Doordash is an online food order and delivery service providing US Company. Commonly, it goes by the name of Dashers, because the company offers a food delivery service. The company hires drivers and riders on contract and offers them commission based on total deliveries. The headquarter of the company is in San Francisco, California, USA.
The business model of Doordash is like any other food delivery service providing company. Customers pay delivery charges to the company; it charges commission from the restaurants and earns the marketing revenue via paid promotion on its platform.
The brand has a network of 450000 merchants partners and the company has roundabout 1 million riders for the food delivery to the 20 million customers in Australia, Canada, and the US.
DoorDash Revenue and Profit (loss)
|2018||$0.55 billion||($204 million)|
|2019||$0.85 billion||($667 million)|
|2020||$2.88 billion||($461 million)|
|2021||$4.88 billion||($468 million)|
Today, we’ll discuss the Doordash swot analysis. It’s going to focus on the internal strengths/weaknesses, and external opportunities/threats of the food delivery service providing brand. Here’s Doordash swot analysis as follows;
Strengths of DoorDash
When we talk about food delivery service providing market, then Doordash has got the advantage of being the market leader. Currently, it is operating in 7000 cities in Australia, Canada, the USA, and Japan.
DoorDash has earned 58% of the total sales in the U.S meal delivery services, while Uber Eats has a market share of 24% and Grubhub placed third with 14% market share.
The brand made the first move by offering a food delivery service. The first-mover is such an advantage that helps the company to build strong brand recognition and win the loyalty of customers long before the entry of competitors in the market.
Doordash came to market with a user-friendly application and a web platform. Its interesting searching features have attracted the attention of customers. Along with the online platform, the company has a wide network of riders on the ground to deliver quality food. The brand has always managed to meet the expectations of customers.
Strong Market Network
Doordash has established a strong network and it helps the company to offer a superior and better customer experience while using the brand. According to an estimate, the company has a network of over one million dashers and developed partnerships with over 450000 restaurants.
Dashpass is a Growth Path
Dashpass is a membership program where a customer can order unlimited free deliveries on all orders over $12 at all eligible restaurants.
Doordash users found this subscription service very attractive as it costs only $10/month. The service appeals to those who don’t want to waste their time in the queue. Skip the line and grab your favorite meal anytime you want.
The membership program has proved the path of growth with 5 million accumulated customers
Doordash is operating its business in major markets Australia, Canada, the USA and Japan. The brand has put extra focus on these markets in terms of strengthening its network and satisfying the needs of customers with quality service. It allows customers in these markets to order food from their favorite franchises, cuisines, and restaurants. Customers have also got the option to place an order and pick it up from the store, grocery, or restaurant.
Weaknesses of DoorDash
Ever since the launch of the company in 2013, Doordash has had great losses. Consistent losses don’t present an attractive picture and it would push away potential customers. The brand won’t be able to launch a new project due to its weak financial position. If it keeps on happening, then it would negatively impact the customer experience and dissatisfaction of customers resultantly. Eventually, it would impact other areas of the company like limited profitability, revenue, and brand customers’ loyalty.
Limited Market Presence
As I mentioned before that Doordash is operating its business in only three markets Australia, Canada, and the USA. In other words, the company is not operating globally and in other growing markets; and it limits the company’s capability to earn revenue from the global market.
Opportunities for DoorDash
Virtual Kitchen & Restaurants
The pandemic crisis has promoted the concept of a virtual kitchen, restaurant, and work from home. Doordash opened up its first kitchen under the prevailing circumstances. The company is operating its business under its four main sub-brands. However, the brand collaborates with various restaurants in the ghost kitchen and provides customers with an opportunity to order food from various brands in the virtual kitchen.
For instance, customers have the option in the virtual kitchen to order the main course of one hotel and dessert in the other kitchen. It helps customers in making the food ordering process easy in terms of ordering everything at one application, instead of downloading different applications. As a first mover, Doordash has the access to the bigger market and leverage to develop a partnership with various organizations.
Doordash has partial ownership in some of the convenient stores and partnerships with stores like CVS, 7Eleven, Walgreens, and others. The company made an announcement in August 2020 that it would soon launch DashMart and its convenience stores.
The brand is operating its network of stores in over 36 cities, and it shows that the company is doing more than just the food delivery service business. In fact, the company has developed a partnership with national and local brands like Cheesecake Factory, Nandos, and others. Partnerships and alliances would help the company to attract customers and sell its products at DashMart.
The company is operating its business in only three regions like Australia, Canada, and the USA. Emerging markets have got a great potential for growth and profitability.
Threats to DoorDash
The food delivery service business is such a business model that doesn’t require a lot of investment and resources; any tech-oriented platform with ground resources could enter the market. The increasing numbers of food delivery service-providing competitors are threatening the company’s position. The brand should invest in tech development and its human capital.
The main competitors of Doordash are Uber Eats, Grubhub, Postmates.
The regulatory framework of the country and changes in them could present serious challenges to the company in terms of high costs. It can also shut down the business permanently in extreme cases. For instance, if the federal government and federal laws legally change dashers as the regular employees of the company; then it would turn out to be very costly for the company in terms of heavy insurance costs, benefits, etc. Heavy costs would jeopardize the profitability of the company.
Doordash has the advantage of being the first-mover and market leader in the food delivery service industry. But the company has to do a lot of work in order to reach the level of profitability. If the brand exploits the opportunity of expanding its operations into developing markets, it would amplify the company’s profitability and market reach.