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Industry Analysis Ola
- 1. Industry Analysis Porter's Five Force Student Name: Narendra A Email ID: narenworld@Hotmail.com
- 2. List down any two entry barriers of the Indian cab industry that has stopped new players from entering it. Threat of new entry Buyer power Supplier power Competitive rivalry Threat of substitutes High Setup cost: Lot of investment required in developing infrastructure, maintaining customer care and offers to attract customers from the existing players Investment needed to future proof(driversless cars, air taxis etc) Signing up cab drivers proven to be high as it requires verification from 3rd party service provides per govt guidelines Making cab drivers stick to the platform is difficult unless better commissions are provided Govt. Interference: Uncertainty in the policies due to frequent changes due to pressure from unions Interference in banning surge pricing and sharing by different states No pan India policy to stick with These thigs might stop new players from entering the market. As the recent statement from the Uber CEO says we may never become profitable company shows the marketconditions
- 3. What do you think about the switching cost of customers concerning the Indian cab industry? Is it high, medium or low? Provide your rationale for the same. Threat of new entry Buyer power Supplier power Competitive rivalry Threat of substitutes Traditionally in India we have Regular Taxi providers most of us whom we remember and has personal trust factor. Switching from Regular Taxi to Managed Taxi services will have Trust issues in terms of safety, reliability of the drivers, credit/debit card linking Negotiation in the fare Flexible in pickup and dropping location Because of these switching cost will be high for the habituated individual. But new customers will feel easy to switch to because of Offers and discounts on the fare Easy to hire and fire the service thru app Any time access and availability of service due to real time service status Exact fare before you book Easy to compare multiple service providers No union fixed price unlike in regular taxi For younger generation and tech savvy people switching cost is less and for the older people switching cost is high
- 4. Do buyers have the ability to influence product pricing in the taxi market? Threat of new entry Buyer power Supplier power Competitive rivalry Threat of substitutes Due to fierce competition and customers has options to switch aggregators has to shell out more offers to retain the customers To retain the customers new services needs to be offered like wifi, music and movies etc. Due to the safety concerns aggregators has to provide options like tracking service, SOS
- 5. Identify and list down suppliers for Olacabs, which is one of the major players in the taxi market. Threat of new entry Buyer power Supplier power Competitive rivalry Threat of substitutes Drivers High risk due to shortage of resources and competitors pay Wifi, movies and music providers Low since customers can also switch to their service Car manufacturers for leasing program Low can buy in bulk and multiple options Finance partners for the leasing program Low can opt for bulk loans and multiple options Customer support Medium can make or break the relation with customers Hiring partners Medium can ask for higher commission as they can influence drivers to competitors
- 6. Do suppliers have the ability to influence pricing in case of the taxi market? Threat of new entry Buyer power Supplier power Competitive rivalry Threat of substitutes Yes they can influence, but influence level depends on the supplier Drivers Can influence high due to shortage and can switch if competitors pay more Wifi, movies and music providers Low influence since they can also win business from customers which is win-win Car manufacturers for leasing program Low influence as they can buy in bulk and has multiple options Finance partners for the leasing program Low influence as they can buy in bulk and has multiple options Customer support Medium can make or break the relation with customers Hiring partners Medium can ask for higher commission as they can influence drivers to competitors
- 7. What do you think about the switching cost of suppliers concerning the taxi market? Is it high, medium or low? Threat of new entry Buyer power Supplier power Competitive rivalry Threat of substitutes Drivers Switching cost is high due to shortage Wifi, movies and music providers Low cost as they can easily switch Car manufacturers for leasing program Low cost as they not get the desired numbers Finance partners for the leasing program Low cost as they not get the desired numbers Customer support Medium can make or break the relation with customers Hiring partners Medium can ask for higher commission as they can influence drivers to competitors
- 8. List any two competitors of Olacabs. Threat of new entry Buyer power Supplier power Competitive rivalry Threat of substitutes Uber Providing fierce competition Global presence High cash reserves Meru Experienced player running in airport taxis Loyal driver base and availability of cars Can influence airports to create hurdles to others
- 9. Write down any 2 substitutes to Olacabs. Threat of new entry Buyer power Supplier power Competitive rivalry Threat of substitutes Bounce Byke renting platform Zoomcar, Drivezy, Revv Car renting platform Yulu Bycycle renting which is becoming popular in IT sectors
- 10. Threat of new entry Buyer power Supplier power Competitive rivalry Threat of substitutes Thank you!