GrubHub Inc.’s SWOT Analysis

SWOT analysis is strategic factors analytical technique; including both internal and external strategic factors, that GrubHub can use to analyze its competitive position in the market. It helps identify a company’s strengths, weaknesses, opportunities, and threats. With SWOT analysis’s insights, GrubHub could create strategies to enhance its strengths, make the most of its opportunities, eliminate its weaknesses, and overcome its threats.

Grubhub Inc.
Source: grubhub.com

GrubHub is a subsidiary of Just Eat Takeaway since June 2020. It is an online application that connects individuals with over 140,000 restaurants that offer takeout food services. Individuals can place their orders electronically from wherever they are to restaurants within their locality that have partnered with Grubhub, and a Grubhub staff will pick up the takeout food and deliver it to the respective individual.

Before jumping into the SWOT analysis of GrubHub, let’s have a look at some key highlights of the company below.

GrubHub Inc. – At a Glance

NameGrubHub Inc.
Websitehttps://www.grubhub.com/
FoundersMike Evans and Matt Maloney
Chief Executive Officer (C.E.O.)Adam DeWitt
Tagline“grub what you love.”
HeadquartersChicago, Illinois
Type of CorporationPublic
Year Founded2004
Revenues (2020)$1.8 B
Key Products/ServicesFood delivery
Key CompetitorsDoorDash, UberEats

GrubHub’s Strengths

GrubHub is a leading business in its industry, has numerous strategic internal fortes. These strengths have kept the company thriving; they have protected the company’s market share and helped it penetrate new markets. So let’s go through some of the GrubHubs’ strengths below.

New acquisition status

GrubHub’s acquisition by Just Eat Takeaway adds to the company a new source of funding, management, and fresh strategies to effectively compete with DoorDash and UberEats, among other competitors.

Strong brand ranking

With the advent of COVID, many Americans made use of food delivery services than ever before. According to Bizvibe, Grubhub came in second in ranking in the world’s global listing of food delivery apps. Bloomberg Second Measure ranks Grubhub at position 3 in 2021. This ranking gives the brand more visibility in online rankings for more discovery by customers looking for food delivery services.

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Long industry experience

Grubhub is a leading online food delivery service. It is the longest-serving brand since 2004, and therefore the company has an unparalleled experience portfolio in the industry compared to its competitors.

Strong distribution network and reach, wider food selection

GrubHub has an extensive reach geographically and would serve its customers with food deliveries from local eateries and national food chains. The brand has its presence in 4,000 US and UK cities. This allows GrugHub’s customers to search for restaurants either by locality or cuisine. Customers can then place their order for food and track their order via the company’s app. In the app delivery instruction box, a customer is able to instruct the driver on where to leave their food in the event they want a no-contact delivery. This network ensures that deliveries are speedily made to waiting clients.

More payment options

GrubHub offers support for multiple payment options, which gives the brand a competitive edge.

Great performance in new markets

GrubHub has had success in entering new markets. This expansion has been critical in ensuring the company has new revenue streams in addition to its existing revenue streams. This expansion also helps the company diversify its economic cycle risk as its markets have varied economic cycles. A highly skilled workforce

GrubHub has invested in the learning, training, and development of its workforce. The results have been a highly-skilled workforce that is motivated to achieve more. And given GrubHub is in the service industry, it largely depends on its employees to deliver excellent service for high customer satisfaction.

Grubhub’s Weaknesses

Consumer dissatisfaction

Grubhub is rated at 1.17 stars on Sitejabber from 3608 reviews, 2 ratings at Trustpilot, and 1.27 on Reviews.io. Grubhub is ranked 133 among food delivery sites. This is indicative of a dissatisfied clientele base.  The major complaints about Grubhub include poor customer services from the delivery personnel, next order problems, and delayed delivery times. A keen look at each of the customer complaints with the help of the company’s strengths could help strengthen the brand and restore customer confidence.

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Declining market share and brand ranking

While GrubHub is the longest-serving company in the food delivery industry, where it had a market share of 50% up to 2018, companies have been overtaken by companies that have come to the industry much later, including DoorDash was founded in 2013, and UberEats that was founded in 2014. DoorDash earned 57% of the US consumer’s food delivery service in May of 2021. UberEats came second with 21%, while GrubHub and its subsidiaries managed a 17% market share. With the market for food delivery increasing due to COVID and increased work from home, GrubHub should focus on strengthening its brand to increase its brand market share.

Huge losses

Since the company went public in 2013, the company has experienced its most considerable losses in 2019 and 2020 of $18 million and $155 million, respectively. This could negatively impact its daily operations due to limited cash flows. It could also limit its ability to access funding from financial institutions. 

Grubhub’s Opportunities

Unprecedented Growth in the industry

The CORONA pandemic saw a year-to-year increase in meal delivery services by 17% in May 2021. The food delivery service industry is projected to grow to USD 200 billion by 2025. Digital food ordering and delivery grew by 300% from 2014 to 2020; additionally, the number of restaurants that actively used online delivery services increased by 169% from February 2020 to April of the same year. GrubHub has a vast opportunity for growth with the new trends in the industry.

Strategic Partnerships

GrubHub has for a long time partnered with restaurants to serve their customers. There is great strength in this strategy. While ensuring a great customer experience with these restaurant partnerships, GrubHub could still make strategic partnerships to enhance their areas of weaknesses and gaps in their services. For instance, given the company has suffered in the past due to bad customer service, the company could explore strategic partnerships in training and delivery and app optimization with tech companies to ensure a rich customer experience.

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New Technology

New technologies offer GrubHub the advantages and opportunities of increasing efficiencies and effectiveness in their service delivery. Efficiency and effectiveness in the delivery of Grubhub’s services have been a huge thorn in the brand’s success. The company could easily make use of technologies such as IoT, AI, robotics, and big data analytics to ensure they overcome their weaknesses in customer service.

Huge revenues

The company has earned huge revenues in the past. This could provide leveraging for the company to acquire necessary solutions for its operations to ensure greater customer satisfaction and the company’s expansion strategy.

The Acquisition

With the new acquisition, GrubHub has a great opportunity in accessing new funding, new management, and new competitive strategies to ensure they compete effectively in the market. 

Grubhub’s Threats

Increased competition

The industry has fierce and aggressive competition from both existing and new entrants in the market. There has been many consolidation in the industry in an attempt to beat the competition. The major competitors of GrubHub include DoorDash and UberEats. While these consolidations are working for the companies at the top, those struggling may find it more challenging to emerge from the bottom and overtake those at the top.

Shortage of top-talent and efficient employees

With the increased growth recorded in the industry, there is bound to be an increased demand for top talent in food delivery services. While GrubHub is already struggling with bad customer service by its delivery personnel, a shortage of top talent could further exacerbate the problem and threaten the continued existence of the company.

Conclusion

While GrubHub has steadily declined over time in market share, brand ranking, and even profitability, the company could explore great opportunities in the industry to lift itself back to being the market leader.

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