How Dominos Destroyed Pizza Hut | Dominos Vs Pizza Hut | Dominos CaseStudy Marketing strategy of Domino’s business model of Domino’s Domino’s marketing strategy Domino’s Stocks
Dominos Pizza came into India in 1996 when Jubilant Foodworks took its master franchise. Dominos is the world’s largest pizza company and it even dominates the Indian pizza market with an 83% market share. Dominos beats Pizza Hut in India using its business strategies. Dominos is beating big brands like KFC, Pizza Hut, and even Mcdonalds in India. This video talks about how Dominos pizza beats its competition in the fast-food business. This article covers various business strategies used by Dominos Pizza that enable them to deliver a pizza in less than 30 minutes and helps them build an unbeatable value proposition for its customers. This article is a complete business case study and marketing strategy on Dominos Pizza along with 3 main business lessons and marketing strategy which we can learn and implement in our business.
How Domino’s Started? And Domino’s achievement
In June 1996, Jubilant FoodWorks, which is master franchise of Domino’s, Opened first store of Domino’s in India. And today there are 1300+ stores of Domino’s in India among 282 cities. In fact in this pandemic, Where even brands like McDonald’s, KFC & Pizza Hut were facing losses. In the same pandemic, Jubilant FoodWorks made a profit of Rs.309 crores. And due to this only, Stock of Jubilant FoodWorks got doubled in last one year. That means it gave returns of 100% to all of it’s investors. One year ago, the stock which was on 2200 Rs is now being traded on 4500 Rs today. Despite pandemic, How was domino’s able to do all these things?
Domino’s marketing strategy
So, Domino’s identified 3 such things in Indian market which are subliminal. i.e, the things which happen but isn’t easily visible to everyone. First thing.
The power of hierarchy of needs
First thing. The power of hierarchy of needs. Understand this very carefully. According to Abraham Maslow, We humans have 5 types of needs. Our first is,
Our first is, Physiological needs. i.e, food, clothes & shelter.
Our second need is, Our safety needs. i.e, we need some amount of security/safety in our life.
Physiological needs are there as our third need. After that, we have our fourth need. Our need of self esteem.All of us need to feel good regarding ourselves. And fifth need is the need of self actualization. i.e, in this stage you have achieved everything that you want to do in your life.
And now you want to discover your inner self. So, these were the needs in a human being discovered by Maslow.
Now, how did Domino’s used this? All of us jump on our second need only when our first need is fulfilled. i.e, If your physiological needs aren’t satisfied & you don’t have food, clothes & shelter. Then, what will you do with the security & self esteem. Similarly, first we fulfil our physiological needs then move on to other needs. Domino’s identified that, Whenever anyone orders food, then the primary need is of hunger. And we try to fulfil this need of hunger as soon as possible. That’s why, Domino’s focused only on their delivery.
And on the same side, Other restaurants like McDonald’s, KFC, Pizza Hut focused on our third need i.e, physiological need. That all of us need a good customer experience whenever we are eating food. You will find fabulous interiors & serving staffs on the outlets of Pizza hut. All these things seems good too much, But this isn’t the most urgent & most important need of any human. Now if we look on today’s date, Then delivery is being done by all the restaurants due to Swiggy & Zomato. Then, why Domino’s is able to provide a guarantee for 30 mins & free.Answer to this is hidden in the second strategy of Domino’s.
Second marketing strategy of Domino’s
So, second strategy of Domino’s is that, Lead consumption appetite. What does this mean? In simple words, Till the time you are not having the capacity to fulfil the demands of customer, Till then don’t spend money on marketing. Why like this? Because look through marketing you will generate leads, Demand will be generated in the market but because you are unable to fulfil that demand, So the same customer will be taken by your competitor by fulfilling the demands. Domino’s mainly did two things to make possible the delivery in 30 mins
First thing, Outlet clustering. If you notice, then you will find at least one outlet of Domino’s in every 3-5 kilometres. But These outlets aren’t opened randomly. Before opening them, two things are being analyzed very strongly. First thing is disposable income. Wherever then want to open an outlet, They check the disposable income of people living in the radius of 3-5 kms. i.e, do they have this much money that they can eat Pizza or not? Because when people don’t have money to eat Pizza then what’s the use of opening an outlet there.
And second thing. Route load. They check how much traffic is used to be on an average on every route in that area. If routes have more traffic then shortcut routes are being found out. Through which they will be able to provide delivery in 30 mins. Only after analyzing critically these two points, Domino’s open any store in that particular area. But still, traffic is a uncontrollable thing. Domino’s can’t control it. So to tackle that what Domino’s do is, Domino’s make sure that there is a buffer time of 18-20 min in between cooking & delivery time. i.e, pizza is being cooked & dispatched for delivery from Domino’s outlet in 10 mins itself. Now how all these things happen so quickly?
How Domino’s delivers so fast?
So Domino’s mainly did two things for this speed. Very first-
Step elimination – As Domino’s is a QSR then there must be standard procedure for everything. But the real speed of Domino’s is being achieved by eliminating cooking steps. How does this happen? So, if you see then all the raw materials imported to Domino’s is either pre-cooked or ready to cook. Even the dough received to make pizza is delivered totally ready to the outlets. That’s why now the staff of Domino’s only need to spread it, put sauce, toppings & cheese on it and keep it in the oven belt. Due to which, pizza is being cooked in just 10 mins. But standard operating procedures, menu engineering, inventory managing & even awesome marketing All these things were done by McDonald’s, KFC and Pizza hut too.
But then why these guys are in losses? And despite pandemic, how domino’s is such profitable?
So answer to this is in the third strategy of Domino’s. Which is Cost leadership. Now see. There are two types of cost. One is which organization needs to bear, And other is the one which customer needs to bear when they purchase the product. As Domino’s focus on their delivery, So 95% of their outlets are opened at very small places. Due to which their expenses on rent, electricity & staff are very minimal. That’s why you will get Domino’s in even Tier 2 & 3 cities. But you won’t get McDonald’s, KFC & Pizza Hut there Because their operational cost is very much than Domino’s. As Domino’s is having less operational cost, they are able to offer pizza at low cost to people. And when people get pizza’s at low cost from Domino’s so they prefer to buy from them only. And as I told you in the start, That Domino’s focus on the prime need of customers i.e, hunger. So that’s why pizza of the range of 40-45 Rs is more stomach filling then the same range of burger. And only this thing force customers to buy products only from Domino’s. Now the most important, What are those business lessons which we can learnt from this case study & implement in our business.
What are those business lessons and marketing strategies which we can learnt from Domino’s case study & implement in our business.
First lesson. Look for paying magic. In your business, find a thing for which customer will pay money anyhow. And put your primary focus on it. Just like Domino’s did. They saw that the prime need of customer is hunger. And to finish hunger, customer is willing to pay anyhow. Second lesson. Systems & processes before marketing. Always look carefully that your system & processes are on point. Because the business is stood on the base of systems & processes. After that focus on marketing. Because if your systems & processes aren’t on point then can’t do anything by marketing. As by marketing you will be generating leads & that lead too will be taken by your competitor. Now, third & most important business lesson. Create a greedy proposition. Look in your business that can you create a greedy proposition in it. Just like Domino’s created. 30 minutes or free. This is such a greedy proposition which force customers to look out for. That let’s see by ordering once as if it’s not in 30 mins then we will get it for free. Likewise, you look into your business that can you create a greedy proposition in your business. Because this will provide you customers for long term & they customers won’t leave your back. Only & only due to your greedy proposition.
So Domino’s mainly did two things for this speed. Very first-Step elimination – As Domino’s is a QSR then there must be standard procedure for everything. But the real speed of Domino’s is being achieved by eliminating cooking steps. How does this happen? So, if you see then all the raw materials imported to Domino’s is either pre-cooked or ready to cook. Even the dough received to make pizza is delivered totally ready to the outlets. That’s why now the staff of Domino’s only need to spread it, put sauce, toppings & cheese on it and keep it in the oven belt. Due to which, pizza is being cooked in just 10 mins. But standard operating procedures, menu engineering, inventory managing & even awesome marketing All these things were done by McDonald’s, KFC and Pizza hut too.
Total number of Domino’s Outlets in India
There are 1300+ stores of Domino’s in India among 282 cities
How much Domino’s stocks price are increased from last year?
Stock of Jubilant FoodWorks got doubled in last one year. That means it gave returns of 100% to all of it’s investors. One year ago, the stock which was on 2200 Rs is now being traded on 4500 Rs today. Despite pandemic,
How to start a business? How to raise funding? How To Start a BILLION-DOLLAR Startup | How To Start A Start-Up Planning to start a business.this Article talks about how to start a startup. In this article I have covered 7 steps to start a startup and scale business. This article contains a proper strategy to build a billion-dollar startup from scratch.
How to start a start up? Friends, today many of us want to have our own start up, but very few of us understand How do we proceed further? We see the life of entrepreneur and think that how great life they are having. But we don’t see the pain behind it, that how much pain they suffer. If you want a start up only for the sake of earning money then I will advise you not to have start up. There are chances that you will fail if you are doing it only for money. All of us see the success of entrepreneurs on social media, but there is one thing other than their success that we don’t see. And that is their pain, their capability that how much pain they have endured to reach here. When someone goes for a startup then people around him say only one thing that you won’t be able to do it. It will be not possible for you. But despite of all this the person who succeeds becomes the king. Gone are the days when only the son of king will be the king.today every person can do something big in life. So if you are also looking to have your start up then read this Article carefully. Because today I am sharing 7 step framework on How to start a start up?
Idea to build Start-up
The first step is Ideation. You create an idea. Now to create an idea the most important thing is problem solving. Find a problem of your own and see if this problem is faced by many people, if it is like that then you can have that idea. Very few start ups succeed without a great idea, one of the example is Dream 11. This does not solve any big problem but still today their valuation is $ 2.5 Billion. While generating an idea it is not necessary that it should be very unique but your idea should be executable, you should be able to work on that idea. You should remember three things while generating an idea.
Simple and Practical
First is Simple and Practical. Idea should be simple as well as practical. Byju’s and Unacademy are good examples of this. Very simple idea, they are aggregator in education platforms, they created it and they just aggregate.
Second most important thing is Futuristic Approach, your idea should not be just for today but should be based on future say 5 years or 3 years from now. Have an estimate of at least 5 years while creating idea.
Apart from this the third important factor is Tweakable. This will help you a lot. Many people compare tweaking with stealing. People think that you have stolen someone’s idea. No! To tweak means to do existing thing in a different manner.Let’s take the example of pharmacy which exists from hundred years. This is an existing business, so just tweak it slightly and brought it online with discounts and there is startup called Pharmeasy. This is known as Tweaking.
Feasibility Analysis during startup
Next step is Feasibility Analysis. You perform feasibility checks in your business. Feasibility will let you know that what is the probability of sustaining the business. You would say, why is it so important?
Why Feasibility Analysis during startup is so important?
I will give you a simple reason for that. You will know first what the viability of business. how much is the business viable? What is the probability of sustenance? And when you perform Feasibility Analysis then your risk is reduced and helps you take calculated risks. You have to check 3 factors.
Factors to check during startup
first is that business should be Economically Feasible.
Now what does this mean? You have to check whether all the people are ready to pay for that. Not like you alone are thinking that people would pay me for this, talk at least to 100 people, before starting a start up if they will pay or not.
2nd is business should be Financially Feasible
You have to check whether more Capex or Opex is not required, Capex means Capital Expenditure means like you have to purchase a building or very high capital expenditure is there. Opex means your running cycle. Means your operating expenditure, it should not need crores of rupees to run the business.
Third factor is check Technical Feasibility
See how much technology you will need? It’s not like you are having Kodak technology business in today’s era of DSLR and smart phones. You have to take extra care that your business is technically feasible or not.
MVP – Minimum Viable Product.
Third step is MVP – Minimum Viable Product. This is your key to wealth. Now why I am saying like this? See, Minimum Viable Product is your first product, in initial phase, on the basis of which you can acquire few customers and can talk to the investors that brother I will take this product further and improve it. See, keep three things in mind, first is create Market Segmentation in the starting itself and decide which people you will target and what is your audience?
Second factor is Market Analysis. Do complete analysis of market. It should be not like you are entering such an industry which is about to shut down.
Third factor is Competitor Analysis. First properly check the competitors. Read properly about their funding, COCA, average revenue per user, all the things, how much profit they are making, everything. Never get so busy with your work that you forget about your competitors. Otherwise one day competitor will knock you down.
Friends, business support is required by all the businessmen and you can’t expect this from normal people they won’t do it. Only an entrepreneur can understand the problem of another entrepreneur. Now buddy how will we solve such a big problem? To solve this there is Tizon, actually what is Tizon?
Tizon works on a SSS framework, it is a triple S. Triple S means Start up Support Start up. It is a start up supporting start ups, providing business support to all the start ups & businesses. Now how do they do it?
Startup pilot run
Next step is Pilot Run. Firstly you perform the pilot run. You will come to know many things with pilot run. First thing that you will come to know is whether your idea is actually executable or not? Or it is just an imagination. Acquire the first 1000 customer. After which you will get two things clear, which are very important for you to know, first is Illusion versus Reality.
You will come to know that you were living in illusion and what reality of market is. The second thing that you will come to know is What next I can do to bring the best? What I can do to make this better? And how much money do I need to do so? Be prepared with financial plan from start. You have many benefits of having financial plan. Many people ask for funding without proper financial plan, chances are your funding will be rejected. See you focus on branding first, design, value, strategy, logo, marketing, identity, build the trust. Do all these things. Branding is like a relationship, if you don’t care for it, it won’t care for you. Network with other businessmen build a proper network. Either be the first or be the fastest. Either you enter very early or run so fast that no one can compete you. Not like you have created an ordinary business and expecting the success.
Next and very important is Team Building, this is core, this is the most important one. Your first 12 people will determine where your start up will go. Your first 12 team members will tell where your business will head towards. And it is very important to keep many things in mind while hiring these team members. First thing that you need to see is whether the person you are hiring is reliable or not. Apart from this two other important aspects are there, first is Vision Oriented Hiring. Whether the employee you are hiring is aligned with your vision? Is he able to get your vision? Click here to read full details
Second aspect is Action Takers. You hire the action takers not late Lateefs or some casual guy, its of no use. And someone who is motivated by only money don’t hire him at all. Why? Because the day someone will offer more money, he will leave you. Hire fast action taking employees because they will save not only your time but also organization time. And bring fast growth to your business.
These aspects matter a lot. You can never execute fast if you have slow people with you. So take care of these three things, first is Leverage, whether the people you hire are creating leverage or not? Can they perform in your absence? Because such people will give you more output in less time. Apart from this the second thing which is very important and should be kept in mind is Time Freedom.
Are you getting time freedom or not? Is it like you keep on doing their work and you don’t have time for the important work? The third aspect which is very much required is Compound Effect Is your team able to create compounding effect? Because in business 1 plus 1 is not two but it is 11. So do you have such a powerful team or not?
Profitable and scalable business model
Next important step which is Profitable and Scalable Business Model. This is where the game changes, it is very important. See in business profit as well as scalability is important, if you are having a start up. Scalability is very important. Two things are needed for that first is Growth Plan. First make a growth plan that how start up will grow? How I will take it further? How will I acquire customers? What will be my COCA- Cost of Customer Acquisition? What will be my cost of expansion? How will I expand? Calculation for cash burn, be prepared with calculation of cash burn.
Second & very important is – Profitability Plan. Most of the people don’t create this. Create a plan that how will I earn profit from the customers that I have acquired. What is my plan to be profitable? How will I generate profit? Because the profit is the only factor with which business is made sustainable. How long will you depend on funding? Make a plan of how you can become profitable in next 2 years or 5 years. For that remember four things, first is Dependency. That what are factors on which your profit depends. Whether it depends on customers or on his pocket. Second is the Cost. What is the cost of business expansion? Is it like it needs lot of money to grow the business.
Check Recurring or One-Time Revenue
The third factor is Recurring or One-Time Revenue. You check whether your revenue model will be Recurring or you will charge customer for One-Time payment. Apart from this Upsell and Cross sell. See how can I upsell or cross sell to customer in future. Cross sell means, came to buy cold drink & I cross sold burger as well. Upsell means he came to buy Rs. 10 product and I sold product worth Rs. 100.
Startup Fundings and Incubation
Funding & Incubation. How funding is raised? Two things are very important to raise funding. First is Pitch Deck, create a Pitch Deck. Pitch Deck is that pitch or presentation which you give to the investors as your pitch. Many things are important in this as well, First thing is your product and concept. Your product and concept should be clear in pitch.
Second is your Vision and Mission. What is your vision, brother? What is the mission of the company? Mention this. Next is TAM/ SAM – Total Addressable Market Size and Serviceable Market Size means how many people you can serve. Then how much will be your COCA – Cost of Customer Acquisition? Apart from this RPU – Revenue Per User, how much will be the revenue generated from one person? Then Growth Projections – what will be your strategy for growth? How will you grow? Apart from this, how much customer base have you acquired in business? What is the plan to acquire? If you have not mentioned all these things then chances are there that you won’t get funding.
Very strong Pitch Deck needs to be prepared. The second important aspect in this is Financial Plan. You should be ready with financials. The first important thing in this is current financials. What are the current financials of your business? Apart from that what is the Revenue Model? Moreover the important thing is Expense Sheet or Cash Flow Statement. How much cash I received & how much cash I will spend? Apart from this you have to mention Requirements, that what is actual fund that you require?
And then comes the Budget Allocation. Which means where will you spend the funds? Not that you will spend it on needless things. You first identify the shortfalls in your Pitch Deck otherwise investor will pin point those and reject your plan. And the most important are your Presentation and Communication Skills. If you can’t present & communicate properly, can’t convince the investor then he won’t fund you. I expect, you would have enjoyed today’s case study.
FAQs Related to Business startup
what is Tizon?
Tizon works on a SSS framework, it is a triple S. Triple S means Start up Support Start up. It is a start up supporting start ups, providing business support to all the start ups & businesses. Now how do they do it?
how to raise funds for startup or business?
First is Pitch Deck, create a Pitch Deck. Pitch Deck is that pitch or presentation which you give to the investors as your pitch. Many things are important in this as well, First thing is your product and concept. Your product and concept should be clear in pitch.
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The tensions between Russia and Ukraine have escalated significantly. Russian President Vladimir Putin has announced a Special Military Operation in Ukraine and basically. Putin has said that any attempt of interference would lead to “consequences you have never seen.” President Volodymyr Zelenskyy has also declared Marital law in Ukraine. But what is the exact scenario now? Is this the start of world war 3? Is this the takeover of Ukraine? What is India’s position here? I talk about all these things in this video.
The tensions between Russia and Ukraine continue to escalate. Russia has deployed its soldiers and tanks in the separatist areas of Ukraine. In the name of ‘Peacekeeping.’ The civilians of Ukraine, the common people are now being given training for bearing arms. Because of the threat of an impending war. Come, let’s understand this in today’s Article
Vladimir Putin announced the move in an unscheduled TV address, he said that Russia would bring in troops, he told the Ukrainian troops to lay down arms and go home. Any attempt to interfere with this Russian action, would lead to consequences they have never seen. After Russian troops were told to lay down the arms, social media became a window into the reality showing the impact of what appear to be missiles being launched into Ukraine.” The situation has been worsening for the last many months, on 10th November 2021, the news broke out for the first time, that Russia has started deploying its military soldiers to Ukraine’s border.
By 28th November, it has become clear, that more than 100,000 Russian troops were present on Ukraine’s border. And that they could attack at any time between mid January to early February. By December, the news had reached the US Intelligence. Leading to a warning by US President Joe Biden to the Russian authorities. He said that if there was any invasion into Ukraine of any kind, Russia would have to face severe repercussions. “He told President Putin directly that if Russia further invades Ukraine, the United States and our European Allies, would respond with strong economic measures. The US Intelligence Agencies claimed that that on 16th February, Russia will declare war on Ukraine. But nothing happened on 16th February. This was widely mocked by the Russian authorities. Saying that America always spouts nonsense and that they wouldn’t have done anything, and that America was simply creating a sensation.A day later, the news broke out that Russia was withdrawing its soldiers. Russia was apparently descalating. But this news turned out to be fake. Experts believe that actually China had put pressure on Russia that Russia wait till the end of the Beijing Olympics. China didn’t want a war to be declared causing interruptions in the Beijing Olympics. They didn’t want China’s image to be hampered. This theory sounds weird but 20th February was the last day of the Beijing Olympics,
What Putin did actually in Russia Vs Ukrain War
And on the next day, on 21st February, Putin gives this address on television. Putin addresses the entire world and says that there are two separatist areas in Eastern Ukraine. They now recognise the separatist areas as independent countries. “After a day of lashing out at NATO, Putin made an explosive announcement on state television.” “I think it is necessary to make a long overdue decision, to immediately recognise the independence and sovereignty of the Donetsk People’s Republic and the Luhansk People’s Republic. The names of the two regions are Donetsk and Luhansk. Come, let’s take a look at the map.
The actual boundary of Ukraine according to the United Nations, looks like this from the outside. In eastern Ukraine, lies the regions Donetsk and Luhansk. They’re special because some areas of Donetsk and Luhansk is actually controlled by separatists. They are not under the control of the Ukrainian Government. These areas lie on the Russian border. And are actually known as Russian occupied.As I said, in 2014, Russia occupied Crimea. This was the same year when the areas of Donetsk and Luhansk were broken apart from Ukraine. Russia supported the separatists there. They sent their military there and the war that broke out, led to new boundary lines being drawn. In these separatist controlled areas, Donetsk People’s Republic and Luhansk People’s Republic, the separatist people there decided to form their own countries. While doing so, they called for an unofficial referendum in these areas.
After that, Russia has tried to help these two separatist areas as much as possible. By giving them military support, financial support as much as providing Covid vaccines to them. The 800,000 people living here were issued Russian passports by Russia. To stop the tensions and foster peace in these areas, the Minsk Agreement was signed in 2015. According to that, Ukraine had to provide special status to these regions. To give them a certain degree of autonomy. They had to acknowledge the governments of the areas. And it was promised that there would be no more riots, no weapons would be used, and the foreign presence in this area would be eradicated. Because Putin said that Russia considers those areas as independent countries, and now that Putin has sent his army to those areas, it is now being called an invasion.
Putin’s action has caused the Minsk Agreement to be Null and Void. The threat, now, is that Putin wouldn’t stop here. The European countries and the USA fear that Putin is trying to capture Ukraine’s entire country. I would like to point out one important thing here, since the Soviet Union has broken apart, after every 6-7 years, Russia does such things to its neighbouring countries. In 2014, Russia occupied Crimea. Before this, in 2008, Russia occupied some areas of Georgia. Look at this map,
the regions of Abkhazia and South Ossetia, are actually under Russian occupation. About 20% of the country of Georgia is actually under Russian occupation. Moving on, there’s a country called Moldova in Eastern Europe, a big chunk of it that lies on its eastern side is a separatist area, called Transnistria. The separatists living there consider themselves to be a new country. And they actually want to reunify with Russia. So there’s a lot of Russian influence in this Transnistria region. And now if you look at the map of the places that Russia has deployed its army, its soldiers, to The red circles on this map, were permanent settlements, so they can be ignored. But the black dots that you see on this map, are the new troops that have been deployed in the last few months. Russia has surrounded Ukraine from 3 directions. And not only are the Russian soldiers present in Russia, they are present in Crimea and Transnistria too. As well as in Belarus. The dictator of Belarus comes under the influence of Russia too.
The result of all this is that the rest of the world is worried that Russia may move in its army at any time. And declare war on Ukraine. No one knows how much area Russia wants to occupy. Some people think that only this strip in the South, from Transnistria to Donetsk and Luhansk, will be occupied by Russia. Some others believe, Russia will reach Ukraine’s capital Kyiv.
Intending to end the existence of Ukraine. Seeing Russia do this, the rest of the world has three main options. The first is that they do nothing about it. But then the danger is that if Russia is allowed to occupy Ukraine today, tomorrow, Russia may say that they want Kazakhstan, Mongolia, Slovakia, Croatia back. They continue expanding by invading all of them. If such imperialism isn’t stopped, someday or the other, we will be under attack too.
The second option is that the countries use their military and send their armies at the locations Russia is invading, stopping the Russian forces by literally fighting with them. But this isn’t a good option, because doing so would mean literally declaring World War. And thankfully, most of the countries today don’t want to fight or go on a war. Because that just leads to bloodshed loss of human lives and there can be no positive result of that. NATO has indeed deployed their military, 5,000 NATO troops have been deployed to Poland 4,000 can be sent to countries like Romania, Bulgaria, Hungary and Slovakia. But these are the NATO countries. Ukraine is not a part of NATO yet. So even if Ukraine is attacked, the chances are that NATO will not interfere with that. It won’t provide military support to Ukraine. But it’s for sure that NATO has tried to help Ukraine in some other ways by providing weapons, advanced weaponry, providing them financial help, at places, helmets were given. But no country is sending their soldiers to fight on behalf of Ukraine. So if there’s an attack on Ukraine, the Ukrainians are alone here. And if you look at Ukraine’s military strength against Russia, Ukraine is very weak.
Ukraine vs Russia Comparison of power
You can see it in this chart.
Russia’s active soldiers are four times that of Ukraine’s. 15 times the number of fighter jets that Ukraine has. More than 5 times the number of tanks. And that’s why Ukraine is considering deploying more than 250,000 of its reserve forces. Civilians are also being trained. The common people of Ukraine, acknowledge this threat and to protect their country from an invasion. they are coming to the forefront.
Ukranians Preparation for War
If Russia invades Ukraine fully, the Ukrainians wouldn’t give up easily. They are ready to fight to the bitter end. Are you scared for your family? We’re all gonna die someday. The thing you can do is you can live your life in dignity.
Effect of Russia Vs Ukraine war
According to estimates by the US, if there is an all-out war here, more than 50,000 civilians can be killed. Thousands of people may have to leave their homes. There would be one more refugee crisis in Europe. And Ukraine’s condition would perhaps be the same as the present condition of Syria. A reason that I forgot to include here is that Russia has literally threatened other countries that they would use nuclear bombs if any other country goes to interfere. What other option does the rest of the world have in Russia Vs Ukraine war?
Economic Sanctions against Russia
The third option is economic sanctions. Economically, if others try to isolate Russia, to attack Russia economically. To attack their money. “I’m announcing the first round of sanctions, these sanctions are a major step, and we hold further sanctions at readiness, to be deployed. The US and its allies have coordinated a first round of sanctions against Russia. Over its troop deployment to breakaway regions of Ukraine. The US, Europe, Canada, Japan, many countries have already declared economic sanctions against Russia. And have said that if Russia takes any further steps towards an invasion, more economic sanctions would be declared. They attacked the Russian banks first. And on Russian billionaires. Because many countries know Putin isn’t that great of a dictator on his own. Putin comes under the influence of the Russian Oligarchs, i.e., the Russian billionaires too. The UK has targetted five Russian banks, the United Nations has also condemned this. And perhaps the most important economic sanction was from Germany. Germany has stopped the certification of the Nord Stream 2 pipeline. This is a big step. More than 50% of Germany’s gas supply comes from Russia. To take such a step means that Germany is interrupting its own gas supply it means that the gas prices in Germany would rise rapidly. This is the thing about economic sanctions, friends, when some other country is isolated, when you try to attack economically, it affects your country too. And this is the deciding factor. The level of negative effects on the economy a country can bear to teach a lesson to another country. For example, if today, India says that all made in China goods are banned in India, it would have more adverse effects on the Indian economy, as compared to the Chinese economy. That’s why it would be very difficult for India to impose economic sanctions on China.
Russia Vs Ukrain war Impact on India
If we talk about India, What role does India play in the Russia-Ukraine crisis? How will it affect India? And what are the steps that India can take? The Indian government has said that they are very concerned about the Russia-Ukraine crisis. “The escalation of tension along the border of Ukraine with the Russian Federation, is a matter of deep concern. If you pay attention to the statement of the Indian government, you will see that the Indian government isn’t saying that Russia’s actions are wrong. Because India is dependent on Russia for a lot of things. And to understand this properly, I’d like to tell you the impact of a war between Russia and Ukraine, on India. We have classified this impact into 3 categories.
The immediate challenge for the Indian government is that to ensure the safety of the Indians that are in Ukraine now. It is estimated that there are 25,000 Indians in Ukraine, of which 20,000 are Indian students, studying medicine or engineering from Ukrainian universities. The situation between Ukraine and Russia is evolving so rapidly, many Indians in Ukraine and their families in India are really worried about the situation. A tweet by Himanshu Dhoria shows that he had to make arrangements for the flight of his children, because of the lack of directions from the Indian government. Although, the Indian government have started their evacuations. In Ukraine, the Indian embassy has issued an advisory, that Indian nationals should leave Ukraine if living there isn’t essential for them.
The medium term concerns of the Indian government is related to the economy. And specifically, the price of petrol. The latest economic survey of the Indian government had estimated, that the petrol prices would be about $65-$70 per barrel during this year. And just a few hours ago, this price had reached $100 per barrel. Highest since September 2014. Mainly because people are worried that the oil production and supply chain in Russia would be severely affected because of this Russia-Ukraine war. Russia is the second-largest oil producer in the world. And almost 13% of the global crude oil is from Russia. This situation may even worsen if the US and the European Union countries impose sanctions on Russian oil and gas production. And we know that if the global supply of oil drops, its prices would increase worldwide including in India. Because of this, there will be a heavy impact on the lives of almost all Indians. Because India imports nearly 85% of its crude oil requirements. Kshitij Purohit, a researcher on this matter, says that the rising petrol prices, may lead to inflation in India, because the transportation cost of all things would be increased. And this would have a deep impact on the budgeting of the Indian government. Because, if the prices of petrol and oil increase, the Indian government would have to spend more money on the LPG and kerosene subsidies.
Now, let’s come to the long term impact. With this, you will get to know why it is so difficult for India to discuss Russia. On one hand, India is hugely dependent on Russia for military supplies. According to the analysis by Roshan Kishore, between 2016 and 2020, nearly 50% of the Indian arms imports came from Russia. According to some estimates, about 50%-80% of the equipment of the Indian military are of Russian origin. And this partnership between India and Russia, is still growing. This partnership isn’t limited to Russia selling armed supplies and Indian buying them. Instead, both countries are jointly developing and researching armed supplies. The BrahMos cruise missile is an example of this. The joint venture between India and Russia, in fact, the name BrahMos, is coined out of the name of two rivers, India’s Brahmaputra, and Russia Moskva. A few hours ago, President Biden announced that they were imposing sanctions on those Russian companies, that have military ties. This can have an affect on India’s military. Gurjeet Singh, the former ambassador of India to Germany, said that because of these sanctions, India may face many problems related to defence supplies. This isn’t the first time that such sanctions have been imposed on a country. The US had imposed sanctions on Iran once. Then India could negotiate because India knows that if the US wants to counter China, they would need India’s help. And this situation is quite unique. A country hadn’t invaded some other country then. Can India negotiate with the US now? And I’d like to explain why this issue is so important for India. That’s the India-China border crisis. “It is troublesome for India the settlement of the Chinese soldiers on the Line of Actual Control. Intrusion by Chinese troops led to clashes between the troops of both countries. The Indian Army foiled the attempt which happened three days back.” The border tensions between India and China aren’t over yet. And because of these tensions, the last thing that India would want is that their military supplies become uncertain. So India’s military dependence on Russia is at one side, and on the other side is the budding close relationship between China and Russia. China is Russia’s largest trade partner. And it isn’t that difficult to understand this relationship. All of us have heard the phrase, The enemy of one’s enemy is a friend. That’s the exact relationship between Russia and China. Both countries are against the US and Europe, and so getting into a partnership with the other would be in their interests. Russia knows that where the US and Europe would impose sanctions on it, China wouldn’t do this to them. And India is worried about Russia and China’s growing relationship. That it might turn dangerous for India. But this isn’t an irrational fear. It is justified because there is historical evidence that Russia has supported China many times instead of India. Such as during the 1962 war. Tanvi Madan, a foreign policy expert, wrote in her book how Nikita Khrushchev, the President of the Soviet Union during the 1960s, during the Indo-China war, told China that the Soviet Union would support their ‘Chinese brothers’ instead of ‘Indian friends.’ In fact, Khrushchev had delayed the delivery of the MiG aircraft to India. That’s why India is worried that in case of an India-China conflict, will Russia support India? Some of you may say, even though India is dependent on Russia, Russia is also dependent on India. Because 25% of the defence exports of Russia come to India. Tanvi Madan claims that Vladimir Putin is a person who is ready to bear hardships for something he wants. Take the Russia-Ukraine war itself. Most experts believe that a full scale invasion would be a loss to Russia. But Vladimir Putin is still doing this, so what guarantee do we have that during a India-China conflict Russia wouldn’t stop military supplied to India?
Propaganda in Russia
what about the people of Russia? Do they support this invasion? The answer to this is quite disappointing. The TV channels in Russia are full of propaganda. They brainwash their own people with imaginary stories. If Russian newspapers and media channels are to be believed, it is Ukraine that actually wants to start a war. That they want to start a war in the separatist areas. And Russia is trying to ‘protect’ them. In the very first line of the video, I told you that the troops that Russia has sent into the separatist areas, they sent them in the name of ‘Peacekeeping.’ Putin tells his people, that the actions taken by Russia are simply to foster peace. And that it is NATO and Ukraine that want to start a war. And unfortunately, when the Russians were asked about their opinion, most of them believed this. Even though they don’t want a war they believe that it is Ukraine and the Ukrainian soldiers who are trying to provoke Russia. This is true at all. I know for sure that we have never taken any aggressive actions, Never. Russia is only defending itself. Ukraine has always been a traitorous country. Always. They’ve always betrayed everyone.
NATO does whatever it wants to.” According to a CNN Opinion Poll, 50% of the Russians believe that using military force against Ukraine would be the right thing if they want to stop it from joining NATO. But 43% of Russians believe that if we want to reunite Ukraine with Russia, it would be wrong to use military force for it. Although, 36% of Russians believe that it would be right. They believe that they can force Ukraine with military forces into reuniting with Russia. This is a huge number. 1/3rd of the population of your country agrees to attacking another country for reunification. This isn’t good.
Conclusion of Russia Vs Ukraine war
After hearing this, you would understand the magnitude of influence these propaganda-filled news channels have on people. About 2/3rds of people in Russia, watch the news through their TV. That’s why a strong impact of it is seen on the people. When the pliable media runs imaginary news stories, somewhat like this, “Putin and Biden will abide by Modi’s decisions.” A matter that has nothing to do with Modi, they still have to include him there so that the process of false praises continues non-stop. And people are actually influenced by this. Anyhow, if we return to Russia and Ukraine, it is being said that if this invasion takes place, and a war breaks out, this would be the most devastating war in Europe since World War II. All of us know what happened in World War II. Any sensible person wouldn’t want a repeat of that.
The Russian annexation of Crimea (2014), the Donbas War (2014–present), naval incidents, cyberwarfare, political tensions, and Russian military buildups along Ukraine’s borders starting in 2021 have all played a role in the conflict. Russia has dispatched troops into separatist-controlled areas.
What did Russia take from Ukraine?
Russia attacked and annexed the Crimean Peninsula from Ukraine in February and March 2014. This incident occurred in the aftermath of the Dignity Revolution and is part of the larger Russo-Ukrainian conflict.
Nokia was one of the largest phone companies in this world. the mobile phone market worldwide. Nokia was started as a paper mill and soon expanded into multiple businesses until they realised that great potential lies in the mobile market. Nokia started making portable handsets in 1983 which soon became real popular and in the early 1900s nokia started to dominate big players like Ericsson and motorola with its value proposition of delivering compact handy affordable mobile handsets. Some fate was wrong and soon nokia started seeing a downfall times changed when steve jobs launched Apple iphone in 2007 and the world started to move towards the smartphone Era. Stephen elop joined Nokia in 2010 as the new CEO but even he failed to pull up Nokia. This article is a complete business case study on Nokia’s failure. The article answers the question Why nokia failed? This article highlights a lot of business and marketing strategies used by nokia which turned them into a multi-billion dollar telephone giant. This article also highlights alot of business mistakes made by nokia. This article also includes some powerful business lessons which one can learn and implement into their own business.
Nokia was the company who introduced portable mobile handset. You will get shocked to know world’s first SMS was ‘Merry Christmas’ sent from Nokia phone. Till 2005, Nokia captured mobile world’s 70% market share. And there was no company who could beat Nokia. But the question is how this powerful 50 Billion Dollar’s company failed ? Many people still think Nokia failed b’coz of Apple and Google. ‘ Didn’t adapted Android so it failed.’ Well this is not the case. Reality is different. Shockingly, how a company whose net worth was more than 50 Billion Dollars sold at 7 Billion Dollars only ? And most importantly what are those business lessons we can learn and implement in our business ?
So story starts 150 years ago, when Fredrik Idestam of Finland noticed that there’s lots of forestry in Finland. And after seeing this, he started a paper mill in Finland. He takes help of his friend Leo Macallen to expand paper mill business. Time by time, they expand and started many mills. After starting many mills, they both decide to enter in Electricity Business. They start an electricity generation plant near the bank of Nokianvirta river and supplied electricity during World War. And from here they named ‘Nokia Ab’. After World War their business almost stopped as electricity demand was reduced. And from here only, Nokia decides to expand in various businesses. And then Nokia expanded in tubes, chemicals, plastics, gas masks. And then a major twist came in this story. At that time, Telephone was a luxury and why not b’coz people neither had money nor resources.And then finally in 1960s, Nokia entered in telephone business. At that time radio phones were used, which were in cars or in military. Common people had no access to telephone.
Nokia’s first Phone
In initial years, Nokia started working on its 1G network. And launched their car phone mobile whose name was Mobira Senator. But the problem was that the phone was of 10 kgs so no one could use it anywhere except cars.
Nokia’s second Phone
After sometime in 1987, Nokia finally launched their first portable phone – ‘Mobira Cityman’. This 800 g phone amazing but common man could never afford it. Interestingly, Mikhail Gorbachev – USSR’s President was spotted many times using Mobira mobile phone. And from here, Mobira became the symbol of power and status. Many less of you would be knowing that world’s first 2G call was done on a Nokia phone by Finland’s PM Harri Holkeri.
And then in 1994, Nokia played a masterstroke. At that time Nokia launched Nokia 2110 and they predicted 4 lakh orders of it but more than 2 Crore orders came. Nokia boomed, everyone said only about Nokia in phone market. And Yes, my first phone was of Nokia. Now the question comes that…
Why innovation king of phone market – Nokia failed and could it have been stopped from falling ?
Yes, it could have been saved from failing. The question is How could nokia be stopped from falling?
To understand this listen to this few things carefully. 2003-2005 were golden years for Nokia. In these years only Nokia launched their Nokia 1100 and 1110. These phones were ruling the market it wondered like they have won a lottery. They were innovating daily . There was such a storm in the market that 7 out of 10 phones which were sold were of Nokia. What Ericsson or what Motorola Nokia ripped everyone. But then there was a big twist in the market. That was management turnaround. Management Turnaround is considered to be good for most of the companies . But proved very dangerous for Nokia. Ex vice president Frank Nuovo of Nokia says that Nokia never lacked innovation In fact Nokia was the first one to develop first Touchscreen Smart Phone and Tablet. But management never permitted to launch those in market. Now the question is Why ?
Why management never permitted to Launch Nokia’s touch screen phones and tablets in market?
The answer is hidden in company’s decision making process . Now whenever Nokia has to take decision regarding technology they used to approach the engineers b’coz finally they have to develop the tech. First they used to take inputs from tech team and then innovate those. When the product was ready they used to launch or reject according to their opinion. There was a big gap in this process and that was Higher Orbit. That means design thinking and this work was done by management not tech team . But sadly half of the innovative decision were taken by engineers in Nokia . As long as management used to think and innovate meanwhile China used to develop and even sell the product. Whatever changes in business world but one truth never changes – Its the people who builds number.
In 2006 when management of Nokia was changed, at that time Nokia was running N series flagship. Then there was a huge explosion in the market. In 2007 Steve announced that Apple is entering in mobile market. Iphone was announced in front of whole world . At that time Iphone was not less than a revolutionary item to people. Before launching Iphone in market there were buttons or single touched phones. But Iphone was the world’s first fully touched screen multi touch phone. Seeing this, why will Google remain silent. Google launched Android. To compete with these two Nokia launched NS800 which was a total hit. After the launch of NS 800, then people agreed on one thing that Nokia was the king of the market before and will continue to be. But if everything was going so well then why no one from us doesn’t use Nokia phone ?
why people don’t use Nokia phone ?
So the reason is Behavioural Shift. So in every market there is time when consumer starts getting bore from their things. Now they need a change. But in this also there is a twist . New doesn’t mean innovative but something which get them rid of the ongoing behaviour and build in something new . Previously we used to make all transactions in cash . Then PhonePe and PayTM has hitted the market. There was no innovation but first we used to carry cash now we carry phones. The work of money is same but your behaviour has been changed. Similarly in those days people got bored by featured phones. No matter how good the hardware was, software was exciting the people.
Nokia’s phones were very good but because of slow software people started experiencing bad. At the same time person using android os or IOS was not facing any difficulty. But why would Nokia give up. Nokia wasn’t called a world’s biggest company like this. To compete with android and IOS Nokia launched their own operating system named MEEGO OS. Meego was so good people started leaving Apple and android and started shifting to Nokia. This move by Nokia shook the market. Then enters Stephen Elop in this game. Before joining Nokia from 2008 to 2010 Stephen Elop was MS office’s Internal Business Head in Microsoft.
Development when Stephen joined Nokia
In 2010 when Stephen joined Nokia, he first focused on research and innovation. At that time Nokia used to spend 5 million dollar on research and innovation which was 30 % of the market. He used to travel the world by saying that he was gathering best technology for Nokia. But there is a saying that when intentions are wrong then hard work has no value. When Meego was going good , in Feb 2011 Stephen Elop met Steve Ballmer who was CEO of MIcrosoft. Together they took decision that Nokia will use Microsoft operating system in its phone. This was ok but along with this they discontinued Meego . After Elop and Ballmer decision Nokia launched their Lumiya series. But people were not liking it and the reason was Complexity. I usually say that people don’t take good decisions but take convenient decisions.Every person like their convenience and simple things, no one wants to take complex things . And you already know how simple windows is in phone.
When Nokia started felling down?
By 2013 Nokia was going out from people’s heart and mind. Nokia had 24 % revenue drop and loss of more than 4 Billion $ yearly loss. And then such thing happened that Nokia could not rise from it. On 3rd Sep 2012 Microsoft acquired Nokia in 7 Billion dollars. Shockingly, how a company whose net worth was more than 50 Billion Dollars sold at 7 Billion Dollars only ?
Why Nokia was sold in so cheap price(7 Billion $) only?
So the reason is Dirty Politics. The time from when Stephen Elop joined the company Nokia didn’t made any profits. So the question arises that despite being a competent man how was this going in the company ? A company which was more than 50 Billion dollars was made to get sold at 7 Billion dollars to Microsoft. And after company was sold he got 19 Million Dollars Bonus. From this 2 things you can clearly identify Stephen Elop’s hidden agenda.
Reality of Stephen (Ceo of Nokia when sold)
From this 2 things you can clearly identify Stephen Elop’s hidden agenda. He didn’t wanted to grow Nokia but to sell company to Microsoft and become CEO as Steve Ballmer was soon going to retire. When Satya Nadella became Microsoft’s CEO, he clearly stated – ‘Microsoft’s biggest mistake was to acquire Nokia’ And then Satya Nadella sold Nokia to HMD Global and shifted to their core business. And most importantly what are those business lessons we can learn and implement in our business?
What are those business lessons we can learn from Nokia and implement in our business?
1) Complexities can cause you a Fortune The more complex things, more time it takes to structure them. Whether they are business processes or operating system. When business processes are complex it takes time in decision making. And this same thing happened with Nokia. When your product has many complexities and then if your competitors provides same thing in simple way then customer will shift.And this is why I say – ‘People love to take Convenient Decisions’ And this brings us to 2nd business lesson.
2) Interdependency is better than moving alone Samsung, Motorola, OnePlus and Xiomi are ripping off the market b’coz they adopted Android ecosystem on time. While Apple built such a strong ecosystem that once you buy Apple product then you will use Apple product only. Nokia didn’t did anything from this, neither they adapted Android nor could create their own ecosystem. But they could survive by creating interdependency. This brings us to most important lesson.
3) Character First and Competence Later Whenever you hire an employee, see character first and competence later. B’coz competence without character is very dangerous for company. Stephen Elop is a living example of it. Competence was amazing but due to lack of character ruined the company. One bad employee can destroy the whole company.
FAQs Related to Nokia’s Case study
Why did Nokia Failed?
in those days people got bored by featured phones. No matter how good the hardware was, software was exciting the people.Nokia’s phones were very good but because of slow software people started experiencing bad. At the same time person using android os or IOS was not facing any difficulty.
Is Nokia owned by Microsoft?
By 2013 Nokia was going out from people’s heart and mind. Nokia had 24 % revenue drop and loss of more than 4 Billion $ yearly loss. And then such thing happened that Nokia could not rise from it. On 3rd Sep 2012 Microsoft acquired Nokia in 7 Billion dollars. Shockingly, how a company whose net worth was more than 50 Billion Dollars sold at 7 Billion Dollars only ?
Who destroyed Nokia?
The time from when Stephen Elop joined the company Nokia didn’t made any profits. So the question arises that despite being a competent man how was this going in the company ? A company which was more than 50 Billion dollars was made to get sold at 7 Billion dollars to Microsoft. And after company was sold he got 19 Million Dollars Bonus. From this 2 things you can clearly identify Stephen Elop’s hidden agenda.
What is the net worth of Nokia?
Till 2005, Nokia captured mobile world’s 70% market share. And there was no company who could beat Nokia. Currently Nokia’s net worth is 50 Billion $
What made Nokia successful?
in 1994, Nokia played a masterstroke. At that time Nokia launched Nokia 2110 and they predicted 4 lakh orders of it but more than 2 Crore orders came. Nokia boomed, everyone said only about Nokia in phone market. And Yes, my first phone was of Nokia.
why people don’t use Nokia phone ?
So the reason is Behavioural Shift. So in every market there is time when consumer starts getting bore from their things. Now they need a change. But in this also there is a twist . New doesn’t mean innovative but something which get them rid of the ongoing behaviour and build in something new . Previously we used to make all transactions in cash .
How MamaEarth Destroyed competitors ? | Mamaearth Billion-DollarStrategy | Business Case Study of mamaearth business model of mamaearth Without business experience, ITM degree and crores of funding can you build a 10,000 Crs company? Seeing her child in pain, a helpless mother takes a decision Who knew that decision would make 10,000 Cr company? Who thought that this lady from small town of Chandigarh, who didn’t knew B of Business Would analyze many businesses on Indian Entrepreneurship show – Shark Tank. Mamaearth How a company started 5 years ago is beating big brands like Dabur, Johnson&Johnson, HUL ? What is so special about Mamaearth? And most importantly what are those powerful business lessons we can learn from mamaearth and implement in our business?
What is mamaearth?
Mamaearth is one of the biggest D2C brands in India. mamaearth startup is currently valued at 1.2 billion dollars making it one of the most valued startups in India. Mamaearth was started by Ghazal alagh and Varun Alagh in 2015 when ghazal noticed that her son Agastya was facing issues while using skin care products. Mamaearth was started as a D2c babycare brand with just 6 products and today the brand is catering more than 200 products in the marketplace. The Journey off Mamaearth has been very exciting from facing trust issues to collaborating with made safe.Ghazal alagh proved to become an entrepreneur without any prior business experience, Ilt-IIM Degree, or funding. Today Ghazal alagh sits as a judge in the Indian entrepreneurship show Shark Tank judging more than 100’s of business. This video is a complete business case study on Mamaearth, the video covers various business strategies used by Ghazal alagh to turn Mamaearth into a billion-dollar D2C brand in India. This Article is a complete business case study on Mamaearth covering various business lessons from Mamaearth’s business model which one can implement in their business.
How Mamaearth was Started?
So the story starts in 2016, when 28 year old Ghazal Alagh became mom for the very first time. Most of the time when a lady becomes mother for the first time, they are fear taking care of the child. B’coz of no experience. Ghazal Alagh’s son – Agastya was born with a special kind of skin condition. When she applied anything on his skin, he used to feel irritation and he used to start crying. Ghazal tried every company product, nothing suited him. And seeing no escape, she shifted to foreign brands. And interestingly all foreign brands used to suit Agastya. It was a happy thing but there was also a very big problem. The problem was many foreign baby care brands were not available in India. And they had to import these products from foreign and it was very costly. And when something is too costly how can a middle class family afford it? And this thing pinched Ghazal. Ghazal talks and discusses this problem with her husband. Her husband used to say only one single thing – Try it yourself, hope things change. And from here Mamaearth started. A product which started with only 6 products have now more than 200 products in market. The question is how Mamaearth did this?
So the answer is hidden in this list. Consumer profile looks something like this.
1) Age and Gender
2) Consumer Education – How much consumer know about product?
3) Spending Capacity – How much consumer can spend on product? And
4) Availability- Is the product available where consumer lives or not?
what was the biggest difference between foreign baby care products and Indian products which mamaearth captured?
Foreign brand products were toxin free products Which means they didn’t include any chemical or ingredient in their product which produced toxins on baby’s skin. Interestingly there are more than 1500 ingredients banned to use in baby care products in foreign. Unfortunately there are no such rules and regulations in India. While customer profiling, Ghazal Alagh found that 95% of the people who brought baby products were Moms. But Moms don’t have any proper education about which products to use on baby’s skin and which not. They didn’t knew which product is good for their baby’s skin and which is harmful. So to solve this problem Ghazal Alagh started talking to many baby care product manufacturers. And asked them than Can we make baby product using toxin free products? And everyone gave the same response – “Yes Ma’am, we can make but no one is making it in India currently” And from here Mamaearth’s journey accelerated.
First Product of Mamaearth
Firstly, they worked and made 6 baby care products and launched in market. During initial days, they distributed them to their friends and relatives and asked for reviews. “Use these products and tell us what’s lacking in them, what things we can improve. ” “Are these products suitable to your kids or not? ” Use them and tell us Whatever may the response be, Ghazal Alagh took the feedback and made improvements. When all this was going, same question was asked many times.
Challanges Faced by mamaearth
The question was- Why should we trust you ? What’s special about you so that we we buy your products? We won’t buy. B’coz at that time Dabur, HUL, Johnson and johnson – these brands were ruling the market.
These brands were ruling the market. People blindly trusted the brands. Then why should they trust Mamaearth ? For this solution Mamaearth colloborated with MadeSafe – a US non – profitable company. MadeSafe does safety testing of health care and beauty products. You will get shocked to know that – Mamaearth is Asia’s first and one and only brand who has MadeSafe Certification. MadeSafe made work of Mamaearth more easy. But still there was a big problem in Indian market. They got MadeSafe Certification but many Moms didn’t knew that the products they are using on their children are harmful. The situation was such that when Ghazal told people that my products are Sulphate free.
People used to ask her – ‘What’s free with your mamaearth product?
To tackle this problem, Ghazal started educating their old customers. Most of the Mamaearth’s old customers were ladies and you know how ladies are. If a lady knows about a thing which no one knows in her friend circle, She proudly shares that information. The things Mamaearth was telling in market that what’s good for kids and what not, Many ladies didn’t knew about it. When one lady used to knew this, she happily shared in her group. This thing kept increasing day-by-day and Mamaearth became very popular among ladies. Then Mamaearth raised some funding and then by digital and influencer marketing started capturing market. But still the question is –
Without any business experience or business background, How Ghazal Alagh did this things ?
See those people who has used Mamaearth products would be knowing that – Mamaearth’s products are expensive compared to normal products. Most of the Mamaearth’s products come in premium category.
How Mamaearth is successful in a country (India) which is price sensitive ?
The answer is Consumer Insights and Personalism. Now understand this carefully. If you see any beauty product ad, you would find one thing comman. The comman thing is – It’s all about you. In any beauty care ad any brand will not talk much about the product, they will always talk about you. You know why ? B’coz Beauty care products are damm personal. And so most of the ads are made to target your self esteem or your insecurities. The question is ..
How this thing applies to baby care products ?
So the answer is hidden in Mom’s Psychology. The psychology of Indian Moms are set such that they would always think about family and kids first then themselves. And due to this reason Kid’s Horlicks is hit and Woman’s Horlicks is fail. Ghazal collected more than 700 ladies consumer insights, took feedback, made improvements and kept going. They introduced such products in market which Moms can trust blindly. And when Mamaearth made products based on these consumer insights a message was sent in market that We are also a part of this product, our say is there in this product. And then sales of Mamaearth sky rocketed. And ladies didn’t cared about cost – they are expensive than normal products or not.And most importantly,
What are those powerful business lessons we can learn from Mamaearth and implement in our business ?
1) Be Everywhere and make Profits Go as far as you can go for profits. Mamaearth is a premium brand whose profit margin varies between 60 – 65% and so its a profitable startup. Mamaearth is a D2C brand. They started it by selling online but today they have done partnerships with more than 3000 retailers. So they are online as well as make their presence offline, so they don’t miss any customer. When one thing becomes successful we get stuck only in it. And this is our biggest mistake. In 2007, Steve Jobs changed Apples Computers Incorporations name to Apple. B’coz now Apple was going to enter in many different products. And then iPhone, iPad, iWatch – Apple launched this products. And at todays date Apple’s 50% of revenue comes from iPhone and only 11% from computers. Mamaearth started with 6 baby care products and today Mamaearth sell more than 200 products. And shockingly there 20% sale is from baby care products. There 80% sales comes from personal care products not baby care. Mamaearth launched beauty care products for not only kids but for Mom, Dad and teenager. And due to this reason Mamaearth become a 10,000 Crs company.
Nike is the largest athletic brand in this world-beating Adidas, Reebok, and Puma in the athletic apparel space. Nike was established by Phil Knight and Bill Bowerman in 1960 with the idea to provide Americans with quality shoes. Nike was initially started as Blue ribbon sports under which Phil and bill used to import high-quality running shoes from Japan and sell it in America. Soon in 1972 Phil and bill together launched their own shoe brand named Nike. Nike’s running shoes became popular in the early 1970s which turned Nike into one of the most profitable athletic brands but soon near 1975 Nike’s profits started to decline, sales were dipping and Nike was looking at the running shoe market saturation which is when Reebok which was Nike’s biggest competitor launched its freestyle aerobic shoes which became a very big success. In 1984 Nike signed a deal with the famous basketball player Micheal Jordan to launch the Air Jordan series. which became a massive hit turning Nike into a billion-dollar company. Nike was also out-bidden by Adidas during the 2012 London Olympics for the title sponsor rights when Adidas bought the 2012 London Olympics title sponsor rights for 150 million dollars but somehow Nike managed to gain more publicity than Adidas using their marketing strategies and business ideas. This video is a complete business and marketing case study on Nike highlighting various business and marketing strategies implemented by Nike to turn a simple shoe company into a billion-dollar brand worldwide. This video is a complete business case study on Nike. The Article also highlights various business lessons which we can learn from Nike’s business and marketing case study and implement in our own business.
NIKE never sells you shoes. It is a very strange thing, right? Because we all know NIKE as a shoe brand. The question is that, If NIKE doesn’t sell shoes then what does it sell? Could anybody have thought, Only two guys can build a huge company from $500. In the early 1980s NIKE was the world’s no.1 athletic brand. But during 1985, they saw a big downfall. Sales were in dip profits were invisible. After some time, Reebok and Adidas took the place of NIKE. But then one person came, who changed NIKE’s Fortune. The question is, Who was that person? And what did he do for NIKE, That today NIKE is a billion-dollar company. And most important, What are the powerful business lessons That we can learn from Nike case study And implement in our business.
How was Nike Started ?
This story starts in 1960, When two people “Phil Knight & Bill Bowerman”, Together starts a shoes trading company. This partnership for a shoe company was very good. Because Phil did MBA in Finance. And during his college days, he was an athlete. And there on the other side, In Phil’s college, Bill was his college coach. So from start, He has good knowledge about running fields & shoes. Phil, A Japanese company named “Tiger” Who manufactures shoes, To sell their shoes in the US market they approached him. And luckily, They give Phill Exclusive contract of selling their shoes in US market. After this deal was final, Phil goes to Bill And starts a company named “Blue Ribbon sports” In the start, they imported shoes from japan, And store them in their storerooms And started selling them in their cars. Some years passed, After some years they opened their store. The business was successful but not scalable. Because Japanese people, The remaining shoes that left after fulfilling their own demand, They use to export that to the US. Because of this NIKE was not able to expand the business. Because their demand was not fulfilled. And finally, that year arrived, In 1972, by raising money from a Japanese trading company, They both started the brand name “NIKE”. Everything was going nice, But there was one problem. The problem was that up to the late 1970s Running was a very popular sport. And all the collection NIKE had, Was only for the running shoes. And until 1983 came, This market started getting saturated. The sales of NIKE stopped. Their profits were going down. And at that time a huge bomb was exploded. Reebok was the biggest competitor of NIKE at that time.
They launched Aerobic shoes freestyle As soon as these shoes came, People started shifting from running to aerobic. And the trend of these aerobic shoes, Changed everything for NIKE overnight. The NIKE which people used to worship, Today no one asked about them. And the sales of Reebok skyrocketed so much, Reebok became the world’s no.1 athletic brand. But then something happened with NIKE, Which made NIKE today the biggest athletic brand in the world.
How Jordan Saved Nike From Bankruptcy ?
And this is the place when there was the entry of “Micheal Jordan”. Very few people know this, If Micheal Jordan was not there Then today wouldn’t have been that NIKE Which we know. As Micheal Jordan came the fortune of NIKE was changed. The question is, what did Micheal Jordan do? That helped NIKE to reach such a huge height today. So guys if you closely observe, Micheal Jordan is a very charismatic personality. But the bigger thing that was special in him was His speed and jumping ability. Which was strategically used by NIKE. By seeing Micheal jordans these two abilities, NIKE launched its Air series. Which was named “Air Jordan”. In 1984, a person named Peter Moore made Air Jordan shoes. That was given only to Micheal Jordan, To play in NBA matches. I know you must be thinking, What a fantastic move! After this move shoes must have been a huge hit, Well, this is not true. Surprisingly NBA rules say that Their shoes must match the colour of their jersey. Air Jordan’s were shining red. They looked very good. But unfortunately, NBA banned Air jordans. But you know what, Nike was so smart that they used this incident in their favor.
After this incident, NIKE made a commercial with Micheal Jordan. Saying that “NBA threw us out, But you don’t need NBA to wear Jordans.” And this commercial was a big hit. Because Air Jordan was very limited edition shoes. And now they were banned also So people wanted more of it. And finally in 1985 Air Jordan made available for the public, Then in just 3 days, all the shoes went out of stock. Now the success of Air Jordan can be found in this thing That is the launch of just 2 months Air Jordan crossed the sales of more than 70 million $. And by seeing NIKE signed a 10-year long-term contract with Michael Jordan. Whenever he will promote he will just promote NIKE shoes. And after that in upcoming years NIKE did many such exclusive deals with athletes. Micheal Jordan, Tiger Woods, Lebron James And Ronaldo’s lifetime’s 1 billion dollar contract We all know about this.
In the 2012 London Olympics, Adidas bought Olympics title sponsor rights in 150 Million $. Interestingly during the time of the London Olympics, NIKE without any spending money Without being the title sponsor Gained more publicity than Adidas.
How did NIKE all these things?
So during 2012’s London Olympics NIKE was restricted by many rules regulations of Olympics. So the 400 athletes who were performing in Olympics, Gave them their Volt series shoes to wear in Olympics. And not only this but apart from London in the UK The other 29 places which are famous by the name of London, On all those places they shot their ad campaigns. And you know what, Where Adidas was talking all the Olympians In all their ads. There NIKE took small kids & teenagers for their ads. Those ads had only one message. The message was greatness within you. And this ad campaign was such a big hit, In 2012, this ad campaign had 4.5 million views. I know there must be one question in your mind, In the start, I said NIKE never sells shoes. The question is, What does NIKE sell So see, NIKE sells you inspiration. If you have watched any ad of NIKE carefully, Then you must have noticed, NIKE never talks about their shoes in the ad. All they talk about is you. How can you achieve greatness? How can you get inspired? In all their advertisements, all the athletes They never talk about shoes. They always convey you a message, How you can achieve greatness in life like the athletes? How can you get inspired by them? Because of this consciously you think that That NIKE is selling you inspiration. But subconsciously they are selling you shoes.
How Nike is selling shoes ?
So see as human beings we genuinely don’t care. How light are the shoes? From which material it is made? Or how good is the grip? You notice all this when you wear the shoes. But the truth is before buying shoes you buy a brand. Go to NIKE’s showroom. There are very high chances, Maybe you like one shoe, But you will definitely buy the second shoe and then go. There are very less chances that you go to the NIKE showroom And come out without buying anything. And this happens because Before selling shoes NIKE has sold you inspiration. And because of these strategies, NIKE is such a big brand.Now the most important,
What are the powerful business lessons, That we can learn from this case study of Nike? That We can implement it in our business.
First business lesson from Nike
Your foundation defines the strength of your business. To build a foundation of any business, The most important role is the “Business structure” Like NIKE follows the matrix business structure. In simple words, One employee is accountable for more than one manager. For example, you are a sales supervisor, So if there is any problem, Then you will inform the sales director And you will inform the footwear head also. This small thing Makes communication in the organization fast. Because of this, any issue is solved very quickly. And the customer gets good service. In fact in 2008, NIKE changed its structure from product base to category based. Today Nike particularly serves in four sports categories. Running, Global Football, Basketball & Training. And in fact, NIKE’s store’s layouts are designed as Whether you buy shoes or not If you are in the store then you will definitely buy something.
Second lesson From Nikee
Learn to accept sometimes you are ahead, And sometimes you are behind. Business has no place for ego. I repeat Business has no place for ego. Having competitors is not a bad thing. But along with it, we must always accept that, Sometimes we will be ahead of the competition And Sometimes we will be behind them. When NIKE was defeated by Reebok, Then they accepted that, That they came late on latest trends. And they improvised. And after that today where is NIKE and where is Reebok. Third lesson. Learn to make a castle with every stone thrown at you. Life or Business People will always throw stones at you. Criticism is part of the process. NIKE saw many tough times. They were banned in NBA. Or people started burning their shoes and making protests. Also, the Olympics sponsor was taken away from them. But despite all these things, NIKE found a possibility in every difficulty. And the profit earned by NIKE by all these incidents That much was never done by their normal operations. By the way, have you thought, How Spotify Dominates Apple, Google And Amazon In Music |Case Study of Spotify stocks
Is Nike a good brand?
According to the Brand Finance Apparel 50 2021 study, Nike is the world’s most valuable apparel brand for the seventh year in a row. Retailers and brands have had a difficult year.
What is the quality of Nike?
Consumer impression of the athletic colossus has recently pulled away from competitors Adidas and New Balance in terms of Quality, according to latest YouGov BrandIndex data. Nike now has a Quality score of 53 among US people aged 18 and up, compared to 37 for Adidas and 33 for New Balance.
What does Nike stand for?
Nike is the Winged Goddess of Victory. The logo is derived from goddess’ wing,’swoosh’, which symbolises the sound of speed, movement, power and motivation. (In greek Mythology)
Playing music is part of civilized humanity. Music is so important to us humans and has been for thousands of years, the last 20 of which have seen an incredible shift; online streaming music. What started out as music piracy became an 11 billion dollar industry, making up 56 percent of global music industry revenues in 2019. And one company has become the clear winner globally in terms of paid subscribers. Spotify is where everyone is at.
We all know that Spotify is by far the most successful audio streaming platform in the world.In fact, even during the pandemic itself, the stock price of Spotify went up by 70%. Now, on the outside if you look at the numbers while Apple Music has only 72 million users Spotify has more than 345 million users and the rest of the competition is not even close.. On top of that, its recommendation and playlist have been so amazing that you’ll agree that it has given you an incredible experience every single time But you know what guys? Fortunately or unfortunately, in 2021, Spotify is in deep-deep trouble. While on one side the losses of the company have been stacking up rapidly On the other side with the giants entering the streaming market. Spotify is officially in a business war.And what we are witnessing right now is perhaps one of the most interesting Internet business wars in history. And if you pay very close attention you’ll be able to learn some incredible business lessons that you can apply to your startup and most importantly, as an investor, if you’re invetsing into US stocks. this streaming war is going to be very very crucial. The question is- What is this business war and most importantly as an entrepreneur, what are the business lessons that you can learn from this iconic case study.People, the music streaming revolution of the world started way back in.Now, back then from 1984 to 1999 CDs were the ultimate instrument of the music industry. The distribution channels of the music CDs made the record labels and musicians billions of dollars every single year.the Internet and the computer revolution began to pick up resulting into massive penetration of both, computers and web, into the American houselhold. Now, people if you see this is a fine culmination of technology and connectivity and if you observe closely every time this golden combination happens, it gives rise to a new generation of startups. In the music industry, it was the company called Napster which was started way back in 1999 35 by Shawn Fanning and Sean Parker. In simple words Napster was nothing but a music torrent instead of buying a CD for 20 dollars. you can download an MP3 file for free and share it with your friends And you know what guys? This invention was a disruption in the making because what followed next was the first wave of music streaming. And this wave did not just change the way people listen to music. it literally changed the entire music industry. Within a few months it had 4 million song downloads and in less than a year, Napster had 20 million users. Now, initially, people thought that it’s no big deal. But in sometime, the numbers of Napster exploded further, to 60 millions users by 2001. 47 And this is when the record labels began to realize that their stores are incurring losses and when they actually computed it shocked them to see that they were incurring more than $100 million in losses due to Napster.
Taking on behemoths like Apple, Amazon and Google, Spotify has dominated the streaming music industry with about 130 million premium subscribers worldwide, despite being number two behind Apple in the U.S., according to data from 2019. Spotify has been on a winning streak recently with the acquisition of Joe Rogan’s incredibly popular podcast, along with exclusive deals with Kim Kardashian and DC Comics, all in an attempt to broaden its scope from music streaming to audio giant. The companies that we bought and the talent that we have brought onto the platform will help us become the number one audio platform in the world. And the devastating global pandemic has also contributed to Spotify’s recent financial gains. Boom. Look at this stock verse three two hundred for first time and it just keeps surging. Linear radio is moving to on demand. We’re talking about something that has billions of consumers around the world that are now moving their behaviors online.
Something like the Covid will likely accelerate that trend. But Spotify had an uphill battle from music rights to artists demanding fair pay. This is the story of how a small Swedish startup came to define the way we listen to music in the digital age and what we can expect in the future.
The Internet has changed so many aspects of media consumption, but few have had a more tumultuous relationship with these changes than the music industry. I don’t believe we’re talking about streaming music if it’s not for Napster and Sean and everything they did. CDs became the standard medium in the 1990s. At the same time, home computers were becoming more commonplace. Many with disk drives built in, allowing users to take their favorite CDs and rip them on to their devices as MP3 files. This made way for peer to peer music sharing or music piracy through platforms like Napster and LimeWire. If you look at Napster and of course other competitors that followed, it really disenfranchised the industry. Apple, having had great success with iTunes and the iPod, decided to start selling music digitally on iTunes in 2003 as a way to charge into the music industry and combat music piracy. It’s not stealing anymore. It’s good karma. iTunes was the first legal attempt of saying, OK, what Napster is doing is piracy and it is the wild, wild west. How can we start to look at digital downloads? Would people pay 99 cents for a song to be able to have access to it? And it succeeded. It was all about downloads.
It’s all about iTunes. iTunes was the driving force. It in turn, destroyed other music selling businesses, knocking out Tower Records and almost every other music store. This was a tough pill to swallow for the music industry as a whole. During the 90s, the money was still flowing. The advances I would get, they would spend a million dollars on the promotion of my singles. Me. Like, someone who doesn’t even write mainstream stuff. Then the Internet put a stop to that. The industry was so used to big margins. To sell a CD for 20 bucks and it only cost one dollars to manufacture. So the margins were huge. And then go from that to OK, now albums are 9.99 at iTunes, those margins started to depleat. And for music lovers who wanted their music for free, radio was still a resource they cherished. Online radio company Pandora claimed some of that market when it launched in 2000 and 10 years later, it had 48 million subscribers. I remember when everyone I know was trying to tweet their Pandora stations. I had it on my phone all the time, was like, oh, like this station becomes this, and it was cool. But pirating was still an issue. A 2007 study concluded that twelve point five billion dollars in total output was lost in the U.S. annually because of music piracy.And radio was great, but users wanted to choose their music. That left the market open for a small Swedish company to make its way in. We want music to be like water, everywhere.
How and when Spotify started
Spotify was founded in 2006 and made its way to the U.S. in 2011. It started with an invite only beta program for the free tier and quickly garnered favorable reviews. But it faced an uphill battle to the top. It was getting the rights. It was convincing subscribers to get onto the platform. These were extremely difficult times for Spotify to make sure that they were able to nab the content, especially at that time. One reason for the company’s delayed entry into the U.S. market was because of music rights. It’s a complicated business that costs Spotify nine point eight billion dollars between its launch in 2018. They made that risky bet at the time. They’re like, look. We know we’re going to lose money, but that’s what we’re going to need to do, if our investors support it, for music rights, given the price, given content. Once we acquire that content, it’s the carrot and stick approach in terms of subscribers would come. Clearly, the company was onto something and that piqued the curiosity of some major brands. Now it seems every major tech player has its own music streaming platform.
Best Competetors of Spotify
Apple dropped iTunes and created Apple Music. Amazon created Amazon Music. Google created Google Play Music and then YouTube Music. Jay-Z even formed his own service called Tidal, which focused on professional sound quality. But Spotify kept its spot at the top thanks to its freemium model, where users can listen for free with ads or pay for a subscription without ads. We believe in a true free service. We believe in something where the user knows that they can go back month and month and month, month again and have access to your music.
Spotify vs Other music plattform
By the end of 2019, Apple Music had 60 million paid subscribers worldwide. Amazon Music had 55 million subscribers worldwide, nearly all of which were paying subscribers. Chinese company Tencent had thirty nine point nine million paying subscribers, while Spotify had one hundred and twenty four million paying subscribers. It was about free going premium. Conversion was key, and I think Spotify was really the one that started that.
Platforms like Apple Music are more exclusionary, forcing customers to pay after their free trial is up. Apple even tried to kill Spotify’s free version back when Apple Music launched. Free just makes sense for customers, which is a major reason why Spotify is so popular today. But free isn’t so great for musicians. The ad dollars are actually less than the premium subscriptions. But Apple Music, Tidal, those platforms, you get your free trial, but you have to pay. So it’s a hard pill to swallow when you’re looking at your statement saying, dang, Apple Music. Should I focus my energy on Apple Music because this is where the money is? Or do I still go with Spotify because that’s where the users are? Spotify gained popularity, artists started to wonder why they weren’t seeing the financial gains they were used to with CD sales and downloads. Taylor Swift boycotted Spotify in 2014, pulling all of her music off the service and saying she and other artists weren’t being paid enough for each stream. Adele followed suit in 2015, announcing her album 25 would not be released on Spotify or Apple Music. The term windowing became popular, where artists would only release an album on a certain platform or would not stream an album at all for a certain amount of time. So a lot of artists window the records where it wasn’t on Spotify, say, for a certain period of time but on Apple Music. Kanye West was known for this with Tidal. Taylor Swift and Adele both released their albums on Spotify eventually, but it opened streaming services up to questions about how much they were paying their artists per stream. Spotify and Apple both don’t release exactly how much they pay distributors per stream, but it has been reported that Spotify pays around 70 percent of the revenue made on a stream.
people listen to my music on Spotify. That makes me happy. Now, I know there people aren’t getting paid for that, and that makes me sad. But I think that that’s a systemic, technological, capitalistic, human issue. And you have to go back 300 years and look at how a musician was making their living for their intellectual property in 1901.
How Spotify stocks increased?
In 2019, Spotify announced it was moving its music focus to a more general audio focus to broaden its offerings and widen its global lead on competitors. It acquired the Joe Rogan Experience early in 2020 and penned exclusive podcast deals with Kim Kardashian and DC Comics. The Spotify’s stock jumped eight percent at the announcement of the Joe Rogan acquisition alone. A year ago, when I was on the show last time, I introduced the shifts in our strategy from music to audio. At that time, we were a very small player in audio, but growing fast. Now, where the number one player in more than 20 markets around the world and quickly catching up in the markets where we’re not number one. That’s where Spotify is taking the future right now, and analysts believe it can ride that wave for a bit. Ninety percent of our monetization is on the subscription side. But 10 percent is on the ad side, and we do think that there is real growth opportunity for us in the ad space, particularly with podcasts. Just after these podcast deals were penned, the global pandemic started taking its toll on the economy. But Spotify was one of the few companies that weathered the storm. In fact, Spotify stock increased 70 percent from the beginning of January 2020 to the end of June 2020. They benefited from Covid because the lockdown’s forced people to stop listening to radio and they discovered Spotify while stuck at home. Of course, yes. If your Spotify, you’d much rather make money from the podcast acquisitions and that then having to pay 60 to 70 cents for every dollar to Universal or Sony. But in order to stay at the top, Spotify is going to have to stay nimble and quick.
Competitors like Tencent are already adding features like karaoke to their streaming music platforms. Tencent, at least, is on that path from a gamification perspective. So I do think that that is an opportunity for Spotify to keep in mind, like, yes, it’s great that you got Joe Rogan. It’s great that you’ve got Bill Simmons. But look at those opportunities as well. Even though it’s a different market, I think there’s a big opportunity there. Nevertheless, Spotify is still very much a success story. Today, they’re sitting there thinking their cappuccino laughing as they see this success.
is spotify a good stock to buy?
The stock of Spotify is a Buy. This is a classic investment case of “short-term pain, long-term gain.” SPOT’s near-term profitability will be harmed by increased spending to build the podcast industry.
Is Spotify a good investment?
Spotify is now trading at even lower rates than it was during the nadir of the pandemic market meltdown of 2020, following a massive devaluation in 2021. This could signal a “buy the dip” opportunity for SPOT. SPOT is down about 25% year to far, and it’s down 35% from its all-time high of $365 per share in February 2021.
why is spotify stock dropping?
However, not long after its stock peaked, Spotify rightly predicted that covid-19 uncertainty and unequal pandemic recovery would make 2021 a difficult year. As the number of monthly active users reduced, the stock price dropped practically continuously throughout the year.
In India, Flipkart is dominating E Commerce market with 38.3% market share. Indian E Commerce market grew so much much that during Diwali Festival Sale Amazon and Flipkart jointly did sales of 9.4 Billion Dollars. Amazon’s 60% sale comes from their Prime Membership. It may be you took prime membership to listen songs or watch movie, But when it comes to order anything you will probably use Amazon b’coz you have prime membership. But Flipkart don’t have such a ecosystem. So the question comes how Flipkart dominating without any such ecosystem? And most importantly what are those business lessons we can learn from Flipkart and implement in our business?
The story starts in 2007 when Sachin and Binny Bansal quit their job from Amazon and start Flipkart in India. Similarly like Amazon, Flipkart also started by selling books. In initial days, Sachin and Binny both delivered the order themselves. The twist came in 2009 when Flipkart starts eKart – A separate logistics wing. But the question is what eKart changed for Flipkart?
So the answer is Consumer Expectations. If you remember when you ordered anything from Flipkart delivery time used to show 3-4 days. But most of the time your order was delivered in 2-3 days. When something happens like this, you used to feel delighted. This feeling comes when someone Under commit and Over Deliver And Flipkart did this. Today eKart delivers more than 1 crore packages every month which made eKart India’s largest logistics company. If we compare company size, then Amazon is 200 times bigger company than Flipkart. Amazon also has more capacity to cashburn. So the question is How Flipkart is beating Amazon?
How Flipkart is beating Amazon?
So the answer is hidden in this 3 elements and business strategies….
1st Business Strategy of Flipkart
Consumer Demographics If you look closely then you would find good brand products on Amazon. But if you look Flipkart closely then Flipkart has branded as well as unbranded on their platform. So why Flipkart keep unbranded products as it will increase their inventory cost? And from here real game begins. Amazon’s focus was big metropolitan cities while Flipkart focused to capture market of Tier 2 and 3 cities.
The question arises that it was easy to generate revenue from metropolitan cities then why Flipkart focused on tier 2 and 3 cities? So the answer is in Consumer Behavior of people of Tier 2 and 3 cities which depends on 2 factors -.
1) Variety- They want more options. 2) Price Point – They want product at good price point.
A middle class man goes to 10-15 stores, sees 100 products and then buy the cheaper one. E – Commerce companies has a advantage which physical stores don’t have. The advantage is – Artificial Intelligence System. People think overselling middle class population is very very tough. But this is not the case. Problem is they choose wrong combinations so they can’t oversell middle class people. A middle class man over purchases when you show relevant and more cheaper product than last purchased one. And Flipkart did this very smartly. They first brought unbranded products for tier 2 and 3 cities. And then started giving heavy discounts on these products. I know many people will say that Flipkart and Amazon’s sale run at time. Yes, it’s true. But interestingly, Flipkart always sells more than Amazon The question is How? To understand this, understand this 2 things carefully.
Second Business Strategy of Flipkart..
Who buys from Flipkart?
People who want to buy mid range i.e. who don’t want to do heavy purchases buys from Flipkart. Their budget is not more than 800-10 000 Rs until and unless they are not buying heavy electronics. People shopping through Amazon have no fixed budget. And during sale absolutely NO. 2) Why People buy from Flipkart? 1) Brand Identity Flipkart’s Brand Identity is b’coz of 2 things – 1) Price Point and 2) Delivery Availability Those who want to shop from Flipkart know that they will get products at good rate. And people living in remote locations also know that Flipkart will deliver their product here. Due to eKart, Flipkart’s Logistics network is much powerful than Amazon. Places where Amazon don’t deliver, Flipkart deliver. Whereas Amazon is known for it’s trust and quality. There are very less chances that a tier 2 or 3 city resident who want good price point and delivery availability will shop from Amazon. Until and unless if he is getting this 2 things. Tier 2 and 3 cities population are collectively more than metropolitan cities.
The 3rd element of Flipkart
This element gave Flipkart an unfair advantage which became bargain for their target customers. It was Flipkart Plus memberships. Flipkart Membership’s most dominating factor is Early Access to Sales. The question is how this small thing can be so much powerful ? So the reason is Feeling of Exclusivity. Amazon under it’s prime membership gives you access of 1 Day delivery, Prime video and also Amazon music which you can easily use on Alexa devices. But you know what none of this things are such that can make a prime member feel superior than non prime customer. B’coz you can get 1 Day delivery by paying extra 100 Rs. But Flipkart gives early members early access to sale. This makes members feel that those products which are going to be Out of Stock, I have option to buy them early. This provides superiority feel to them. When a Tier 2 or 3 resident get Price Point, Availibilty and Exclusivity to season sales then volumes are confirmed. And most importantly what are those business lessons we can learn and implement in our business ? 1) Knowing your exact customer can be a goldmine. If you try to sell to everyone, you will sell to no one. Every customer is different and his behaviour depends on Demographics and Ethenographics. If you target the right customer in the right way then no one can stop the sales. This brings us to 2nd business lesson. 2) Nothing can beat customer centricity. Flipkart or Amazon both the companies leave no stones unturned to please you. Flipkart wanted to provide more variety in fashion so they acquired Myntra and Jabong. They wanted to make payment process easy so acquired PhonePe. This both companies take decision according to customers. Infact, Amazon rewarded a person for returning a product 137 times. B’coz whenever he returned the product 137 times his neighborhood saw Amazon. So Amazon got free Branding. Customer is God. No customer, No revenue. So its important for any business to keep their customers happy keeping costs in mind.
People who want to buy mid range i.e. who don’t want to do heavy purchases buys from Flipkart. Their budget is not more than 800-10 000 Rs until and unless they are not buying heavy electronics. People shopping through Amazon have no fixed budget. And during sale absolutely NO. 2) Why People buy from Flipkart? 1) Brand Identity Flipkart’s Brand Identity is b’coz of 2 things – 1) Price Point and 2) Delivery Availability Those who want to shop from Flipkart know that they will get products at good rate. And people living in remote locations also know that Flipkart will deliver their product here
How Flipkart is beating Amazon?
The question arises that it was easy to generate revenue from metropolitan cities then why Flipkart focused on tier 2 and 3 cities? So the answer is in Consumer Behavior of people of Tier 2 and 3 cities which depends on 2 factors -. 1) Variety- They want more options. 2) Price Point – They want product at good price point.
Credit Cards! What are credit cards? How do they work? How do credit card companies make money? And most importantly, Should you be using a credit card? What are the pros and cons? Come, let’s find out.
Let’s use an example to understand. Suppose you’re a school student and suddenly there’s a pandemic. All your classes are now online. But to attend these online classes, you’d need a smartphone, but you don’t have one. You need to buy a smartphone urgently. But there’s insufficient money in your bank account for buying it. So you ask your parents to transfer some money to your bank account. But it’ll take 2-3 days to transfer the money. But you need to buy the smartphone before your class the next day. What other options are there? In such situations, you can use credit cards to make the purchase immediately. And pay for it later. So essentially, a credit card is a card that helps you in purchasing things instantly. But you can pay for them later. At the end of the month. Generally, if there’s enough money in your bank account, you withdraw cash and use it to make payments. The second option is to use a debit card. It is directly linked to your bank account. When you make a payment through your debit card, then the money is deducted directly from your bank account and transferred to the other party. But in a credit card, the bank makes the payment on your behalf. To whomever you’re trying to pay. And then at the end of the month, you repay all the expenses of that month to the bank. You can take more than a month in repaying the bank’s money. Then the bank will charge high interest. Similar to a loan. So you can think of the credit card as a type of a ‘mini loan.’
Normally when you take a loan, you can get it in cash if you want to. But here, instead of a loan, the bank is giving you a plastic card. With your name and a unique number on it. So that the card can be uniquely identified. As well as the expiry date.
How Payment is being Processed in Credit Cards ?
There are some payment processing companies. Like Visa and MasterCard. These two are the most popular companies. They basically provide the back-end infrastructure to facilitate credit card transactions. The bank issuing you the credit cards, are distinct from Visa and MasterCard. These two are only involved in the payment processing. And there is a magnetic strip on the other side of the credit card. As well as the CVV number. It is very important to keep it safe and secret. Otherwise, you may be a victim of fraud.
Credit Cards Limit
Now, friends, every credit card has a credit limit. The amount of money that you can spend with the credit card. Without first paying the bank. If the limit is set at 30,000 Then you can’t spend more than 30,000 using that credit card. The credit limit varies from bank to bank. And the type of card you’ve bought. And the bank checks your salary. It checks your credit score. And decides on your credit limit based on these. If the bank is assured that your salary is adequate that you can afford to pay back the bank then the bank will trust you more. And you get a higher credit limit.
Now, Credit Score is also an interesting concept. If you don’t make the credit card payments and loan repayments on time, then the bank will think that it will be quite risky to give you money. It’ll be unsure about when you’ll repay the advances, if at all. Because the bank takes a risk while giving you a credit card or a loan, to judge this risk, the banking sector has created its grading system. It grades you. The score ranges from 300 to 900. And it is known as your Credit Score. If your credit score is between 750 and 900, then it is an excellent credit score. It means that the bank can trust you and the risk is very low. But if your score is around 300-400, then the bank can’t trust you at all. So your credit score is calculated based on your previous track record. And on that basis, the bank judges if your credit limit should be high or low. In fact, whether or not to issue a credit card to you at all using credit card?
As I talked about one advantage at the beginning of this article :
if you want to buy something immediately, but you want to pay for it later at the end of the month, you can. It helps to meet immediate expenses.
The second major advantage is that using a credit card is less risky than using a debit card. If you’re a victim of a fraud then in the case of a debit card, the money will be directly deducted from your bank account. But in the case of a credit card, your bank or the credit card issuer will pay on your behalf. And if there’s a fraud, they can investigate it. If there’s actually a fraud, then they’ll get your money back. In India, if there’s any fraud with your credit card then the customer’s, i.e. your, liability is zero. If you report the fraud within 3 days. So the risk of making payments is borne by the bank.
The third major advantage is the rewards that you get for using a credit card. The reward systems vary depending on the bank and the type of credit card. In some, you may get cashback in others, you may get heavy discounts you may even get insurance in some. Like insurance to be paid if you meet with an accident. You can also get travel insurance for free with your credit card. The benefits that you’d get for using it depends on your credit card. But nowadays, almost every credit card comes with some sort of a reward point system. You can collect the points and can then exchange those points to buy something expensive. Which credit card is right for you? To decide, you need to remember three main things. First is the bank that will issue your credit card. Any reward point system, the fees charged by the bank and any hidden fees. These are mostly decided by the banks. Second is which of the credit cards offered by the bank will you be using? There are more rewards for high-level credit cards. The insurances and points are also better. But they often have high fees as well. And the third thing to remember is that which payment network is used in that card? As I said, Visa and MasterCard are the two most common networks.
But apart from these, American Express, Diners Club and RuPay are also used. Although Visa and MasterCard are so common that there is a negligible difference between the two. But if you see American Express, then it differs a lot from these two. Because in most of the places Visa and MasterCard are accepted but not American Express. But American Express offers better rewards. I told you that banks decide the reward point system mostly but to an extent, the payment networks also decide about the types of rewards on their network and the benefits to the credit cardholders. Although, it is interesting to note that no more MasterCard cards can be issued in India Because MasterCard violated some guidelines and the RBI notified that though people can keep using the existing MasterCard cards but no more MasterCard cards can be issued. As long as the MasterCard company does not comply with these guidelines. But overall, the various banks it’s equally interesting to note that all of them use a different proportion of MasterCard, Visa and American Express cards.
How do banks profit from credit cards?
The most simple way for the banks to earn money is by charging annual fees. To use some credit cards, you have to make yearly payments. Apart from this, there are many different types of fees charged by the banks. If you are not making timely payments, then a late fee will be charged. If you want to withdraw cash from the credit card, then there is often an extra fee @ 2% – 5%. But friends, you’d be surprised to know that a large portion of these banks’ income actually is a result of people’s stupidity. Many people don’t pay their credit card bills at the end of the month. Because of this, the banks charge a high interest rate on it. And this interest rate can be as high as 30% compounded annually. That’s twice or thrice the interest rate on loans. The bank earns a lot of money by charging so high interest rates. And people lose their money. If every person using a credit card, starts paying the bank on time then a major part of the banks’ profit will disappear. This is the reason why credit cards aren’t popular in some countries. In many European countries, credits aren’t used much because the mindset of the people is so that they make all their payments on time. They don’t buy anything if they don’t have the money for it. People don’t really buy things on EMI in Europe. So credit cards aren’t very popular in Europe. As compared to countries like India and the USA. Where people have the habit of buy things even when they don’t have enough money. That’s why in European markets, alternative banks like N26 and Revolut are gaining popularity. They offer some of the functions of credit cards.
These banks issue their debit cards an annual fee is charged on some of them and those debit cards offer rewards like insurances and stuff. But the security that you get in a credit card is not offered here. So they’re trying to offer some of the functions of credit cards. Similarly, some credit card ‘challenger’ companies are gaining popularity in India as well. Like Slice. It does not charge an annual fee but gives the user rewards as well as security benefits that one gets in a normal credit card. They offer some other advantages that a normal credit card doesn’t. Like their 3-months repayment duration. Whereas a normal credit card’s repayment duration is normally 30 days. They claim that they do not have any hidden charges. This specific company, Slice, works only on Visa. It will be interesting to see how with time, the advantages offered by the credit cards the companies are trying to offer these through various channels in the future. And reduce the disadvantages of credit cards. When the competition among these companies will rise the advantages for us will increase and the disadvantages will reduce. But if we talk of the present, the disadvantages of credit cards might already be evident to you. As I’ve said, if you don’t make the payments on time if you don’t pay your credit card bills on time, Then you’d have to pay heavy interest. And fall into a debt spiral very quickly. Where once you don’t make the payment on time, then so much interest is charged that you end up paying a higher amount. You wait for a few more days and the amount increases further. Soon, within some days, or maybe a few months, the amount may become so large that you can’t repay. I’ve also talked about the second disadvantage. There are many hidden fees on credit cards. So the question arises Should you use a credit card? Or should you not? The answer to it is very simple friends. If you make timely payments of the credit card bills, then you can use it. On the other hand, if you use credit cards to buy things that you can’t afford, if you think that now I may not have the money, so I’ll use the credit card to buy it, and I’ll arrange the money from somewhere within 30 days, then please don’t use a credit card. You may fall into a debt trap. Third, if you want to get a credit card because of the rewards, then evaluate the situation a bit. The various fees that you will pay to use that credit card, often the processing fee is around 2% -3%, and the reward that you’d get in exchange.
would they actually be worth it? Or are you still losing money?
So you’ll have to calculate it a bit. Fourth, if you’re wary about paying online or anywhere else about falling for a fraud, then use credit cards in such situations to be safe. I hope you found this video informative. Here, I would like to thank the KUVERA app for sponsoring this video. It’s a wonderful app for mutual funds where you can invest your money in various mutual funds. By setting your goal. Whether you want to buy a house or a car set this goal on the KUVERA app and the algorithm of this app will tell you which mutual fund will be best for you to invest your money in. Not only mutual funds but you can compare FDs also. .
How does a credit card get paid?
In general, credit card companies make their money from three sources: interest, fees charged to cardholders, and transaction fees paid by businesses that accept credit cards. Use credit cards wisely to minimize the amount of money that credit card companies make.
Can I withdraw the money from credit card?
Yes, most credit cards let you withdraw cash from an ATM. Borrowing money on a credit card is called a cash advance, a type of short-term loan, and it’s very different from a debit card withdrawal. Cash advances usually come with very high fees.
Amazon, Apple, Sony in fact Airtel and Jio and Gillette do you know what’s common about them ? Only one thing – this companies use same business model due to which we become slaves of this companies. The question is what’s that business model ? And how smartly these companies use this business that you or me, both of us can’t stop buying products. And most importantly, what are those business lessons we can learn and implement in our business ?
How Gillette Started
So Gillette Billion Dollar Business Model starts in late 1800s. The shaving trend started recently. But there is one problem. Shaving was considered a tough and dangerous activity. B’coz none of the man had expertise in shaving. If you go back in olden times, two types of razors existed.
Straight Razors were very sharp and risky to use.
Safety Razors were less sharp and dangerous but there was a problem. The problem was that after buying them you need to sharpen its blades regularly.
Tired of this problem, King Gillette – a travelling salesman designed a razor blade with detachable blades. When blades get old, remove them, insert new one and shave. And from here Gillette company started.Today Gillette is among top brands of the world.
But do you know that when Gillette came to India it badly failed ? But if you look at today’s scenario, then Gillette is dominating world’s razor market. But the question is how Gillette did it ?
How Gillette is dominating world’s Razor market?
So the answer is Consumer Relevance. So in 1921, Gillette’s razor design patent got expired. After this many companies started making razors like Gillette. A company which was dominating market since 15 years saw it falling. After the entry of many competitors, razor’s sale decreased. Sales dropped too much that it started making losses. But Gillette does something that in 1923 their revenue doubles and profits become 4x. So Gillette introduced a new business model in market which was named – The Razor Blade Model
After Gillette’s consumer study they found that people liked their products But due to many competitors in market people had no reason to buy only Gillette’s product. And so Gillette reduced it’s razor’s price too much that people used to think it a bargain offer. This made people compelled to buy Gillette’s products. The question is if they reduced prices then how their profit turned 4x ? And here comes Razor Blade Model. Gillette made it’s razors cheap but blades expensive. So people didn’t thought before buying razors. They bought razor they too will need blade so they came again to company to buy blades. This created a massive revenue stream for Gillette.
Today many big companies like SONY, Amazon, Apple, Airtel, Jio use this model. Do you know SONY sells it’s PlayStation in loss ? Amazon sells it’s kindle and prime subscription with zero profit margin. Infact Airtel and Jio sell their broadband connections in losses. These things are done b’coz the company’s AIM is – To Hook You in their Ecosystem. If you buy PlayStation then you surely need to buy games. If once you took broadband connection, you need to pay bill every month. In fact if you buy MacBook then eventually you will also buy their paid softwares. And that’s how they Hook You and makes Profits. Due to this these companies are ready to sell their base product in loss. So the question is if Gillette had this amazing business model then how they failed in India ?
Why Gillette failed in India?
So the answer is Product before Consumer. Gillette entered in Indian market with their Gillette Vector Razor. Before launching the product they did research on 200 Indian MIT student but interestingly, their product failed in India. The question is WHY ??? The research was done on MIT’s Indian students but they used to live in US And this was their biggest mistake Gillette is a Procter and Gamble product and when it’s CEO came to India he was shocked. He saw people had no enough water to shave. In USA where people used to shave in running water, in India people shaved using water in mug. Americans shaved after every 2 days whereas in India people hardly shaved twice in one week. In USA, water and their beard both are soft but in India water and beard both are hard. When Gillette lauched its Vector Razor, people bought it but they were not able to use it properly. So Gillette realised – Now it’s Time to change the Game. They studied about people of India and concluded that majority people was cheap and strong razor. After doing reverse innovation, Gillette launched Gillette Guard and Gillette Presto. These products were too hit that till today Gillette is dominating India’s Razor market. So without knowing Consumer behavior company need to hard sell their product. The better way to it is- Understand the customer first. Well honestly it is not so hard to understand people as you think b’coz most of the behavior are common. Like how Dale Carnegie in his book ‘How to Influence People and Win Friends’ tell that – The first thing which interests someone is themselves.
FAQs Related to Gillette
Who owns Gillette?
Procter & Gamble Co. Procter & Gamble Co., the leading U.S. manufacturer of household products whose brands include Crest, Pampers, Tide and Charmin, is owner of razor maker Gillette Co.
Is Gillette an American company?
Boston, Massachusetts, U.S. Gillette makes safety razors and other personal care products, including shaving supplies, for the multinational corporation Procter & Gamble (P&G).
Why did Gillette fail?
Gillette missed out on one crucial insight regarding shaving habits in India when testing the product at MIT with Indian students. This was the main reason for the failure of the product.
what are the business lessons we can learn and implement in our business ?
Reduce the barriers of Decision Making Many big companies try to sell their product with lower prices with maximum features. This is done so that people take decision to buy their product as fast as possible. It should be your goal to reduce consumer’s decision barriers. So that consumers grab the opportunity as fast as they can. This brings us to 2nd business lesson.
Build an Ecosystem Bate Had you ever thought that why Amazon gives its prime membership’s 1 month free trial for free ? Why JIO distributed its services for free for 6 months ? These companies delivers this value proposition with frictionless entry in their ecosystem. And once you are in it’s very tough to get out. But in business, ecosystem is less important then the way to build frictionless entry for customers. B’coz once they are in you get loyal customers for very long period of time. And this brings us to third and most important business lesson.
Do not ignore the changing trends in greed of Profits. In business as profit increases, greed also increases. Kodak is a perfect example of it. As much profit was coming from camera rolls that they ignored that whole world is shifting to digital cameras. And today maybe some people only use Kodak Cameras. Profits are important but not so much that you forget to change with time. Its a saying that Change with Time otherwise you will get hurt Time will Change. Today everything became costly but had you ever thought that why Parle G is of 5 Rs only ? And what’s the secret behind Parle’s pricing strategy ?