Strategy Final Paper: Bird Scooters
Essay by Marcos Ivan • March 3, 2019 • Term Paper • 2,621 Words (11 Pages) • 632 Views
Final Paper
1. Define the Comparison Competitive Set in which Bird competes? Explain why for each. Who did you consider and leave off the list? Why? (25 pts)
The comparison competitive set consists of Lime, Motivate, Scoot, Uber and Zipcar. Why each were selected:
• Lime: on top of e-assist and pedal bikes for city and campuses, it also offers dock-free electric scooters (Lime-S) which competes directly with Bird’s product offering and has an identical price structure of $1 + $0.15 per minute.
• Motivate: the company disrupted the urban and tourism transportation market by providing a flexible method for completing short trips, as contrasted with the longer rentals offered by traditional bike rental companies. Motivate currently operates bicycle sharing systems in several cities in the United States, including Divvy in Chicago which I use on a daily basis, and I thought it’d be a natural competitor against Bird.
• Scoot: provides an online network for sharing electric sit-on scooters, which are also owned and maintained by the company. The service has been referred to by the media as the "Zipcar for scooters." At the end of the day the product is very similar to Bird’s, with the difference that you sit on it and you can’t just leave it anywhere.
• Uber: although the average Uber trip is ~6 miles and does not cater exclusively to the “last mile” per se, its UberPool offering is typically at 50% of UberX, making it more attractive to Bird’s perfect customer, which we will discuss later.
• Zipcar: provides short-term car reservations but differentiates from traditional car rental companies because, similar to Bird, its members can unlock Zipcars with an app. Trips are billable by the minute, hour or day, and members pay a monthly or annual membership fee in addition to car reservations charges.
Other companies I considered and left off the list include: Spin, Skip and GOAT, which are all electric scooters operators, as well as Lyft and mass transportation organizations, such as the CTA in Chicago. With the exception of Lime, I left out the other electric scooters operators because cities, led by San Francisco, have started capping the number of scooters and are shifting from a non-permit environment to issuing only a couple of permits total for these startups, in an attempt to avoid over-cluttering cities sidewalks. I left CTA out because users are limited to predetermined routes and inconvenient wait times relative to a short-trip, making it more a substitute than a direct competitor of Bird. In the case of Lyft, I though Uber was a representative identical example; additionally, the company recently announced that it would acquire Motivate, which I used as a competitor example, operating it as a standalone business.
2. Who is the Perfect Customer for Bird and Why? Explain your response (15 pts)
The Perfect Customer is an urban millennial who needs to make a quick, relatively short trip without sweating, but going far enough that it would take too long to walk.
This individual’s life revolves around technology. He orders food, hails a car, completes banking transactions and finds romantic dates all on his smartphone - he is very agile when it comes to finding or “hunting” a nearby Bird.
The average length of a Bird trip is 1.6 miles, indicating that the problem Bird actually solves for the perfect customer is not how to get to work in the morning but, instead, how to get to that lunch spot quickly for only $2 and without sweating, because this person has to go back to class, to work or is meeting someone.
3. Potential RBA #1: Dock-less ubiquitous convenience, emission free
Rare: Passes
• Lime’s electric bikes and scooters can certainly match this competitive advantage.
• Motivate can’t match this because, even though bikes are emission free, they are parked at their own docks, so every trip has to start and end at these specific spots.
• Scoot can’t match this, because the sit-on scooters have to be parked at specific garages, on the street in any neighborhood in a Blue Zone or for free at motorcycle meters. Basically, you can’t pick-up or drop-off at a restricted area.
• Uber’s are not ubiquitous or emission free. Wait times can be very long if, say, a driver cancels your trip because he doesn’t like your face, reviews or destination. Also, an Uber will not always be able to drop you off at your door. Scooters and electric bicycles are particularly popular on-campus because dorms are usually not too close from the actual street and, unlike Uber, you can ride them to your door. Literally.
• Zipcar can’t match this because its business model requires cars to be picked-up and parked at specific parking spots and only a few vehicles are emission free.
Durable: Passes
• Lime: N/A (matched Rare)
• Motivate: even though the company might have the desire to get rid of its dock, or it would require a significant amount of time to add Divvy docks in every other block and a huge investment to install them, and this still wouldn’t guarantee there will be a bike waiting.
• Scoot: money and desire might not be an issue for them; however, it would require an unimaginable number of years for all cities to allow sit-on scooters to be parked on the sidewalks, or anywhere standing scooters can be drop-off.
• Uber: does have more than enough money and it would certainly be interested in a device that can pick up and drop off people anywhere; however, it would require a significant amount time until their entire fleet of vehicles are emission free.
• Zipcar: might be interested in this idea because one of the most popular things that customers demanded for years are one-way trips. However, it would entail a very long time and a huge investment for Zipcars to be able to park freely anywhere in the city.
Relatively No substitutable: Passes
• Substitute #1 – CTA: the customer who wants to hop on public transit has to do it a very specific spots and, unlike Bird, very rarely will drop you off at your door.
• Substitute #2 – Yellow Cab Taxi Co: even in a city that has a high taxi density, a customer who might take a taxi for a short trip can frequently sit on traffic for a relatively long time. Furthermore, the number of emission-free taxis are still very limited.
Relatively Nontradable: Passes
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