Sample Individual Reflection Essay on Business Opportunity
Digital ridesharing platforms have been identified as a broader part of innovations that make up the so-called sharing economy. The paper presents an overview of the current research on the development of ridesharing business and potential opportunities that can be leveraged to enhance the performance of the industry. Becoming successful entrepreneurs is the dream of a vast majority of the population globally. However, prospective entrepreneurs face diverse challenges, ranging from the development of the idea to capital acquisition. Successful implementation of a business idea by establishing a business venture has become a gateway to emergence of huge international corporations. Our business is a start-up firm in the ridesharing business. The company is called Carmony, and the initial capital for its establishment will be obtained from shareholder contribution as well as borrowing from the lending institutions. Lyft and Uber are the major competitors of this company, but its strategy will enable it to survive and attain its main goals. The company will utilize a market gap identified through complex analysis and anticipates achieving break-even point after two years of operation. The success of this firm will be based on its continued exploitation of its core competencies and generic growth strategy.
The development of digital ridesharing platforms has marked an essential step in the rate diffusion of technology and the use of innovations in promoting efficiency in service delivery. Notably, this technological innovation has led to the emergence of the sharing economy, which has been demonstrated by such companies as Lyft, Airbnb, Uber, and WeWork (Wallsten, 2015). Principally, the adoption of this digital transformation seeks to increase efficiency in the utilization of labor and capital through enhanced information sharing to reduce the cost of business operation. The company offers ridesharing services, which entail the use of modern technology to connect vehicles and drivers with customers who are looking for a ride. Typically, the service is accessed through a mobile application, which provides users with diverse information, such as the price and location of the driver. Additionally, the service will enhance communication between drivers and customers without disclosing personal information. The design of the service delivery model considers the need for efficiency or pay flexibility and price adjustment, depending on the prevailing market conditions. The key motivation behind this idea is the low capital requirement for the business establishment, as well as the opportunity for exploitation of digital technology to overcome some critical challenges in transportation and logistics.
There has been empirical evidence showing that the demand for ridesharing services continues to grow as technology advances and the penetration of internet surges. Further, evidence has revealed that the use of ridesharing platforms has increased exponentially, particularly in the large metropolitan areas of most countries. For example, since its establishment, Uber has increased the number of new driver-partners for basic ridesharing service from less than 1000 in 2013 to about 4000 by the end of 2004 (Hall and Krueger, 2015). The current surveys indicate that more than 50% of adults in America have heard about ridesharing applications such as Lyft and Uber. Besides, 15% of the American adult population is using ridesharing services (Smith, 2016). A ridesharing application called Didi in China facilitates an average of 7 million rides in one day (Floyd, 2016). Analysts have shown that the nature of this industry is likely to change considerably in the future. One of the essential changes being the introduction of autonomous vehicles. As the number of internet users continues to surge internationally, the market for these services is expected to increase significantly. Thus, the establishment of a business in this industry has the potential to create huge wealth for an entrepreneur. The rest of the paper is a reflection on the identified business opportunity, paying particular attention to its novelty and scope. The concluding remarks will be drawn from the outcomes of the assessment of the idea, particularly with regard to its viability.
Reflection on the identified opportunity for business
The demand for ridesharing service has grown exponentially over the years, and this trend is mainly contributed by the growing technological advancements and increased access to the internet. The service to be offered by this company is ridesharing, but it will be provided in a differentiated way from the existing companies. It is no doubt that the growing attractiveness of ridesharing services to customers arises from the large number of economic benefits associated with these services. Notably, ridesharing services use the smartphone and GPS services to link travelers with drivers. Additionally, drivers are afforded greater flexibility in relation to choosing when to work. At the same time, riders do not spend considerable time when paying for the ride because the app allows them to make automatic payments using credit cards. The design of the mobile application used in the delivery of the service allows the adjustment of the pricing system to ensure the prices are adjusted to reflect the prevailing market conditions (Hall and Nosko, 2015). Uber and Lyft are the main rivals of the company, and they provide their customers with a variety of rides. For instance, riders can do carpooling cheaply, ride from a partner driver, ride a luxury car, or request a normal car. The company will venture into the same business, but it will strive to differentiate its service delivery model to facilitate effective market penetration.
In competitive markets, new entrants look for effective approaches that need to be adopted to penetrate the industry effectively. Flexibility and efficiency are some of the key areas of service differentiation that the company will focus on. The success of business organizations in markets characterized by stiff rivalry depends on the strategies that a firm adopts to enhance the uniqueness of its products or services. Additionally, companies must strive to build brand loyalty and trust among customers to achieve sustainable competitiveness. Sustainability is another critical area that the firm will focus on. With the growing awareness about different global concerns, business organizations realize the significance of engaging in sustainable practices to leverage greater stakeholder support.
The flexibility aspect of the service delivery model of the company will be achieved mainly by expanding its network of operations beyond the metropolitan areas, as well as offering customers a variety of services. The incumbent firms, which are mainly Uber and Lyft, have capitalized on the urban areas, ignoring the fact that the rapid development of infrastructure has led to the emergence of new markets for ridesharing services in other locations (Li, Hong, & Zhang, 2016). Additionally, the company will strive to utilize the underserved segments of the global market by investing in countries where the main competitors have invested intensively. As noted, the company will also diversify its services to capture a wide market for sales maximization.
In terms of sustainability, Carmony will implement unique measures for promoting sustainable practices. For example, the firm will advocate for the use of energy-efficient fuel to enhance the reduction of pollution and create awareness programs to educate its stakeholders on the significance of engaging in practices that foster sustainability. Also, it will collaborate with various international policymakers to learn different ways of maintaining the safety of the environment. Another unique strategy that will be adopted to support the competitiveness of this enterprise relates to congestion management. Studies have noted that the operations of the existing companies in the ridesharing sector face a severe challenge of traffic congestion, which often delays the ride and inconvenience the riders, resulting in reduced customer satisfaction. In some cities like Los Angeles and San Francisco, a significant part of congestion is attributed to drivers searching for parking (Rassman, 2014). Consequently, the revenue of the companies may reduce as a result of the delays caused by heavy traffic. To avoid this problem, the company will adopt an operating model that will allow the operations manager to coordinate the movement of drivers using the app. Additionally, the use of this model will connect the drivers and customers more efficiently to avoid the costs associated with traffic congestion. As a result, the company will be able to compete favorably in the market, growing its revenue and profitability consistently to achieve its business goals.
The company will strive to bring revolution in the ridesharing business by using an app that will not only consider the distance and demand during price determination but also the income class of the riders. This innovation will allow the integration of geographic information or residential place as a socioeconomic status determinant and, therefore, sets prices that will align with the income class of consumers. Notably, firms that differentiate their brands attract more customers, who have a tendency to try new things. For Carmony, differentiation will involve not only the product, but also the whole aspect of service delivery. As noted in the above discussion, the company will utilize a unique model, which will address the key challenges that incumbent firms are facing, particularly in the assignment of drivers to customers, as well as pricing. The technique used to set prices will be designed to create a huge consumer surplus. The existing companies like Uber use a pricing strategy that charges riders higher prices during periods of high demand and low when demand declines. Although the company will adopt a relatively similar approach, its model will be more advanced as it will incorporate other aspects such as efficiency and convenience to save cost, thereby charging competitively low prices regardless of the season.
The implementation of the proposed idea will have diverse benefits to the customers. It is no doubt that consumers have a great preference for products or services that impact positively on their economic and social welfare. As noted, the company will adopt a pricing model that will allow users to enjoy high convenience, greater efficiency, and low prices. As a result, the operating model of this firm will create an economic benefit to its customers through cost saving. Sustainability is the main aspect of the company’s operations that will lead to the creation of social welfare. Notably, business organizations that adopt sustainable practices provide services to their customers without exposing them to negative externalities. Thus, the commitment of the company to engaging in sustainable practices will help to reduce the social cost of operations, thereby maximizing the social benefits to consumers. The expanded market coverage will promote equity by making sure that users can access services regardless of their location.
The viability assessment of this idea is based on the prevailing market conditions for ridesharing services. The market research conducted to conclude that this idea is feasible relates to the mode of service delivery of the two dominant companies, which are Lyft and Uber. The research findings indicated a gap in efficiency of service delivery, adherence to principles of sustainable practices, and pricing. The evaluation of the proposed model for the company indicates that customers will gain more by consuming its services and, therefore, the idea has the potential to achieve the desired financial objectives.
Summary and conclusion
Carmony is the name of the new company proposed in this plan, which will deliver ridesharing services. The development of this idea was motivated by the need to utilize the existing digital technology to enhance the delivery of transport services, as well as addressing the market gap identified through the performance analysis of the existing companies. The adoption of a unique model of service delivery will lead to a considerable transformation of the market for these services by making sure that firms put equal emphasis on consumer needs as the pursuit of their profit goals.
Floyd, D (2016). Didi Kuaidi: China's Uber Partners With Lyft (BABA, BIDU). Investopedia. Retrieved from http://www.investopedia.com/articles/investing/022516/didikuaidi-chinas-uber-parterns-lyft-baba-bidu.asp.
Hall, J. V. and A. B. Krueger (2015). An Analysis of the Labor Market for Uber’s DriverPartners in the United States. Working paper, 587, Princeton University Industrial Relations Section.
Li, Z., Y. Hong, Z.& Zhang (2016). An empirical analysis of on-demand ride sharing and traffic congestion. Working paper.
Rassman, C. L. (2014). Regulating Rideshare without Stifling Innovation: Examining the Drivers, the Insurance Gap, and Why Pennsylvania Should Get on Board. Pittsburgh Journal of Technology Law and Policy, 15(1): 81-100.
Smith, A. (2011). 35% of American adults own a smartphone. Washington, D.C.: Pew Internet & American Life Project.
Wallsten, S. (2015). The Competitive Effects of the Sharing Economy: How is Uber Changing Taxis? Washington, D.C.: Technology Policy Institute.
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