Should Grubhub prioritize expanding restaurant selection or improving delivery speed for its core food delivery service?

Introduction

The core trade-off we're examining is whether Grubhub should prioritize expanding its restaurant selection or improving delivery speed for its food delivery service. This decision is crucial for Grubhub's growth strategy and user satisfaction. I'll analyze this trade-off by considering business objectives, user impact, technical feasibility, and resource allocation.

Step 1

Clarifying Questions (3 minutes)

• Context: I'm assuming Grubhub is facing increased competition. Is this correct, and are there specific markets where we're losing market share?

Why it matters: Helps prioritize which aspect to focus on based on competitive landscape. Expected answer: Yes, facing pressure from DoorDash and Uber Eats in major urban markets. Impact on approach: Would influence whether to focus on differentiation or matching competitors.

• Business Context: I'm thinking our revenue model is primarily based on commissions from restaurants. Can you confirm our current revenue breakdown between restaurant commissions and user fees?

Why it matters: Determines if expanding restaurant selection directly impacts our primary revenue stream. Expected answer: 70% from restaurant commissions, 30% from user fees. Impact on approach: Higher restaurant commission percentage would favor expansion strategy.

• User Impact: Based on user feedback, I'm guessing delivery speed is a top concern. Do we have data on user churn reasons, specifically around delivery times versus restaurant selection?

Why it matters: Identifies which factor more directly impacts user retention. Expected answer: 60% cite slow delivery, 30% cite limited restaurant options. Impact on approach: Higher churn due to speed would prioritize delivery improvements.

• Technical: I'm assuming improving delivery speed would require significant algorithm updates. What's our current technical capacity for optimizing routing and dispatch systems?

Why it matters: Assesses feasibility of speed improvements. Expected answer: In-house team capable of improvements, but would require 3-6 months. Impact on approach: Longer development time might favor quicker restaurant expansion.

• Resources: Considering our current team structure, I'm thinking expanding restaurant selection might be more resource-intensive. Can you provide an overview of our sales and onboarding team capacity?

Why it matters: Determines if we have the manpower for rapid restaurant expansion. Expected answer: Sales team at 80% capacity, onboarding team stretched thin. Impact on approach: Limited resources might favor focusing on delivery speed optimization.