Should Delivery Hero prioritize expanding its restaurant selection or improving the reliability of existing partners?

Introduction

The trade-off between expanding Delivery Hero's restaurant selection and improving the reliability of existing partners is a critical decision that could significantly impact our business trajectory. This scenario touches on the core of our value proposition: providing customers with a diverse range of dining options while ensuring a consistently high-quality experience. I'll approach this analysis by examining the current market context, evaluating potential impacts on key stakeholders, and proposing a data-driven framework for decision-making.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm thinking about our current market position. Could you share our market share compared to competitors and how it's been trending over the past year?

Why it matters: Helps determine if growth or consolidation should be prioritized Expected answer: Moderate market share with steady growth Impact on approach: Would influence whether to focus on expansion or optimization

• Business Context: Based on our revenue model, I assume we take a percentage of each order. Is this correct, and are there any other significant revenue streams we should consider?

Why it matters: Affects the financial impact of each option Expected answer: Primarily commission-based with some advertising revenue Impact on approach: Would help quantify the potential revenue impact of each strategy

• User Impact: I'm curious about our user retention rates. Do we see significant churn, and if so, what are the primary reasons users cite for leaving the platform?

Why it matters: Indicates whether reliability or variety is a more pressing issue Expected answer: Moderate churn with a mix of reasons, including limited options and unreliable service Impact on approach: Would help prioritize which aspect to address first

• Technical: Regarding our current platform, how scalable is our system for onboarding new restaurants versus implementing reliability improvements?

Why it matters: Determines the feasibility and resource requirements for each option Expected answer: Both are feasible but require different resource allocations Impact on approach: Would influence the timeline and resource allocation for each strategy

• Resource: Can you give me an idea of our current team structure and capacity? Are we more constrained on the partner acquisition side or the operations/reliability side?

Why it matters: Helps understand internal constraints and capabilities Expected answer: Balanced team with some flexibility to reallocate resources Impact on approach: Would affect the feasibility and speed of implementing each option