Business Strategy for Deliveroo: Impact of Macro Environment and Internal Capabilities Analysis

This report analyses the impact of macro environment on Deliveroo's business operations and its internal environment and capabilities. It includes PESTEL analysis, SWOT analysis, and VRIO analysis to determine strategic management decisions and objectives.

Unit 32: Business
Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Applying the appropriate frameworks and analysing the impact and influence of the macro
environment on a given organisation and its strategies..............................................................1
M1 Critically analyse the macro environment to determine and inform strategic management
decisions......................................................................................................................................4
D1 Critique and interpret information and data applying environmental and competitive
analysis to produce a set of valid strategic directions, objectives and tactical actions...............4
TASK 2............................................................................................................................................5
P2 Analysing the internal environment and capabilities of a given organisation with the use of
appropriate frameworks..............................................................................................................5
M2 Evaluation of the internal environment to assess the strengths and weaknesses of the
internal capabilities, structure and skill set of organisation. ......................................................8
TASK 3............................................................................................................................................8
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market
sector for an organisation............................................................................................................8
M3 Devise appropriate strategies to improve competitive edge and market position based on
the outcomes................................................................................................................................9
TASK 4............................................................................................................................................9
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning
for a given organisation...............................................................................................................9
M4 Producing a strategic management plan which include tangible and tactical strategic
priorities and objectives..............................................................................................................9
CONCLUSION................................................................................................................................9
References:.....................................................................................................................................10

INTRODUCTION
For every business organisation, it is necessary for them to make and develop relevant
strategies which are effective in nature and which also leads to the growth and development of
organisation. In simple words, business strategy can be defined as the rough working plans
developed by the Human Resource Management of organisation for the purpose of achieving
goals, objectives, vision and mission of organisation. For the purpose of optimizing the financial
performance of organisation and making use of all available resources in best way, the
organisation is required to develop business strategies. The below mentioned report is based on
Deliveroo which is an organisation of providing services of delivering food online. In 2013, it
was founded by Will Shu and Greg Orlowski in London, England, United Kingdom. Currently
this company is working in almost 200 locations which incudes Kuwait, United Arab Emirates,
Hong Kong, Australia, Singapore, Italy and many more. The main purpose of making this report
is to know about the various factors of macro environment on the business operations f given
organisation. Along with this, it also highlight the internal environment and capabilities of
Deliveroo.
TASK 1
P1 Applying the appropriate frameworks and analysing the impact and influence of the macro
environment on a given organisation and its strategies.
The vision, mission and objectives of Deliveroo is given below:
Vision
The vision of Deliveroo is to open a biggest market for their customers and then make
limited restaurants for any special occasion and reducing the cooking habits of people. They
would like to take orders from people on regular basis.
Mission
The mission of Deliveroo states that the want to change the eating habits of customers by
bringing all the local restaurants into the home and offices of every person.
Objectives
Environmental analysis
Internal environment can be explained as the collection of several elements of
environment which exists in the environment of business. For instance, employees, management
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and organizational culture can be said as the internal environmental factors of an organisation as
it is within the organisation.
Several small forces which are available in the environment of organisation comes under
micro environment and implies the effect on the complete ability and effectiveness of the
organisation. There are few examples of factors of micro environment such as shareholders,
competition, employees, suppliers and customers.
The macro environment can be explained as the environment which include the factor
which are not in he control of business organisation. Such factors sometimes implies various
benefits to the business and sometimes it implies negative effect on them.
Below mentioned is the explanation of various forces of macro environment of
Deliveroo:
 Political Factors:
Such factors include the high influencing power with long term sustainability of the profit of
Deliveroo. This organisation is working in various countries and the international business
environment include dynamic political environments. This increase in the instability of global
political environment implies direct impact on the growth of industry.
Continuous change in the policies of government is also a challenge for business. The
management of Deliveroo is required to do the complete and detailed stud of current trends.
Bureaucracy and corruption are the another factors which implies negative effect on the business.
Entering in the market of low taxation implies higher profit for them.
 Economic Factors
For the purpose of estimating the trajectory of growth of industry, the management is required to
analyse the economic environment of a specific country. Deliveroo id required to take care of
given economic factors as they are influencing the Deliveroo such as economic/business cycle
stage, Inflation/employment/exchange rates/interest, labour market condition, financial market
efficiency, economic structure and many more. It is found that the online food delivery market of
Europe is to be valued at $20.27 billion by 2026. Along with this, it is also estimated that the
market of online delivery may be highly volatile on post pandemic.
 Social Factors
Societal norms, trends and values have a vital role on the culture of organisation. Several factors
which can help the Deliveroo in order to designing the effective strategies of marketing include
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spending patterns of consumers, power structure, demographic trends and shared beliefs. The
management of Deliveroo has established a marketing department in their organisation which
help them in analysing the potential customers. Demographic trends, Equality and power
distance, Gender Roles, Societal norms and class distribution, online shopping, Spending
patterns and behaviour are the various social factors which influence the Deliveroo. After this
pandemic, audience is taking more interest in the online food delivery service. Growth of culture
of vegan has caused a surge in demand on the bases of plant based orders.
Many of demographic trends such as socio-economic variables, migration trends and aging
population plays an vital role in the business organisations which are performing operations
globally.
 Technological Factors
Next factor of PESTEL analysis is technological factors which helps the organisation in knowing
about the technological diffusion and advancement all over the world. Advance technology helps
the organisation in making more effective strategies in the process of decision making.
Analysing the technological factors may leads to the adoption of new and advance technology
which leads to the achievement of goals and objectives of organisation in an effective and
efficient manner. Social Media Marketing, Technological innovations and development level,
Research and development on technology and impact on cost structure/value chain, shortened
product life cycles can be considered as the effective technological factors of Deliveroo.
Delivering the food by using droven helps the organisation in gaining the attention.
 Environmental Factors
Change in the condition of climate and the growth of consciousness in environment comes under
the environmental factors of PESTEL analysis. For the purpose of avoiding undesired
circumstances, the management of Deliveroo The Food Delivery Startup on an Expansion Spree
is required to perform the detailed study of such factors. Along with this, environmental factors
of Deliveroo helps them in making the effective decision of entering in a new market or
introducing any new product. Environmental factors of Deliveroo The Food Delivery Start up on
an Expansion Spree include Recycling and waste management, Renewable Technology, Weather
and climatic conditions, Attitude towards the ozone-friendly products, Rules and regulation of
environment for the purpose of avoiding resource depletion. Rapid growth of environmental
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concerns which are related to the markets of delivery helps the organisation in knowing about the
various managing actions and justifiable steps by organisations.
 Legal Factors
It is also an important aspect of analysing the legal factors of an organisation for the purpose of
avoiding to get into any serious trouble. If any organisation ignore the legal factors to analyse, it
may result in the hurting of advantage of competition which also result in the harming of image
of organisation. Legal factors which are influencing the Deliveroo includes Employee protection
laws, Consumer protection laws, Intellectual property laws and many more. They are following
the employee/labour health and safety laws because many of countries are restricted to follow
this law.
M1 Critically analyse the macro environment to determine and inform strategic management
decisions.
It is found that the currently stability in the political factors is in the favour of Deliveroo
as they are helping then organisation in continuous performance of their operations in various
countries. Growing economy of Europe implies that the economic factors of organisation are also
in the favour of Deliveroo. Introducing new technology and doing some innovation related to the
technology also leads to the attraction of customers towards the organisation. It is also found that
Deliveroo is following all the legal factors which are very helpful for business organisation in
establishing a good and positive brand image in the market.
D1 Critique and interpret information and data applying environmental and competitive analysis
to produce a set of valid strategic directions, objectives and tactical actions.
On the basis of data and information which has been collected by applying PESTEL
analysis, it can be said that the operations of Deliveroo has been affecting by the environmental
factors in a negative way. Along with this, it is also found that the constantly increase in the
competition in the same industry working as a huge challenge for Deliveroo. Below mentioned
are some objectives which are developed by Deliveroo:
Quantitative Objectives
 To become a leader of the complete industry of food delivering within the time period of
almost 4 years.
 Expansion of operations of business organisation in three new markets by the middle of
2022.
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 To attaining an annual growth of 17%
 To increase in the share of markets by 25% by the end of year 2021.
Qualitative
 Carrying out various innovation in technology for the purpose of serving their customers
in a better way.
TASK 2
P2 Analysing the internal environment and capabilities of a given organisation with the use of
appropriate frameworks.
SWOT analysis of Deliveroo is given below:
Strengths Weaknesses
 Deliveroo has developed a good
channel of merchants and riders which
include almost 115000 merchants and
1000 riders in approximately 12
countries.
 Deliveroo has a well established and
recognized brand as it has been in this
business from a long time. People of
United Kingdom easily recognize the
name of their brand as they are well
known about their priced and taste.
 Deliveroo is constantly attracting the
customers along with beating the
competition by providing services to
the people on less prices.
 The menu list of Deliveroo is not
comprise of few products. They have
done customization in their menu
which implies a competitive edge.
 Deliveroo is facing loss on each and
every single order which they are
delivering.
 Pandemic has created a lots of problem
for the organisation as the people are
less preferring outside food because the
people become more health conscious
which result in the deduction of 15% of
jobs.
 The prices of food ingredients are
continuously increasing. Increasing
cost of raw ingredients of food products
also result in the increase in the final
prices of food products as the
organisation is adding values in their
cost. Hence, it is becoming very
difficult to attract the customers as the
prices are too high.
 Customers are not able to see the
operations of food which is going on in
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the kitchen. Hence, it is not an easy
task to build trust of audience on the
organisation regarding the quality of
the ingredients.
Opportunities Threats
 They have opportunities to improve the
traffic on the application of Deliveroo
by using the subscription services.
 It has been also found that the increase
in the demand of online food delivery
has been increasing day by day which
leads to the growth and expansion of
business organisation. They gain the
opportunity to start their business
operations in a new market where they
are targeting new group of people.
 Deliveroo also have opportunity of
doing expansion of their business in the
market of grocery. If the organisation
start delivering the grocery, it may
result in the higher growth and
expansion of organisation which leads
to the earning of high profit as well.
 Another opportunity that the Deliveroo
have to start food trucks and Wagons as
the organisation is facing trust issue. By
opening food trucks, the people can see
the quality of ingredients used in the
kitchen which help in minimizing the
issue of trust.
 It is very difficult for Deliveroo to
classify their drivers employees
according to their operations and
managing the total cost of organisation.
 The market of Deliveroo is found as
hardly competitive as there is very less
cost of switching.
 In this pandemic, people lost their jobs
and currently they are consuming their
savings. In this situation, people are not
able to spend more in online takeaway
and food delivery services. It is getting
very difficult for online food delivery
business to provide services on less
prices.
 The downfall in the economy implies
less purchasing power of customers.
They are not able to spend too much
amount on food products.
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It has been found that good brand image and the relationship of Deliveroo with their
merchants and riders are the strong strengths of the selected organisation. Trust issue of
customers on the organisation is the main weakness of Deliveroo along with the continuous
increase in the costing of food products.
VRIO Analysis
It can be considered as the important framework or model used by the various
organisations with the purpose of identifying and evaluating the capabilities and resources of
organisation. VRIO analysis of Deliveroo is given below:
 Valuable
It has been found that the financial resources are high valuable as it is very useful while doing
investment in any opportunity which is available in the market.
Another valuable resource of Deliveroo is the employees of organisation. It has been found that
the employees working with Deliveroo are highly skilled and trained. Along with this, it is also
identified that the employees of Deliveroo The Food Delivery Start up on an Expansion Spree
are also loyal and detainment level for the company is high.
 Rare
The financial resources available to the Deliveroo has been found as rare and it is analysed that
the there are only few organisations in this industry who have strong resources of finance.
The local food products which has been offered by the Deliveroo are not found to be rare as they
are easily available to customers by their competitors. It implies that the local food products
leads to the competitive parity for Deliveroo.
 Imitable
The financial resources available for Deliveroo are found as costly to imitate as recognized by
Deliveroo The Food Delivery Start up on an Expansion Spree. It is possible only because of
prolonged profits earned by the organisation over the last many years. If any new entered
organisation or any competitors are firstly require to earn equal profit for a long period of time in
order to accumulate the equal amount of financial resources.
The local food products which are provided by the Deliveroo are not so costly to imitate. Hence,
it is not so tough task to acquire such products by the competitors. Such food products do not
require many years of experience.
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 Organisation
For the purpose of capturing the value, the financial resources of Deliveroo are organised. Such
resources gives the proper directions to the management to invest the finance at right place so
that organisation can grab all the opportunities by combatting threats. It can also be said as the
competitive advantage for Deliveroo.
It is analysed that the patents of Deliveroo are not in the form of well organised. It implies that
the organisation is not able to use their patents potentially. This can be said that in this situation,
the patent can be put as unused advantage of competition. It can also be changed if the
organisation start selling products with patents.
M2 Evaluation of the internal environment to assess the strengths and weaknesses of the
internal capabilities, structure and skill set of organisation.
From the above studies, it is analysed that the the distribution channels which include
merchants and riders along with a good brand image of Deliveroo are the strengths of
organisation. The main benefit of these strengths is that they are attracting the customers towards
their organisation. For the purpose of maintaining these strengths, the organisation is required to
do the investment financially and technically along with human resources.
Trust issue of customers and constantly increase in the prices of food items and
ingredients are considered as the higher weakness of Deliveroo. They have a good opportunity to
do the business in new markets.
TASK 3
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given market sector
for an organisation.
M3 Devise appropriate strategies to improve competitive edge and market position based on the
outcomes.
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TASK 4
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning for
a given organisation.
M4 Producing a strategic management plan which include tangible and tactical strategic
priorities and objectives.
CONCLUSION
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References:
Books and Journals
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