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COMPANY OVERVIEW

“Anything you want, delivered in minutes”

As the slogan states, Glovo is an on-demand delivery application which

connects customers to urban couriers, who acquire and then deliver
products- food, groceries, flowers, pharmaceuticals, cigarettes, newspaper,
makeup and much more- from any restaurant or shop in a city. What
differentiates Glovo from other similar on-demand services is that its
couriers can pick up and bring literally whatever customers want to them.
Thanks to this app, the idea of “anything delivery” is expanding all over the
world.

The service is carried-out in less than sixty minutes by independent

couriers, called “Glovers”. They can be recognized in a city by the yellow and
light blue uniform, with an inverted drop symbol which recalls the Google
maps pointer. The outfit, along with the rest of the required equipment,
costs 15 euros in Italy. Glovo asks for a deposit of 65 euros and, at the time
of return, it gives back 50 euros, withholding 15 of them. If the courier
doesn’t have the money right away, Glovo will deduct them from the first
paycheck.

Founded in Barcelona, Spain, the start-up was first introduced in 2015.

Its founders are Oscar Pierre, who is the CEO and strategic head of the
company, and Sacha Michaud, who, instead, is the co-CEO and mainly
focuses on the marketing, legal and administration side of the company.
Before becoming the founder of Glovo, Oscar Pierre studied at Universitat

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Politècnica de Catalunya and then graduated at Georgia Tech as an
aerospace engineer; after graduating, Oscar began his working career as an
aerodynamics engineer at Airbus in Toulouse but decided after a few months
to follow his passion for social entrepreneurship and start his own business.
Oscar was inspired by American business models like Airbnb and Uber, and
realized that there was no way to have all city products at home on demand.
When he went back to Barcelona with the idea of launching his own app on
the on-demand market, he met the co-founder of Glovo Sacha Michaud.
Sacha is not only the founder of Glovo, but is also one of its first investors.
Furthermore, he is the founder of several digital businesses like Jdigital,
Betfair, Wanadoo, AEDAPI, and has more than 15 years of experience in the
online sector as an advisor and an investor. Oscar quickly realized he was
the ideal figure to help Glovo grow and become a well- established name in
the mobile apps sector. As a matter of fact, since its first order, Glovo has won
several awards like Start-up of the year in 2017, the Google award for
mobile innovation in the retail sector and the Expansión prize for the best
digital ideas in the category of new business models .

From research, we found that Glovo has raised a total of €152.1M in

funding over 6 rounds. Their latest funding was raised on Jul 18, 2018. Its
first round goes back to March 1st, 2015 and was of $140K. Since 2015, the
number of investors has become 20. The lead investors are Rakuten, which
is a tech company that offers electronic commerce solutions in Japan and
internationally, and Cathay Innovation, a global venture capital fund that
supports digital entrepreneurs by bridging USA, Europe and China
simultaneously.
In October 2015 Glovo acquired personal assistant app Justbell.
On Mar 31, 2016, it also acquired a food-delivery company based in Milan
called Foodinho. This was a very important move as it became the link

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between Glovo and Italy. In fact, the founder of Foodinho, Matteo Pichi, then
became the Country Manager and official spokesperson of Glovo in Italy.
Furthermore, news says that just a few months Glovo has signed a deal to
purchase Foodora Italia which is owned by the German competitor Delivery
Hero. With this operation, the Spanish delivery app becomes the market
leader in Italy with a potential of 620,000 users and 4,500 business
partners. Another important event occurred in June 2017: Glovo signed an
exclusive agreement with McDonald's Spain and Italy to partner with the
McDelivery service.

Since its first order in Barcelona took place in March 2015, Glovo has
expanded all over the world. In September 2015, it started operating in
Madrid. In November of the same year, Glovo opened in Valencia. As said
before, in March 2016 it acquired the Italian company Foodinho and started
operating in Milan and this is when the international expansion started.
Now Glovo is available
in 22 different
countries: Spain,
France, Italy,
Portugal, Chile, Peru,
Argentina, Panama,
Costa Rica,
Guatemala,
Dominican Republic,
Romania, Morocco,
Turkey, Egypt, Figure 1- Number of countries in which the company operates

Ecuador, Uruguay, Ukraine, Georgia, Colombia, Belarus and Kenya. Its

headquarters remain in Barcelona.

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 Glovo’s current team is made up of 6 Members: Oscar Pierre (CEO and
Co-Founder), Bartek Kunowski (VP Product & Tech), Miguel Vicente (Co-
Founder of JustBell), Matteo Pichi (Italy Manager), Sacha Michaud (Co-
Founder) and Utsav Agarwal (Head of Expansion - EMEA and APAC). In
addition, it has 7 board members and advisors, including Javier Cebrián
Monereo (Advisor), Felix Ruiz (Advisor), Miguel Trovar (Board
Member), Oskar Mielczarek de la Miel (Board Member), Gerard Olivé (Board
Member), Zaryn Dentzel (Advisor) and Beatriz González (Board Member). As
of now, Glovo has 800 employers all over the world, more than 7000
Glovers, has made over 10 million deliveries and has over 5600 partners.

SELECTION OF A BUSINESS

As stated above, what characterizes Glovo and makes it one of the

leading on-demand delivery apps is that its couriers are able to satisfy
customers’ requests and bring anything he/she wants to their desired
address.

More specifically, the evolution of the international food delivery

market has been very rapid. In the last 5 years, delivery of ready-to-eat
food has had an average growth of 51%, with significant changes also in
terms of business model. This type of market has gone from restaurants or
stores which offer specific delivery services to large online ordering
platforms, ending with companies that try to provide an even more
integrated experience by taking control of the entire food chain.

For our project work, we’ve decided to mainly focus on the Italian
food-delivery market because we think that concentrating on our
environment will give us a better insight on what Glovo’s strategy is in our

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country and what are the factors that might affect it. In fact, while doing
research, we realized that competitors change based on what country or
area is being analyzed- every market is different. In Early 2019, Glovo
announced their intention to leave Brazil, after one year of operation,
pressured by local competitors- this shows how choosing the right business
location is crucial for a company. A good location is just as important as the
product, employees or marketing. As Oscar says “You have to delocalize
(from your native city), otherwise the company stops. You need to find
super strong regional teams.”

One of the leading sectors in Italy is definitely the food one but food
delivery has started to become popular only in the last couple of years;
entering the food market for Glovo was not simple and this is why it had to
acquire Foodinho to first enter the food-delivery market. Smart business
moves are also what differentiate successful startups from failing ones, and
the acquisition of the Italian startup was one of them.

With respect to other European countries such as England and

Germany, the Italian food and grocery delivery sector in Italy in 2009,
represented only a small percentage of online purchases (around 1%), but
then expanded strongly in recent years, reaching today a potential of 7
million people (data from the National Observatory and Gfk Eurisko for
affariitaliani.it, 2016). This confirms that the food delivery in Italy today
involves a €400 million market, with broad prospects for growth: 500 million
euros in two years only in Milan.

After giving a general insight of the company in the previous section,

we will now concentrate on Italy and show what is the strategy analysis used
by Glovo to be able to completely dominate the Italian food-delivery scene.

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We will concentrate on the food market, but, there is to say that Glovo
remains the only on-demand “anything delivery” app in Italy.

STRATEGY ANALYSIS

Since the beginning, Oscar Pierre’s and Sasha Michaud’s vision was to
create something much bigger than a simple food-delivery company. Most
startups are first born from trying to solve a problem and this is exactly
what the two founders did: they wanted to fulfill a gap which was becoming
more and more important in modern society. They noticed that there wasn’t
a way for people to have access to all the shops or restaurants of their city
in a fast and easy way. In fact, the founders have stated in many interviews
that their mission: “we believe everyone should have their entire city
accessible to them immediately”. With this statement, the food-delivery now
moves to the background- the leading role of the story is played by
“anything delivery”.

The problem wasn’t only present amongst local customers, the

founders’ goals was also to help the cities’ restaurants and stores gain more
popularity and fight against giant online retailers. Why order something
online when you can have it delivered to you in less than an hour? The
platform allows users to buy or deliver almost anything in their city at the
press of a button on their smartphone, and is able to connect the order to
the nearest available Glover and therefore optimizing distance and time.

Glovo not only helped making customers life easier, but also favored
local shops and restaurants by partnering with them. Another example of a
smart business move.

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Success for Glovo came thanks to their way of understanding profoundly the
needs of all kinds of customers and finding a new idea of satisfying them.
The two founders, Oscar and Sasha, really listened to its customers and
found a way to enter their minds. As for Italy, we could say that they found
a solution even before the problem started to expand all over the country. At
first, Glovo concentrated on the Northern cities of the country, like Milan,
which is a very international and dynamic city. Now we can say that Glovo is
present in 22 different Italian cities, that go from the North all the way to
Sicily.

The app also includes geolocation, which lets customers find the
nearest Glover and track him/her on a map from the moment they place the
order to the moment it's delivered- in this way, people will feel like they
have a personal courier that runs errands for them. Glovers can also bring
your clothes to the laundry, or bring you the keys you forgot.
In a world where everything is moving so quickly and where people,
especially workers, don’t have the time to go from one place to another, this
is a real innovation. Also, the payment method is easy and convenient,
because it charges customers only upon delivery.
Essentially, Glovo aims at enhancing attractiveness of buying locally while
making life easier for customers.

One of the biggest innovations for the company was partnering with
McDonald’s in June 2017. Since then, customers can order their favorite
McMenu and have it delivered wherever they’d like. This also Glovo a
massive growth. Competitors like Deliveroo weren’t willing to meet big
companies’ demands, but Glovo was able to adapt its service to reach new
customers. Oscar says that they “literally built anything they wanted”- like a

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personalized McDelivery bag or a part of the app entirely dedicated to
McDonald’s.

Things are not as easy as they may seem though. One of the biggest
challenges for Oscar and Sasha was finding the funds to continue operating,
especially the latest one which goes back to July 2018. Convincing investors
that a Spanish startup can compete on a world stage was not easy.
Just like in any other startup, the risks are very high and, most importantly,
the process is affected by the environment that is always flowing and
changing. There have been a lot of changes in Glovo’s business model and
growth. Delivery is a complicated sector to compete in and this is why there
is a lot of pessimism. Still, how was Glovo able to survive in such a difficult
market? The founders are obsessed about being profitable because they
strongly believe that only those who focus on profitability get funding.

With all these factors, Glovo has been able to gain its competitive
advantage and keep it with great results. When moving around the
city, seeing two to three or more couriers for Glovo is very common. They
are everywhere! But Glovo certainly has no incentive to stop here. In an
interview on Sifted, which is journal backed by the Financial Times, Oscar
talked about Glovo’s first “dark supermarket”. His idea is to build large
warehouses like Amazon, very close to world’s cities, to accumulate many
products to then send them to the end user in a short period of time. The
warehouse is called “SuperGlovo” and is the size of a garage. Their goal is to
have items delivered in 20 minutes. But Glovo’s vision has always been to
work with local shops and give them support, so their idea is still far from
Amazon’s. Customers can order only convenience groceries from
“SuperGlovo”, like drinks, snacks or toilet paper- things that they want
almost immediately.

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 Another idea the founders have in mind is to open their own food-
delivery kitchen, like “Glovo Sushi”. People are a bit skeptical about this
because they think customers are not willing to try food made by a courier
company. However, Oscar is positive about the idea as he believes that
beyond the top 20 or so brands on any food delivery app, there are
hundreds of unknown restaurants which customers are occasionally willing to
try, without ever going to the place. The thing that worries him is that it
could seem like Glovo is competing against its own partners, but it’s
certainly something that would help the busy customers. The idea is to
imitate what Amazon did by selling basics with their own brand.

Creativity is the ability to find unexpected links among things, ideas,

people in order to generate solutions for customers. Glovo has been able to
do this since day one, and, as time passes by, it’s becoming one of the
leading on-demand delivery companies in Europe and the rest of the world.
The company’s vision has stayed the same overtime, making the
‘everything-delivery’ a trademark.

EXTERNAL ENVIRONMENT

We’ve analyzed the external environment in which Glovo is playing

and, for now, we think it has been able to overcome difficulties in the best
way possible. Glovo is still the only on-demand app in Italy which delivers
anything to its customers. This has certainly helped the company have a
competitive advantage in the market. Furthermore, one of the most
important things for the companies which operate in this industry is timing

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of delivery. In its vision statement, Glovo says they will be able to deliver
the wanted product or food in max 60 minutes. Choosing a wider time range
with respect to its competitors could be seen as a shortcoming, but, in
reality, this was made to not deceive its customers. In this way, Glovo has
been able to respect its vision. In big cities, like Rome for example, it is hard
to guarantee that all deliveries will come in a short time. Some factors that
can affect the delivery time are weather, traffic and malfunctioning of the
vehicle- these are all thing that cannot be controlled by Glovo’s employees.
When one of its competitors first entered the market in 2014, Foodora, they
promised a 30 minutes delivery to its customers. News say that Foodora has
been acquired by Glovo and one of its main weaknesses was the fact that it
was not able to respect timing. We shall not forget that Glovers only bring
deliveries with bikes and motorcycles/scooters and that accidents may occur.
A company should never make promises it can’t keep.

Another factor that affects time delivery for food is the preparation
time of the meal: restaurants are busier during weekends and at certain
times of the day. Glovers’ job is to go to the partners’ store and pick up the
food, if it’s not ready on time customers should know that the ones to blame
are not Glovo but the restaurant.

We expect that in a couple of years all food-delivery companies in Italy

will have the same delivery time because the factors that affect it are
uncontrollable for Glovo. Morever, we believe that the latest injection of
capital (€115 mil) made in July 2018 will allow the startup to continue to
invest in optimizing its platform and its technical team in order to further
improve the service offered to couriers, users and affiliated businesses. In
fact, the founders stated in an interview the company will expand its
technical team with the recruitment of over 100 engineers in the coming

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months with the goal of becoming the most important technology hub in
Southern Europe. They said that their priority, is to invest in the growth of
the technologic team to continue to optimize the platform and offer an even
better service to their three main contacts: riders, consumers and shops,
becoming their reference app for deliveries”.

Working on improving the application to better satisfy user navigation

and interaction will lead to optimal results, making the user feel like Glovo is
an experience. This may lead to a company to a better relationship with
clients and build stronger trust between Glovo users and Glovers. Having the
trust of users allows flexibility for the company in any future ventures with
easy backing from user satisfaction.

When the compay first started operating in Italy in 2016, there were
other companies which were already doing food-delivery in the country.
These are Deliveroo, JUSTEAT and Moovenda.
Here we look at them individually:

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1.GLOVO VS DELIVEROO

Landed in the country in November 2015,

Deliveroo actually started in London in 2013, where
it immediately decided to carefully select the
restaurants to offer to its customers.
The result is an overall medium-high quality offer.

Company Color: light blue/green

Number of Partner Shops in Italy: over 4000
Delivery time: the average waiting time is around 30 minutes, but the
customer can follow the driver via GPS during the journey and if a delay of
more than 10 minutes is expected, the client is contacted by telephone.
Costs and Payment Method: Deliveroo has a standard rate of 2.50 euro,
but if you don’t order at least 15 euros worth of food a fee of half the
delivery price is added.

Glovo, on the other hand, has different rates for different restaurants.
The rates take into account the type of restaurant, the distance, the time of
the day, etc. Deliveries from Glovo range from €1.90 to €4.90. There is no
minimum delivery order for Glovo, but the service works 24/7. After
midnight, when Deliveroo goes dark, a new charge is added to every order
of 7% of the total. Luckily, the corner store, the pharmacy, the market, and
a handful of 24 hour fast-food restaurants, like McDonald’s, always have the
same €1.90 charge. Customers are charged upfront for the order and are
provided with a receipt for proof of purchase of the items.
As a consumer, the advantage is being able to benefit from the companies

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who are competing for market share. When a customer is up past midnight
and wants food delivered to his/her home, they will use Glovo. But from
interviews we’ve noticed that when Deliveroo is open they will use it and
take advantage of free deliveries; once they’ve run out of credit on
Deliveroo, people might go back to using Glovo. While the difference in
delivery charge is only €0.60, after three Glovo deliveries they would be able
to order a fourth time using the money saved from ordering through Glovo
instead of Deliveroo. After examining the target market of these delivery
apps, it is clear that convenience, availability, and options are important
aspects of the service. Aside from being able to rack up credits from sharing
reference codes among friends, Deliveroo falls short of Glovo. Ultimately,
Glovo has had the competitive advantage in these aspects and it’s because
of their innovative platform and the 24-hour service which is extremely
useful from certain types of consumers.

2.GLOVO VS JUSTEAT:

JUSTEAT is an online food delivery service

that has been present in Italy for most years
and therefore it is has been able to gain much
amongst the Italian consumers: currently it is
active in more than 400 Italian municipalities.
Born in Denmark back in 2001, it arrived in our
country five years ago and recently opened a
new headquarter in Milan, reaching 70
employees. The main goal of the company is to
connect customers with restaurants nearby. In fact, JUSTEAT is only an
intermediary: the portal offers the web platform to choose and order food,

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but then, in most parts of Italy, it is the restaurateur who carries the order
to the customer's home. This is one of the main differences from Glovo
because it means that everything depends on the quality and seriousness of
the restaurateur and not on the delivery app itself. Exceptions are the 14
cities in which JUSTEAT handles delivery directly through its logistics
partners. This option is currently available in Milan, Rome, Palermo, Genova,
Turin, Bologna, Florence, Padova and Verona.

Company Color: red and white

Number of Partner Shops in Italy: over 7600
Delivery time: JUSTEAT has set 40-45 minutes as the maximum delivery
time for an order, although, as we said, it is impossible to determine the
standard time since it depends on the individual operator/restaurant.
Costs and Payment Method: the price depends on the restaurants and
payment can be made through credit card or cash on delivery.
JUSTEAT has many points of weakness, the first is the limited success
outside core business – even though it is one of the leading organizations in
its industry it has faced challenges in moving to other product segments.
The company has not been able to tackle the challenges which were
presented by the new entrants in the segment, like Glovo, and has lost
market share in the niche categories. In fact, the company had to rebuild
internal feedback mechanism directly from the sales team to deal with these
challenges. Moreover, JUSTEAT has not been very good at the forecasting of
product demand which has lead a to higher rate of missed opportunities with
respect to its competitors. Even though the company is successful at
integrating small companies, it’s not highly successful at integrating firms
with different work culture. From our analysis, we found that although
JUSTEAT is the oldest company in Italy doing food-delivery is spending
above the industry average on Research and Development, it has not been

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able to compete with the leading players in the industry in terms of
innovation. It can be seen as a mature firm which is trying to bring out new
products but with scarce results.

3.MOOVENDA VS GLOVO

In November 2014, during the

Startup weekend in Rome, the
founders developed the idea of
Moovenda, thanks to which they
received the first prize of the
competition. Afterwards they entered
the Luiss Enlabs' accelerator.
Moovenda then became a service in the field of food delivery with the choice
of selecting only the best restaurants in the cities and a quality service: from
products delivered in isothermal packaging to preserve their temperature, to
customer assistance before and after the purchase. Nowadays, Moovenda is
the largest food delivery startup in terms of the number of orders, around
10,500 per month. Another great novelty will be characterized by the service
dedicated to lunch at the office, it will be called "OffLunch" and will allow all
employees and professionals to comfortably receive lunch at the office at an
affordable price

Company Color: orange and white

Number of Partner Shops in Italy: over 1.200
Delivery time: it depends on the distance riders have to travel
Costs and Payment Method: also depends on the distance, price varies
from 2,50 euros to 10 (for trips longer than 15km)

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Glovo was able to retain a higher market share with respect to Moovenda
thanks to the resolution of some problems, which were not solved by
Moovenda. One of these problems is the fact that its website is quite difficult
to use because there aren’t any filters, nor guidelines, thus, if you have
some problems it is quite difficult to solve them. Another main weakness is
the smaller choice of restaurants. As a matter of fact, Moovenda only has
1431 partner shops, while Glovo has more than 4500.

Figure 2 - Glovo and its competitors

4. Another type of competitor that can be analyzed are the restaurants

in Italy that have a delivery service. In Italy there are many restaurants,
especially “pizzerie”, that already have their own delivery service and don’t
have a partnership with Glovo or any other on-demand app. This could be a
threat especially because of loyal customers that have been clients for a long
time of that certain pizzeria or restaurant in general and don’t feel the need

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of ordering their food on an app. Especially for the segment of the old
generation customers, they might find it much easier to just call the pizzeria
and make their order rather than downloading a high-tech app that they
don’t know how to use.

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SWOT ANALYSIS

Figure 3 - Glovo's SWOT analysis

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Strengths

Glovo’s strengths are mainly based on their ability to quickly expand

in Europe and other countries while still holding their own trademark in an
increasingly crowded competition. First of all, in Italy Glovo is present in 22
different cities which gives many consumers in the country the possibility to
access such a technologic and modern service. Second of all, as the Country
Manager Matteo Pichi said, the diversification of the diversification of the on-
demand delivery offer, extended to restaurants, supermarkets, pharmacies
and shops of all kinds is a business approach that has really rewarded them
on the market. In fact, on the app customers can find every kind of food a
customer they wish for. Another strength, related to the previous one, is the
important partnerships that Glovo has managed to conclude throughout its
territorial expansion, thanks to which it was capable of differentiating its
products, as said before, and most importantly of providing customers with
high quality food that in other companies was not available.
One advantage that Glovo has is that the company’s couriers, the Glovers,
only use scooters or bikes to move around the city, in order to avoid traffic
and reach the customers’ address much faster. However, as we’ll see later,
this could also be a weakness for the company.

Weaknesses

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 One of the main critiques directed to Glovo is the amount of time that
people actually have to wait for the food.
Glovo’s main objective is to bring food everywhere in less than an hour, but
customer’s criticism comes from the fact that during busy hours, or during
weekends, when there is even a higher demand, the waiting time even goes
after the stated time (60 minutes). This is a common weakness for on-
demand delivery apps because, as we’ve said before, the factors that affect
it do not really depend on Glovo itself, rather on things that can’t be
controlled.
Another weak point that can be analyzed is the fact that orders are delivered
only by scooters or bikes. These means of transport are also considered as
disadvantages for the company because of several factors: little capacity to
transport heavy stuff- it is quite difficult to transport heavy or large objects
on these kind of vehicles- and the possibility of being involved in situations
concerning a legal risk for the company, for instance accidents caused by
Glovers rushing to deliver food on time. While consumers are increasingly
satisfied with this service due to its efficiency, the same cannot be said of
the couriers that work for Glovo and the food delivery platforms in general.
Although the exponential increase in users has also increased the work for
the Glovers and, consequently, their pay, workers' conditions have not
improved over time. The peculiarity of this type of job is that recruitment
takes place on the basis of extremely flexible work contracts, making the
choice of working hours completely discretionary for the worker. But this is
not always true because riders’ testimonies show that the decision not to
work for a few days can negatively affect their ranking. The classification of
the riders, which is processed automatically by the platform, is on the basis
of which shifts are chosen by the couriers but, in reality, points are lost even
for variables outside the Glover’s control, such as the number of rejected

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orders or bad reviews on product quality. Furthermore, since the couriers
are generally considered self-employed, without the right to be paid on
holidays or if they are sick, also periods of long inactivity negatively affect
the ranking.

Another weakness for Glovo, but probably for the whole on-demand
service in general, is that the food is almost always cold when it arrives at
destination.

Opportunities

Main opportunities for Glovo are the possible global expansion and a
possible fast market increase in a short period of time. For example, in Italy,
Glovo expanded its market share in a relatively short amount of time.
Thanks to its fast expansion, Glovo can be an attractive business for many
new investors and it could be able to conclude higher level of partnerships.
Another opportunity can arise from the fact that the company could continue
to develop, as they are already doing, non-food services. Glovo already
delivers products such as medicines or flowers for example, but it might also
expand in other businesses.

Threats

Glovo’s main threats are the other competitors such as JUSTEAT,

Deliveroo and Moovenda, for what concerns the on-demand market, and
also face-to-face shops, online shops and traditional delivery courier
companies, when we talk about a more general food delivery service.
Other threats may come from the lack of development in some areas, which
could prevent the expansion of Glovo worldwide.

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PORTER’S FIVE FORCES

Rivalry Among Competitors - High

 New market
 High product differentiation, similar company structure
 Growth has been rapid
 Multiple direct and indirect rivals
 High costs of leaving market

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  Low customer loyalty
 Differences among competitors are difficult to perceive online

Threats of New Entry - Low

 High economies of scale
 Brand names are well-known
 No so difficult access to channels of distribution
 High capital requirement before starting to sell
 Proprietary materials/technology are issues
 Not easy to enter, so the company that will succed in enter the market
will more easily have big part of it

Bargaining Power of Suppliers - High

 Building efficient supply chain with multiple suppliers
 High number of suppliers
 A restaurant has averagely from 20% to 40% turnover thanks to a
partnership with Glovo
 Way for suppliers (restaurants and shops) to become more popular
and accessible to customers

Bargaining Power of Buyers - Medium

 Glovo is in total control of its prices
 Less switching costs
 Buyers (consumers) are more concentrated than sellers
 Buyer is price sensitive

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  Products are highly differentiated
 Substitutes are available
 Buyer is educated about the products

Threats of Substitute Products or Service - High

 Consumer switching costs are low
 Substitute product are similar in quality
 Substitute performance is similar
 Substitute products are available

STRATEGIC GROUPS WITHIN INDUSTRIES

Strategic groups are used as an analytical tool to help identify barriers

that can protect a group from attacks by other companies, it finds groups of
firms whose competitive position may be marginal or tenuous, helps chart
the future direction of firms’ strategies and think through the implications of
each industry trend for the strategic group as a whole.

For our strategic groups analysis, we plotted Glovo and its main
competitors on a two dimentional grid. The two dimensions are: on the y-
axis there’s the time delivery of orders (in minutes) and, on the other hand,
on the x-axis we observed how much the firm is present on the Italian
territory based on how many partnerships it had made (in number of partner
shops).

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 Figure 4 - Strategic groups

By looking at the graph, we can clearly notice that the delivery time of
Glovo is higher than its competitors, but, as we stated before, it decided to
set a high time limit to avoid customer’s disappointments in case of extra
waiting time. In this way, the rejection of orders is lower.
As regards of the geographic coverage, Just Eat leads the on-demand food
sector in territorial expansion, because it serves the highest number of cities
and municipalities. The main reason is that the company is well-established
and has been operating since 2011 in Italy. This has given it a head start
with respect to Glovo which is still a startup.
Focusing on delivery time, Moovenda and Deliveroo promise a faster service
compared to Glovo, but from several researches we found out that customer
complaints mainly come from the fact the time is not respected.

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FIGURE’S REFERENCE
Figure 1- Number of countries in which the company operates...................4
Figure 2 - Glovo and its competitors.....................................................17
Figure 3 - Glovo's SWOT analysis.........................................................19
Figure 4 - Strategic groups.................................................................26

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