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 - – digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing,
increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, 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 -
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.
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.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Oyo Vit 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.
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.
Innovation driven organization
– Oyo Vit is one of the most innovative firm in sector. Manager in OYO Rooms: Another Unicorn in the Making? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Oyo Vit digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Oyo Vit 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.
Highly skilled collaborators
– Oyo Vit 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 OYO Rooms: Another Unicorn in the Making? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Oyo Vit in the sector have low bargaining power. OYO Rooms: Another Unicorn in the Making? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Oyo Vit to manage not only supply disruptions but also source products at highly competitive prices.
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 -
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.
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.
Products dominated business model
– Even though Oyo Vit has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - OYO Rooms: Another Unicorn in the Making? should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study OYO Rooms: Another Unicorn in the Making?, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Capital Spending Reduction
– Even during the low interest decade, Oyo Vit 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.
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 bargaining power of channel partners
– Because of the regulatory requirements, Saju B, Harikrishnan K, Joseph Jeya Anand S suggests that, Oyo Vit is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow decision making process
– As mentioned earlier in the report, Oyo Vit 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. Oyo Vit 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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study OYO Rooms: Another Unicorn in the Making? 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 Oyo Vit 's lucrative customers.
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.
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 -
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Oyo Vit can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Oyo Vit can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Oyo Vit 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.
Developing new processes and practices
– Oyo Vit can develop new processes and procedures in Leadership & Managing People 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Oyo Vit is facing challenges because of the dominance of functional experts in the organization. OYO Rooms: Another Unicorn in the Making? case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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.
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.
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.
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.
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 -
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.
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.
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 Oyo Vit.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Oyo Vit 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 OYO Rooms: Another Unicorn in the Making? .
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.
Consumer confidence and its impact on Oyo Vit 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.
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.
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.
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.
High dependence on third party suppliers
– Oyo Vit 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.
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 .
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.
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.
