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The Supply and Demand Concept and Competition

Discuss about the Comparative Cost of Food and Beverages.

FoodByUs launched in Sydney in 2013 for the purpose of providing online food services to the local people in their community. Company is working as an online middleman for the person living in Australia. FoodByUs provides good quality homemade food products to the customers at low price (Timeout, 2018). Basically it is an electronic food sharing platform. They delivered the product sometimes for a cost and sometimes free at their door step and offering a wide range of varieties in food from cakes to curries and more. The aim of the company is to give “people the chance to sell their amazing homemade food” as well as giving “buyer the chance to have an authentic experience of homemade food”.

The supply depends on the demand of product in the economy (Startup Smart, 2018). They are providing the opportunities for those people who love to cook food and who are passionate for cooking. They are providing employment to many people with the flexibility of working part time or full time. In this type of market there exists consumer sovereignty that means government will not decide the consumption of goods and services; consumer will himself decide about it (Larder, Lyons and Woolcock, 2014).

The supply and demand concept is always applied in the economy as it is one of the fundamental concepts. As the law of demand states that consumer will buy more of a commodity only when its price is low and vice versa. The law of demand operates here also as FoodByUs is providing low cost products to its customers. Similarly seller prefer to sell their goods at a higher price so that they can earn higher amount of profit as law of supply states that as price increases quantity supplied also increases and vice versa(Trostle, 2010). Price is decided in the market on the basis of the market forces that is demand and supply. Elasticity is also dependent on the price and quantity factor. There is an intense competition in the online food delivery market. There exists large number of sellers in the market and offering the variety of services and products with innovative ideas. FoodByUs also has many competitors like Foodara, UberEats etc.

FoodByUs has not only affected the online food services but also affected the restaurant’s profitability and earnings. Due to competition restaurants keep their cost as low as possible giving discounts and rebates. However, due to heavy discounts, restaurants have to decrease the quantity and they are compromising with the quality of their food well as (Ferguson, O'dea, Chatfield, Moodi, Altman, and Brimblecombe, 2016).

Impact on Restaurant Profitability and Earnings

Online consumer rating provides a good basis to the customers to select good restaurants. Consumers rely on ratings given to these online food delivery companies. Quality control standards are maintained to have a good relation between the consumer and the seller. FoodByUs provides the homemade food to the people and works as a linking pin between them. The ratings of FoodByUs are high which signifies that good quality food is being delivered to the customers.

FoodByUs provides a platform where cooking turns into dollars and people have to work according to their convenience and people need not be professional. This type of online chains provides employment to the people in Sydney as they can do this work from home and this business does not require a huge amount of investment to start. In this form of business there are less chances of downfall in the market as people will not stop the consumption of food. The growth rate i.e. GDP of country increases because of this type of food chains in country. Earnings of the individual worker are increasing so ultimately it will increase the growth of the country (Lee, Kane, Ramsey, Good, and Dick, 2016). Shared economy gives rise to the independent workers in the country and these are called freelancers. These freelancers are free from the tax liability up to an extent so it is an extra benefit to them. These virtual labours are skilled and they are doing this work because they are passionate towards cooking. These workers are not dependent on the MNC’s for the jobs (Morgan and Kuch, 2015).

As they are operating in the market where the marketers are playing online and dealing in goods and services through apps and fulfilling the demands of public. The supply of goods also depends on the needs and wants of the consumers. This online food industry provides employment to many people to earn their livelihood and increase their standard of living. Sharing economy is considered to be less harmful as compared to the other commercial units. They offer the worker the suitable timings for their workings. It increases the personal well-being of an individual and increases the earnings in the economy (Belk, 2014). FoodByUs tries to provide better deliveries to its customers. The platform also offers a GPS tracking system for deliveries and mobile ordering along with an integrated payment system.

Allocation of resource become simple in shared economy as there is less wastage of resources and workers try to utilise the resources to the best (Verghese, Lewis, Lockrey, and Williams, 2015). Sharing economy reduces the entry barriers for the firms. Workers only have to concentrate on making the food and all the logistics, marketing and payment work are done by the company. Resources are utilised efficiently and effectively in shared economy so that overhead cost could be reduced.  In this type of business, requirement of capital and investment is too low (Heikkurinen, and Forsman?Hugg, 2011). Consumers have perfect knowledge of the market and products offered by marketeers. Consumers have the right to choose individually which goods and services they have to choose and reject. Marketers have control over the prices of the product as they are the price maker of their product.

Sharing Economy and Personal Well-being

According the founder of the FoodByUs, the company can expand and make more money in the market. But in this type of market the resources are highly mobile. They can easily move from one place to another if they find higher pay from the other company so it will be a risk for a company. In this online food market, makers are those people who love to make food and do this work as side business to earn more revenues. These makers can also include retirees, housewives and a person wanting a career change (Ghonkrokta, 2017).

FoodByUs is running on the concept of love your passion not your boss. Workers are free to work as per their convenience. Labour gets the payment for delivering only quality food to the customers. FoodByUs provides a unique range of variety of its products which others are not offering. As an intermediary, FoodByUs is responsible for providing the good quality products and services (Cahuc, Carcillo, and Zylberberg, 2014). FoodByUs is providing an adequate amount of wages to its labour. FoodByUs working as a middleman for buyer and makers, so company collects charges from both the parties.

But in some cases labour is not getting paid satisfactorily as they want. According to rules and regulations, if labour is working more than 40 hours week, an overtime should be given to them (Anleu, and Mack, 2005). In sharing economy, the labour is paid according to quantity produced. In sharing economy, labour of FoodByUs can easily charge the high fee and in a position to negotiate the amount as there are few sellers available in the market. They are not the permanent employees and they are free from the threat of being fired as they are free to move to other place whenever they want and can showcase their talent there. In the online delivery of food market, the elasticity of wages is imperfectly elastic as compared to wage rate if the labour choice is heterogeneous then the elasticity of wages will be low that means labour is offered to work at low rates and vice versa.

From the above discussion, we can conclude that the FoodByUs is providing an online homemade food delivery to the people of Sydney and now it wants to expand to Melbourne also. Company is providing a good quality homemade food items to the people and offering them a variety of food. FoodByUs prefers to use the concept of customization in its activities. The market is quite monopoly in its nature. Talking about its competitors, company is becoming the leader in its industry as others like foodara are striving for this position. Prices of homemade food are fixed by the labour. Labour has monopoly over the market as they can shift from one place to another where they are getting the handsome amount. This type of company increases the employment opportunities for those who love to make food and for those also who are unemployed and searching for the job positions. These sharing economies make people independent.

References:

Startup Smart, (2018). Menulog co-founder launches new startup FoodByUs with $2 million in funding to bring the sharing economy to home cooking [online]. Available at: https://www.smartcompany.com.au/startupsmart/advice/startupsmart-funding/menulog-co-founder-launches-new-sydney-startup-foodbyus-with-2-million-in-funding-to-bring-the-sharing-economy-to-home-cooking[ACCESSED ON 27th march 2018]

Morgan, B. and Kuch, D., 2015. Radical transactionalism: legal consciousness, diverse economies, and the sharing economy. Journal of Law and Society, 42(4), pp.556-587.

Verghese, K., Lewis, H., Lockrey, S. and Williams, H., 2015. Packaging's role in minimizing food loss and waste across the supply chain. Packaging Technology and Science, 28(7), pp.603-620.

Larder, N., Lyons, K. and Woolcock, G., 2014. Enacting food sovereignty: values and meanings in the act of domestic food production in urban Australia. Local Environment, 19(1), pp.56-76.

Cahuc, P., Carcillo, S. and Zylberberg, A., 2014. Labor economics. MIT press.

Heikkurinen, P. and Forsman?Hugg, S., 2011. Strategic corporate responsibility in the food chain. Corporate Social Responsibility and Environmental Management, 18(5), pp.306-316.

Trostle, R., 2010. Global agricultural supply and demand: factors contributing to the recent increase in food commodity prices (rev. DIANE Publishing.

Belk, R., 2014. You are what you can access: Sharing and collaborative consumption online. Journal of Business Research, 67(8), pp.1595-1600.

Ghonkrokta, S.S., 2017. Science and Strategies for Safe Food. CRC Press.

Anleu, S.R. and Mack, K., 2005. Magistrates' everyday work and emotional labour. Journal of Law and Society, 32(4), pp.590-614.

Ferguson, M., O'dea, K., Chatfield, M., Moodie, M., Altman, J. and Brimblecombe, J., 2016. The comparative cost of food and beverages at remote Indigenous communities, Northern Territory, Australia. Australian and New Zealand journal of public health, 40(S1).

Lee, A.J., Kane, S., Ramsey, R., Good, E. and Dick, M., 2016. Testing the price and affordability of healthy and current (unhealthy) diets and the potential impacts of policy change in Australia. BMC Public Health, 16(1), p.315.

Kadiyala, S., Harris, J., Headey, D., Yosef, S. and Gillespie, S., 2014. Agriculture and nutrition in India: mapping evidence to pathways. Annals of the New York Academy of Sciences, 1331(1), pp.43-56.

Timeout, (2018). You can now order home-cooked meals with this new food delivery site [online]. Available at: https://www.timeout.com/melbourne/blog/you-can-now-order-home-cooked-meals-with-this-new-food-delivery-site-120116 [ACCESSED ON 27th march 2018].

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