|Type of paper:||Essay|
|Categories:||Company Business management Strategic marketing|
Ofo stands to be the best web and mobile-based bicycle sharing platform, which allows clients to search, hire, and use bicycles within a specified period of time (Owler, 2019). The company was founded with Dai Wei in the year 2014, who is also the CEO of the enterprise. Since its inception, the organization has developed and grown in its client base and annual revenue returns, dominating the Hong Kong market base for bicycles. According to Owler report (2019), in the year 2019, Ofo enterprise garnered revenue of about 886 US dollars from its bicycle-sharing business. Equally, it's estimated that the organization has about a thousand employees and an annual return of ten million US dollars. The organization hosts its activities from a web platform and software application, which aids the clients to access the services at ease such as hiring, buying, and using bicycle services.
From the statistics, it's vivid that Ofo enterprise is committed to delivering quality service and products to their clients, such that it has a strong bond with the numerous clients. Although Ofo is a developing brand in the bicycle share market, its key performance indicators show that the organization is doing far much better than its immediate competitors. The close competitors of Ofo enterprise include Mobile, Nextbike, Zagster, Motivate, Obike just to mention a few (Owler, 2019). The competitor analysis on key performance indicators shows that the Mobike is the biggest rival of Ofo in the market whereby it generates at least 70% of Ofo revenue returns. Mobike was established in the year 2015 with its headquarters in Beijing, China, and it operates from a mobile platform just as Ofo. The other close rival of Ofo is the Nextbike Company, which was founded in the year 2004 with headquarter in Leipzig, Germany (Owler, 2019). The difference between Ofo and next bike is seen in the employee difference between the organizations whereby the nextbike has 836 employees compared to Ofo, which has more than 1000 employees(Owler, 2019). Generally, statistics show that the Ofo bike sharing platform is doing better than its competitors. Therefore it's an established brand in Hongkong.
The success of Ofo Company is due to the envisioned and commercial mindset of the founder Dai Wei and the entire management that has strategized effectively to meet the market needs to the clients. Equally, the organization seems to be providing satisfactory services to clients; hence it maintains a firm brand name Hong Kong and other nations. The organization hosts its bike-sharing services in at least in twenty countries in Asia, Europe, and America, thanks to the business models which the management has adopted to ensure that it has a useful chain management system to enhance its service provision (Henry and Paul, 2018: 11).
Business Models Used with Ofo in Hong Kong
The Gap Analysis
The management of Ofo enterprise deploys the Gap analysis tool in the management to establish the business strategy by finding the potential position of the organization. Here, the administration conducts a meta-analysis study to find the actual performance of the organization against predicted performance (Okland, 2015:106). With the establishment of the future need, the management aligns the mechanisms through which it will achieve its stipulated objectives. The gap analysis is advantageous for the enterprise since it helps the organization to survive in the present day dynamic market place environment. At present, the market trends have changed as the retail market has moved through leaps and bounds with online markets taking over. Smartphones are used to affect trade since the internet is used to reach clients at their doorsteps, a notion that has changed due to technological advancement. In the gap analysis, Ofo enterprise has been able to predict the expectationsof employees, clients, and vendors. In the end, the organization is able to meet the needs in a timely manner to facilitate and support the production and supply of products.
Customer Value Chain
Ofo enterprise seems to be committed to enhancing the maximum benefits to its clients as such; it has obtained a maximum consumer value. The consumer value chain is a process in which an organization conducts statistical analysis to develop a critical understanding of customer behavior and its subsequent benefits (Patterson, 2016:487). The customer value is a procedural process, and each stage has a cost to the organization. The steps of the chain help the organization to gain clients, retain them, and develop a working relationship. Actually, from the performance indicators recorded with Ofo, it's evident that the organization is implementing the steps of the consumer value chain to enhance its results. For example, the organization conducts a geographical analysis to find the location where the company has the most significant target population before initiating activities in such areas. Equally, the company performs a price optimization not only to gain clients but also retain them(Patterson, 2016:485). In building a bond with the client base, the organization does a trigger-based communication and a prosperity analysis.
Service Design and Quality
The bike sharing services from Ofo Company have been facilitated through efficient mechanisms of payment during bike lending and access of bike platform through the mobile phone platforms. This service provision design allows the clients to access the bicycle remotely and pay for the services in the most effective way according to their own schedule (Henry and Paul, 2018: 10). Furthermore, the bike sharing services suit the population size of Hong Kong, which is densely populated with expensive transportation systems. Thus, the bike sharing scheme suits the needs of the residents who want to move within the city conveniently at a lower price. Ofo services substitute the expenses endured in using other modes of transport. In addition to that, Ofo Company has designed its bicycles outlook to suit the need of the clients. According to user attitude analysis, the bike riding hotspots are situated in East and West of New Territories of Hong Kong. Thus the company has fostered much of its services in the places (Henry and Paul, 2018: 12). This allows the Ofo Company to attract, retain, and build relations with clients in areas of demand. Cycling lanes in Hong Kong are narrow, which are quite dangerous to share with vehicles. Here, the Ofo organization has enhanced the quality of its bikes in terms of its appearance, safety, and comfortability to ensure it meets the road needs (Henry and Paul, 2018: 24). In the end, clients tend to choose bicycles from its stations.
Sustainable Competitive Advantage
Ofo is already an established brand in Hong Kong doing much better than its competitors in the bicycle sharing service. At the particular position, the organization management is smart attracting customers, being informed of the market needs, and pleasing clients. Having the top rank and reliable brand name gives it a competitive advantage. Since the company still needs to improve its market base in order to gain more profits like other developed organization, it has boosted its business strategy to ensure that establishes an added advantage over the current and future competitors (Huang et al., 2015: 618). The mechanisms through which the organization enhances its sustainable competitive advantage include product design, value for production, and quality. The approach aids the organization to outsmart competitor firms in a manner which the opponents cannot easily surpass its market position. In the end, Ofo tends to offer its clients a great value as contrasted to the competitors. For example, Ofo charges its clients less lending fee,yet it provides them with other services such as a paid parking fee for its bikes within the city. Thus, its clients enjoy a free parking space for bikes. This to imply that the sustainable competitive advantage entirely helps an organization to develop a strong market position which can be maintained on a long-run through the use of technological advancement as done with Ofo (Huang et al., 2015:623).
According to Ofo management, the client is their King. The company holds the statement at heart each time they serve the clients to the maximum satisfaction levels to builds chances or retaining the client (Owler, 2019). Given that the organization operates on lending and leasing terms, the management gives client satisfaction high stake to ensure it has vast return customers. The measure of the client satisfaction levels through the feedback reviews helps the organization to reassess its marketing strategy and operation terms optimally.According to Patterson 2016, interpersonal communication between the managers and the clients helps to boost the client satisfaction levels and the ability to create trust and loyalty with some of them which are advantageous for the business (486). For situation whereby Ofo clients feel satisfied, they have been able to reuse the bike services, help spread the word on Ofo services and products, and give a remarkable review on the services which helps in the attraction of new clients. The results of commitment to client satisfaction have been the strong market position of Ofo in the Hong Kong market. In the client satisfaction levels, that of Ofo can be coded in level five, which made of highly satisfied clients who are likely to shift to another brand or product of a similar kind. In the end, Ofo seems to provide services which clients are left delighted.
Recommended Strategies for Ofo Market Competitiveness and Client Attraction
Although Ofo still remains the top bike sharing brand in Hong Kong, it's being faced with external market challenges such the environmental restriction and legal provisions of the nation. Mainly, Ofo management is in conflict with the government over the parking spaces of its bicycles and handling of the old bikes (Owler, 2019). Equally, the company has refuted its operations in some sections of Hong Kong busy roads since they lack bicycle lanes as such Ofo bicycle create commotion with motor vehicles. The situation also places the cyclists on the health risk of encountering accidents on the busy roads. In turn, the Hong Kong government has banned the use of bicycles on such roads. Among other challenges that are affecting the client base of Ofo clients such as the age bracket and gender, the company should adopt other models that will help it maintain the market position and maintain the strong client base (Owler, 2019). The competitor is implementing their own strategies to build the market position as such Ofo management needs to remain updated with market trends and changing client needs. Some business approaches that can be adapted to challenge the risks include the following.
Value Attitude and Lifestyle (Vals)
It involves the performance of a psychographic segmentation, which is the evaluation of the consumer mind to establish the kind of communication or market strategy that attracts most clients(Naami, Ashouri, and Soleimani, 2017: 107). The analysis of the values, attitudes, and lifestyle of clients will give Ofo an understanding of the inert nature of its target population. For example, the organization needs to conduct a study of the income level of its clients and social status. A person in a high-income class will automatically have different habits like taking regular vacation tours in rural areas, exercising frequently, and taking his children for trips too. The pattern and attitudes of such a person are different from a person in a middle or low-income class.
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