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Strategic Management Individual Case Study Analysis #2
Date of Submission: Feb 6, 2024
Submitted To
Steve
Stephen J. Havlovic, Ph.D
Submitted By
Molla Tashrif Hossain Student ID: 0428601
I. Strategic Profile
Blue Apron, a key player in the meal-kit delivery industry, faces challenges stemming from
financial instability, fluctuating customer engagement metrics, and intense competition. The
company's historical financial performance indicates significant revenue fluctuations and
persistent losses, necessitating a reassessment of cost structures and revenue streams for
sustainable profitability.
Customer engagement metrics reveal fluctuations in orders and customers, highlighting the need
for enhanced marketing strategies and customer retention initiatives to drive revenue growth.
Competitive pressures from rivals like HelloFresh and EveryPlate necessitate Blue Apron to
differentiate its offerings and capitalize on emerging market opportunities.
Blue Apron must address financial challenges, optimize operational performance, and
differentiate its offerings to achieve long-term success in the evolving meal-kit delivery
landscape. The analysis will focus on identifying strategic initiatives to overcome these
challenges and capitalize on emerging market opportunities.
II. Situation Analysis
A. General environmental analysis
Technological Trends
Technological trends in the meal-kit delivery industry are evolving rapidly, with advancements in
automation and logistics technology enhancing operational efficiency and customer experience.
Blue Apron must embrace technology to optimize its supply chain, improve delivery times, and
enhance order customization capabilities to remain competitive.
Demographic Trends
Demographic trends indicate shifting consumer preferences towards healthier and convenient
meal options, driving demand for meal-kit delivery services. Blue Apron can capitalize on this
trend by expanding its product offerings to cater to diverse dietary preferences and lifestyle
choices.
2
Molla Tashrif Hossain, ID: 0428601
Economic Trends
Economic trends such as fluctuations in disposable income and unemployment rates can impact
consumer spending on discretionary items like meal kits (Grant, 2019)
. Blue Apron needs to
monitor economic indicators closely and adjust pricing strategies and promotional activities to
remain affordable and attractive to consumers during economic downturns.
Political/Legal Trends
Political and legal trends, including food safety regulations and labor laws, can influence Blue
Apron's operations and cost structures. Compliance with regulatory requirements and proactive
engagement with policymakers are essential to mitigate legal risks and maintain business
continuity (Volberda et al., 2023).
Sociocultural Trends
Sociocultural trends emphasize health consciousness, sustainability, and convenience in food
choices. Blue Apron can align its marketing messages and product offerings with these cultural
shifts to resonate with its target audience and differentiate itself from competitors.
Global Trends Global trends such as globalization and international trade agreements can open up new market
opportunities for Blue Apron to expand its operations globally. Strategic partnerships and market
entry strategies tailored to specific cultural and regulatory environments will be critical for
successful international expansion.
Physical Environment Trends
Physical environment trends, including climate change and environmental sustainability
concerns, are shaping consumer attitudes towards food production and distribution. Blue Apron
should prioritize sustainability initiatives and environmentally friendly practices throughout its
supply chain to meet evolving consumer expectations and regulatory requirements.
B. Industry analysis
Threat of New Entrants: The threat of new entrants into Blue Apron's industry, the meal-kit
delivery sector, is moderate to high. While the industry is relatively young and entry barriers
3
Molla Tashrif Hossain, ID: 0428601
such as establishing supplier relationships and distribution networks are not prohibitive,
significant capital investment and brand recognition are necessary to compete effectively (Porter,
2008)
. Established players like Blue Apron benefit from economies of scale and brand loyalty,
making it challenging for new entrants to gain market share. However, the industry's growth
potential and evolving consumer preferences continue to attract new entrants, increasing
competitive pressure.
Bargaining Power of Suppliers: The bargaining power of suppliers in the meal-kit delivery
industry, including farmers and food processors, is moderate to high. Suppliers wield significant
power to negotiate prices and terms due to the perishable nature of food products and the
importance of quality and freshness to customers. Blue Apron and other meal-kit companies
must maintain strong supplier relationships and diversify their supplier base to mitigate supplier
power and ensure a reliable and cost-effective supply chain.
Bargaining Power of Buyers: The bargaining power of buyers, represented by Blue Apron's
customers, is moderate. While customers have various options and can switch between providers
based on factors like price, quality, and service, they often value the convenience and
personalized meal options offered by meal-kit companies. Threat of Substitutes: The threat of substitutes in the meal-kit delivery industry is moderate.
Traditional grocery shopping and restaurant dining serve as primary substitutes for meal-kit
services. However, Blue Apron differentiates itself by offering convenience, meal variety, and
portion control, which traditional alternatives may lack. Competitive Rivalry: Competitive rivalry in the meal-kit delivery industry, including Blue
Apron's market, is high. The industry is characterized by intense competition among major
players like Blue Apron, HelloFresh, and Home Chef, as well as smaller niche players. Price
competition, product differentiation, and marketing efforts drive rivalry among competitors. C. Competitor analysis
Blue Apron operates in the meal-kit delivery industry, facing competition from various players
offering similar services. Competitors like HelloFresh, EveryPlate, and Freshly represent
significant challenges in the market (Ghemawat, 2007)
.
4
Molla Tashrif Hossain, ID: 0428601
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