||Age Group||Children||Youngsters||Families with kids||Adults|
|Economic||Income||Upper Income||Upper middle income||Low income|
|Phycological||Life Style||Willingness to socialize||Not willing socialize|
Based on the identified segments, Food Panda serves following target market in Bangladesh food and grocery delivery section.
High and Medium Income with Dine-In Preferences
High and Medium Income with delivery Preferences
Source: Author Developed
Low Income with Dine-In Preferences
Low Income with delivery Preferences
Based on the target market analysis, it can be identified that Food Panda focuses on high and middle income level category with higher delivery preferences customers. Therefore, business model has been created to cater to their requirements.
Based on the industry rivalry analysis, market positioning can be elaborated as follows.
Source: Author Developed
When considering the market positioning of Food Panda, it can be identified that the business is positioned with the highest product quality and freshness while having reasonable pricing scales around the country.
-As far as branding is concerned, the company is keen n maintaining a standardized logo, delivery bags as well as staff uniform to demonstrate a better global presence. Moreover, same elements are used in terms of digital marketing aspects, website and mobile applications are concerned, which can be depicted as follows.
Source: (foodpanda.com.bd, 2021)
Following consumer trends can be identified as food and grocery delivery platform is concerned.
Source: (CHA, 2020)
|Focus on healthier Foods||The company should focus on engaged with organic based food preparation restaurants as well to initiate the deliveries of such products.|
|Socialization||With the socialization trends of the home country as well as host country, there is a higher tendency of ordering foods from outside which is considered as an opportunity for the business expansion.|
|Ecommerce based food delivery preferences||With the implications of covid-19, there is a higher tendency of customers transforming towards more ecommerce based delivery methods instead of physically visiting the restaurants which can be capitalized by the company.|
|Digital tendency||There is a higher digital usage by the customers such as social media, emails and so on. Therefore, it is vital to revisit the marketing initiatives to ensure sufficient digital marketing aspects are covered.|
It can be identified that Food Panda actively engages with online activities as far as digital marketing presence is concerned which can be elaborated as follows.
The website is considered as the 11st most preferred brand in food delivery segment, while having a country rank of 134.
Source: (similarweb.com, 2021)
Website customer Engagement
Source: (similarweb.com, 2021)
It can be identified that total visits have increased at a rate of 19% where average customer retain for six minutes on the website. However, prevailing bounce rate over 35% would be a negative point for customer conversion as online buyers.
There is a 3.26% of impact from referral sites to direct to Food Panda where strengthening of the aspect should be looked at.
Source: (similarweb.com, 2021)
Search Engine Optimization
Search Engine Optimization has created 29.93% of contribution for the enhancement of website traffic where 68% is from organic SEO methods while having 31.15% of contribution from paid SEO methods.
Source: (similarweb.com, 2021)
Source: (similarweb.com, 2021)
Social media has 7.37% of contribution towards the generation of web traffic where the higher contribution is from Facebook and Youtube. Therefore, the company has been able to generate a higher customer attraction and engagement through social media performance.
Based on the critical evaluations, it was identified that several improvements as well as modifications are required to be put in place to enhance global marketing position of the company while increasing overall online presence.
Source: (Uppaluri, 2019)
|Global Marketing Recommendations|
|1.||It is required to collaborate with major restaurants, hotels and other food preparation locations to enhance customer reach and the business position of the company. Further, this will provide a major marketing support with joint collaborations|
|2||It is required to expand the business model to suburbs and selected remote areas based on customer profiling to capture untapped markets.|
|3.||Undertaking targeted promotions collaborating with website as well as applications is required to create higher customer engagement.|
Moreover, joint promotions with banking institutions, food processing companies and so on is vital to manage a loyal customer base.
|Digital Marketing Recommendations|
|1.||It is required to focus on paid or click on advertisement based on customer preferences and buying patterns to attract more customer orders vial online marketing options.|
|2||Creation of more customer engagement through social medial platform is vital. Therefore, regular posts, boosting, obtaining customer comments and reviews, social media based engaged customer competitions and so on can be arranged.|
|3||Increasing more interactivity of the website and applications is vital to attract more customers. Further, number of clicks up to order confirmation needs to be limited to reduce customer bounce rate.|
|4||Introduction of website selection based on geo fencing criteria such as country, town and so on is vital without letting customers to select it manually.|
Based on the evaluations, it was identified that Food Panda has effectively identified Bangladesh as a desired country to expand its business operations and to be internationalized with prevailing economic conditions. There are enormous business opportunities created in the environment due to economic boost supported by the government (dhakatribune.com, 2021).
Moreover, with Bangladesh culture, several business practices were required to be changed and adopted while retaining branding, logos with scandalization format to represent global presence. Appropriate marketing strategies as well as online initiatives are practiced by the company to enhance overall business effectiveness in order to enhance overall performance and growth aspects.