Grubhub's Entry Strategy into Mexico Management Essay (Essay Sample)

Grubhub
Name
Institutional Affiliation
Statement of Purpose
The purpose of this paper is to recommend an entry strategy, consisting of a business structure (entry vehicle) and organizational structure for Grubhub to enter and operate in Mexico. Two potential entry vehicles will be analyzed and compared, and the best will be picked to allow Grubhub to accomplish its strategic objectives in Mexico. A design of the organizational structure showing who will implement the strategic objectives will be created detailing applicable human, facilities and operational cost.
Company and Industry
Grubhub, Inc. is a technology service company founded in 2004 dedicated to connecting hungry diners with local restaurants for food ordering, delivery, and pick-up services (Grubhub, 2017a). Grubhub, Inc. is a growing platform that expands choice and convenience allowing diners to order from a large selection of restaurants with a click of the mouse or tap on a mobile phone (Hirschberg, Rajko, Schumacher, & Wrulich, 2016). The company’s online and mobile ordering website has allowed 8.75 million active diners to order directly to more than 55,000 mobile ordering restaurants in over 1,200 U.S. cities as well as London (Grubhub, 2017a).
Grubhub market expansion focuses on providing a platform for online and mobile food ordering service with delivery or pick-up.
The use of Grubhub’s online ordering website and mobile app is free to use, so buyers purchase food from local restaurants and only pay for food and delivery fees with the option for pick-up from the restaurant (Grubhub, 2017a). Grubhub’s primary revenue consists of per order commissions charged to the restaurant (Grubhub, April 2017). The 2017 Q1 revenue was $156.1 million (DMR, 2017).
The industry of delivering restaurant meals to the home is undergoing rapid change as new online platforms race to capture markets and customers across the Americas, Asia, Europe, and the Middle East. Although these new Internet platforms are attracting considerable investment and high valuations—already, five are valued at more than $1 billion—little real knowledge about market dynamics, growth potential, or customer behavior exists. Research from McKinsey, based on a six-month study covering 16 countries around the globe, provides insight into this fast-changing market. Worldwide, the market for food delivery stands at €83 billion, or 1 percent of the total food market and 4 percent of food sold through restaurants and fast food chains (Mckinsey 2017).