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 - – increasing household debt because of falling income levels, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, wage bills are increasing, challanges to central banks by blockchain based private currencies, increasing energy prices,
talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, 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 -
Highly skilled collaborators
– Bigbasket Grocery has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Customer Analytics at Bigbasket - Product Recommendations HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
Low bargaining power of suppliers
– Suppliers of Bigbasket Grocery in the sector have low bargaining power. Customer Analytics at Bigbasket - Product Recommendations has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bigbasket Grocery to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Bigbasket Grocery digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bigbasket Grocery has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Training and development
– Bigbasket Grocery has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Customer Analytics at Bigbasket - Product Recommendations Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer 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.
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 -
Aligning sales with marketing
– It come across in the case study Customer Analytics at Bigbasket - Product Recommendations that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Customer Analytics at Bigbasket - Product Recommendations can leverage the sales team experience to cultivate customer relationships as Bigbasket Grocery is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Bigbasket Grocery needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Customer Analytics at Bigbasket - Product Recommendations, in the dynamic environment Bigbasket Grocery has struggled to respond to the nimble upstart competition. Bigbasket Grocery has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Bigbasket Grocery supply chain. Even after few cautionary changes mentioned in the HBR case study - Customer Analytics at Bigbasket - Product Recommendations, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bigbasket Grocery vulnerable to further global disruptions in South East Asia.
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.
Need for greater diversity
– Bigbasket Grocery has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Low market penetration in new markets
– Outside its home market of Bigbasket Grocery, firm in the HBR case study Customer Analytics at Bigbasket - Product Recommendations needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 -
Building a culture of innovation
– managers at Bigbasket Grocery can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Bigbasket Grocery to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Using analytics as competitive advantage
– Bigbasket Grocery has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Customer Analytics at Bigbasket - Product Recommendations - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bigbasket Grocery to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Bigbasket Grocery in the consumer business. Now Bigbasket Grocery can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bigbasket Grocery can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Customer Analytics at Bigbasket - Product Recommendations, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
Developing new processes and practices
– Bigbasket Grocery can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bigbasket Grocery can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 -
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.
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.
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.
Stagnating economy with rate increase
– Bigbasket Grocery can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bigbasket Grocery with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Technology acceleration in Forth Industrial Revolution
– Bigbasket Grocery has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Bigbasket Grocery needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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 .
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 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bigbasket Grocery in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Bigbasket Grocery will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
