STRATEGY, ENTERPRISE AND

INNOVATION
DELIVEROO – CASE STUDY

MODULE CODE: LSBM 306

MODULE TUTOR: KNOWLEDGE MPOFU
STUDENT ID: 160921005
STUDENT NAME: ANCA ELENA AL
HIGAWI
DATE OF SUBMISSION:3 JANUARY 2020
TABLE OF CONTENT

1.INTRODUCTION............................page 3
2. OVERVIEW OF DELIVEROO.........page 3
3. EVALUATE KEY DRIVERS OF INNOVATION
…......................................................page 4
4. COMPETITIVE STRATEGIES OF
DELIVEROO......................................page 6
5. BLUE OCEAN STRATEGY.............page 8
6. CONCLUSION................................page 11
7. REFERENCE LIST..........................page 12
 1.INTRODUCTION

This report aims to analyse the entrepreneur and innovation of the case study of
Deliveroo. The report shows the assessment of key drivers of the innovation that have
contributed to the business. Further, it includes the application of the innovation as
well as entrepreneurship models like 4Ps of innovation and entrepreneurship model.
Also, there is a critical analysis of the different approaches that are undertaken by the
Deliveroo to help shape its entrepreneurial vision as well as a business model. The
evaluation related to the success of the Deliveroo Company has been done by
applying the blue ocean strategy tools or framework. Thus, it has been determined
that the entire approach is related to the application of the relevant theories as well as
a framework that will support the evaluation and analysis of the tasks.

2. OVERVIEW OF DELIVEROO

The undeniable success of Deliveroo started in 2013, when Will Shu, Deliveroo’s
founder and CEO, turned a small idea into a reality, due to a keen focus on making
food delivery as easy as possible. The mission of Deliveroo began to bring the flavour
of the people's favourite restaurants directly to their door, most of which used to not
have delivery services before Deliveroo came along. This simple concept has
revolutionised food delivery and turned Deliveroo to a business worth $2billion prior to
Amazon deal. (Ghosh, 2019)
3. EVALUATE KEY DRIVERS OF INNOVATION

This section includes the important drivers of the innovation that contribute to the
success of Deliveroo. There is a discussion about major drivers of the invention:

The demand within the market is one of the factors that drive innovation and brings
way to provide effective services. The demand is the dominant influence on the
process of innovation (Ferreira et al, 2015). In the market, there is a need for proper
delivery, as well as timely delivery, due to which Deliveroo's company makes use of
the technology to bring the innovation in the products and services that they are
offering. Deliveroo’s Editions platform assists in the restaurant to expand its business
in new areas. The editions determine the different cuisines that customers want but
they don't have access to locally, which is why they invest in restaurants who excel in
those foods to provide help in the set-up of local areas (Deliveroo, 2019). This
innovation allows the customers to meet their demand for the food in the market.

The innovation is also driven by technology which is one of the major reasons behind
the success of the business. The introduction of ‘Frank’ algorithm which is founded on
the dominant analytical technology that majorly estimates the most effective way of
allocating the orders that are founded on riders, restaurants as well as the customers
(Deliveroo, 2019). The machine learning provides the assistance to estimate the time
that it will take to manufacture the mealtime, assisting the streamline knowledge of
delivery. The innovation in the technology for bringing the mobile app is one of the
reasons behind the success of Deliveroo's company. Even though it has been
determined that delivery apps are notoriously hard to make into something that
genuinely leads to profit, Deliveroo has found a way to make a profit, as their app
offers many great features such as placing orders for now, later or tomorrow, as well
as tracking the progress of your order in real-time to name a few.

These features are the main reason the app has over 10 million downloads, which all
count towards the profit, as well as Deliveroo’s approach in which they claim the
delivery of food will take no longer than 30 minutes. (Deliveroo, 2019). The app has
the feature of their logistics-driven approach. It has been found that they crunched the
numbers to identify things like local traffic for people like cyclists. In the research, it
has been found that innovation allows Deliveroo to win the great app platform for the
client and also for the effective logistic system of the company.

The growth of the economy is considered as one of the more important drivers of the
innovation which contributes to the achievement of Deliveroo’s business, as it
contributes to the growth of the economy, as well as leading to a rise in productivity,
meaning that a higher input leads to a higher output. Deliveroo brings the innovation
of the app and allows the company to enhance the productivity which will lead to a
high output and contribute in improving the GDP of the country. This element can
better be understood with the help of the product life cycle, Deliveroo’s product is at
the growth stage in which there is need for development (Trading Economics, 2019).
The development is possible with the effective innovation that enhances productivity.
The growth is the stage in which Deliveroo brings innovation so that they can
contribute to the development of the country, which is partly done through their
creation of 25,000 new jobs, which is estimated to rise up to 70,000 by 2020.
(Deliveroo.news,2019)
In the market, the evolution in technology pushes the companies to bring innovation
in their product as it will lead to a rise in productivity. However, it has been found that
a change in the rules and regulation related to the minimum wage law by government
or the change in the labour market might influence the companies which is why these
factors are considered as pull factors for the companies in the environment (Cai and
Li, 2018). It has been found that environmental protection is one of the major concerns
of government due to which they bring regulations. It pulls the company as they are
contributing to the environmental issues.

An example of how Deliveroo is contributing to the environmental issues is by them

adding a new opt in for cutlery feature, which means that cutlery will no longer be
added automatically, overall reducing the amount of wasted plastic. Another example
is them encouraging other companies to switch to environmentally friendly straws,
offering 250,000 biodegradable straws to its restaurants on a first come, first served
basis (Shu, 2018).

4. COMPETITIVE STRATEGIES OF DELIVEROO

In order to gain a competitive advantage in the market over its competitors, Deliveroo
has adopted different strategies to help them shape its entrepreneurial vision as well
as its business model. One of these strategies is the partnership with restaurants,
however, the most recent partnership was with Kellogg’s, which is very uncommon,
but is believed to help Deliveroo out in the future, where food manufacturers act more
like restaurants brands and deliver unique and personalised food at scale
(Craske,2019). Another way that Deliveroo has gained a competitive advantage is
from their merging with Amazon, as it has gained £450 million from doing so, which
will be used to expand internationally, improve its services and to grow its delivery-
only kitchens business (BBC News,2019).

The competitive advantage that Deliveroo has can be understood effectively with the
help of the Ansoff matrix strategies which is majorly used by them to help the business
in dealing with the competitors present in the market (CFI, 2019). The below given is
the discussion of the strategies that are used by Deliveroo for the growth at the
business and the corporate level.

The strategy of market development is utilised by the company. In this strategy, the
company focuses on entering the new market by making use of the existing products
(Hales and Mclarney, 2017). The five-year-old business is on mark to hit more than
six million UK clients by the end of 2018 and to raise its schedule of 10,000 restaurants
by approx. 50% which include expanding the business to more than 50 towns as well
as metropolises countrywide. This tracks the choice in June to open up its stage to
more than 5,000 restaurants by approving them to make use of their fleets instead of
the network of 15,000 rides by putting the business in the straight struggle with the
one of the major rival Just Eat (Rogers, 2018). Further, it has been found that the
company has expanded to more than 12 nations across the world in the 5 years since
the company came into existence. The company is strong-minded to preserve its
disruptive edge as it scales up (Fleming, 2019)

The market penetration strategy focuses on rising the sales of the present product in
the existing market. The company applies this approach of the market penetration in
which they generate attentiveness for the brand in the market which helps them to
improve the sales in the market. In February 2018, the company went live with the
innovative worldwide brand campaign which is intended to inspire the clients to “eat
more amazing at every food occasion” (Deliveroo, 2019). It was observed that running
across TV, outdoor, mobile, social media as well as direct mail, are different ways that
the brand has been promoted which is the reason behind its success (Matoso, 2018).

Recently, it has been determined that Deliveroo embarked on an experimental road-

show by the name of Tasting Rooms which brought new flavours from different
cuisines within the UK market as a method of involving the clients who might be not
aware of the brand. It is observed that the answer to Eat More Amazing was positive
for the company as it generates awareness (Rogers, 2018).

According to Porter's Generic Strategies model, there are three main strategic options
that are available to the company for attaining the competitive advantage within the
market. These strategies include Cost leadership, Focus and Differentiation (Ouma
and Oloko, 2017)

From the above strategies, the company applies the cost leadership strategy in the
UK market where they find the tough competition (Bell et al, 2017). Deliveroo has the
cost-driven construction whose aim is to maximize the expenses through important
automation as well as the low-price worth propositions. Thus, the cost leadership
strategy of a company affects the competitors due to the reduction in the cost, which
allows to keep the price down.
5. BLUE OCEAN STRATEGY

This section presents the evaluation of the success of Deliveroo by applying the Blue
Ocean strategy tools as well as frameworks. Blue ocean strategy consists of the major
tools and frameworks that are applied by Deliveroo within their business. The value
innovation is the most important standard of the Blue Ocean strategy. It is a
commercial method that emphasizes on the forming of new marketplace seats.
(Deliveroo, 2019). Instead of opposing for the market share, value innovation is
majorly intended to form innovative marketplaces. The value innovation includes
providing value to the clients by making effective use of technology. For instance: The
introduction of the ‘Frank’ algorithm which is founded on the dominant extrapolative
expertise that majorly assesses the most active way of allocating the instructions that
are based on the riders and restaurants, as well as the customers (Deliveroo, 2019).

This strategy is the simultaneous pursuit of the differentiation as well as low cost to
open up the novel space in the market and to form the new demand (Blue Ocean
Strategy, 2019). It is all related to capturing as well as forming the uncontested market
space due to which they are making the competition irrelevant. (Kim and Mauborgne,
2005). This strategy has been applied by Deliveroo which is why they attained the
success in the UK market.

This strategy has allowed Deliveroo to push all the boundaries of their industries and
to provide the consumer with something unique to immense value with their delivery
service (Singh, 2019). The focus of the company at the time of formation was to form
the new market in the UK by offering the products and services to their clients. They
want to give the new value to their customers by competing with the competitors that
are present in the market. Deliveroo is obsessed with the food and bringing the people
more choices. The mission of the company is to ensure that the restaurants present
within the area are present to the client when they need it (Deliveroo, 2019).

The company has applied this strategy so that they can bring the food from the
restaurants, unlike the transport amenities. It provides food from the fanciest
restaurants that are present in the city. The strategy has allowed the company to
become the new delivery type of service which is why they have handled all the
transportation by themselves.

By generating the value for the customers to whom they can deliver the products on
time they continuously rent the riders so that they can go around cities by bike or car
and deliver products to clients (Deliveroo, 2019).

Deliveroo applies the blue ocean strategy through which they are forming the new
market as can be seen in the fig.1 below.

Fig.1 Strategy canvas on Food Delivery Companies in the UK

(adapted from Kim and Mauborgne, 2005)

For example; the business expands the commercial in the different marketplace
across the UK and in different regions across the world with the help of the latest
technology. Along with this, the low cost and effective delivery on time has attracted a
wide range of customers towards the company. However, it has been found that the
company is dealing with tough competitors, such as Uber Eats and Just Eat who are
also offering delivery services to the customers (Deliveroo, 2019).

For example; customer loyalty is one of the benefits which is attained by these
competitors in the market. Although, the unique service of the business has grabbed
the attention of the customers in a very short period. This is the only way through which
the company was able to give the tough competition.

It has been found that competition between Uber Eats, Deliveroo and Just Eat is very
intense in the market of UK (Business matters, 2018).

Recently, it has been observed that Uber will cut the fees for the delivery of the food
in the market of UK and Ireland (Financial Times, 2019). It allows the restaurants to
make use of this app and carry out their deliveries because of the intensifying
competition with other companies like Deliveroo and Just Eat which are the leading
food delivery companies. However, Deliveroo and Uber Eats have their own courier
system though which means they can easily deliver the products to their clients whilst
they charge the restaurants higher commissions. The market has affected Just Eat as
their share fell by 5% to £6.98 in trading within London in 2019. The share of Uber
keeps from the food deliveries after making the payment of couriers and restaurants
on average lower than the cut the business takes from rides (Financial Times, 2019).

If Deliveroo carry on improving, then they will meet their goals, one of which is
becoming more affordable. This will bring in more customers as the prices will be more
convenient. Another one of their goals is expanding outside urban areas, which will
mean that they are reaching out to different customers, not just those in urban areas.
If they do manage to achieve these goals, then it is very likely that they will also
increase awareness of their brand as a result (Gilliland,2016).

A recommendation for Deliveroo is to find a way to involve people who are less familiar
with technology, such as old people or people who like to do things the old fashioned
way.
6. CONCLUSION

Overall, the analysis shows that Deliveroo’s strategies, as well as a business model
which includes innovation, has been analysed. The analysis includes the 4 major key
drivers which include demand on the market, advances in technology, growth in the
economy and environment. This has been done with the analysis of the push and pulls
factors, as well as the product life cycle.

Furthermore, there is an analysis of Deliveroo with the help of the different approaches
that contribute in shaping the entrepreneur vision, as well as a business model. The
different approaches which are used to analyse are Ansoff matrix and Porter’s generic
strategies. The company makes use of approaches like market penetration and market
development in terms of Ansoff matrix. Additionally, the cost leadership strategy is
used by the company for Porter’s generic strategies. The report shows that there is an
evaluation of the success of Deliveroo which includes an analysis of the
implementation of the Blue Ocean strategy, tools and framework.
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