In this case study, we’ll learn about the SWOT Analysis of OLA. Before we dive into that, let’s get to know a little about OLA.
As, we are going to talk about Ola, how it started, who invented this type of facility. If you believe that Ola is an abbreviation or short form, you are wrong. The word is derived from the Spanish word “Hola” which translates to “Hello”. The logo also has an “O” which represents a tire. The full form of Ola is the Operational Level Agreement.
Ola cabs were styled as OLΛ is an Indian Multinational Ridesharing company that offers services that include vehicles for hire and food delivery as well. The Ola cabs were invented by two people named Bhavish Aggarwal and Ankit Bhati. The company is based in Bengaluru, Karnataka. The main vision behind Ola Cabs is to provide hassle-free, reliable, and technology-efficient car rental services to Indians.
As we all know about Ola, which has grown rapidly in a very less span of time, so here we can get detailed knowledge about the same.
Let’s get into the SWOT Analysis of Ola, let’s start with the Strengths of Ola. Below mentioned are the sectors for analysis.
SWOT Analysis of OLA
SWOT Analysis is a simple but useful framework for analyzing your organization’s strengths, weaknesses, opportunities, and threats. It helps you to build on what you do well, to address what you’re lacking, to minimize risks, and to take the greatest possible advantage of chances for success.
1. Strengths of Ola
Strengths are things that your organization does particularly well, or in a way that distinguishes you from your competitors. Think about the advantages your organization has over other organizations.
- First mover as a taxi aggregator in India:
Ola was started back in 2010 and had a first-mover advantage in comparison to its competitors which were started very late. Though other taxi services were already existing like Meru and Ola targeted a new segment and is currently targeting the mass segment owing to the low prices it offers.
Ola makes use of state-of-the-art technology with strong data analytics which helps it to forecast the demand in any geographic region accurately to provide a balanced supply of cars for the commuters. The more availability the more it will be used by the customers.
- Product Line:
It provides a wide product line which starts from offering services using bikes, different types of cars and also the auto and it also offers more services like local commuting, outstation, and rentals and also share cabs. Therefore, it offers a complete package of services to its users which gets fixed with different segments according to their usage. This is the reason why Ola is popular in India.
- Low investment:
Ola, an aggregator (service provider) does not have to own a fleet of cars to run a business. Drivers from all the regions collaborate to meet the demand from the consumers and therefore, there is always Cash Surplus.
- Dynamic Pricing:
Ola has been using a dynamic pricing model to rate the ride according to the demand of the rides in a particular region or during bad weather conditions. This helps to manage the supply efficiently and at the same time adds to the bottom line.
2. Weaknesses of Ola
The business has to work upon these areas so they are not left behind from the competition. Though there will be some of the other weaknesses it should not be an area that takes the business out of the market.
- No Control over Drivers:
The business model that Ola has leaves itself with no control over the drivers. Drivers play an important role in making the brand name of Ola and hence any misbehaviour of the driver with the customers directly reduces the brand image in the market.
- Fake Riders:
There have been incidents wherein Ola drivers have started to ask riders to book fake rides just to increase their ride counts for the day. This tends to result in a loss of revenue as the drivers are grossly paid for nothing.
- Weak Support:
The customer relations services offered by Ola are not up to the mark and customers are always regretting and carping over the support they receive from the brand.
- Dependence on the Internet:
Customers are only able to book rides if they are connected to the internet. As in India, connectivity is an issue and hence customers are not able to book rides. Though they have started with offline booking it is not yet very helpful and appropriate.
- Market Segment:
Ola markets themselves as mass segment usage people who are tech-savvy can use the services in India, the ratio of tech-savvy people is very non-technology users.
3. Opportunities for Ola
An opportunity for an Ola helps in understanding what other things a business can do with the current skills and all its assets resources. Ideally, this helps Ola to exponentially grow in the areas where it can expand and take a lead to diversify the market and grow on customer base.
- Wider Market:
Ola shall attract non-tech-savvy customers, ola has to rethink its business model where such segments can also make use of their services and it shall help Ola in a big breakthrough as it helps to enhance the customer base to a great on a roader prospect with good margins of profit.
- Increasing Internet Penetration:
The increase of the initiative taken by the government to make smart cities and penetrate the internet to remote places as well provides Ola with an opportunity to focus on these regions and expand their services to another level as well. Above all Ola shall make use of old-school marketing.
- Poor Government Transport:
In Tier 2 and 3 cities, there has been a lack of proper government transport service and hence this can knock the door of opportunities for Ola to look into those cities and capitalize on the opportunity.
4. Threats to Ola
This analysis shall help Ola in risk understanding & which are market areas it can impact the business in the future or right away. So Ola has to giddy up itself to handle such market threats in the future landscape. Competitors or an increasing number of players in the market with the same value proposition is a bad debt threat to business as it will directly drill down on service efficiency which will adversely impact the consumers base & business capital at the same time.
- Government Regulations:
Government regulations about the taxi service industry have several uncertainties at the hand. Taxi service providers are changing being threatened by the changing norms and regulations.
- Customer Satisfaction:
Ola has gross customer service and failed to deliver likely worthy customer service thereby the presence of Uber in the market relies on the customers to switch the brands in an open market.
Lately, there has been an increase in competition inside the market due to the presence of Uber and other local taxi service providers.
|Revenue||2,544 crores INR (US$360 Million 2019)|
|Total Funding||$3.8 Billion|
|Valuation||$6.2 Billion (October 2019)|
|Parent Company||ANI Technologies Pvt. Ltd|
Ola directly competes with Uber, the world’s most well-financed startup that has raised more than $24 billion in equity and also debt on a recent valuation of $82 billion. Other players in India include Meru Cabs Company Pvt. Ltd. which owns Meru cabs, which owns a car on rent, and also Zoomcar India Private. Ltd. which owns Zoomcar. In the bike taxi segment, Rapido is slowly and gradually capturing the market share of Ola.
Ola is cost-effective and people who don’t want to travel in auto also get their desire fulfilled by offering a car drive. Even they are broadening their facilities. They are now providing a bike facility which is very beneficial for the people who want to travel alone or in a hurry and want to avoid traffic. Thus, this is the success story of Ola, and we all can realize how Ola has become a vital part of our day-to-day life. I had to be grateful if you could share these with your friends via email, Twitter, or Facebook, kindly spread the word. KUDOS! Thank you.
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