Scenario: Over the last five years, the food delivery market has experienced significant growth. Thanks to platform-to-consumer
Question:
Scenario: Over the last five years, the food delivery market has experienced significant growth. Thanks to platform-to-consumer services like DoorDash and Uber Eats, food delivery has expanded from traditional takeaways to anything and everything, thereby increasing the potential revenue capture by billions of dollars.
The network effects that result from an increased number of delivery riders, combined with advancements in route optimization technology, have facilitated fast and cheaper delivery. As a result, this has created a flywheel effect for many of the food delivery operators, which continue to try and undercut competition on razor thin profit margins as they battle for market share.
For this assignment, we will assume there are only three firms, DoorDash, Uber Eats, and Grubhub in the food delivery market. Annual revenue data of these firms are provided below (unit: million dollars):
year | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |
Grubhub | 683 | 1007 | 1312 | 2026 | 2362 | 2482 |
year | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |
Uber Eats | 600 | 1500 | 1900 | 4800 | 8300 | 10900 |
year | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |
DoorDash | 110 | 550 | 850 | 2880 | 4880 | 6580 |
The revenue data above provide some information. For example, Grubhub made $2.3 billion revenue in 2021, but Uber Eats made $8.3 billion revenue in the same year.
The data of annual users of each firm for last ten years are provided below (unit: million):
year | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |
Grubhub (million) | 3.4 | 5 | 6.7 | 8.1 | 14.5 | 17.7 | 22.6 | 31.4 | 33.8 | 28.3 |
year | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |
DoorDash (million) | 4 | 10 | 20 | 25 | 32 | |||||
year | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |
Uber Eats (million) | 5 | 9 | 15 | 21 | 66 | 81 | 85 |
This annual user data also provide some information. For example, Uber Eats has over $60 million active customers, who purchase through the app once a month.
Assignment questions:
Explain how the market shares of three firms have changed between 2018 and 2022, using either their revenue or annual user data. Provide appropriate Excel charts to support your arguments.
Compare the growth rate of three firms, using their revenue or annual user data. Provide a line chart(s) to support your argument.
Expert Answer:
To answer this question lets discuss each aspect one by one 1 Market share Market share can be calculated by taking a firms total revenue or number of ... View the full answer
