Customers want the “eat out” experience of quality food but are saving money by dining at home with food being delivered. According to a study by NPD Group in 2009, the number of restaurant meals eaten at home is expected to grow by 20% in the next 10 years. The increase in home leisure activities has been a key growth driver in the take-out and delivery franchise sector. Growth is also largely driven by the convenience offered as well as menu innovation and promotions. According to market intelligence provider Key Note, the industry rose in value by 2.5% in 2012.

1. Cass Business School
Just-Eat and Takeaway.com
Strategy For Business Coursework 2
Group 26 (Friday Cohort)
Anh Ho
120005724
Dorothy Kiew
120003293
Karin Chong
120018974
Yuan Sing Wong
120019673
1STRATEGY FOR BUSINESS COURSEWORK 2 - GROUP 26

2. 2526 words
Table of Contents
Introduction………………………………………………………….3
Attractiveness of Industry Structure……………………………….4
Performance and Competitive Strategies…………………………7
Performance Differences………………………………………….11
Opportunities and Threats………………………………………..12
Future Strategic Landscapes…………………………………….14
References…………………………………………………………16
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3. Introduction
Customers want the “eat out” experience of quality food but are saving money by dining at
home with food being delivered. According to a study by NPD Group in 2009, the number of
restaurant meals eaten at home is expected to grow by 20% in the next 10 years. The increase
in home leisure activities has been a key growth driver in the take-out and delivery franchise
sector. Growth is also largely driven by the convenience offered as well as menu innovation
and promotions. According to market intelligence provider Key Note, the industry rose in
value by 2.5% in 2012.
Companies which provide home food delivery platforms manage and process online orders
mainly for restaurants which already offer their own delivery service. In exchange, they
receive a share of the value of each order placed – ranging from 9% to 11%. A select few
operate slightly differently – Deliverance and Housebites deliver food prepared by its own
team of chefs while Room Service delivers meals freshly prepared directly from London's top
restaurants.
We will focus on two firms in this industry.
1) Just-Eat was originally launched in Denmark in 2001 and has since expanded to 13
different countries; its headquarters is located in the UK.
2) Takeaway.com was founded in the Netherlands in 2000 and now operates in 10 different
countries under different names.
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4. Attractiveness of the Industry Structure
Industry analysis is a tool that facilitates a company’s understanding of its position relative to
other companies operating in the same industry. Understanding the forces at work in a
particular industry is an important component of effective strategy planning. We utilize
Porter’s 5 forces framework as a starting point for carving out a sustainable niche in the
market.
This model underestimates the influence of a company’s core competencies on its ability to
achieve profits. It assumes that the industry structure is the sole determinant of its success or
failure and that there is no collusion within the industry. Additionally, it is difficult to apply
onto multinational corporations which have synergies and interdependencies from a portfolio
of businesses. Finally, the possibility of creating a new market is not considered.
Ease of Entry
This refers to the difficulty for a new firm to begin competing in a particular industry. Low entry
barriers allow firms to enter the market space but pose threats to existing firms. We consider
start-up costs and legal requisites as the main barriers for this industry.
The most common start-up costs for online delivery intermediaries are development of a
platform, website and mobile application and launch marketing fund. A basic website can cost
as little as £500 and with the existence of companies like Shopify which provide a pre-made
platform for a fixed monthly rate of £14, entry into the market is made simpler. Obtaining a
company registration number has a minimum cost of £20 and can even be arranged on the
same day. The only time-consuming requirements for entering this market is setting up an
Internet Merchant Account (IMA) and obtaining PCI compliance for handling credit cards.
We find these minimal requirements to be problematic for Just-Eat and Takeaway.com.
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5. Power of Suppliers
Considering where the power in a supply chain lies, one can assess how easy it is for suppliers
to drive up prices due to shortage of supply or unique products. It appears that suppliers have
great control because restaurateurs worry that if they venture into food delivery, they may not
be able to maintain the quality of their food and their reputation may suffer as a result.
Convincing restaurants to offer delivery and post their services on the platforms may be
difficult and a lower commission fee may be required. This problem is especially troubling
with the changes in social attitude (discussed below) forcing Just-Eat and Takeaway.com to
ensure the listing of a varied range of restaurants or risk losing website traffic.
Power of Buyers
Conversely, bargaining power may lie in the hands of consumers. A key determinant in this
industry is the level of choice available to buyers. Greater choice allows buyers to exert
pressure on suppliers by demanding lower prices or higher quality. Where substitutes are
readily available and switching costs are low, consumer’s bargaining power increases.
The problem of changes in social attitude (explained below) applies here. Also, with
technology making customers more social, any negative comments made about restaurants
listed or the accessibility of their website may spread like wildfire. Since Just-Eat and
Takeaway’s largest space for marketing is the Internet itself, bad press is detrimental. The
absence of a mobile application may cause a loss in customers using their service as reliance
on on-the-go devices is growing.
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6. Availability of Substitutes
Porter theorized that all firms in an industry are competing in a broad sense as industries
produce substitutes. Positive cross elasticity of demand is the measure of this threat.
Understanding consumer preferences help firms to create demand specific products. Speed,
menu, prices and locations are all factors that are taken into consideration by consumers when
choosing their food.
There are two main substitutes apart from the dine-in option – drive-thrus and direct
telephone orders. Drive-thrus have experienced increased popularity due to the convenience
and cost effectiveness offered but is a substitute mainly for customers in larger cities and only
for those who have a car. Thus, posing a lower threat. Direct telephone orders usually mean
that a customer has to pay by cash and the convenience of card, PayPal, and BitCoin payment
is removed, reducing their impact on competitiveness.
Rivalry
Competition can occur through price wars, advertising, marketing campaigns, and new
product introductions. High exit barriers such as fixed costs and contractual agreements are
reasons for a firm to compete in an industry despite finding it unprofitable. Along with ease of
entry and bargaining power of suppliers and buyers, this factor may prove problematic for
Just-Eat and Takeaway.com. Companies such as ReadyForFood undercut them by charging
0% commission; since they are heavily reliant on these fees, revenue could see a massive fall.
Although the threat of collusion is possible, it is illegal in the UK. The ease at which
businesses can enter this industry (explained above) and technology allowing customers to
discover these websites more easily increases competition.
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7. Performance and Competitive Strategies
*Date last accessed 21 November 2014
JUST-EAT TAKEAWAY
UK Debut 2006 2010
No. of Restaurants 30,000 7,500
Public Listing FTSE-250 Not listed
M&AActivity
UrbanBite (2011)
FillMyBelly (2012)
Meal2Go (2014)
None
Website Traffic 3 million views/month 1 million orders/month
Social Media*
Facebook: 1,200,091
subscribers
Google+: 179,557 followers
Twitter: 85,400 people;
107,000 tweets
Facebook: 88,980 subscribers
Google+: 843 followers
Twitter: 1,041 followers; 1,931
tweets
Trustpilot.com
Rating*
6.2/10
1,855 reviews
7.4/10
1,885 reviews
FSA Rating Ratings not published Ratings published
Adverse Publicity
Accused for advertising non-
existent restaurants
None
Service Accessibility
Website
Apple AppStore
Google PlayStore
Windows Phone Store
Website
Apple AppStore
Google PlayStore
Windows Phone Store
Payment Methods
Cash-on-delivery
Credit/Debit card (MasterCard,
Maestro & Visa)
Cash-on-delivery
PayPal
BitCoin
Credit/Debit card (Maestro,
MasterCard, Visa & AMEX)
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8. KEYWORDS
JUST-EAT
TAKEAWAY.
COM
JUST-EAT
TAKEAWAY.
COM
Google Search - UK Google Search - London
Takeaway 2nd 1st 1st 3rd
Takeaway
food
1st 5th 1st 8th
Takeaway
delivery
1st 2nd 3rd 1st
Takeaway
order
1st 3rd
1st (w/o Google
Ads)
1st (w/ Google
Ads)
Order
takeaway
1st 2nd 1st 8th
Order
takeaway
online
2nd 3rd
1st (w/o Google
Ads)
2nd (w/ Google
Ads)
7th (w/o Google
Ads)
1st (w/ Google
Ads)
Online
takeaway
1st 3rd 2nd 1st
Takeaway
online
1st 2nd 1st 7th
Food delivery 1st n/a 1st 8th
Food ordering 1st n/a 2nd 1st
Ordering food 1st n/a 2nd 1st
Indian
takeaway
1st
Ads)
3rd
Ads)
Chinese
takeaway
1st n/a
Mexican
takeaway
1st
Ads)
1st
Ads)
Thai takeaway 1st n/a
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+ Keywords include “London”

9. Just-Eat Competitive Strategies
Marketing
Just-Eat uses typical keywords of the food industry and those similar to their competitors’
names. For example when the words “takeaway” or “hungry” are typed into a search box,
Just-Eat appears. Just-Eat consistently ranks first in listings on Google when common
keywords are searched. This is achieved by increased advertising campaigns beyond the
Internet (billboards, television, magazines); it recently invested £5m in its new advertising
campaign - ‘mini fist pump’. The table above also contrasts Just-Eat and Takeaway.com’s
social media presence. Just-Eat continues to remain superior as they actively offer vouchers,
regularly update their blog and introduce mini-games to maintain their attractiveness.
Mergers & Acquisitions
Acquiring Urbanbite, FillMyBelly and Meal2Go allowed Just-Eat to generate synergies and
eliminate competition in the marketspace. From the SEO perspective, Just-Eat reduced access
to competitors’ sites because Urbanbite consistently ranked above Takeaway.com in certain
keywords.
Innovation
Just-Eat innovated Nosh Knocker reduces human interaction need, while safety and hygiene
are ensured.
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10. Takeaway.com Competitive Strategies
Price competition
Takeaway.com charges a commission of 2% lower than Just-Eat’s 11.2% which has outraged
some restaurateurs.
Marketing
Takeaway.com acknowledged the restriction their original Dutch name Thuisbezorgd.nl had on
international users and changed its name to Takeaway.com. This boosted their position in Google
search results – it is ranked first in the search for “takeaways”. Takeaway.com also offers deals
on their regularly updated blog and social media pages but limited advertising beyond the
Internet is what fails the company.
Legal Compliance
In response to Just-Eat’s food hygiene scandal, Takeaway.com took precautionary measures and
published FSA ratings of their restaurants. This prevented exposure to fines.
Quality Control
Takeaway.com’s Trustpilot.com rating of 7.6/10 which is higher than Just-Eat’s rating of 6.2/10
suggests that it administers better quality control and is able to manage complaints more
effectively.
Flexibility
Takeaway.com offers more varied methods of payment (PayPal, Bitcoin, etc.) and hence, provides
greater convenience to customers.
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11. Strategic Management Concepts and Performance
Differences
It is evident from the data above that Just-Eat outperforms Takeaway.com and differences in
performance is attributable to differing strategic management as largely explored above.
Strategic management monitors and evaluates opportunities and threats of an organization in
lights of its strengths and weaknesses.
The biggest opportunity in the online food delivery business is the low barriers to entry and
the biggest threat is the high barriers to growth. Online takeaway websites do not require a
huge sum for initial capital but steady and continual cash inflows are challenging to maintain.
Also, the need to often update technology employed cripples growth. Just-Eat appears to have
grasped the nature of the market and this resulted to being a market-leader.
Just-Eat’s apparent ability to read and forecast markets grants it advanced entrance into new
markets. Thereafter, they focus on increasing the number of customers and restaurants to
fortify their position in the overall market. Their strategy is deemed successful when
comparing the 30,000 restaurants registered with them to the meagre 7,500 registered on
Takeaway.com.
Furthermore, Just-Eat invests heavily in technology to enhance the browsing experience of
their website; they recently installed JustConnect which allows restaurants to receive and
confirm orders while keeping the phone line completely free.
Lastly, Just-Eat attracts many investors because of its highly scalable business as seen by their
lucrative M&A deals which increased revenues and profits. The investments in Just-Eat are
used to acquire businesses with a two-prong strategy, i.e. buying out small companies in
existing markets and acquiring profitable companies in new markets to increase market share
and profitability as well as for the expansion of its 13-country footprint. This is an example
where the saying ‘the rich gets richer’ holds.
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12. Opportunities and Threats
Political & Legislative
Employees should be protected by ensuring all hiring, compensation and training is according to
the UK Labour Law as stipulated. Also, political factors such as tax rates and acts of legislation
influences the firms’ performance. UK places great emphasis on health safety laws. As such,
firms should ensure that the restaurants they work with have a set minimum rating by the Food
Standards Agency (FSA). In fact, Just-Eat recently ceased working with restaurants awarded a
low FSA score.
Economic
Online takeaway is considered as a normal good. As the disposable income increases, the
demand for takeaway increases as well and vice versa. Despite growing demand for the industry
itself, cash-strapped consumers who dine out less frequently have reduced sales volume. Both
companies can venture into catering for corporate luncheons and private functions to compensate
for these tougher market conditions. Since corporations are cutting back on unnecessary
spending, the food offered by them provides a cheaper alternative to the usual caterers. 66% of
restaurateurs surveyed believe that the 11% transaction fee Just-Eat charges is unfair. This can be
seen as a weakness as other companies can undercut their fees – ReadyForFood, the fastest
growing competitor, does not charge any commission. As they face increasing competition, we
suggest the implementation of loyalty schemes where customers gain points per order and upon
reaching a certain level, rewards like free meals will be given.
Heavy reliance on commission fees from takeaway orders may prove problematic for the
companies so providing booking services similar to that of OpenTable for the restaurants listed
on their respective websites and charging a commission for each table booked through them may
be a good form of diversification.
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13. Social
The growing importance of the breakfast and snacking occasions, and healthy living has created
new market dynamics. Just-Eat and Takeaway can attach quality ratings and nutritional
information including calorie count to their current “Tried and Tested” schemes where these
intermediaries sample the restaurants’ food and provide a stamp of approval. Operators will be
forced to invest in crafting their menus to maintain market dynamism and rebrand the industry
away from being a major player in the growing obesity crisis in the UK.
Also, Britons’ more adventurous food choices which fuel demand for non-typical fast food and
takeaways cuisines (Sushi, Thai and Mexican are currently the fastest growing cuisines) provide
opportunities to advise restaurants on changes in market stimulus and possibly generate another
revenue stream.
Technological
Technology has a high impact on these online companies. Methods of payment especially now
with the introduction of contactless and Apple Pay have nudged this industry to move away from
accepting only cash payments but at the same time creating more complicated tax filings. Paul
Backman, director of food services consultancy Horizon explains, "As we buy more and share
more online, takeaway food companies, whatever their size, have to respond to survive."
Takeaway.com & Just-Eat can develop a platform that allows small business to access to the
site’s domain with a small setup cost and forgo any commission fees in return.
The way customers interact with these platforms will need to continue evolving and since a large
amount of investment into development of applications may be required, Just-Eat and
Takeaway.com could consider an open-source business strategy similar to that of Google
Android whereby developers can openly contribute.
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14. Future Strategic Landscapes
In the future, Just-Eat and Takeaway could purchase food trucks and sell their restaurants’
food on a larger scale. With food trucks, both firms can expand their customer base by
operating in strategic locations like areas with a high concentration of offices and busy
industrial areas. Moreover, food trucks provide opportunities for more of its own marketing
and advertising and even selling the space on their trucks’ shell for advertisement, thus
providing another revenue stream.
Over half of the 400 takeaways surveyed by consultants Preoday claim to have lost significant
income due to these platforms and 49% claim an inability to build relationships with
customers. These platforms can exploit their position as a broker to reduce those problems by
utilizing existing distribution and sales networks and developing new partnerships through
venture capital or business angel opportunities and monetary assistance by the government
(Treasury has recently increased loans to small businesses). For example, Dum Dum
Donutterie in Shoreditch partners with Addison Lee and quotes promotional prices when
called upon for catering.
Takeaway & Just-Eat can also provide tracking of orders to standardize delivery times even as
one orders from multiple restaurants. The partnership with delivery companies as explained
above may assist with this and this may be a way to differentiate from their competitors.
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15. Nevertheless, the strength of growth in the home delivery market pushes the boundaries for
companies like Just-Eat and Takeaway to thrive. Home delivery is rising in every industry as
there is little that cannot be bought online nowadays. Also, fast food burger chains like
McDonald’s have had a delivery service running internationally for years, proving home
delivery to be a ‘tried and true’ technique.
We, therefore, conclude that there is sufficient room for Just-Eat and Takeaway.com to expand
given their strengths and weaknesses to cater for rapidly changing market trends. The ability
for them to grow is backed up by the flourishing demand for online-based services.
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16. References
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www.londonlovesbusiness.com/entrepreneurs/fast-growing-businesses-and-sme/how-just-eat-
became-uks-most-popular-food-website/3005.article. Last accessed 15th November 2014.
Dum Dums. (2014). Dum Dums. Available: http://dumdums.co.uk/. Last accessed 23rd
November 2014.
Hardwick, N. (2014). Is the UK's £30bn-a-year taste for takeaways getting healthier?.
Available: http://www.theguardian.com/lifeandstyle/wordofmouth/2014/apr/01/uk-takeaways-
healthier-fast-food-industry. Last accessed 16th November 2014.
IBIS World. (2014). Takeaway & Fast-Food Restaurants in the UK: Market Research Report.
Available: http://www.ibisworld.co.uk/market-research/takeaway-fast-food-restaurants.html.
Last accessed 2nd December 2014.
Just Eat. (2014). Don't Cook Just Eat. Available: http://indexventures.com/news-room/index-
insight/don%E2%80%99t-cook-just-eat. Last accessed 20th November 2014.
Just Eat. (2014). Yearly Takeaway Trends. Available: http://www.just-eat.co.uk/takeaway-
trends/. Last accessed 21st November 2014.
Key Note. (2013). Fast-Food & Home-Delivery Outlets Market Update 2013. Available:
http://www.keynote.co.uk/market-intelligence/view/product/10874/fast-food-%26-home-
delivery-outlets?utm_source=kn.reports.browse. Last accessed 22nd November 2014.
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17. Martin, S. (2014). Just Eat's Greedy Commissions Should be Taken Away, Say UK
Restaurants. Available: http://www.ibtimes.co.uk/takeaway-just-eats-greedy-commissions-
say-uk-restaurants-1452806. Last accessed 18th November 2014.
Norton, M. (2010). Starting up your online business. Available: http://
www.smallbusiness.co.uk/starting-a-business/setting-up-a-company/1308053/starting-up-
your-online-business.thtml. Last accessed 26th November 2014.
Shopify. (2014). Shopify Pricing. Available: http://www.shopify.co.uk/pricing. Last accessed
27th November 2014.
Thring, O. (2011). Deliverance from terrible takeaways. Available: http://
www.theguardian.com/lifeandstyle/wordofmouth/2011/nov/02/deliverance-from-terrible-
takeaways. Last accessed 10th November 2014
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