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0:00
Hello. My name is
Mariusz Soltanifar,
and I am a researcher in the area
of corporate entrepreneurship
and a marketing lecturer at Hanze
International Business School
in Groningen, the Netherlands.
Today I'm going to be talking
about food ordering services
and how the low entry barriers lead to growing
competition from technology start-ups.
0:24
Let us first have a
look at the overview,
and what I've
prepared for today.
The following case discusses
how Seamless merged
with one of the market leading
food ordering services, Grubhub,
and tries to overcome the challenge of growing
competition due to the rise in technology.
First, the nature of the
challenges are highlighted.
Second, the company
itself is presented.
Third, the explanation
of what has been done,
action taken is then discussed.
Fourth, the outcome is revealed.
Lastly, the learning
is presented.
1:00
Let me highlight the nature of the
challenge Seamless faced first.
Seamless is a food delivery
company in the United States.
Seamless and GrubHub were both market
leaders until 2013 in the United States.
In 2013 they merged together.
Even after the merger,
they are still the
market leaders.
But other companies,
like Uber Eats,
are counting as
strong competition.
Undoubtedly, the demand of
ordering food online has
increased in the past years with
the rise of new technologies.
1:39
There are no barriers
to enter this market,
which makes it hard for
existing companies to thrive.
Restaurants choose themselves which
company will deliver their food.
Companies like Uber Eats might
have better deals for customers,
for example, lower
delivery costs.
Companies in the
food delivery market
are constantly improving
the technology used to meet
sophisticated customer
expectations.
For instance, tracking
delivery in real time.
The competition makes customers
try out different services.
We as customers
tend to order food
from different platforms
and not only one,
especially if there are different
promotions offered on the platforms.
In 2017, 88 percent of Grubhub's
customers didn't use the other services.
In 2019, it was only 61 percent.
Grubhub dropped in the
market share from over 50%
to around 34 percent during
the years of 2018 and 2019.
The fastest growing company
in 2018 was DoorDash,
which generated growth in share
of revenue of 42 percent.
Grubhub share of revenue in
comparison decreased by 17 percent.
Therefore, the challenge
arose for Seamless,
as well as Grubhub, that are
facing strong new competition,
and therefore the company is pressured into
positioning itself as new in the market,
including being more innovative.
