LUBM301 - Entrepreneurship: Analyzing Gousto's Business Strategy

This essay provides a comprehensive analysis of Gousto, a British meal kit retailer, through the lens of entrepreneurship. It begins by dissecting Gousto's business model using the Business Model Canvas, examining key partners, activities, resources, value propositions, customer relationships, channels, customer segments, cost structure, and revenue streams. The essay then explores the external environment using PESTLE analysis, considering political, economic, social, technological, legal, and environmental factors impacting the company. Furthermore, it employs Porter's Five Forces to analyze the industry landscape, focusing on competitive rivalry and supplier power. A SWOT analysis identifies Gousto's strengths, weaknesses, opportunities, and threats. Finally, the essay concludes with recommendations for Gousto to enhance its competitive position and ensure sustainable growth in the dynamic meal kit market.

Entrepreneurship

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Analysing the business model using an appropriate Business Model Canvas.............................3
Examining the external environment (PESTLE) and analysing industry (Porter's Five Forces)
to analyse business environment and industry landscape............................................................6
SWOT analysis of the business..................................................................................................10
Recommendations......................................................................................................................11
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Entrepreneurship is the creation that is viewed as the change, taking the risk in order to
set up the business. An entrepreneur is someone who creates and set up a new business, bearing
risk and enjoys the profit as a reward. This process of creating and setting up the new business is
called entrepreneurship. The entrepreneur is basically the innovators who create new ideas of
producing new gods and services. It is the process of designing, launching and running the new
business. Gousto is the British meal kit retailer having its headquarters in Shepherd's Bush,
London. This company was founded in 1 January 2012 and the areas served by them is the most
of maintained Great Britain. There are total nine hundred employees in the organization. The
organization has won Retail Business of the Year in 2015 start-ups awards and many more
awards. The organization has raise funding from many other organization in order to survive in
the market. This essay will outline the analysis of the business model using an appropriate
Business canvas model. Further this essay will outline the external environment of the company
by using the PESTLE analysis and it will also analyse the industry by using the Porter's Five
Forces in order to analyse business environment and industry landscape. At last this essay will
outline the SWOT analysis of the business and recommendations to the company.
MAIN BODY
Analysing the business model using an appropriate Business Model Canvas
Business Model Canvas is the management template that is used by the new business in
order to make the business model and values of the company. It consists of the visual charts with
the following elements describing the company or product value proposition, infrastructure,
customers and finance (García-Muiña and et.al., 2020). The nine building blocks of this business
model template is known as the business model canvas which was firstly proposed in year 2005
by Alexander Osterwalder. This Model consists of the following factors which are as follows:
Infrastructure- It includes the key activities, key resources and partner network. Key
activities helps to execute the organization's value proposition. Key resources are the resources
which are necessary to create the value for the customers in the market (Keane, Cormican and
Sheahan, 2018). The resources can be human, financial, physical etc.
Offering: This includes the value propositions which use to collect the products or
services in order to meet and satisfy the needs of customers. The value proposition could be
quantitative or may be qualitative.

Customers: It includes the customers segments, channels and customer relationships. This
is very important element in order to make the business model effective (Sparviero, 2019). The
organization must have good customer relationship in order to ensure the survival and success of
the company.
Finances- It includes the cost structures of the business model which shows the monetary
consequences while operating in the new business market. The cost structures includes the
features like having fixed cost, variable cost, economies of scale and economies of scope.
Revenue steams: It is the process of the company in order to make the income from each
customer segment (Umar, Sasongko and Aguzman, 2018). There are various ways to generate
the revenue stream which includes the sale of the asset, usage fee, subscription fees, brokerage
fees, etc.
Business model canvas of the organization
Key partners
1.Riders as the
collaborators.
2.Technology
providers.
3.Insurance
providers.
Key Activities
1. Providing
the delivery
services to
the
customers.
2. Human
resources.
3. Providing
the
customer
services.
4. Maintaining
a platform
in the
market.
5. Providing
meal kit to
the
Value
Propositions
1. The value
proposition
of the
company is
to be the
world's
local
restaurants
in to
everyone's
home in
order to
provide the
best meal
kit.
2. Provides
the
Customer
Relationships
1. Provides
the fast
deliver of
the meal
kit to the
destinatio
n of the
customers.
2. Provides
digital and
online
services.
3. Convenien
t for the
customers
to order
the food.
Customer
segments
Customer who
are for home
deliver or take
away.
Corporate
accounts.
Good quality
restaurants.
Key partners
as for the
support in the
market.

customers. customers
a digital
and
effective
way to
order the
food from
the
restaurants
any time.
Provides meal kit
at the very
reasonable rate.
Key Resources
1. Local team
workers.
2. Brand and
status of the
company.
3. Train
employees
to enhance
the
platform.
4. Funding
5. Wide spread
of riders.
6. Proprietary
software
platform.
Channels
Websites
Mobile Apps
Social media
pages and
providing online
delivery.
Radio advertising.
Television
promotion.
Business
development team
for restaurants.
Blogging for the
organization.
Cost structures
Marketing Expenses of the company.
Investment in the technology for producing more and fast.
Support from the customer's side.
Information Technology operations.
Information Technology maintenance.
Sales mangement of the company.
Revenue streams
Connection Fees: The revenues
which are generated from the
one-off fee hotel pay to join the
services.
Transaction Fees: The revenues
generated from the commission
that the company charges on the

order they deliver.
Advertising Fees: The revenues
that are generated in order to
develop and promote the
restaurants in the competitive
market.
This business canvas model of the Gousto shows that the company has the key partners
which are riders as the collaborators, technology providers and insurance providers. Key
activities of the company is to provide the delivery services, customer services, maintaining the
platform in the market, etc. Further this model shows the value propositions of the company
which shows to be the best restaurants in the market and provide the vest online services to
customers. The customer relationships and customer segments of the company is good.
Organization's key resources and channels must be effective in order to provide the best product
the customers. It has the cost structure and revenue steams by which it maintains and earns the
profitability.
Examining the external environment (PESTLE) and analysing industry (Porter's Five Forces) to
analyse business environment and industry landscape
PESTLE analysis of organization
All the aspects and factors of this analysis are important for the industry to focus on. It is
very important to analyse the Political, Economic, Social, Technological, Legal and
Environmental factors which may influence or affect the profitability of the company (PESTLE
ANALYSIS, 2021). The PESTLE analysis of the Gousto is described below:
Political factor- These factor includes up to which extent the government affect the
economy of the company. Government can impose the tax or duty by which the entire company
revenue structure might change. It includes the tax policies, fiscal policy, trade tariffs, etc. The
current legislation and the future legislation in order to maintain the food handling, packaging,
labelling and distribution may impact the organization in order to mange the political factors
impacting the business (Christodoulou and Cullinane, 2019). The organization must work
according to the tax laws of the government which makes the company to earn good profit. As

working with the government laws and regulations is the expensive and time-consuming process.
The organization has to make the planning in order to consider the laws with earning
profitability.
Economic factor- These factors affects the economy's performance which has a direct
impact on the long-term goals of the company (Phan, 2021). A rise in inflation will affect the
profitability of the company. It will affect the purchasing power of the company as increase in
price of the products decrease in demands of the customers. These factors include the inflation
rate, interest rates, economic growth pattern, foreign exchange rates, etc. Differentiating the
various ingredients and material for each foreign nation is the tough task. The cyclical economic
trends may impact the landscape of the industry which are hard to tackle. As it is the food
process, so it is hard to recognize the offerings oh the meal kit by the customers if there is rise in
inflation. This factor has a great impact on the profitability of the company.
Social factor- These factor includes the social environment of the market having
determinants like culture trend, population, demographics, etc. the company must maintain the
social environment in order to attract the customers by providing and satisfying the needs of the
customers (Zhang and et.al., 2021). As the consumers are becoming more conscious about the
quality of the food and to maintain the balanced and healthy diet. The meal kit organization
should be aware and satisfy the expectations of the customers in the market. In the today's worlds
many families are engaged in the full-time work environment so company has an opportunity to
provide healthy meal kit to the families by focusing on providing healthy and balanced meal to
that families. This will helps the company to maintain the social environment and landscape of
industry.
Technological factor- These are the most usable factor which includes the innovations in
the technology for better producing and delivering of the goods and services in the market. This
factor has the favourable and unfavourable impact on the company's growth (Demirtas and et.al.,
2021). This factor makes aware the company about the technological awareness in the market.
As the organization is the delivering the meal kit it must remain updated with the fast packaging
and delivering machines and used the technology which produces the goods faster. The
customers can make and mange their accounts online to order the meal kit from the company.
This makes easier for customers and company to manage the delivery of food easily.

Legal factor- This includes the certain laws which may affect the business environment
as some companies maintain their own laws and regulations. Legal factor have both the external
and internal sides which has an impact on the profitability and landscape of the company. The
organization aim is to free from the litigation as such as possible. As Gousto is providing food
meal kit so it increases the risk for the company which involves contamination or allergy issues
to the customers. So the organization must have the health and safety laws in order to manage the
quality of the food.
Environmental factor- These factors includes all those determinants which influence or
affect the company in surrounding environment. This factor of the PESTLE is important for the
industry in order to manage customers in the market. It includes the climate weather, location,
global changes in the climate, environmental offsets, etc. As the organization is producing
packed foods and products to the customers, so they must use recyclable or renewable packaging
material which does not affect the environment.
Porter's Five Forces Model
Porter's Five Forces Model is the model that used to identify ans analyse the five
competitive forces which used to shape the industry and make the company to analyse the
company's strengths and weaknesses (Porter's Five Forces, 2021).
Competitive Rivalry- It is the first porter's five forces which makes the company to
know about their competitors in the market. It makes the company to know how many rivals are
there in the competitive market. Market where the rivals are more the company cut down its
products prices in order to attract the customers towards the market (Varelas and Georgopoulos,
2017). It makes easy for the suppliers to increase the gain by cutting down the prices. The
organization must take care of this factor in order to compete with their competitors in the
market. As it is the retail company it has many competitors to compete in the market. The
organization must do innovation in order to attract the customers and earn profits. The brand
distinguishes the products as the company is food company must use quality of ingredients in
order to pack the meal kit.
Supplier Power- This force of the model shows that how the supplier can increase the
prices in the market. It makes the company to know that how many potential supplier the
company have (Wee, 2017). It makes the organization to know about the uniqueness in their
products and services they provide. In the retail industry, supplier power is relatively small and

have the significant role. The supplier of the organization are required the raw material or inputs
to produce the food for the customers. The organization must focus on the factors which
strengthen the bargaining power of the supplier. The supplier must produce the quality of goods
and services in order to increase in the demand of the products. As the organization is producing
and preparing the meal kit, the ingredients used in that must be healthy and safe for the
customers.
Buyer Power- Buyers are the individuals or the group of people who used to purchase
the goods and services of the industry. It includes the end customers, retailers, distributors and
the purchaser of the industry. The bargaining power of the buyer is higher if the buyer is
switching from one product brand to another. When the buyer is purchasing the products at a
large quantity than also it can bargain at the high. As the organization is the retail industry it is
expected to have the high bargaining power due to availability of the substitutes with better price
offerings, volumes purchased by the buyer and poor loyalty towards the product brand. The
organization is producing meal kit for the families and customers it must give the meal kit at the
better prices by maintaining the quality of the products.
Threat from the substitutes- The presence of the substitutes will affect the
attractiveness of the company and decreases the profitability. This is because as substitutes
affects the prices of the products and demand of the products from the customers side as well. In
the retail industry the threat of the substitutes are very high. Due to high substitutes the buyer has
more options to satisfy their customers by fulfilling their requirements. The cited organization
must maintain the quality of their food products as the customer will not shift to the another meal
kit. As it is the retail organization there are various factors such as availability of alternatives like
availability of home delivery service and cost of the food product can increase the threats from
substitutes.
Threat of New entry- The position of the company can be affected by the people's
ability in the competitive market. It only takes the little extra capital and effort to enter into the
new market (Kuznetsova and et.al., 2017). If the company is having no or little protection for the
technologies than the new entrants and rivals can affect and weaken the position of the company.
Due to change in the technology and innovation the entry of new entrants is so possible and
affect the business. The organization must have the strong and durable barriers to entry the new
entrants in the market. These barriers to entry is the favourable for the company as it is already

existing in the market. The new entrant can affect the profitability of the organization so the
company must be aware and ready to compete with the new entrant in the market.
SWOT analysis of the business
The retail business and companies use the SWOT analysis in order to describe and
evaluate the business. It makes the company to know about the strengths, weaknesses,
opportunities and threats (SWOT Analysis for Retail, 2021). The strengths and weaknesses are
the internal factors and opportunities and threats are the external factors of the company.
Strengths- The first step in this analysis for the retail company is to find and identify the
strength (Elavarasan and et.al., 2020). The strengths for the organization can perform well in the
new market and get success in the new market. It increases the customer satisfaction by
increasing the more profit in the market. The company must have the strong dealer bond which
makes the company more profitable in the market. The strength of the organization is to increase
the high level of satisfaction from the consumers who are consuming their meal kit. This makes
the company to have high return on the expenditure done by them.
Weaknesses- The retail company must identify the weakness in order to survive and
grow in the market. By doing the market research the company can check the that where they are
lacking in the market. As the company is preparing the meal kit the organization has to spend
lots of money in the research and development. The retail food industry is spending more on the
research in order to know about the preferences of the customers. As the taste and preferences of
the customers change on the regular basis it is the weak point to check and then prepare the meal
kit.
Opportunities- Another step in the SWOT analysis is used to identify the opportunities
in the market. The company can sell their prepared meal kit and deliver that food product online
(Abdel-Basset, Mohamed and Smarandache, 2018). The organization can increase their market
share by purchasing the small retailer from the market. This opportunity will increase
profitability of the organization and makes the company to adopt the new technology in the
market. The company can also decrease the transportation or shipping prices while delivering the
food online this will attract the customers to purchase their food product.
Threats- The retailer of the retail company can identify the threats by using the SWOT
analysis. Threat includes the decrease in the demand of the customers, price wars among the

competitors, recession time or the threat can be the increase in price of the products (Agyekum,
Ansah and Afornu, 2020). The change or switch by the customers in order to purchase or have
the meal is the threat for the organization. The new technologies developed by the competitors in
order to produce the food or meal kit fast can also be the threat for the company in order to
survive in the market. The imposition of any new regulation by the government can also be the
threat for the company in order to survive in the competitive market. Due to COVID 19 it has
affected the food market as people don't prefer to eat packed foods so it is also a threat for the
company in order to deliver their meal kit to the customers.
Recommendations
It is recommended to the company that it must maintain the quality of the products which
makes the families to buy more meal kit. The organization by increasing the delivery sales can
improve the profit margin in order to maintain profitability in the market.
The company can increase and build a strong delivery customers base in order to attract
the customers in the market. It is also recommended to the company that it must start spreading
awareness in order to order or take the meal kit from the organization. The organization can also
take the feedback from their customers which makes them know about the quality and quantity
of the food that they are giving to the customers.
It is also suggested to the company that it can provide the discounts on the more orders,
must collect the online reviews of the customers. This makes the company more to know more
about the taste and preferences of their customers which reduces the research and development
amount of the organization. The company must make sure that they are easily available or found
on the google which makes easier for the consumers to order the meal kit. It can also use the
social media in order to direct the customers about the menu of the company.
It is recommended to the company that it must decrease the food delivery expenses which
makes the company to increase in the profit margin. The organization must not do expensive
delivery packaging, take risk in order to produce new food item, unsuccessful marketing
attempts, etc.
The company should control the labour cost by providing the labour better trainings and
providing them high wages. The company must hire the right people, should keep the delivery
drivers happy and motivated and must train the labours and drivers in order to proper supply of
goods.

In order to be successful in the competitive market the company must have the win-win
scenario. The organization must supply proper quality of gods which must satisfy the needs of
their customers. By implementing the changes it will help the company to improve its profit
margin and work on the opportunities in order to gain the mane in the market.
CONCLUSION
From the above essay it has summarized the analysis of the business model using an
appropriate Business canvas model. Further this essay has described the external environment of
the company by using the PESTLE analysis which includes political, environmental, social,
technological, legal and economic and it has also analysed the industry by using the Porter's Five
Forces which includes the bargaining power of the supplier, bargaining power of the buyer,
threats of new entrants, competitor rivalry and threats of substitutes in the market in order to
analyse business environment and industry landscape. At last this essay describes the SWOT
analysis of the business which shows the strengths, weaknesses, opportunities and threats and
recommendations to the company.

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