Case Study: Strategic Analysis of Careem in the MENA Region

This report provides a comprehensive analysis of Careem, a Dubai-based transportation network company, focusing on its strategic positioning and competitive landscape. The analysis utilizes Porter's Five Forces to assess the competitive intensity within the market, examining factors such as supplier and buyer power, the threat of new entrants and substitutes, and industry rivalry. Furthermore, a SWOT analysis is conducted to evaluate Careem's internal environment, highlighting its strengths, weaknesses, opportunities, and threats. The report discusses Careem's strategies for dealing with competition, including its acquisition by Uber, and emphasizes the importance of adapting to market dynamics and leveraging opportunities for growth and expansion. The conclusion summarizes the key findings, emphasizing Careem's strong market position and the role of technology and innovation in its success.

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Introduction
The aim of this report is to analyse Careem which is a Dubai-based transportation
network company through using a strategic tool Porter’s five forces and suggest strategy to
the company for dealing with the cut-throat competition. This report will also cover the
internal environment of the company by using SWOT as a strategic tool.
Porter’s Five Forces Analysis
The structure of Porter’s five forces helps a company in measuring the competition
between distinct brands within the market and here, it is used for Careem to analyse the same.
 In Dubai, the suppliers bargaining power is low where private competitors are not
able to compete at national level under the fuel and power of government agency.
Careem is required to use outsourcing strategies for hiring labour by increasing job
opportunities and dealing against competitors such as Uber (Kerr, 2019).
 Buyers bargaining power is medium as tourist can also go for opting car rental
services whereas residents go for using their own cars rather than the options of public
transportation. There is not much use of Careem services by its customers along with
no switching cost involved for them by using online application which is free.
 There is low threat for the company of new entrants as in the country; there are high
entries barriers and high regulations as well. There is only presence of Careem and
Uber Taxi services allowed in Dubai. Other than this, all other public services are
operated and regulated by “RTA (Roads and Transport Authority)” (Alkaabi, 2019).
There are strict policies implemented by the UAE government where the only threat
to Carreem is Uber due to charging less for the similar distance of traveling.
 There is low threat of substitutes as there are no such alternatives of Taxi rides
required for Buses and Metro. Careem is provided to keep on fluctuating service rates
of the company as people are price sensitive in Dubai which can results in shifting
towards Uber due to slight increase in fares.
 There is low presence of industry rivalry as per the competition for Taxis, only
Careem and Uber are regulated and licensed by RTA and there is no competition of
public transportation area in Dubai. Uber is the only competitor of Careem in Dubai
in relation to transportation industry where Careem is older than Uber in this market

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and made significant investments for the growth in the Middle East (Khan, Woo,
Nam, & Chathoth, 2017).
The strategy of acquisition with Uber helped Careem to face cut-throat competition by
getting ready for much-anticipated IPO where Uber spend $3.1 billion to have the ownership
as a whole majorly in the region of “MENA (Middle East and North Africa)” (Amin, 2019).
Another strategy that helps Careem to face cut-throat competition is reduction in traveling
cost and increasing the service quality. It requires making its customer aware about the kind
of available services the company uses or serves.
SWOT Analysis
SWOT Analysis is done for examining a company internally to know its strengths and
weaknesses to analyse its threats and opportunities for better operations.
 Careem can generate opportunities by using MENA as its strength for position
consolidation and expansion of the company in the marketplace.
 Careem can use approaches as its strengths by building and analysing its processes
and trends for pronging the approach of market penetration while dealing with the
threats to the company (Finster & Hernke, 2014).
 To reduce the weaknesses of the company, it requires building strategies based on the
product orientation for consumers to generate opportunities through marketing and
development approach.
 In MENA, Careem can face the threat if not get out from business areas which
weakens the company’s position.
Careem use its strengths for the creation of positioning in the niche market by also
striving to remove and reduce weaknesses for competing with its rivals. The company look
towards leveraging opportunities by providing through regulations, industry structure, and
other external environment development (Nair, Paulose, Palacios, & Tafur, 2013). Lastly, it is
essential to make provisions and strategies development for mitigating threats undermining
Careem’s business model in MENA. Based on capabilities and resources in the marketplace
for leveraging or lacking to build sustainable competitive advantage and for market
positioning for further expansion:
Strengths

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 Careem operates in robust domestic market
 The company has the first mover advantage
 Careem has a diverse portfolio of product
 There is proper management of business environment and regulations
 Have strong brand awareness and brand equity in Dubai (Staff, 2019).
 Have intellectual property rights
 Shows a strong relationship with its existing suppliers
Weaknesses
 Lack of critical talent
 Easily replication of the company’s business model
 Lack of diverse workforce
 Considering environment, track record is not very encouraging
 Dominating organisational culture
 No focus on external stakeholders’ interests of project management
Opportunities
 Exploring adjacent markets
 Accessibility to international talent in the marketplace globally
 Changing the landscape of technology
 Standardization increment
 Opportunities lucratively in markets internationally
 Use of increasing consumer disposable income
Threats
 Changing bureaucracy and government regulations
 Protectionism growth
 Post of credit binge due to recession in 2008 (Varriale, 2013).
 Sticky prices culture in the industry
 Trade relations in different countries other than Dubai such as the United States and
China
 Costs increment while working in developed market due to environmental regulations

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Conclusion
In conclusion, Careem in the Dubai’s transportation industry was the only company
other than Uber permitted to provide Taxi public services. The company worked smoothly
and outsourced as well which developed the job opportunities. In Dubai, people preferred to
use their own cars and tourists were in doubt of loyalty where the decision of made of
acquisition with Uber for providing one-in-all public Taxi services to local and tourists
individuals. The position of the company was strong in the marketplace along with changing
business environment and use of technology for innovations as well.

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References
Alkaabi, K. (2019). MODELLING TRAVELLER’S GROUND ACCESS MODE CHOICE
OF DUBAI INTERNATIONAL AIRPORT, UNITED ARAB EMIRATES. Journal
of Air Transport Studies, 10(1), 87.
Amin, S. (2019, March 28). Why Acquisition of Careem Is a Big Win for Uber. Retrieved
from Market Realist: https://marketrealist.com/2019/03/why-acquisition-of-careem-is-
a-big-win-for-uber/
Finster, M., & Hernke, M. (2014). Benefits organizations pursue when seeking competitive
advantage by improving environmental performance. Journal of Industrial Ecology,
18(5), 652-662.
Kerr, S. (2019, September 17). Dubai’s Careem rides high after $3bn Uber buyout. Retrieved
from Financial Times: https://www.ft.com/content/c54749ca-b50c-11e9-b2c2-
1e116952691a
Khan, M., Woo, M., Nam, K., & Chathoth, P. (2017). Smart city and smart tourism: A case
of Dubai. Sustainability, 9(12), 2279.
Nair, S., Paulose, H., Palacios, M., & Tafur, J. (2013). Service orientation: Effectuating
business model innovation. The Service Industries Journal, 33(9-10), 958-975.
Staff. (2019, August 29). RTA, Careem launch e-hailing service Hala in Dubai. Retrieved
from Khaleej Times: https://www.khaleejtimes.com/uae/dubai/rta-careem-officially-
launch-e-hailing-service-hala-in-dubai
Varriale, G. (2013). Build or Bust. Int'l Fin. L. Rev., 32, 30.