Swot Analysis for OlaCabs

Strengths:1. Ola started out in December 2010, earlier than its competitors. As a result it has had an advantage in establishing its dominance in the Indian market. Currently Ola has presence in 102 cities with a fleet strength of 450,000. 2. Olacabs is an aggregator of car rental service focusing on creating a technology platform that seamlessly connects drivers with those who need a ride. The burden of owning, licensing, insuring and maintaining a car rests with the driver, not Ola. Thus it has limited exposure - as defined by total fixed and quasi-fixed costs like payroll. 3. Ola is backed by several heavyweight VC firms like DTS Global, Softbank, Falcon Edge, GIC, Sequoia, Steadview, Matrix, Tiger Global. Chinese carhailing app Didi Chuxing has also invested in Ola Cabs taking its market valuation to more than $ 2 billion. This has not only made the brand financially strong but has enabled it to capture the market and attract more drivers on to the platform by burning significant cash to provide ride-linked incentives to drivers. Thus it has succeeded in warding off competition from radio taxi service providers like Meru Cabs and deep pocketed competitors like Uber. 4. Aggressive TV, online and print media marketing has helped in increasing its customer base and due to network effect it is increasing. 5. Ola Cabs has a strong technology base which enables it to make extensive use of data analytics and thus predict demand accurately on a daily basis and thus prepare accordingly. Weakness:1.

Ola Cab’s business model allows it to exercise limited control over its drivers who represents the face of the company. Thus any misbehavior on the part of the drivers directly affect the company’s brand image. This is apparent from the scores of negative feedbacks ranging from drivers not showing up to harassment faced by the women customers.

2.

While the demand for their services is huge, Ola Cabs has had to burn huge amounts of cash to establish its market share. Monetization is very difficult which is apparent from the loss figures of ₹ 754.87 crore posted by Ola Cabs for the year 2014-15.

3.

Loyalty is elusive in this business model with customers always flocking to the most attractive alternative. This is true for its driver partners as well, as several of them cut off ties with Ola Cabs after it revised its incentive policy which cut into the earnings of the drivers.

Opportunities:-

1. India’s online taxi services market is estimated to be around $9 billion, pegged to grow at a CAGR of over 17% during 2015-2020. This shows huge potential for expansion with Ola Cabs rightly deciding to register its presence in Tier – 2 and Tier – 3 cities as well. 2. Increasing internet penetration and smartphone users has further helped the cause of Ola Cabs. Rising disposable income has led to shifting of consumers towards convenience, thus further increasing demand. 3. Acquisition of Taxi for Sure and other smaller companies by Ola Cabs has established it as the market leader.

Threats:1. Ola Cabs faces fierce competition from its most significant rival Uber, the global giant in this field, with presence in 66 countries and a market valuation of more than $ 50 billion. Despite its late entry in India compared to Ola Cabs, it has expanded aggressively, currently offering its services in 26 cities with a fleet strength of 2,00,000 2. Ola Cabs also faces competition from multiple local players like Meru Cabs, Easy Cabs,