'Zomato': Downsizing to Remain Competitive

            

Details


Case Code : CLBS152
Period : 2008-2016
Publication date : 2016
Teaching Note :Not Available
Subject :Business Strategy
Case Length : 05 Pages
Countries : India
Industry : Food Tech Industry
Organization : Zomato

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Abstract: ICMR India ICMR India ICMR India ICMR India RSS Feed

This case is about the restructuring strategy taken up by India-based restaurant search and review website, Zomato. Zomato was launched in 2008 by Deepinder Goyal (Goyal), a management consultant. Zomato was able to raise funds from various investors and in no time expanded pan India and by 2012 reached its first oversees location. By 2015, it was operating in 23 countries. With rapid expansion and increased competition, the revenue of the company kept growing...

Issues:

The challenges faced by startup companies.
How to manage a startup.
The drivers of profitability for a startup.
Building a company around existing and new business opportunities.
Managing crisis in a startup venture.
Funding a startup.
Role of a founder / CEO in startup.

Introduction

In February 2016, India-based restaurant search and review website Zomato announced that it had operationally reached a break-even point in six markets – India, West Asia (United Arab Emirates, Lebanon, and Qatar) and Southeast Asia (the Philippines and Indonesia) – due to growth in its core advertisement business and tighter financial controls. Zomato, launched in 2008, provided in-depth information in terms of menu cards, contact details, pictures, directions, and ratings and reviews of restaurants and events to its users. In the next few years, the company expanded into several countries across the world. The company grew rapidly; however, its EBITDA remained negative. In order to generate profits amidst growing competition, Zomato’s CEO, Deepinder Goyal (Goyal), employed a three-fold strategy of reducing manpower, closing its cashless businesses in a few markets, and dividing the company’s markets into two types, with different strategies to be applied in each. All these measures helped the company achieve break-even in early 2016...

Key words:
Zomato,Restructuring,Downsizing,Breakeven,Competition,Strategy"

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