Advanced Innovative Business Practice: Instacart PESTLE and Porter's

This report provides an analysis of Instacart's innovative business practices, focusing on its external environment and industry dynamics. It examines Instacart, an American company specializing in grocery delivery services, through the lens of PESTLE (Political, Economic, Social, Technological, Legal, and Environmental) and Porter's Five Forces frameworks. The PESTLE analysis highlights the impact of factors such as economic policies, technological advancements, and environmental regulations on Instacart's operations. Porter's Five Forces assesses the competitive landscape, considering the threat of new entrants, bargaining power of buyers and suppliers, the threat of substitutes, and competitive rivalry. The report concludes that Instacart has a promising opportunity for international expansion due to its innovative and trendy services, despite facing challenges related to political and environmental factors. The analysis suggests that Instacart's business model aligns well with current consumer demands, particularly among the younger generation, positioning it for future success.

Advanced Innovative Business Practice

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Contents
Introduction...........................................................................................................................................2
PESTLE.................................................................................................................................................2
Porter’s Five Forces Framework............................................................................................................4
Conclusion.............................................................................................................................................5
References.............................................................................................................................................6

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Introduction
Innovation in business is a key aspect of staying viable in every changing situation of the
business environment. In this report, the discussion is made on the business and its practices.
Business practices of the organisation has been analysed on the basis of its environment
(Cortimiglia, Ghezzi, & Frank, 2016). Instacart has been taken into consideration in order to
analyse the environment. In this report, the external and industry analysis will be done to
analyse the impact of external factors on it.
Overview
Instacart is an American Company that operates the business of delivering the services of day
grocery. The consumers select the groceries from web application and place the order from
different retailers who connected with the web application. After getting the order, the
retailers deliver it to consumers from their personal shops (Instacart, 2019)
Now, it has been seen that the online platform grab the high market share. People place the
orders in clothes, foods, household products through online platform. But the online
groceries’ delivering is the new concept that is innovative and creative. As per the current
trends and innovation context, it is an appropriate example of innovative business practices.
That is why; this business has been selected for the report.
PESTLE
Political
Changing policies is a risk for the
organisation because the government can ban
the new ideas and business while changing
Economical
United States is mixed developed economy
that helps the business to grow in the market.

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policies with new government.
As it is an online platform that is why; it is
expanded in different region due to which it
has to manage the diverse regulation as per
the region and market.
GDP of the country is $20.5 trillion which
indicates the high purchasing power of
consumer that is a positive factor for the
business because consumer spends the large
amount on it (Caliendo, Parro, Rossi-
Hansberg, & Sarte, 2017).
Social
The living standard of the people of US is
high due to the people prefers the online
shopping instead of visiting shops. It is also
has positive impact on business.
As per the report, the 99% of adults are
able to read and write which is beneficial
for business because people can easily
drive application and place the order
(Country meters, 2019).
Technological
The business is totally relies on internet.
There are many broadband companies of US
put their efforts to provide the high speed
services.
The government of US also support the
technology for development.
Legal
Legal protection of intellectual property,
patents, copyrights and the other IPR rights
has to be followed by the business even it is
an online service.
Legal policies of safe and secure food are
also required by the company to be followed.
Environmental
Changing weather affects the business as it
offers the services of day grocery products.
The business has to follows the different
regulation regarding environmental policies.

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Porter’s Five Forces Framework
The threat of new entrants
High degree
Low cost to enter the market
Everyone can copy this technology and enter
the market with the new business strategy
Bargaining power of buyers
Low degree
There are very few companies or businesses
that provides these types of convenience
services to consumer (Instacart, 2019)
Bargaining power of suppliers
Moderate degree
Retailers are interested to invest in the
organisation as per the trends
There are some other retailers that invest in
their shops instead of online platform that is
why; it is moderate level.
The threat of competitors
Low degree
As there is new idea to provide the services
to consumer
The business is specialised in providing the
specific services (Ansoff, Kipley, Lewis,
Helm-Stevens, and Ansoff, 2018).
The threat of substitute
Moderate degree
Physical stores and shops are the main substitute of the business
There are many people interested in visiting shopping as compare to online shopping due to
which the demand of business is reduces.
But somewhere there are other people who like this idea and reduce their work by using the
application for order groceries product.

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Conclusion
From the above analysis, it is concluded that the Instacart is a good start-up business that
have the opportunity to expand the business at international level. It is also an innovative idea
as the external and industry factors have the positive impact on it. These services are new
and trendy as the demand of consumers specially young generation is increases. Although,
the business faces the challenges of political and environmental due to different region but it
attain more success in future.

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References
Ansoff, H.I., Kipley, D., Lewis, A.O., Helm-Stevens, R. and Ansoff, R. (2018) Implanting
strategic management. Springer.
Caliendo, L., Parro, F., Rossi-Hansberg, E., & Sarte, P. D. (2017). The impact of regional and
sectoral productivity changes on the US economy. The Review of economic studies, 85(4),
2042-2096.
Cortimiglia, M. N., Ghezzi, A., & Frank, A. G. (2016). Business model innovation and
strategy making nexus: evidence from a cross‐industry mixed‐methods study. R&D
Management, 46(3), 414-432.
Country meters. (2019) United States of America (USA) Population. [online] Available from:
https://countrymeters.info/en/United_states_of_america_(USA) [Accessed 12/05/19].
Instacart. (2019) About us. [online] Available from: https://www.instacart.com/ [Accessed
12/05/19].
Instacart. (2019) Instacart Expands Alcohol Delivery Experience for Customers Across the
U.S. [online] Available from: https://www.prnewswire.com/news-releases/instacart-expands-
alcohol-delivery-experience-for-customers-across-the-us-300810601.html [Accessed
12/05/19].