Case Study Description of Grofers: Re-Energizing Kirana Stores through M-Commerce
In 2014, the food and grocery industry in India experienced a surge in the online grocery market. Before that time, existing e-business players had largely avoided the online grocery market because of its complex logistics requirements and issues related to last-mile delivery, or reaching customers in remote areas. The rise of online grocery businesses raised concerns for brick-and-mortar stores, especially local kirana stores (corner stores), about becoming redundant in the future. With limited or no technology adoption, these kirana stores had no way of going online. Grofers came to the rescue of these local stores with a mobile commerce (m-commerce) model for groceries that promised on-demand delivery within 90 minutes. However, with very low margins in the grocery business compared to lifestyle products, in addition to last-mile delivery and returns complexities, it remained to be seen whether Grofers would be able to carve out a niche in the grocery industry with its innovative model. Considering the low entry barriers and the easily replicable business model, how viable and sustainable was an m-commerce business like Grofers? Reema Khurana is affiliated with Institute of Management Technology, Ghaziabad. Susmi Routray is affiliated with Institute of Management Technology, Ghaziabad.
Swot Analysis of "Grofers: Re-Energizing Kirana Stores through M-Commerce" written by Reema Khurana, Susmi Routray includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Grofers Grocery facing as an external strategic factors. Some of the topics covered in Grofers: Re-Energizing Kirana Stores through M-Commerce case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Grofers: Re-Energizing Kirana Stores through M-Commerce casestudy better are - – increasing household debt because of falling income levels, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , increasing commodity prices, increasing energy prices, cloud computing is disrupting traditional business models,
banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, etc
Introduction to SWOT Analysis of Grofers: Re-Energizing Kirana Stores through M-Commerce
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Grofers: Re-Energizing Kirana Stores through M-Commerce case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Grofers Grocery, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Grofers 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 Grofers: Re-Energizing Kirana Stores through M-Commerce can be done for the following purposes –
1. Strategic planning using facts provided in Grofers: Re-Energizing Kirana Stores through M-Commerce case study
2. Improving business portfolio management of Grofers Grocery
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Grofers Grocery
Strengths Grofers: Re-Energizing Kirana Stores through M-Commerce | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Grofers Grocery in Grofers: Re-Energizing Kirana Stores through M-Commerce Harvard Business Review case study are -
Learning organization
- Grofers Grocery is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Grofers Grocery is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Grofers: Re-Energizing Kirana Stores through M-Commerce Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Grofers Grocery digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Grofers 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.
Highly skilled collaborators
– Grofers 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 Grofers: Re-Energizing Kirana Stores through M-Commerce HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Grofers Grocery is one of the leading recruiters in the industry. Managers in the Grofers: Re-Energizing Kirana Stores through M-Commerce are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Grofers: Re-Energizing Kirana Stores through M-Commerce 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.
Analytics focus
– Grofers 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 Reema Khurana, Susmi Routray 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.
Training and development
– Grofers Grocery has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Grofers: Re-Energizing Kirana Stores through M-Commerce 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
– Grofers Grocery has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Grofers Grocery to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Grofers Grocery in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Grofers Grocery in the sector have low bargaining power. Grofers: Re-Energizing Kirana Stores through M-Commerce has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Grofers Grocery to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Grofers Grocery
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Grofers Grocery does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Grofers Grocery is one of the most innovative firm in sector. Manager in Grofers: Re-Energizing Kirana Stores through M-Commerce Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Grofers: Re-Energizing Kirana Stores through M-Commerce | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Grofers: Re-Energizing Kirana Stores through M-Commerce are -
Capital Spending Reduction
– Even during the low interest decade, Grofers 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.
Aligning sales with marketing
– It come across in the case study Grofers: Re-Energizing Kirana Stores through M-Commerce 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 Grofers: Re-Energizing Kirana Stores through M-Commerce can leverage the sales team experience to cultivate customer relationships as Grofers Grocery is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Grofers Grocery is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Grofers: Re-Energizing Kirana Stores through M-Commerce can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Grofers: Re-Energizing Kirana Stores through M-Commerce, is just above the industry average. Grofers 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.
Need for greater diversity
– Grofers 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 Grofers Grocery, firm in the HBR case study Grofers: Re-Energizing Kirana Stores through M-Commerce needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Grofers Grocery has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Grofers Grocery even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Interest costs
– Compare to the competition, Grofers Grocery has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Skills based hiring
– The stress on hiring functional specialists at Grofers 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Reema Khurana, Susmi Routray suggests that, Grofers 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 Grofers: Re-Energizing Kirana Stores through M-Commerce 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 Grofers Grocery 's lucrative customers.
Opportunities Grofers: Re-Energizing Kirana Stores through M-Commerce | 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 Grofers: Re-Energizing Kirana Stores through M-Commerce are -
Creating value in data economy
– The success of analytics program of Grofers Grocery has opened avenues for new revenue streams for the organization in the industry. This can help Grofers Grocery to build a more holistic ecosystem as suggested in the Grofers: Re-Energizing Kirana Stores through M-Commerce case study. Grofers Grocery can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Grofers 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. Grofers 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.
Developing new processes and practices
– Grofers Grocery can develop new processes and procedures in Leadership & Managing People 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.
Learning at scale
– Online learning technologies has now opened space for Grofers 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.
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 Grofers Grocery in the consumer business. Now Grofers Grocery can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Grofers Grocery is facing challenges because of the dominance of functional experts in the organization. Grofers: Re-Energizing Kirana Stores through M-Commerce 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Grofers 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, Grofers: Re-Energizing Kirana Stores through M-Commerce, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Grofers Grocery can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Grofers Grocery can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Grofers 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 Leadership & Managing People segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Grofers Grocery can use these opportunities to build new business models that can help the communities that Grofers Grocery operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Grofers 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.
Loyalty marketing
– Grofers Grocery has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Threats Grofers: Re-Energizing Kirana Stores through M-Commerce External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Grofers: Re-Energizing Kirana Stores through M-Commerce are -
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. Grofers Grocery needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Environmental challenges
– Grofers 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. Grofers Grocery can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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. Grofers 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.
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 Grofers Grocery is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Grofers 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 Grofers: Re-Energizing Kirana Stores through M-Commerce .
High dependence on third party suppliers
– Grofers 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.
Consumer confidence and its impact on Grofers Grocery 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.
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.
Technology acceleration in Forth Industrial Revolution
– Grofers Grocery has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Grofers Grocery needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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 Grofers Grocery.
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 Grofers Grocery in the Leadership & Managing People sector and impact the bottomline of the organization.
Regulatory challenges
– Grofers 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 Leadership & Managing People industry regulations.
Weighted SWOT Analysis of Grofers: Re-Energizing Kirana Stores through M-Commerce 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 Grofers: Re-Energizing Kirana Stores through M-Commerce 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 Grofers: Re-Energizing Kirana Stores through M-Commerce 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 Grofers: Re-Energizing Kirana Stores through M-Commerce 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 Grofers: Re-Energizing Kirana Stores through M-Commerce 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 Grofers Grocery needs to make to build a sustainable competitive advantage.
