Business Model Report: Analysis of Menulog's Operations and Strategies

This report provides a comprehensive analysis of the Menulog business model, a prominent online food delivery service. It deconstructs the model using the nine building blocks, including customer segments (restaurants and individual customers), key partners, value propositions (convenience, affordability, and variety), key activities, channels (website and app), revenue streams (commissions and delivery fees), cost structure, key resources (software, customer support), and customer relationships. The report examines key interrelationships between these elements and identifies critical success factors such as accessibility, convenience, and customer loyalty. It also discusses potential risks to the business model, including technological failures, changing consumer preferences, and data security concerns. The report concludes with recommendations for personalization within the app, integration of advanced technologies like machine learning, and strategic expansion into emerging markets. The analysis draws on various sources to provide a detailed overview of Menulog's operations and strategies.

Running Head: MANAGEMENT 0
BUSINESS MODEL

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Contents
About Menulog.........................................................................................................................2
Nine building blocks of business model..................................................................................3
Key interrelationships..............................................................................................................5
Critical Success Factors...........................................................................................................5
Factors influencing business model success...........................................................................6
Recommendations....................................................................................................................6
References.................................................................................................................................8

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About Menulog
In online food delivery, Menulog provides greatest choice to Australians with
connecting over 12,000 plus local restaurants through their easy navigation website and
mobile application (menulog.co.nz, 2018). Menulog was founded in 2006 and their
headquarter is situated in Sydney, Australia. The company is now powered by Just Eat, a
global leader in delivery of food and therefore reached 92 percent of Australian delivery
addresses through their extensive network (worldreginfo.com, 2017). Being a service
organisation, the company does not offer any product but gives a price promise that a
customer never has to pay more to have a meal delivered with us – or else they will give their
money back including $10 credit. In terms of HR resources, the company have more than 130
plus fulltime employees led by their experienced executive team. For Menulog the key will
revolve around innovation and agility.
In this report, Menulog business model is deconstructed with nine building blocks
including customer segments, key partners, key activities, value proposition, key resources,
cost structures, revenue streams, channels and customer relationship.

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Nine building blocks of business model
The nine building blocks of Menulog is elaborated below –
 Key Partners - As their business expands at scale, their top priority is to increase
brand awareness through various partnership. For instance, Menulog partners with
Auckland Council to offer some tasty samples with giveaway vouchers and goodies at
the biggest free entertainment series, Movies in parks and music (justeatplc.com,
2019). The company also has a partner centre section on their websites that allow its
partner to have access to brand new tool.
 Customer Segments – Menulog has two face business model where on one side there
is restaurant chain that Menulog has partnered with and on the other side, it is the
customers to whom the company is serving. These customers can be any individual,
professional, family or children’s looking for quality food from various different
restaurants across Australia and New Zealand.
 Value Proposition – Menulog partner with Drive Yello sharing enormous energy as
both the brands providing a different side of value proposition for customers in
Australia (insidesmallbusiness.com, 2016). It also helps the company to bring more
meals to the customer’s doorsteps and customers can effectively track their order due
to Menulog last-mile technology resulting in greater satisfaction. Menulog also aims
to create food discovery exciting for all customers with offering various options for
people to choose from their restaurant partners. In addition, collaboration with Drive
Yellow allows them to facilitate seamless delivery for local restaurants. The value
proposition is also provided to the other customer segment i.e. restaurants as they are
provided with establishing delivery drivers.
The company also offers price value proposition as currently, the average fee across
the likes of Menulog stands at around $3. In terms of packaging, the company use a
distinct packaging material that keeps the temperature of food for a greater period.
The company also offers convenience in terms of value proposition as through their
services, the customers can get their food or parcel by sitting at their home. The
restaurants were also provided accessibility in relation to the customers who are not
seeking to eat by coming to their place and rather preferring their home or office.

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 Key Activities - Both customers and restaurants are catered by Menulog through a
network of e-commerce platform allowing individual (customers) to order their food
from the available restaurants through their website or mobile application.
 Channels – Menulog provides different channels to their customers for ordering food
from their list of restaurants. The main channels of Menulog include their websites
and mobile application that connect both user and restaurant team. The company also
attracts its customers and clients from social media platform including Facebook and
Instagram.
 Revenue Streams – In relation with revenue streams, the company depends upon two
sources, commission from restaurants (up to 35%) and a fee around $3 for delivery to
its customers.
 Cost Structure – Due to company e-commerce business model, most of the things
are automated however, company have a team of engineer and staff to maintain the
system effectively. Other than this, the major and fix expense of the company is
related to their promotional budget and advertising.
 Customer Relationships – In relation with customer relationships, it can be said to
technical in nature or self-centred service as most of the clients and consumers book
food through their website or mobile app and thus not allowed to speak to any of their
employees to ordering food online (Barrett et al, 2009). However, Menulog has
support centred for catering customer needs and issues and customer can reach to it by
chatbot, customer care number or email.
 Key Resources – One of the major key resources of Menulog is its legacy software
system that is responsible for connecting its network of restaurants and Australian
customers. Other key resources of Menulog includes their customer support team and
delivery driver. Just Eat, the parent company of Menulog also raised $2.6 million in
2017 for their new 'Menulog for beauty' startup (Koehn, 2017).

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Key interrelationships
From the commencement in 2016, the company has developed strong link between its
chains of restaurants, customers and other partners. The company also gained various awards
for its high quality customer service such as Canstar Blue Award for Customer Service in
2017 (Hogan, 2017). Due to its strong market position and attractiveness, Just Eat buys the
company in 2015 and raised millions for further investments.
Considering Menulog main resources and channels, the company is able to effectively
connect 12000 plus restaurants and customers through an e-commerce platform allowing
Menulog to offer best services to the customers through high accessibility and convenience.
Considering value proposition of Menulog, they also gain cost benefit due to their cost
structure offering food to customers at affordable prices. In addition, the automation in their
platform also provides the company a key competitive advantage in this sector.
Critical Success Factors
Rise of globalisation and e-commerce platform push food delivery market in various
parts of the world. This key competitive advantage of this industry is the accessibility and
convenience given to both customers and restaurants (Turban et al, 2017). Facilitation in
stead of control is the first critical factor for Menulog as during the industrial revolution the
trend was to centralize both resources and people. However, it also has some downsides.
Menulog platform works as an intermediately with a client base, that can be rise
exponentially with the help of a non-capital-intensive strategy. This platform also has a
unique challenge in the form of needs of two sides i.e., - the demand and the supply.
Personalization of delivery services can be another critical success factor for Menulog that
requires the company to focus on that pinpoint which has not be covered by its competitors
such as Uber Eats.
Customer loyalty is another critical success factor for Menulog and to gain high
customer loyalty, it is required for Menulog to satisfy each and every customer by
collaborating with maximum restaurants chains and providing greater quality of the service to
its customers and businesses. The company also need to manage effectively its key resources

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including the proprietary system and mobile application so that customers can order food
from the given restaurant chain with greater convenience.
Factors influencing business model success
The business model of Menulog is quite unique however, there are some major risks
needs focus on the management of Menulog. Fault in technology is the first risks that can be
faced by company in the breakdown of internet or due to any system malfunction. As the
company use various systems to connect restaurants and customers, there are high chances of
this risk. The other biggest risk is the moving of customer’s trends towards organic and
healthy food and most of the customers in future may not prefer to eat outside food due to
various health issues and the misconception that the food baked outside is not up to the mark.
Hence, Menulog needs to consider this risk as to the top priority.
The other risk to the business model of Menulog can be the physical damage to the
food. Drivers of Menulog delivers food to the customers through their bi-cycle and they also
have a burden to deliver food as fast as possible. This may damage the food during the
transport and thus make customer loss to the company. In last, data security is also a big
concern to this business model as the company requires various customers’ data such as
history of their purchase, in-app behaviour for planning high user experience for them.
However, this also attracts various hackers to steal that data for selling it to the other firm.
Recommendations
The first recommendation for Menulog is more personalisation inside the apps by
ranking various restaurants on the app home screen. For example, an eater may notice that if
they order a lot of spicy Szechuan food, they will begin to see more Chinese restaurants
selling spicy food in the app. At the same time, additional Thai, Japanese, or other Asian
recommendations might show up, too.
Other than this, the company should connect their platform with advanced technology
such as machine learning as it will help in central to Menulog day-to-day operations while
optimising order batching and also help in driving dynamic demand-based pricing across

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merchants of Menulog. In order to attain economy of scale, the company can also expand in
emerging countries through the help of joint venture or franchising. It will also help in
increasing brand awareness and Menulog can be recognised globally.

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References
Barrett, C. B., Bell, R., Lentz, E. C., & Maxwell, D. G. (2009). Market information and food
insecurity response analysis. Food Security, 1(2), 151-168.
Hogan, A. (2017). Australia’s best food delivery services, Canstar Blue. Retrieved from
http://www.ausfoodnews.com.au/2017/12/04/australias-best-food-delivery-services-
canstar-blue.html
insidesmallbusiness.com.au. (2016). A new partnership aims to facilitate seamless food
delivery from a host of local restaurants to your doorstep.. Retrieved from
https://insidesmallbusiness.com.au/planning-management/faster-food-delivery-to-
your-door
justeatplc.com. (2019). Menulog partners with Auckland Council to deliver great cuisine to
Music and Movies in Parks. Retrieved from https://www.justeatplc.com/news-and-
media/press-releases/menulog-partners-auckland-council-deliver-great-cuisine-music-
and-movies-parks
menulog.co.nz. (2018). About Us. Retrieved from https://www.menulog.co.nz/info/about-us
Turban, E., Outland, J., King, D., Lee, J.K., Liang, T.P. and Turban, D.C., 2017. Electronic
commerce 2018: a managerial and social networks perspective. USA: Springer.
worldreginfo.com. (2017). Just Eat Annual Report & Accounts 2017 - RegInfo. Retrieved
from https://www.worldreginfo.com/wdoc.aspx?file=Just_Eat_plc/2/BFCCCE97-
5E51-47FA-A994-2C7B9244C81E/394352_rfa_2017_en_gb00bkx5cn86.pdf