Pre-Seen ISDC Class Notes

Financial performance analysis: Use Financial analytics, Ratios (gearing,

performance, turnover), comparison
Financial analysis for decision making
Financial Analysis:
- Size of investment
- Financial Acceptability (returns such as profits)
- Long term value creation
- Reliability of planning and budgeting
- Sensitivity analysis
- Impact of time and cost overrun
- Long term funding required

Non-financial analysis:
- Availability of resources
- Skilled staff
- Cultural issues
- Operational systems
- PEST factors in the new country

PESTEL
Government is encouraging TNC Industry.
Zenbi has huge data base, economies of scale, experience.

Risk: Each city has its own regulations. It’s a risk because the
regulations are not uniform and Beago is operating in 250 cities. It will
have different regulatory requirements to be fulfilled in each city.

TNCs are mainly dependent on internet and drivers.

Demand for TNCs is increasing meaning demand for drivers is increasing. The co
will have to maintain a necessary of drivers which can be a challenge.

If driver dissatisfaction is increasing, it might lead to formation of driver unions

and TNCs will face challenges.
TNCs could be more customer focused than drivers.
REVISE BOARD STRUCTURE. GOVERNANCE, RISK AND ENVIRRONMENTAL
ASPECTS.
PESTEL:
1. Political:
o Government support for innovations in transport solutions to
address the urban challenges. Benefit Beago.
o Government is encouraging environmental protection. Promotes
using of EVs.
o Currently operating in 250 cities, each city has its own licenses. No
uniformity and therefore keeping track of different requirements can
be a hassle.

2. Economic:
o Disposable income is high, therefore indicates it’s a growing market.
o If economic growth is slow, fluctuates then spending can be
affected and may not be commercially viable. Increase in costs: fuel
costs.
o Competition: Zenbi largest.

3. Social:
o Urbanisation: 80% population is in urban areas therefore high
demand for transportation.
o Safety concerns for customers and drivers. Impact the reputation
o Customer preference: Ride sharing ride hailing – envision of micro
mobility

4. Technology:
o Emergence of autonomous (driverless cars) may change the
business model for Beago. How will you connect customer with
driver? Operations will change.
o Platform efficiency – crucial. Updates/ maintenance.
o Updated GPS system.
o Data security
o Payment option.

5. Legal:
o Regulatory equipment for driver registrations.
o Laws related to data protection.
o Labour laws: Possibility of drivers’ union.

6. Environment:
o Congestion/ Pollution: Clean air zones are created which increase
cost for Beago.
o Sustainability: Focus on ride sharing, micro mobility
o Introduce/ encourage use of EVs

Influence the strategic decision of Beago

PORTER’S 5 FORCES:
1. Bargaining power of customers:
o No of customers
o Alternatives available (switching costs).
o Scattered customers, not united. Power is neither high nor low.
o Won’t cost much to shift to another type of transport.

 Beago’s Strategy:
 Customer loyalty program: offer discounts to retain
customers or stop them to moving.
 Differentiate: Superior customer service, offer convenience,
reduced wait time.

2. Bargaining power of suppliers (drivers):

o Beago relies on independent drivers who have limited bargaining
power. There is a large pool of drivers and flexible working hours.
This reduces the bargaining power of suppliers.

 Beago’s Strategy:
 Implement incentive programs to maintain a satisfied driver
base, ensuring steady supply of service providers.
 Diversification towards maintaining a fleet of EVs,
autonomous driverless cars. Venture into leasing EV to
independent drivers.

3. Threat of new entrants:

o Technology developments
o Regulatory requirements for drivers.
o Fragmented/ non-uniform regulatory requirements in different cities.

 Beago’s Strategy:
 Brand building/ strengthening
 Innovation – continuous enhancement of user experience.
Improved mobile application.
 Provide discounts.

4. Competitive Rivalry:
o It is high.
o Faces intense competition from Zenbi and others which could lead
to price wars, technological advancements and service
differentiation.

 Beago’s Strategy:
 Focus on cost efficiency without sacrificing the margins.
  Forming strategic alliances: Tech companies, enhance the
service offering and gain competitive edge
 Market penetration

5. Threat of substitutes:
o Threat is high. Alternative mode of transport.

 Beago’s Strategy:
 Value proposition: Convenience/ safety/ reliability
 Service expansion: Rentals/ integrating with public transport

Overall recommendation:
1. Innovation development of technology/ differentiation
2. Cost management
3. Diversification
4. Regulatory engagement
5. Customer and driver loyalty program

SWOT ANALYSIS:
1. Strengths:
o Strong market position: It is the second largest service provider in
Bealand.
o Large Established customer base: 12 years of establishment – 16
million expected increase 19 million
o Diversified/ multiple service: Ride hailing, ride sharing, micro
mobility and business services.
o Technology: Efficient mobile app. 22% employees are involved in
technology. Seamless operated app.
o Large pool of drivers due to the flexible working. Workforce
o Strong presence 250 cities: Benefit from economies of scale.

2. Weaknesses:
o Competition: The co has to focus on cost efficiency which can be
challenging for the company.
o Driver dissatisfaction
o Dependency on cloud service providers: Data security
o Dependency on ride hailing as it is the major contributor of revenue.
It has negative impact on environment.
o Safety of customers and drivers relating to illegal activities, It can
also affect reputation.

3. Opportunities:
o It can expand to different countries. Market expansion (national and
international)
 oIntroduce new service/ diversify leasing, rental, food delivery, EV
Vehicles, driverless vehicles
o Technological advancements: Innovate & reduce operational cost
o Govt encouraging innovation in transport.
o Overcrowding in public transport
4. Threats:
o Intense competition: Industry rivalry, substitutes
o Potential regulatory changes: Legal issues
o Technological disruptions
o Data security breach
o Economic fluctuations: Recession – Increase in fuel price
o Public perception regarding environmental issue

STRATEGIC IMPLICATIONS
- Beago should capitalise on its market position: Technological platform &
established customer base
- Address weakness: Managing the regulatory complexities, competitive
pressure, safety protocols, maintain and grow market share
- Seize the opportunity: Expansion, diversifying, implementing sustainability
programs
- Mitigate the threat: Prepare for economic downturn, stay ahead of
technological disruptions

PORTER’S DIAMOND:
1. Factor conditions
o 80% urban population:
 Availability of drivers
 Customers
o Technological developments/ infrastructure
 Developed economy

2. Demand Conditions
o Huge customer base
 80% urban customers
o Preferences of customers
o Environmental awareness

3. Related and supporting industries

o Technological industry:
 Data analytics
 Tech service providers
o Automotive Industry: EV
o Financial services: Bank/ Insurance

4. Firm strategy, structure and rivalry

o High level of competition will push for better cost efficiency,
innovation and constant improvement.
 o Culture: Innovation – congruence with Beago: vision and mission

STRATEGIC IMPLICATIONS
1. Innovation leadership
2. Strategic Alliances
3. Sustainability focus
4. Enhance customer experience

VALUE CHAIN ANALYSIS:

 Primary Activities

1. Inbound logistics:
o Driver registrations
o Background checks, vehicle inspections, training, impact the quality
of service
o Vehicle availability – ensure sufficient no of available vehicle – size,
peak hours, minimise the wait time for customers.
- Streamline/ standardise the process & strong relations with drivers –
uninterrupted supply, improving customer experience.

2. Operations:
o Regular health safety checks for driver’s vehicle
o Technological platform – connect drivers with customers
o Wide allocation
o Payment processing
o Customer data protection
- Focussing on technology – Optimise ride allocation, smooth operation,
enhancing customer experience. Contributing customer loyalty,
competitive advantage

3. Outbound Logistics:
o Service delivery – transportation services. Pick drop – timely safe
and comfortable.
o Real time tracking – Transparency and security
o Value added: Real time tracking system – efficient service delivery
build customer trust, higher customer satisfaction.

4. Marketing and Sales:

o Customer acquisition: Digital marketing. Strategies – refusal
program
o Branding: Promotional activities to help differentiate from the
competitors.
o Pricing strategies: Dynamic pricing strategies to balance demand
and supply. Competitive rates.
 o Value added: Effective strategies should drive customer acquisition/
retention.

5. After sales service:

o Customer support address any grievances. Email/ chat/ app –
resolve
o Driver support – fare disputes/ remittance of amount
o Feedback system
o Value added: High quality customer & driver support enhance the
overall experience – increase loyalty.

 Support Activities

1. Infrastructure
o Financial management
o Corporate governance policies
o Value added: Operational efficiency, regulatory compliance,
strategic growth

2. Human resource management

o Recruitment and training employee and drivers.
o Employee and driver engagement
o Incentive/ motivation for career development opportunities.
o Value created: Motivated workforce required to maintain the service
quality and operational efficiency.

3. Technology
o App development/ IT infrastructure essential to maintain or get
competitive advantage.
o Data analytics
o Value created: Data utilisation that will drive operational efficiency.
Improve customer satisfaction and get long term advantage over
competitors.

4. Procurement
o Technology: Require hard and soft ware for the development and
maintenance of the platform.
o Service procurement: Some services can be outsourced.
o Value added: Efficient procurement process will reduce the cost,
improves service quality and overall improvement in the operational
efficiency

STRATEGIC IMPLICATIONS
1. Optimise implications
2. Strengthen marketing
3. Enhanced support systems
4. Invest in innovations