E B0usiness Strategies And Business Model

RUNNING HEAD: E BUSINESS STRATEGIES AND BUSINESS MODELS
-Business Strategies and Business Models
Careem Case Study
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E Business Strategies and Business Models
Answers
1. Porter Five Forces Analysis
Source: (Careem, 2020)
Careem offers car booking services through the website and has a presence in 14
countries and 120 cities across the MENA region. The company has a strong supply
chain and customer base with 150,000 drivers and six million customers respectively
(Careem, 2020). To understand the transportation industry in Dubai, Porter's five forces
framework is used.
Source: (Dobbs,2014)
Bargaining power of suppliers: The transportation industry mainly dependent on the
suppliers and they are drivers. The business model of Careem depends on drivers owning
cars with that oil and gas suppliers are other major suppliers. It is quite difficult for
Careem to negotiate with these suppliers. Hence, suppliers' bargaining power is high in
this industry.
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E Business Strategies and Business Models
Bargaining power of buyers: The bargaining power of buyers in this industry is high
because of the low switching cost. As there are many companies in this industry that
provide the same services at a low cost. The customer base of Careem is sensitive to price
variations any changes in price shift customers to rivals because of more choice
availability power is in the hand of customers (Bostoen,2020).
Industry rivalry: The degree of rivalry is high in this industry as the competition is
increasing in terms of suppliers and customers. Some of the competitors for Careem are
Uber, Dubai taxi and RTA Smart taxi and local taxi services. In this industry, competitors
are not competing only for market share but also suppliers and setting target market
customers to reduce operating costs.
The threat of substitutes: For Careem, in the transportation industry there is much
organization that can provide the same services as of Careem. The same quality is
provided by Uber in this industry and other opponents are local taxi services. Further,
some substitutes are public transportation that includes trains, private cars, and self-
driven cars. Hence, there is no such close substitute for Careem in this industry due to
that threat of substitute for Careem is weak.
The threat of Entry: A company position is affected by the entry of new players in the
market. To set up in this industry huge capital is required but upcoming players in this
industry using lesser capital. Careem introduced many new options to enhance services
provided by the company to women and kids. Further, Careem cannot stop imitation of
its strategies by other companies. Due to that threat of entry in this industry is high as
other players imitate the strategy of present players and try to enter the market with low
investment options.
From the analysis, it is identified that in this industry competition is tough and to survive
in the market Careem should focus on lowering the cost of operations to attract more
customers. Further, the cost of operation can be reduced by negotiating with drivers,
strengthening the supply chain and by introducing promotion strategies that enhance the
scale of operations.
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