Case Study of Lyft’ me up; Entering a new market

Introduction

This case study is about the Lyft company. Lyft is the company that connects the drivers with the users, in which many are those drivers that drives their own car instead of a dispatcher taxi. Recently, the company has brought its car service to the city of New York. The company has started up as a ride sharing startup business. This means that the owners of the privately owned cars sell rides to other people using this service. By going through the case study, following questions will be answer below.

 

Answer 1. Contributions of the main functions of business to the Changes in organization

The key functions of the business are finance, marketing, Information system, supply change, human resources, production and information systems. These main areas of business helps contribute successfully to the organizational change (Argyris, 1993). The organization in this case study is ‘Lyft’. In order for Lyft to succeed and compete in the market, it needs the support of all the key business functions. These major business component interacts with each other in various ways to contribute to management effectiveness. If one of the area is missing then the management cannot function properly. In order for Lyft to achieve its business goals and objectives, it needs to maintain a balance of all these core functions. The company can only achieve effectiveness and efficiency in its operations if it utilizes all of these business departments (Argyris, 1993).

All of these business functions have their own characteristics and role to play. Marketing helps in identifying the needs and demands of the customers. Marketing helps to gain information such as customer demand, needs, demographics and wants (Langston, 2014). A successful marketing strategy is necessary to compete against other corporations. The key role of marketing is to satisfy the needs of the customer by providing them with the right product at the right price. Finance plays a crucial role in managing the finances, accounts, cash of the business (Argyris, 1993).  Finance department also helps in forecasting, capital budgeting, preparation of the financial statements. Human resource management is also a core function for Lyft. As the company wants to expand, it needs talented employees to help run the company. Human resource department helps in identifying the hiring and recruitment needs of the business (Argyris, 1993). All of these core business functions are inter related to each other and the improvement of one business function impacts the other. These core functions will help Lyft to manage its strategies and plans to reach the desired goals (Langston, 2014).
Answer 2: Key issues in Stakeholders management

Stakeholders are those persons that play an active role within the organization. Stakeholders are those persons that care for the wellbeing of the company. Stakeholder can be a group, company or a person and can be effected by the objectives, actions and the policies of the corporation (Hausman, 2013). Stakeholders may have an indirect or direct stake in the business. A stakeholder can be external as well as internal. Internal stakeholders are the one that works for the organizations. The external are the ones that invest in the business in the form of capital and can be termed as Shareholders. They play a crucial role in the growth of the organization (Hausman, 2013).

The management of stakeholders is the primary responsibility of the corporations. The stakeholder influences the organization in the implementation of a quality management process. One of the main problem arise in the management of stakeholders is the communication of the project’s progress. The lack of proper reporting and summary of the business operations to the stakeholders is another important issue (Hausman, 2013).Because of this lack of proper planning and reporting, the stakeholders are not able to make proper decisions. Proper reporting and communication with the stakeholders help in better decision making (Hausman, 2013).
Answer 3: SWOT Analysis and the future assessment of Lyft

Strengths

• The elimination of city contract and union issues helped Lyft to combat its rival ‘Uber’
• Innovative and intuitive marketing approach such as the giant mustaches in from of the Lyft cars
• The social rollout schemes that helps the process of Lyft to utilize this by Google plus, Spotify and the other software (Langston, 2014).
• Strong essentials for service networks by Lyft which benefits not only the drivers but also those riders who want to earn extra money (Langston, 2014).
• Pickup trucks and party buses in the services of Lyft. This helps to differentiate the ‘ride’ varieties available. This will cause the interest of the consumer to grow as they can explore these new and innovative options.

 

Weaknesses

• The issues of Liability; which means that the oversight and background checks of the drivers is not concerned with the payment issues, safety of the riders, injuries and the problems of reliability (Hausman, 2013).
• Legal problem: The network of Lyft turns the drivers into caps gypsies. This is regarded as maligned and illegal in major cities. This creates vulnerability for the company as its threatening the services of the unionized cabs .
• The profit of each ride is limited for Lyft as the money paid to drivers for the fares is huge. So, there is a less margin for profits and market capitalization (Hausman, 2013).

 

Opportunities

• Scheduled rides and subscription services (weekly, monthly and daily)
• Constant revenue because of the consistent riders being enrolled in the Lyft services
• A huge untapped market waiting to be expanded (Langston, 2014).
• The major rival of Lyft is ‘Uber’ and it has only expanded in London and U.S. So, it is a great opportunity for Lyft to expand beyond the borders of U.S and London.
• The users who are driving personal cars allows Lyft to constantly circumvent this inhibitor to lead to growth in the business (Hausman, 2013).

 

Threats

• Constant threat from its main rival ‘Uber’ and other new startup ridesharing firms.
• The issues of Liability and the another destructive press issues create hurdles for the future growth of Lyft (Hausman, 2013).
• Lacking profits and reliability on the riders

 

 

 

Conclusion

After going through the SWOT analysis, it can be concluded that as a startup company Lyft has to rely on its strengths and opportunities to tackle the threats and weaknesses. The main rival of the company ‘Uber’ also has its operations in New york (Hausman, 2013). Lyft has many opportunities to deal with this competition by expanding the market beyond the borders of United States. Another thing in the future strategy for Lyft is that the company needs to solve the issue of running a car service without licensed drivers (Langston, 2014).  As this is illegal in New York so this can create hurdles for the future growth of the company. Lastly, the company needs to increase its profits by increasing its market share and sales revenues. This can be done if the company efficiently utilizes the core business functions.

References

Argyris, C. (1993). Knowledge for action: A guide to overcoming barriers to organizational change. Jossey-Bass Inc., Publishers, 350 Sansome Street, San Francisco, CA 94104.

Chan, N. D., & Shaheen, S. A. (2012). Ridesharing in north america: Past, present, and future. Transport Reviews, 32(1), 93-112.

Hausman, A. (2013). Lyft’s Business Model: Exploiting an Existing Competitor’s Weakness. [online] Capitalist Creations. Available at: http://capitalistcreations.com/lyfts-business-model-exploiting-an-existing-competitors-weakness/ [Accessed 9 Dec. 2014].

Hwang, K., & Giuliano, G. (1990). The determinants of ridesharing: Literature review.

Langston, J. (2014). Taxi vs. Lyft: My Commute. [online] Sightline Daily. Available at: http://daily.sightline.org/2013/08/06/taxi-vs-lyft-my-commute/ [Accessed 9 Dec. 2014].