DMart in 2023: From Offline Triumphs to Online Trials

In December 2023, Avenue Supermarts Limited, operating as DMart, celebrated its robust performance in the offline retail sector in India. Since its establishment in 2002, DMart had built a sizable network of profitable offline stores, showcasing industry-leading metrics. However, its online subsidiary faced losses, prompting the management to confront pivotal decisions for future expansion. The management grappled with the choice of expanding its physical stores and deliberated on the strategic approach: Should it broaden geographically or deepen existing clusters? Simultaneously, they confronted the challenge of resource allocation for the online business amid intense competition and recent financial setbacks. DMart’s leadership stood at a crossroads, weighing options to sustain offline success while addressing the complexities of online market dynamics and profitability.

The case is designed to be used in undergraduate or graduate courses on strategic management. It illustrates the importance of choosing a business-level strategy that is a good fit for the industry economics and demonstrates how a clearly conceived and effectively implemented strategy can lead to strong results. The case can also be used to illustrate the sustainability of a competitive advantage, the stickiness and context specificity of a competitive advantage in terms of the challenges in replicating it even in a closely related area (e.g., from offline to online retail), and the need for even a successful business strategy to be dynamic. After working through the case and assignment questions, students will be able to do the following:<br><br><ul><li>Understand how successful competitive positions are built in emerging economies.</li><li>Appreciate the importance of effectively implementing a business strategy through consistent and coordinated sub-strategies.</li><li>Understand the trade-offs between various strategies, and recommend a strategic alternative based on evaluation of the pros and cons of the various alternatives.</li></ul>

• cost leadership
• Indian retail
• online retail strategy
• competencies
• competitive strategy
• offline expansion
• geographic expansion
• cluster expansion
• resource allocation
• market dynamics
• profitability analysis
• business-level strategy
• strategic management
• emerging economies
• competitive advantage
• sustainability
• industry economics
• strategic alternatives
• dynamic strategy
• retail sector