Ref: IMD-7-2249

Case study

Reference: IMD-7-2249

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Matas (A): Will the Danish retailer’s transformation ignite growth?

Goutam Challagalla

By Professor Goutam ChallagallaGoutam Challagalla and Philip Charles Zerrillo

This case details the struggles of a traditional retailer (Matas) wrestling with the changing retail landscape. The Matas management team recognizes that the company’s offline retail business is under serious pressure. Top-line growth has flattened, and bottom-line profitability has declined. The online market is expanding rapidly but is a tiny portion of the business. The team is aware that the company needs to grow the online business. However, this shift will be financially difficult because the margins for the online business are near zero and it represents less than 3% of total business. As the market leaders, whatever Matas management chooses to do will inevitably affect its core “in-store” business. The company needs the cashflow from the in-store business to pay dividends to investors. In this situation, the new CEO sets out three priorities (i) reignite store growth, (ii) build new growth paths, and (iii) grow online. Investors are unhappy with this direction and the stock has sunk to an all-time low. The question is whether this new strategy will enable Matas to survive or transform?

Learning Objective

  • Demonstrate the difficulties in changing a corporate strategy despite an observed need to do so
  • Learn the difference between online and offline business models and the operations, skills, investment and metrics that lead to success
Keywords Digital Transformation, eCommerce, Execution, Online Sales, Online Shopping, Retail, Strategy Deployment, Strategy Development, Transformation
Settings Denmark
Matas, Retail
2014-2020
Type Field Research
Copyright ©IMD 2021
Language English
Related material Teaching note, Video
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Reference: IMD-7-2249

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Reference: IMD-7-2249

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