ABS106 Business Model Analysis
ABS106 Business Model Analysis
Assignment 2
Business Model Canvas Analysis
Introduction
HelloFresh's goal is to revolutionize the way we eat all together, and it has enormous plans to get there. Their mission is to unleash our inner chefs by making nutritious ingredients and delicious dishes accessible to all. Numerous dishes on HelloFresh have been developed with the help of world-class chefs (Worldwide Business Research, 2022). After purchasing a meal kit, all the consumers must do is follow the included cooking instructions and heat the ingredients.
In the last paper, we utilized Hello freshs business canvas model to dissect the company's most vital parts, including its value proposition, infrastructure, customers, and money. This article builds from the previous one by expanding on the process of generating a SWOT analysis and business concept and then developing a business canvas model from those two sources.
SWOT analysis
Strengths
HelloFresh has cutting-edge manufacturing technology that generates less than 5% CO2 while manufacturing and delivery. HelloFresh's large distribution network allowed them to satisfy all its customers' ingredient supply needs throughout the 2020 pandemic (Katte, 2019). HelloFresh has invested much in delivery to improve its services and provide clients with the greatest value. HelloFresh's revenues have risen more than 100% in the past year due to its quickly growing customer base and great satisfaction ratings. HelloFresh prioritizes sustainability. HelloFresh's excellent PR helps the company attract new customers and retain its reputation. Weaknesses
HelloFresh has some disgruntled customers, but overall, the service is popular. Often, companies underestimate delivery time. The buyer risks becoming sick from spoiled or broken food in the shipment, which arrived late and was damaged in shipping. HelloFresh app users who had a terrible experience may never return. HelloFresh's prices may be prohibitive for customers on a budget (Braun, Latham, & Cannatelli, 2019). HelloFresh's meal packaging is indistinguishable from its rivals. HelloFresh must invest more in its differentiation approach to compete.
Opportunities
During Covid, residents couldn't eat outside. This makes all marketplaces go online. This move increased demand for HelloFresh. This spike and change will last, according to projections. HelloFresh can grab additional markets to be successful. People moving from city to city and nation to country miss their local food. HelloFresh may offer a worldwide meal selection by offering diversity. HelloFresh should consistently innovate and expose its solutions to the market to remain relevant to clients. Threats
HelloFresh is up against some formidable rivals. Blue Apron, Home Chef, DineInFresh, PeachDish, and Maria are some of the leading rivals. HelloFresh, started in New York in 2012, faces stiff competition from Blue Apron. Furthermore, the company is active in the field of food distribution as well. The meal selection on HelloFresh is more extensive than that on Blue Apron. Due to the potential for health problems caused by late delivery and customers eating the food, HelloFresh may become embroiled in several accidents. Many dissatisfied HelloFresh customers as a result decided to stop placing orders with the company.
New concept based on SWOT
The purchase and distribution of pre-packaged meal boxes that contain all of the fresh vegetables, meat, dairy products, and spices that are required to create a particular meal is the basis of HelloFresh's business plan. These boxes are sold on a subscription basis.
Due to the perishable nature of the food contained in its meal kits, HelloFresh has a daily challenge in its supply chain in reducing food waste while also guaranteeing that all of its customers receive meal kits that contain fresh ingredients (Toulikas, 2022). Because modern consumers are so choosy, they have high expectations for both the speed with which they get service and the quality of the products they purchase.
It is not sufficient to simply have the capacity to access information on your customers and suppliers. This plethora of data must be capable of being interpreted, and the HelloFresh team must have the tools necessary to do so (Vadana et al., 2019). The ecosystem that HelloFresh is a part of comprises its well-known brand, effective production procedures at its fulfillment facilities, reliable and cost-effective logistic solutions, proprietary data and software, and a robust growth marketing and digital platform (Worldwide Business Research, 2022). HelloFresh has only secured 7.2 million of its estimated 176 million Total Addressable Market, leaving a large amount of untapped potential for the company's expansion.
Business model canvas components
Key partners
To guarantee that its clients always receive the highest quality products, HelloFresh maintains tight relationships with its farmers and manufacturers. HelloFresh considers what fruits and vegetables are currently in season to make it easier to source enough of them at reasonable pricing while selecting and developing recipes.
Key activities
Currently, third-party logistics partners are responsible for the vast majority of HelloFresh deliveries (Kuhne & Bohmann, 2018). The process's ultimate goal is to improve logistical performance. To maximize efficiency and cut down on expenses, HelloFresh uses data broken down by geographic region to figure out how large a delivery fleet is to maintain and where to set up distribution centers.
Key resources
HelloFresh's low-to-no inventory fulfillment method is fast and streamlined. HelloFresh can pack any sort of box in any order because of its adaptable manufacturing setup.
Value proposition
Five pillars support HelloFresh's value proposition: delicious, healthy food, personalization, high value for money, convenience, and a positive customer experience. To better suit, the needs of its customers, meal kit services allow for individualized plans. Customers may select a package that best suits their lifestyle, schedule, and family size. HelloFresh uses its data and analytics technologies to provide customers with a wide variety of meal plans, including those that are kid-friendly, vegetarian, vegan, low-calorie and prepared in a flash. HelloFresh provides customers with data-driven meal planning and menu optimization. The chefs at HelloFresh use their industry expertise in conjunction with data from customers, such as star ratings and ingredient preferences, to develop new recipes for the company's customers.
Channels
With a focus on global scalability, a near-zero inventory model, and a sustainable supply chain that benefits both suppliers and customers, HelloFresh has created an efficient and effective supply chain from beginning to finish. HelloFresh's data platform and analytics engines power a procurement strategy based on price and quality. HelloFresh has reduced the number of links in the supply chain, which has sped up the delivery of fresh products and allowed the company to take a larger share of the product margin across the whole value chain.
Customer relationships
HelloFresh's internal research indicates that its typical customer is someone who likes to cook, cooks at home at least three times per week, is concerned about the quality and freshness of their food, and is already a regular online shopper for things like clothing, technology, and literature.
Customer segments
Most HelloFresh users (75%) are in their twenties and thirties. HelloFresh caters to three main demographics: young, working professionals (aged 18 to 54) who value cooking as an experience, young families (aged 18 to 54) who prioritize convenience, and empty nesters (aged 65 and above) who want to branch out of their rut in the kitchen (aged over 54 years). A substantial percentage of HelloFresh's sales comes from returning customers, and the company boasts that this number is 90% or higher. HelloFresh's concept serves clients in both urban and rural locations.
Cost structure
By going straight to the consumer, Hellofresh can cut out costly middlemen and increase its bottom line. The company's bottom line will benefit from selling items at discounted costs thanks to this approach. Hellofresh can make a profit even though the cost of labor and manufacturing is lower in emerging and developing countries (Isabella and Yemen, 2017).
Revenue streams
The primary source of revenue for HelloFresh is the sale of food solutions, which include I ingredients with corresponding recipes ("meal kits"), (ii) add-on products like soups, desserts, bakery products, salads, and surcharge products, and (iii) ready-to-eat meals in addition to the shipping fee. Sales are the money you get in through the sale of your wares, before deducting for things like sales tax, returns, and other deductions (Carter & Carter, 2020). HelloFresh offers affordable weekly subscriptions. Users may choose from more than fifty different menus and market products to create a unique meal plan with HelloFresh's personalized menus.
Business model canvas
Key partners
Professional chefs
Investors
Delivery Partners
Trusted Vendors
Digital technicians
Key resources
Preserve the quality of meals
Modest pricing strategy
Attractive packaging
Excellent customer service
Online and mobile applications Channels
Digital sales channel
Mobile applications
Website
Customer relationships
Ready to make food
Availability
Quality
Quick delivery Customer segments
Customers with healthy appetites and
Key activities
Logistics
Extensive range offering
Shipping
Customer and vendor management Value proposition
Quick and easy meal delivery facility
Providing subscription plans at the best price
Cost structure
Employees Salary
Fleet preservation fees
Website and apps fees
Communication and IT costs
Recipes development costs Revenue streams
Subscription plans with classic, veggie, and family meal options
Advertisements incomes
Franchise incomes
Implementation Considerations
Hellofresh is a reputable company with the resources to easily put any plan into action, including ample financial backing and investment prospects. Hellofresh may face difficulty putting their approach into action efficiently in undeveloped nations because of a lack of resources and technology. So, it is crucial that Hellofresh ships all required hardware and software to the country where they plan to set up shop to implement the strategy there. The possibility of a nationwide price war is raised by a dynamic pricing war. Companies engage in a dynamic pricing war with one another until one of them can no longer operate profitably in the market. Hellofresh may struggle to make a profit at first in emerging markets due to pricing competition with local media outlets. Hellofresh may, however, eventually have the same level of long-term success in underdeveloped nations as it does in wealthy ones.
Conclusion
Hellofresh is responsible for delivering its finished goods to its consumers as scheduled. In addition, Hellofresh will have to put in more effort because of this strategy since it will have to do all the tasks that were previously handled by the middlemen. Hellofresh will have to hire them to handle financial transactions, shipment of orders, collection of overdue payments, as well as marketing and customer service duties. In addition, Hellofreshs fulfillment expenses including software, phone calls, billing, order tracking, etc., all go up due to the company's adoption of a direct-to-customer approach.
References
Braun, M., Latham, S., & Cannatelli, B. (2019). Strategy and business models: why winning companies need both.Journal of Business Strategy.
Carter, M., & Carter, C. (2020). The creative business model canvas.Social Enterprise Journal.
Katte, L. M. V. (2019).HelloFresh: a recipe for sustainable market leadership?(Doctoral dissertation).
Kuhne, B., & Bohmann, T. (2018). Requirements for representing data-driven business models-towards extending the business model canvas.
Toulikas, A. (2022).Business plan hungry4pasta-operational & financial plan/team management & business model validation(Doctoral dissertation).
Vadana, I. I., Torkkeli, L., Kuivalainen, O., & Saarenketo, S. (2019). Digitalization of companies in international entrepreneurship and marketing.International Marketing Review.
Worldwide Business Research. (2022). HelloFresh's Data-Driven Customer Experience Strategy. https://etailconnecteu.wbresearch.com/blog/hellofresh-using-data-better-serve-customers-ty-u
