Glovo 2.0: Pivoting to a new Business Model

Description

The last-mile food-delivery market is on the rise. The trend is clear: every day, more people are using apps to buy things and order food from their mobile phone. Local restaurants and other businesses have seen an opportunity to sell their products and services to a market that, until recently, was unattainable. More and more competitors have entered this sector but only a few survive for long. Relying on a competitive business model seems to be one of the key ingredients to do so. This case study analyzes the changes that Glovo made to its business model between the summer of 2016 and December 2017 under the leadership of Oscar Pierre, the founder and CEO of the Barcelona-based company. The case starts with a diagnosis of the situation in the company in April 2016, when it entered a period of stagnation that lasted for several months. Then the case analyzes the changes made to the business model and, at the end, it shows how the company's results changed, possibly as a consequence of those changes to the model. Glovo was facing a challenging situation in the late summer of 2016. After more than a year of activity, the company's growth was no longer satisfactory. The company was moving away from the break-even point and was not expanding its user base as quickly as predicted in the business plan (and as promised to its current investors). The future of the company was uncertain. However, a year later, in September 2017, Glovo closed a funding round of €30 million and was immersed in a very ambitious international expansion. The volume of operations had increased considerably and the company was growing in new geographical areas such as Latin America and the rest of Europe.

Learning Objective

This set of two case studies is designed to be used in courses on strategic management and business model innovation, as well as entrepreneurship courses. The two cases might be of special interest for MBA students and senior executives. The cases may also be useful for managers, especially those from companies involved in a transformation process sparked by the digital economy. The cases are very effective for students willing to analyze the growing process of a start-up trying to offer a competitive value proposition in a crowded market.

Related Documents

• Glovo 1.0: Launching a New Business Model in the Ultra-Competitive Last-Mile Delivery Landscape
• Glovo 1.0: Iniciando un nuevo modelo de negocio en el ultra-competitivo mercado de la última milla
• Glovo 2.0 - Teaching Note: Pivoting to a New Business Model

Keywords

Glovo