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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, increasing energy prices, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google,
customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, 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 -
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.
Cross disciplinary teams
– Horizontal connected teams at the Grofers Grocery are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
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.
Diverse revenue streams
– Grofers Grocery is present in almost all the verticals within the industry. This has provided firm in Grofers: Re-Energizing Kirana Stores through M-Commerce case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
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.
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.
Effective Research and Development (R&D)
– Grofers Grocery has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Grofers: Re-Energizing Kirana Stores through M-Commerce - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Grofers Grocery has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Grofers 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.
Strong track record of project management
– Grofers Grocery is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– 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.
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 -
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.
No frontier risks strategy
– After analyzing the HBR case study Grofers: Re-Energizing Kirana Stores through M-Commerce, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Grofers: Re-Energizing Kirana Stores through M-Commerce 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 Grofers Grocery has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Grofers: Re-Energizing Kirana Stores through M-Commerce HBR case study mentions - Grofers 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.
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.
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 dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Grofers Grocery supply chain. Even after few cautionary changes mentioned in the HBR case study - Grofers: Re-Energizing Kirana Stores through M-Commerce, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Grofers Grocery vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Grofers: Re-Energizing Kirana Stores through M-Commerce, in the dynamic environment Grofers Grocery has struggled to respond to the nimble upstart competition. Grofers Grocery has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Grofers Grocery 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Grofers Grocery needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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 -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Grofers Grocery can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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.
Buying journey improvements
– Grofers Grocery can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Grofers: Re-Energizing Kirana Stores through M-Commerce 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 Grofers 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 Grofers Grocery to hire the very best people irrespective of their geographical location.
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.
Using analytics as competitive advantage
– Grofers 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 Grofers: Re-Energizing Kirana Stores through M-Commerce - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Grofers Grocery to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Grofers Grocery can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Grofers Grocery to increase its market reach. Grofers Grocery 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.
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 -
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.
Increasing wage structure of Grofers Grocery
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Grofers Grocery.
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 .
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Grofers Grocery can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Grofers: Re-Energizing Kirana Stores through M-Commerce, Grofers Grocery may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Grofers Grocery with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.