Ola’s Business Strategies and Market Share
Discuss about the Business Strategies For Satellite Systems.
On-demand cab services have become very popular in India. With the world wide technological disruption that was caused by Uber, its competitor in Business, Ola set its sight on improving digital business technology. It enhanced its business strategies by exploiting the search, social and mobile ecosystems within the online marketplace. Value configuration in online business operations is also enhanced while supporting value-adding processes. Different customer segmentation has increased businesses while increasing destination sites in the business. Ola has continued to be a market leader in on demand cabs businesses by adding better strategies and focusing on customer satisfaction aspects. Digital environments have caused disruptions in the market place as is the testament by increased competition due to digitization of business and mobile applications(Bu?low, Ahmon and Spencer, 2011). Although there are many challenges and threats that affect this type of business model, the important thing to take into consideration that exploitation of the digital environment has led to increased efficiency in business.
The digital environment has greatly affected any business model in the cab industry. Through the use of mobile application, Ola users have gained access to TaxiForSure cabs also called the TFS. As a private business, it is a pure play virtual business that has both physical and virtual aspects although mostly it uses the mobile app for digital use. Due to increased competition from Uber, Ola has been acquiring small firms as a business strategy aimed at strengthening its position in India. In March 2015, Ola acquired TFS for approximately $ 200 million. In the same year it acquired Geotagg, which is a trip-planning company. With this acquisition, it strengthened its applications systems affecting both the macro and micro environments of the business(Scott, 2008). In December of 2017, Ola made the acquisition of Food panda and Ridlr a public transport ticketing company for an undisclosed fee. This shows the strategic positioning of business aimed at improving the digitization process.
Ola provides other services that range from economic to luxury travel. However, due to its efficiency in cab services used by its mobile app, it commands a 60% of indias market share with 150,000 bookings a day.
The environment is a factor that influences the overall competitiveness of companies in a given country or region. Three steps that show how the general environment affects the performance of Ola Company, identifying the relevant economic and social factors and assessing the variables with mechanisms like the PESTEL analysis(Chhokar, Pandya and MeenaRaghunathan., 2004). The analysis of the general environment will allow the report to identify the most important variables that affect Ola so that the business can decide which the most appropriate digital strategy to follow is.Macro Environment: It will be constituted by all those factors that cannot be controlled and that directly affect the company.
Impact of the Digital Environment on Ola’s Business Model
Political factors, Technological factors, Environmental factors, Demographic factors, Economic factors, Cultural factors.
Micro Environment: Non-controllable environmental factors or forces that have a general impact on the activity of the company and the rest of the companies.
Suppliers, Company, Third Parties, competitors, Intermediaries, Market.
It is important to analyze the Macro and Micro environments and establish in our action plan the different actions that we will take to be able to act in the different situations that our company is in. First you must define the environment of your business that you will study later. To do this, select at what level you are going to carry out the study. This first delimitation is important to discriminate the type of information you will need to perform your analysis(Gifford, 2013).
Secondly, is identify which variables have a significant impact on the activity of Ola and which do not. For this, the PESTEL analysis is very useful with the Political, Economic, Sociocultural, Technological, Ecological, Legal dimension.
Perform the Pestel Analysis
The PESTEL analysis helps to define the dimensions and the variables that compose them and then evaluate them. This assessment will provide a strategic profile with a general overview of the environment (Technology, 2013).
India’s political climate is not volatile. It is democratic with a population if around 1.3 billion people. Digitization will thrive very much in a tranquil political environment. Most of the business run in India thrive due to a large population. Without political interference in business Ola can only grow and expand to other towns in India. The government has also led in setting a political agenda that aims at improving and growing local businesses like Ola.
India is among the emerging economies in the world. In fact, it belongs to a special category of countries called BRICK that are the next frontier in terms of world economies. Since the economy is expanding and growing rapidly, Ola will only grow commensurate to the economic growth. The economy is also facing a lot of changes in digitization with many Indians embracing digital platforms to grow businesses. The economy is also important in providing structures that affect the business model(Green and Basher, 2012).
This is the general impact of the society to the company. As an external factor in business, the society affects a business positively or negatively. A digital business strategy which includes a mobile app in Ola cabs is now 60% of the market share and Uber takes the remaining share.
Macro and Micro Environmental Factors Affecting Ola’s Performance
This is the most important factor in digitization process. A disruption in the cab industry in India has been brought by application of mobile technology and using the same strategy as Uber. Technology eases control of business operations and enhances efficiency. Using digitization strategy, technology keeps on improving from one level to another. Ola is building electric cars to act as cabs and therefore increase competition to uber (Business environment, 2009).
This means the entire environment. A list of groups or dimensions to consider and include the key environmental factors. The ecological chart is a simplified example of the result of a PESTEL analysis. The tips on the left indicate the threats and the tips on the left the opportunities. But before taking assessments you should bear in mind that similar characteristics of the general environment can have different effects in different industries, that the impact of the environment varies even among companies within the same sector and that not all variables affect a relevant sector in a relevant way so you have to differentiate the relevant ones.
These are the laws that legislated to help in maintaining a business framework that works for all. Laws concerning digitization in many businesses are kept to prevent fraud and reduce any chance of private information leaking. In India legislation is done to control dominant business practices while creating a business environment that is free for all to participate.
In order to survive, the company must focus its efforts on the environment. The environment is everything outside the company. The environment are factors that affect the company directly or indirectly and in some cases will be uncontrollable (Lange, 2010).
Suppliers or suppliers: These are the companies, persons or entities that provide the company with all kinds of inputs (machinery, raw materials, personnel, etc.). They directly influence since they can give a competitive advantage to the company (quality, reduction of costs, more qualified personnel, innovation, etc). Intermediaries of the company: These are the companies, persons or entities that intervene in the promotion, communication and sale of the company’s services(Seth, 2015).
Company markets: The different targets to which the company can be directed.
Competitors: Knowing about them in order to differentiate ourselves and give our value proposition to them.
Third parties: Different from competitors, may affect the activity of the company.
The company: The Company is part of the micro environment, there are companies that are divided when making decisions, and so must take it into account.
PESTEL Analysis of Ola’s Business Model
Ola has very many competitive advantage to its competitors like Uber. The first is the advanced mobile app that has led many to prefer Ola to any other company. Being a local company which was founded in India, it will find support of many locals than its competitors. The drivers are also very friendly and know how to take care of their customers.
Threats in this case can be associated with technology advances, many industry players enter the market with the aim of growth and profit but with an increased advancement in technology, many organizations shut down. Threats can also be from fellow competitors (Shareef, Dwivedi and Kumar, 2016).
Demographic factors: the demographics of Population trends. Birth rate, mortality, migratory movements, etc.
Economic factors: The interest rate, GDP, risk premium, economic cycle, etc.
Cultural factors: The beliefs, norms and values ??that are shared by society.
Technological factors: Companies must be aware of technological advances. They must be at the forefront of technology applied to the company.
Political-legal factors: Regarding the legal referent about the company and decisions to be made.
Environmental factors: It refers to raw materials that affect environmental factors, scarcity of resources.
Companies are affected by changes in the environment that constitute a general background that conditions the activities of organizations. Changes can be good or bad. That is why whenever planning is done within the organization, the strategy must be well developed for continuous improvement.
Companies need to obtain information from the environment in order to know the interrelationships of the variables, their influence on the market of the organization, to take advantage of opportunities or positive trends and avoid potential threats (Annette Runte., 2015).
The information obtained must be reliable to make better decisions in the company.All of us always hope for a better future and for this, the analysis of the generic environment opens the panorama. From my point of view, the analysis of the generic environment opens several doors on the way to success for the business, we always have to think big and from different perspectives to have success in life.
The supply chains are digital in operations. Although cash can be paid in the offices of Ola, most people use their E-wallets to pay for cab services. This study shows the intersection of digital business models and the management of supply chains. Digital disruption has empirically disrupted B2C interdependencies. In the transport industry, the industrial sector channel structure has been compressed to only the cab driver and the client with the mobile app acting as the intermediary. The physical contact is only initiated upon the driver accepting to carry the client. Firms like Ola can still add value through improvement of their mobile application. The payment through mobile app and requesting a Ola cab enables the company to elicit aggregated client demand which in turn identifies optimal pricing strategies. The company should employ further resources in improving the mobile app to ensure their strategic positioning in the supply chain is not diminished (Shareef, Dwivedi and Kumar, 2016).
When doing customer segmentation, the report looks at the behavioral characteristics in online tendencies based on age, gender, interests and behaviors of spending. Ola and uber noticed that when a person wanted a cab, he or she had to hustle for it. The idea of using a mobile app therefore emerged. The customers are segmented according to how they use the Ola cabs. It was noted that the young adults use the Ola more than any other customer segments. They are also likely to be online most of the time. They have peculiar spending habits but mostly ride the cabs. The old are not into this so much. The Pareto principle says that in marketing the focus should be put more on the 20% who use the services frequently rather than the 80% who are not regular users.
Ola is exploiting the digital capabilities it has to succeed in the digital environment. The organization and the sector are getting most of their revenue streams from cab payments which is digital. The transport sector is a big sector and has massive competition, digitization has helped to pull revenue streams and increase income that could have gone to competition. Digitization means that revenues can be traced and projected due to the calculation of all prices.
The online market place for the organization is the map for digital marketing strategy and strategies used by the internet to enhance marketing. The online value proposition is the client of Ola value proposition. It is important to communicate clearly how the online experiences are and give the mobile application an online presence. Market place analysis is important as it give the organization a chance to give feedback while improving on the mentioned weaknesses cited by the client. It also helps an organization like Ola in formulating strategies for marketing and the analysis on the online market place.
The organization is exploiting the search social and mobile ecosystems by improving its legitimacy through a blending of both online and offline actions. It is also improving its relations with the clients or the feedback giver while improving the services given. Ola is improving on how the firm can use the digitization avenues to add more clientele and to add more services so as to increase revenues. The relevant customer segments include the young and the old and the destination sites is mostly in local towns like Mumbai , Bombay and Delhi(Annette Runte., 2015).
Value configuration in operation and the place of digital in the support of value adding processes is important. In this case, value is added by improving customer feedback and improving the services. Digitization has led to improved service delivery due to the global audience that are always asking for better services.
There are many strengths in that the web place is fast to maneuver and use. The app has reduced a lot of time wastages to hustle for a cab, the use of websites and mobile app improves efficiency and customer satisfaction where h the clients get everything at one stop shop. It is important to note that all feedback can be posted in the website and therefore improvement is paramount on the side of the company. Another advantage is that a website or app is always with you. It is convenient and reliable depending on the strengths of the network.
The weaknesses compared to one direct competitor is that in case of electricity loss in which mobile phones and computers are highly dependent on, a client will be inconvenienced. It does not favor any client who is computer illiterate and a direct competitor is more visible than the app. Many people also trust the one direct competition due to the physical presence and availability(Liu et al., 2007).
Conclusion
Like any other collective development strategies, digitization works to support the mission of on organization like Ola. It is difficult to build and sustain a digitization program if the organization has no clear sense of the cause and effects. The future is digitization, and just like Ola disrupted the market by embracing digitization, the sector as a whole should gear towards embracing technological projects, building them and sustaining them. Certain approaches of digitization work for different sectors of the economy and not all strategies are scalable. Modest strategies may be the best avenue to start and embrace technology. Mobile apps and websites use to outsource an Ola cab is the way to go. Digitization is the way to go as it improves value. The importance of business environment digitization is that it reduces costs of operations, increases benefits to the clients by improving customer satisfaction and helping the organization to look ahead if it is to be sustained over time. Digitization must be an integral part of the organizations mission, vision and goals(Robinson and Robinson, 2005).
There are many decisions that are involved in digitization processes. The following are the recommendation for a good digitized strategy; develop an easy mobile application or website that is easy to maneuver and navigate, develop clear protocols for digitization processes, taking simple steps in decision making processes, clarify on the target market and customer segment, build coherent collection systems in the application and ensuring that customer feedback is worked upon. Digitization of Ola led to improved business in India while ensuring that clients got the best services.
There are many strengths in that the web place is fast to maneuver and use. The app has reduced a lot of time wastages to hustle for a cab, the use of websites and mobile app improves efficiency and customer satisfaction where h the clients get everything at one stop shop. To improve and revolutionize a business, disruptive technology plays a key role. Many companies will be shut due to their inability to embrace technology while others will lose out due to their slow response in digitizing their market strategies. Those that have embraced digitization are reaping the fruits of success(Liu et al., 2007).
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