Strategic Management Analysis: Gojek's Island-Wide Expansion Plan

This report provides a strategic management analysis of Gojek, focusing on its island-wide expansion plan. It employs Porter's Five Forces to evaluate the competitive environment, identifying threats from new entrants and competitors, and the bargaining power of suppliers and consumers. The Resource-Based View (RBV) and VRIO framework are used to assess Gojek's tangible and intangible assets, highlighting the competitive advantage gained from brand value, customer loyalty, and fast services. The BCG Matrix categorizes Gojek's ride-hailing service as a 'star,' indicating high growth and market share. The report also addresses key issues that may arise during expansion, such as supply shortages and market changes, and concludes with recommendations for Gojek to navigate these challenges and sustain its competitive edge. Desklib offers more solved assignments and past papers for students.

Strategic Management

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Contents
Introduction................................................................................................................................2
Strategic Management................................................................................................................2
Porter Five Forces Analysis on Gojek.......................................................................................2
Resource Based View on Gojek.................................................................................................2
Competitive Advantage of Gojek...............................................................................................2
Applying BCG Matrix on Gojek ride-hailing island wide plan.................................................2
Key Issues that may arise when Gojek extend its riding to island wide....................................2
Conclusion..................................................................................................................................2
Recommendations......................................................................................................................2
References..................................................................................................................................3

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Introduction
Strategic Management is the process of analysing, controlling and measuring the environment
of the organisation (David, and David, 2016). This process helps the organisation to achieve
success in the market by identifying the strength and weaknesses. The main aim of this report
is to analyse the environment of the organisation to understand the process of strategic
management. In this report, Gojek has been taken into consideration to analyse its external
environment in order to achieve success in the expansion. Gojek is a technology startup
company that is specialised in ride-hailing and logistics service. It is the first Unicorn
Company of Indonesia. It operates under the transportation and delivery industry to provide
the services to consumers related to transportation (Gojek, 2019a).
At the beginning of the report, the discussion is made on the topic of strategic management.
Later on, the different tools will be used to evaluate the environment of the organisation in
order to identify its position in the market and these tools are BCG Matrix, and Porter’s Five
Forces Framework. At the end of the report, the key issues will be identified which can be
arises at the time of expanding the business.
Strategic Management
Strategic management is a method of analysing the environment of the organisation to
develop a different strategy. This process helps the management to access the present position
of the company in the market. It is essential for the company to analyse the market as Gojek
expanding its business at the international level (Ansoff, Kipley, Lewis, Helm-Stevens, and
Ansoff, 2019). The company analyses the environment of the market so that chances of risk
is reduces while entering the new market. It can also adopt the strategies which help to reduce
the threat of factors that affect the organisation. In this report, BCG Matrix and Porter’s Five

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Forces models will be used to analyse the situation of the company. BCG Matrix helps to
analyse the market position with its strength and weaknesses and Porter’s Five Force will use
to analyse the competitive environment of the company. It is required for the company to
analyse its position in the market while expanding the business at the international level
(Gans, and Ryall, 2017).
Porter Five Forces Analysis on Gojek
It is a strategic tool which is used to determine the competitive environment of the industry.
The threat of new entrants
It has been evaluated that the company has a moderate degree of threat just because of
various reasons. The market requires a higher amount of capital to establish the business in
the market that is why the company has less threat of new entrants. It is also observed that the
company cannot stop the new entrants to copy the technology concept. It means that it is an
easy concept which can be copied by any new-riding companies and the other competitors of
the company in order to operate in the market. This reason causes the high threat of new
entrants for the company.
The threat of substitute
The threat of substitute products is high because traditional services of transportation industry
also satisfied the consumer's demand. Taxi services are the traditional services of the
transportation industry which can replace riding services of the organisation. As discussed
above, the consumers are more prices conscious and the taxi drivers charge less prices from
the consumer at the major rate. Trains, private cars and the other transportation vehicle are
also a threat of substitute for the company (Hill, 2017).
The threat of competitors

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There are many competitors in the industry which are highly competitive for the company in
terms of market share. Curb, and Didi Chuxing are the main competitors, which can beat the
company by providing different services to the consumers. Lyft, Careem, Grab, OLA and
UBER are the top competitors that offer different services to the consumer in order to attract
a large number of consumers (Owler, 2019).
Bargaining power of supplier
It has been seen that the bargaining power of suppliers is high due to the high demand of
consumers. Drivers are the leading suppliers of Gojek Company because the company totally
depends on the drivers owning cars. Oil and Gas companies are the suppliers of the company
and that is the essential part of the transportation system. High fluctuation in the prices of oil
and gas brings the high bargaining power of the suppliers. It is observed that there is less
number of companies who have the license of Oil and Gas Company that is why the company
has less option to switch with another supplier.
Bargaining power of consumer
Bargaining power of consumer is high in the industry as the consumers of the company are
more sensitive in the terms of charges and fees. The number of competitors brings more
choices for the consumer which makes the low bargaining power of consumers. The
consumer runs towards the low prices due to the low prices offers by the competitors. High
competition among companies increases the bargaining power of Gojek consumers.
Resources Based View on Gojek

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(Source: Jurevicius, 2013)
Tangible:
Human resources
Drivers and their own cars are the main tangible assets of the company because the company
totally depend on it.
Market development resources
Computers and technology to connect the people from drivers are also the tangible assets of
the company (Ferreira, and Fernandes, 2017).
Intangible:
Brand value, innovation, customer loyalty, service quality, fastest services of riding, and the
financial position are the intangible asset of the company (Del Río, Carrillo-Hermosilla,
Könnölä, and Bleda, 2016).

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VRIO Framework
Resources Valuable Rare Inimitable Exploitability
by
Organisation
Competitive
Advantage
Drivers Yes No No Yes Temporary
Advantage
Technology Yes No No Yes Temporary
Advantage
Brand Yes Yes No Yes Strong
Advantage
Customer
Loyalty
Yes Yes No Yes Strong
Advantage
Fast services Yes No No Yes Parity
Advantage
(Source: By Author)
Competitive Advantage of Gojek
As per the above diagram, it has been seen that the company can attain a temporary
competitive advantage from its tangible asset. But it is observed that the intangible asset of
the company is brand, customer loyalty and fast services that help to gain a competitive
advantage. The company gain a strong competitive advantage from the intangible asset
because these are very rare and valuable in the market as compare to the other competitors.
The company gains a strong competitive advantage from its inimitable and organised feature
in the market (West, Ford, and Ibrahim, 2015).

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Lyft, Grab and Curb are the top competitors of the company which increase the competition
in the market. All the companies offer similar services at different prices to the consumer.
Applying BCG Matrix on Gojek ride-hailing island-wide plan
BCG Matrix is a framework which is used to determine the strategic position of a business
brand portfolio and its potential. This framework is further classified into the four categories
in which it describes the business portfolio as per the industry attractiveness and competitive
position. Ride Hailing is also a growing industry in which the company expand its business
by providing the services to the consumers of islands. According to the case study, the
demand for services is high in the market. The four categories of the matrix are a question
mark, cash cow, stars and poor dog. These are defined with the different meaning which
helps to evaluate the plan of the company (Morden, 2016).
Question marks are the goods which have low market share in the fast-growing market
because it consumes a large amount cost. Poor Dogs categorise that product which has a low
market share and operates in slowing market growth. Stars categorise the product in the high
growth industries and maintain a high market share. Cash Cow is last categorised which
reflects the most profitable brands which provide the high cash to the company (Schawel, and
Billing, 2018).
According to the case study, it has been seen that the plan of expanding the business of ride-
hailing is considered efficient for the company. It is observed that the company used
marketing strategies in order to attract a large number of customers. It introduces the Beta
application from which the consumers meet the riders within a few minutes at anytime and
anywhere. In the BCG Matrix, ride-hailing services of the company are categorised as star
column which indicates that the service has high growth in the industry and the high market
share. It has been seen that the company uses the dynamic price strategy which attracts the

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customer and helps to earn a high profit. According to the case study, the demand of the
consumer is high during the beta phase. As per the waiting list of users to gain access to the
application indicates the high demand of consumers for the Gejko riding handling. The
dynamic pricing strategy of the company also attracts a large number of customers that helps
to gran the high market share (Straits Times, 2019).
QUESTION MARKS STARS
Current
Situation
DOGS CASH COWS
Market Share
(Source: By Author)
Key Issues that may arise when Gojek extend its riding to island wide
There are many issues arises while the company expanding its riding hailing business to
island-wide.
Supply Shortage
Gojek ride
hailing

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As per the case study, it is observed that the company face a shortage of demand because
there are large numbers of customers standing in the waiting line to gain the benefit of
services. It is the biggest issue for the company because this issue increases the risk of losing
the customer in the organisation. It also increases the threat of competitors because there are
many competitors take advantage and supply a large amount of services (Gojek, 2019b).
Keeping up with the market changes
Earlier, the company is operating in Indonesia but now it expands the business in Singapore.
The environment of the market changes which affect the activities of the company in terms of
supply chain, expenses, profit and loss. Political, legal, technological and many others are the
factors that affect the activities of the company.
Deciding when to abandon a strategy
The chances of failure are increases for the company while entering the market due to high
competition. As per the case study, it has been analysed that the company can adopt the
dynamic price strategy from which it can compete the competitors in the market. The issue
arises in this situation is deciding the strategy as per the requirement of the market. In the
case of Gojek, the company expand the business slowly with the different strategy as it first
adopted the mobile application from which it can provide the services to the consumers and
then it adopted the dynamic price strategy to attract a large number of customers. The
company faced a high amount of expenses to adopt a different strategy (Lasserre, 2017).
Conclusion
At the end, it is concluded that the expansion plan of the company is effective. As per Porter's
five forces analysis, it has been seen that the company has a high threat of new entrants and
competitors. Tangible and Intangible asset indicates that the company gain a high competitive

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advantage in the market. It is difficult for the company to expand the business as it has a high
threat of competitor in the market. As per the BCG Matrix, it developed an effective plan for
expanding the riding hailing business. The plan is categorised as a star because it gains a high
market share in the growing industry. The company faced the issues while expanding the
business such as shortage of supply, market changes and the different strategy. As per the
analysis, it is observed that the company have a high score in the islandwide to expand its
services of ride-hailing.
Recommendations
As it is observed that the company face the issues in the market while providing the services
at a large number of consumers. It is recommended that the company has to adopt the porter’s
generic strategy to resolve the issues.
Cost leadership strategy
As the company adopted the dynamic price strategy to attract the large customer but it has
been seen that the competitors also adopt this strategy. It has to adopt the cost leadership
strategy in order to reduce the price issues and beat the competitors in the market.
Differentiation strategy
The company provides similar services as per its competitor services due to which it faces the
high threat of competitor. It is recommended that the company has to adopt the differentiation
strategy to make its services differ from the other company. It can be said that the company
has to adopt new features which attract a large number of the customer such as entertainment
mode. The company has to adopt the new technology devices to entertain the passenger in
long rides such as television (Zhang, and Warner, 2017).
Focus strategy

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It is observed that the company operates in many activities due to which it does not focus on
one service that is a reason for the issue of abnormal losses. It is essential for the company to
focus on the existing services by investing the large amount on it and innovate it with the new
features (Wheelen, Hunger, Hoffman, and Bamford, 2017)

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