Subject category:
Strategy and General Management
Published by:
International Institute for Management Development (IMD)
Version: 13.04.2022
Revision date: 09-Jun-2022
Length: 15 pages
Data source: Field research
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Abstract
This is part of a case series. 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?
Time period
The events covered by this case took place in 2014-2020.Geographical setting
Country:
Denmark
Featured company
Matas
Employees:
1001-5000
Turnover:
USD 656 million
Industry:
Retail
About
Abstract
This is part of a case series. 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?
Settings
Time period
The events covered by this case took place in 2014-2020.Geographical setting
Country:
Denmark
Featured company
Matas
Employees:
1001-5000
Turnover:
USD 656 million
Industry:
Retail