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?

From your analysis, you will find that some of these points are not relevant to your industry. You should also appreciate that some points are more important than others. Lastly, you should find that some elements will say that the industry is attractive, while other elements say that the industry is unattractive. 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)

• Do suppliers have power over firms in this industry? The first step is to determine what this industry purchases. Not in detail, but as a generalization. Then, identify items that are recognized as being commodities. These can be dismissed from further consideration. Focus on suppliers of key items that firms in this industry must have.

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)

• Assuming that we enter this industry, at some point in the future we will want access to capital for expansion or other business reasons. You need to determine whether we would likely have access to capital on acceptable terms. Since we can't know the future, we have to use the past as an indication. 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? If so, they limit access to labor and usually increase costs. Do firms in this industry require highly skilled knowledge workers? How is the present labor market for this industry?

As with the threat of new entrants section, provide conclusions for each subsection as to the power of suppliers. Then provide an overall conclusion for this section using a decision matrix. Do suppliers have power and is the industry attractive?