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M2022HRM009 - Environment Analysis
M2022HRM009 - Environment Analysis
OF LICIOUS
Licious operates on a farm-to-fork model i.e., it procures the necessary meat directly from the
producer who in most cases is a farmer/animal-rearer. This is done in order to meet the stringent
quality standards. The procured meat goes to the processing centres where the meat is cleaned, cut
into different sizes and finally, packaged. Licious currently has 5 state-of-the-art processing centres
at Delhi, Mumbai, Bengaluru (2 here) and Hyderabad. While quality checks are conducted right from
procurement, the processing centers conduct over 150 stringent quality checks to ensure only the
best reaches their customers. From the processing centres, the packaged products are sent to the
distribution centres based on customer orders. Thus, the hub and spoke model is followed here,
wherein the Processing centres serve as the hubs to the distribution centres.
Environmental Assessment:
The environmental assessment of any organization is key to ensuring its growth. An understanding
of the stakeholders is essential to make changes in the style of business or the processes involved or
any other factor intrinsic to the business. Licious being a D2C company, it has a high customer-
centricity- which in this case are the households that consume meat and related products. The
following is an analysis of the various stakeholders, their characteristics and whether conditions are
favorable for the growth of the organization.
1. The Customers: Licious operates in the D2C space and thus households determine the profitability
and success of the organization. Currently, the meat/ seafood market is heavily skewed in favor of
unorganized markets with 90% of the consumers sourcing their requirements from these markets.
This can be seen as both an obstacle and an opportunity. It is an obstacle because the traditional
unorganized markets are successful because they are ingrained in the rural tradition and because of
the notion that the freshest meats are obtained closest to the source. However, they present an
opportunity in terms of an untapped market.
Moreover, after the pandemic hit the nation, there has been a fall in trust in traditional wet markets.
This leads to favorable conditions for the growth of the organization.
In addition, it is predicted that more than half of India’s population will be urban by 2050(UN DESA,
2014). This serves as an opportunity to the organization since the target audience of Licious is the
urban household.
2. The Investors/ shareholders: In 2021, Licious became the first ever D2C company to become a
unicorn. It achieved this due to funding by some Asset Management Companies like IIFL AMC. This
additional round of funding has helped to spur growth of the organization. Licious will probably use
this fund to expand its presence in East India in general and Kolkata in particular.
However, fears of global recession in 2023 and the spiking of US Fed rates will lead to an outflow of
capital from India and this could throw a spanner in the works for Licious’ expansion plan.
There are also plans to go Public in 2023 or 2024, which will further increase the sources of funding
and hence growth of the organization.
3. The employees: As of 2021, Licious employed over 3500 employees in its various roles. The
employees are key to ensuring the quality of Licious products and their timely delivery.
In the start of 2021, probably owing to mounting losses, Licious introduced a unique ESOP for nearly
1/3rd of its employees. The ESOP was a one-of-a-kind instrument with the defining feature of
‘everyday vesting, any day liquidation’. This allowed employees immense flexibility when it came to
ESOPs and also helped reduce the cost to the company.
Owing to the tech boom in the country, it will be easy to attract talent for tech roles in the event of
future expansion. In addition, the pervasiveness of gig and platform work implies that there will be
no shortage of delivery agents in the future.
4. The competitors: The major competitors in the space are Fresh to Home, ZappFresh, etc. These
companies have not been as fortunate as Licious when it comes to funding. However, in case they
receive any round of funding, they will become very strong competitors. What is noteworthy about
Licious is that it has diversified to the ready-to-eat segment and spreads/marinades segment. Such
diversification could probably help it stay ahead of the curve. Some possible areas into which Licious
can diversify are exports, processed meats, B2B operations, etc.
5. Government Policies: The Government has pledged to achieve a $5-trillion economy by 2024. One of
the components of this plan is to increase employment and promote start-ups. The Department for
Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, India, has various
schemes to encourage start-ups including easy access to credit, tax rebates, etc. It is believed that
such policies will continue in the future too due to the requirement to decrease unemployment.
Hence, the political climate is well suited for the growth of the organization.
In short, conditions are ripe for the growth of the company. However, some headwinds can be faced
because of:
However, the same can probably be circumvented by innovation, diversification and aggressive
marketing.
References:
1. FAQ's – Licious official website( https://www.licious.in/faq)
2. Licious Revenue and Sales Model( https://jungleworks.com/licious-business-and-
revenue-model-explained/)
3. Licious expansion plans( https://www.foodinfotech.com/licious-expands-its-footprint-
in-east-beginning-with-kolkata/ )
4. Licious innovative ESOP( https://www.vccircle.com/post-investment-due-diligence-
in-india-is-crucial)