Zomato - Let the Hunger Games begin !!

Let the Hunger Games begin !!

The Brew for the day is for Zomato
Type: Served Hot – Disrupt and Transform brew.

The Brew will analyze Zomato on the following points:
Business Model Analysis (& Improvisations)

Business Model Analysis:
Zomato is an Indian company that started as FoodieBay back in 2008 from Gurgaon before it was rechristened to Zomato in November 2010. The company, over the past years, has brought in a number of strategy changes and launched numerous new features to gain traction. The foodtech venture was founded by Deepinder Goyal and Pankaj Chaddah in 2008 and has raised over $220 Mn in funding, and made 10 acquisitions. Zomato is now present in 24 countries with a listing of over a million restaurants globally.

Food-tech in India:
Startups in the Food-tech sector can be broadly categorized into three business models. The first set comprises ventures such as Zomato, which provide a software-only marketplace to restaurants. The second group includes hyper-local food delivery services like Foodpanda and Swiggy, which bring in traffic and manage the logistics. Zomato has also ventured into food delivery of late. Finally, there are full-stack food businesses like FreshMenu and Yumist, which prepare food in-house and have their own delivery fleet.

Coming back to Zomato, The Brew firmly believes that it is poised to be an Industry game changer in Food Industry, irrespective of the likes (& funding firepower) of it’s Competitors, however the reason why it’s not unleashed so far, is the lack of understanding of the inherent levers it has, which remain largely unexplored and un-capitalized, which will be enlisted below:

a) Strong Sense of Purpose: Inspite of having a great head start (both, in terms of time and funding), The Brew feels that a lot less has been accomplished at Zomato, than what it’s capable of. Presently, Zomato’s mission is to ensure nobody has a bad meal at a User level which equally justifies Location Discovery platform it runs today. Definitely a strong purpose at a User Level, however at an Industry level, there are equally bold problems that can be helped by Zomato’s cause which needs to be accounted along with tangible proactive action and impact. After facing numerous strategy changes, it is only apparent that somewhere the purpose, if it existed, went slightly off focus, or rather off taste in this case, however being tied to a strong sense of purpose will only enable Zomato, not only to create a much needed disruption in the food space, but equally scale the potential of what it’s capable of.

b) The Social Paradigm of Zomato: With much of pain and courage, Zomato transformed itself in to Restaurant Social Network, mapping the relationship networks of users with service providers, which The Brew believed could have been extended to going further granular from restaurants to food. A lot of unutilized potential can be wielded if Zomato goes further granular to being a Social Network for Food (& other variables of experience & value) exploring a completely different horizon for users to discover and realize, predominantly, cos the level of Engagement will be huge (equally contributing to Zomato’s intelligence, more of it explained in Point c), and all of it’s Core offerings can then be built around the attributes of User Likes & Dislikes, Relationships and Preferences complimenting the existing model of Location discovery.

c) Competence of Zomato: Along with point b, The Brew wants to drive home another realization that Technology needs to be a Competence for Zomato, helping it scale and fulfilling it’s purpose right from user, to markets, to industry.
The Brew believes that Zomato is not a Food Solutions company enabled by Technology, rather it’s a Technology company disrupting the food market ecosystem and enabling consumer centric solutions.
Not to forget, the other complementary levers it has to amplify the disruption – Social Network and it’s Ecosystem spread across the value chains of B2B and B2C (B2B2C).

The Brew strongly recommends Zomato to stay focused on these levers, along with strengthening them incessantly, not only enhancing the Value created v/s. Value captured for all stakeholders in the value chain, but faring well on the trajectory for purpose. Zomato should as well encourage to drive this platform approach to larger players, of the likes of other Food companies, and exploring the feasibility for logistics players as well. Covering entire Value chain is of essence along with making sense of user data, engagement and fulfillment.

d) Strategy & Competitive Advantage:  With Competence that Zomato has, it’s strategy needs to cover driving solutions for entire ecosystem’s value chain right from Enablement to Fulfillment i.e. on both the sides given that it operates on both the sides – B2B and B2C. On the B2C side, it’s right from Discovery to Order bookings, table booking and experience management, while on B2B side it’s definitely intelligent insights about user experience, higher consumer yield leading to optimization of profitability.

The Brew equally recommends Zomato to have a high data & data sciences focused on Consumer behaviour, developing competence over time to disrupt the Consumer Decision Making over the validated Preferences and Likes.

e) Strategy for Enablement Competence: Lately Zomato has been expressing high interest on the logistics side of food delivery, which it believes can be a good enablement strategy to complement the core business, The Brew equally thinks that a Logistics presence will definitely augment Zomato’s capabilities manifold, however not on the B2C side, but rather on the B2B side, where there is lot more certainty, predictability and the potential to unlock huge value along with keeping Service providers sticky to the business model. With a better value delivery & consolidation here, Zomato can have an opportunity to impact the pricing and other aspects, having an impact to change consumer behavior. Logistics Investments on the B2C will be huge with minimal returns as it wont be limited to fulfillment requests from Zomato, moreover it’s a different animal to tame, unless there is an advance intelligence systems at Zomato to figure out 3 things:
a) Certainty and Predictability with respect to demand generation on the B2C side.
b) Consolidated Value generated for the B2B side, which can be culminated to entire value chain.
c) Ability to influence, change and disrupt the Consumer behavior basis real time, intelligence

f) Shaping up an Organisation: With Zomato on a High Impact – High Growth trajectory, equally with a potential to disrupt the ecosystem, it should equally focus now on transforming itself from a Startup to Organisation with increased focus on mechanisms of institutionalization, governance for Operational Excellence, People Strategy & Human Capital, Collaboration, Innovation, Culture & binding all of this to Zomato’s Purpose, Business Model and Organisational Strategy.

The Brew strongly believes that there is huge potential to be unlocked with respect to offering, and disruptive potential of Zomato, should a few of the above points get incorporated in its operating model.  
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