SBM4202 Case Study: In-depth Analysis of Instacart's Business Model

This case study provides a comprehensive analysis of Instacart, an e-commerce and online retail company. It begins with an introduction to Instacart, its founding, and its operational approach, highlighting its use of local retailers and independent contractors to bypass traditional expenses. The analysis then delves into Instacart's value chain, examining primary activities such as inbound and outbound logistics, operations, marketing and sales, and services, as well as secondary activities like firm infrastructure, human resource management, technology development, and procurement. It assesses the competitive forces impacting Instacart, including competition from major retailers and factors like production costs and delivery times. The study also explores Instacart's value proposition, its business model focusing on app-based order fulfillment and partnerships, and its revenue generation strategies. Furthermore, it examines the critical role of information technology in Instacart's operations, from its app's functionality to its impact on partnerships and service efficiency, concluding with an assessment of the viability of Instacart's model for selling online groceries.

Running head: IS STRATEGY, MANAGEMENT AND ACQUISITION ANALYSIS
IS STRATEGY, MANAGEMENT AND ACQUISITION ANALYSIS
Name of the Student
Name of the University
Author Note

1IS STRATEGY, MANAGEMENT AND ACQUISITION ANALYSIS
Give a brief introduction about the company Instacart
Instacart is a new entrant in the e-commerce and online retail industry that was founded
by Apoorva Mehta who is also the CEO of the organization. The organization has started its
operations in the industry in an effective manner by facing the competition in online retail
market. Instacart has aimed at bypassing the various expenses that are related to transportation
and warehousing by using the local food based retailers and the independent contractors. The
operations of Instacart have been developed with respect to the services that can be offered to the
consumers. The convenience of consumers have been provided maximum levels of importance
by an organization like Instacart that has recently entered the online retail industry and is also
facing major levels of competition (Attaran and Gunasekaran 2019). The analysis will be mainly
based on the discussion related to value chains and the competitive forces that have an impact on
Instacart. The impact of the business model of Instacart on the revenues generated by the
organization will be discussed along with the impact of information technology on the business
model.
Analysis of Instacart using the value chain and competitive forces models. Competitive
forces that the company has to deal with. Value proposition of the company
Value chain analysis of Instacart –
Primary activities
Inbound logistics – Instacart has aimed at developing strong relationships with the
suppliers as they are able to support the ways by which the organization is able to distribute the
products. The analysis of inbound logistics can help Instacart to face the challenges that are a
part of the product development based phases. Instacart has been able to reach the customers

2IS STRATEGY, MANAGEMENT AND ACQUISITION ANALYSIS
with the support that is provided by inbound logistics developed by the organization (Ayodeji
and Kumar 2019).
Operations – The operational activities that are performed by Instacart can help the
organization so that it can process the raw materials for manufacturing the end products.
Instacart is able to perform different operational activities that include packing, machining,
testing and assembling. The manufacturing as well as the servicing operations are considered to
be highly important for the proper improvement of activities that are performed by Instacart. The
operational activities have also supported the organization to enhance its competitive advantage
in the industry (Chen, Nan and Li 2018).
Outbound logistics – Outbound logistics of Instacart mainly include activities that are
related to delivery of the products to consumers with the help of various intermediaries. Instacart
has been able to analyze and also optimize outbound logistics in order to enhance the processes
of material handling, scheduling, warehousing, processing, transporting and also delivering to
various destinations (Gallino, Karacaoglu and Moreno 2018).
Marketing and sales – Instacart aims at highlighting differentiation and benefits that are
related to the products in order to attract the customers and enhance the competitive advantage in
the retail industry as well. The high quality based products are offered to customers by Instacart
at affordable prices and this has proved to be helpful for the organization to gain competitive
advantage in the industry (Johri and Tiwari 2019).
Services – The pre-sale as well as post-sale services that are offered to the consumers by
Instacart can have an impact on the loyalty of the customers of the organization. The support that
is provided by Instacart to the improvement of customer loyalty is mainly based on the ways by

3IS STRATEGY, MANAGEMENT AND ACQUISITION ANALYSIS
which efficiency of fulfilment of the orders can be enhanced. The price sensitive customers are
provided with more importance by Instacart for the purpose of maintaining the profitability in the
industry (Liao et al. 2017).
Secondary activities –
Firm infrastructure – The effective and delivery processes that have been developed by
Instacart have been able to enhance the value chain of the organization. The infrastructure
activities and app of Instacart is able to strengthen its competitive position in the online retail
based industry (Men 2017).
Human resource management – Instacart can analyze human resource management
based activities and aspects by proper evaluation of different aspects that mainly include
recruitment, selection, training, rewards and performance management activities. The employees
of Instacart have been able to play a major role in enhancing the services that are offered to the
consumers (Phong et al. 2020).
Technology development – The value chain based activities of Instacart mainly depend
on the technological support that is gained by the organization. Technological integration is able
to play a major role in enhancing the production, distribution, marketing and human resource
based activities of Instacart. The service quality of Instacart will also be improved with the help
of proper usage of technologies (Thakur and Kaur 2017).
Procurement – The procurement based aspect of the value chain developed by Instacart
will be able to enhance the production and process of manufacturing of the organization. The
store partners of Instacart are able to influence the procurement process of the organization.
Competitive forces that impact operations of Instacart –

4IS STRATEGY, MANAGEMENT AND ACQUISITION ANALYSIS
 The competition is mainly faced by Instacart from the major retail organizations
like Amazon (Truşculescu, Drăghici and Paschek 2018).
 The production and distribution costs and their impact on the prices of products is
considered to be a major competitive force that can influence the revenues of
Instacart.
 The delivery time that is taken by the online retail organization can also prove to
be major competitive force related to operations of Instacart (Verma, Sharma and
Sheth 2016).
Value proposition of Instacart – The value proposition of Instacart is mainly based on
the two-fold competitive advantage that is gained by the organization related to a wide variety of
choices that are offered to the consumers.
Explanation of ways by which Instacart’s business model works. Ways of revenue
generation of the company
The business model of Instacart is mainly based on the app that has been developed by
the organization in order to fulfill the orders that are provided by the consumers. The
organization has also bypassed expenses related to transportation and warehousing in order to
reduce the production costs that can in turn reduce the prices of services and products. The
organization also aims at developing connections with the local stores in order to enhance the
efficiency of operations of Instacart (Wang et al. 2019). The users of the app can also gain access
of various recipes that are related to the ingredients that are delivered by the organization. The
revenue generation process of the organization on the other hand is mainly based on the
partnerships that are formed by Instacart with various firms that have the ability to provide
related services (Xu 2018).

5IS STRATEGY, MANAGEMENT AND ACQUISITION ANALYSIS
The organization has aimed at developing partnerships in order to enhance the service
levels that are provided to the consumers. The major organizations with which Instacart has
developed its partnerships include Petco and Tomlinson’s Pet Supplies that is located in Austin,
Texas. The grocery store partners of Instacart have set their prices for the products that are
offered to the consumers. The organization gains a cut or percentage of the profits that have been
gained based on the sales of the grocery based items or products (Zhu and Gao 2019).
Role of information technology in Instacart’s business model
Information technology has been able to play a major role in the ways by which Instacart
is able to maintain its operations and also enhance the business model of the organization. The
app of Instacart is able to support the buying process of the consumers of the organization. The
partners of Instacart have also been connected in an effective manner with the help of the app of
the firm. The efficiency and speed of grocery delivery has also been improved with the proper
usage of the app of Instacart (Verma, Sharma and Sheth 2016). The retailers have also agreed to
pay Instacart for the purpose of gaining business and enhancing the revenues gained in the
industry as well. The strategy related to business development that has been formed and
implemented by Instacart is also implemented by the organization with the support that is
provided by technologies (Truşculescu, Drăghici and Paschek 2018).
The business model of Instacart is mainly based on the ways by which the organization
has placed labor on the top of the operations that are developed by the organization. The core
competencies of Instacart are mainly based on the price-insensitive and convenience shopping
based activities of the organization. Technology has also been used by the organization for the
purpose of providing services like Amazon Prime to the consumers or members of Instacart
(Chen, Nan and Li 2018). The customers in this case can be provided with enhanced services if

6IS STRATEGY, MANAGEMENT AND ACQUISITION ANALYSIS
they are able to provide a premium to the organization. The implementation of technology has
been able to enhance the service levels that are offered to the consumers of Instacart. The speed
and efficiency of the services offered by Instacart can be enhanced with the support that is
provided by the implementation of technology (Liao et al. 2017).
The innovation that had been implemented in the business model of Instacart is
considered to be an important aspect that has been helpful for the organization to face the
competition that is provided by the major organizations like Amazon and Walmart. The
partnerships are considered to be the most important part of the effectiveness of the business
model that has been used by Instacart. The competitive advantage has been mainly gained by
Instacart with the support that is provided by the innovative business model of the firm
(Truşculescu, Drăghici and Paschek 2018).
Viability of Instacart’s model for selling online groceries
The business model of Instacart can be considered to be suitable for the selling the online
groceries in different parts of the country. Labor is placed at the top of the business model of
Instacart and the uniqueness of model is able to influence the operations and relationships with
the consumers as well. Online groceries can be sold by Instacart with the help of highly efficient
app and the partnerships that have been formed with the various organizations (Johri and Tiwari
2019). The needs of the target market of Instacart can be fulfilled effectively by the options that
are offered to the consumers. The sales of online groceries will be maintained by the
organization with the support that is provided by a variety of the products that are offered to the
consumers. The business model of Instacart has been able to enhance the process of grocery
delivery that is related to the effective operations of the firm (Verma, Sharma and Sheth 2016).

7IS STRATEGY, MANAGEMENT AND ACQUISITION ANALYSIS

8IS STRATEGY, MANAGEMENT AND ACQUISITION ANALYSIS
References
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9IS STRATEGY, MANAGEMENT AND ACQUISITION ANALYSIS
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