Food delivery apps have been prominent even before the pandemic started. People would love to stay at home and eat their meals from their favorite restaurants. It is also convenient for those who are very busy with their work or school requirements. Thus, having a food delivery app on your phone is quite handy. One of the most popular food delivery apps is GrabFood. "It is a food delivery service that connects local food businesses to people." (Grab) Grab is a leading organization providing travel sharing services as well as food delivery services in the SEA region. Specifically, GrabFood and its strong presence in the country, thanks to powerful technologies and positive consumer service, have helped shape and broaden industry in recent years. GrabFood offers a range of foods based on what's available around you: Filipino, Western, Asian, European, Fusion, and so on. It provides delivery service to known restaurants such as McDonald's, Burger King, Popeyes, Jollibee, Army Navy, and a lot more. They also provide services to cafes like Starbucks, Tim Hortons, Black Scoop Caf, J.Co Donuts & Coffee, and etc. A competitor of GrabFood is Foodpanda. The Foodpanda Group is the world's leading online food delivery market. Their headquarters is located in Berlin, Germany. It operates in more than 40 countries covering five continents. Foodpanda helps users to easily discover food around their neighborhood and order their favorite meals online or via smartphone. It was introduced in the Philippines in June 2014 and has since expanded to more than 1,000 partner restaurants across the region. Another competitor of GrabFood is Honestbee. Honestbee offers on-demand, online concierge and distribution services to retailers in South East Asia. It owns and runs an e-grocery website to deliver food to the user's premises. Honestbee operates in Hong Kong, Taiwan, Japan, Malaysia, the Philippines, Indonesia, and Thailand. It was founded by Isaac Tay, Joel Sng, and Jonathan Low on 23 July 2015, with headquarters in Singapore. The company temporarily stopped operating in the Philippines in April 2019 due to financial issues. Deliveroo, part of the food delivery app industry, is also a competitor of Grabfood. It is a company based in London, UK and it was founded by William Shu. It does not operate in the Philippines, but it does operate in these countries: Australia, Belgium, France, Germany, Hong Kong, Italy, Ireland, Netherlands, Singapore, Spain, United Arab Emirates, and the United Kingdom. They offer a wide variety of food selections, from American, Italian, Thai, Chinese cuisine, and a lot more.

Instruction: Give Porter's five forces for the whole industry of Food Delivery Apps: GrabFood, FoodPanda, Deliveroo, and Honestbee

A. Threat of New Entrants (Explain)

1. Economies of scale (Explain)

Reach a conclusion: based on your analysis, do economies exist? What does this do to the threat of new entrants? Does this make the industry attractive or unattractive?

2. Working capital requirements (Explain)

How much money will we have to tie up to keep the doors open?

3. Proprietary product differences secret formulae or processes (Explain)

Do you see that some firms have a secret process or secret formula? An example would be Coca-Cola. They have a secret formula for their cola soft drink that acts as a high barrier to entry.

4. Absolute cost advantages: patents or copyrights (Explain)

Do you see the presence of patents or copyrights?

5. Brand identity (Explain)

Is brand identity important in this industry? Do buyers make conscious choices based on brand identity? You must prove that brand identity is or is not important.

6. Access to distribution (Explain)

How do firms get their product or service to market? Would we need to duplicate the distribution channels, or could we tap into existing channels?

7. Expected retaliation (Explain)

Do you see indications of retaliation against prior newcomers?

*Provide a decision matrix to justify your final answer as to the barriers to entrants, the threat of new entrants, and the attractiveness of the industry.

B. Suppliers (Explain)

1. Supplier concentration (Explain)

Are there more or fewer suppliers than firms in this industry?

2. Presence of substitute inputs (Explain)

3. Differentiation of inputs (Explain)

Are suppliers able to differentiate their products/services in some way?

4. Importance of volume to supplier (Explain)

Do we, as an industry, buy a significant percentage of the total production of the suppliers output?

5. Impact of inputs on cost or differentiation (Explain)

6. Threat of forward or backward integration (Explain)

Is there any indication that vertical integration is occurring?

7. Access to capital (Explain)

Determine the average profitability for the industry over the last five years. Net income as a percentage of sales works. Plot a graph comparing industry profitability against inflation. In your opinion, does the return on investment represent a reasonable income?

8. Access to labor (Explain)

If we enter, would we have access to labor on favorable terms? Does this industry have unions? Do firms in this industry require highly skilled knowledge workers? How is the present labor market for this industry?

*Provide an overall conclusion for this section using a decision matrix. Do suppliers have power and is the industry attractive?