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, there is increasing trade war between United States & China, geopolitical disruptions, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, talent flight as more people leaving formal jobs,
increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, 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 -
Successful track record of launching new products
– Dmart Geographies has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Dmart Geographies 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.
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.
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.
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.
Training and development
– Dmart Geographies has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in DMart: Disrupting Food Retailing 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.
Innovation driven organization
– Dmart Geographies is one of the most innovative firm in sector. Manager in DMart: Disrupting Food Retailing 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 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.
Sustainable margins compare to other players in Sales & Marketing industry
– DMart: Disrupting Food Retailing firm has clearly differentiated products in the market place. This has enabled Dmart Geographies to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Dmart Geographies to invest into research and development (R&D) 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.
Superior customer experience
– The customer experience strategy of Dmart Geographies in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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 -
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.
No frontier risks strategy
– After analyzing the HBR case study DMart: Disrupting Food Retailing, 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.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study DMart: Disrupting Food Retailing, is just above the industry average. Dmart Geographies 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.
Products dominated business model
– Even though Dmart Geographies 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 - DMart: Disrupting Food Retailing should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the DMart: Disrupting Food Retailing 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 Dmart Geographies has relatively successful track record of launching new products.
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.
Capital Spending Reduction
– Even during the low interest decade, Dmart Geographies 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.
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.
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.
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 -
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.
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.
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. Dmart Geographies 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 Dmart Geographies 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.
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.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Dmart Geographies can use these opportunities to build new business models that can help the communities that Dmart Geographies operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Dmart Geographies 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.
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.
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.
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 Dmart Geographies in the consumer business. Now Dmart Geographies can target international markets with far fewer capital restrictions requirements than the existing system.
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 -
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.
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.
Consumer confidence and its impact on Dmart Geographies demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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.
Shortening product life cycle
– it is one of the major threat that Dmart Geographies is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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 Dmart Geographies.
Increasing wage structure of Dmart Geographies
– 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 Dmart Geographies.
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.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Dmart Geographies can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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 .
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.
