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Summary

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Description

With the advancement of technology and society, along with the widespread use and level of development of smartphones and the internet, the buying methods are no longer confined to retail shops, but rather to increasing diversification according to customer specific demand. Furthermore, there is a growing trend of online and offline sales among many industries. In this fast-moving world and busy lifestyle people want everything at their doorstep. Taking the advantage of this opportunity, newer digital platforms have started to come in place that help consumers with getting the necessities delivered to them. D.a.D, Dail a Delivery is one of these, a platform that connects people who want to something to be delivered to them or are willing to deliver it to someone. The application creates a digital marketplace for booking deliveries. Considering this situation, such delivery platforms are apparently the great solution to reach a balance, that satisfies both customers and drivers who are in different needs and conditions. Platform model

https://en.wikipedia.org/wiki/Platform_economy Sustainable competitive advantage It is necessity for D.a.D to have sustainable competitive advantage against its competitors. By sustainable competitive advantage it is meant to have superior skill or factors that are unique selling propositions (USP) of the company which makes it stand out of its competitors. The table under suggests few Key Success Factors that will help D.a.D to differentiate itself from its competitors. Highly Effective partnership network

Low pricing strategy

Wide variety of Products

Attractive to local merchants who see an added value and New opportunities to compete against joint online retailers By receiving Commission from its partners from every product bought through the application, D.a.D can transfer a part of this revenue to its customers in the form of lower delivery prices Medicines, stationary, groceries, drinks, flowers,

food from take-aways or restaurants, documents, keys, clothes, etc D.a.D is created to respond to social behaviour of wanting things without moving from their houses. The business focused its strategy on growing very fast and investing a lot capital in improving its process in order to position as reference delivery application.

Response to Changes in Lifestyle

Fast Growth Strategy

Strategic Uncertainty Impact Analysis Strategic Uncertainty

Impa ct

Immedia cy

Action

Decline in Disposable Income

High

Low

Monitor and analyse; contingent strategies considered. - React to changes in disposable income; offer incentives and discounts or increase prices.

Market Competition

High

High

Technological Advancements

High

High

Analyse in-depth; develop strategy. - Investigate new competitors. - Create contingency plans for new market entrants. Analyse in-depth; develop strategy. - Research and development. - Trend analysis.

External environment analysis PEST analysis Political factors A strong government is vital to effective operation of any business in any nation. It maintains a stable political climate that can be good for business. With the establishment of the new government the political climate in Australia changes every three years. Australia is one of the steadiest democracies in the world (https://www.dfat.gov.au/trade/resources/publications/Pages/australia-is-a-top-20country The new administration is making some changes to the rules and regulations that relate to employment laws and workforce in particular, and it is necessary for companies to be aware of these changes. It is also important to decide if the reforms are beneficial for doing business in Australia. These laws in Australia are very strict and expensive in Australia. The interest rates are also high, which means the company will have to pay more taxes so the company will have to rethink its share of profit when operating in Australia. Overall Australia provides business and trade with a great deal of freedom which makes it an ideal market to launch D.a.D Economic factors D.a.D is a business app that uses Gig Economy concepts. Individuals in gig economy are employed on contractual basis by companies but only for a limited period. The idea of a contract economy has gained traction in Australia (https://cdn.aigroup.com.au/Reports/2016/Gig_Economy_August_2016.pdf). This would be an

advantage for D.a.D as it offers better job prospects for people who are able to work independently without the employer being constrained by long term contracts. But this also has a long drawback as it does not offer the individuals job protection which can be dangerous for the economy. D.a.D's closest competitor in Australia Uber Eats faced problems with parking and timing of distribution in Auckland as it sought to expand its business to meet rising demand. Socio – cultural / demographic factors

In a society that is technology driven and time pressured, consumers are embracing more convenient means to purchasing their good. Now, native people of Australia are turning more towards a sedentary lifestyle and embracing food delivery services and the like. Numerous local and foreign students’ study at various institutes and universities across the region. The 18-24-year-olds make up 1.44 million of the 4.7 million Australians. D.a.D will provide career opportunities for young people pursuing flexible jobs. Legal factors As businesses in Australia have started to employ workers on short term contracts it has caught the attention of the Australia government pertaining to labour laws and regulations. Employment and labour laws are very stringent in Australia and they are well protected. There are cases where employees have been exploited in the form long working hours, less remunerations etc due to short term contracts. Also, businesses in Australia will have to pay higher amount of taxes as a part of their legal obligations. Uber has been under scrutiny for violation of labour laws and licensing in many countries due to its policies of hiring drivers on contractual basis which overlooks the laws. Technological factors

Most Australians have access to the Internet and use mobile devices to connect from anywhere, at any time. Research suggests that even isolated and marginalised groups are using technology in their everyday lives. Increasing digital business has also fostered demand for delivery service apps in Australia. People and businesses are more inclined towards modernisation and want to use technology. D.a.D will provide great technological advancement to businesses and people who are looking for fast paced services of any kind. Ecological

Protecting the environment is one of the major priorities of the Australian government. When D.a.D will be launched in Australia it is estimated that it would increase traffic congestion and increase pollution on the road, especially in populated cities. However, as D.a.D will mainly use bicycles and motorcycles for the deliveries, the impact on the environment and the generated pollution will be very low. Pestle Analysis Categories Political

Economic

Key points -

Stable Government Tax rate and profits Safety concerns Rise of gig economy Employment opportunities

Impact

Opportunity/Threat -

Opportunity Threats Opportunity Opportunity Opportunity

Ranking in Importance

SocioCultural

Technological Legal

Ecological

-

Job Securities Logistical support Personal preferences Skilled flexible job Lifestyle changes Digital business Modernisation Labor law and policies Scrutiny of contracts Licensing Traffic congestion Pollution Bicycle and bikes

-

Opportunity Opportunity Threat

-

Opportunity Threat Opportunity Opportunity Threat

-

Opportunity Threat Threat Threat Opportunity

Competitor Analysis Yello Auspost Amazon flex Zoom2u Gofetch Competitor Strength grid Porter’s 5 forces model Value chain model

Market analysis STP Buyer persona Canvas CBBE pyramid ‚Building a strong brand has been shown to provide numerous financial rewards to firms, and has become a top priority for many organizations ‛(Keller, 2001, p.1). According to Keller (2001, p.1), developing a strong brand can be defined in four steps: 1) ‚Establishing breadth and depth of brand awareness 2) Creating the appropriate brand meaning through strong, favorable and unique brand associations 3) Eliciting positive, accessible brand responses

4) Forging brand relationships with customers that are characterized by intense, active loyalty” In order to achieve these four steps into creating a strong brand, it is necessary to excel in six brand building blocks explicitly brand salience, brand performance, brand imagery, brand judgements, brand feelings and brand resonance presented in four levels (Keller, 2001) as exhibited in Figure

Figure 6 - Customer-Based Brand Equity Pyramid (Keller,2001, p.7) Next, it will be explained in detail the dimensions that compose the brand building blocks starting from the bottom up to the top. Level I – Brand Identity The first level of pyramid provides an answer to the question: ‚Who are you? ‛ and relates it to the concepts of brand salience (a fundamental building block in developing brand equity) and brand awareness. Brand salience relays to the characteristics of costumer awareness of the brand. As for brand awareness, it concerns the aptitude of costumers to recall and recognize a brand. Brand awareness connects the elements of the brand such as brand name, logo, symbol and other to associations in consumers’ mind. Brand salience influences the creation and strength of the brand associations that lead to the formation of a brand image and provides meaning for the brand to the consumers. A high level of brand salience also drives consumption or consumptions opportunities (Keller, 2001). Level II – Brand Meaning On the second level of the pyramid two important concepts that define brand meaning are enlightened (brand performance and brand imagery) and an answer to the following question is seek: ‚What are you?‛. The connotation and image that costumers have of the brand also affects brand equity. In order to create brand meaning it is vital to establish a positive brand image in consumers’ minds. Brand meaning refers to what the brand is renowned or acknowledge for in the clients’ perspective. It is easy to comprehend that the actual brand performance plays an important role to develop a strong brand since the consumer experience, feedback from other users and brand communications can positively or negatively influence the entire experience with the brand. If the brand fails to meet consumer expectations, it can have a dramatic effect in obtaining brand loyalty and resonance. ‚Designing and 31 delivering a product that fully satisfies consumer needs and wants is a prerequisite for successful marketing, regardless of whether the product is tangible, good, service or organization‚(Keller 2001, p. 10). Brand imagery represents the consumers’ more abstract thoughts about the brand rather than the actual products and services that it provides. Positive results in three dimensions (strength, favorability and

uniqueness) elicit positive brand responses that will, in turn, lead to brand loyalty and are ultimately indispensable to generate customer-based brand equity (Keller, 2001). Level III – Brand Responses At the third level of the pyramid, special attention is provided to the consumers’ judgements and feelings since positive interactions with the brand can lead to a change in behaviour and attitude towards the brand. Brand responses, as the name indicate, refers to the consumers’ response (both rational and emotional) towards the brand, their marketing communications and other information provided by the brand. Brand responses can be divided into two categories: brand judgments and brand feelings. Brand judgements focus mainly in customers’ personal thoughts and evaluations about the brand, and as for brand feelings, the emphasis is on the emotional responses and reactions towards the brand. A broader definition of brand feelings describes it as the degree to which consumers perceive the brand as unique or superior when comparing to other brands (Keller, 2001). Level IV – Brand Relationships The fourth and final level of the CBEE pyramid respects the decisive and desired level of identification that the costumer has with the brand defined as brand resonance. With high levels of brand resonance, the customer itself 32 becomes the brand ambassador and genuine apologist of the brand, actively communicating about the brand and their advantages and advocating on the brand behalf, meaning that a relationship between customer and brand was built. Brand relationships can be categorized in two dimensions: intensity (the extent to which the consumer is loyal to the brand) and activity (the number of times the consumer not only buys and uses the brand but also how actively they engage in other activities besides purchase and consumption) (Keller, 2001). The CBBE Model basic premise is that brand strength is based on how consumers think, feel, act and respond to the brand and therefore the strongest brands are able to create and nurture a meaningful relationship with the consumers, transforming them into brand advocates. Essentially, the model recognized consumers’ influence and power to the firms. “It is through their learning about and experience with brands that they end up thinking and acting in a way that allows the firm to reap the benefits of brand equity ‛(Keller, 2001, p. 17)

Problem Statement

Market Objectives Product launch and development Strategies D.a.D’s value proposition, that has been globally recognized, is entrenched into a two-sided platform. Differently from many companies that have the need to build a platform around their product in order to grant supremacy in their market, in D.a.D’s case the product can be considered as the platform itself. Drawing from its definition, a platform is a business model that creates value by facilitating exchanges between two or more interdependent groups, leveraging at the same time the network effects created by its installed base of customers. D.a.D is a two-sided platform that connects drivers and people that need a ride, providing both with network externalities (Parker & Van Alstyne, 2013). This platform is characterized by the presence of transfers between the parties, which exchange information, money and the transportation itself, as we can see from Figure 1 (Choudary, 2015).

The value of the platform is measured by its ability to connect the parties and to attract new producers and the users/customers. This value depends on direct network effects: the utility of platform users increases as the size of both sides increase. The priority for this type of platforms is therefore to quickly build a large customer base in order to foster direct network effects and gain a dominant position against new entrants (Choudary, 2015). As a two-sided platform, D.a.D has managed to grow its network by subsidizing the side of the market that is more price sensitive (the drivers) and that can provide network growth to the other side, the riders, which is charged full price instead (Rochet & Tirole, 2003). Drivers, in fact, do not have to pay anything in order to use the app and they are rewarded through surge pricing when there is a higher demand than supply (D.a.Das a Two-sided Market, n.d.). In this way, D.a.D can manage to leverage direct network externalities proportionally at both ends (Shane, 2014). In fact, as described in Figure 2, if on one hand the number of drivers positively influences the ride availability and the variety of riding options, on the other hand an excess in drivers’ availability may lead to an insufficient number of riders, which would leave drivers unhappy. At the same time, as the number of riders influences the possibility for drivers to earn money, too much growth on the buyer side could also lead to an insufficient number of sellers, leaving buyers dissatisfied (Sullivan, 2015). D.a.Dhas fostered network externalities since its launch in 2010, when it managed to create local network effects through an intense market focus. Indeed, D.a.D targeted at first the early adopters of the tech community of San Francisco. There are two main reasons behind this strategy. First of all, San Francisco had a notoriously spotty cab service; secondly, tech people are continually looking for new tools and services that can improve their quality of life (Brown, n.d.) One of the peculiar characteristics of D.a.D is that the technology behind it is easily replicable, while the whole network built around it is not. The company’s customer base has been built through the continuous conquest of new areas. There are actually some factors that can explain Uber’s successful expansion. First of all, Uber’s geographical expansion has always been tailored according to a city-bycity strategy: D.a.D understood from the beginning that each area has different actors with different characteristics. Secondly, the launch of the service in a new city was also followed by the offering of free rides in order to lead new potential customers to try the service. Once an appropriate customers base is created, Uber’s discount and free rides decrease. There are two other interconnected and important factors behind Uber’s growth: the quality of the experience and the word of mouth. In fact, one of the main issues that D.a.D had to face was the risk of negative network effects, which was resolved by ensuring a high safety and quality of the ride through an ad hoc feedback system. Moreover, the early adopters who tried D.a.D told their friends about it and also shared their experiences on blogs and social media. Spreading awareness about the quality of the service was at least as important as delivering it: this positive word of mouth eventually encouraged more and more people to try D.a.D and led to an increase in customer base through positive network effects (Brown, n.d.). Thanks to the successful launching strategies and the incredible increase in the customer base, D.a.D eventually became a social phenomenon, as shown by the fact the “Uber” is now used as a verb (Moazed, 2016).

Implementation

Lean Canvas...