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The corporate strategy analysis of Meituan Dianping
food delivery,five forces analysis,platform strategy,network effect,BCG matrix,
|Publication Year :||2020|
Meituan Dianping, the third largest internet company in China, is a trading platform providing the localized integrating life service, including food delivery, in-store service, OTA (Online Travel Agency), bike sharing and etc. It is the third largest Internet company in China. Alibaba, Tencent, and Meituan Dianping, the top three Chinese internet magnates are collectively called 'A.T.M '. Meituan Dianping has already reached the market value of RMB 1,021.7 billion by July 2020. Hence, the motivation of this thesis is to analyze how Meituan Dianping to select the market, to implement the strategic placement, to cultivate the core competencies, and to generate the company’s profits successfully by the platform business model within ten years.
This thesis is based on the case-study method and secondary data such as the company’s annual financial reports, the company’s website, industry research reports, and the media reports to analyze the industrial environment of Meituan Dianping’s main business and to find out the key success factor, core competitors and core competencies through the models of Porter’s (1980) five forces analysis and C.K Prahalad and Gary Hamel (1990) core competence analysis. Finally, the BCG matrix and Porter’s (1980) competitive strategy were applied to analyze the company’s business portfolio and competitive strategy.
Meituan Dianping uses 'eating' to walk into the life of its users by the platform combining the functions of eating, drinking, transporting, traveling, shopping, and entertainment. Among its three main business – the food delivery, in-store localized life service, and OTA, its’ key success factors are the differentiated services and the user experience (customer engagement), the group resource capital and operating capabilities, and the economies of scale (the market share and the number of B/C-end customers), the value chain optimization and integration capabilities. After the battle with the other thousands of platforms in the year of 2010, Meituan Dianping has gradually developed its’ core competencies and resources of strategy, operation, integration, branding, and parent group resources and also has formed its competitive advantages as the market insight and resource placement, the B/C-end market scale and the capability of performance, the differentiation from horizontal integration and vertical integration, the market expansion from branding, the company’s culture, finance, network traffic and other operational and market resources.
These advantages have made its’ leading role in the food delivery industry with the 50% plus of the market share. In the in-store localized life service industry, Meituan Dianping and Alibaba Group’s Ele.me are top-two winners. In the OTA industry, Meituan Dianping is focusing on the accommodations, competing with the CTRIP.COM, a market leader being supported by Baidu, and Fliggy.COM, a website selling transportation tickets. The choice of the three business shows that Meituan Dianping has targeted the large-scale and high-growth market. Food delivery is the star business which brings the network traffic to the platform. In-store localized life services and OTA are the businesses of cash cow and the main sources of its profit.
Meituan Dianping is a multi-party platform combining its customers, suppliers, and its’ reviewing platform. This forms an attractive network relationship resulting the positive cross-side and the same-side network effect. Under its’ business of the functions of eating, drinking, transporting, traveling, shopping, and entertainment in one platform, an envelope effect is generated to increase the conversion cost in its’ customers and suppliers. Due to no need for delivery services in the in-store localized life services and the OTA market, it is hard to strengthen the differentiation with the delivery service in the platform. Since the main sites of consumer experience are in stores and external tourist attractions, it is also difficult to differentiate from competitors and to establish a winner-takes-all situation.
Meituan Dianping has used the different competitive strategies in its main three businesses. The food delivery business as the traffic entrance has adopted the low-cost strategy initially, and then differentiated its B-end service to increase profit. The in-store localized life services business has adopted the differentiation strategy to strengthen its branding and marketing. As for the differentiation strategy of the OTA business, it launched from the third and fourth tier cities by expanding the market of the high-end hotels.
|Appears in Collections:||事業經營碩士在職學位學程|
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