Customer Satisfaction and Business Operations: A Case Study of Ofo

This paper delves into the customer satisfaction issues faced by Ofo, a bicycle sharing service company, and explores the tools used to address them. It examines the business operating model, priorities, and proposed solutions. The study focuses on Ofo's operations in Hong Kong and the challenges it faces, such as bicycles blocking footpaths. Feasible solutions are proposed to resolve these issues.

Running head: BUSINESS OPERATIONS
BUSINESS OPERATIONS
Name of the Student:
Name of the University:
Author Note:

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Introduction:
Customer satisfaction is one of the main business parameters which multinational
companies consider while considering their operations and business efficiency. High levels of
customer satisfaction results in generation of high revenue and a high position in the market.
Satisfied customers promote the companies concerned using words of mouth and provide the
companies with referral leads of customers. In fact, it is generally it is easier to convert referral
leads into existing customers compared to customers not belonging to the referral groups. Thus,
it is evident that customer satisfaction is one of the most powerful tool to ensure competitive
advantage in the market. Issues pertaining to customer satisfaction can have severe impact on
business generations like reduction in revenue generation and dwindling capital generation. The
multinational companies today in order to deal with customer satisfaction related issues use
different tools like balance scorecard and CATWOE (customers, actors, transformation, world
view, owner and environmental constraints. The aim of the paper is to delve into customer
satisfaction issues which multinational companies seek to deal with using different tools. The
company which would form the base of the study would be Ofo. Ofo is a bicycle sharing Service
Company based in Beijing, China and having operations in more than a hundred locations. The
foreign markets of the Ofo include top cities in the world like Melbourne and Chicago. The
customer issue which the company is facing is that its bicycles block footpaths, thus causing
inconvenience to pedestrians. The paper would seek to delve into the issue to find out feasible
solutions to it.

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Part I.
Business Operating Model of the selected organization and its business operation priorities:
The new process would consist of rolling out specific numbers of bicycle at a given time
and in a given area. The process would also consist of customers parking bicycles at specific
points or allotted parking spots so as not to block the footpath and create inconvenience to
pasers-by. Ofo is a bike sharing organization based in Beijing, China. The operations of Hong
Kong are based on satisfying the requirements of the customers. Sharing economy business
model has been the predominant business model used by the organization. The model consist of
strategies that focus on building trust, transparency and authenticity among the customer base.
This has been one of the core strategic dimensions of Ofo in all the markets including Hong
Kong. However, the organization has also implemented customer driven strategies in the market
of Hong Kong. The country is also part of the Asian expansion strategy of Ofo. A very important
operating model of the company in Hong Kong has been delivery and process design. Ofo
focused on transparent customer interaction through the official smartphone application. The
organization was focused towards serving the needs of the customers through the implementation
of effective strategies. This strategy proved to be successful as Ofo was able to garner significant
customer base in Hong Kong (www.ofo.com 2019). The transparency oriented strategy had
actually worked better than the expansion strategy. It has actually worked well with the process
design strategy that was implemented by the organization. However, the recent strategy to
acquire some of the local bike sharing services did not actually work according to plan. One of
the major problems recently has been the rise of competition in the market of Hong Kong.
Companies like Go-Bee, Loco Bike, Hoba Bike, etc are causing significant competition. The

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industry also faces significant issues with theft or vandalism. Hence, there is a need for more
effective strategies to be implemented by the organization.
Product
The product that is being provided is bicycle sharing services. The customers have to
download the app provided by Ofo. Customers would then have the option to locate a nearby
bike and unlock it through a special code from the app (www.ofo.com 2019). The rides are
charged on the basis of hourly fee. The focus of the product is customer centricity. The priority is
to provide the customer with a level of independence, where the customer can decide how and
where to use the service. The customer can locate the bikes with his/her smartphone, pay and get
the QR code use it and leave it at a safe place when done. This provides the customers with a
level of independence that they cannot get from other hire services.
Price
The fee is charged as per hourly usage. There are also provisions for monthly payments.
The prioritization as per the pricing strategy is the fact that the payment system is completely
digitized. In Hong Kong the company provides payment options from e-wallets or debit or credit
cards. This also makes it easier to avail certain discounts and cash backs. Hence it can be said
that the pricing strategy is focused towards helping people to pay through easier methods without
involving actual cash at any given time. An important part of the pricing operation system is that
the charge is much lesser than the ride-hailing services that are available. Hence, the system is a
cheaper alternative to the ride-hailing services and one that helps the customers to use the
services independently without relying on others.

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Location/Facilities
There are specific locations where the bicycles can be kept. These are the locations
specified where the bikes can be kept. Usually the busy corporate areas and the college campuses
are the main locations of the bikes. This is because the majority of the target customers are
present at these locations. The services in a way give quick access to the customers around a
college campus or provide easy hassle free access to corporate employees to reach their offices.
People can take a ride to their college and then again use a nearby cycle stand to get their rides
back home. In the same way the locations are strategically designed to help riders at the
corporate areas get similar kind of help. The facility that is being provided here is giving more
power to the hands of the consumer without them actually having to rely on others. Additionally,
bike rides are cleaner much more effective in terms of pollution. The main aim has been to
position the product in such ways that consumers can actually get the services where they would
need it the most (Sting and Loch 2016).
Quality etc
The quality provided is effective. Special locks are provided that can only be unlocked
through providing the special code (www.ofo.com 2019). The bicycles are made with carbon
fibre bodies. The bodies are built to resist higher pressures. The focus is on providing a strong
and durable bike. With regards to the app, it is designed to take up only little phone space and
work even with lesser available internet.
The Problem Situation Proposed Solution
Some of the problems are that are affecting the services are significant issues with theft
or vandalism. There are larger numbers of riders that do not possess riding etiquettes leading to
damage. This can be resolved through proper promotion and spreading better awareness. Another

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major problem has been the problems with the refund system. Ofo in Hong Kong have faced
issues with the refunds being blocked a more efficient system of refund needs to be created
(South China Morning Post 2019). The focus should also be towards creating a better framework
for the services to be delivered hassle free.
Business Model of Ofo
Key Partners Key activities Value proposition
Customer
relationship
Customer
segments
1. Suppliers of bicycle
models
2. Suppliers of bicycle
parts
3. Supplier of mobile
app
4. Markerting
partners both in
home and host
markets
4. Banks (financial
products like
insurance and
payment gateways)
5. Risk management
and insurance
companies
Providing on-
demand bicycle
hailing services
1. Superior
services as per
customer
requirement
2. Round the
clock booking
services available
on smart phones
3. Safety
4. Punctuality
1. Relationship
with customers
by offering high
quality ride
services
2. Round the
clock support to
customers on
telephone and
email.
3. Disocunts and
product bundling
to enhance
customer
purchase value.
4. Continuous
communication
with customers
on the social
media to gain
their valuable
feedback
Upper and
middle class
customers
Key Resources Channels
Financial
resources,
material
resources,
techniological
resources, cars,
human resources
Official website,
Youtube, Mobile
app
Cost structure
Revenue
structure

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Fixed costs(taxes, customs duties and rent
on property both in the home and host
markets)
Variable costs(marketing costs etc)
Semuivariable costs(electricity, telephone,
internet etc)
Sale of bicycleride service slots to customers
Part II.
Root Definition (just base on Part I):
Ofo should use Root definition to deal with the issue. The root definition consists of three
variables namely Z(why), Y(how) and X(what). An interpretation of the variable shows that the
company should aim to achieve X, by means of Y to gain Z. In terms of Ofo, the aim can be
interpreted as generating of high profits by ensuring customer satisfaction by complying with the
requirements of other two stakeholders namely, public and government (Wang, Liu and Mingers
2015).
CATWOE Table (just base on Part I):
The CATWOE model points out that methods which business organisations can aim to
achieve customer satisfaction and revenue generation. The following are the main components of
the model:
Customers:
Ofo should aim to ensure maximum customer satisfaction by deploying sufficient number
of bicycles so as to serve customers efficiently.
Actors:
The actors in terms of Ofo would consist of the employees who would receive the orders
from the customers and allocate cycles to them.

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Transformation process:
The transformation process would consist of the entire process which Ofo would use to
convert the orders received from customers to actual services.
Weltanschauung or world view:
The world view stands on the perception that the services of the company benefits the
environment. As far as Ofo is concerned, it can be pointed out that the company should aim to
benefit the environment by deploying maximum numbers of bicycles in specific areas so as to
encourage more people to use bicycle as modes of local transport instead of transport modes
running on fossil fuel (Wilson and Van Haperen 2015).
Owners:
The term owners here refer to the government which forms policies for companies
including Ofo to operate. Ofo should follow the mandate and directions issued by the local
government so as not to block footpaths with excessive numbers of bicycles parked by customers
after use (Mello et al.2017).
Environmental constraints:
The environmental constraint in this case refers to macroeconomic constraints which
impedes the operations of business organisations. As per as Ofo is concerned, the organisational
constraints refer to the public resentment caused by bicycles owned by it blocking footpaths after
use by customers. The restrictions placed by the governments on the specific numbers of
bicycles that would ply in particular areas can also termed as the constraint.

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Figure 1. As is diagram of Ofo
(Source: Author)
Customers
leave
bicycles on
the footpath
Too many
bicycles
block
footpath
Walkers
cannot walk
Lodge
complain
against Ofo
Government
place
restriction

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Govt places restrictions
on number of cycles
which can ply on the
road
Customers have to be
satisfied by supplying
enough numbers of
bicycles
a midway strategy
Making sufficient numbers of
bicycles available to customers
in compliance to Gvt. rules
Customers after using bicycles
leave the same at specific
spots
Govt. and customers
satisfied
Figure 2. To be diagram of Ofo
(Source: Author)

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Rich Picture (just base on Part I)

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Customers leave bicycles of
Ofo on footpath Bicycles block footpath
Passersby (society) face
problems
Creates resentment
against Ofo
Government limits movement of
bicycles to free footpath
Ofo has to limit
bicycles
Customer face
problems
Ofo loses revenue
Ofo has to comply
Ofo infringes
Faces govt. penalty

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Part III.
Resources necessary for effective implementation of the new processes suggested in part I.
The main resources necessary to implement the new process of rolling out specific
numbers of bicycles to provide services to customers and parking them after use at specific spots
would consist of four main resources namely, financial resources, technological resources,
knowledge capital and manpower.
The financial resources would consist of resources allocated by the management towards
obtaining the manpower, technology and market information to implement the process described
above. The company should have detectors fixed on bicycles which would enable the tracking
their exact positions within the cities. The company would be able to ensure that the bicycles are
parked by customers in specific parking zones so as not to block footpaths and cause
inconvenience to the public. The employees would monitor the movement of the bicycles in
particular areas so as to ensure that bicycles parked after used do not lie idle for long time and
they are immediately allotted to serve the successive customers. The knowledge resources which
the company would acquire would consists of specific numbers of bicycles which the company
would be required to mobilise in specific areas to satisfy maximum numbers of customers
efficiently, thus ensuring customer satisfaction.
How performance objectives related to operations priorities:
The performance objectives would be related to the operations priorities in several ways
so as to ensure that Ofo is able to ensure customer satisfaction and generate high profits without
causing inconvenience to the public, thereby attracting government actions. The performance
objectives in this case would refer to generating high level of customer satisfaction and earn high
revenue. The operational priorities in this case would be ensuring the bicycles of Ofo parked by

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customers after use do not block the footpaths. The company should in this case form strategies
to estimate the number of bicycle orders it can receive at a given point of time and the number of
bicycles it would be required to mobilise the serve the customers efficiently. The company
should also ensure that the bicycles are parked by customers in specific points so as to not to
block the footpath. Thus, it is evident that the company would be able to align its performance
objectives and operations priorities by aligning the former with the latter.
Soft Systems Methodology:
The managers should turn performance objectives into operational priorities and
resources which would be necessarily be used to significant for effective implementation of
business processes by using the system of soft methodology. Soft methodology is the process of
business strategy which managers use to deal with business challenges and to drive changes in
their respective organisations. The performance objectives of Ofo is to generate high profits and
ensute customer satisfaction. The issue recognised in the research is that bicycles of Ofo are
often parked on the footpaths which blocks the latter. This creates inconvenience to the passers-
by and attracts government actions. The government bodies of several countries in order to deal
with this problem have imposed restrictions on the number of bicycles which would ply in
particular areas within a given time frame. These restrictions have adverse impact on the
business generation of Ofo. The company is not able to serve large numbers of customers, thus
causing inconvenience to the latter. It can be pointed out that the both the customers and the
governments are significant key stakeholders. The situation has apparently placed the two
stakeholders on the opposite sides due to their conflicting interests. The company in order to
solve this conflicting situation should use soft systems methodology. The company should hold
meetings with the representatives of the government bodies of the particular cities in which it

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operates and conduct surveys of customers on the issue. The findings from the meeting and the
surveys would form the bases of a decision making to enable to solve the critical problem. The
company should form the strategies which would consist of deciding on the minimum number of
bicycles which it will be able to operate at given time. The strategy should also involve
customers parking bicycles after using them in specific points so as not to cause inconvenience
to the passers-by. This would enable the biocycle sharing company to form strategies so as to
serve immense number of consumers at the same time and not block the footpaths. Thus, it is
evident that the soft system methodology would enable Ofo to form strategies to preserve the
interests of both the customers and the government. This would enable the company to fulfil its
main performance objectives namely, generating high revenue and ensuring customer
satisfaction.
Balanced Scorecard measurement of performance applied in organization selected by
referring to company’s annual reports
Conclusion:
The implications of the study suggest that a customer based operational strategy is best
suited for a company like Ofo. This is mainly because it is a customer centric service. As found
though essential analysis the aim should be the generation of high profits by ensuring customer
satisfaction by complying with the requirements of other two stakeholders namely, public and
government. It was found that the organization utilizes much of its potential towards improving
the promotional aspects for the service. Ofo would have to maintain good coordination with the
public and stakeholders to be able to give a service that is truly useful. The key is reaching a
large number of customers with the innovative service that they provide. The organization needs
to make its framework stronger in the future for increasing chances of profitability.

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References:
Mello, M.H., Gosling, J., Naim, M.M., Strandhagen, J.O. and Brett, P.O., 2017. Improving
coordination in an engineer-to-order supply chain using a soft systems approach. Production
Planning & Control, 28(2), pp.89-107.
Wang, W., Liu, W. and Mingers, J., 2015. A systemic method for organisational stakeholder
identification and analysis using Soft Systems Methodology (SSM). European Journal of
Operational Research, 246(2), pp.562-574.
Wilson, B. and Van Haperen, K., 2015. Soft systems thinking, methodology and the management
of change. Macmillan International Higher Education.

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