Question 21.
Sundaram is a happy man now. He has managed to get contracts with two more nearby gated communities. He feels like the grocery king of the suburb. However, his happiness is short-lived as Rush’em, a new startup, begins making waves among gated communities. This app-based startup promises to deliver any grocery item within 15 minutes, leveraging its own large warehouses. Earlier, Rush’em was confined to the main town, but now, the startup has expanded its delivery services to the suburbs, including gated communities where Sundaram operates. Of course, for the suburbs, Rush’em promises delivery within 60 minutes, given the distance. Though not an official slogan, the rumour in the market is that Rush’em’s founder inspired her employees by shouting “Rush’em or Crash’em, but Push’em through that door!” Sundaram started losing business to Rush’em. He felt rushed, pushed, and was wondering if his business would come crashing. What should Sundaram BEST do to ensure that his revenues do not come down due to Rush’em?
Question Explanation
The correct answer is Option C, as it offers a practical and competitive solution to the challenge posed by Rush’em. By employing a few helpers to deliver products within 10 minutes across the three gated communities, Sundaram can leverage his proximity advantage and provide a hyper-local, fast delivery service. This approach ensures convenience for his customers while capitalizing on his established presence and reputation. It allows Sundaram to directly compete with Rush’em’s delivery services while avoiding the heavy infrastructure costs of setting up a startup like Rush’em.
Option A, ignoring the problem, is a poor strategy. Rush’em has already expanded to the suburbs, and Sundaram is losing business to them. Not acting on this threat could lead to a steep decline in revenue and eventually make his business unviable.
Option B, starting his own delivery startup "Finish’em," is impractical. Competing directly with Rush’em in terms of warehouses and technology would require significant financial investment, operational expertise, and infrastructure, which Sundaram likely cannot afford. Additionally, such an initiative would take time to scale, leaving him vulnerable to continued revenue losses in the interim.
Option D, demanding that his rent be reduced to one-third, is unlikely to succeed and doesn’t address the core issue. The residents’ association cannot directly regulate Rush’em’s operations, and Sundaram’s rental arrangement was made through a competitive bidding process. Furthermore, rent reduction does not help Sundaram retain customers or address their preference for fast deliveries.
Option E, offering discounts on every product, would further strain Sundaram’s profitability without guaranteeing that customers would stop using Rush’em. Discounts alone won’t solve the convenience advantage Rush’em offers through its delivery service. Customers may still prefer the ease of doorstep delivery, even at slightly higher prices.
Hence, Option C is the best solution. By introducing a fast delivery service within his gated communities, Sundaram can counter the threat posed by Rush’em while leveraging his existing infrastructure and customer base to maintain and grow his revenue.
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