OYO Rooms: Another Unicorn in the Making? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of OYO Rooms: Another Unicorn in the Making?
OYO Rooms had been growing exponentially since its inception in 2013. By January 2016, it had registered 1 million check-ins and was set to become India's largest budget hotel chain. The venture's unique business model helped it to offer effective solutions for the difficulties that were faced by customers seeking budget hotel accommodation in India. OYO Rooms' potential for rapid growth made it a candidate for even greater expansion in the global arena. However, OYO Rooms needed to prove its ability to sustain growth in the Indian budget accommodations market. The company's success and the opening of a huge untapped market had led to a flurry of competition. Would the entrepreneurial founder be able to sustain his company's early momentum in the wake of increased competition? What would be the best strategy to achieve growth and monetize the company's operations? Should OYO Rooms diversify into allied services or apply a more focused strategy? The founder needed to answer these questions to retain the company's dominant position in the market. Saju B. is affiliated with VIT University. Hari Krishnan K is affiliated with VIT University. Joseph Jeya Anand S. is affiliated with VIT University.
Authors :: Saju B, Harikrishnan K, Joseph Jeya Anand S
Swot Analysis of "OYO Rooms: Another Unicorn in the Making?" 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 Oyo Vit facing as an external strategic factors. Some of the topics covered in OYO Rooms: Another Unicorn in the Making? case study are - Strategic Management Strategies, Competition, Entrepreneurship, Growth strategy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the OYO Rooms: Another Unicorn in the Making? casestudy better are - – geopolitical disruptions, talent flight as more people leaving formal jobs, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, wage bills are increasing,
technology disruption, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of OYO Rooms: Another Unicorn in the Making?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in OYO Rooms: Another Unicorn in the Making? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Oyo Vit, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Oyo Vit 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 OYO Rooms: Another Unicorn in the Making? can be done for the following purposes –
1. Strategic planning using facts provided in OYO Rooms: Another Unicorn in the Making? case study
2. Improving business portfolio management of Oyo Vit
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Oyo Vit
Strengths OYO Rooms: Another Unicorn in the Making? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Oyo Vit in OYO Rooms: Another Unicorn in the Making? Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the OYO Rooms: Another Unicorn in the Making? 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.
Analytics focus
– Oyo Vit 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.
High brand equity
– Oyo Vit has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Oyo Vit to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Oyo Vit in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Oyo Vit
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Oyo Vit does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Oyo Vit has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in OYO Rooms: Another Unicorn in the Making? 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.
Ability to lead change in Leadership & Managing People field
– Oyo Vit 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 Oyo Vit in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Oyo Vit has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Oyo Vit has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High switching costs
– The high switching costs that Oyo Vit 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.
Ability to recruit top talent
– Oyo Vit is one of the leading recruiters in the industry. Managers in the OYO Rooms: Another Unicorn in the Making? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Oyo Vit is present in almost all the verticals within the industry. This has provided firm in OYO Rooms: Another Unicorn in the Making? 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– OYO Rooms: Another Unicorn in the Making? firm has clearly differentiated products in the market place. This has enabled Oyo Vit to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Oyo Vit to invest into research and development (R&D) and innovation.
Weaknesses OYO Rooms: Another Unicorn in the Making? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of OYO Rooms: Another Unicorn in the Making? are -
Slow to strategic competitive environment developments
– As OYO Rooms: Another Unicorn in the Making? HBR case study mentions - Oyo Vit 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Oyo Vit is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study OYO Rooms: Another Unicorn in the Making? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the OYO Rooms: Another Unicorn in the Making? 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 Oyo Vit has relatively successful track record of launching new products.
Need for greater diversity
– Oyo Vit 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 cash cycle compare to competitors
Oyo Vit 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study OYO Rooms: Another Unicorn in the Making?, in the dynamic environment Oyo Vit has struggled to respond to the nimble upstart competition. Oyo Vit has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Oyo Vit products
– To increase the profitability and margins on the products, Oyo Vit needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study OYO Rooms: Another Unicorn in the Making? 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 OYO Rooms: Another Unicorn in the Making? can leverage the sales team experience to cultivate customer relationships as Oyo Vit is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Oyo Vit 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.
Low market penetration in new markets
– Outside its home market of Oyo Vit, firm in the HBR case study OYO Rooms: Another Unicorn in the Making? needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Oyo Vit 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.
Opportunities OYO Rooms: Another Unicorn in the Making? | 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 OYO Rooms: Another Unicorn in the Making? are -
Leveraging digital technologies
– Oyo Vit can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Building a culture of innovation
– managers at Oyo Vit 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 Leadership & Managing People segment.
Buying journey improvements
– Oyo Vit can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. OYO Rooms: Another Unicorn in the Making? 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.
Creating value in data economy
– The success of analytics program of Oyo Vit has opened avenues for new revenue streams for the organization in the industry. This can help Oyo Vit to build a more holistic ecosystem as suggested in the OYO Rooms: Another Unicorn in the Making? case study. Oyo Vit can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Oyo Vit to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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 Oyo Vit in the consumer business. Now Oyo Vit can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Oyo Vit 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 Oyo Vit to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Oyo Vit 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Oyo Vit 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, OYO Rooms: Another Unicorn in the Making?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Oyo Vit can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Loyalty marketing
– Oyo Vit 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.
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. Oyo Vit can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Oyo Vit 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. Oyo Vit 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.
Threats OYO Rooms: Another Unicorn in the Making? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study OYO Rooms: Another Unicorn in the Making? are -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Oyo Vit business can come under increasing regulations regarding data privacy, data security, etc.
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 Oyo Vit in the Leadership & Managing People sector and impact the bottomline of the organization.
Environmental challenges
– Oyo Vit 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. Oyo Vit can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study OYO Rooms: Another Unicorn in the Making?, Oyo Vit may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Regulatory challenges
– Oyo Vit 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 Leadership & Managing People industry regulations.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Oyo Vit can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Technology acceleration in Forth Industrial Revolution
– Oyo Vit has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Oyo Vit needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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. Oyo Vit 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.
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. Oyo Vit needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Oyo Vit 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.
Shortening product life cycle
– it is one of the major threat that Oyo Vit is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Oyo Vit with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of OYO Rooms: Another Unicorn in the Making? 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 OYO Rooms: Another Unicorn in the Making? 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 OYO Rooms: Another Unicorn in the Making? 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 OYO Rooms: Another Unicorn in the Making? 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 OYO Rooms: Another Unicorn in the Making? 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 Oyo Vit needs to make to build a sustainable competitive advantage.