Factors for Online Food Business Success in Australia: Report

This report investigates the critical success factors for online food businesses in Australia, examining the industry's current state and key drivers of success. The research explores the impact of technological advancements, including internet availability, network connectivity, and unattended food deliveries, on the growth of online food ordering. It also analyzes customer-related factors such as convenience, satisfaction, and perceptions, as well as the role of marketing strategies and cyber security issues in shaping the industry's trajectory. The report includes a literature review, research methodology, data analysis, findings, and recommendations. The findings highlight the importance of technology, customer convenience, marketing, and cyber security in achieving success. The recommendations provide strategies for enhancing the growth of online food businesses in Australia, offering a comprehensive framework for industry players to navigate the evolving landscape and improve their performance.

CRITICAL SUCCESS FACTORS
FOR ONLINE FOOD BUISNESSES IN
AUSTRALIA
By
Subject
Professor
Date
Acknowledgment
I have taken consistent efforts for the successful competition of the particular project.
However, it is crucial to mention that the project could not have been completed without the
guidance and support of various individuals and organizations alike. Hence, it is my duty to
extend my sincere thanks to these people.
I want to acknowledge the consistent efforts of my professor, (Name of the Professor), for his
assistance and guidance in the project and also for providing relevant information which
would then assist me to complete the particular project. Moreover, I also want to express my
gratitude for the different industrial individuals who provided me with the time as well as
attention to perform well. Lastly, my gratitude goes out to my colleagues who helped me with
their abilities and enabled me to complete the project.

Table of Contents
LIST OF TABLES AND FIGURES...........................................................................................................3
1. BACKGROUND TO THE RESEARCH..............................................................................................4
2. AIM OF THE RESEARCH..............................................................................................................4
3. LITERATURE REVIEW..................................................................................................................4
3.1. ONLINE FOOD DELIVERY PLATFORMS IN AUSTRALIA...........................................................................4
3.2. FACTORS CONTRIBUTING TO THE SUCCESS OF ONLINE FOOD ORDERING.................................................5
3.2.1. TECHNOLOGICAL ADVANCEMENTS....................................................................................................5
3.2.2. CUSTOMER-RELATED FACTORS.........................................................................................................7
3.2.3. MARKETING FACTORS.....................................................................................................................8
3.2.4. CYBER SECURITY ISSUES...................................................................................................................9
4. RESEARCH AIM AND OBJECTIVES...............................................................................................9
5. SITUATION ANALYSIS.................................................................................................................9
6. FRAMEWORK...........................................................................................................................12
7. METHODS................................................................................................................................13
7.1. RESEARCH PARADIGM..............................................................................................................13
7.2. RESEARCH APPROACH..............................................................................................................13
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7.3. RESEARCH METHOD.................................................................................................................13
7.4. SAMPLE SIZE..........................................................................................................................14
7.5. SAMPLING TECHNIQUE.............................................................................................................14
7.6. DATA COLLECTION...................................................................................................................14
7.6.1. PRIMARY DATA............................................................................................................................14
7.6.2. SECONDARY DATA........................................................................................................................14
7.7. DATA ANALYSIS......................................................................................................................15
8. DATA ANALYSIS.......................................................................................................................15
8.1. PROFILE OF THE INTERVIEWEES....................................................................................................15
8.2. RESULTS................................................................................................................................16
8.2.1. GENERAL OVERVIEW.....................................................................................................................16
8.2.2. TECHNOLOGICAL FACTORS.............................................................................................................16
8.2.3. CUSTOMER CONVENIENCE.............................................................................................................17
8.2.4. MARKETING RELATED FACTORS.......................................................................................................18
8.2.5. CYBER SECURITY ISSUES.................................................................................................................18
8.3. SUMMARY OF THE RESULTS........................................................................................................19
9. FINDINGS.................................................................................................................................19
9.1. TECHNOLOGICAL FACTORS..........................................................................................................19
9.2. CUSTOMER CONVENIENCE..........................................................................................................20
9.3. MARKETING FACTORS...............................................................................................................21
9.4. CYBER SECURITY......................................................................................................................21
10. RECOMMENDATIONS............................................................................................................22
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11. CONCLUSION.........................................................................................................................25
REFERENCES...................................................................................................................................26
APPENDIX – INTERVIEW QUESTIONS..............................................................................................29
LIST OF TABLES AND FIGURES
Figure 1: Research Framework..................................................................................................9
Table 1: Profile of the Interviewees.........................................................................................13
Table 2: General Overview......................................................................................................14
Table 3: Technological Factors................................................................................................15
Table 4: Customer Convenience..............................................................................................15
Table 5: Marketing Related Factors.........................................................................................16
Table 6: Cyber Security Issues.................................................................................................17
Table 7: Summary of Results...................................................................................................17
Figure 2: Framework for the Success of Online Businesses....................................................22
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1. BACKGROUND TO THE RESEARCH
The technology has advanced greatly and this has made the business environment very
competitive and given rise to the scope of various technological advancements. Hence for this
reason, the internet has become a major part of the business and led to a shift in the operating
strategies of the firm. Various Supermarkets like Tesco and Walmart have launched their
online applications and strategies so as to ensure considerable success for themselves. This
approach is also being followed by various restaurants which has benefited them largely bb
allowing them to increase their sales and improve customer service with the help of an online
medium like that of Uber eats. This technology has thereby made it easier for various
businesses to enter into the market. The main aim of the project is to highlight the status of
food delivery services in Australia and undertake relevant research based on the same which
would help the companies to perform well. Certain recommendations have also been
provided following the factors of cyber security, customer convenience and technological
factors which have to be considered by the businesses.
2. AIM OF THE RESEARCH
The aim of the report is as follows:
 To highlight the status of Food delivery in Australia
 To analyze the factors affecting the success of the technology like customer
convenience, technology and cyber security.
3. LITERATURE REVIEW
3.1. ONLINE FOOD DELIVERY PLATFORMS IN
AUSTRALIA
pg. 4

Online food ordering is the process by which consumer can order food, like other consumer
goods, over the internet having it delivered to their doorstep. Online food delivery platforms
were initially introduced by restaurants, as they offered item on their menus to customers
over the internet (Patel, 2015). However, with the passage of time, numerous ‘third-party’
food ordering platforms, like Online food business, Seamless and Grubhub have emerged.
These platforms operate via websites and mobile applications, offering customers items
belonging to different cuisines and restaurants. Not only does this allow customers to
compare different options, it also enables them to order anything using a single platform,
contributing to greater convenience and subsequently, satisfaction (Kamarudin et al., 2009).
According to a study, online food ordering has taken over phone-based ordering in terms of
both transaction value and sales volume, representing growth of the sector (and therefore,
revealing the existence of numerous opportunities here).
3.2. FACTORS CONTRIBUTING TO THE SUCCESS
OF ONLINE FOOD ORDERING
The growth and successful operation of online food ordering platforms, including Online
food business, is contributed to a number of factors. Across the literature, these factors have
been distributed into three major classes, namely:
 Technological advancements
 Customer-related factors
 Improvements in marketing (Kim et al., 2018).
3.2.1. TECHNOLOGICAL ADVANCEMENTS
3.2.1.1. INTERNET AVAILABILITY:
Continual improvements in internet access throughout the world, coupled with the success of
e-commerce, has led towards the establishment of a large number of online food delivery
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systems. According to a study, since the year 2000, global internet usage has increased by
more than 570 percent owing to technological advancements and expansion of global
network ‘webs’ (Kim et al., 2018). Increased internet availability has had a two-way impact
on digital food sales by encouraging organizations to offer more variety online and on the
other hand, providing consumers with greater options to choose from (Kedah et al., 2015). In
addition to that, increased internet availability and usage has allowed Online food business
and similar platforms to provide advanced options to customers, such as creating accounts for
convenient placement of orders in the future, as well as comparison of different cuisines and
restaurants.
3.2.1.2. IMPROVED OVERALL NETWORK ACCESS AND CONNECTIVITY:
Advancements and technology, particularly the introduction of new communication media,
such as wireless systems and optical fiber have greatly enhanced the reliability and reach of
global networks. This, in turn, has led towards growth in online shopping, as more people can
access e-commerce platforms (Kedah et al., 2015). Since more people can access online
shopping platforms as well, this factor opens up opportunities for them, motivating more and
more organizations to enter this sector (See-Kwong et al., 2017). Not only does the growing
online population present an untapped market, improved network connectivity offers other
opportunities too. Existing services like Online food business can enhance their services
using improved networking and communication media, allowing them to better understand
and fulfil the requirements of customers (Adithya et al., 2017). This is another major factor
contributing towards the success of Online food business, as well as other companies
operating in the said sector.
3.2.1.3. UNATTENDED FOOD DELIVERIES
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There is a consistent increase in the importance of and research pertaining to last mile
deliveries using unmanned vehicles. The report, titled “Parcel delivery: The future of the last
mile”, developed by Joerss et al (2016) indicated that by the year 2025 80% of all the
deliveries throughout the world will be conducted through unmanned vehicles. The increase
in the customer pressures now require the companies to deliver faster, while at the same time
ensure lower costs. Hence, the following new means of delivery can be deployed by the
organizations in the future:
o Crowdsourcing / Shared Economy
o Autonomous ground vehicles
o Drones
o Semi Autonomous Ground Vehicles (Frank and Albertz, 2017).
3.2.2. CUSTOMER-RELATED FACTORS
Factors pertaining to consumers contribute significantly to the success of online food delivery
systems.
3.2.2.1. CUSTOMER CONVENIENCE AND SATISFACTION:
Services like Online food business increase customer convenience, tempting them to order
food rather than visiting restaurants physically. Moreover, the ability to order food from any
place at any time greatly enhances customer convenience (ALagoz and Hekimgolu, 2012).
This increase customer satisfaction, improving the popularity and demand of such services
(resultantly aiding in successful operation of Online food business and other similar services).
In addition to that, in contrast to phone-based ordering, online order placement provides an
interactive interface to customers, where they can view the product they are ordering and go
through its characteristics (ALagoz and Hekimgolu, 2012). In addition to that, customers can
compare different restaurants, cuisines and products using an online delivery system, an
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option which is not available when making use of phone delivery (Kimes, 2011). All these
factors have increased the popularity of online food delivery as compared to that of phone-
based order placement systems. Again, this factor has been a major driver of the growth of
services like Online food business.
Customer Perceptions:
Customer perceptions regarding online food delivery are important drivers of Online food
business success as well. Many researchers claim that online food delivery systems succeed
because customers have positive perceptions associated with them. Most importantly,
customer consider these services as potent options whenever they feel hungry and resultantly,
place online orders (See-Kwong et al., 2017). In addition to that, yet another important
consumer perception here is ease-of-access and usability. Individuals can place orders with
minimal efforts using their computers and mobile phones (Adithya et al., 2017). Services like
Uber Eat provide access to a number of restaurants, allowing people of different tastes and
preferences to order food of their choice.
Lastly, the success of Online food business is spearheaded by the ‘mood’ factors. Consumer
behavior is strongly influenced by mood when it comes to selection of food (while placing
orders) (Kimes, 2011). Since these services are not bound to a single restaurant, consumers
get access to a wide variety of items; this makes it likelier for them to find what they wanted,
increasing their contentment and forming positive perceptions regarding the brand during the
whole process.
3.2.3. MARKETING FACTORS
Another major set of factors which have propelled the growth of Online food business
pertains to marketing. Technological advancements have led towards innovation in the field
of marketing as well, with new techniques like social media marketing and online
advertisement gaining popularity due to their effectiveness (De Vries, Gensler and Leeflang,
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2012). These techniques have a wide reach and involve low costs. Their use, resultantly, has
allowed Online food business to capture the attention of millions of customers in its targeted
markets (Stelzner, 2011). Factors which can have negative impacts on Online food business
3.2.4. CYBER SECURITY ISSUES
One of the key areas that has a negative impact on the overall growth of the online food
businesses is a threat to the privacy and security of the customers. It has been suggested by
the research of Smith and Rupp (2003) that one of the key elements associated with the
psychological characteristics of the customers, which determines whether they will use the
specific service or not, is that of trust. The emergence of cyber security issues, including
insecure transaction/payment system, as well as misuse of the customer information, has a
negative impact on the overall trust levels of the customers, which in return deteriorates the
growth of the online food delivery systems (Brassington and Pettitt, 2005).
4. RESEARCH AIM AND OBJECTIVES
The following report aims at assessing the critical success factors that determine the success
of the online food businesses in the region of Australia.
The following key objectives have been addresses by this research:
o To assess the factors enhancing the overall success of Online food business.
o To identify the factors that deteriorate the success of Online food business.
o To recommend strategies, a holistic framework, for the enhancement of the growth of
Online food business.
5. SITUATION ANALYSIS
pg. 9

Within the region of Australia, the digital disruption in the area of fast food delivery is now
occurring at a very fast pace, with latest researches indicating that the new players like Uber
Easts and Deliveroo are also attaining effective levels of growth in the region of Australia. As
per the report of Morgan Stanley, from the time Menulog made the delivery of its first order
in 2006, the worth of the online food delivery market in Australia has increased to $600
million and it is expected that it will grow to $2.4 billion by the year 2025. The key player
within this industry is currently Menulog which incurs transaction worth of $500 million with
9,000 restaurants each year. However, the new players in the market also have a chance to
attain high levels of growth as the market demand is heating up. This is because the online
food delivery market of Australia is still underdeveloped, when compared to mature online
food markets, such as that of UK. This, as a result, leads towards expectations that the
increase in the population coupled with increased use of internet and restaurant food
consumption, the growth of this market will reach new heights (Nelder, 2018).
This modern age of technology, and common availability of high-speed internet connections
have evolved the internet into the most powerful communication medium. Since the internet
has grown into a full-fledged media platform, and the number of its users is rapidly growing;
the conventional media platforms are experiencing decline in their popularity. This sudden
shift has forced the businesses to change their operating strategies. The young segment of the
market community is the largest contributor to the over-all social media usage across the
globe. Sighting the popularity of social media among younger generations, businesses have
now started to integrate social media and online marketing strategies into their business plan.
For instance, Tesco launched its electronic retailing campaign in South Korea in 2015, and
allowed its customer’s to electronically-purchase products from the company’s web-store.
The company also introduced the e-transaction facility, where customers could utilize their
bank-cards and vouchers to pay for the products (Yeo, Goh, and Rezaei, 2017).
pg. 10

Upon the completion of purchasing process, the selected items could be dispatched to buyers.
This approach appeared to be a “big hit” in South Korean market and Tesco emerged as the
second largest retailer in the country. The business plan of Tesco was so successful that,
many companies quickly adapted it. The company’s business plan is also being successfully
practiced in the restaurant industry, and many international restaurants have also launched
their web-application where customers can electronically place their orders. Such restaurants
and businesses relay upon online mediums such as “social-media, blogs, and e-mail clients”
to directly communicate with their customers (Kitthanadeachaorn, 2016).
This approach has not only helped the restaurants to increase their sales, but also eliminated
the role of physical mediatory between the restaurants and their customers, which has added
to the profitability of such restaurants. Nevertheless, the increasing trend of internet-based
business activities have increased the demand for courier and delivery services that connect
the businesses to their customers. In this kind of system, the customers place their order
through the website of mobile application of the company, and make transaction. Upon the
confirmation of the order, restaurants prepare the food, which is then delivered to their
customers through courier/delivery services. Such food delivery companies either offer their
services through contract, or charge commissions for each order (Liao, Chen, and Lin, 2011).
The aforementioned discussion is evident that the vast availability of internet and internet-
based services have opened the way for many online companies to enter the market.
However, there are certain trade-offs too. For instance, the web-based outlets do not offer
much flexibility to the customers, and customer cannot assess the quality of the product
before making the purchase (Liu and Florkowski, 2018).
pg. 11