Académique Documents
Professionnel Documents
Culture Documents
REDBUS
The Next Step for Growth
By: Ankit Singh (19) Balraj Naik(28) Madhav Joshi(46) Priyanka Thakur(60) Sybil Fernandes(91)
RedBus
Customer It has a customer Yes, firm has Has been tried by Company is leveraging the Provide medium term
Network and centric model and invested to build competitors but customer loyalty to good competitive advantage
Loyalty therefore it is highly a strong customer none of them are effect
valuable. loyalty as successful
Sales Force Yes No Can be imitated Still there is lot of Can provide sustainable
and Channel by competitors potential to utilize the competitive advantage.
Management excellent sales force Potential is certainly
there.
Conclusion after doing VRIO
analysis
– Based on VRIO Analysis, we have found that the competencies of Redbus are
1. Leadership Team
2. Local Presence
Redbus should remain in Bus travel booking business because they have a
competitive advantage.
Whether Redbus should own private buses.
An option for vertical integration
5 Force analysis in the year 2012 to know the feasibility of entering as bus operating
transport services.
Type of Force Power Implication on RedBus
Threat of new entrants Low Market share(65+ % in online bus industry) of RedBus will be
less affected.
Bargaining power of suppliers Low 800+ Bus operators will extract lower price from the RedBus.
Bargaining power of buyers High Buyers usually tend to drive price down thus limiting the
potential of the Bus Redbus to earn sustainable profits.
Threat of substitute products and High Redbus has to either continuously invest into R&D or it risks
services losing out to disruptors in the industry.
Rivalry among existing competitors High Difficult for Redbus to earn sustainable profits due to increase
in competitors.
Overall implication on RedBus
Overall 5 force impact is High which is not favouring RedBus to own private buses.
Bus Fleet Requirements for Private Bus Operators
In spite of requirements for Private Operator, Payback Period is long and capital required to buy Buses
are high. It also disrupts their Business Model.
Whether RedBus must go global?
Distance Singapore & Malaysia USA
Cultural Distance 1.Singapore has about 3,48,119 ethnic Indian residents, 1.Mostly English and Spanish speaking
who form 9.2% of the population(Mostly Tamil) and 7% country.
in Malaysia.
2.There are estimated to be 2,60,00 Hindus in Singapore 2.Three quarters of the US population are
and unlike Malaysia and Indonesia there is no religious Christians.
restrictions on freedoms of Hindus.
Does not match
Match
Administrative 1.On the democracy index Singapore is ranking 66 out of 1.On the democracy index USA ranks 25th .
distance 167 countries and Malaysia ranks 52nd .(India ranks 41)
2.Singapore ranked number 2nd & Malaysia ranked 2.USA ranked number 7 in global competitive
25th in global competitive index in 2012. Index.
Ansoff’s Matix
New
Services Service Development
Unrelated Diversification
Test for success of diversification
– 1.Attractiveness Test:
– The industry has grown from INR62.5 billion in 2007 to INR378.9 billion in 2011.
– Growth of Online Travel Industry at the annual rate of 50%.
– Increase in the internet audience in India to about 137 million as of 2012.
– By 2012 overall bus travel industry in India was growing at a rate of 25 % per annum
– Customer segment in tier I and II cities ,in the age group 20-40 were internet savvy and had access to credit card.
Median Age of Indians are 29 year.
2.Cost of Entry Test:
The cost of Online Booking for Air Travel, Hotel and Package Tours will not take away the future profits of Redbus because
1. Package Tours: Due to its 800+ Operators Network connecting 20 States
2. Air- Travel:
– 10% RedBus customers buying airline ticket using its website will give 10 times the revenue as compared to the revenues of
Online Bus Tickets.
– There are only 5-6 airlines in the domestic market. So creating a platform will not be difficult.
– Not Viable because the target audience changes and also it has to move from cost effective sector .
3. Rail Travel: Railway ticket can be offered by partnering with Indian Railways .
2.Borrow:
Joint Venture with the Indian railways so that they can create a platform for booking
train tickets so that the traffic in train ticket booking also can be controlled.
Thank you