Dabbawala is deemed as the pioneer of the concept of home cooked food delivery system in India. The business comprises of food delivery personnel who deliver the home cooked meals to the customers, primarily in Mumbai. The following section details the effect of PESTLE analysis of Dabbawala from the external environment on the business operations.
Political Factors
The political factors determine the ease of business for the company as the delivery of food is dependent on the stable situation in the region. In case of protests or social unrest in the country, the food delivery process is impacted as the completion of orders becomes difficult. The availability of transport and road blockages are common issues that the company can face.
The policies developed by the government can affect the business operations of the company. For instance, during the pandemic, Indian government had imposed restrictions on the public transport system, allowing only those workers access to the local railway who were a part of the essential work segment. This policy made it difficult for Dabbawala to carry on smooth delivery (Newsd, 2020).
Other political factors that have the potential to influence the efficiency of the operations and profitability is the government policies pertaining to tax, presence of corruption that can mar the transparency of the company operations. Favorable tax policies can help the business in growth.
Economic Factors
The economic situation of a country effects the way business operate as the raw material prices and the manufacturing cost needs to be adjusted according to the economic changes. Inflation is one such economic factor that causes an increase in the prices of fuel, food items and other related commodities.
Both of these factors are critical for the operations of Dabbawala. The delivery charges had to be revised by the company, considering the increasing price of food items and the additional expense incurred on transportation (Hindustan Times, 2014). Previously changes made to the delivery charges were minimal, but the sudden price hike lead to an increase of Rs.100/ month.
In addition, the rising inflation can affect the buying power of the people, who may consider alternate lunch options that they deem as more affordable. The changing economic dynamics in India can inhibit or support the growth of the business, influencing the demand of orders from the customers.
Dabbawala focuses on delivery of food to the employees working across the region. The influx of order for the tiffin delivery service is also dependent upon the employment rate of the country. In case of high unemployment rate, the people, the demand for such food delivery system will be negatively impacted.
Social Factors
Population changes such as increasing population opens up opportunity for growth as the demand for tiffin service is likely to increase. Around 50% of the orders are linked to the school segment, thus comprise a significant portion of the business for the service. The increasing number of women in workforce further indicates increasing demand of the service.
The changing patterns of customer demand also carry implications for the food delivery system. The preference of people for home based food is a prime feature that drove the business toward success. In case if the attention shifts to fast food or restaurant-based meals, the number of orders gained by the Dabbawala service can decline.
COVID 19 has brought significant changes to the social interaction, which effected the way people performed their work duties. With the rise of work from home workers and closure of offices, the demand for food delivery at the workplace declined. As a result, the workers linked with Dabbawala faced significant decrease in the orders they received (Bhansali, 2021).
Technological Factors
The business model of Dabbawala was based on coding and management of orders, without any use of IT. However, the changing food preferences, rise of online delivery combined with the pressure from lockdown, has created new business opportunities for food delivery. To stay relevant with the current industry trends, food delivery services needs to have online presence.
Considering the way technology could help the service to operate more effectively, the business has decided to embrace digital presence. People in India have access to different online food delivery options, and introduction of Central Kitchen is an addition to the food delivery options. Moreover, Dabbawala has included other services such as electronic registration of agreements (Lal, 2021).
Another development for the service is evident in the form of partnership between Dabbawala and other food vendors. However, the lack of familiarity of the delivery personnel with technology remains a significant obstacle for the service. Since a majority of the people involved in the delivery system are illiterate, merging technology with the business model is complex.
Legal Factors
The legal issues and conflict between customers and delivery providers are handled by the Dabbawala association. The labor laws are related to issues such as hiring, remuneration, code of conduct and employee interaction with customers. Furthermore, informing the concerned authority about leave of absence is also managed within the legal framework.
Another example of legal factors is maintaining the quality of service offered by the business to the customers to avoid any lawsuits. In addition, the dealings with the workers also need to transparent as failure to comply with ethical business can lead to legal action. An ex-chief of Dabbawala had to face legal issues due to involvement in exploitation of the delivery workers.
Environmental Factors
Organizations in India are concerned with reducing the harmful impact on the environment and minimizing the gas emissions. Considering the case of Dabbawala, the business operations reflect pro-environment business practices as the delivery system involves the use of cycles for dropping the food boxes to the customers,
The use of cycles is deemed as an environment friendly mode of transportation. Moreover, the metal containers that are used for the delivery of the lunch lower the harm to the environment. Other food delivery services use disposable boxes, however Dabbawala has a system of providing lunch in tiffin and collecting empty tiffin, reducing wastage.
Conclusion
Dabbawala has been able to withstand the political changes in the country, indicating a resilient business model. Changes in the economic environment, along with the massive impact of pandemic had negatively affected the business. The service has incorporated technology as a part of the delivery system, showing the effect of emerging trend of online food delivery.
References
- Bhansali, A. (2021). A struggle for Mumbai’s dabbawalas: ‘Covid-19 has ruined us’. Indian Express. Retrieved from https://indianexpress.com/article/cities/mumbai/mumbai-dabbawalas-covid-pandemic-7387162/
- \Hindustan Times (2014). Mumbai ‘dabbawalas’ hike delivery charges. Retrieved from https://www.hindustantimes.com/mumbai/mumbai-dabbawalas-hike-delivery-charges/story-4t0ZET67avBh2dTXwftU8K.html
- Lal, N. (2021). Mumbai’s ‘dabbawalas’ go digital to beat COVID-19. Nikkei Asia. Retrieved from https://asia.nikkei.com/Life-Arts/Life/Mumbai-s-dabbawalas-go-digital-to-beat-COVID-19
- \Newsd (2020). Mumbai’s dabbawalas threaten protests, need access to local trains. Retrieved from https://newsd.in/mumbais-dabbawalas-threaten-protests-need-access-to-local-trains/