DoorDash Inc. SWOT and PESTLE Analysis

Strength

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Weakness

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Opportunity

1. DashMarts, partly owned and operated convenience stores, will boost sales: In April 2020, DoorDash entered the convenience delivery market by partnering with several stores like 7Eleven, Walgreens, CVS and so on. In August 2020, Doordash announced it would be launching DashMarts, its own online convenience store. Initially it was launched in 8 cities but by December 2020, it already spread its wings to 36 cities; most recently, DoorDash has said it’ll be launching two stores in Washington DC. Instead of focusing on just everyday basic items, DoorDash has also partnered with national brands like The Cheesecake Factory and Nandos while also focusing on local restaurants. These brands will sell their popular retail products to customers via DashMarts. DashMarts increases the merchant partnership DoorDash has by taking the collaborations beyond restaurants and fresh food delivery. It also increases customer traffic on their app as people will log in not just for takeout delivery but also to find all their convenience store needs under one roof.

2. Virtual restaurants and ghost kitchens are gaining traction: DoorDash is the flagship company in the food delivery market to venture into the ghost kitchen segment. DoorDash launched it’s first ghost kitchen in Redwood City, an hour outside of San Francisco. The kitchen houses five different brands, including the famous Chick-fil-A. A major plus point of these kitchens is the pairing possibility, for example, customers who order the main course from one of the brands operating in that ghost kitchen will be able to order dessert from another brand in that kitchen in the same order. This will reduce the hassle of multiple orders and apps faced by consumers. It also gives brands and merchants access to new customers plus the benefit of cost optimization. Since DoorDash has the first mover advantage and the dominating market share already, they stand to benefit from ghost kitchens before their competitors.

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Threat

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Political

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Economic

1. COVID-19 causing the delivery market to be increasingly volatile: The onset of the pandemic in March 2020 caused a sharp increase in the demand for delivery services, particularly food delivery. While the sharp rise subsided, the demand remained higher than before. But costs of operation spiked simultaneously due to the increased precautionary measures taken such as providing masks, sanitizers and enabling no contact delivery to the customers. Moreover, several merchants that food delivery apps partner went out of business affecting supply. Overall, they experienced a substantial increase in revenue and total number of orders placed. DoorDash has warned that demand won’t remain as high once enough vaccines are rolled out and hence a decline in revenue is to be expected. A resurgence in the virus will have a mixed impact on the industry as a whole.

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Social

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Technological

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Legal

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Environmental

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