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

This study analyzes the contextual factors affecting Ola's exploitation of the digital platform. It identifies the threats and competitive opportunities in the macro and micro environments, supply chains, customer segments, and online behavior. The report also performs a PESTEL analysis and evaluates the industry/sector channel structures and the supply chains in operation.

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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.

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Perform the Pestel Analysis
The PESTEL analysis helps to define the dimensions and the variables that compose
them and then evaluate them. This assessment will provide a strategic profile with a
general overview of the environment (Technology, 2013).
Political
India’s political climate is not volatile. It is democratic with a population if around 1.3
billion people. Digitization will thrive very much in a tranquil political environment. Most
of the business run in India thrive due to a large population. Without political
interference in business Ola can only grow and expand to other towns in India. The
government has also led in setting a political agenda that aims at improving and
growing local businesses like Ola.
Economic
India is among the emerging economies in the world. In fact, it belongs to a special
category of countries called BRICK that are the next frontier in terms of world
economies. Since the economy is expanding and growing rapidly, Ola will only grow
commensurate to the economic growth. The economy is also facing a lot of changes in
digitization with many Indians embracing digital platforms to grow businesses. The
economy is also important in providing structures that affect the business model(Green
and Basher, 2012).
Social
This is the general impact of the society to the company. As an external factor in
business, the society affects a business positively or negatively. A digital business
strategy which includes a mobile app in Ola cabs is now 60% of the market share and
Uber takes the remaining share.
Technology
This is the most important factor in digitization process. A disruption in the cab industry
in India has been brought by application of mobile technology and using the same
strategy as Uber. Technology eases control of business operations and enhances

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efficiency. Using digitization strategy, technology keeps on improving from one level to
another. Ola is building electric cars to act as cabs and therefore increase competition
to uber (Business environment, 2009).
Ecological
This means the entire environment. A list of groups or dimensions to consider and
include the key environmental factors. The ecological chart is a simplified example of
the result of a PESTEL analysis. The tips on the left indicate the threats and the tips on
the left the opportunities. But before taking assessments you should bear in mind that
similar characteristics of the general environment can have different effects in different
industries, that the impact of the environment varies even among companies within the
same sector and that not all variables affect a relevant sector in a relevant way so you
have to differentiate the relevant ones.
Legal
These are the laws that legislated to help in maintaining a business framework that
works for all. Laws concerning digitization in many businesses are kept to prevent fraud
and reduce any chance of private information leaking. In India legislation is done to
control dominant business practices while creating a business environment that is free
for all to participate.
In order to survive, the company must focus its efforts on the environment. The
environment is everything outside the company. The environment are factors that affect
the company directly or indirectly and in some cases will be uncontrollable (Lange,
2010).
Micro environment:
Suppliers or suppliers: These are the companies, persons or entities that provide the
company with all kinds of inputs (machinery, raw materials, personnel, etc.). They
directly influence since they can give a competitive advantage to the company (quality,
reduction of costs, more qualified personnel, innovation, etc). Intermediaries of the

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company: These are the companies, persons or entities that intervene in the promotion,
communication and sale of the company's services(Seth, 2015).
Company markets: The different targets to which the company can be directed.
Competitors: Knowing about them in order to differentiate ourselves and give our value
proposition to them.
Third parties: Different from competitors, may affect the activity of the company.
The company: The Company is part of the micro environment, there are companies that
are divided when making decisions, and so must take it into account.
Competitive Opportunities and Threats
Ola has very many competitive advantage to its competitors like Uber. The first is the
advanced mobile app that has led many to prefer Ola to any other company. Being a
local company which was founded in India, it will find support of many locals than its
competitors. The drivers are also very friendly and know how to take care of their
customers.
Threats in this case can be associated with technology advances, many industry
players enter the market with the aim of growth and profit but with an increased
advancement in technology, many organizations shut down. Threats can also be from
fellow competitors (Shareef, Dwivedi and Kumar, 2016).
Demographic factors: the demographics of Population trends. Birth rate, mortality,
migratory movements, etc.
Economic factors: The interest rate, GDP, risk premium, economic cycle, etc.
Cultural factors: The beliefs, norms and values that are shared by society.
Technological factors: Companies must be aware of technological advances. They must
be at the forefront of technology applied to the company.

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Political-legal factors: Regarding the legal referent about the company and decisions to
be made.
Environmental factors: It refers to raw materials that affect environmental factors,
scarcity of resources.
Companies are affected by changes in the environment that constitute a general
background that conditions the activities of organizations. Changes can be good or bad.
That is why whenever planning is done within the organization, the strategy must be
well developed for continuous improvement.
Companies need to obtain information from the environment in order to know the
interrelationships of the variables, their influence on the market of the organization, to
take advantage of opportunities or positive trends and avoid potential threats (Annette
Runte., 2015).
The information obtained must be reliable to make better decisions in the company.All
of us always hope for a better future and for this, the analysis of the generic
environment opens the panorama. From my point of view, the analysis of the generic
environment opens several doors on the way to success for the business, we always
have to think big and from different perspectives to have success in life.
The industry/sector channel structures and the supply chains (digital and/or
physical) in operation
The supply chains are digital in operations. Although cash can be paid in the offices of
Ola, most people use their E-wallets to pay for cab services. This study shows the
intersection of digital business models and the management of supply chains. Digital
disruption has empirically disrupted B2C interdependencies. In the transport industry,
the industrial sector channel structure has been compressed to only the cab driver and
the client with the mobile app acting as the intermediary. The physical contact is only
initiated upon the driver accepting to carry the client. Firms like Ola can still add value

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through improvement of their mobile application. The payment through mobile app and
requesting a Ola cab enables the company to elicit aggregated client demand which in
turn identifies optimal pricing strategies. The company should employ further resources
in improving the mobile app to ensure their strategic positioning in the supply chain is
not diminished (Shareef, Dwivedi and Kumar, 2016).
Analysis of Customer segments and online behavior
When doing customer segmentation, the report looks at the behavioral characteristics in
online tendencies based on age, gender, interests and behaviors of spending. Ola and
uber noticed that when a person wanted a cab, he or she had to hustle for it. The idea
of using a mobile app therefore emerged. The customers are segmented according to
how they use the Ola cabs. It was noted that the young adults use the Ola more than
any other customer segments. They are also likely to be online most of the time. They
have peculiar spending habits but mostly ride the cabs. The old are not into this so
much. The Pareto principle says that in marketing the focus should be put more on the
20% who use the services frequently rather than the 80% who are not regular users.
Analysis of the current contribution of digital capabilities to the organization
Ola is exploiting the digital capabilities it has to succeed in the digital environment. The
organization and the sector are getting most of their revenue streams from cab
payments which is digital. The transport sector is a big sector and has massive
competition, digitization has helped to pull revenue streams and increase income that
could have gone to competition. Digitization means that revenues can be traced and
projected due to the calculation of all prices.
The online market place for the organization is the map for digital marketing strategy
and strategies used by the internet to enhance marketing. The online value proposition
is the client of Ola value proposition. It is important to communicate clearly how the
online experiences are and give the mobile application an online presence. Market
place analysis is important as it give the organization a chance to give feedback while

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improving on the mentioned weaknesses cited by the client. It also helps an
organization like Ola in formulating strategies for marketing and the analysis on the
online market place.
The organization is exploiting the search social and mobile ecosystems by improving its
legitimacy through a blending of both online and offline actions. It is also improving its
relations with the clients or the feedback giver while improving the services given. Ola is
improving on how the firm can use the digitization avenues to add more clientele and to
add more services so as to increase revenues. The relevant customer segments include
the young and the old and the destination sites is mostly in local towns like Mumbai ,
Bombay and Delhi(Annette Runte., 2015).
Value configurations in operation, and the place of ‘digital’ in supporting value-
adding processes
Value configuration in operation and the place of digital in the support of value adding
processes is important. In this case, value is added by improving customer feedback
and improving the services. Digitization has led to improved service delivery due to the
global audience that are always asking for better services.
The strengths and weaknesses of the current customer-facing website or App,
compared to that of one direct competitor
There are many strengths in that the web place is fast to maneuver and use. The app
has reduced a lot of time wastages to hustle for a cab, the use of websites and mobile
app improves efficiency and customer satisfaction where h the clients get everything at
one stop shop. It is important to note that all feedback can be posted in the website and
therefore improvement is paramount on the side of the company. Another advantage is
that a website or app is always with you. It is convenient and reliable depending on the
strengths of the network.
The weaknesses compared to one direct competitor is that in case of electricity loss in
which mobile phones and computers are highly dependent on, a client will be

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inconvenienced. It does not favor any client who is computer illiterate and a direct
competitor is more visible than the app. Many people also trust the one direct
competition due to the physical presence and availability(Liu et al., 2007).
Conclusions, recommendations, and critical assessment of the work that has been
undertaken
Conclusion
Like any other collective development strategies, digitization works to support the
mission of on organization like Ola. It is difficult to build and sustain a digitization
program if the organization has no clear sense of the cause and effects. The future is
digitization, and just like Ola disrupted the market by embracing digitization, the sector
as a whole should gear towards embracing technological projects, building them and
sustaining them. Certain approaches of digitization work for different sectors of the
economy and not all strategies are scalable. Modest strategies may be the best avenue
to start and embrace technology. Mobile apps and websites use to outsource an Ola
cab is the way to go. Digitization is the way to go as it improves value. The importance
of business environment digitization is that it reduces costs of operations, increases
benefits to the clients by improving customer satisfaction and helping the organization to
look ahead if it is to be sustained over time. Digitization must be an integral part of the
organizations mission, vision and goals(Robinson and Robinson, 2005).
Recommendations
There are many decisions that are involved in digitization processes. The following are
the recommendation for a good digitized strategy; develop an easy mobile application or
website that is easy to maneuver and navigate, develop clear protocols for digitization
processes, taking simple steps in decision making processes, clarify on the target
market and customer segment, build coherent collection systems in the application and
ensuring that customer feedback is worked upon. Digitization of Ola led to improved
business in India while ensuring that clients got the best services.

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Critical assessment
There are many strengths in that the web place is fast to maneuver and use. The app
has reduced a lot of time wastages to hustle for a cab, the use of websites and mobile
app improves efficiency and customer satisfaction where h the clients get everything at
one stop shop. To improve and revolutionize a business, disruptive technology plays a
key role. Many companies will be shut due to their inability to embrace technology while
others will lose out due to their slow response in digitizing their market strategies.
Those that have embraced digitization are reaping the fruits of success(Liu et al., 2007).
Appendices 1.1

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Appendices 1.2

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Appendices 1.3
Porters Five Forces Analysis

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Appendices 1.4
PESTEL Analysis

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Appendices 1.5
Business model canvas

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Appendices 1.6

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Appendices 1.7- Online market place search

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References
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Liu, D., Jiang, W., Ma, W. and Chong, A. (2007). Chinese business strategies.
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Springer.
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