Case Study on ZOMATO.pptx

Case Study on ZOMATO

1. Assignment on Zomato

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3. INTRODUCTION  " Never have a bad meal". Launched in Delhi 12 years ago, Zomato has grown from a home project to one of the largest food aggregators in the world. We are present in 24 countries and 10000+ cities globally, enabling our vision of better food for more people. We not only connect people to food in every context but work closely with restaurants to enable a sustainable ecosystem. 3 DLF Phase V, Gurugram, Haryana, India

4. WHAT IS THE CASE ABOUT? Zomato is an Indian restaurant aggregator and food delivery  start-up  founded by Deepener Goyal and Pankaj Chaddah in 2008 As of 2019, the service is available in 24 countries and in more than 10,000 cities. Zomato expanded across India to  Delhi NCR ,  Mumbai ,  Bangalore ,  Chennai ,  Pune  and  Kolkata . Launched in Delhi 12 years ago, Zomato has grown from a home project to one of the largest food aggregators in the world. We are present in 24 countries and 10000+ cities globally, enabling our vision of better food for more people. Their idea has now grown into the vision that drives our team of 5000+ people everyday. 4

5. Who are the actors & players? 5 NEW ENTRANT: Well established market leader, decent market share SUPPLIERS: Print media & online media ,app in play store SUBSTITUTES: online platform BUYERS: improving features upgrades technology, switch to other app RIVALRY: swiggy food panada , burrp, just eat

6. LOW TO HIGH HIGH MEDIUM TO HIGH HIGH MEDIUM TO HIGH

7. Who are the actors & players? Threat of new entrants again varies from Low to high, depending on the category of the products. The food categories, with higher infrastructure costs, it becomes low & with the lower cost of operations, it becomes high. Threat of substitution becomes high due to nature of the products. Easy availability similar products increases the threat of Substitution. This analysis gives an opportunity to proactively work on product category & features. Distinguishing products from the competition on these fronts, can minimize this threat. Bargaining power of the Buyer again varies from medium to high. Due to higher competition available in each category, bargaining power of the buyers goes up. With the promos offered in the retails, E-coms & food aggregator’s buyers get lot of options across the category. Understanding this component given an opportunity to work on versatile pricing & marketing strategy. This article discusses about the alternatives of strategic approaches based on analysis of this force. 7

8. Who are the actors & players? Bargaining power of Suppliers varies between medium to high. Usually, the raw material comprises of commodities, which are highly competitive in pricing, moreover, prices their keep fluctuating depending on the yield of the crops, exports & domestic demands. To ensure consistent supplies for the planned production, annual price contracts becomes critical, accounting hedging of the financial risk. This raises the bargaining power of the suppliers, negatively impacting production cost. We will discuss on long term contractual procurement, effective supply chain solutions & options to arrest challenges in this component. Intensity of the competition Rivalry in India is higher. With the huge growth potential in the Indian market, it keeps attracting many domestic & International companies in each of the food categories. It becomes critical to understand how to strategies the operations to win against the competition. Our article will cover the current gap & try to arrive on a methodology to organize this Strategic approach to overcome this Rivalry. 8

9. What is the event ? The idea struck Deepinder when his colleagues consistently had a demand for paper menu leaflets of different restaurants, to order food. Swiggy leads the online delivery space with about 14 million monthly orders, Zomato currently clocks about 10.5 million monthly orders across India and UAE.  The most significant hurdle they faced was to find a way to cover all the areas in all the pivotal cities so the people who hinge on them do not fail to miss the finest restaurants. 2015 came in with the need of Zomato laying off 300 employees in order to curb losses, and 10% of these layoffs came to be in the US.  In 2017, the company  claimed  to have turned profitable in all the 24 countries that they operated in, along with rolling out a zero commission model. In February 2018, after the funding from Ant Financial Services, Zomato’s evaluation reached an unprecedented USD 1.1 billion dollars. 9

10. What are the symptoms, problem, & issues ? Symptoms Currently Zomato is available in only English which creates a language barriers. Online table booking in restaurants   Problem In Singapore restaurants founds they were not willing to disclose their menus on the internet. Sudden loss of the company they forced to wind up the operations in Singapore. Issue Reviews and orders at the same place. Confusion may happen between the restaurants and Zomato which may effect the end customers and the customers has suffer. Restaurants PH NO. on website is not working thus firm try to rectify this issue. 10

11. What have been action taken ? What actions need to be taken ? Expand its reach 18 to 20 others countries in coming few years. Advance booking of seats at various restaurants from the website. Zomato also wanted to expand its reach to rural areas. The zomatian way of providing the tight information to the right people was certainly going to change the future of restaurant businesses. What Zomato need to be done due to more competition they provide the best quality food & quality of services to the customer. At present Zomato may be calculating and preparing its for the launch of public shares. Zomato is also thinking to acquire few more start-ups as this could help them greatly in the coming futures Keeping our users happy by giving them a beautiful, easy -to-use product & maintaining a strong content platform . Their action plan is to become the go-to restaurant discovery service across the globe. 11

12. 12 What in your opinion are the uncontrollable factors affecting mobile phone industry in India?

13. Zomato pestle analysis Political Any business firm wishing to enter the overseas market is highly prone to political risks. The political decisions made by a host country are likely to affect the organizational productivity and profitability (Deshpande, 2016). Extreme political actions can very detrimental. The digital India campaign that was recently launched by the country's Prime Minister Narendra Modi is more likely to allow the company to get more internet penetration in India and everyone can easily access from every corner of the market (Deshpande, 2016). Economic Between the periods of 2011 and 2014, Zomato achieved an overwhelming growth by 1399%. This comes as a result of its tremendous achievements in 22 countries, thus, contributing effectively to economies of the countries. Besides, there is a potential rise in service prices after the country announced a service tax from 12.36% to 14% (Deshpande, 2016). This move is likely to affect the economic well-being of Zomato. Furthermore, the company is initiating cashless transaction aimed at creating jobs in different countries (Chakraborty, 2016). Socio-Cultural In the last six years, Zomato has turned out to be the country's favorite online restaurant discovery tool. However, it has influenced the manner in which individuals select their preferred restaurants. The changing lifestyle patterns and income levels of the Indian working population, and this is advantageous to Zomato (Wikiwealth, 2017). This is because; many young people and new age working couples like eat out, with this category attracting about 30% in 2012 (Deshpande, 2016). For this reason, user engagement in its website is therefore critical for customer participation. 13

14. Zomato pestle analysis Technological Zomato has enjoyed a greater advantage by using technology in designing a beautiful user interface that makes it easier for the users to browse (Wikiwealth, 2017). One advantage that Zomato continues to enjoy out of this kind of technological innovation is that the service is much faster despite the fact that the high resolution is needed for the menus. In essence, the technology encourages online services. For example, incorporating what the restaurant into mobile app helps the customers to select the restaurant on the go. According to Deshpande (2016), the restaurant information is customized in a manner that the customer to obtain the information he or she needs without necessarily making a hassle.  Environmental Achieving business sustainability is dependent on how the company addresses the ecological requirements (Deshpande, 2016). Being a service company, there are no significant environmental impacts from Zomato Company. Legal The company is required by the Indian law to comply with all regulations that control technology firms in the country (Wikiwealth, 2017). This ensures that it is used effectively without being subjected to abuse. 14

15. 15 What strategic choices does ZOMATO have under the circumstance defined above? You may use application of SWOT Matrix to generate the option available to ZOMATO

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17. Strengths First, Zomato enjoys a very innovative culture that has enabled it to seal its place in the India's IT culture. In a world where technological innovations are common, coming up with a new product can attract many people in the market. According to Deshpande (2016), this makes the company have an aggressive as well as an innovative marketing strategy that has resulted in brand recognition. Innovative culture has made Zomato win various accolades and awards. Second, the company boasts of financial leverage. This high financial leverage is as a result of its unique business model whereby the customers enjoy the use of a friendlier interface.  Weaknesses The company has limited growth, and this is due to competition arising from search engines and similar applications. According to Deshpande (2016), it becomes very hard for the company to achieve global expansion, and it has lost the opportunity of becoming the first mover in online food delivery. Second, the company faces drastic growth, and this is caused by its susceptibility to outdated content (Deshpande, 2016). For example, menu cards without food prices are mentioned in some restaurants and in some cases, the menu content is even partial. 17

18. Opportunities There are various opportunities to be exploited by the organization. First, global expansion to new and emerging markets. Since the technology has been utilized extensively in India, Zomato can consider going global and address the needs of the new market (Deshpande, 2016). This is a sure way of increasing profitability through attraction of additional customers. Second, increasing internet penetration as well as the rising number of people using smartphones presents a good business opportunity for Zomato. The company should consider targeting these individuals so that they can get the experience of using a new service while selecting their best restaurants in India and abroad. Threats First, there is intense competition from close rivals such as Food panda, Just East, Yelp, Tiny Owl and Burp (Deshpande, 2016). These companies offer brand competition from national and international. All these are a threat to the company and must be addressed effectively. Second, changes in the government policy affect its business model, and therefore, lack of clear rules and regulations is a threat to the company. 18

19. RECOMMENDATIONS Zomato has a popularity advantage over others. They are currently market leader in 18 out of 23 countries, with more than 8.5 monthly users only in India. Trend of ordering food online is at its peak. They are offering online ordering service but in India with wide opportunity, they are not making much online orders as their rivals. They need a logistic team to pick food from restaurants and deliver to customers. Compared to their rivals, Zomato have more restaurants listed on their platform. India is the biggest marketplace for Zomato and Indians are more inclined toward cash-on-delivery (COD) in comparison to online payments. They need to introduce COD options for all the restaurants, to excel swiftly. 19

20. 20 s. no Factors Weight Rating Total score 1. 2 3 Opportunities Opportunity to expand to further more countries Increasing internet penetration & number of smartphone users Rapid technology development 0.11 0.17 0.25 3 1 2 0.33 0.17 0.50 1. 2. 3. Threats Intense competition Lack of clear rules and regulations - Changes in government policy can easily affect the business model Business model can be easily imitated by other players TOTAL 0.17 0.03 0.14 1 4 2 3 0.68 0.06 0.42 1.16 EFE MODEL OF ZOMATO EXTERNAL

21. 21 s. no Factors Weight Rating Total score 1. 2 3 Strengths First mover advantage  The fantastic design of the app The number of users 0.17 0.03 0.14 4 2 3 0.68 0.06 0.42 1. 2. 3. Weakness Security issues for the app Still a lot of expansion required Word of mouth and  Facebook  check-ins TOTAL 0.11 0.17 0.25 1 3 1 2 0.33 0.17 0.50 1.16 IFE MODEL OF ZOMATO INTERNAL

22. 22 BALANCED SCORE CAED AREA OF OBJECTIVES MEASURE OF TARGET TIME EXPECTATION PRIMARY RESPONSIBILITY CUSTOMERS INCREASE MARKET SHARE IMPROVE BRAND IMAGE APPEAL TO WIDER RANGE IMPROVE CUSTOMER LOYALTY YEARLY EVALUATION MANAGER/EMPLOYESS MARKETING EMPLOYEES/MANAGERS QUALITY & SERVICES TRAINING INCREASE EXPRIENCE EFFECTIVE TRAINING UTILIZE MANAGERS WHO ARE FAMILIAR WITH EXPECTATIONS & ENVIRONMENT YEARLY EVALUATION TOP LEVEL MANAGEMENT (CHIEF FINANCIAL & ADMINISTRATIVE OFFICER) MARKETING/PUBLIC IMAGE GOOD BUSINESS ETHICS MAINTAIN A GOOD IMAGE TO SUSTAIN IN COMPANY DESRIABILITY YEARLY EVALUATION MANAGERS BUSINESS ETHICS/NATURAL ENVIRONMENT REDUCE PRODUCT RECALLS REDUCE CYCLE TIME AVOID OVERUSE OR UNDER USE OF WORK FORCE MAINTAIN GOOD FOOD REPUTATION YEARLY EVALUATION MANAGERS FIANANCIAL REVENUES INCREASE SHAREHOLDER VALUE INCREASE SALES BY INCREASING ANNUAL SALES YEARLY EVALUATION (CHIEF FINANCIAL & ADMINISRATIVE OFFICER)

23. 23 TWOS MATRIX Internal factors External factors STRENGHT(S) S1:Profitability S2:Brand recognition S3:Global presence Weakness(W) W1: Uneven worldwide distribution W2: Product pricing W3:Sustainability Opportunities(O) O1:Dilevery Service O2:Expansion to Europe & emerging Markets S-O Strategies SO.1. Quick Delivery SO.2. Good brand image SO.3. Growing in food delivery business to potential customer W-O Strategies WO.1.New market will balance distribution WO.3.Expanding to Europe to survive. Threats(T) T1:compition through entrants or pages with more features(e.g. delivery) S-T Strategies ST.1. Present customer base is not enough ST.2Delivery is not on time issue W-T Strategies WT.1.low brand awareness WT.2.Lower turnover WT.3.Engage the customer with constant rewards

24. 24 SPACE MATRIX QUADRANT 2 QUADRANT 1 Market Development Market Penetration Product Development Horizontal Integration Divestiture Liquidation Market Development Market Penetration Product Development Forward Integration Backward Integration Horizontal Integration Related Diversification QUADRANT 3 QUADRANT 4 Retrenchment Related Diversification Unrelated Diversification Divestiture Liquidation Related Diversification Unrelated Diversification Joint Ventures Rapid Market Growth Strong Competitive Position Slow Market Growth Weak Competitive Position

25. 25 BCG MATRIX Indian Brand STAR QUESTIONMARK? Customer loyalty Brand Loyalty COW Currently present in metro cities & urban places. Competitors DOG HIGH LOW HIGH LOW MARKET GROWTH RATE RELATIVE MARKET SHARE

26. Thank You Shweta Chauhan