AE1- Case Study Report

Ceylon Cargills Food City

Enterprise and Entrepreneurship (BCM 707)

PG Department - Solent Global MBA

Student ID: 15142434

Content
1.Introduction to Cargills Food City Pvt Ltd 4
1.1. Type of Organisation 4
1.2. Size of Organisation 5
1.3. Product range 5
1.4. Key customer segment 5
1.5. Competitor analysis 6
1.5.1. Porter’s five force model 6
1.6. Cargills current market position 7 -8
2.Current business trends 8
2.1. Idea 1 - Digital Loyalty Card payment method 8-9
2.2. Idea 2 - Cargills Juice Corner 9-10
2.3. Risk factor associate with business ideas 10-11
2.4. Evaluation and recommendation for viable business idea 11
3.Buiness proposal implementation plan for the 12
Digital Loyalty card payment system

3.1. Background of new business idea - Business Model Canvas 12

3.1.1. The business model canvas: Cargills Digital Loyalty Card 13-14
3.2. Business development plan 15
3.2.1. Impact of new business idea to the business 15
3.2.2. Vision of new Digital Loyalty Card payment concept 15
3.2.3. Critical success factors and strategies 15-16
3.3. Change management 17
3.3.1. Kotter’s Eight Step Model 17 -19
3.4. Financial Plan 20 -21
3.5. Operations Plan 21- 22
3.6. Conclusion 23
4.References 24-25

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5.Annexures 26
5.1. Appendix 1 - Cargills SWOT Analysis 26-27
5.2. Appendix 2 - PESTEL Analysis for Cargills 28
5.3. Appendix 3 - Porter’s value chain model 29
5.4. Appendix 4 - Cargills retail operations 29

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1.Introduction to Cargill’s Food City Pvt Ltd
Cargills Food City is Sri Lanka’s largest modern retailer. Its pioneer
venture into modern trade in 1983 with the opening of its inaugural
store at Colombo’s staples street that is still considered as the chains
premier location. Today the Cargills is the largest country’s retail
super marketer and spread throughout the island as ‘Cargills Food
City’ supermarkets, ‘Cargills Food City Express’ minimarts, and
the 'Cargills Food Hall' gourmet store in three formats.Cargills Food City has 411 outlets covering
all districts of Sri Lanka as of 31 March 2020(Report, 2019-2020).The company has maintained
3725 new recruits and 10522 permanent employees as at March 2020.Currently consisting
approximately 600 employees with more than 15 years of service (Report,2019 - 2020).

Registered Suppliers - 558 Food Processing Plants - 8

Vision - To be a global corporate role model in community,friendly national development.

Mission - Serve the rural community, our customers and all other stakeholders, through our core
business - food with love - and other related businesses, based on the three main principles of;
 Reducing the cost of living
 Enhancing youth skills
 Bridging regional disparity by enhancing local and global markets.

1.1. Type of Organisation

Cargills Food City Outlets are undertaken by Cargills (Ceylon) PLC’s FMCG and retail sectors,
which completely own by Ceylon Theatres PLC. Through the island-wide network of Cargills
Food City Outlets, the food categories and retail products are delivered extensively. The FMCG
sector encompasses 8 production facilities, namely for vegetables and fruits, milk, seafood,
pharmaceuticals, chilled dairy products, frozen dairy products, frozen meat products,
commodities, vegetable seeds and other dry goods ect (Report, 2020).

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1.2. Size of Organisation
The retail sector of Cargills has contributed 94.66Mn which is 83% of total revenue of their group.

1.3. Product range

Frozen food Liquor
Grocery Beverage and Culinary
Products Household Homeware
Pharmacy Vegetable
Meat/Fish Fruits
Dairy Confectionery
Bakery Service
Bill payments
Services Online shopping
Delivery service
Banking service
Table 01: Cargills Product Range

1.4. Key customer Segment

Attracting customers is one of the hardest parts of running a business,retaining them is even more
challenging. Providing good customer service is important, but that's not enough anymore
(Freedman, 2020).Therefore maintaining a loyal customer base is challenging aspect for Cargills
as well. It has BtoB customer base such as farmers, dry and fresh food suppliers, and household
item suppliers ect.When it comes to Cargills BtoC customer segment, below customer categories
can be identified.

Customer Description Source

Loyal / Gourmet customers Looking for good quality goods, ready to pay a premium
gourmet price.Look for a particular brand name

Smart Shoppers Looking for the best value of the commodity offer.
Above the budget shoppers, successful in evaluating value.

Variety Shoppers/Seekers Looking for new products and brands.

Budget shopper Restricted to budget fixing, low price check and discount prices

Looking for primary shopping needs and expecting best value for
Basic Shoppers the pay.
Table 02: Cargills Key Customer Segment

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1.5. Competitor Analysis

Competitors Outlets Employees Online shopping & Delivery

Keells 102 4900 Yes
Cargills 407 8932 Yes
Arpico 74 4772 Yes
Sathotha 423+ 5000+ Yes
Spars 3 105 Yes
Glomark 7 201 - 500 Yes
Laugfs 40 4000+ Yes
Table 03: Cargills Key Competitors

At present in Sri Lankan context there is a strong presence of major competitors who play and
there is a high barrier to the survival in the market. According to above competitor break down
analysis,Cargills food city stated as number one player in the market whilst recognition vise Keells
as 2nd and Sathosa, Arpico, Laugfs,Glomark and Spars ect.

1.5.1 Porter’s Five force model

Porter’s Five force model of analysis, will be discussed about competitors’ impacts, customer
bargaining powers, customer impacts and rivalry of Cargills.

CARGILLS
Rivalry of the
Industry
HIGH

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 Forces Description
At present Cargills has more than 558 suppliers who supply more
than 20000 products. The strategy of Cargills is to acquire the most
significant business entities that have the negotiating power over
their company. Vegetables, fruits, spices, rice and lot of other items
directly harvested from rural famers with the idea of "Farm to shelf”.
Due to intermediaries and production cost. This is useful for both
Bargaining power of supplier customers and direct suppliers.

This factor is the most significantly effect on Cargills retail business.

Currently this has identified as moderate to high. Constant
Bargaining power of promotion of competitors enhances the bargaining power of
Customers customers. Cargills spend millions of rupees on advertising to
maintain their customer base.

Cargills has maintained its market share through low cost

competitive advantage and other several factors over the past few
years. As a result, it is not easy for entrants to compete in Sri Lanka’s
retail market. Because Cargills has a competitive advantage and risk
of new entry consider as a low risk.
Rival of New Entry

The substitutes of Keells,Laugfs, Arpico lead the Cargills customers.

Even earlier there was no alternative, but today customers have more
alternative to go for.Most of substitute products are poor in quality.
Therefore, there is no major improvement to the challenge.
Rival of Substitutes Substitute risks are mild to low risk.

Table 04: Cargills Competitors Analysis

1.6. Cargills current market position

In supermarket industry has great unique opposite and challenges in its Micro and Macro
environment. Basically technological, environmental, social and economical (macro
environmental factors) have high impact on creating opportunities and strengths to manage
challenges to develop innovative strategies. “SWOT Analysis” investigates the organization
current situation (Appendix 1).
Cargills is one of the largest retailers in the island with wide outlets, its’ strong financial stability
along with years of experience in the industry. Also Cargills follows lowest competitive pricing
strategy. Due to some ongoing pressures like COVID -19 pandemic, high inflation inside the
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country makes high competition among competitors like Keells, Laugfs, Arpico etc. Hence
company should keep expanding its market share by adding value addition to their services and
products through eco-friendly Cargills own brands while applying differentiation strategy depend
on the area and target customer base (Eg: Large scale stores in Urban cities, Small scale convenient
stores in rural areas). Accordingly, Cargills needs to grow up with modern trade concept.
Whilst “PESTEL Analysis” describes the framework of macro environmental factors impact on
strategic management of the Cargills (Appendix 2).

2. Current Business Trends

Most of retail businesses in Sri Lanka become more interest towards e-commerce based digital
sales platform feature in their business. Since March 2020 many retailers have pushed cash less
payments to break the norm and use digital payment apps.For now that one thing that customers
are trusting when it comes to shopping is their own phones. Consumers can conduct entire
transactions on their mobile devices without touching anything else.
“A great online experience is what’s going to attract customers, so Cargills will have to innovate
and focus more on the digital and virtual experience”.

2.1. Idea 1- Digital Loyalty Card payment method

During the COVID -19 lockdown period, most of Sri Lankan customers faced problems to make
transactions without cash in their hand to pay for deliveries at their door step.As a result of it
retailers themselves seeking providing technology solutions towards cashless, self-checkout
system, which could pay online. ‘According to a global consumer survey conducted by Master
Card in April 2020,the Global disruption has led to increased concern from consumers on cash
usage and positive perceptions towards contactless due to the peace of mind that it provides
(Magzter, 2020).
Introducing a “Digital Loyalty Card Payment System” which can link customer’s debt or credit
card to pay directly using one loyalty card and this can be used as a payment method at retail outlet
as well as online payments. At present context when customers use their own debit/credit card for
the payments, the particular bank will be charged a percentage (%) from customer, yet there will
be no additional charges of utilizing this loyalty card, since the Cargills has made an agreement
between the banks. With this system customer receives unique discounts and benefits (Eg: -
Seasonal special card offers, card holder membership duration offers ect). Further there is no hassle
paying by cash, since payable amount directly deducted by linked bank account. In addition, this
card system enables customers to check their transaction history by logging to their loyalty account
online and all the SMS alerts will be delivered to the customer registered mobile device. This
would be considered as “Innovation Based” business idea as Cargills loyalty card is already being
processing as points accumulator system. In order to create better understanding towards
innovation process following table provide pros and cons of this new concept.

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 Advantages Disadvantages

- Essay, user friendly payment method - Technological barriers

- Quick access to the stores when paying - Can misuse if the card gets stolen
for online orders

- Special loyalty card related offers and - Only limited customer base in Colombo city
discounts limits and suburb areas can be reached

- Easily can enhance consumers interest - Limited access to each part of the country’s
and loyalty since this makes their lives outlets(Rural areas would not be interest on
easy and convenient such advance payment methods)

- Better solution to maintain social distance

when there will be pandemic situation
like COVID -19

- Convenient and less time consuming

- Consumer confidence and loyalty

- Safe payment method

Table 05: Advantages & Disadvantages of Digital Loyalty card payment method

2.2. Idea 2 - Cargills Juice Corner

Adding a juice bar concept into Cargills is a reasonably inexpensive way to provide added
value to its customers by providing the convenience of obtaining quality nutrition as they
seek enjoyable, relaxed shopping experience under one roof. Introducing fresh juice bar
shop for shopping customers at Cargills out lets using fresh organic fruits and vegetables
make additional income to the group. As many seeking for more convenient shopping
experience this concept would be a value added to the current business process. Further to
above mentioned loyalty card concept, Cargills enables to make payment to the juice bar
by using digital loyalty card. Moreover, this would be considered as a new product and
service line with “innovation based” idea. Following table provides pros and cons of juice
bar approach.

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 Advantages Disadvantages

 Need to have experience staff to work at

 Additional income to the outlet the Juice Bar

 Best value addition to the shopping  Quality and tasty always considered as
customer number one factor

 Gives enjoyable, stress free shopping  Space issues arise when customer request
experience (All in one store) dine -in facility

 Always need to adhere with Hygiene

 Essay and convenience factors

Table 06: Advantages & Disadvantages of Cargills Juice Corner

2.3 Risk factors associate with Business ideas

Idea Risk Factors

Idea -1 - 100% security cannot be guaranteed

- Tendency to reject by rural area customers due to

technological barriers

- When the system gets clashed whole payment process will

be interrupted

- Rules and taxes incurred from banks

- Some banks won't agree to integrate with the new system

- High cost incurred to maintain software facilitator

- Possibility to reach only selected customers in limited areas

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 Idea - 2 - Hygiene factors always matters

- Unnecessary crowed will be gathered inside the out

let(customers who only visit to the juice bar)

- Need of experience staff who knows the subject(Quality of

the juice may vary based on experience of the staff member)

- Always need to be innovative with the taste since there are

several juice bars in the market to avoid the competition.

- Facilitating all the customers at one time will be a problem

Table 07: Risk factors for new business ideas

2.4 Evaluation and recommendation for viable Business idea

At present context requirement of ecommerce digital payment platform is highly demanded.
Despite the lockdown being lifted in phase, the economy being to limp back to the “New normal”.
Most of retail business are trying to integrate the “No contact commerce” feature in their business,
keeping their limitation and budgets in mind (Magzter,2020).When it comes to shopping,customer
are trusting pay orders online and get delivered to their homes.Threfore getting everything done
under one roof is one of the key reuirqiments in eveyone’s life.This digital loyalty card system
offers many benefits such as convenient and low time consuming, and more specific feature
requirement is,this card system is a better solution to maintain social distance when there will be
pandemic situation like COVID-19.In addition this would support to maintain strong customer
relationship and loyalty towards Cargills.Futher executing juice bar concept inside the cargills
outlets provides customers with enjoyable stress free shopping experince and finest value addition
to cargills product and services.With the presnt trend of demand this case study will rely on
implementing the “Cargills Digital Loyalty Card System’’ as new business idea .

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3. Business proposal Implementation plan for the Digital Loyalty card payment
system

Change management is the discipline that guides how we prepare, equip and support individuals
to successfully adopt change in order to drive organizational success and outcomes. It involves
creating a customized plan for ensuring impacted employees receive the awareness, leadership,
coaching, and while taking new business idea as an innovation process of enhancing loyalty card
system on digital platform as a one-time payment method which could change the system of
Cargills. At initial stage it could be uneasy and challenging. Cargills is now at the forefront of
expansion and popularizing the concept of modern retail, spelling out opportunity to shop in
comfortable and clean surrounding with friendly service. The supermarket industry is projected to
expand at the pace of 25% and plan to attract and serve more and more customers through an
expansion programme (Today, 2018).
Driving successful individual transitions should be the central focus of the activities in
organizational change management (Prosci, n.d).
"Change is the only constant."- Heraclitus, Greek philosopher (tools, n.d)
Through this systematic approach Cargills expect to enhance their quality of service towards
strengthen customers’ loyalty. To be execute effective change management process company need
to consider adjustments will impact to its current processes. Therefore, Cargills mainly focusing
on developing user friendly convenient, secure, cost effective and eco-friendly digital loyalty
system to retain and attract its loyalty customers.Change management also encourages future
company growth by allowing it to remain dynamic in the marketplace (Rouse, 2019).

3.1 Background of new business idea - Business Model Canvas

The Business Model Canvas (BMC) is a strategic management tool to quickly and easily define
and communicate a business idea or concept. This works through the fundamental elements of a
business, structuring an idea in a coherent way (Ebinum, 2016).This tool uses below to give quick
and easy definition to explain/communicate new business idea.

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3.1.1 The Business Model Canvas: Cargills Digital Loyalty Card

Value Propositions
Key Partner Key Activities

-Government and Commercial -Advance technological software Qualitative

banks system for card processing
-Convenience

-Software & system -Time saving

development companies -Eco friendly card material
-Essay access

-Industry expertise to maintain the -User friendly

-Distributors system
-Simplicity

-Sales expertise at point of sales to -Cost effective

-Suppliers create awareness
-Scalability

-Discounts given for, usage of the -Favorable discounts upon

card within the group of companies subscription

Customer Relationships Customer Segments

Mass Market
-In person at point of sale

-Through email alerts -Residence

-SMS alerts to the mobile device

regarding promotions -Urban

-24x7 Online assistance

-Sub urban
-Direct phone call assistance

-Rural

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 Key Resources Channels

-Card swipe portable machines -Point of sale awareness progaramme

-People(Staff) -Publicity through banks

-Internet facility -Mobile stall within Cargills outlet premises

-Hosting -Existing platform

-Electricity -Social media

-Delivery vehicles -Offline advertising (Radio, Bill boards)

Revenue Streams
Cost Structure
-Loyalty card Fee - Revenue from issuing
-Cost of card printing loyalty card (E.g: Rs.350/- per card)

-Percentage(%) to be given to partner banks -Annual fee for card subscription

-Swipe machines maintenance cost

-Using card at other Cargills group of
-Maintenance fee for payment gateway companies companies(Additional income to the group)

-Fee for IT support company -Revenue from delivery fee

-Maintenance cost of delivery vehicles

-Salaries to the employees

-Initial advertising cost

-Electricity

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3.2 Business Development Plan
With present situation of COVID -19 pandemic, Cargills stepping up to create strategies to sustain
entire business with new levels of growth and profitability. Business development plan is a process
that is used to identify, nature and new business opportunities to drive growth and profitability
(FREDERIKSEN, 2020).

3.2.1. Impact of new business idea to the business

By introducing new digital loyalty card payment platform, that makes customers ease with hassle
free, convenient shopping experience as well as this enables to use as a simple one-time payment
method at any Cargills out/online. Further this idea leads to enhance customers’ loyalty towards
name of the Cargills and brand image as well. When it comes to pandemic like COVID-19,
requirement and demand for a cashless payment is increasing day by day. Therefore, it is obvious
digital card payment method would be an ideal solution to the current problem. Easy access, user
friendly and discount based features adding more value addition to this business innovation and
same time increase the revenue margin and customer base accordingly. Therefore, there is a
favorable impact towards Cargills with this new concept.

3.2.2. Vision of new Digital loyalty card payment concept

Empower to access e-payment options that is safe, secure, convenient, quick and affordable”

3.2.3. Critical success factors and strategies

In order to be effective Cargills need to determine critical success factors which achieve its long
term organizational plan. Therefore, following CSF need to be considered when implanting this
new idea.
1.Increase market share through existing customers.
2.Be more service oriented and serve quality products to the customers.
3.Mainating effective KPI’s in line with implementation goals.
4.Regular customer feedback about new Digital loyalty card concept. Their insights can help to
shape company strategy to keep the business ahead of the curve.
5.Maintain speed up response time for online inquiries.
6.Develop long term customer relationship with the trust.
7.Updated the website content for online purchases and user friendly fresh interface.

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At a point of marketing funnel shows how customers make their buying decision and how company
force their target market through strategies towards closing the sale
In order to create about digital loyalty card payment method Cargills has to create “Awareness”
within existing loyalty card members, then “Leads” generate using social media, flyers, point of
sale displays and awareness programmes. Prospects level, follow up with SMS alerts, emails etc.
Finally, successful subscription with new Digital Loyalty card at last level of the funnel and close
the sale.

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3.3 Change Management
3.3.1. Kotter’s Eight Step Model
John Kotter’s 8 step change model is a popular framework for change, and is used across many
industries. It was introduced “Leading Change” which was based on years of research (Athuraliya,
n.d).A change in the process of Cargills loyalty card in digital payment platform considerably
making an effect to an organisation.Therefore using Kotter’s eight step model assists to understand
the correct path of process that should follow to introduce this new business concept.

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 Steps Description

Step 1 : Create Urgency

With COVID -19 pandemic situation and during the lockdown
period in Sri Lanka, most of people came across problem of
using cash and paying by cash for door step deliveries, therefore
requirement of introducing one-time card payment linking to
their relevant bank accounts make easy, hassle free shopping
experience for customers. Also making payments online or
paying by loyalty card at door step is convenient rather using
several credit /debit cards.

Having strong sales oriented team of staff to promote new

Step 2:Creating a powerful Coalition
digital card concept and creating awareness within exiting and
prospecting customer become vital as well as established IT
support, hosting company along with smooth process with all
partner banks will considered as significant to have better
change coalition.

Vision of this new concept is “Empower to access e-payment

options that is safe, secure, convenient, quick and affordable”
Step 3 : Develop a change vision
This vision statement ultimately focuses on convenient and
security as benefits of using this card system. Nowadays people
have compact lifestyle and working in a busy schedule,
therefore the vision of this concept clearly understood the
requirement of present situation.

Step 4 : Communicate the vision for

buy-in
Having strong vision in mind, that makes easy for Cargill’s to
direct its staff and other related process towards vision
statement. Therefore need to communicate and link the vision,
frequently and powerfully, and embed it within everything that
company does in the process of implementing new digital card
concept.

In order to keep in line with vision and building buying in,

Cargills has to check barriers and obstacles to empower the
people who need to execute the vision. In other words achieve
the benefits that company has been promoting is significant to
Step 5 : Empower board based action climb up the ladder.

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Step 6 : Generate short term wins
In order to enjoy the victory early in the process, within a short
frame like 3 months,6 months & one-year company has to have
quick wins. Keeping targets for short term supports to evaluate
the sales success, number of cards been promoted, impact to the
revenue ect.Also small targets is achivable,with little room for
failure.

Quick wins, as described in step 6, is just the start of what needs

Step 7 : Never let up
to be done to achieve long-term change. Therefore, it is important
for Cargills to continue searching for changes. Each success
provides an opportunity to expand on what went right and
recognize what card system should strengthen. To achieve the
vision, it is necessary to continue adding value adds for
continuous improvement.

Finally, the process of new card concept should become part of

the core of the Cargills. Therefore, values must be reflected in
day-to-day work behind the new vision. Meanwhile continuous
efforts should ensure that implementation of new card system is
Step 8 :Incorporate changes into in line with every aspect of the Cargills. That will help ensure the
culture progress is in a solid position in the culture of the company.

Table 08:

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3.4. Financial Plan
A financial plan is essentially an overview of ongoing business financials and projections for
growth estimates. This plan shows present monetary condition as a snapshot of the health of the
business and the prediction of protection plans. It informs short and long-term financial goals and
gives a starting point for developing a strategy (Betenson, n.d).Following table will briefly explain
the financial plan for next three years for Digital Loyal Card implementation.

Year 1 Year 2 Year 3

(Rs). (Rs). (Rs).

Revenue (Rs350 x 800000) 280,000,000 420,000,000 490,000,000

Cost of Sales (93,102,676) (86,800,321) (73,070,458)

Gross Profit
186,897,324 333,199,679 416,929,542

Administration Expenses 33,135,166 33,963,545 35,322,087

Marketing Expenses 52,489,780 53,014,678 56,460,632

Operation Expenses 79,007,620 81,377,848 83,819,183

Total Expenses (164,632,566) (168,356,071) (175,601,902)

Net Profit/Loss 22,264,758 164,843,608 241,327,640

Table 09:

At present Cargills has 1,177,081 number of Loyalty card customers in the system, therefore
considering current loyalty customer base, 1st year target customer based will be 800,000 from
existing loyalty members. Hence revenue generates as 1st year 800,000,2nd year 400,000,3rd year
200,000 cards and membership fee is Rs350 per year. While enhancing Digital card loyalty
members’ loyalty card renewal fee also adding to year 2 & 3 as additional income. Based on that
revenue been calculated accordingly. Cost of sales consist with cost of cards sold, sales force cost
and card distribution cost.

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Assuming administration expenses will be increased gradually by 2.5% in 2nd year and 3rd year
by 4%. Year 01 marketing expenses will be stated as Rs. 52,489,780, but after acquiring
considerable market share in 1st year, it will have reduced by 1% in 2nd year and again increase
by 6.5% in 3rd year in order to maintain market share and awareness. Operational expenses are
gradually increased by 3% year on year(YOY)with the advancement of the processes.

3.5 Operations Plan

An operation plan is a guiding direction for the organisation to follow in order to meet all of its
goals and objectives outlined in the general business plan, which primarily defines all the physical
requirements for the operation of the business (Upcounsel, n.d).The operational process related to
digital loyalty card will be explained below using Porter’s value chain model (Appendix 3),
Michael Porter developed a strategic management tool for analyzing a company’s value chain.
This includes the process from start to finish, Analysis focuses on the systems and activities with
customers (TARVER, 2019).

Support Activities Value Chain

Procurement - Well managed storing system

- Cargills own suppliers and healthy distribution system

- Sales experts for awareness and initial introducing

Human Resource Management programme at the point of sale or within outlet premises
- Using outsource personals at beginning level
- Sales training programme for the staff

- High technological system to integrate banks and the

Technology Development Cargills system
- User friendly card system
- Easy online ordering process

- Systems which coordinate all parts of functions

(Frontline,procument,accounts,marketing&
Infrastructure sales,banks,suppliers and legal entities ect)
- Enough delivery capacity
- Strong network system among outlets

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 Primary Activities Value Chain

Inbound Logistics
- IT system support company, hosting company,
card printing, swipe machine and maintenance
system

Operations - Direct IT system support

- Agreement with leading banks
- Training and awareness programmes to sales and
front office staffs to increase sales of number of
cards

Outbound Logistics - On time deliveries for online orders

- 24/7 customer assistance towards operating system

- Fulfillment of accurate order placement made

online
- Well maintained distribution network(Vehicles)

Marketing & Sales - Social media advertising

- Point of sale advertising awareness programme
- Offline advertising (Bill board, Radio)

Service - SMS alerts to the phones when using loyalty card

- 24/7 online assistance
- Free assistance for card usage
- GPS system when delivering goods(Customer has
no hassle to give directions to their location)
Table 10:

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3.6. Conclusion
This case study report has critically evaluated the two business ideas. After analyzing the factors,
the selected business idea considered as an important and useful during the current COVID-19
pandemic situation. Introducing “Digital Loyalty Card” payment method become more interest
towards ecommerce based sales platform feature, as many retailers and customers’ awareness
towards cashless, essay payment process when shopping. Therefore, this new business idea
concept enables to enhance Cargills brand loyalty as well as market share together. Further many
people willing to enjoy hassle free shopping experience since everything become digital and
adhering to the new normal in payments in digital. It is an interesting time for the cards industry
and for issuers there is a similar narrative to that of legacy banks and digital transformation. There
have been several triggers of innovation in recent years, very much accelerated by the current
pandemic and the different demands and transitions that have been introduced to the retail industry
in various ways, as well as to the consumer base (Finextra, 2020).
As this payment card is a user friendly payment method along with the features for quick access
for online orders and especially better solution to maintain social distance when there will be any
pandemic situation. Convenience and less time consuming enables to attract awareness more.
Therefore, digital loyalty card would significantly be an opportunity to ensure that innovation
within Cargills group.

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TARVER, E. (2019, May 26). What Are the Primary Activities of Michael Porter's Value Chain?
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 Strengths Weaknesses

- Goodwill and reputation - Lack of trained employees at outlets and

operation levels

- Organized and clear directions by - Poor leadership at outlets and operation levels
Senior management

- Large network of Island wide outlets - Storage issues at outlets

- Strong logistics facilities - Cargills has - Lack of emphasis on other retail formats (Big
one of the country’s largest city, Express, Book city)
warehouses.

- More than 5000 brands of items - Drop in level and quality of service standards
(Housekeeping, speed, accuracy, courtesy)

- Having strong recognized brands - Storage issues at outlets

- Strong relationships with leading - Parking issues at some outlets

suppliers (Eg:-Uniliver Ceylon, Nestle
Lanka, Prima, Stassen ect)

- Assets and strong financial stability - High staff turnover

- Years of experience & heritage - Delay in payment to small suppliers

- Direct link to farmers and rural sector

with their own growing plantations

- Lowest, competitive price

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 Opportunities Threats

- Growing with modern trade through - Global economic downturn due to COVID-19
Urbanization and Modernization pandemic and high inflation rate inside the
country.

- Possibility of expanding supermarket

Chain in North and East provinces of the - Government policies and pricing standards
country

- Government high rates on value added tax

- Adding "Value addeded"services through
more different partnership
- Sustained competition growth such as Keells
- Launching more Eco friendly Cargills super,Laugfs,Arpico and Other new super
own brands market concepts

- Opening large scale stores in urban cities

and small scale convenient stores in rural - Raising customer concerns on service quality
areas. and standards(Mainly in Urban areas)

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 Political - Fluctuating VAT
- Government controls on goods transportation
(Eg: -High transportation cost to deliver vegetables from central
province)

Economical - High inflation impacts on consumer’s buying behavior

- Unstable method of pricing for goods
- Strong expenses for import and export TAX

Social - Consumer interest towards organic fresh products

Technological - Advance ERP and MIS technology to manage the operations

- Online shopping facilities
- Home delivery systems

Environmental - ECO friendly business process

- Increase in consuming natural food
- Weather and Climate changes

Legal - Product quality certifications

- Food safety acts
- Consumer protection law

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 : Porter's Value Chain Model

(Source : Agbolad, 2020)

Cargills Retail Operations

(Source: Report C. A., 2019)

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