Morgan Stanley, a U.S. world class company that provides financial services, estimated the market value of the currently growing food delivery business to be as high as USD 10 billion and to definitely continue to grow steadily in the future. More and more startup businesses are taking interest in food delivery, be it in the area of online takeout ordering, ready-to-cook ingredients ordering or even online purchase order of supermarket goods which is just as popular among consumers. The business model is highly on demand in densely populated areas such as in the metropolitan areas in the U.S. where money is gladly paid in exchange for daily comfort and convenience.
Grubhub, one of the above-mentioned businesses highly popular among New York consumers, is a food delivery platform in which restaurants provide delivery services to customers waiting at home. This not only ensures customers’ comfort and convenience such that they can enjoy their favorite dishes at home round the clock but also proves to generate better income on the part of restaurants as they can accommodate more customers than they can actually seat. Grubhub is a startup founded in 2004 by co-founders by the names of Michael Evans and Matt Maloney and currently handles more than 5.6 billion orders per …(?), or approx. 234,700 orders a day through a network of its business partners representing over 35,000 restaurants throughout the country. The startup has certainly been growing steadily ever since. A factor contributing to its great success, aside from the fact that it was an innovative business model at the time, is the outcome of a strategy that has brought about steady income on the part of restaurants who are their business partners along with the ads and promotions involving various discount offers.
UberEats is another example of Food on Demand which is growing steadily while providing services globally. Having perceived the demand for food delivery for quite some time and given the company’s broad and expansive network which enables its operations to cover all areas, Uber thought it was high time for it to play a globally leading role in food delivery business. It announced last April 18 that its food delivery services known as UberEats was catering to more than 46,100 restaurants worldwide. With over 200% growth over its performance as of October 2016, Uber plans its growth strategy involving business expansion overseas. At present, UberEats has been launched in more than 71 cities in 24 countries worldwide.
More than 60% of UberEats’ business partners operate in the United States where competition is fierce indeed considering other startups such as Postmates and DoorDash along with large enterprises such as GrubHub and its most formidable rival Amazon, each of which has diverse strengths in various areas. For example, GrubHub that is going strong in New York and Chicago and Postmates in Los Angeles. All of this has brought about fierce competition as far as Food on Demand business is concerned.
UberEats has therefore been trying to materialize its plan to expand operations to countries other than Japan, South Africa, Australia, France and Brazil. The targets are South Korea and India. Meanwhile, its major rival GrubHub still targets on the United States and London. The fact that UberEats application has to be downloaded separately from the main Uber application compels UberEats to come up with attractive features that would satisfy consumer needs while accommodating both buyers and sellers. So far, it plans to add new functions in the application such as recommended restaurants, advanced screening of stores, food delivery on demand and real-time monitoring.
Obviously, a highly successful company such as Uber is compelled to expand its business and always look for new opportunities so as to be able to steadily achieve satisfactory performance and be prepared for future competitions which tend to be ever fiercer. Failing to be prepared in advance means a lack of attractive differentiation upon the emergence of business rivals as well as the disability to retain the customer’s brand loyalty. In any business, to stay on top of market trends and be able to add value to the business through the use of the company’s assets lead to its competitiveness as well as sustainable survival on the part of the leader.
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