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| Details |
Case Code: CLBS152
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| Case Length: 5 Pages |
| Period: 2008-2016 |
| Pub Date: 2017 |
| Teaching Note: Not Available |
| Subject :Business Strategy |
| Price:Rs.100 |
| Organization :Zomato |
| Industry :Food Tech Industry |
| Countries : India |
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'Zomato': Downsizing to Remain Competitive |
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| 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. However, EBITDA was negative and was continuing to fall. Goyal then decided to downsize operations. This had a positive effect and within a few months the company managed to break even. The case discusses in detail the inception and growth of the company and the strategies that helped it break even. |
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Issues: |
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- The challenges faced by startup companies.
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- The drivers of profitability for a startup.
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- Building a company around existing and new business opportunities.
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- Managing crisis in a startup venture.
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- Role of a founder / CEO in startup.
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| 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.. |
Keywords |
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Market expansion, Retail, Cash and carry format, Regulations, Emerging markets, India; Marketing strategies, Business strategy, Ansoff’s matrix, Market penetration, Product development, Market development, Diversification
* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US
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