Zomato Case Study Analysis 1 PPT Present

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

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

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

LOWTOHIGH
HIGH
MEDIUMTOHIGH
HIGH
MEDIUMTOHIGH

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

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

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

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

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
11

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

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

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
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

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

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

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
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
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
BALANCED SCORE CAED
AREA OF OBJECTIVES MEASURE OF TARGET TIME
EXPECTATION
PRIMARY RESPONSIBILITY
CUSTOMERS
1. INCREASE MARKET SHARE
2. IMPROVE BRAND IMAGE
1) APPEAL TO WIDER RANGE
2) IMPROVE CUSTOMER LOYALTY
YEARLY
EVALUATION MANAGER/EMPLOYESS
MARKETING
EMPLOYEES/MANAGERS
1. QUALITY & SERVICES
TRAINING
2. INCREASE EXPRIENCE
1) EFFECTIVE TRAINING
2) UTILIZE MANAGERS WHO ARE
FAMILIAR WITH EXPECTATIONS &
ENVIRONMENT
YEARLY
EVALUATION
TOP LEVEL MANAGEMENT
(CHIEF FINANCIAL &
ADMINISTRATIVE OFFICER)
MARKETING/PUBLIC IMAGE
1. GOOD BUSINESS ETHICS 1) MAINTAIN A GOOD IMAGE TO
SUSTAIN IN COMPANY DESRIABILITY
YEARLY
EVALUATION MANAGERS
BUSINESS ETHICS/NATURAL
ENVIRONMENT
1. REDUCE PRODUCT RECALLS
2. REDUCE CYCLE TIME
1) AVOID OVERUSE OR UNDER USE OF
WORK FORCE
2) MAINTAIN GOOD FOOD REPUTATION
YEARLY
EVALUATION
MANAGERS
FIANANCIAL YEARLY (CHIEF FINANCIAL &

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
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
 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

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