Case Number 7

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Hey there, amazing subscribers!

Thank you for the storm of fantastic replies last week on the Dunzo case study; your insights continue to deepen our collective understanding of strategy. Before we venture into the maze that is Haldiram's current market standing, let's wrap up the Dunzo discussion. Today, you'll find my own take on how Dunzo can recalibrate its strategic compass using the Three Horizons Model. And then, ready your strategic thinking hats for this week's new case—Haldiram's struggle to adapt to a world where its traditional sweets and savories face intense competition and marketing puzzles.

This week is a treat, quite literally, so let's get cracking!

Case #7

Today's Case-Study: The Curious Case of Haldiram's Stagnant Sales

Haldiram's, a pioneer in the Indian snack industry with an annual revenue of $1.3 billion, has experienced a decline in sales growth rate from 12% to 6% over the past year. The company's performance on online platforms has especially lagged, contributing only 10% of total sales. With the global snack market expected to grow at a CAGR of 5.2% between 2021 and 2026, Haldiram's situation is increasingly urgent. Despite brand popularity and extensive distribution networks, competitors like PepsiCo's Lay's and Britannia have overtaken Haldiram's online market share by introducing innovative flavors and marketing strategies.

Questions to Ponder:

1. Strategic Options: Haldiram's is considering three major approaches:What are the pros and cons of each approach in both short-term and long-term scenarios?

   1. Doubling down on traditional marketing to reinforce its current customer base.

   2. Focusing on digital marketing and online sales, possibly introducing a subscription model.

   3. Launching innovative flavors targeting the younger demographic.

2. The GTM Quadrant: If Haldiram's were to employ a Go-To-Market (GTM) strategy that focuses on:Which quadrant offers the most promise, considering the capabilities of Haldiram's?

   1. Market penetration

   2. Market development

   3. Product development

   4. Diversification

3. Transaction Models: Given the average cart size of $30 for online sales and $50 for offline, how could Haldiram's optimize their transaction models to incentivize higher sales?

4. Competition: How easily could competitors like Lay’s and Britannia emulate Haldiram's strategic changes? What unique resources or capabilities does Haldiram's possess to gain a competitive advantage?

5. Success Stories: Brands like NatureBox and Graze have seen success by adapting to online sales channels effectively. What can Haldiram's learn from these brands?

6. Strategic vs Tactical: How does strategic thinking in marketing differ from a tactical approach and why is the former crucial before any execution?

7. Budget Allocation: With a budget of $5 million for strategic changes, how would you allocate resources among marketing channels, product development, and other operational costs?

Reply to this email with your detailed analysis and recommendations. The complexities of this case demand your best strategic thinking skills. I’m excited to see what solutions you come up with!

Last Week's Top Solutions for “The Dunzo Dilemma”

1. Rebranding & Restructuring

Ajay:

• Refocus on core services like grocery and food delivery where Dunzo has an edge. Spin off non-core businesses.

• Invest in technology and automation to improve efficiency and unite a fractured supply chain.

• Rebuild trust through increased transparency and engagement with employees and gig partners.

Neha:

• Launch a subscription model for predictable revenues, offering benefits like free delivery, priority support.

• Revamp mobile app and web experience to improve convenience and personalization.

• Consolidate operations in key profitable regions and exit non-viable markets.

2. Strategies to Rejuvenate

Neha:

• Focus marketing on Dunzo's reliability and support during tough times.

• Launch loyalty programs and promotions to reactivate retained users.

• Leverage social listening data to address pain points and refresh branding.

Saloni:

• Highlight social impact through partnerships with NGOs, SMEs etc.

• Share stories of employees and gig partners who stood by Dunzo.

• Make the brand more inclusive and accessible to a wider audience.

Now, I'd like to share my own take on how Dunzo could potentially steer the ship back on course, employing the Three Horizons model for a balanced perspective.

First Horizon: Urgent Damage Control

1. Immediate Financing: My first move would be to secure funding to settle the owed salaries and rebuild the sinking morale among employees. Whether it's through debt financing or by selling off non-core assets, generating quick capital would be the priority.

2. Back to Basics: I'd propose that Dunzo reverts to its core strength—hyperlocal delivery. Especially in the food and grocery delivery sectors, there's still substantial room for growth.

3. Cutting the Clutter: I'd also recommend Dunzo consider pulling the plug on its peripheral ventures like car washes and beauty services, which are diverting resources and focus from its core business.

Second Horizon: Rejuvenating the Brand

1. Subscription Model: A Dunzo subscription program could offer a lifeline by creating a predictable revenue stream. Premium tiers with perks like free delivery could make it more appealing.

2. Careful Partnerships: Another idea would be to enter partnerships with big players in e-commerce and groceries. However, I'd urge Dunzo to weigh the risks of exclusivity agreements very carefully.

3. Smart Marketing: Aligning the brand with post-pandemic consumer needs, like safe and reliable delivery of essentials, could also be a game-changer.

Third Horizon: Setting Up for the Long Haul

1. High-Tech Adaptation: In the longer-term, Dunzo could leverage technology like AI and geospatial analytics to enhance its supply chain resilience.

2. Crowdsourced Delivery: Exploring crowdsourced delivery options could balance out operational costs and better utilize the fleet.

3. Quick Commerce: Once the market ripens, I see a significant opportunity for Dunzo to step into the q-commerce space for even quicker delivery services.

I'm of the opinion that while divestment or even an outright sale might seem tempting, Dunzo's existing brand equity and tech capabilities warrant an earnest turnaround attempt. The Three Horizons model provides a comprehensive, yet structured, methodology to deal with the immediate crises without losing sight of the future.

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