Organizational Strategy & Roadmap of Daily Needs Delivery (DND) LLP

Assignment Taken

Tagline

“ Think globally, connect locally “

Case Understanding

DND, a daily need delivery startup is an app-based ordering system which currently operates in Delhi, Bangalore and Hyderabad. It is built keeping the customers at the center of the fulcrum-but due to issues in last mile delivery like sudden disappearance of the delivery boys during peak demand, the company is suffering a decline in user base growth. Also, the firm is currently focused on a hyperlocal marketing model.In the long run,it needs to expand itself keeping the basic values and missions of the organization intact.

BCS Solution Summary

The solution is based on a multi-pronged approach – i) improving customer satisfaction, ii) implementation of an efficient cold chain, iii) last mile tracking, iv) improved supply chain and logistics, v) moving away slowly from a hyperlocal marketing model to a pan India based model ,vi)increased delivery timings, vi) Introduction of AI chatbot support system for easier grievance redressal mechanism.

Solution

Through our solution we aim to see a self-sustainable business flourishing in the upcoming years with diversified portfolios built up from “milk to groceries” model rather than the “groceries to milk” model.

 

1)SWOT Analysis

 

Strengths

1. Customization of app:Fully customizable app where customers can earmark dates of non delivery as well – offers the option of prescheduling deliveries
2. Digital India :Availability of cashless  payment wallets and platform like BHIM UPI for seamless user experience
3. Customizable calendar:Providing customers with a fully customizable delivery calendar

 

Weaknesses

1. Perishability:Perishable nature of the products leads to wastage on inventories
2. Absenteeism:High rate of absenteeism of delivery boys in peak hours leading to significant loss
3. Lesser variety:Limited variety of SKUs
4. Consumer behavior:Growing customer agitation due to wrong deliveries and deliveries beyond time
5. Dependency:Overdependence on specific delivery partners

 

Opportunities

 

1. Geographical expansion:Currently, it is operating in 3 metro cities viz. Delhi, Bengaluru and Hyderabad-following a stepwise expansion strategy the service can be extended to Tier 2 and Tier 3 cities as well
2. Untapped markets:Largely untapped semi urban and rural markets
3. Changing economy:Leveraging the fast growing economy of India
4. Differentiation:Introduction of different varieties of milk viz camel milk and goat milk on a use case basis
5. Diversification:Diversification of portfolios in subsequent stages & venturing into groceries as well
6. Delivery timings:Increasing the delivery hours from 3 hours(morning only) to 6-8 hours(morning & night)
7. Vertical integration:Tie ups with bigger Ecommerce players viz Flipkart, Walmart & Amazon to establish a Vendor Managed Inventory
8. Implementation of improved IT systems:Working on the possibilities of the implementation of in-app complaint box to improve operational efficiency drastically by live delivery tracking systems and feedback of delivery partners

 

Threats

 

1. Markets:No specific entry barrier for competitors
2. Competitors:Competitors taking the advantage of delaying the idea of expanding the service to non-dense areas
3. User base of installed applications:Decrease in the percentage of active user base of installed apps from 96.82% (2500/2582) to 92.57% (4000/4321) i.e. a decrease of 4.25% YoY
4. Sales figure:Sales/employee decreased from 13,44,220(FY 2018-2019) to 13,05,000 (FY 2018-2019) – a sharp decline of approximately 2.9%

 

2) Vision Document for the next 5 years

Purpose

Currently operating in  three main metro cities, the main objective is to establish DND as the market leader in the Indian  online daily need delivery sector within the next 5 years and strengthening our core competencies.

Scope

To develop an efficient supply chain model to minimize excess inventory and enhance customer satisfaction

 

Positioning

• No minimum order cap
• Focusing on developing an efficient cold chain so that customers need not worry even if the delivered products remain at the doorstep for a longer period of time

 

Product Segment

Currently, majority of the customers are affluent households in metro cities but the segment needs to be extended to institutions like hotels, restaurants as well for bulk deliveries.

 

Future directions of growth

We expect to strategically expand in 4 different stages over the course of next 5 years and beyond.

Stage 0: Involves development of core competencies- establishing an efficient supply chain and logistics system to strengthen the service with existing dairy products-(for upcoming 6-12 months)

Stage 1: Product Line Expansion- addition of eggs, breads and other essential groceries as per  extensive primary and secondary research (for next 2 years)

Stage 2: Market Expansion – extending from B2C model to B2B markets encompassing restaurants, hotels, institutions (between 2nd and 4th year)

Stage 3: Geographic Expansion- expanding in Tier 1 cities and slowly entering the Tier 2 cities as well – keeping a target like expanding operations across 3 Tier 1 cities and 1 Tier 2 city every year (over a period of upcoming 5 years)

Stage 4: Backward Integration – Shifting to a Vendor Managed Inventory Model for smooth and efficient functioning of warehouse, supply chain & logistics (beyond 5th year)

Conclusion

After all this expansion strategy and portfolio diversification, the main aim of DND is sustainable development of the organization and create a resonating experience for the customers such that they would recommend it to the acquaintances and the word of mouth would spread. Moreover, DND should follow a careful expansion strategy with a bit of aggression.Properly defining KPIs for the different hierarchies of employees is also required as the organization tends to grow bigger. Expansion is expected to follow a multi pronged strategy encompassing product line expansion, market expansion, geographical expansion and backward integration for a bigger and better stronghold of the market.

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