Olacabs: Riding on a High SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Olacabs: Riding on a High
Ola Cabs, a pioneer in the taxicab aggregation business in India, was confronting several issues that were posing serious challenges to the company. The government had temporarily banned cab services offered by aggregators due to an incident involving an assault on a female passenger. Subsequently, new regulations were put in place to protect passenger safety, which stipulated that cab aggregators must obtain a licence under the radio taxi category. This was a major blow to Ola Cabs as it was a technology platform provider that connected customers with cab owners. The situation required quick resolution as Ola Cabs was going through a major phase of unprecedented growth and had set ambitious targets in terms of revenue. The company had been growing at a rate of 40 per cent month on month, and had more than 50,000 cabs in its network, which spread across 28 cities. Authors are affiliated with VIT Business School.
Authors :: Saju B, Harikrishnan K, Joseph Jeya Anand S
Swot Analysis of "Olacabs: Riding on a High" written by Saju B, Harikrishnan K, Joseph Jeya Anand S includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cabs Ola facing as an external strategic factors. Some of the topics covered in Olacabs: Riding on a High case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Olacabs: Riding on a High casestudy better are - – supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, geopolitical disruptions, increasing transportation and logistics costs,
central banks are concerned over increasing inflation, increasing energy prices, etc
Introduction to SWOT Analysis of Olacabs: Riding on a High
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Olacabs: Riding on a High case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cabs Ola, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cabs Ola operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Olacabs: Riding on a High can be done for the following purposes –
1. Strategic planning using facts provided in Olacabs: Riding on a High case study
2. Improving business portfolio management of Cabs Ola
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cabs Ola
Strengths Olacabs: Riding on a High | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cabs Ola in Olacabs: Riding on a High Harvard Business Review case study are -
Ability to lead change in Strategy & Execution field
– Cabs Ola is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Cabs Ola in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Cabs Ola has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cabs Ola to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Cabs Ola is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Saju B, Harikrishnan K, Joseph Jeya Anand S can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Training and development
– Cabs Ola has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Olacabs: Riding on a High Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Cabs Ola digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cabs Ola has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Learning organization
- Cabs Ola is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Cabs Ola is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Olacabs: Riding on a High Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Olacabs: Riding on a High Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Highly skilled collaborators
– Cabs Ola has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Olacabs: Riding on a High HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Strategy & Execution industry
– Olacabs: Riding on a High firm has clearly differentiated products in the market place. This has enabled Cabs Ola to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Cabs Ola to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Cabs Ola is one of the leading recruiters in the industry. Managers in the Olacabs: Riding on a High are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Cabs Ola are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Low bargaining power of suppliers
– Suppliers of Cabs Ola in the sector have low bargaining power. Olacabs: Riding on a High has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cabs Ola to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Olacabs: Riding on a High | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Olacabs: Riding on a High are -
Workers concerns about automation
– As automation is fast increasing in the segment, Cabs Ola needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Lack of clear differentiation of Cabs Ola products
– To increase the profitability and margins on the products, Cabs Ola needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Olacabs: Riding on a High HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Cabs Ola has relatively successful track record of launching new products.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Cabs Ola supply chain. Even after few cautionary changes mentioned in the HBR case study - Olacabs: Riding on a High, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cabs Ola vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Cabs Ola has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Skills based hiring
– The stress on hiring functional specialists at Cabs Ola has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow to strategic competitive environment developments
– As Olacabs: Riding on a High HBR case study mentions - Cabs Ola takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Olacabs: Riding on a High, is just above the industry average. Cabs Ola needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow decision making process
– As mentioned earlier in the report, Cabs Ola has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Cabs Ola even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cabs Ola is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Olacabs: Riding on a High can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Cabs Ola, firm in the HBR case study Olacabs: Riding on a High needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Olacabs: Riding on a High | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Olacabs: Riding on a High are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cabs Ola can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cabs Ola to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Cabs Ola to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cabs Ola can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Cabs Ola can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cabs Ola in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Developing new processes and practices
– Cabs Ola can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Better consumer reach
– The expansion of the 5G network will help Cabs Ola to increase its market reach. Cabs Ola will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Cabs Ola in the consumer business. Now Cabs Ola can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Cabs Ola can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cabs Ola can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Cabs Ola to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Buying journey improvements
– Cabs Ola can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Olacabs: Riding on a High suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Using analytics as competitive advantage
– Cabs Ola has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Olacabs: Riding on a High - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cabs Ola to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Cabs Ola has opened avenues for new revenue streams for the organization in the industry. This can help Cabs Ola to build a more holistic ecosystem as suggested in the Olacabs: Riding on a High case study. Cabs Ola can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Olacabs: Riding on a High External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Olacabs: Riding on a High are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cabs Ola can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Olacabs: Riding on a High .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cabs Ola in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Shortening product life cycle
– it is one of the major threat that Cabs Ola is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Cabs Ola.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Cabs Ola needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Cabs Ola in the Strategy & Execution sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cabs Ola with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Cabs Ola will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Increasing wage structure of Cabs Ola
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Cabs Ola.
Environmental challenges
– Cabs Ola needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Cabs Ola can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Stagnating economy with rate increase
– Cabs Ola can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
High dependence on third party suppliers
– Cabs Ola high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology acceleration in Forth Industrial Revolution
– Cabs Ola has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Cabs Ola needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Weighted SWOT Analysis of Olacabs: Riding on a High Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Olacabs: Riding on a High needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Olacabs: Riding on a High is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Olacabs: Riding on a High is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Olacabs: Riding on a High is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Cabs Ola needs to make to build a sustainable competitive advantage.