Case Study Description of Customer Analytics at Bigbasket - Product Recommendations
Bigbasket was India's largest online grocery and food store established in 2011 by a group of entrepreneurs Hari Menon, Vipul Parekh, V S Ramesh, V S Sudhakar, and Abhinay Choudhari. In 2016, Bigbasket sold more than 18,000 products and 1,000 brands operating across 12 Indian cities. Online grocery market in India has been small, but a rapidly growing segment. According to "The Retailer" Ernst and Young's publication in consumer products and retail sector, during July-September 2015, India was among the top-10 food and grocery markets in the world, with an estimated size of INR 22.5 trillion (approximately USD 350 billion). The market has grown at 10-12% CAGR between 2010 and 2015, with food and grocery being the largest segment, accounting for close to 60% in 2015 alone. The protagonist of the case, Pramod Jajoo, Chief Technology Officer, at Bigbasket was trying to solve two problems frequently encountered by customers of online grocery stores. It was estimated that about 30% of Bigbasket customers place orders through smart phones. Unlike other e-commerce companies such as Amazon, Bigbasket customers place order for several products in a single order, sometimes as high as 80 in one order depending on their purchase frequency. When the basket size is high, using smart phones to place order is challenging. Also, it is a common phenomenon that customers forget to place order few grocery items which may result either in placing additional orders or customers purchasing those products from neighborhood stores resulting in a financial loss to online grocery stores. Jajoo and his team wanted to create a "Smart Basket" that would make placing orders easier for their customers and "Did you forget?" feature that would identify the items the customer may have forgotten to order.
Authors :: Paul Abraham, Manaranjan Pradhan, Lakshminarayanan S, Ganesh Iyer
Swot Analysis of "Customer Analytics at Bigbasket - Product Recommendations" written by Paul Abraham, Manaranjan Pradhan, Lakshminarayanan S, Ganesh Iyer includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bigbasket Grocery facing as an external strategic factors. Some of the topics covered in Customer Analytics at Bigbasket - Product Recommendations case study are - Strategic Management Strategies, Sales and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Customer Analytics at Bigbasket - Product Recommendations casestudy better are - – wage bills are increasing, technology disruption, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies,
cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Customer Analytics at Bigbasket - Product Recommendations
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Customer Analytics at Bigbasket - Product Recommendations case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bigbasket Grocery, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bigbasket Grocery operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Customer Analytics at Bigbasket - Product Recommendations can be done for the following purposes –
1. Strategic planning using facts provided in Customer Analytics at Bigbasket - Product Recommendations case study
2. Improving business portfolio management of Bigbasket Grocery
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bigbasket Grocery
Strengths Customer Analytics at Bigbasket - Product Recommendations | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bigbasket Grocery in Customer Analytics at Bigbasket - Product Recommendations Harvard Business Review case study are -
Sustainable margins compare to other players in Sales & Marketing industry
– Customer Analytics at Bigbasket - Product Recommendations firm has clearly differentiated products in the market place. This has enabled Bigbasket Grocery to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Bigbasket Grocery to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Bigbasket Grocery are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Innovation driven organization
– Bigbasket Grocery is one of the most innovative firm in sector. Manager in Customer Analytics at Bigbasket - Product Recommendations Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Bigbasket Grocery is one of the leading recruiters in the industry. Managers in the Customer Analytics at Bigbasket - Product Recommendations are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Sales & Marketing field
– Bigbasket Grocery is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Bigbasket Grocery in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Bigbasket Grocery is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Bigbasket Grocery is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Customer Analytics at Bigbasket - Product Recommendations Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Bigbasket Grocery in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Bigbasket Grocery has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bigbasket Grocery to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Bigbasket Grocery has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Operational resilience
– The operational resilience strategy in the Customer Analytics at Bigbasket - Product Recommendations Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Strong track record of project management
– Bigbasket Grocery is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Bigbasket Grocery has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bigbasket Grocery has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Weaknesses Customer Analytics at Bigbasket - Product Recommendations | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Customer Analytics at Bigbasket - Product Recommendations are -
Interest costs
– Compare to the competition, Bigbasket Grocery has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Customer Analytics at Bigbasket - Product Recommendations HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Bigbasket Grocery has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Customer Analytics at Bigbasket - Product Recommendations, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Products dominated business model
– Even though Bigbasket Grocery has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Customer Analytics at Bigbasket - Product Recommendations should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Bigbasket Grocery has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Bigbasket Grocery even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High operating costs
– Compare to the competitors, firm in the HBR case study Customer Analytics at Bigbasket - Product Recommendations has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Bigbasket Grocery 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Customer Analytics at Bigbasket - Product Recommendations, is just above the industry average. Bigbasket Grocery needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Capital Spending Reduction
– Even during the low interest decade, Bigbasket Grocery has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Increasing silos among functional specialists
– The organizational structure of Bigbasket Grocery is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Bigbasket Grocery needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bigbasket Grocery to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Bigbasket Grocery products
– To increase the profitability and margins on the products, Bigbasket Grocery needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Bigbasket Grocery has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Opportunities Customer Analytics at Bigbasket - Product Recommendations | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Customer Analytics at Bigbasket - Product Recommendations are -
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Bigbasket Grocery can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Bigbasket Grocery can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Low interest rates
– Even though inflation is raising its head in most developed economies, Bigbasket Grocery can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Better consumer reach
– The expansion of the 5G network will help Bigbasket Grocery to increase its market reach. Bigbasket Grocery will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Creating value in data economy
– The success of analytics program of Bigbasket Grocery has opened avenues for new revenue streams for the organization in the industry. This can help Bigbasket Grocery to build a more holistic ecosystem as suggested in the Customer Analytics at Bigbasket - Product Recommendations case study. Bigbasket Grocery can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Bigbasket Grocery has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bigbasket Grocery can use these opportunities to build new business models that can help the communities that Bigbasket Grocery operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Bigbasket Grocery can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Bigbasket Grocery can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bigbasket Grocery is facing challenges because of the dominance of functional experts in the organization. Customer Analytics at Bigbasket - Product Recommendations case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bigbasket Grocery in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Bigbasket Grocery to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Buying journey improvements
– Bigbasket Grocery can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Customer Analytics at Bigbasket - Product Recommendations suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Threats Customer Analytics at Bigbasket - Product Recommendations External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Customer Analytics at Bigbasket - Product Recommendations are -
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Bigbasket Grocery.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Environmental challenges
– Bigbasket Grocery needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Bigbasket Grocery can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Bigbasket Grocery in the Sales & Marketing sector and impact the bottomline of the organization.
Increasing wage structure of Bigbasket Grocery
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Bigbasket Grocery.
High dependence on third party suppliers
– Bigbasket Grocery high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bigbasket Grocery can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Customer Analytics at Bigbasket - Product Recommendations .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Regulatory challenges
– Bigbasket Grocery needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Shortening product life cycle
– it is one of the major threat that Bigbasket Grocery is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Customer Analytics at Bigbasket - Product Recommendations, Bigbasket Grocery may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Bigbasket Grocery needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Bigbasket Grocery business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Customer Analytics at Bigbasket - Product Recommendations Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Customer Analytics at Bigbasket - Product Recommendations needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Customer Analytics at Bigbasket - Product Recommendations is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Customer Analytics at Bigbasket - Product Recommendations is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Customer Analytics at Bigbasket - Product Recommendations is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Bigbasket Grocery needs to make to build a sustainable competitive advantage.
