Competitive strategy

According to (similar web,2021) and (Statista), Hello Fresh is the world’s leading meal kit company and one of the first companies in the meal kits industry with a mission to change the way people eat forever. Covid-19 has changed consumer behaviour and enhanced delivery services.

Traditional competitive forces are still at work, but because of the Internet, a competitive rivalry has become much more intensive (Porter, 2001, cited in Laudon and Laudon, 2017, p.128). Internet expanded current markets and created new ones. When looking into the online food and beverage industry overall we can see that it is extremely competitive. Direct rivals to Hello Fresh are Gousto, Simply Cook, and Mindful Chef (Similar web).

The threat of new entrants can be considered from medium to high due to standard food regulations and the standardisation required. As a result of increasing demand for meal kits, in the market begin to appear a lot of new entrants or current start to adapt to new changes as focusing on diet-specific meals like paleo, Keto or vegan. From simple boxes with cooking ingredients companies go a bit farther to attract customers with special boxes as Breakfast in bed, Easter box, Thanksgiving, or Date night.

Bargain power of suppliers in the food industry can be considered medium after Brexit and the ending of the transition period of the deal between the UK and EU. Companies need good logistics and strong relationships with local farms and awareness of the organisation’s importance of logistic strategy to prevent shortages of products in the worldwide market.

The bargaining power of buyers in the food industry is high. Customers can choose between different companies which offer more discounts, to switch subscriptions and to try new offers.

In terms of the food industry and particular meal kits, what general customers need is food. They can choose between ordering ready dinner, changing another brand with different recipes, or ordering from a grocery shop.

According to its website, Hello Fresh hit over 600 million meals delivered in 2020, with 5.29 million active customers and net revenue of 3.75 billion euro showing huge growth and customers loyalty worldwide. With rapidly increasing revenue, the company’s mission is to continue to expand, provide more flexibility, meals wide range, and innovative solution for cooking at home.

The competitive advantage which Hello Fresh follows is unique as cannot be put in a frame. Their project is to improve customer experience, operation efficiency, and reduce costs.

Its brands Green chef, Every plate, and Chef plate offer a diverse range of products at a different price points.

Hello Fresh become more profitable in 2020 and enhanced customer loyalty by offering a constant discount from the first 3 boxes and a discount in the first 3 boxes for a referred friend.

The company benefits itself by running one of the world’s largest direct-to-consumer food supply chains, using data and software to drive efficiency and optimization (hellofresh.com)

Recommendations:

The company needs to balance the speed of expanding the business, food quality, and customer satisfaction. Some records show not enough customer relationship satisfaction.