A case study on ofo bike

Despite being founded in 2014 by five members of the Peking Cycling Club, the company made expansions to its operations to several countries and almost all major cities of the world -250 cities in 20 countries (Wikipedia 2018, May 6). By june 2015, the company had 2000 bicycles and at least 20000 users. A Funding of U. S $130 million was received from Xiaomi and Didi Chuxing technology companies enabled the company to expand to the international scene where it launched its operations in Singapore on February 2017, later the U. K, Seattle In America and Australia(Wikipedia 2018. Things are getting worse as the Ofo Singapore recently lay off its staff, vacated offices and it still owes debtors over $700000 U. S dollars (Lim, 2019). The embattled start-up has been rolling back its operations after a tough period of disruption.

COMPANY ANALYSIS 1. Company’s Business viability Analysis Ofo Bike Company is affected by various factors, which can be internal or external such as political factors, social, economic factors, changes of technology, legal, as well as government policies of the various regions where the company operates. Pradeep describes it as, “ a segment where the amounts you get per ride are small, so it takes time,” he says. “These bikes are not that expensive. They have to be invested so they can deal with all the fines and regulations. It will take time before they start making profits,” (Varakantham, 2018). He goes ahead to advise the bike companies to move away from the deposit collecting model for them to make anything out of the Business that way they will squeeze smaller investors.

Social Sustainability Bicycle riding is not bound to a social class, but it cuts across the social divide thereby making it sustainable socially. Among the rich, there are a good number of people that ride bicycles for fun or exercise, even among the middle class and the lower class as well make use of the bicycles thus, Ofo Inc. is a justifiable business socially since it touches a large number of people in society and across the major classes of society. Ofo Bikes Inc. makes it easier by hiring out their Bicycles out at affordable rates while it promotes the physical and health well-being. They have rolled back from most of the international markets, and they are struggling financially since most of their investors have left.

Today Ofo Inc. Singapore is no longer economically viable. The Company’s interest margins have slumped the whole of 2018, with a few exceptions. 0 Professionalism Usually, professionalism serves to remind people of the workplace standards, principles and can inspire people to the value of expertise in their professions. Due to unpredictable markets and fall in profits for long periods, the funding organizations of the Bike Company also withdrew, and currently, the Company has a massive debt of U. S $700,000 that it is not able to clear. The occurrences are because of stiff competition and emerging of other bike sharing companies and startups that are cheaper. Management The management directs, instructs, motivates, and supervises as well as controls workers. Ofo Company has a good management team comprising of operations team starting with its founder member who were University students in Beijing, business management team, and other teams.

When Ofo entered the international scenes, it encountered a problem with theft and vandalism, which was hard to manage. It happened that a solution was able to be developing an app, in which they bill the user or the rider from their credit card before they can ride and then a flat rate is charged for every subsequent kilometer a ride goes. The primary challenge that stands is that of theft and vandalism as well as the last mile or last kilometer threat. Risk management strategies like mitigation, avoidance, and reduction need to be done in three parts, which are preventing the risk from happening, communicating and recovery and lasting recovery. Ethical Issues The Company is accommodative to foreigners hence they embrace diversity in their area of work, and it is gender neutral in its worker composition where women are allowed to work without much problem.

The signing of contracts for businesses especially start-ups is inevitable, and all business needs to be prepared to do the same. Other than employment, contracts that Ofo signed with its employees when offering them a chance to work with their start-up the Company made other agreements with other parties like the municipal governments concerning parking boroughs that they were ready to allow Ofo to use. When entering foreign markets, Ofo had to agree to some terms and conditions and sign some agreements and contracts as well. Also, Ofo had suppliers who made supplies to them, and they used to sign contracts, which later Ofo broke by failing to pay those over 700,000 dollars (Wildau, 2018). The recent cases that the Company is reported to have failed to pay its workers what was in the contract for termination of their employment are utter ignorance of the law.

Potential of new entrants into the industry Over the past five years, there has been a rise in new entries in the Bike sharing business sector since the industry has less entry barriers and it allows easy entry. The Singapore transport sector announced that it would license more Bike companies. The move not only pauses a competition threat to the existing Companies like Ofo but also the marketing and business strategies possess mighty potential than the current existing businesses. The new entrants also analyze their market based on research pegged on the existing companies, which gives them potential over the existing firms. For example, Mobike began later than Ofo but the latter is facing bankruptcy issues while the former relishes in its glorious days.

Ofo values every customer, which has led to its speedy down slide. Threat of Substitutes Many regard the bike sharing to be a leisure business. Therefore, it has numerous substitutes like train, cars, motorcycles, buses, and vehicles in the public transport. For the purpose of exercise, people prefer to walk, jog, or even gardening, which are cheaper substitutes to bike sharing. That weakens Company’s power to great extent.  The Status of Bicycles in Singapore. [online] Lee Kuan Yew School of Public. Available at: https://lkyspp. nus. edu. CoBE (2003).  Code of Business Ethics | Avanade Singapore. [online] Avanade. com. Available at: https://www.  Ofo Singapore lays off operations team without compensation | Malay Mail. [online] Malaymail. com. Available at: https://www. malaymail. Available at: https://sis.