Sample Answer
The Rise of Just Eat and Its Impact on the Restaurant Industry
Introduction
Information and communications technologies have transformed the hospitality and tourism sector, particularly through the rapid growth of collaborative consumption and peer to peer platforms. The sharing economy allows individuals and businesses to make use of under utilised resources through digital intermediaries, creating new forms of value and convenience for consumers. One of the most successful examples within the UK hospitality sector is Just Eat, an online food delivery platform founded in 2001. Its growth reflects wider changes in consumer lifestyles, including increased demand for convenience, speed, and digital access to services. The takeaway and food delivery market in the UK has expanded significantly over the last decade, driven largely by app based platforms that connect restaurants with customers in new ways. This essay outlines and evaluates the success of Just Eat and examines its impact on the restaurant industry. It then recommends whether restaurants should develop strategies to minimise the actual or potential impact of Just Eat, using concepts such as disruptive innovation, strategic drift, and the TOWS strategic matrix to support the discussion.
Task 1: Outline and Evaluation of the Success of Just Eat
Just Eat’s success can be clearly demonstrated through its rapid growth, scale of operations, and strong market position. By 2017, the company was valued at approximately £5.5 billion and had partnered with over 82,000 restaurants worldwide, serving more than 21.5 million active customers. In the UK, the platform benefited from the fast expansion of the sharing economy, with food delivery transactions rising alongside wider changes in digital consumer behaviour. The growth of the takeaway delivery market from £2.4 billion to £4.2 billion over a decade highlights how platforms such as Just Eat have capitalised on shifting lifestyles, including longer working hours and reduced time for home cooking.
The core concept of Just Eat is rooted in collaborative consumption. Rather than owning restaurants or delivery fleets in its early model, Just Eat acted as an intermediary that connected customers with existing takeaway providers through a digital platform. Restaurants were able to monetise spare capacity, such as kitchens and staff during quieter periods, while consumers benefited from increased choice and ease of ordering. This asset light model reduced operational risk for Just Eat and allowed rapid scaling across regions and countries. From a theoretical perspective, this aligns with sharing economy principles, where digital platforms facilitate access rather than ownership.
Scale has been a major contributor to Just Eat’s success. The platform’s extensive restaurant network creates a strong network effect. As more restaurants join, the platform becomes more attractive to customers due to greater choice. At the same time, a larger customer base makes the platform more appealing to restaurants. This positive feedback loop has allowed Just Eat to dominate key markets, particularly in the UK and parts of Europe. Smaller independent takeaways, which may lack marketing budgets or digital expertise, have especially benefited from access to a large online customer base.
Consumer demographics also help explain Just Eat’s growth. Younger consumers, particularly those aged between 18 and 35, are more likely to use mobile apps and value convenience over traditional dining experiences. However, usage has expanded beyond younger age groups as smartphone adoption has increased across society. Families and older consumers increasingly use food delivery apps, particularly in urban areas. This broad demographic appeal has strengthened Just Eat’s market position and made it a routine part of everyday consumption rather than an occasional service.
Just Eat can also be viewed as a form of disruptive innovation within the restaurant industry. Disruptive innovation occurs when new technologies or business models change how industries operate, often challenging traditional practices. Just Eat has disrupted how customers interact with restaurants by shifting ordering from phone calls and in person visits to digital platforms. For many restaurants, particularly takeaways, online orders now represent a significant share of total sales. While this has increased revenue opportunities, it has also changed cost structures due to commission fees charged by the platform.
The impact of Just Eat on the restaurant industry is therefore mixed. On the positive side, it has increased visibility and sales for many businesses, particularly small independent restaurants. It has enabled restaurants to reach customers beyond their immediate local area and operate more efficiently during off peak hours. However, there are also negative impacts. Commission fees can reduce profit margins, and heavy reliance on third party platforms can limit direct relationships with customers. Some restaurants risk losing control over pricing, branding, and customer data, which can weaken long term competitiveness.
Task 2: Strategic Recommendations for the Restaurant Industry
Given the significant influence of Just Eat, it is important to consider whether the restaurant industry should strategize to minimise its actual or potential impact. Rather than attempting to resist digital platforms entirely, many restaurants may benefit from adopting strategies that balance participation with greater independence and control.
One key strategy is the effective use of technology. Restaurants can invest in their own digital ordering systems and mobile friendly websites to encourage direct orders. While this requires upfront investment, it can reduce long term reliance on third party platforms and lower commission costs. Technology can also support more efficient kitchen operations, inventory management, and data analysis, allowing restaurants to better understand customer preferences and demand patterns.
Innovative marketing and digital connectivity are also essential. Social media platforms such as Instagram and TikTok allow restaurants to build strong brand identities and engage directly with customers. By promoting unique menu items, behind the scenes content, and customer reviews, restaurants can differentiate themselves from competitors on Just Eat, where options may appear similar. This approach supports customer loyalty and encourages repeat business outside third party platforms.
Product differentiation is another important strategy. Restaurants that offer unique cuisines, high quality ingredients, or strong ethical and sustainability credentials are less likely to compete solely on price. For example, independent restaurants focusing on vegan, organic, or locally sourced food can attract niche markets that value authenticity and quality over convenience alone. Differentiation reduces the risk of being easily replaced by another option on a delivery app.
Customer relationship management also plays a critical role. Platforms like Just Eat often control customer data, limiting restaurants’ ability to build long term relationships. Restaurants can counter this by offering loyalty schemes, personalised promotions, and incentives for direct ordering, such as discounts or free items. Building emotional connections with customers helps reduce dependency on intermediary platforms.
From a strategic perspective, the concept of strategic drift is relevant. Strategic drift occurs when organisations fail to adapt their strategies to changes in the external environment. Restaurants that rely entirely on traditional dine in models or resist digital change risk falling behind consumer expectations. At the same time, over reliance on platforms like Just Eat without a clear long term strategy can also lead to drift, as restaurants lose control over key aspects of their business.
The TOWS strategic matrix can help restaurants evaluate their position. Strengths such as food quality and local reputation can be used to exploit opportunities like digital marketing and direct delivery channels. Weaknesses such as limited technological expertise can be addressed through partnerships or staff training. Threats from platforms like Just Eat can be mitigated by diversification of sales channels, while opportunities created by increased online demand can be strategically leveraged.
Overall, the restaurant industry should not aim to completely minimise the presence of Just Eat, as it provides access to large customer bases and supports short term revenue growth. Instead, restaurants should adopt hybrid strategies that combine platform use with investments in their own capabilities. This approach allows them to benefit from digital innovation while maintaining long term resilience and strategic control.
