Global expansion strategy for a multinational business has always been one of the most success-critical decisions for the management. The strategy may need to be aligned to the long-term goal of the corporate and fit in to the sustainability approach framework as well. The given essay discusses about one of the multinational companies across the world in terms of its expansion in a specific market. At the outset of the study, the discussion framework is set providing the overview of the study followed by the company’s expansion strategy in the new market. The researcher wraps up the discussion by way of concluding note.
The leasing and car rental sector across the world is strongly growing over the last five years. It has been identified that the emerging demand from businesses and the rising numbers of tourists had supported the enhancing revenue growth over a period of five years through 2018-19 (Ibisworld, 2018). In addition, it can also be stated that the imperative revenue growth at the very onset of the specified period has relatively given operators the assurance of pursuing their fleet growth. Moreover, the rising demand rate from the small medium enterprises has usually supported the expansion of the sector across the world. Furthermore, the industry revenue is estimated to rise at an annual compound rate of 7.4% over the span of past five years through 2018-19 to reach the figure of £ 16.6 billion (Ibisworld, 2018).
In a similar manner, the UK car rental is equivalently emerging with the rapid pace. As per the research of Frost & Sullivan, the figure of people using car-rental services are forecasted to rise with a degree of threefold ranging with the figure of 6 million in 2017to approximately 18 million by 2025. This emerging figure is somewhat instigating other car rental marketers to penetrate in the UK market and run successful operations (Elliot, 2018). For instance, the brand named Zipcar has managed to distribute 10,000 cars in the urban areas across the UK market, which enabled the brand to grow as the most established tested car rental company in the UK market. In a similar manner, Uber and various other car rental brands have expanded their operations in the UK market after observing the rapid growth and prospect the industry is facing an would face in the upcoming future.
It has been recognised that after the successful expansion in the Australian market, Ola has targeted to recently enhance its operation across the UK market. The present essay aims to evaluate the expansion strategy of Ola has embraced to expand its reach in the target market and it’s by far outcome. The motives of the brand behind the recent market entry in the UK would also be evaluated in the later section.
It has been identified that month after launching its car rental operations in the Australian market; Ola has recently shown interest in expanding its operation in the UK market. As per the records of “Economic Times,” UK has been the most efficient market, which influences the brand to look forward to providing a dependable, compelling fresh service offering (Bansal, 2018). Information received from the similar sources reveals the fact that the above prospect has made Ola the single ride-hailing application in the UK market offering its passengers with the choice of booking black cabs and private hire vehicles through one definite platform. Such proposition can be stated as Ola’s one of the aggressive overseas expansion strategies. The brand has claimed of conducting in a total of 1 billion rides every year in the global context, having more than one million driving partners and 125 customers over 110 cities (Bansal, 2018). In the UK market, the company has already started its operations in the Cardiff, Newport and Vale of Glamorgan. It has been recognised that in the upcoming future, it is planning to expand its reach in South West England as well (Olacabs, 2018). The brand is claiming of offering affordable rides with high qualities, which is relatively satisfying customers to enjoy the passengers of UK to avail fast, easy and comfortable rides at the much low fare. Moreover, Ahi et al. (2017) determined that the economic scenario of the UK has been considerably challenged by its political circumstances as a result of Brexit referendum. This is somewhat letting the people face certain economic crunch. As a result, people in the UK market are looking for affordable alternative options to feet their survival. Hence, the offerings and the services lines Ola has designed for the UK passengers are somewhat suiting their transport connectivity needs, which effectively creating better prospect for Ola to expand in the other potential cities.
The brand has also kept a sincere approach towards its safety management tools. To ensure high-security measures for its passengers, it has installed emergency button on the application where customers can get access to it the moment they find something wrong with their riding experience. It also allows riders to check the verified drivers and the live ride tracking system is installed in its app to ensure high-security travel experience to its passengers. These had been some of the real and genuine efforts the brand has taken to ensure a successful penetration in the UK market. According to Lojacono et al. (2017), Ola has undergone a thorough research work in terms of the issues passengers are facing with the car rental services. Based on which, the service lines, pricing and safety standards are revised to ensure high satisfaction rate of the UK customers with Ola rides.
It has been determined that Ola’s biggest competitor Uber has already been running a successful operation in the UK market. However, as per the recent data, a group of black cab drivers in London has been planning to take legal actions against Uber with the claim of losing earnings since Uber expanded its operation in the London (Bansal, 2018).
Ola has received licenses to effectively operate in the Greater Manchester and South Wales. The brand has been working with the local authorities throughout the UK to expand its service nationwide by the end of 2018 (Dash, 2018). The Co. Founder and CEO of Ola, Mr. Bhavis Aggarwal has shown excitement in the expansion strategies and announced its plans for future service expansion in the untapped UK markets. He denoted UK to be the most potential market for business and encouraging the brand to come up with fresh service lines to meet the ever demanding mobile needs to the UK passengers (Dash, 2018). Moreover, information gathered from the recent source reflects the fact that the UK cab hailing market is getting highly saturated with too many players like myTaxi, Uber, Gett, BlaBlaCar, etc. As per Kumar and Reinartz (2018), there has always been room for competition ever in the most competitive market. On the contrary, Nagle and Müller (2017) determined that to get a successful share in this competitive market a new brand needs to offer a proper service and value proposition than that of the existing brands offering. Hence, it can be stated that Ola in the UK market would need to offer a great value proposition to drivers and riders to create its own individual space. Even from the perspective of getting on board drivers, it would be considerably difficult to work as the rivers act carefully in terms o switching organisations (Hunt, 2018). The drivers in the UK market usually assess the quality of support and benefits the brad would design specifically for them before switching to Ola. Hence, the brand would require being efficient in terms of designing the beneficial measures for its drivers to get their commitment (Ottman, 2017). On the other hand, Watson IV et al. (2018) stated that the customers might be willing to experience a new service but might hesitate to install yet another app in their device unless the service offerings or cost margins are significantly better than the existing providers. This has specifically encouraged Ola to redesign its service lines, security measures and price range to get the attention of the UK consumers who are already a customer of the existing car-hailing service providers.
However, it has been determined that few of the strategies taken by the brand would be benefiting its operation in the UK market (Dash, 2018). For instance, Ola’s performance outside the Indian market has been phenomenal. In the Australian market, the brand has been successful in attracting a good figure of the customers and driver partners, which also indicates the fact that Ola has enabled to create its niche segment in the highly competitive market and has also been able to grab a nominal shares of the other domestic players in the same market within the tenure of less than even 6 months (Dash, 2018).
In addition, affordability and rideshare experience provided by the company get the maximum attention as well. Ola’s policy design to attract driver partners, as well as customers, might be highly attributed to the costs margins at which it operates (Lojacono et al. 2017). Hence, considering the price ambiguity amongst the customers due to Brexit referendum, UK is estimated to witness sensitivity soon after its issue. Thus, this particular strategy of Ola would again count as its advantage, where the brand seems to be having ample scopes in terms of dealing with the price sensitivity attitudes of the UK customers (Broocks and Van Biesebroeck, 2017).
Furthermore, Ola’s market entry in Europe has been identified as another step towards taking on its doorway competitor, Uber. The competitor has already run-in with the UK government, where its license was currently repealed by the London transport agency. This had left in the total of 400,000 drivers of Uber at a lurch (Dash, 2018). Although it had received the license of operating back again in the market, yet, the dilemma lies in the fact whether Ola can ride on Uber’s delinquencies or not. On the contrary to the latter statement, Ahi et al. (2017) kept his point that the similar sot of questions was raised in the Australian market as well, which was also a market dominate by Uber. Nevertheless, in the Australian market, the brand has managed to operate in seven potential and prospectus cities by having more than 40,000 registered drivers (Dash, 2018).
According to Ducange et al. (2018), Ola is generally targeting the major cities to run its operations in the Australian market. It has also been noticed that the brand is about to continue a similar strategy in the UK market as well. However, the accessibility of the brand in the suburbs is still found low, which can be a threat to its successful operation in the recently entered market. Since consumers would preferably like to access in all possible areas, restrictive choices might not encourage them to shift from the existing preferences who are already offering the demanded service lines. Therefore, as per the versions of De Mooij (2018) it may be stated that the scenario might take a few more considerable years for Ola to set a tough competition standard for Uber in the UK market.
In a similar context, Parola et al. (2018) has denoted that the success of ridesharing brand depends entirely upon its rapid scaling up margin. In case the cabs are not much available or consumers face a significant delay in the service lines due to low supply, they might not even think of sticking with the brand. Since the figure of substitute brand offering relative service lines are high, therefore, the customer switchover rate is greater. Ola with its current strategy of operating explicitly in the major city might not stand in the position of competing against the existing car-hailing brands like Taxify, which is scaling up pretty fast. According to Arnold et al. (2018), Ola would enable to surpass the position of Uber only through the acquisition of the currently operating ride sharing brands. On the other hand, Ysasi et al. (2018) claimed the fact that Uber has recently faced legal allegations in the UK market, which can act as an advantage for Ola to pull its customer base. In addition to the latter statement, it has been recognised that Ola is offering industry-leading commissions in the UK market, which can result in higher earnings on daily payments. It seems that Ola in the UK market tends to lead the sector with its approach of passenger security involving its DBS screened drivers and efforts like 24/7 customer support (Olacabs, 2018). The option of sharing ride details with the emergency contact has also been a lucrative effort for it. Hence, it can be stated that Ola in the UK market is usually identified for its collaborative approach of working with the governing bodies and domestic authorities. This approach specifically helps the brand in finding absolute solutions relating to its mobility issues in many meaningful and innovative manners. Moreover, Ola has also differentiated its brand from the other taxi apps that are operating in the UK market, in terms of its payment structure. The brand has strategized of taking 10% commission from the privately hired vehicles and 5% from the black cabs in the UK markets (Morrison, 2018). As per the management of Ola, both the segments are industry lows which may indicate its drivers getting a major chunk of fares.
Conclusion
Based on the discussion and analysis performed in the preceding sections of the essay, it may be stated that the essay has arrived at a concluding statement underscoring the fact that Ola has managed to expand its reach successfully in the UK market after the successful operation in Australia. Yet, the brand has definitely managed to introduce some of the most lucrative efforts like collaborating with legal bodies and local authorities in terms of getting legal guidance and support. This is where it can cut show on Uber’s competition, which has faced legal charges recently in the same market. Nevertheless, it is too early to infer on Ola’s operation in the UK market. The brand has just expanded into this market, where the numbers of competitors are comparatively higher. Hence, Ola might face tough competition from the existing operator in terms of setting its own service standards. Therefore, it may be concluded that the clearly chalked out overseas expansion strategy coupled with the sound governance through efficient leadership for Ola may significantly contribute towards the corporate goal of attainment of sustainable growth globally in the long-run.
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