Eat and Deliver: The crisis at Tomato Ltd.
Synopsis
Through this case we understand how lines of communication might need to be crossed and overlapped in a situation of crisis. The marketing director, Deepak had to undertake various roles apart from the ones mentioned in his job portfolio to tackle the misfortune. As the company’s CEOs and founders, Pankaj and Ravinder, have always focused on keeping the culture at forefront. They try to inculcate and shape their policies with this in mind. For a foodtech to enter a market, various dimensions (monetary, social etc.) need to be considered and Tomato tries to meet up to those expectations......................
Prerequisite Conceptual Understanding
The reader must be equipped with basic management knowledge of frameworks such as SWOT and PESTEL to better understand how Tomato functions and thrives in the food tech business. Additionally, the reader needs to have general understanding of management principles.
Case Positioning and Setting
This case study can be used for either of the following courses in MBA or Executive MBA programs:
- Principles of Management
- Organizational Behavior
- Human Resource Management
- General Management
Assignment Questions
I. Analyze the business model of Tomato.
II. ...................
III. ..................
Preamble to the Case Analysis
The case provides a very interesting stepping stone to build on class discussion. A good approach is to first start with analyzing the company and its business model. The instructor may ask students to give examples of other companies that follow the aggregator model. They must then start on building the PESTEL and SWOT analysis of Tomato and see its applicability to other companies. ..................
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Case Analysis
I. Analyze the business model of Tomato?
The core offering of Tomato is the platform it offers for its business clients. It acts as an aggregator for restaurants to collate their menus and extend their delivery services. The major revenue streams of Tomato include food delivery (33%), advertising (29%), ticket sales (11%), and consulting (6%). The other revenue sources are comprised of Tomato Gold and Tomato Treats. Coming to the cost structure,......................
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Industry potential and Tomato’s standing in the industry with the current government in rule seems to be favourable. Additionally the encouragement provided in development of the startup environment by the government seems to play to Tomato’s favor. With the advent of the Digital India Campaign and other supportive government initiatives directed towards the development of the youth, new companies experience increased support...............
With regards to the economic dimension we look at factors like tax policies imposed or taxes the particular company is exempted from, the business environment the company is operating in, the benefits it receives, the trading regulations imposed,.................
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As part of Tomato’s functioning, their core business areas are in food delivery, dining out and sustainability. In sustainability, Tomato set up Hyperpure with the intention of providing fresh, clean ingredients and reducing wastage in the process as well. In July 2019, Tomato started collecting used cooking oil and delivering it........
Legal dimension
Tomato has to mandatorily comply with the FSSAI standards. The e-commerce food giants have also stepped up scrutiny under the new Act. This aside, all the other legal obligations hold as would hold for an e-commerce giant under the new e-commerce rules.
SWOT Analysis
A more commonly used framework to analyze the company would be through a SWOT analysis. The same has been summarized in Exhibit II of the case.
Strengths
Tomato has cleverly tapped into the market and the e-commerce industry by being the first to set foot in India as an online food delivery app. It was able to capture a significant portion of the market through its innovative technological offerings and has an immense global presence. .................
Weaknesses
The application needs to be made more user friendly and security issues must be addressed from time to time. This is a huge weakness for the organization as security issues have been raised as a concern time and again in the past. .............
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The first stage talks about apologizing for the situation that arose. Deepak should take to the social media handles and apologize for the inconvenience caused due to this issue. This way, the users understand that the organization is prompt and respects the users’ time and commitment to the brand. The second stage is to either accept or deny the organization’s involvement in the matter. It could either accept that it was at fault and that the situation could have been under control provided timely measures and actions were adopted;................