Is the Hare Dashing Too Fast To Expansion?
Is DoorDash’s expansion to all of Europe a smart move or does it need to be reassessed?
Online food delivery services have become a race of competition to see who can gain the most market share the fastest, but the question has to be asked: is this the right way to go about things? When thinking of this competitive market and the quick expansion, I think of the story about the tortoise and the hare. Sometimes slow, steady, and smart decisions are the best way to win the race. DoorDash recently announced its plans to expand into the European market.
Currently, DoorDash has a cemented place in the U.S market for online food delivery. This expansion is extremely costly and challenging — as the European market is home to so many unique cultures.
In order for DoorDash to have a more seamless transition, they plan to acquire Finland-based food delivery company, Wolt, in a deal estimated to be around $8 billion. This could be either DoorDash’s strength or weakness when trying to penetrate a new market, as Wolt already has a strong stance. If DoorDash disrupts Wolt’s already strong consumer base with too many changes, it can cause consumer agitation and distrust. This means DoorDash must walk the fine line of making Wolt a part of the DoorDash brand, while also understanding why consumers in these different cultures hold trust in the brand.
Throughout the pandemic, there has been a huge international spike in online food delivery services. With this success comes increased competition as everyone wants a piece of the pie. By DoorDash entering such a large market, like Europe, they could be making a huge mistake, as they will not only be dealing with many different cultures, but they will also be dealing with a large array of competitors who have already made their place in the market. One recommendation could be for DoorDash to take steps in their expansion into the European market, instead of taking it all on at once.
By taking time and steps, DoorDash could then truly do research on both the culture and their competition in order to best introduce and place themselves on the market. Interestingly with more research, I found that DoorDash has entered Germany. When they entered the German market, they grew to understand the importance of sustainability to the people and their culture. So for them to best pay their respects to each distinct culture, they could partner with two organizations called Watershed and Zoomo. Both of these companies work in various ways to work toward decreasing the business’s carbon footprint.
This exciting expansion of the beloved American brand now also needs to consider the current war between Russia and Ukraine and the overall impact it will have on European countries. At the end of the day, we all know the story of the tortoise and the hare, and by being slow and smart you win the race.
