INNOVATION AND TECHNOLOGY 1: Instacart Business Model Analysis

This report provides an in-depth analysis of Instacart's business model, focusing on its operational structure, value chain, and the application of information technology. The report begins with an introduction to Instacart, highlighting its key features as an online grocery delivery service. It then delves into a detailed value chain analysis, examining the various activities that contribute to the company's value proposition. The report also applies Porter's five forces framework to assess Instacart's competitive positioning, evaluating threats from new entrants, substitute products, existing rivals, and the bargaining power of suppliers and buyers. Furthermore, the report explores Instacart's business model, detailing its value proposition, key stakeholders, and revenue streams. The role of information technology in streamlining operations and enhancing customer experience is also discussed. Finally, the report assesses the viability of Instacart's model, considering its potential for growth and sustainability in the online grocery market. The report concludes with a summary of findings and insights into the future prospects of Instacart.

Running head: INNOVATION AND TECHNOLOGY
INNOVATION AND TECHNOLOGY- Instacart organization
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction......................................................................................................................................2
About company Instacart.................................................................................................................2
Analysis of Instacart........................................................................................................................3
Porters five forces for instacart....................................................................................................3
Instacart’s business model...............................................................................................................6
Role of information technology.......................................................................................................7
Viability of instacart model.............................................................................................................7
Conclusion.......................................................................................................................................8
References......................................................................................................................................10

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Introduction
The report aims at describing the features and working principle associated with instacart.
It becomes very much essential to ensure that with the use of proper model it will become easy to
implement an online grocery shop. The report will focus on analyzing the value chain that is
associated with the instacart model so that it becomes easy to analyze the values that can be
managed within the company.
About company Instacart
Instacart is a new entrant to the world of online market. The Key features that are offered
with the application is that it offers customers with wide range of order and can select multiple
items from different vendors. Instacart is on demand grocery that offers the facilities at
doorsteps. With the use of technology and the business model it becomes easy to improve the
overall performance of the Instacart. This has enhanced the performance in the market. The
grocery delivery has become so famous that it has gained huge market value. The working of
instacart can be divided into four states that are listed and described below:
 Customer places their orders for groceries and pay online
 Personal shopper received the order and start collecting the items as discussed within the
order
 Shoppers then focuses on paying the bill through insta cards prepaid debit card
 The shopper then deliver the grocery towards the customer based on their address
mentioned

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Analysis of Instacart
Value chain is referred to the process all the activities that are used for the purpose of
adding property values towards the company. These include the analyzing the production, overall
marketing and the provision that is associated with after sales services. Value chain is referred to
the set of activities that are associated with the business performance. Porter has designed a value
chain for the purpose of analyzing the different activities that are associated with the
organization. With the Help of proper value chain activities it becomes easy to perform Costs
and associated profit analysis with an organization that is used for the purpose of creating value
for the customers. The working principle based on which the instacart carries the working
includes helping the customer for making the orders for groceries based on their requirements,
ensures that every shop has received the proper notification through the use of application and all
the items are being picked up manually. The application allows making payment online via debit
card. The payment needs to be managed so that it becomes easy for the customers to organize the
purchasing process. Through this processes it becomes easy to manage the product transactions
and accessibility.
Porters five forces for instacart
The porters five forces model is used for the purpose of evaluating the competitive
positioning and value that is associated with the instacart business. With the help of these
analyses it will become easy to evaluate the factors that have the potential to impact the
performance of the organization. The factors that hamper the business performance on the basis
of Porter’s five forces are discussed below:
Threats from new entrants:

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Threat from new entrants is mainly used for the purpose of analyzing the impact that may
be created on the organization due to some other organization. The factors that are capable of
reducing the threat of new entrants for the organization instacart and the new wave of grocery
start-ups are discussed below:
 With the high substantial capital investment it will become very difficult for new entrants
to gain access over the market.
 The regulations set by the market will prevent the new entrants to access the market.
There is a need to implement proper regulation that will be capable of preventing the business
from new entrants. It is important for instacart to manage their customers efficiently so that they
don’t lose any customer.
Threat from substitute products or the services:
Due to the high availability of substitute products it becomes very difficult for instacart to
manager position in the market. It has been observed that these chances increases when the
substitute product is available for cheaper rates and offer same superior quality. There is a need
to manage the quality and the prize efficiently so that it becomes difficult for the substitute
product to gain place at the market (Sekar et al. 2019).
Rivalry among the existing forms:
Rivalry among the existing firms has the potential to impact the overall performance of
the instacart. Due to excessive competition it becomes very difficult to gain better advantage.
However it can be stated that the rivalry among the existing farms for instacart and new wave

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grocery is comparatively low as there are no such market that can offered online business
towards their customers.
Bargaining power of suppliers
Bargaining power of the supplier is used for the purpose of reflecting the pressure that
extended by suppliers on the organization. When the suppliers have strong bargaining power and
it has the potential to impact the business organization. It can be stated that with high supplier
bargaining power there is a chance that the competition in the market will increase. It can be
stated that the bargaining Power of the suppliers are high (Kumar et al. 2018). In order to reduce
the bargaining power of suppliers on instacart it is important to have different suppliers that can
be selected in case of high cost, substitute product ideas and better control over the market.
Bargaining power of the buyers
The bargaining power of buyers is used for the purpose of indicating the pressure that a customer
can put on the business. Instacart may face bargaining challenges. Thus there is a need to
implement proper measures that can prevent the business from getting impacted by the
bargaining power of customers. By increasing and diversifying the customer base in Instacart it
becomes easy to manage the bargaining power effectively (Kosintceva 2016). This can be done
by introducing new products, targeting different segments of the market and adopting product
diversification strategy. This will lead to increase in the bargaining power of the buyers. It is
important for the organization to adopt strategies that will strengthen the competition in the
market.

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Instacart’s business model
Instacart is an online business model that offers better support towards the users and
shoppers. The value proposition based on which the instacart works includes offering vast
inventory, no warehouse, and quick deliveries towards the customers, tie up with the
supermarket and no shiny delivery trucks. It is important to understand the traits of the customer
so that it becomes easy to manage the relationship between the customers and the organization
(JungleWorks. 2020).
The business model of instacart defines the key customers and stakeholders and the
working principle of instacart. Instacart offers wide range of services for grocery items. This
ensures that the delivery is provided on the same day. The organization has dedicated workforce
that aims at delivering the products from local stores to the doorsteps of every customers. The
key stakeholders that are associated with the organization are the customers, the retail partners
and the grocery shoppers (Imran et al. 2019). Instacart offers a wide range of features towards
the customers. The revenue model of instacart is divided into three sub parts that are delivery fee,
membership fee and the mark up prices. Through these three points the instacart earns money.
This helps them to gain better revenue in the market. In addition to these instacart offers an
annual membership with the name of instacart expresses (Dillahunt, Simioni and Xu 2019). This
is a scheme that helps in earning the revenue. Users with this membership card can get free
delivery for one year with terms and conditions. Through this processes it becomes easy to earn
the revenue for the organization. The business model of Instacart is efficient and has the potential
to engage

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Role of information technology
Information technology is referred to the system that is used for the purposes of
maximizing the return on investment and also focuses on identifying the areas that can be
improved within an organization. With the help of information technology it becomes easy to
manage the requirements and communication process within the organization (Khanam et al.
2013). The organization offers a wide range of features towards the people from different parts
of world for solving their problems related to grocery products. The operating model of instacart
is designed with the help of several technologies and information system so that it becomes easy
to manage the data (Sundström and Grindestam 2018). The information technology has been
aligned within the organization for the purpose of managing the overall inventory. The
information technology and processes are integrated for the purpose of managing the overall
functioning of the organization. Instacart has implemented technologies for the purpose off
enhancing the overall business functionalities (Infigic Technologies 2020). It can be stated that
with the use of proper technology it will become easy to enhance the overall performance.
Viability of instacart model
Instacart offers different features and services towards the customers. Along with this the
organization has also aligned the business process effectively so that it can meet the needs of the
customers. The instacart business model is divided into different level so that it becomes easy to
meet the needs of the customers efficiently. After evaluating the instacar model it can be stated
that online groceries selling is viable through the use of instacart model. It has the potential to
offer a better support to words the customers. This will ensure that better service and facilities
are offered towards the customers (Bhargava, Bafna and Shabarisha 2018). This offers a huge

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number of products availability and ensures that it becomes easy to manage the product and
facilities with the use of information technology. The main aim of using information technology
within the business model is to ensure that all the data related to the company are managed
efficiently. The organization offers wide range of facilities through online mode and is
considered to be most suitable for the customers. The organization has the ability to offer better
tie-ups with existing supermarkets that leads to becoming me the best online store. In addition to
this the instacart organization also ensures that they offered extremely quick delivery for
enhancing the viability feature of the organization. Apart from these there are several features
that are integrated in instacart for the purpose of enhancing the viability as an organization. This
includes increasing the shop retention by adding a Beatty option in the application. In addition to
this the delivery time needed for providing the products to the customers has also been reduced
so that it can save 50% of the overall time and also can provide satisfied service towards the
customers. Apart from these the storage has also been managed by the organization so that it can
deal with huge products efficiently
Conclusion
Therefore it can be stated that with the use of proper technologies and implementation it
will become easy to organize the processing of Instacart. Instacart is one of the most efficient
organizations offering wide range of features towards the customers. The report has evaluated
the different factors associated with the Instacrt and the revenue associated with the instacart. It
can be expected that with the use of different technologies it will become easy to meet the
expectation of the market. It is expected that the grocery delivery business has a bright future and
will also help in providing better support towards the people. In addition to this, with the

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development of new technology and application the business model will also be capable of
providing better access to words the customers. The organization has gained a huge market in
other countries. The report has evaluated the instacart and the technology that are used within the
organization. In addition to this the business model of the instacart is evaluated so that it
becomes easy to understand the impact of the technology. Hence it can be concluded that with
the use of proper technologies and facilities it will become easy to enhance the performance.

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References
Bhargava, A., Bafna, A. and Shabarisha, N., 2018. A review on value chain analysis as a
strategic cost management tool. Acc Financ Manag J, 3(3), pp.1386-1393.
Imran, M., Hamid, S., Aziz, A. and Hameed, W., 2019. The contributing factors towards e-
logistic customer satisfaction: a mediating role of information Technology. Uncertain Supply
Chain Management, 7(1), pp.63-72.
Infigic Technologies. 2020. Instacart Business Model | How Instacart Works. [online] Available
at: <https://www.infigic.com/instacart-business-model-revenue-how-instacart-works/>
JungleWorks. 2020. How Instacart Works: Comprehensive Business & Revenue Model -
Jungleworks. [online] Available at: <https://jungleworks.com/how-instacart-works-makes-
money-revenue-business-model/>
Khanam, Suby, Jamshed Siddiqui, and Faisal Talib. "Role of information technology in total
quality management: a literature review." Khanam, S, Siddiqui, J. and Talib, F.(2013),“Role of
Information Technology in Total Quality Management: A Literature Review”, International
Journal of Advanced Research in Computer Engineering and Technology 2, no. 8 (2016): 2433-
2445.
Kosintceva, A., 2016. Business models of sharing economy companies: exploring features
responsible for sharing economy companies’ internationalization (Master's thesis).
Kumar, V., Lahiri, A. and Dogan, O.B., 2018. A strategic framework for a profitable business
model in the sharing economy. Industrial Marketing Management, 69, pp.147-160.

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Sekar, S., Lundin, K., Tucker, C., Figueiredo, J., Tordo, S. and Aguilar, J., 2019. Methodology
and Value Chain Analysis.
Sundström, J. and Grindestam, V., 2018. Understanding Antecedents for Business Model
Innovation: A Case Study Of the US Grocery Retail Market.
Slamet, C. and Ramdhani, M.A., 2019, March. Concepts of Strategic Management of
Information Technology. In Journal of Physics: Conference Series (Vol. 1175, No. 1, p.
012264). IOP Publishing.
Dillahunt, T.R., Simioni, S. and Xu, X., 2019, May. Online Grocery Delivery Services: An
Opportunity to Address Food Disparities in Transportation-scarce Areas. In Proceedings of the
2019 CHI Conference on Human Factors in Computing Systems (pp. 1-15).