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    RedBus Case Situation Analysis IIM Nagpur

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    - redBus is an online bus ticket booking platform that has experienced exponential growth since its inception in 2006, growing 1000 times in size over 6 years. - The company now needs to evaluate its current business model and decide on a future strategy to achieve its target of $1 billion in annual revenue by 2015. - The CEO, Mr. Phanindra, is considering four options: vertically integrating by launching its own bus service; expanding globally; increasing its service offerings like air/hotel bookings; or focusing solely on its core bus booking business.

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    RedBus Case Situation Analysis IIM Nagpur

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    265 views3 pages
    - redBus is an online bus ticket booking platform that has experienced exponential growth since its inception in 2006, growing 1000 times in size over 6 years. - The company now needs to evaluate its current business model and decide on a future strategy to achieve its target of $1 billion in annual revenue by 2015. - The CEO, Mr. Phanindra, is considering four options: vertically integrating by launching its own bus service; expanding globally; increasing its service offerings like air/hotel bookings; or focusing solely on its core bus booking business.

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    RedBus-Case-Situation-Analysis-IIM-Nagpur

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    - redBus is an online bus ticket booking platform that has experienced exponential growth since its inception in 2006, growing 1000 times in size over 6 years. - The company now needs to evaluate its current business model and decide on a future strategy to achieve its target of $1 billion in annual revenue by 2015. - The CEO, Mr. Phanindra, is considering four options: vertically integrating by launching its own bus service; expanding globally; increasing its service offerings like air/hotel bookings; or focusing solely on its core bus booking business.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    265 views3 pages

    RedBus Case Situation Analysis IIM Nagpur

    Uploaded by

    dead
    - redBus is an online bus ticket booking platform that has experienced exponential growth since its inception in 2006, growing 1000 times in size over 6 years. - The company now needs to evaluate its current business model and decide on a future strategy to achieve its target of $1 billion in annual revenue by 2015. - The CEO, Mr. Phanindra, is considering four options: vertically integrating by launching its own bus service; expanding globally; increasing its service offerings like air/hotel bookings; or focusing solely on its core bus booking business.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    REDBUS: THE NEXT

    STEP FOR GROWTH


    Situation Analysis

    WAC-1

    Himanshu Agrawal (P16002)


    [email protected]

    Submission Date: 1st


    Dec’2016
    Submitted By:
    Situation Analysis
    redBus has done greatly since their inception in 2006. Company have grown
    exponentially and have grown 1000 times in size in a span of 6 years only. Now
    they need to evaluate their current business model and make a decision on the
    future business model.

    Objective
    Objective of redBus is to provide a simple online bus ticket booking platform with
    transparency to their customers and suppliers both.
    redBus has a target of achieving annual revenue of US$1 billion by FY2015.

    Analysis of redBus
    Online booking industry have been growing at a rate of 50% per year and is
    expected to continue the same in coming years. There is a fierce competition in
    industry and lot of chances of new entrants coming in the market as the growth
    prospects are huge. This is a highly unorganized market in the semi urban and
    rural areas. redBus will always has the advantage of first mover and can always
    attract customers with the new service offerings. Customer satisfaction has been
    superb till now. They have opportunity of backward integration with
    procurement of buses and horizontal integration of air travel bookings, hotel
    bookings etc. They also have tremendous opportunity of global expansion.

    Dilemma of Mr. Phanindra


    redBus have done very well since their inception and want to continue the same
    momentum in coming times. Mr. Phanindra has four options in front of him and
    he is not able to decide which option will be best suited to achieve their target by
    FY2015.

     Vertical Integration – Launch their own private buses (backward


    integration)
    PROs CONs
    1. Supplier bargaining will be reduced. 1. Huge capital requirement for
    buying buses.
    2. It will result in cost savings. 2. It can cause a divergence from their
    core business.
    3. redBus already have a strong 3. They will have to hire new team to
    analytics and data mining abilities. manage this vertical and the overhead
    They can use this to find the most costs will increase.
    profitable routes and can launch their
    services on these routes.

     Go global
    PROs CONs
    1. As redBus already have a platform 1. Present team has no experience in
    which is quite extensive, same can be working in a global market, also team
    used for international service also. strength is low for expansion.
    2. No major competitors at present. 2. Need to study the socio-economic
    trends in global market, consumer
    behaviour.
    3. Enormous opportunities in Asia 3. They have to spend a lot of money
    region, these can be looked to sustain on market research and marketing of
    in long term. their brand.

     Increase the portfolio of service offerings


    PROs CONs
    1. Exponential growth of online 1. Huge competition in online booking
    bookings market. industry.
    2. It will increase the revenue 2. Profit margins are very low.
    generation as the transaction involved
    are high value (air travel, hotel
    bookings etc.)
    3. Consumer traffic will increase and it 3. Not the core competency of the
    can help in broadening of their company.
    customer base.
    4. Strong technology platform and 4. It will divert them from their core
    infrastructure to integrate these add- business model.
    on values.

     Focus on the core business


    PROs CONs
    1. Exponential growth of bus 1. Marketing expenditure needs to be
    transportation with 25% annual increased to increase awareness and
    growth rate. credibility.
    2. Lot of untapped market to capture, 2. Need to increase team-size to
    they will always have the first mover manage more bus operators .
    advantage.
    3. High internet adoption rate and 3. Need to add value added service to
    increasing GDP growth rates. retain customers which can increase
    the operating costs.

    Number of word: 599

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