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Harvard Case - Grabbed! How the PMD Ban Almost Immobilised the Food Delivery Industry

"Grabbed! How the PMD Ban Almost Immobilised the Food Delivery Industry" Harvard business case study is written by Cheng Boon Koh, Xuanxuan Liang, Kelvin Tan, James Teo. It deals with the challenges in the field of Organizational Behavior. The case study is 9 page(s) long and it was first published on : Jun 8, 2020

At Fern Fort University, we recommend a multi-pronged approach for food delivery companies to navigate the challenges posed by the PMD ban. This strategy focuses on building resilience, fostering innovation, and adapting to the evolving landscape of urban mobility.

2. Background

The case study 'Grabbed! How the PMD Ban Almost Immobilised the Food Delivery Industry' highlights the sudden disruption faced by food delivery companies in Singapore due to the unexpected ban on Personal Mobility Devices (PMDs). This ban, implemented due to safety concerns, significantly impacted the delivery process, causing delays, increased costs, and customer dissatisfaction. The case study focuses on GrabFood, a leading food delivery platform, and their struggle to adapt to this change.

The main protagonists are:

  • GrabFood: A major player in the food delivery market, facing the challenge of adapting to the PMD ban.
  • Delivery Partners: The freelance riders who use PMDs for deliveries, facing job insecurity and income loss.
  • Customers: End users who rely on GrabFood for convenient food delivery, experiencing delays and potentially higher prices.

3. Analysis of the Case Study

This case study can be analyzed through the lens of Organizational Behavior, Change Management, and Strategic Management.

Organizational Behavior:

  • Leadership Styles: The case highlights the importance of transformational leadership in navigating crises. Grab's leadership needs to inspire and motivate their delivery partners, communicate transparently, and foster a sense of shared purpose.
  • Team Dynamics: The ban significantly impacted the team dynamics of delivery partners, leading to potential frustration and a sense of uncertainty. Grab needs to address these concerns and build a supportive environment.
  • Motivation Theories: Understanding motivation theories is crucial for Grab to retain and motivate their delivery partners. Offering incentives, flexible working hours, and clear communication about future plans can help.
  • Organizational Culture: The ban highlighted the need for a culture of adaptability and innovation within GrabFood. This culture should encourage employees to find creative solutions and adapt to changing circumstances.

Change Management:

  • Resistance to Change: The PMD ban triggered significant resistance to change among delivery partners. Grab needs to effectively communicate the rationale behind the ban, provide support and resources, and address concerns to minimize resistance.
  • Leadership Development: The case highlights the need for leadership development within GrabFood. Leaders need to be equipped with the skills to effectively manage change, communicate with stakeholders, and build resilience within the organization.
  • Communication Patterns: Clear and transparent communication is crucial during times of change. Grab needs to communicate effectively with delivery partners, customers, and stakeholders, addressing concerns and providing updates on the situation.

Strategic Management:

  • Corporate Strategy: The PMD ban necessitates a re-evaluation of GrabFood's corporate strategy. This includes exploring alternative delivery methods, optimizing logistics, and potentially adjusting pricing strategies.
  • Operations Strategy: GrabFood must adapt its operations strategy to incorporate alternative modes of transportation. This might involve partnerships with traditional delivery companies, investing in electric vehicles, or exploring innovative delivery solutions.
  • Growth Strategy: The ban presents an opportunity for GrabFood to develop a more sustainable growth strategy that is less reliant on PMDs. This could involve expanding into new markets, diversifying services, or focusing on technology-driven solutions.

4. Recommendations

Short-Term:

  1. Immediate Support for Delivery Partners: Provide financial assistance, temporary job reassignment opportunities, and training programs for alternative delivery methods (e.g., bicycles, e-bikes).
  2. Transparent Communication: Communicate the rationale behind the ban, the impact on delivery services, and the company's plans to address the situation.
  3. Alternative Delivery Solutions: Explore and implement alternative delivery methods, including partnerships with traditional delivery companies, investing in electric vehicles, or developing innovative delivery solutions like drones or robots.
  4. Customer Engagement: Communicate potential delays and price adjustments transparently. Offer incentives for customers who choose alternative delivery options.

Long-Term:

  1. Develop a Sustainable Delivery Model: Invest in research and development for innovative delivery solutions that are sustainable, efficient, and environmentally friendly.
  2. Build a Culture of Adaptability: Foster a culture that encourages innovation, problem-solving, and adaptability. Encourage employees to think creatively and find solutions to unexpected challenges.
  3. Strengthen Partnerships: Build strong relationships with stakeholders, including delivery partners, customers, and government agencies. Collaborate to find solutions and address concerns.
  4. Invest in Technology: Leverage technology and data analytics to optimize delivery routes, manage resources effectively, and improve customer experience.

5. Basis of Recommendations

These recommendations address the core competencies of GrabFood, which include technology, logistics, and customer service. They also consider the needs of external customers, internal clients (delivery partners), and competitors. The recommendations prioritize safety, sustainability, and long-term growth. While quantifying the return on investment (ROI) for some initiatives might be challenging, the focus on innovation and adaptability is expected to provide a competitive advantage in the long run.

6. Conclusion

The PMD ban presented a significant challenge for GrabFood, but it also presented an opportunity for strategic adaptation and innovation. By focusing on supporting their delivery partners, exploring alternative delivery solutions, and fostering a culture of adaptability, GrabFood can navigate this disruption and emerge stronger.

7. Discussion

Other alternatives not selected include:

  • Ignoring the ban: This would have severe consequences, including legal repercussions, customer dissatisfaction, and potential loss of market share.
  • Focusing solely on traditional delivery: This might be a short-term solution, but it would limit GrabFood's growth potential and competitive advantage.

Key assumptions include:

  • Government support: The government's commitment to finding alternative solutions for delivery services is crucial.
  • Customer acceptance: Customers are willing to adapt to new delivery methods and potentially accept higher prices.
  • Technological advancements: The development of innovative delivery solutions like drones and robots will be feasible and commercially viable.

8. Next Steps

  1. Immediate action: Implement short-term recommendations within the next 3 months.
  2. Develop a long-term plan: Within 6 months, develop a comprehensive strategy for sustainable delivery solutions, including technology investments and partnerships.
  3. Continuous evaluation: Monitor the effectiveness of implemented solutions and adjust strategies based on feedback and market trends.

By taking these steps, GrabFood can navigate the challenges of the PMD ban and emerge as a leader in the evolving landscape of urban mobility and food delivery.

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Case Description

In 2013, the Land Transport Authority (LTA) published the Land Transport Master Plan 2013, where additional foci were placed on improving commuters' experiences in the first and last legs of their travelling journeys. The LTA actively promoted the theme of "active mobility" where the use of bicycles and personal mobility devices (PMDs) were encouraged as a means of transport over short distances. Due to the affordability and conveniences of PMDs, the population of PMD users grew steadily in Singapore over the next three years. The boom also saw an uptake on PMDs in the food delivery service industry as service providers saw PMDs as an efficient and cost-effective means of transport in the area-of-operation. The increased PMD traffic on the shared footpath, however, resulted in a rising trend of accidents between PMD users and pedestrians. Voices of dissent swelled and concerned Members of Parliament (MPs) continuously highlighted the issues on safety and control of PMDs during Parliamentary sittings. Consequentially, the Singapore government announced on 4 November 2019 that PMDs or e-scooters would be banned on all public footpaths. The announcement caught many PMD users by surprise as the campaign of "active mobility" promoted actively by the government barely took off six years prior. What are the change processes that were carried out and what were some of the communication barriers affecting this change in policy?

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