Just Eat Limited

Just Eat Limited - SWOT Analysis

Just Eat Limited (Just Eat) offers online food delivery service in the UK. Business Operation
the UK and Strong Support from parent company are the company’s main strengths, whereas
Limited Scale of Operations remains major area of concern. Strategic initiatives, Growing
Global Travel and Tourism Industry, Positive Outlook for US T&T Industry and growing
foodservice market in the UK are likely to provide growth opportunities to the company.
However, foreign exchange risk, changing consumer preferences and covid-19 may affect its
growth.

Just Eat Limited- Strengths

Strengths - Strong Support from parent company

The well-recognized market position of the parent company, Just Eat Takeaway.com
enhances Just Eat Limited brand image and top-line performance. Just Eat Takeaway.com is
a global online food delivery brand that connects 10 million consumers with nearly 2,50,000
local restaurants, websites, and app. As of 31 December 2020, it has a presence in 23
markets namely, the United Kingdom, Germany, Canada, the Netherlands, Australia, Austria,
Belgium, Bulgaria, Denmark, France, Ireland, Israel, Italy, Luxembourg, New Zealand,
Norway, Poland, Portugal, Romania, Spain, and Switzerland, as well as through partnerships
in Colombia and Brazil.

Strengths - Business Operation

A strong business operation enables the company to serve a great number of clients and
enhance its financial performance. Just Eat acts as an intermediary between independent
takeaway food outlets and customers. The company in association with restaurant partners
offers its services to customers through online portals such as apps, gaming platforms, social
media platforms.In FY2020, the portfolio of the company states the following data as follows,
operated 50K restaurants with 16 million active consumers, which resulted in 15% in delivery
share, 179 million orders with an average order value of EUR22.34 million, and gross
merchandise value of EUR 4.0 billion.

Just Eat Limited - Weaknesses

Weaknesses - Limited Scale of Operations

The limited scale of operations compared to its competitors may be a concern for the
company. Although the company has strong parent backing, its operations are limited
compared to its competitors. The company’s major competitor, Deliveroo plc has a diverse
base of approximately 115,000 restaurant and grocery partners and 1,00,000 riders. The
company has presence in UK, France, Italy, Hong Kong, and UAE. Therefore, limited
operations compared to its competitors may put competitive pressure on the company’s
operations.

Just Eat Limited- Opportunities

Opportunities - Growing Global Travel and Tourism Industry

The company is likely to benefit from the positive outlook for the Global Travel and Tourism
(T&T) industry. In spite of being affected by the COVID-19 pandemic, the Travel and Tourism
(T&T) sector is optimistic about growth as vaccine distribution across the world gains
momentum and economic activities return to pre-Covid levels. According to the World Travel
& Tourism Council (WT&TC), in 2029, the direct contribution of the T&T industry to the world’s
GDP is expected to reach US$4,065 billion, while the industry's total contribution to GDP may
increase to US$13,085.7 billion. The increase in investments in the T&T industry to
US$1,489.5 billion in 2029 is likely to spur growth in the T&T industry.

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Just Eat Limited

Opportunities - Strategic Initiatives

The company is taking various strategic initiatives to enhance its business performance. On
June 2021, Just Eat Takeaway.com acquired 100% of shares in Grubhub Inc. This acquistion
will accelerate capital and resources to strengthen its competitive positions in all markets.In
February 2021, Just Eat collaborated with Manna to launch drone delivery services as part of
a pilot programme in Oranmore, Co Galway. Customers of Camile Thai can select their
dishes on the drone delivery menu, which is available on sparticular days and the food will be
dropped within three minutes.

Opportunities - Growing Foodservice Sector in the US

The company is likely to benefit from the growing foodservice sector in the UK, which includes
quick service restaurants (QSR), full-service restaurants (FSR), and coffee shops. According
to in-house report, the sales and transactions of the foodservice sector in the US are
expected to reach GBP88,315 million and 11,605 million, respectively, in 2024. QSR's value
and transactions are expected to reach GBP15,714 million and 2,681 million, respectively, in
2024. FSR's sales and transactions are expected to reach GBP13,438 million and 904 million,
respectively, in FY2024. Coffee and tea shops' sales and transactions are expected to reach
GBP7,622 million and 2,050 million, respectively, in FY2024. Increase in the foodservice
sector is expected to be due to an increasing number of transactions.

Opportunities - Positive Outlook for US T&T Industry

The company is likely to benefit from the positive outlook for the US Travel and Tourism
(T&T) industry. In spite of being affected by the COVID-19 pandemic, the Travel and Tourism
(T&T) sector is optimistic about growth as vaccine distribution across the world gains
momentum and economic activities return to pre-Covid levels. According to the World Travel
& Tourism Council (WT&TC), in 2028, the direct contribution of the US T&T industry to the
country's GDP is expected to reach US$673.9 billion, while the industry's contribution to the
US economy is expected to reach US$1,954.1 billion. Visitor exports are expected to reach
US$291.7 billion in 2028. The increase in investments to US$246.2 billion in 2028 is likely to
spur growth in the US T&T industry.

Just Eat Limited - Threats

Threats - Changing Consumer Preferences

The foodservice industry is an ever changing segment with varied customer preferences.
Consumer preferences may vary with changing tastes, dietary concerns and trends. The
company should anticipate and offer products that appeal according to the changing
preference of consumers. If the company fails to respond to such changes, the demand for its
products may decline, which affects its operations. The company has to update itself with
consumer tastes and latest trends to maintain and expand its market position. Failing to
capture the latest consumer trends may result in loss of customers.

Threats - Foreign Exchange Risks

JUST EAT operates in many parts of the world and is exposed to fluctuations in foreign
exchange rates. The company reports financials in British pound and therefore its revenue is
exposed to volatility of the British pound against other functional currencies, as it conducts
business operations in major countries. Significant part of its revenue is also denominated in
other currencies such as Canadian dollar, Euro, Australian dollar, Brazilian real and Danish
krone, among others. Major elements exposed to exchange rate risks include the company’s
investments in overseas subsidiaries and affiliates and monetary assets and liabilities arising
from business transactions in foreign currencies. To minimize risks from currency fluctuations,
the company involves in foreign exchange hedging activities by entering into foreign
exchange forward contracts. However, there may be no assurance that such hedging

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Just Eat Limited

activities or measures may limit the impact of movements in exchange rates on the
company’s results of operations.

Threats - Coronavirus Impact on Global Economy

The company, an operator of online food delivery services in United Kingdom, could find its
business affected by the coronavirus outbreak. Its impact had already affected the travel and
tourism segments such as airlines, accommodation, food and beverage, entertainment, and
transportation. As of April 2021, the World Health Organization (WHO) declared that more
than 3,003,794 people died and more than 140,322,903 confirmed cases globally. The
tourism industry is expecting cancellation of tickets and a slowdown in forwarding booking,
which may lead to a fall in the occupancy rates of hotels due to a dramatic decrease in tourist
arrivals in the region.

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