Entrepreneurial Approach to Strategy: A Case Study of OYO Rooms

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Entrepreneurial Approach to Strategy 1
ENTREPRENEURIAL APPROACH TO STRATEGY
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Entrepreneurial Approach to Strategy 2
Entrepreneurship refers to the practice of developing a business venture or venture for the
purpose of generating profits while dealing with the associated risks (Pierre, et. al., 2014). The
role of entrepreneurship has been transformed completely in the context of modern global
business context.
Chosen entrepreneur
OYO Rooms
Founded in 2013, OYO Rooms Company was established by a young entrepreneur named Ritesh
Agarwal. The concept of this company was based on Ola for rooms, which were developed as a
network of budget hotels being technology enabled. This Gurgaon-based company entails more
than 8,500 hotels in 230 cities all over India under the brand “OYO Rooms”. The company was
established with the goal of changing the way people stay away from their homes.
Interview Method
I interviewed Ritesh Agarwal on December 20, 2018, when he was in Mumbai, India and the
conversation was continued for 60 minutes. It was a coffee meeting at a five-star hotel in
Mumbai where a one-on-one conversation was undertaken. He told that the company is now the
largest hotel network of India. The company was established in June 2013 with only one hotel
under the brand name. He further expressed his views that the growth journey of the company is
an exciting and interesting adventure but the main aim is to attain the most loved hotel brand
name at the global level.
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Summary of the interview
Business
OYO Rooms Company provides stay experiences with hassle-free and standardisation to the
travellers and other people at a price which is unmatched or discounted. The main business units
of OYO Rooms Company are OYO Homes, OYO SilverKey, and OYO Townhouse.
OYO Homes: This business unit provides fully managed homes to the exclusive holiday
destinations of countries where it operates. This unit involves cottages, villas, homes, and
apartments designed for families, couples, and friends.
OYO SilverKey: This business unit designed especially for corporate travellers and corporate
purposes. These exclusive apartments are located at the places near to the airports and business
centres for the convenience of corporate travellers.
OYO Townhouse: This business unit provides affordable accommodations to the travellers aimed
mainly for convenience, comfort, and efficiency. The main purpose of using such
accommodations may be playing, lounging, or working. This business unit is designed for any
type of travellers.
Key strategies of OYO Rooms
Digital marketing strategy: The strategy of search engine optimisation of OYO Rooms implies
the utilisation of key terms for increasing traffic on the company’s website. The keywords for the
company are comprised of OYO Rooms, online hotel booking, best hotel prices, hotels in Ooty,
and best hotel deals and so on. All the keywords help the company to display the results with the
company's name and website on top of the list. The company uses social media platforms such as
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Facebook, Twitter, Pinterest, and Instagram for marketing the brand name. The social media
marketing campaigns involve reposting the pictures taken by OYO users, Dubsmash contest, and
#AurKyaChahiye campaigns on Youtube and other platforms. Its digital strategy helps the
company in gaining a global presence on social media platforms. Strong social media presence is
evident from 5 million app downloads, 26,000 followers, and 3.65 lakh fans on Facebook.
Other strategies: The key strategy of OYO Rooms can be stated as attracting a large number of
customers with a lower price strategy than the base hotel price. The discounted price strategy of
the company provides rooms and services for every economic class population depending on the
location of the hotel. This strategy is implemented to offer rooms at a price affordable for all the
customers along with excellent services and customer loyalty generation. The segmentation
strategy of the company implies mainly luxury travellers, business executives, and backpackers.
The services of OYO Rooms can be accessed using the website or mobile app.
Strategic planning process and Implementation of Strategy
The planning and implementation of a strategy within OYO Rooms follow a process that
encompasses mission & objectives, environmental scanning, Strategy formulation, strategy
implementation, and evaluation & control. The stage of mission & objectives in OYO Rooms
implies the development of vision statement, values, and ethics of the company, and the goals &
objectives of the overall company. OYO conducts environmental scanning phase using the
analysis of internal and external environment where the company operates. A SWOT analysis,
PESTLE analysis, and Porter’s Five Forces Model are used as the analysis tools. OYO
undertakes the strategy formulation by information gained in the environmental scan.
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It formulates the strategy mainly using the company’s strengths and opportunities with equal
consideration for addressing the weaknesses and threats identified. OYO uses budgets and a
formal procedure for implementing the strategy formulated using environmental scanning. It uses
mainly the motivation to employees and adequate resources for the strategy implementation.
OYO considers strategy evaluation and control as the most significant stage in the strategic
planning process. OYO follows the strategy evaluation using the method of comparing the
planned parameters with the parameters achieved in actual terms. Improvement areas are
identified for making necessary changes in the strategy.
Strategic Options
The company is mainly concerned with the industry competition, macro-environmental factors,
and limits of the internal capabilities and resources.
Industry Competition
As per the model of Porter’s five forces, there is high competition within the hotel industry even
though OYO Rooms is one of the strongest companies. High bargaining power of suppliers and
buyers make it difficult for the company to make high profits in the competitive industry. There
are high numbers of substitutes available while market entry barriers are very low.
Strengths and Limitations of OYO Rooms
The key strengths of the company are a user-friendly interface, excellence advertising, constancy
in innovation, and providing hotel rooms at budgeted prices. The opportunities for OYO Rooms
are increasing technological driven people and an increasing number of budget travellers.
Limitations of OYO Rooms are questionable credibility & trust due to the renovation of run-
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down hotels and restriction to budgeted hotels and lodges. High competition is being faced by
the company due to the existence of STAYZILLA and ZO Rooms.
Macro-environmental Factors
The political factors for OYO Rooms involve industrial governance system, lower taxation
policies, changes in governmental policies, and political instability. OYO Rooms gets affected
by the high inflation rate, increasing liberalisation, and growing inequality in consumer
spending. Social factors that affect OYO Rooms are leisure interests, inequality in social income,
and increasing trends towards safety and health. Factors such as the emergence of 5G, disruptive
technological innovation, and technological integration in supply chain partnership are the
technological factors due to which OYO Rooms affects largely.
Measuring Strategy Success
The success of OYO Rooms Company’s strategic plan is measured by certain criteria. The
metrics for OYO Rooms are some customer complaints, positive feedbacks, number of hotel
bookings, number of hotel cancellations, and traffic on social media platforms. Most importantly,
sales, profits, and earnings are the major metrics for the overall strategic plan measurement.
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Reflection
Before the Interview
Before the interview with Ritesh Agarwal, I used to think that developing and executing the
strategy is not a difficult task for the experienced or personnel with a high level of knowledge. I
thought that gathering the facts would be sufficient for developing strategy. I believed that the
implementation of strategy would involve mainly the budgets, procedures, and motivation to
employees as well. I did not think that a universal approach or process is followed for the
strategy formulation as well as the strategy implementation.
After the Interview
After conducting the interview, I realised that Ritesh Agarwal is a big entrepreneur who is polite
and humorous as well. Entrepreneurship is a huge task with various roles and responsibilities. I
think that examining internal and external environmental factors is an essential ingredient for the
successful strategy. A systematic procedure is followed for creating and implementing the
strategy within the company.
Self-Reflection
This interview would be significant for my learning as I interviewed such a great personality of
the business world. I have learned that a person should be polite, humble, expertise, confident,
and a good leader for a successful entrepreneur. Strategy formulation involves the application of
certain tools and techniques such as PESTLE analysis and Porter’s five forces model. Ritesh is a
young man and what has he achieved till now clearly reflects the effectiveness of his
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entrepreneurship. He is a man of inspiration to all the people who think that age is a constraint
for the start-ups.
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References
Pierre, A., von Friedrichs, V., and Wincent, J., 2014. Entrepreneurship in Society: A Review and
Definition of Community-Based Entrepreneurship Research. Social Entrepreneurship:
Leveraging Economic, Political, and Cultural Dimensions.
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