In the present research study it is identified that weak economic conditions of the nation and further due to worldwide Corona Virus disease in the upcoming time period firm will earn less profit in the business. In front of other components of the business environment there is no threat to the business firm. There are multiple valuable resources in the company, but they are easy to imitate and due to this reason firm does not have competitive advantage over rivals. Zomato need to generate more economies of scale in the business so that maximum profit can be gained in the business.
Zomato is the Indian company that is providing online food ordering service. External and internal environment analysis of Zomato has done in the research work. It is observed that most components of the external environment are positively affecting Zomato other then economic factor. VRIO analysis is done on Zomato and the resources of the company are identified and analyzed to find out whether the company has a competitive advantage over rivals. At the end of the report, recommendation is given for Zomato and conclusion section is prepared.
External and internal environment analysis
Business environment and company performance are closely connected to each other. It is the business conditions that severely affect company performance and also assist them to earn huge amount of revenue and profit in the business when business conditions are congenial to the company (Prajogo, 2016). Every large size company has its own system by using which it analyze entire business conditions and take steps accordingly to handle business. External analysis of Indian market is done below.
• Political environment: Political conditions of the nation determine direction in which particular industry will work. This is because Government that governs any nation play a crucial role in creating a positive environment for the industry or business firms to do business in any nation. Many nations like USA and European nations have a large number of startups and well settled business firms just because of Government of relevant nations always prepare business friendly policies. This clearly reflects that the political environment of the nation greatly affects any business firm. Political environment contains Government that is in power, ideology and attitude, belief as well as the value system. Whether there is a coalition or single party Government in the nation also greatly affect the political environment of the nation (Hawn .and Ioannou, 2016). If there is single party Government business firms receive immediate and sufficient support. On other hand, if there is coalition Government then in that case it takes time to make any decision and due to this reason delay happened in receiving support or any sort of decision from Government. Such kind of things create positive or negative image of the Government in the eye of the business firms and this directly affect investment by foreign companies in the nation. Hence, it can be said that the political environment greatly affects business firms. Political conditions of the India are congenial for Zomato. The Indian Government is taking every step to promote business firms. The Indian Government is promoting people to do more online transaction and online business so that more and more people can be bringing to digital platform. Indian Government is preparing business friendly policies for IT industry and due to this reason IT firms are able to expand business at fast pace in the Indian market. Zomato acquire Uber Eats and by doing so it intends to expand its business in the Indian market (Pati. and et.al., 2018). Uber Eats currently have 30% market share in the Indian market. By acquiring Uber Eats Zomato intend to achieve that market share. This acquisition will lead to obtaining well developed business intelligence system in the business which assists in making more accurate business decisions. Indian Government is making it easy for the firms to operate in the Indian market. Hence, there is ample opportunity for Zomato in Indian market.
On the basis of the above discussion, it is concluded that there is significant importance of the business environment factors for the business firm because such kind of factors positively and negatively affect the company. Political, social and technological environment is creating opportunity for the Zomato but economic factor is creating threat for the mentioned company. Global epidemic caused by Corona Virus will severely affect Zomato business and will lead to earning of less profit in the business. Zomato have sufficient resources in its business but they are easy to copy for rivals and due to this reason Zomato does not have competitive advantage on rivals. It is also concluded that Zomato must expand its business in the foreign market.
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