Business Strategy

Best option for growth & Diamond Model for Ola Cabs

Group Members:

B-21
B-23
B-32
B-40
B-60
B-65
B-66

Reema Gandhi
Raveena Gohil
Uzma Keruwala
Shailavi Modi
Jayni Shah
Sagar Sharma
Shubham Singh

Options for Growth of Ola Cabs

1.
2.
3.
4.
5.
6.

OLA stops just like BRTS stops or AMTS stops

Ola cab can acquire cab operator with a license who is having 500 cabs at least
Ride sharing
Market penetration
The company can invest in brand building
Reducing customer waiting time could also help Ola

Options given in case:

1. A safety device that allowed passengers to raise alarm and call for help if
necessary, the device could send location, cab and driver details and GPS
coordinates through text messages to selected family members or friends of the
passengers
2. launch Ola pink and all woman cab service similar to Meru eve, in selected cities
3. Detailed driver verification policy that could be outsourced to an expert service
provider

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Option Evaluation for Growth of Ola Cabs

1) OLA stops just like BRTS stops or AMTS stops
Brief- Ola can create its own stops in each area, by just putting a hoarding or a sign of
Ola where 2 cabs can stand after taking permissions from government
This option will solve Olas concern of brand recalling and also can help Ola in growing
and acquiring more customers
PROS
-Customer satisfaction-Ola available in nearby stops
-People leaving in remote areas can easily approach an OLA at the OLA stop where they
generally dont get any other means of transport
-People who dont know how to use app can come at stop and directly take an OLA
-Brand recall- customers will think of going to an Ola stop rather than opting for other
modes which may be available or not and also create an image in customers mind that
Olas are easily available at stop.
-Competitive advantage
-Can be used in marketing- Ola can promote itself by telling we are now available just a
few steps away at Ola stops
-will help in reducing waiting time- customers waiting time will be reduced if 2 cabs are
standing for each area, further when 1 cab is already on road before leaving the stand the
company can send other cab in less time possible
CONS
-Government permissions will be required for making such Ola stops(parking
permissions)
-There are Chances that cabs remain idle at the Ola stops
-Managing cabs would be hard- if both the cabs are on road, then are chances that
customer has to wait on stop for another Ola.

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2) Ola cab can acquire a cab operator with a license who is having 500 cabs at least
Brief: Instead of the hassle of applying for their own licenses and investing in cabs, Ola
can acquire a small competitor having 500 cabs to start with and later when they plan to
expand their business, they can plan on making more investment.
PROS
-They would not have to wait for their own license, thus taking over a cab operator who
is already having a license is far more convenient
-Acquiring their own cabs and appointing drivers for those cabs shall ensure good
condition of cabs
-Safety can be ensured implementing safety measures in own cabs would be easy
- More cabs can help in reducing customers waiting time
CONS
-Capital investment would be required
-Making more investments will be a risk
3) Ride sharing
Brief- In ride sharing customers can be attracted towards hiring Ola cabs for long
distances and sharing the Ola for reducing their total journey cost by sharing the bill.
Further for this option Ola can tie up with institutions like corporate, schools and
colleges-car pools for corporate(convince them to take Ola rides for travelling anywhere)
school children (4-5 students living in one area can take Ola cabs) and for children whose
colleges are in remote areas, for this Ola can convince institutions dean or principals to
tie up with them as this will ensure their children safety.
PROS-Helpful to customers who want to travel longer distances
-Helpful to institutions in a way that Ola is trustworthy and is a brand to be associated
with which in turn will also ensure safety of students
CONS-revisiting the existing model is required
-there are chances that only one passenger shows up for a journey even if customer has
opted for sharing option

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4) Market penetrationBrief- customers in India gets more attracted to less prices and majority of customers in
India opt for companies which provide fewer prices and give good quality product or
service, so starting a price war with competitors can help in growth.
PROS-There are chances that more customers (users of competitors or nonusers of Ola) are
attracted towards Ola
-Ola can have a competitive advantage
-Ola can cover more market share
CONS-remodelling of Ola price structure will be required
-customers can build an image of Ola as a cheap brand giving cheap quality (quality can
be a perception made because of cheap price )
Further evaluating this option:
Ola can also Start Ola Auto or small cars such as Ola nano Brief- Starting an Ola auto or small cars such as Ola nano can help Ola in targeting
customers who want rides at cheapest price possible.
-In cities Ola written autos can run and this autos will be exclusively for Ola
Pros-price sensitive customers will be attracted towards Ola auto
-Autos or Ola nano rides are easily available and cheap(this perception of customers can
help in some way to company)
-give an competitive advantage in covering non users of app
Cons-more investments required in terms of owning the auto and giving salaries of drivers and
also installing the GPS system
-There are chances of AUTOS or Ola nano staying idle

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5) The company can invest in brand building

Brief- Ads through radio stations, sponsoring TV shows and events and more
promotional schemes to attract Non users
PROS
-Help in getting competitive advantage
-Help in acquiring market share
-brand recall
CONS
-Investment will be required
6) Reducing customer waiting time could also help Ola
PROS
-Customer satisfaction
-Brand loyalty (Ola cabs dont make us wait)
CONS
-Hard to find bottlenecks in current system
-More cabs required which in turn will require more investment

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Options given in case:

The major concern of Ola as mentioned in the case is assuring customers their safety
So if these measures for safety are implemented then this can surely help company to grow
and also in brand recall.
1) A safety device that allowed passengers to raise alarm and call for help if
necessary, the device could send location, cab and driver details and GPS
coordinates through text messages to selected family members or friends of the
passengers
PROS
- Safety of the customers will be ensured
- In case of any emergency location of the cab will be known.
CONS
-There are chances of Chances of false alarm
-In case of non availability of network or extreme weather conditions location cannot be
tracked
-In spite of having driver details there are chances that the driver may run away
2) Launch Ola pink and all woman cab service similar to Meru eve, in selected
cities
PROS
-Increase in customer base
-Increase in Job Opportunity for women
-Safety of woman passengers will be ensured
-Night travel for woman can be promoted through Ola pink
-Other cab aggregators havent come up with this idea
-Can be used as a marketing tool
CONS
-It is hard to get woman drivers for night travels
-For long distances across cities this pink cab wont be of any good

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3) Detailed driver verification policy that could be outsourced to an expert service

provider
PROS
-The external service provider will be having the responsibility of recruiting and
verifying the authenticity of drivers
-Customers can be ensured of safety
CONS
-Cost of Outsourcing
-The External service providers maybe biased
-Subjectivity issues (I thought the driver was good)

These safety options will surely help in ensuring customers that Ola is safe to travel and you
trust Ola.

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Recommendation for Ola Cabs

If we go by case the best option for solving all the concerns related to government and brand
recall thenThe best option for Ola would be to Ola cab can acquire cab operator with a license who is
having 500 cabs because this will solve concerns of Ola and also help in growth.
And if this strategy is successful they can start acquiring more cab operators.
The reasons for this option are:
1) By acquiring cab operator the government regulations will be taken care of as all the
cabs will be licensed, so government will no longer have any objections and so
company can grow.
2) By acquiring cab operator the safety of customers can be assured as if Ola owns a
cab they can implement whatever safety measures they want to implement like
mentioned in case, in fact Ola can implement all safety measures i.e. installing a GPS
alarm system, running pink Olas. This safety measures will ensure customers
satisfaction and build a brand trust towards Ola and thus help in growth.
3) Fleet Leasing (To Drivers)-Ola after acquiring cab operator can give it on lease to
drivers for a better loyalty of drivers towards Ola. This may work like a fixed daily /
weekly fee to run the vehicle. This can also ensure safety of customers.
4) The option of having Ola stops will be more feasible if Ola owns more number of
cabs as there will not be any waiting time which in turn will satisfy customers and
help in brand recall and thus in growth of Ola
5) The ride sharing option and tie up with institutions option will also be feasible if Ola
has more number of cabs, Ola can easily allot few hundreds of cabs for Ola ride
sharing, and in turn covering some more customers and thus more growth.
6) More cabs available will reduce customers waiting time and thus give customer
satisfaction
But if Ola wants to establish something new and be such a brand that people think of Ola
first if they want to travel and also to connect Indian people well Ola should opt for Ola
stop option as if this is implemented people will have easy mode of transportation
available every time they want to travel anywhere, customers wont face waiting time
problem as the cabs are standing just at the nearby Ola stops, for those customers who
cant use an app or having any mobile related problem issues can go to Ola stop and hire
an Ola cab. This will surely increase brand recall and brand loyalty of customers towards
Ola.

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Diamond Model Ola Cabs

1) Arenas
Product Categories:
Royal Sedans - for upper middle class
Normal Sedans- For a family of 2 or more
Hatchbacks: For working people / family of two
Ola Auto or Ola nano: For daily use, household purpose, for middle class/lower class
affordability (cheaper)
Market Segments: Targets the personal transport of middle class people not owning
cars, the working people who want to reach their office without the hassle of driving
themselves to their office and the travellers ( local or intercity), institutes like school,
college and corporate.
Geographic Areas: If Ola considers the option of acquiring a cab operator, then it can
transform the personal transportation system of India by not only covering Metro
cities of India but other small big cities of India too.
Core technologies: the technology which is used is installing a safety alarm system
which sends the GPS coordinates to relatives and usage of app for booking and
paying.
Value creation- by customer service
2) Vehicles- By opting for inorganic growth by acquisition. This will help to increase
market share of Ola.
Internal Development: Developing alarm system , Developing driver verification
policy, providing Ola stops for customer convenience, coming up with Ola pink for
women, proper training of drivers, developing strict recruitment policies for new
drivers are the measures for internal development of Ola. The drivers can also be
outsourced from any driver enterprises and after all verification of drivers they can be
hired.

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3) Differentiation: Ola is currently competing with Uber on the basis of the price factor
as its main segment the Indian middle class is a price sensitive class of people. As
mentioned in the case, Ola uses technology as a differentiating characteristic by
diverting the customers towards its App. This is because as mentioned in exhibit 4, the
mobile users are growing constantly year on year. Ola differentiates in form of styling
from its competitor by providing convenience by letting customers book online in
seconds. Also after taking the safety measures as mentioned above for customers Ola
can ensure reliability. Providing Ola stops for customer convenience can be another
differentiating factor. Trained and verified drivers can be added in this list of
differentiation.
4) Staging: Ola for now must bring more cars and drivers on board for reaching out to
maximum customers possible. So the speed in expansion covering all cities of India.
Sequence of initiative- After covering the Metro cities properly, Ola can cover all
A, B, C class cities and further Ola can acquire more taxi operators once the strategy
of acquiring works.
5) Economic logic:
The return can be made sure by giving customers unmatchable services that is less
waiting time, safety assurance, wallet services, calls for feedbacks.
Ola can use a tired fee structure for obtaining its returns and can also charge little bit
higher than competitors for extra services that Ola provides.
The cars can be divided in to 3 types and on those bases Ola can charge to customers.
Charges according to cars:
Aggregator

Mini (Tata Indica, Sedan (Maruti Dzire, Hatchback

Nissan Micra, Maruti Tata Indigo, Toyota
Ritz)
Etios)

OLA

Rs 80/- for first 4 km

Rs 10/km after 4 km
Re 1 / minute post 5
minutes

Rs 100/- for first 4

km Rs 13/km after 4
km Re 1 / minute
post 5 minutes

Rs 49/- for first 2 km

Rs 6/km after 4 km
Re 1.5 / minute Ride
time rate

Other ways for returns can be as Ola is unmatchable service( less waiting time and safety
assurance) Ola can charge a bit higher than uber. Also in peak hours Ola can charge slightly
higher. If Ola continues with the present rate of growth, then the projected growth by 2017 is
impressive.

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2013

2014

2015

2016

2017

SIZE(US
Billion

7.2

8.64

10.368

12.4416

Organized
market share

18000

21600

51840

93312

149299.2

Ola share

3%

20%

35%

50%

80%

Ola revenue

513

615.6

1477.44

2659.392

4255.0272

INDUSTRY ANALYSIS
Table 1: Rivalry among competitors
Attractiveness
Low
1
No of competitors
Industry growth
Fixed cost
Differentiation
Switching cost

High
5

The attractiveness among the competitors is almost moderate.

Table 2: Barriers to exit

Attractiveness
Low
1
Asset
specialization
Cost of exit
Government
restrictions

High
5

The attractiveness is between moderate to high for exiting the business.

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Table 3: Barriers to entry

Attractiveness
Low
1
Economies of
scale
Product
differentiation
Brand identity
Switching cost
Access to
channels of
distribution
Capital
requirement
Access to
technology
Access to raw
material
Government
protection

High
5

The attractiveness for entering the business is moderate to high.

Table 4: Threat of substitutes
Attractiveness
Low
1
Availability of close
substitutes
Switching cost
Substitutes pricevalue
Profitability of the
producers
of
substitute

High
5

The attractiveness for substitutes is high. ( but in long run can be low)

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Table 5: Bargaining power of buyers

Attractiveness
Low
1
Number of buyers
Availability of
substitutes
Switching cost
Buyers threat of
backward
integration
Industrys threat of
forward integration
Contribution to
quality
Contribution to cost
Buyers profitability

High
5

The attractiveness for buyers for bargaining power is between moderate to high.

Table 6: Bargaining power of suppliers

Attractiveness
Low
1
Number of suppliers
Availability of
substitutes
Switching cost
Suppliers threat of
forward integration
Industrys threat of
backward integration
Contribution to
quality
Contribution to cost
Industrys
importance to
supplier

High
5

The attractiveness for supplier is high. (new firms wanted to create platform and ready to pay
competitors)
Table 7: Government action
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Attractiveness
Low
1

Industry protection
Industry regulations
customs and tariff
restrictions abroad

High
5

The attractiveness for government was high.

Table 8: Overall assessment

Attractiveness
Low
1
Barriers to entry
Rivalry among
competitors
Barriers to exit
Power of buyers
Power of suppliers
Threat of substitutes
Government action
Overall
attractiveness

High
5

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