Entrepreneurs are exploiting the technology with the on-demand services to create great businesses. This is giving customers better service as compared to traditional industries and disrupting them.

They want to assure that the improved communication platforms are provided so that the customers can easily engage with the services providers. Here we have the GrubHub business model case study to help you understand how a company brought innovation to the restaurant business.

They want to assure that the improved communication platforms are provided so that the customers can easily engage with the services providers. Here we have the GrubHub business model case study to help you understand how a company brought innovation to the restaurant business.

What is GrubHub

GrubHub is providing a platform to the food industry specialists to allow them to use the on demand services. They are making the food industry transform and help them deliver the food items to the willing customers at their doorstep.

The GrubHub business model analysis shows that it has been designed to allow the customers to order the food online from a variety of restaurants available and get the food items delivered at their doorstep. They are providing a streamlined technological solution to the restaurants and their customers.

In online food ordering market, GrubHub has taken a giant lead, as it is an instant solution for the larger masses of restaurant servers.

Facts and Figures

  • Founded by Michael Evans & Matt Maloney
  • 2004 – year of foundation
  • Headquarter is in Chicago, IL
  • IPO date is 7th April 2014
  • Publically listed as GRUB by New York Stock Exchange
  • In May 2013 GrubHub announced collaboration with seamless
  • In last one year, GrubHub has served 5.6 million active customers
  • On daily basis, it deals with 267,800 customers with the well-orchestrated system
  • Its market presence is showcased in over 1000 US cities
  • 44000 food joints are active business partner with GrubHub

Value Propositions For Customers

  • It provides easy and quick way for customers to order food online
  • Clients can order food from any restaurant they like
  • Saves time and money
  • Customers will get the opportunity to track the status of their order
  • 24/7 customer services

Value Proposition for Restaurants

  • The restaurants can supervise the deliveries that were channeled through the GrubHub by an application
  • Restaurants are engaged with a large customer base
  • GrubHub has its own delivery personnel.

Customer Segments

  • Restaurants
  • Users
  • Good food gives us a good life. Every customer likes to explore different types of food items using the platform. It would be perfect when good food is delivered at your doorstep. GrubHub will nourish the expectations of two different customer segments by taking turns.

Users

  • GrubHub will be beneficial for the people who are not interested in cooking
  • When you are hosting a team lunch in the organization it would be better to order food from outside
  • It is perfect for the people that like to get food delivered at their doorstep
  • It is the perfect station for the people who love to eat outside but have a tough schedule

Restaurants

  • It is the ideal platform for the restaurants to reach more customers and increase their brand awareness
  • The food joints can target the masses in their locality
  • Restaurants who cannot afford to have the delivery guys due to tight budget can trust GrubHub for all the deliveries.

How GrubHub generates revenue

GrubHub business model case study shows that it takes less ownership framework. It is working on a simple approach to serving all the customers by allowing them to order the food products from thousands of restaurants by not having one of their own restaurants.

GrubHub business model case study is working to serve the on-demand food industries and it is establishing the innovative revenue system. GrubHub generates its revenue by getting the commission on every order that is delivered and they are providing restaurants an advertisement platform.

Commission

GrubHub provides a platform to order food and get it delivered to the customer. This is what the customers think GrubHub is. The common question everyone has is how does the team make money. When the customers place their order using GrubHub from their favorite restaurant and the order is delivered without any inconvenience then GrubHub takes a percentile. Once the order is delivered there is a specific charge that GrubHub will take. The percentage of the commission can range from 5% to 15% and the standard pricing is 13.5% per order.

Advertisement platform for restaurants

GrubHub provides a perfect platform to the restaurants to show their market presence and reach a large customer base. For the restaurants to make it at the top of the customer’s search, they will have to pay GrubHub. In this way, GrubHub has designed a skyrocketing revenue system by introducing GrubHub business model innovation. This is how GrubHub has become a big name in the industry.

GrubHub business model explained in 4 step smart system

GrubHub works on the 4 step smart system in the following way.

1-Search

Customers or users can search through the list of restaurants and select their favorite food items. They can also hunt for the deals and special offers given by different restaurants that are listed on the community of GrubHub. The search results can be refined by selecting the location and the type of food they would like to have.

2-Place order

Once the customers have selected the type of food they would like to order from the restaurant of their choice, they can make the transaction online or do as they are convenient.

3-Process

Once the order has been accepted by GrubHub it would be redirected to the particular restaurant through the application. The restaurant starts to prepare and pack the order for delivery once it has received the order.

4-Deliver

The delivery person of GrubHub will pick the order from the particular restaurant and they will deliver it to the address mentioned by the customer.

How GrubHub became successful

From the very beginning when GrubHub was introduced in 2004 until it became the master of the on-demand economy, GrubHub has made its own way towards success. It has transformed the business prototype by using the revenue generated theory.

The GrubHub started its business as a marketing platform for the customers. It made the list of the restaurants available and provided them a chance to make their business stand out. The motive of featuring the restaurant by GrubHub was different; it wanted the people to return to the restaurants again by using their list.

The unique options available at GrubHub makes it help the restaurants and customers in different ways and this is how it has been able to grab the attention of different restaurants and thousands of customers.

GrubHub features

Some of the amazing features that you will come across while using GrubHub are.

1-Selecting a restaurant

On the GrubHub list, customers will get a chance to select from a wide range of restaurants. User can select any restaurant they prefer and depending on the partnership with the restaurant, they will be offered with several deals and discounts.

2-Rate the restaurants

GrubHub allows the customers to rate the restaurants. They can select the rating and write their review according to their experience with the quality food that was delivered. It will help the other customers to make the right choice.

3-Knowledge of pricing

At the GrubHub platform, the customers will get a chance to compare the standard rates of every restaurant. It will help the customers to order the food considering their budget.

4-Location of restaurant

You will get every detail regarding the restaurant from which you are planning to order food. So you will get the specified location of the restaurant.

5-Delivery fee

The delivery fee of the order can fluctuate depending on the distance of the restaurant from your location, minimum order and estimated wait time. The users can select different pickup options available at GrubHub.

These features are one of the reasons behind the success of GrubHub.

GrubHub business model problems

Since the beginning, the online food ordering and delivery system of GrubHub has improved but there are still some problems in the business model that they have to resolve. Some of the GrubHub business model problems have been discussed here.

It is very hard to maintain the menu data of the restaurants. When there are several restaurants a large number of data has to be maintained all the time and they have to upgrade it according to the changes done by the restaurant. The issue occurs when there has been a sudden change in the menu.

There is no room for errors in the GrubHub platform. They have to assure that everything works according to the plan and the information regarding the orders should reach the specified audience. A single error would lead to many issues. The order has to be delivered on time because making the customer wait is never good.

Merging the technology with the restaurants is hard because they have not been made for the technology. Apart from ordering the food, there are many other tasks that the team of the restaurants has to manage and the introduction of technology has changed nothing in that regard.

Electronically managing everything is not an easy task. However, GrubHub is working to make it easier more for the restaurants as well.

Channeling the market presence

In the US market, GrubHub is very famous. A question that has been disturbing many is that how GrubHub reaches its customers. They have a well-developed platform and software applications that help them to reach the customers at the right place and time.

Customer service

The success of any business is defined by the number of satisfied customers they have. It is important for the business organization to retain their customers. The main goal of business organizations is to not sell the products but make strong relations with their customers. They can use different business marketing platforms to get the job done. They have to assure that they win the trust and confidence of their clients. GrubHub has been maintaining a strong bond with its customers by providing 24/7 support using different platforms.

1-Social media

The best way to reach out to the customers is using the social media platforms. The presence of GrubHub is very strong on the social media platforms. They use the platform to welcome the new customers and help the old ones understand how they can use the latest deals and offers. GrubHub has properly socialized the business strategy by using social media platforms.

2-Customer support

GrubHub has an efficient customer support system through which it maintains the bond between the business and the customers that return. There is an inbuilt customer support system at GrubHub that helps to answer the questions by customers and provides them the solution regarding their issues. The potential customer comes once in months or years. In a short span of time, GrubHub has made customers believe that they are partners and that is how they have added value to their success in a short time.

3-Review and Rating system

Customers get the chance to review and rate the services of GrubHub and the listed restaurants using the review system. It allows GrubHub to understand the real demands of the customers. In this way, they can change their strategies of working and it helps them to protect their organization from any potential downfall. It has been noticed that 60% of the customers give importance to the ratings.

GrubHub business model analysis

  • Explanation of the GrubHub business model and 4 step smart system
  • How it is standing out from the customers in the market
  • The risks have been identified
  • GrubHub and the customer support team assures that the customers get what they want

From the GrubHub business model, it is clear that you have to work hard and assure to keep your customers happy as only then you can become the giants of the business industries.

Author Barkan Saeed

Barkan Saeed is the founder of ondemandstartup and vizteck solutions. With more than 10 years of experience in platform application development, barkan has been helping entrepreneurs convert their development visions into reality.

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