Analysis of Internal and External Environment of a Company - Paper Example

Instacart is one of the leading online service providers in the US. It is estimated to be 2 billion US dollars as of 2015, a figure that represents valuation of the company by investors. SWOT analysis is a business technique for understanding strength, weaknesses, opportunities and threats of a company (Pickton & Wright, 1998). Some of the internal factors that influence the growth of Instacart are finances, and employees and operations. On the other hand, some of the external factors that SWOT analysis looks into include but are not limited to weather conditions, local grocers and companies, and producers.

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Internal Strengths and Weaknesses

Strengths are qualities which are useful and can enable a company to attain her mission ( Osita, Idoko & Justina, 2014) One of the strengths that make it outdo its competitors is the fact that it concentrates on one product, that is, groceries. Thus, it enables their competition to appear narrow. Another strengths that Instacart boasts of her huge funding, it is estimated to be 275 million US dollars as of mid-2015. The large sum of money that the company receives as funding enables it to finance and expand her investment. Additionally, the operations appear in a way that delivery of goods to consumers is in a span of one to three hours, but not longer than one day.

The company has weaknesses that can easily be detected, one of them is reliance on other business ventures to supply them products. One of them is Costco. The fact is a huge blow for the company as they are unable to deliver the goods to customers if the stores from where they get the products do not supply to them. Moreover, the weather pattern determines how fast the delivery of goods, which is another setback for the company.

External threats and opportunities

Threats are factors with a potential to affect an organization growth or performance ( Gretzky, 2010). Competitors pose a threat to Instacart, for instance, Amazon uses drones to deliver goods which are faster and more reliable than human delivery. Moreover, there may be grocery delivery by other outlets which may hinder the expansion of instacart. On the other hand, opportunities that exist include a partnership with hotels. Additionally, most hotels may need delivery of foods to their customers.

Recommendation

Reducing delivery time, to maintain and even outdo competitors, Instacart has to introduce a faster method of delivery products. The quicker and more reliable the product reaches customers, the easier it is for them to remain the most preferred online delivery grocers. In addition to that, the delivery charges should be lower than those of competitors (Bensinger, 2016).

References

Bensinger, G. (2016). Grocery delivery startup Instacart cuts pay for couriers. The Wall Street Journal.

Gretzky, W. (2010). Strategic planning and SWOT analysis.

Pickton, D. W., & Wright, S. (1998). What's SWOT in strategic analysis?. Strategicchange, 7(2), 101-109.

Osita, C., Idoko, O. R., & Justina, N. (2014). Organizations stability and productivity: the role of SWOT analysis an acronym for strength, weakness, opportunities andthreat. International Journal of Innovative and Applied Resources, 2(9), 23-32.