Is it better for Glovo to focus on increasing order frequency or expanding into new service categories?

Introduction

The trade-off we're examining today is whether Glovo should focus on increasing order frequency or expanding into new service categories. This decision is crucial for Glovo's growth strategy and market positioning. I'll analyze both options, considering their impacts on user behavior, business metrics, and long-term sustainability. Let's dive into the key aspects of this trade-off to determine the most strategic path forward for Glovo.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm assuming Glovo is facing increased competition in its core markets. Could you share more about the current market dynamics and Glovo's position relative to competitors?

Why it matters: Helps determine if growth should come from existing services or new categories Expected answer: Glovo is a strong player but facing pressure from new entrants Impact on approach: Would influence whether to double down on core offerings or diversify

• Business Context: Based on Glovo's current revenue model, I'm thinking order frequency might be directly tied to profitability. Can you confirm how our revenue structure works, particularly regarding commission rates and delivery fees?

Why it matters: Clarifies the financial impact of increased order frequency vs. new categories Expected answer: Revenue is primarily commission-based with a per-order delivery fee Impact on approach: Would help quantify the potential value of each strategy

• User Impact: I'm curious about our user segments and their behaviors. Do we have data on the percentage of power users vs. occasional users, and how this split varies across different service categories?

Why it matters: Identifies opportunities for increasing frequency or cross-category adoption Expected answer: Mix of frequent and occasional users, with varying engagement across categories Impact on approach: Would guide targeting strategies for each option

• Technical Feasibility: Considering our current platform architecture, I'm wondering about the complexity of integrating new service categories. How modular is our system for adding new offerings?

Why it matters: Assesses the technical effort required for expansion Expected answer: Moderately flexible, but significant work needed for entirely new categories Impact on approach: Would influence timeline and resource allocation for expansion

• Resource Allocation: Given our current team structure, I'm thinking about how we'd resource either initiative. Can you give me an overview of our available product and engineering capacity?

Why it matters: Determines feasibility of pursuing one or both strategies simultaneously Expected answer: Limited additional capacity, would require reallocation from existing projects Impact on approach: Would impact the scope and timeline of the chosen strategy