Fasten: Challenging Uber and Lyft with a New Business Model SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Fasten: Challenging Uber and Lyft with a New Business Model
Fasten, a new ridesharing start-up in Boston, entered the scene in September 2015 hoping its unique vision of transparency for both driver and passenger and strategy to keep riders' fares low and charge drivers a flat $0.99 fee per ride as opposed to the 20-30% commission charged by its competition, would help differentiate it and gain the necessary traction in an ostensibly concentrated market between Uber and Lyft. Despite both Uber's and Lyft's valuations skyrocketing to $50 billion and $5.5 billion respectively, heavy investment in top notch Silicon Valley software developers and technological innovations such as autonomous vehicles, aggressive marketing strategies, and cutthroat poaching practices-all of which forced number three competitor Sidecar out by January 2016-Fasten's leadership felt confident their 17 years of experience in Russia's car services industry positioned them well to truly understand their customers and ultimately expand to other major cities. But with limited budgets to acquire talented and expensive platform developers, Fasten needed to ensure its core IT services could compete, and that its word-of-mouth approach to attract the essential network of drivers and passengers could get it the vital foothold it would need to grow.
Swot Analysis of "Fasten: Challenging Uber and Lyft with a New Business Model" written by Feng Zhu, Angela Acocella includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fasten Lyft facing as an external strategic factors. Some of the topics covered in Fasten: Challenging Uber and Lyft with a New Business Model case study are - Strategic Management Strategies, Entrepreneurship, IT and Technology & Operations.
Some of the macro environment factors that can be used to understand the Fasten: Challenging Uber and Lyft with a New Business Model casestudy better are - – increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies,
there is backlash against globalization, increasing commodity prices, etc
Introduction to SWOT Analysis of Fasten: Challenging Uber and Lyft with a New Business Model
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Fasten: Challenging Uber and Lyft with a New Business Model case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fasten Lyft, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fasten Lyft 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 Fasten: Challenging Uber and Lyft with a New Business Model can be done for the following purposes –
1. Strategic planning using facts provided in Fasten: Challenging Uber and Lyft with a New Business Model case study
2. Improving business portfolio management of Fasten Lyft
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Fasten Lyft
Strengths Fasten: Challenging Uber and Lyft with a New Business Model | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fasten Lyft in Fasten: Challenging Uber and Lyft with a New Business Model Harvard Business Review case study are -
Strong track record of project management
– Fasten Lyft is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Fasten Lyft digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fasten Lyft 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.
Training and development
– Fasten Lyft has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Fasten: Challenging Uber and Lyft with a New Business Model 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.
Effective Research and Development (R&D)
– Fasten Lyft has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Fasten: Challenging Uber and Lyft with a New Business Model - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Fasten Lyft
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Fasten Lyft does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Fasten Lyft is present in almost all the verticals within the industry. This has provided firm in Fasten: Challenging Uber and Lyft with a New Business Model case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Analytics focus
– Fasten Lyft 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 Feng Zhu, Angela Acocella 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.
Innovation driven organization
– Fasten Lyft is one of the most innovative firm in sector. Manager in Fasten: Challenging Uber and Lyft with a New Business Model Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Fasten Lyft has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fasten Lyft to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Fasten Lyft in the sector have low bargaining power. Fasten: Challenging Uber and Lyft with a New Business Model has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fasten Lyft to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Fasten Lyft 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 Fasten Lyft is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Fasten: Challenging Uber and Lyft with a New Business Model Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Fasten Lyft has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses Fasten: Challenging Uber and Lyft with a New Business Model | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Fasten: Challenging Uber and Lyft with a New Business Model are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fasten Lyft is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Fasten: Challenging Uber and Lyft with a New Business Model can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Fasten: Challenging Uber and Lyft with a New Business Model that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Fasten: Challenging Uber and Lyft with a New Business Model can leverage the sales team experience to cultivate customer relationships as Fasten Lyft is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Fasten: Challenging Uber and Lyft with a New Business Model, in the dynamic environment Fasten Lyft has struggled to respond to the nimble upstart competition. Fasten Lyft has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Fasten Lyft 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.
Skills based hiring
– The stress on hiring functional specialists at Fasten Lyft 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 Fasten: Challenging Uber and Lyft with a New Business Model HBR case study mentions - Fasten Lyft 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.
High cash cycle compare to competitors
Fasten Lyft has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Fasten: Challenging Uber and Lyft with a New Business Model 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 Fasten Lyft has relatively successful track record of launching new products.
Need for greater diversity
– Fasten Lyft has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High operating costs
– Compare to the competitors, firm in the HBR case study Fasten: Challenging Uber and Lyft with a New Business Model has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Fasten Lyft 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Fasten Lyft is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Fasten Lyft needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fasten Lyft to focus more on services rather than just following the product oriented approach.
Opportunities Fasten: Challenging Uber and Lyft with a New Business Model | 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 Fasten: Challenging Uber and Lyft with a New Business Model are -
Buying journey improvements
– Fasten Lyft can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Fasten: Challenging Uber and Lyft with a New Business Model 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Fasten Lyft can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Fasten Lyft 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 Technology & Operations segment.
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 Fasten Lyft in the consumer business. Now Fasten Lyft can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fasten Lyft can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Fasten Lyft 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.
Using analytics as competitive advantage
– Fasten Lyft 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 Fasten: Challenging Uber and Lyft with a New Business Model - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fasten Lyft to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fasten Lyft 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fasten Lyft 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 Fasten Lyft to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Fasten Lyft has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fasten Lyft can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Fasten: Challenging Uber and Lyft with a New Business Model, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Fasten Lyft can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Fasten Lyft in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
Threats Fasten: Challenging Uber and Lyft with a New Business Model External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Fasten: Challenging Uber and Lyft with a New Business Model are -
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. Fasten Lyft needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Regulatory challenges
– Fasten Lyft needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Technology & Operations industry regulations.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Fasten Lyft can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Fasten Lyft has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Fasten Lyft needs to keep up with the evolution of technology in the Technology & Operations 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.
Consumer confidence and its impact on Fasten Lyft demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
High dependence on third party suppliers
– Fasten Lyft 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.
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 Fasten Lyft.
Stagnating economy with rate increase
– Fasten Lyft 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.
Environmental challenges
– Fasten Lyft 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. Fasten Lyft can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fasten Lyft with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fasten Lyft in the Technology & Operations industry. The Technology & Operations 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.
Weighted SWOT Analysis of Fasten: Challenging Uber and Lyft with a New Business Model 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 Fasten: Challenging Uber and Lyft with a New Business Model 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 Fasten: Challenging Uber and Lyft with a New Business Model 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 Fasten: Challenging Uber and Lyft with a New Business Model 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 Fasten: Challenging Uber and Lyft with a New Business Model 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 Fasten Lyft needs to make to build a sustainable competitive advantage.
