Case Study: The Success Story Of Grab Holdings - Strategy And Competitors Essay.

Key Drivers in Success of Grab

This case study is based on the Grab Holdings incorporation which is a leading organization in South-East Asia. Grab is a transportation and technology leading company that provides several services such as grocery delivery, food delivery, ride-hailing various financial services, and online mobile payments. This report includes the tools which has been used to identify and evaluate the key drives of in success of Grab. This report also includes the strategy framework and approaches to be analyze and evaluate to achieve the entrepreneurial vision and business model. It also includes examples of Grab competitive strategy at corporate level or business level. This report will analyze Blue Ocean concept and tools for strategy canvas and value curves for the comparison of Grab and its competitors in the industry.. Based on discussed points this report will also conclude the results, key concept, and aspect of the case study.

Grab is an international organization which has been established in the year 2012 by Anthony Tan and Tan Hooi Ling. In the year 2012, when company launched Grab taxi in Malaysia and expand the business in Singapore, Thailand, and Philippines in 2013 and launched Grab bike (Successstory, 2021). In the year 2018, Grab merged with Uber for the south east Asian market. Grab launches a super app for the south east Asian market in the year 2019. Key drivers in success of Grab are

Source- By Author 

• Innovation- Grab policies towards the customers. Company taking care needs of the customers and data driven insights with dep tech expertise with a potential of digital bank. Grab adopts best technological changes to implementing the business model for earning profit (Agwan,2019).
• Research& Development- Grab research about the market conditions and requirement of the customers. Grab analyze and evaluate the various factors that affects the business of the company such as social, economic, political, and technological factors. Research conducted by R&D department of Grab helps company to improve quality of services.
• Cost Efficiency-The cost efficiency policy of grab is based on Transport expense management which includes tracking and management of cost from different departments and Grab also applied corporate payment option. The policies of the company for the rides are allowed for business expenses (Agwan, 2019).
• Competitive advantage-Grab take advantage from competitors by focusing on the low-cost services of production. Company uses regular cars instead of using fancy and modern cars for the taxi services.
• Workforce- The training department of Grab trained very well and efficiently to the employees of the company. For taxi drivers company launches a new training program for the pandemic of COVID-19. The training program consist two programs for the drivers with reskill and upskill driver partners. The training program is mainly focus on the customer support and services, safety of vehicles (Mustafa, 2021).
• Rewards and subscriptions to customers-Grab provide additional discount and rewards to the customers by Grab pay wallet system. Apart from this company runs a customer loyalty program to reward the loyal and important customers of the company. Grab rewards provide free rides and discount in booking of food order (Todayonline, 2021). 

• Focus on local market- Grab focuses on the local market to serve their services instead of global market that provides additional advantage to the company. Company focuses on local brand awareness. Company changes policy to the enhancement of local services (Warc, 2018).
• Business model-Business model of Grab is clearly defining the goal of the company. Grab is applying technologically advanced business model for the services provide by him. The business model of Grab is sustainable ad reliable for the next 30 to 50 years.
• Program goals-Grab targets on the digital literacy and greater inclusion to more than 3 million people in Southeast Asia till the year 2025 with the several partners such as government and private companies, non-profit organizations in the field of market (Grab, 2021).
• Grab mastered super App- App of Grab is Southeast Asia’s leading app which provide various services to 670 million people in Singapore, Thailand, Malaysia and many more. Grab announces different vouchers and coupons for the customers (Fastcompany, 2021).
• Distinctive super App-Taxi app of Grab is a distinctive super app that provides facilities of taxi booking to the customers. Nowadays this taxi app is converted into super app and now it also provides services of food delivery and online payment. These service plays an important role for in success innovation of Grab.
• Competitive advantage-Grab take advantage on the rival companies by applying the low-cost production service strategy. The major competitors of Grab are Uber, Lyft, Gojek and Gett. In most of the countries where Grab served their services, they are the only major service provider (Fallarme, 2019).
• Strategic capital investment- Grab announces various investment in several companies for acquisition. For example, Grab invested $40 billion to acquire the Altimeter group (Bolilia, et al., 2019).
• Technological adoption-Adoption of new changes related to the technology is adopted primarily by the company. Company focuses on adoption of technology to gain advantage from the competitors. 

Grab applied Technology push model and Market pull model achieving advantage in the market over the competitors. Technology pull method is a linear model and first-generation method which shows the innovation process start by an organization and Grab applied Artificial Intelligence (AI) as a technological advancement which improves the communication between passengers and drivers(Ipacso, 2021). Grab applied messaging system as an innovation model and Grab also applied Microsoft Azure which is a cloud commuting service to store data online. Market pull model is second generation method which emphasis the solution for the problem in the market by delivering the product and services through research and development.

Strategy framework of Grab is based on to provide safe taxi rides to the customers and company focuses on the needs of the passenger with providing the rides on affordable price. Strategy framework is a methodology that has been used for to effectively evaluate the plans to achieve in the future. Business strategy shows how a business will achieve the goals that has been formulated on the strategy. There are various frameworks for implementing the strategies such as SWOT analysis, PESTLE analysis, 3C’s (Corporation, competition, and customer) strategy model (Warc, 2018).

Grab mission is to lead the Southeast Asia region on the global platform and they focus on to “Drive Southeast Asia forward”. The vision of company is to provide real world transport and online payment to the customers and business opportunities for all the partners. Grab earns income from the commission by their customers, drivers and from restaurant from there they provide services to its customers. The business model of Grab is straight because company does not have physical assets such as cars or drivers instead of this company provide work to them and charge their profit as commission from them. Grab provides services of transportation through the internet. Business model of grab is based on revenue model (Fallarme, 2021).   

Strategy Framework of Grab

Marketing expenditure of Grab is associated with the revenue earned by the company and it will $1.99 million and increasing demand of the sector in which company serves is high demanding (Lee, 2016). Company promotes their activities through social media and event campaigns. Target customer section of Grab is middle class and lower middle class because taxi services is mostly used by the lower and lower middle class section people (Code-brew, 2021).

Grab competitive strategy for business unit level is to take advantage on the competitors by lowering the cost of production and using normal family car instead of fancy cars. Grab also evaluate the importance and value of dominating the market. The major competitor of Grab is Uber but their business strategy is very different because Uber focuses on buying car through the company and company introduce itself as a luxury taxi car service provider, but Grab establish itself with local taxi companies and do not have their own drivers with non-fancy cars. Business unit level strategy of Grab is based on three aspect such as low price of services, low-cost production, time efficiency, comfort, and convenient services to the customer (Gabriel, 2018). Grab aims on to acquiring the local companies of Southeast Asian countries.

Grab business model is based on demand business model which means Grab provide their services when a service is in need or in demand. On demand model of business approaches the customer when they required the different kind of services from the company. Business unit level model of grab is based on light assets. Light asset model is including transferring capabilities across the customers of the company (Cher, 2021). The key aspect of business model of grab is drivers of the car, customers, and investors of the company. Grab divides drivers into three categories such as-

• Platinum category- When a driver achieved the target of 300 rides per month then company provides medical benefits to the driver.  
• Gold category- When a driver achieved the target of 150 rides per month then company provides coupons and vouchers to the drivers.  
• Silver category- silver category is for those drivers that completes 60 rides per month then company provides the additional coupons for car maintenance (Grab, 2021).

Entrepreneurial model is related with a business model that aims on to launch a new business idea and entity which provide work to the individual person and group of individual people that are willing to work with that idea. Grab is an online entrepreneurial company that works in association with various partners such as drivers, food delivery boys, restaurants, local taxi service provider and with referral fees from different sources (Madhav, 2021).   

Corporate level strategy is a conceptualized framework that provides a unique to achieve the ultimate goals of the organization for long term period. Corporate level strategy also helps to take advantage by the strategy formulation on the competitors. Corporate level strategy of Grab is designed by the management of the company which focuses on to achieve the future goals by the maximum utilization of resources to take advantage on the rival companies. By evaluating the future trends in the industry company formulate the corporate strategy for the customers, drivers, market, and competitors to create a remarkable growth of the company (Grab, 2021).

BCG model is a matrix tool which has been used for presenting the graphical presentation of company’s different product and services for the long-term strategic planning through four square matrixes. Grab star product category is combined with its latest advancement in safety and assurance of customers with digital payment services through a super app model. Question mark for Grab is related with the food delivery and service app for the company. Cash cow category for the company is financial services such as loan, insurance, investment, and many more which is low market growth product with high market share for the company (Corporatefinanceinstitute, 2021).   

Grab's Business Model

Source: (Corporatefinanceinstitute, 2021) 

Ansoff model is product/market expansion model used by organizations to analyze the future growth of the organization which has been based on four elements such as- 

Source: (Corporatefinanceinstitute, 2021) 

Market penetration strategy for the Grab is increasing sales through different existing services such as food app, financial services, taxi rides and many more. Product development strategy of Grab is launching of new product and services in the market where company launches customer financial services and loans for micro investment companies. Market development strategy is related with entering new market with existing products and company uses development of new payment alternative for both drivers and passengers. Diversification for the company is entering into a new market with new products in delivery services, payment services through Grab pay application.

Strategy canvas is a line graph tool that has been used for analyzing the factors and importance of the company over the competitors and current trends in the industry. Grab major competitor in the taxi service industry is Uber.

(Source: By Author) 

Grab is an established organization which provide their services from the year 2012. In the year 2016 application of Grab become the top ride sharing app in Southeast Asia with the 100 million downloads from the app store (Grab, 2021). Blue ocean strategy is a business approach in which the market is runs with very few competitors and majorly market is formulated by one or two organizations and blue ocean strategy gives high profit to the organizations, so blue ocean strategy reduces the competition in the market and helps an organization to gain the profit in market (Blueoceanstrategy, 2021).

Grab success is depending on the unique and creative business model that provides competitive advantage to the companies over the competitors. Grab won the award of most innovative company in the year 2019 across the world. Grab is first company to establish the separate research and development department to provide better services to the customers. Grab is first organization that launches the digital bank policy in the market segment for the customers which includes data driven insights and technological expertise (Belton, 2020). Grab applied the Grab mastered super app that is Southeast Asia’s leading app which provide various services to 670 million people in Singapore, Thailand, Malaysia and many more. Grab announces different vouchers and coupons for the customers that helps the company to formulate the blue ocean strategy. Booking process of taxi is very easy with insured drivers with various benefits of coupons and vouchers for both customers and drivers (Toni, 2021).

The major attribution of garb towards the blue ocean strategy is that the biggest competitor of Grab is Uber which charges from the customer based on distance and time for travelling but Grab charges the fair from the customer based on fixed rate that is primarily decided by the company. Grab provide quality services to the customers in an efficient cost structure. Uber and grab are leading companies where Uber is the leading company across the world but Grab is a leading company in local approach in the Southeast Asian market. Based on innovation and new business strategy (Datentreiber, 2021). Grab launches the Grab bikes in the market to save the time of the people from the traffic jam and the fare of bikes is also low in comparison of the cars. People of manila and Jakarta facing the issue of long traffic jam, so bike service of Grab is a very innovative idea that contributes in blue ocean strategy. Blue ocean strategy is a combination of four factors such as raise, reduce, eliminate, and create. Strategy canvas is a tool that has been used to compare the product factors through a graph that has been based on a particular customer segment, so Strategy canvas shows the current and future landscape future of the organization (Strategyforexecs, 2021). It is a combination of current state and future aspect of an organization. Strategy canvas of the Grab company is divided with the customer segment in three categories people who don’t have car, people who want cost effective cars and people who wants VIP cars. Key activities of the organization are on to provide petrol pumps and vouchers to the drivers. Strategy canvas model of Grab provides advantage the company over its competitors.

Grab's Competitive Strategies

Grab strategy canvas model is based on key activities such as product development and management, hiring of drivers, and support to the customers. Value proposition of Grab is based on the minimum waiting time for the customer. Company aims on to focus the customer relationship through customer support and customer relationship management. Value curve canvas is an analytical diagram that uses to design the products and services to solve the issue and needs of the customer, so Value curve is design to show the instant value of an organization product or services (Datentreiber, 2021). Grab launches online app platform for the users and provide quality services to the customers with effective cost price.   

Four action framework is used for developing the existing products of the company which is related with blue ocean strategy with four elements such as raise, reduce, create, and eliminate. Raise is related with upgradations of existing products and services such as financial services and grab super model app. Reduce means what products and services must be removed from the market such as services in medical sector. Create means new opportunity for the company to enter in the market and opportunity for the company is to enter in new market in transportation sector for earning more profit. Eliminate is related with instantly removing factors from the market in the industry.

Conclusion

Based on above study, it is concluded that Grab is largest taxi service provide company in the Southeast Asia which provide quality service to the customers. Key innovative factors of Grab quality customer services, customer reward and subscription, technology-based business model, focus on local market instead of global market, Grab mastered super app, innovative approach helps Grab to achieve success. The role of Blue ocean strategy in Grab success is very important because company launches new policies to capture the market. Grab applied Corporation, competition and customer model which focuses in to work with corporation, with competition and for the customers to earn maximize profit. The major reason of Grab success is the strong focus on local market instead of global market. Value curves and strategy canvas is an important factor for the company for analyzing the competition of the organization, preparing horizontal axis, analyzing competitor score and review market position. It is a combination of three major factors such as clear focus on goal, competitive analysis and tag line for the product and services.

References

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