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Case Study

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

By Goutam Challagalla and Philip Charles Zerrillo

15 pages

October 2021

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Reference: IMD-7-2249

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

Strategy Development, Execution, Transformation, Digital Transformation, Retail, Online Sales, Online Shopping, eCommerce, Strategy Deployment

Settings

Denmark
Matas, Consumer Services, Retail
2014-2020

Type

Field Research

Available Languages

English

Related material

Teaching note, Video

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This case study is part of a series

Matas (A): Will the Danish retailer’s transformation ignite growth?
Matas (B): Will its digital transformation strategy succeed?

This case study is part of a series

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