Case Study Description of Grocery Gateway: Customer Delivery Operations
As Canada's largest direct online grocer, Grocery Gateway provided home delivery to approximately 125,000 customers in the Greater Toronto area, which covered a territory of approximately 3,200 square kilometres. Grocery Gateway's management staff was concerned that the company had been met only 67 per cent of its target of making four deliveries per hour. Consequently, the vice-president of industrial engineering and operations had been asked to make some recommendations aimed at improving delivery operations. These recommendations would be presented at Grocery Gateway's next weekly management meeting. There are a number of options that were worth considering. The vice-president's job was to pinpoint those options and assess how each one might affect the company's existing operation. The final choice would have to reflect and maintain Grocery Gateway's focus on low cost and high service.
Swot Analysis of "Grocery Gateway: Customer Delivery Operations" written by P. Fraser Johnson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gateway's Grocery facing as an external strategic factors. Some of the topics covered in Grocery Gateway: Customer Delivery Operations case study are - Strategic Management Strategies, Operations management and Technology & Operations.
Some of the macro environment factors that can be used to understand the Grocery Gateway: Customer Delivery Operations casestudy better are - – cloud computing is disrupting traditional business models, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China,
banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Grocery Gateway: Customer Delivery Operations
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Grocery Gateway: Customer Delivery Operations case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gateway's Grocery, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gateway's 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 Grocery Gateway: Customer Delivery Operations can be done for the following purposes –
1. Strategic planning using facts provided in Grocery Gateway: Customer Delivery Operations case study
2. Improving business portfolio management of Gateway's Grocery
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Gateway's Grocery
Strengths Grocery Gateway: Customer Delivery Operations | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gateway's Grocery in Grocery Gateway: Customer Delivery Operations Harvard Business Review case study are -
Ability to lead change in Technology & Operations field
– Gateway's 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 Gateway's Grocery in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Gateway's 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.
Strong track record of project management
– Gateway's 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.
Analytics focus
– Gateway's Grocery is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by P. Fraser Johnson can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Organizational Resilience of Gateway's Grocery
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Gateway's Grocery does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Gateway's Grocery has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Gateway's 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.
Superior customer experience
– The customer experience strategy of Gateway's Grocery in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Gateway's Grocery has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Gateway's Grocery to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Gateway's Grocery is one of the most innovative firm in sector. Manager in Grocery Gateway: Customer Delivery Operations Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Gateway's Grocery in the sector have low bargaining power. Grocery Gateway: Customer Delivery Operations has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Gateway's Grocery to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Gateway's Grocery is one of the leading recruiters in the industry. Managers in the Grocery Gateway: Customer Delivery Operations are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Gateway's 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 Grocery Gateway: Customer Delivery Operations HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Grocery Gateway: Customer Delivery Operations | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Grocery Gateway: Customer Delivery Operations are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Grocery Gateway: Customer Delivery Operations, it seems that the employees of Gateway's Grocery don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow to strategic competitive environment developments
– As Grocery Gateway: Customer Delivery Operations HBR case study mentions - Gateway's Grocery takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Increasing silos among functional specialists
– The organizational structure of Gateway's Grocery is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Gateway's Grocery needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Gateway's Grocery to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Gateway's 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 star products
– The top 2 products and services of the firm as mentioned in the Grocery Gateway: Customer Delivery Operations 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 Gateway's Grocery has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, P. Fraser Johnson suggests that, Gateway's Grocery is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High operating costs
– Compare to the competitors, firm in the HBR case study Grocery Gateway: Customer Delivery Operations 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 Gateway's Grocery 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Grocery Gateway: Customer Delivery Operations 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 Grocery Gateway: Customer Delivery Operations can leverage the sales team experience to cultivate customer relationships as Gateway's Grocery is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Gateway's Grocery, firm in the HBR case study Grocery Gateway: Customer Delivery Operations needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Grocery Gateway: Customer Delivery Operations, in the dynamic environment Gateway's Grocery has struggled to respond to the nimble upstart competition. Gateway's Grocery has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Gateway's 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 Grocery Gateway: Customer Delivery Operations | 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 Grocery Gateway: Customer Delivery Operations are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Gateway's Grocery can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Gateway's Grocery can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Using analytics as competitive advantage
– Gateway's 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 Grocery Gateway: Customer Delivery Operations - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Gateway's Grocery to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Gateway's Grocery can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Gateway's Grocery can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Grocery Gateway: Customer Delivery Operations 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Gateway's 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 Technology & Operations segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Gateway's Grocery has opened avenues for new revenue streams for the organization in the industry. This can help Gateway's Grocery to build a more holistic ecosystem as suggested in the Grocery Gateway: Customer Delivery Operations case study. Gateway's Grocery can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Gateway's Grocery can develop new processes and procedures in Technology & Operations 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.
Building a culture of innovation
– managers at Gateway's 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 Technology & Operations segment.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Gateway's Grocery to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Gateway's Grocery to hire the very best people irrespective of their geographical location.
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. Gateway's Grocery can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Gateway's 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Gateway's 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Gateway's 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 Grocery Gateway: Customer Delivery Operations External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Grocery Gateway: Customer Delivery Operations are -
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.
Stagnating economy with rate increase
– Gateway's 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.
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 Gateway's Grocery business can come under increasing regulations regarding data privacy, data security, etc.
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 Gateway's 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.
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. Gateway's Grocery needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Gateway's Grocery in the Technology & Operations industry. The Technology & Operations 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 Gateway's Grocery is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Gateway's 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 Technology & Operations industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Gateway's Grocery with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Gateway's 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Gateway's 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 Grocery Gateway: Customer Delivery Operations .
High dependence on third party suppliers
– Gateway's 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.
Weighted SWOT Analysis of Grocery Gateway: Customer Delivery Operations 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 Grocery Gateway: Customer Delivery Operations 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 Grocery Gateway: Customer Delivery Operations 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 Grocery Gateway: Customer Delivery Operations 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 Grocery Gateway: Customer Delivery Operations 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 Gateway's Grocery needs to make to build a sustainable competitive advantage.
