Scaling Sharebite: A Strategic Approach

The assignment content is about Sharebite, a food ordering platform that aims to end hunger in NYC. The founder has not yet implemented the customer acquisition strategy and needs to decide on a charity to partner with. The company faces threats from competitors like Amazon and Grubhub, as well as internal challenges such as high implementation costs and inflexible pricing models. The analysis suggests focusing on medium-sized businesses (200-500 employees) that value image over engagement, and prioritizing growth and market share over profit. The strategy involves increasing unit sales volume, customer retention, and attracting customers from competitors.

ADVANCED MARKET STRATEGY
Company Summary and Market Insights
Sharebite is an online marketplace for food delivery. The platform connects restaurants to
consumers who want to order food delivery. Sharebite’s core differentiator is its mission-driven
business model. Sharebite’s goal is to eliminate hunger in NYC. For every order placed on
Sharebite’s platform, 2% of the order value is donated to a charity of the patron’s choice.
Customers have an inexhaustible list of charities to choose from, but the default charity is City
Harvest. Approximately 130,000 meals have been donated so far through the Sharebite platform.
According to Morgan Stanley’s 2016 report1 titled, “Pizza Paradigm for Online Food
Delivery”, the total restaurant industry is about $500 billion, with the Sharebite total addressable
market being nearly 40% ($210 billion, composed of food eaten off premises). Of that 40%, $30
billion is the delivery market, and $11 billion is from online delivery services. The online
delivery market is currently just 5% of the Sharebite addressable market, and has much room to
grow. In comparison, eCommerce has penetrated 10% of its addressable retail market and travel
penetrated 40%. The market is extremely attractive in terms of size and growth.
According to a Quartz2, the largest player in the online food order and delivery market is
Grubhub (parent of Seamless), at approximately 23% market share as of 2016. Other (much
smaller) competitors include UberEats, Postmates, Doordash, and Munchery. Amazon Prime
Now Restaurant delivery service is still in nascent stages, but is expected to be a formidable
player if executed successfully. Overall the market is very crowded, with one leading competitor
that continues to grow both organically and inorganically through acquisitions.
1 https://www.morganstanley.com/ideas/pizza-paradigm-for-online-food-delivery
2 https://qz.com/1045776/grubhubs-purchase-of-yelps-eat24-may-make-it-the-only-place-to-order-
restaurant-delivery/

Strengths, Weaknesses, Opportunities and Threats (SWOT)
Strengths
 Food delivery3
 Variety of restaurants found at one
platform
 User friendly
 Fast and assured delivery
 Effective CSR activities such as charity
Weaknesses
 Low reliability
 Food delivered might not be up to the
standard
 Limited choice
Opportunities
 Expansion in the Asian market
 Changes in the life style of the people
 Lack of time to visit the restaurants,
hence urgent need for delivery
 Fast and time saving
Threats
 Competitors such as UberEats, Postmates
 Lack of reliability of the food delivered
 Shortage of the delivery man
The strengths include the fast delivery of the food with variety of restaurants found in one
platform. Moreover the sharebite is user friendly and it ensures fast and assured delivery.
Effective CSR activities such as charity are also one of the strength of share bite. However, the
weaknesses include the lack of reliability of the food that is delivered, might not be of the
standard as that of the restaurant4. The weaknesses also include limited choice unlike that of the
restaurant. The opportunity that sharebite has includes the expansion in the Asian market.
Changes in the lifestyle of the people is also an opportunity as changes in the lifestyle the people
has lesser time and thus the need of delivery of food has become essential. Use of sharebite is
fast as well as time saving as people lacks time5. The threats include high competition from
UberEats and Postmates. Moreover the lack of reliability of the food, that is delivered might
result in customer deflection. The shortage of delivery boy is also a major issue for Sharebites.
Market Segmentation Analysis
We started our segmentation process by brainstorming all possible descriptors. We started with
descriptors that are easily observable and that help answer the question, “Who are our
consumers?” We continued with descriptors that are difficult to observe and that help answer the
more relevant question, “Why do our consumers use Sharebite?”
3 https://www.morganstanley.com/ideas/pizza-paradigm-for-online-food-delivery
4 https://www.morganstanley.com/ideas/pizza-paradigm-for-online-food-delivery
5 https://www.morganstanley.com/ideas/pizza-paradigm-for-online-food-delivery

Region – We decided to limit our exercise to the NYC area. We agreed with Dilip’s conclusion
that the NYC area is an ideal growth environment for Sharebite because it has the optimal
density, consumer demand and infrastructure.
Consumer type – There are two possible business models: business to consumer (B2C) and
business to business (B2B). Under the B2C model, Sharebite consumers are individuals who
order to any location (e.g. their office, their residence). Under the B2B model, Sharebite
consumers are employees ordering to the office. An employee could place an individual order
during his or her lunch break. Alternatively, an employee in human resources (HR) or in
administration, for example, could place a group order for a company event.
Company size – Building off the B2B model, company size is an important descriptor. We
identified three buckets: small (<50 employees), medium (50-250 employees) and large (>250
employees). We followed the standard definition of small and medium-sized enterprises
(SMEs).
Industry – Financial services is the dominant industry in NYC. We bucketed financial services
companies and legal services companies because they have similar cultures and working hours.
For example, a banker or lawyer likely work long hours (outside 9:00 am-5:00 pm) and orders
meals into the office to save time. Banks and law firms have more discretionary budget to pay
for employee dinners and client lunches. We also considered the tech space, a growing industry
that is bleeding into traditional industries (e.g. fintech).
Employee income – How much disposable income an employee has will factor into how
frequently he or she can afford to order in. An employee with less discretionary income will opt
for a cheaper alternative like preparing lunch at home and bringing it into the office or using a
bundling service like MealPal.
Employee family status – Like employee income, employee family status is a descriptor that
determines the likelihood for an employee ordering into the office. An employee with greater
work-life balance who has the flexibility to work from home or to commute home in the
afternoon will have family meals. A single employee is more likely to eat around the office.
Employee function – Some functions work more remotely than others. Programmers, project
managers and consultants (to name a few) may only work from the office 1-2 days a week and
travel, work virtually or work in a flexible office (e.g. WeWork) during the rest of the week.
Bankers and lawyers will be in the office 5 days a week and some weekends.
Company culture – Startups notably in the Tech space have many perks that sometimes impact
how employees eat. A company that subsidizes meals may be interested in Sharebite. A
company with a strong corporate social responsibility (CSR) strategy will find synergies with
Sharebite and be interested. On the flip side, a company that invests little in employee
engagement will likely be indifferent to Sharebite’s value proposition.
Company mission – What motivates a company to make decisions for its employees? Two
similarly sized companies with industry overlap may have different reasons to use Sharebite. Let
us say that Company A is a hedge fund and Company B is a fintech company. Companies A and

B each have 100 employees. Company A is an older company with a single objective:
maximizing profit. It is concerned about its image in the aftermath of the 2007-08 financial
crisis. Company A may be interested in partnering with Sharebite to enhance its image. A
young and motivated founder started Company B in 2015. Company B has great perks and
strong values that keep employees highly engaged. Company B is less concerned about its
image. However, it may be interested in partnering with Sharebite to further employee
engagement. Employees who are passionate about a societal cause could use Sharebite to
support that cause from the convenience of their office.
Strategic Recommendation
Target Segmentation
Initially, we analyzed the B2C and B2B markets. The direct to consumer market is the
one with largest client base, however suffers from strong competition (at least 5 companies
focused on B2C market), has the largest consumer acquisition cost (all clients are price driven),
has the lowest switching cost and the lowest stickiness. Competing in the direct to consumer
market requires scale and enough funding to survive in the market, that makes an unfeasible
market for Sharebite to attend to initially.
Analyzing the B2B segments, we got to the conclusion that the main focus of Sharebite
should be the middle sized companies in NY Metro area. The small sized companies don’t have
enough scale to make it a possible target for an enterprise solution, while the large sized
companies are well attended by internal cafeterias, or by large competitors, such as Seamless.
Even more, large companies usually have strong corporate requirements that make it cost to
create a customized solution. The middle sized companies have enough scale to make it
profitable for a low cost player, such as Sharebite, and don’t have the issues of large
corporations.
In the B2B middle sized market, we have traditional companies, that would benefit from
Sharebite’s unique CSR attached program to improve their image, both externally to investor,
and internally to cause sensitive employees. Even more, the donations made by Sharebite could
have a tax benefit for the company, generating directly value for the company. Adding to that,
the convenience for their employees to purchase delivered food without the payment-
reimbursement process would increase their employee perception and engagement. Given that
they receive lots of value, without any additional cost, we believe that this should be the primary
focus.
The novelty industry companies, such as tech companies, are more tech aligned and
Sharebite solution could improve their employee perception, however they do not have pressure
to improve their corporate image. Given this reason, they do not benefit completely from the
value proposition of Sharebite, and should be a secondary focus.

Positioning of each segment, given their attractiveness to Sharebite, and the value created by Sharebite.
Strategic Focus
Sharebite focus should be increasing their market share, until it achieved a critical mass
to build a sustainable operation. Given that Sharebite is a small, start-up company, its client base
does not generate enough fees to cover its operation. Even more, given its primary purpose of
reducing hunger, the largest social benefit that this company could generate would be with a
larger scale. For that, we believe that the initial focus should be increasing the client base, and
after the sustainable point is achieved, the secondary focus should be increasing its donations/
CSR actions.
Value Proposition
The main value created by Sharebite is its CSR attached component. Given that within
each purchase there is an explicit value donated to charity, there is a strong potential for
companies to explore it as an image improvement program. In general this is an easy to
implement CSR program, that does not generate any additional cost, being interesting for any
company. A secondary effect would be a tax break over the value destinated to charity, that
would increase the appeal of this product sharply. This tax benefit is something that we believe
that is feasible, but that has not been verified yet.
Functionally, it is a program that has a potential of great improvement in the employee
engagement. It should be a convenient way to eat food, bringing more choices and freedom than
a traditional cafeteria, and reducing reimbursement procedures. Linking this program with a
social benefit may give a great incentive for employees, increasing their perception of the
company.
Competitive Landscape

In the B2B market, the main competitor is the internal cafeteria trend, that we believe that
would increase in the next years (more convenience for employees allied to lower costs). To
revert this trend, Sharebite should focus on showing the value that their CSR program adds to the
company is higher than the cost benefits of internal programs.
Other main competitor is Seamless, and its presence in the B2B market. They have more
experience as they have been operating in this segment for almost a decade. They are currently
focused on large clients, with a lower UX, but could easily catch up with a remodelled solution
to attach Sharebite, it this segment proves to be large enough.
Moreover, there is a risk of new entrants in this segment, with the CSR attached
proposition, attacking directly sharebite position. If this segment is large enough, it is quite
possible for Amazon Prime Now, Grubhub, and others to create separate brand, with different
pricing model, and the same of Sharebite’s value proposition. This is mitigated by the large
switching cost of the B2B model, in which there is a need for a customized model for each
company, to operate with their internal needs and logging system, that reduces the appeal for
them to operate with companies that already have a system in place.
There is an indirect competition of other food companies, such as Blue Apron, MeatPal,
etc. This segment, as we classify as “do yourself”, is not a relevant competitor for Sharebite, as
its main focus is in the corporate market, as these products do not have a fit for its market.
Reason to Believe
The main advantage is that Sharebite was built around its charitable mission, and not the
opposite, that would be the case of its competitors. Its strong focus on social impact, and not in
profitability, gives a gigantic advantage in terms of cost and impact, as it can operates with lower
margins that a for-profit company would. Additionally, there isn’t any investor pressure to
generate profits, making it a solid social company.
Other important reasons are the focus on UX, to attend the corporate market. The current
competitors don’t have competition, and don’t invest in UX. Given an acquired customer, the
switching cost is high. So focusing in a high quality experience can give enough leverage to
encourage clients to go through their transition cost, but one they have a well-adjusted interface,
they should not be willing to change back.
Another point is the transparence. The company focus is around charity, and the
transparence of each value would go for each charity is an important tool to convince clients to
change to Sharebite.
Implementation Plan
We recommend a 4-pronged implementation plan that targets Product, Promotion,
Financing, and Human Capital. We believe pricing and distribution can remain the same given
pricing inflexibility from already compressed margins and the singular distribution option of
online ordering.
Product

In order to better serve the B2B market, we believe a seamless and custom platform
integration process is necessary, in order to make switching costs as low as possible for potential
clients. We recommend offering free customization and integration to better incentivize medium
sized companies to switch to the Sharebite platform. Our back of the envelope calculations result
in a 7.5 month payback period for a $30K customization per client (assume 200 employees/client
x $10/employee/day x 10% take-rate margin x 20 days/month = $4,000 revenue/month). This
does not include any positive spillover effects within the B2C market, for employees also using
the service in their personal time.
Additionally, we recommend adding a charitable contribution report to client interfaces,
so that employees can view real-time feedback on how ordering through Sharebite is making a
positive impact in the world. The cost to implement this feature will be relatively low but will
encourage loyalty to the Sharebite brand due to the strong psychological appeal for users.
Promotion
Sharebite does not currently engage in any formal advertising, but has been leveraging
the advertising its competitors have been doing in order to convert customers from offline to
online ordering. We recommend Sharebite increase awareness for its brand via low-cost
advertising methods in order to accelerate customer acquisition. In particular, we recommend
building relationships with public influencers that are aligned with Sharebite’s mission-driven
model. For example, Sharebite can gain support from NY state government agencies/officials,
non-profit organizations, and celebrities. These influencers can provide public endorsement via
social media posts, verbal endorsements at largely attended events, or even direct referrals to
medium sized businesses in their network.
We also recommend Sharebite develop a robust referral program to incentive word-of-
mouth advertising. For example, clients may receive a billing credit for every business client
they refer. Word of mouth referrals are known to be much more effective than other forms of
advertisement and generally have a higher return on investment. Additionally, Sharebite should
ramp up their social media advertising and request approval from existing clients to showcase
them on social media posts.
Financing
Sharebite currently has little to no investor-raised capital. We believe Sharebite can raise
capital without being encumbered by investor requirements such as EBITDA multiple
expectations, by targeting angel investors only. We believe raising capital is necessary to engage
in the strategic growth initiatives outlined in this report. Use of the funds will primarily go
towards growing sales and tech staff.
Human Capital
Sharebite is heavily reliant on the founder and CEO’s business relationships in order to
grow sales. Not only is this an unscalable and unsustainable method of growth, it is also highly
risky in case there is a loss of the founder. We recommend Sharebite hire a Head of Sales with
veteran experience in B2B sales particularly with a large network of COO’s and HR directors at

medium sized companies. The Head of Sales will also require a sales team to follow up and
complete contract execution once deals are struck.
We also recommend Sharebite hire additional tech staff such as engineers, project
managers, and an analytics team in order to support the development of customized interfaces for
their growing B2B clientele. The recruitment process can be done in parallel with the sales
process so that there is an on-going pipeline of potential hires alongside closing of key business
deals. Alternatively, Sharebite can consider growing its independent contractor network of
engineers.
G1. Situation Analysis
SWOT analysis: Strengths, weaknesses, opportunities, threats
Strengths:
- Clear vision/mission, backbone of strong culture, employee engagement
- Penetration into the CBS network
- UX/UI
- Clear geographical scope, NYC restaurant business highly dense and logistics already in
place
- Business model and consumer behavior are aligned, people will order in using an app
anyway, restaurants are on the rescue route for City Harvest anyway
- Daily direct depositions convenient, selling point to restaurants
Weaknesses:
- Low level of capital funding limits scalability
- Customer acquisition strategy is the founder--plans to hire salesforce, has not been
implemented yet
- Option to chose your own charity of unlimited options muddies, makes inconsistent
mission to end hunger in NYC
- Expensive implementation cost/IT investment for enterprise clients, he needs to deliver
on customization promise
Opportunities:
- B2B model is more scalable, spillover effect into B2C
- Catering marketplace
- Other metropolitan areas in the US
- Partnering with a logistics company
- Having an ad budget, right now all WOM
Threats:
- According to him, consumer purchasing behavior (picking up the phone instead of using
an app to order in food)
- Inflexible pricing model, he cannot run promotions

- Amazon/Grubhub can create child brand that copies Sharebite business model on
Sharebite scale without negatively impacting pressure on parent company’s EBITDA
multiple standard requirement
- Weworks, virtual employees changes org structure, employees not physically in one
company office
- In-house cafeteria/suppliers, on a bigger scale company campuses, that have own culture
and employee engagement
G2. Situation Analysis
Descriptor Variables under B2B model:
- Lifecycle (startup culture, lots of perks or not?)
- Industry (banking, law, tech)
- Motivation (convenience, image)
- Size (small, medium 500 min, large)
- Region--NYC
- Scale (catering, one off orders)
- Family status (single, married, children, no children)
- Income
- Function (in office, in flexible office, in virtual office)
B2B (region = NY)
- Small
- B2B client don’t go corporate
- Med
- Image
- Focus on social benefits (Banks)
- Engage
- Focus on convenience
- Need employee contracts
- Large
- Focus on catering (one shot)
B2C
- Open market
- Not focus
- Too much competition
- Corporate employee
Bubbles:
Small business
- <25 employees
- Startup culture
- One off orders (best to offer B2C service)
Med business - image
- Traditional corporate culture

- 200-500 employees
- Banks, Consulting, Law, legacy consumer, etc. (OCR companies)
- Company driven, single charity
- Consistent work schedules
- Older employees with families and high earnings
- Cubicle floorplans
Med business - engage
- 200-500 employees
- Startup-like culture without in-house cafeteria
- Employee driven - they pick restaurants, charitable causes, etc
- Flexible work hours
- Open floorplan
- More digital lifestyle and consumption behavior
- Med-high income
Large business
- >500 employees
- Very bureaucratic with complex organizational structure
- Multiple product offerings and business divisions - with different cultures in each “mini-
business”
- Typically no firm-wide free food perk (?)
G3.
Segment target analysis:
Large biz: high attractiveness, low biz strength
Small biz: low attractiveness, mid biz strength (we could easily get undercut on price by
competitors)
Med biz: med attractiveness, strong biz strength. We are stronger in Image vs Engage
-> Choose Med biz with Image focus
Performance objectives —> desired results
Growth and market share vs. profit vs. cash flow
- Sharebite should focus on growth & market share because firm just recently launched and
marketplace is new
Core strategy —> resource allocation
1) Strategic Focus
For a growth market we should:
Increase Unit Sales Volume
- Current Revenue Base
- Increase customer retention
- Increase customer use
- New Revenues
- Attract customers from competitors
- Secure new business
2) Positioning

- Select customer targets (customers to target for effort)
- Direct
- COO and HR executives
- Indirect customers
- Employees of medium-image firms + connected individuals
- Frame competitor targets (reference for customer targets to assess our offer)
- Direct
- Seamless/Grubhub
- Indirect competitors
- MealPal, online grocers (FreshDirect)
- Supply chain competitors
- Logistics companies (amazon, ubereats)
- Restaurants
- Design the value proposition (benefits/values we emphasize in communications with
customer targets)
- Economical
- Tax breaks on charitable contribution
- Higher stock value due to improved CSR image
- Functional
- CSR improvement
- Superior UI
- Psychological
- Supporting charitable mission
- Articulate reasons to believe (why customer targets should believe we can deliver on the
value proposition)
- CSR value proposition:
- The business model was built around the mission - not on the profits. The
business is basically a charity with a business around it.
- Transparency in charitable contribution: You can see the database of
charities, you can add charities, and you see on the homepage how many
meals have been donated so far.
- No financial pressure from investors / external parties.
- UI is visibly better than outdated Seamless version
Implementation programs —> specific required actions (internal, external)
(1) Marketing mix: price, product, promotion, distribution, advertising, sales, service, market
research
- Price:
- Can have add-on fees such as
- Product:
- Reports on total charitable contribution per company/customer.
- Can offer free customization of interface (intranet, etc)
- Calculations: 200 employees x $10/person/day x 10% take-rate margin x
20 days/month x 36 month contract/company = $144K
- Assume $30K customization cost, so payback within 7.5 months (without
considering any spillover effects)

- Promotion: nothing
- Distribution: nothing to do (all web based)
- Advertising:
- Gain public support from local politicians/celebrities and gov’t entities, etc
- Ramp up social media presence and word of mouth (showcase current clients)
- Sales:
- Scale up sales force
- Referral program to incentivize more word of mouth referrals from company
clients (discounts, etc)
- Market research:
-
(2) Functional support: operations, technical services, R&D, HR, logistics, finance, legal,
purchasing
- Tech: Increase tech staff (engineers, project managers, analytics team) to support
customized interfaces (can do it in anticipation of closing key contracts)
- Finance: Raise capital for cash flow purposes to support above initiatives