Digitization of Ola Cabs: Contextual Factors and Exploitation of Digital Environment

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Digital Business Environment
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Abstract
The study draws on literature on digitization of services and supply chain. Competition
in today’s business environment has been taken a notch higher by introduction of digital
platforms to enhance business efficiencies while maximizing profits. Digitization has
been supported by advance technology and digital processes that has been used to
improve businesses. Ola cabs in India has been using this strategy and due to its fierce
competition with Uber, business rivalry has been transferred to the mobile apps. With
the business strategy aiming at improving efficiency, the report seeks to identify and
analyze the contextual factors affecting Ola’s exploitation of the digital platform. Since it
is a private owned company, the report will also analyze the threats and competitive
opportunities in the macro and micro environments. Other factors affecting digitization
include the supply chains and the industrial sector channel structures. It will also
analyze the online business behavior and customer segments in the country. The
revenue streams will also increase as digital capabilities will be enhanced to increase
the online market place map for the organization.
Table of Contents

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Introduction.................................................................................................................... 5
Identification and analysis of contextual factors affecting the organisation’s
exploitation of the digital environment..........................................................................5
Micro and Macro Environments....................................................................................6
Perform the Pestel Analysis..........................................................................................7
Political.....................................................................................................................7
Economic................................................................................................................. 7
Social........................................................................................................................ 7
Technology.............................................................................................................. 8
Ecological.................................................................................................................8
Legal......................................................................................................................... 8
Competitive Opportunities and Threats........................................................................9
The industry/sector channel structures and the supply chains (digital and/or
physical) in operation...................................................................................................10
Analysis of Customer segments and online behavior.................................................11
Analysis of the current contribution of digital capabilities to the organization.................11
Value configurations in operation, and the place of ‘digital’ in supporting value-adding
processes....................................................................................................................12
The strengths and weaknesses of the current customer-facing website or App,
compared to that of one direct competitor....................................................................12
Conclusions, recommendations, and critical assessment of the work that has been
undertaken.................................................................................................................... 13
Conclusion.................................................................................................................. 13
Recommendations......................................................................................................13
Critical assessment.....................................................................................................14
References....................................................................................................................15

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Introduction
On-demand cab services have become very popular in India. With the world wide
technological disruption that was caused by Uber, its competitor in Business, Ola set its
sight on improving digital business technology. It enhanced its business strategies by
exploiting the search, social and mobile ecosystems within the online marketplace.
Value configuration in online business operations is also enhanced while supporting
value-adding processes. Different customer segmentation has increased businesses
while increasing destination sites in the business. Ola has continued to be a market
leader in on demand cabs businesses by adding better strategies and focusing on
customer satisfaction aspects. Digital environments have caused disruptions in the
market place as is the testament by increased competition due to digitization of
business and mobile applications(Bülow, Ahmon and Spencer, 2011) . Although there
are many challenges and threats that affect this type of business model, the important
thing to take into consideration that exploitation of the digital environment has led to
increased efficiency in business.
Identification and analysis of contextual factors affecting the organization’s
exploitation of the digital environment
The digital environment has greatly affected any business model in the cab industry.
Through the use of mobile application, Ola users have gained access to TaxiForSure
cabs also called the TFS. As a private business, it is a pure play virtual business that
has both physical and virtual aspects although mostly it uses the mobile app for digital
use. Due to increased competition from Uber, Ola has been acquiring small firms as a
business strategy aimed at strengthening its position in India. In March 2015, Ola
acquired TFS for approximately $ 200 million. In the same year it acquired Geotagg,
which is a trip-planning company. With this acquisition, it strengthened its applications
systems affecting both the macro and micro environments of the business(Scott, 2008).
In December of 2017, Ola made the acquisition of Food panda and Ridlr a public
transport ticketing company for an undisclosed fee. This shows the strategic positioning
of business aimed at improving the digitization process.

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Ola provides other services that range from economic to luxury travel. However, due to
its efficiency in cab services used by its mobile app, it commands a 60% of indias
market share with 150,000 bookings a day.
Micro and Macro Environments
The environment is a factor that influences the overall competitiveness of companies in
a given country or region. Three steps that show how the general environment affects
the performance of Ola Company, identifying the relevant economic and social factors
and assessing the variables with mechanisms like the PESTEL analysis(Chhokar,
Pandya and MeenaRaghunathan., 2004). The analysis of the general environment will
allow the report to identify the most important variables that affect Ola so that the
business can decide which the most appropriate digital strategy to follow is.Macro
Environment: It will be constituted by all those factors that cannot be controlled and that
directly affect the company.
Political factors, Technological factors, Environmental factors, Demographic factors,
Economic factors, Cultural factors.
Micro Environment: Non-controllable environmental factors or forces that have a
general impact on the activity of the company and the rest of the companies.
Suppliers, Company, Third Parties, competitors, Intermediaries, Market.
It is important to analyze the Macro and Micro environments and establish in our action
plan the different actions that we will take to be able to act in the different situations that
our company is in. First you must define the environment of your business that you will
study later. To do this, select at what level you are going to carry out the study. This first
delimitation is important to discriminate the type of information you will need to perform
your analysis(Gifford, 2013).
Secondly, is identify which variables have a significant impact on the activity of Ola and
which do not. For this, the PESTEL analysis is very useful with the Political, Economic,
Sociocultural, Technological, Ecological, Legal dimension.