Case Study Description of DMart: Disrupting Food Retailing
In early 2017, 15 years after being launched, DMart was India's second-largest and most profitable food and grocery retailer. To achieve its stellar growth, the company had followed a no-frills, limited assortment model and had restricted itself to limited geographies within the country. The company was listed in the capital market and attracted very favourable views from investors. As a listed company, DMart might be expected by shareholders to expand to new locations and develop an online presence. Would DMart be able to meet the challenges of exploring new geographies and new formats? What strategies would it need to adopt to remain competitive? Rakhi Thakur is affiliated with SP Jain Institute of Management & Research.
Swot Analysis of "DMart: Disrupting Food Retailing" written by Rakhi Thakur includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dmart Geographies facing as an external strategic factors. Some of the topics covered in DMart: Disrupting Food Retailing case study are - Strategic Management Strategies, Strategy and Sales & Marketing.
Some of the macro environment factors that can be used to understand the DMart: Disrupting Food Retailing casestudy better are - – technology disruption, wage bills are increasing, there is increasing trade war between United States & China, increasing transportation and logistics costs, increasing commodity prices, geopolitical disruptions, increasing government debt because of Covid-19 spendings,
increasing energy prices, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of DMart: Disrupting Food Retailing
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in DMart: Disrupting Food Retailing case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dmart Geographies, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dmart Geographies 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 DMart: Disrupting Food Retailing can be done for the following purposes –
1. Strategic planning using facts provided in DMart: Disrupting Food Retailing case study
2. Improving business portfolio management of Dmart Geographies
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 Dmart Geographies
Strengths DMart: Disrupting Food Retailing | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dmart Geographies in DMart: Disrupting Food Retailing Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Dmart Geographies in the sector have low bargaining power. DMart: Disrupting Food Retailing has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dmart Geographies to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the DMart: Disrupting Food Retailing 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.
Ability to lead change in Sales & Marketing field
– Dmart Geographies 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 Dmart Geographies in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Dmart Geographies 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 Rakhi Thakur 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.
Highly skilled collaborators
– Dmart Geographies 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 DMart: Disrupting Food Retailing HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Dmart Geographies has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Dmart Geographies to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Dmart Geographies
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Dmart Geographies does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Dmart Geographies digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dmart Geographies 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.
Learning organization
- Dmart Geographies 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 Dmart Geographies is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in DMart: Disrupting Food Retailing Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Dmart Geographies is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Dmart Geographies 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.
Ability to recruit top talent
– Dmart Geographies is one of the leading recruiters in the industry. Managers in the DMart: Disrupting Food Retailing are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses DMart: Disrupting Food Retailing | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of DMart: Disrupting Food Retailing are -
Lack of clear differentiation of Dmart Geographies products
– To increase the profitability and margins on the products, Dmart Geographies needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study DMart: Disrupting Food Retailing, in the dynamic environment Dmart Geographies has struggled to respond to the nimble upstart competition. Dmart Geographies has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Dmart Geographies 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.
High cash cycle compare to competitors
Dmart Geographies has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of Dmart Geographies, firm in the HBR case study DMart: Disrupting Food Retailing needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Rakhi Thakur suggests that, Dmart Geographies 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study DMart: Disrupting Food Retailing, it seems that the employees of Dmart Geographies 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.
High operating costs
– Compare to the competitors, firm in the HBR case study DMart: Disrupting Food Retailing 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 Dmart Geographies 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Dmart Geographies is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study DMart: Disrupting Food Retailing can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Dmart Geographies 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.
Slow to strategic competitive environment developments
– As DMart: Disrupting Food Retailing HBR case study mentions - Dmart Geographies 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.
Opportunities DMart: Disrupting Food Retailing | 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 DMart: Disrupting Food Retailing are -
Building a culture of innovation
– managers at Dmart Geographies 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.
Buying journey improvements
– Dmart Geographies can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. DMart: Disrupting Food Retailing 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.
Better consumer reach
– The expansion of the 5G network will help Dmart Geographies to increase its market reach. Dmart Geographies 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.
Manufacturing automation
– Dmart Geographies 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.
Leveraging digital technologies
– Dmart Geographies 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.
Developing new processes and practices
– Dmart Geographies 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Dmart Geographies 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 Dmart Geographies to hire the very best people irrespective of their geographical location.
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. Dmart Geographies 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 Dmart Geographies 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.
Creating value in data economy
– The success of analytics program of Dmart Geographies has opened avenues for new revenue streams for the organization in the industry. This can help Dmart Geographies to build a more holistic ecosystem as suggested in the DMart: Disrupting Food Retailing case study. Dmart Geographies can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Dmart Geographies 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 DMart: Disrupting Food Retailing - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Dmart Geographies to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Dmart Geographies can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Dmart Geographies is facing challenges because of the dominance of functional experts in the organization. DMart: Disrupting Food Retailing 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.
Threats DMart: Disrupting Food Retailing External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study DMart: Disrupting Food Retailing are -
Environmental challenges
– Dmart Geographies 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. Dmart Geographies can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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 Dmart Geographies business can come under increasing regulations regarding data privacy, data security, 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 DMart: Disrupting Food Retailing, Dmart Geographies 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 .
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 Dmart Geographies.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dmart Geographies 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.
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. Dmart Geographies needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Dmart Geographies 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.
Regulatory challenges
– Dmart Geographies 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Dmart Geographies with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Dmart Geographies has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Dmart Geographies 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.
Stagnating economy with rate increase
– Dmart Geographies 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Dmart Geographies 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 DMart: Disrupting Food Retailing .
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 Dmart Geographies in the Sales & Marketing sector and impact the bottomline of the organization.
Weighted SWOT Analysis of DMart: Disrupting Food Retailing 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 DMart: Disrupting Food Retailing 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 DMart: Disrupting Food Retailing 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 DMart: Disrupting Food Retailing 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 DMart: Disrupting Food Retailing 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 Dmart Geographies needs to make to build a sustainable competitive advantage.