MBA 's WORK ON DABBAWALA'S

Analysed from the Michael Porter's Five Forces Model

i. Threat of new entrants:

According to Porter, the threat new entrants is dangerous to any organisation as it can take away the market share the organisation enjoys. Started in 1880, the experience curve of the 125-year-old dabbawalla service serves as a huge entry barrier for potential competitors. Besides, it would be difficult to replicate this supply chain network that uses Mumbai's jam-packed local trains as its backbone.

ii. Current competition:

Porter's five forces theory states that strategy is determined by a unique combination of activities that deliver a different value proposition than competitors or the same value proposition in a better way.The dabbawallas do face competition from fast food joints as well as office canteens. However, since neither of these serve home food, the dabbawallas' core offering remains unchallenged. They have also tied up with many catering services and hotels to cater to the vast number of office goers.

iii. Bargaining power of buyers:

The delivery rates of the dabbawallas are so nominal (about Rs 300 per month) that one simply wouldn't bargain any further. Also, their current monopoly negates any scope of bargaining on the part of their customers. Thus, we encounter a perfect win-win combination for the customers as well as the dabbawallas.

iv. Bargaining power of sellers:

The dabbawallas use minimum infrastructure and practically no technology, hence they are not dependent on suppliers. Since they are a service-oriented organisation, they are not dependent on sellers to buy their product. Hence, sellers do not assume any prominence as would be the case in a product-oriented company. The strategy map framework in Porter's theory allows companies to identify and link together the critical internal processes and human, information and organisation capital that deliver the value proposition differently or better. Human capital is the greatest driving force in the dabbawalla community; as a result, they are not dependent on suppliers or technology, thus negating the seller's power in the equation.

v. Threat of a new substitute product or service:

As substitutes to home cooked food are not seen as a viable alternative in the Indian scenario, the threat to the dabbawalla service is not an issue at least in the foreseeable future. This gives them a leeway to probably expand their already existing network into newer cities as demand increases in these places as well.

Here is a clutch of statistics that reveals the task that the dabbawallas are up to: -

History : Started in 1880
Average Literacy Rate : 8th Grade Schooling
Average Area Coverage : 60 Km per Tiffin Box
Employee Strength : 5000
Number of Tiffins : 2,00,000 Tiffin Boxes,
i.e., 4,00,000 transactions every day
Time Taken : 3 hours (9 am - 12 pm delivery of carriers,
2 pm - 5 pm collection of empty carriers)
Cost of Service : Rs. 200/- - Rs. 300/- per month
Turnover : Rs. 50 crore per month approximately