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NMIMS – Is Sundar, approaching the issue of service offering, too quickly? Do you feel he needs to invest some more time designing the offering, as it could be more complex and deeper than what it apparently looks like

Strategic Cost Management

NMIMS – Is Sundar, approaching the issue of service offering, too quickly? Do you feel he needs to invest some more time designing the offering, as it could be more complex and deeper than what it apparently looks like
  1. You stay in a semi-urban setup near your house, and medicine delivery is extremely unreliable. The medicine shops close around 9 PM and medicine availability becomes a challenge. You come up with a business plan to deliver medicines to all houses, (in the area) at no extra cost, 24X7. The challenge however is that companies like 1mg, Net meds are already offering their services in the area. The advantage for you is the popularity of ordering medicine online is still not prevalent among the people in your area. You intend to buy the products from the nearest retail point and deliver to the customer with the help of, a few delivery personnel that you will maintain. What are the challenges that you will face while setting this up, from a services perspective? How will you differentiate yourself from the competing firms? (10 Marks)
  2. Salman goes to ‘Javed Habibs Salon’ and Amir goes to ‘Lakme Salon’. If you are an entrepreneur who wishes to open a salon, how will you differentiate your offerings vis a vis your competitors? You are also clear that you want to offer your services at a higher price point, where you intend to service a smaller client base. You understand that your client’s time (for your business idea) will be a very critical component for providing a great service. How do you intend to manage the demand vis a vis the capacity? (10 Marks)
  3. Sundar wants to start a ‘C2C’ (customer-to-customer) model of food service. He had just passed out of his B School and the canteen food in his college was pathetic. Most of the days, he relied on Swiggy and Zomato for his meals. He realized that probably there is a need to have an option for customers to order it from homemakers or families who would be interested in selling their cooked food to others. Sundar started with his basic research and spoke to a couple of housewives who were willing. He got his B School classmate on board to design an app that would help customers order. While both started their work, he realized that there were two major problems in this service situation. The first problem of course is bringing awareness for the services and popularizing it among the people of his city. Another challenge would be to encourage homemakers to enroll and encourage them to sell. This would be a major bottleneck as most of the deliveries would be following a specific timeline and unavailability of a homemaker would cost the delivery and customer. The second problem was the area of operations. The city in which he plans to operate is big, with lots of offices and a student population. He chose on the student’s category primarily as his primary targeted audience. However, Sundar did not have any hard data to support his stand. Sundar therefore came up with three value propositions for his business.
  • Good quality food for students at a reasonable price.
  • Good discounts for students who are adopting a long-term association with his food service company.
  • Encourage homemakers by providing them with the flexibility of several days they would want to work, a wonderful incentive plan, pick up from their home, faster settlement of their accounts, and training to pack and promote their food. Sundar is now charged up to get things in place and start the venture as early as possible. He now needs to start working on the logistics, operations, service quality, etc.
  • a.) Does Sundar have all the information needed to choose students as the segment? Is he right in his decision? If you were his friend, what segments would you suggest and why? (5 Marks)
  • b.) Is Sundar, approaching the issue of service offering, too quickly? Do you feel he needs to invest some more time designing the offering, as it could be more complex and deeper than what it looks like? (5 Marks)

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