Harvard Case - Bird Scooters: Shaking up the Micro-Mobility Market
"Bird Scooters: Shaking up the Micro-Mobility Market" Harvard business case study is written by Sayan Chatterjee, Michael Marchionda, Sarah Sydlowski. It deals with the challenges in the field of Strategy. The case study is 20 page(s) long and it was first published on : Apr 30, 2020
At Fern Fort University, we recommend Bird Scooters pursue a multi-pronged strategy focused on sustainable growth, international expansion, and technological innovation. This strategy aims to solidify Bird's position as a leader in the micro-mobility market while mitigating risks and maximizing long-term value creation.
2. Background
Bird Scooters, founded in 2017, is a leading provider of electric scooters for shared micro-mobility services. The company operates in over 100 cities worldwide, leveraging a disruptive business model that relies on a flexible, asset-light approach to deploying scooters in urban environments.
The case study highlights Bird's rapid growth, challenges with regulatory hurdles, competition from established players like Lime, and the need to adapt to evolving market dynamics.
3. Analysis of the Case Study
Applying a SWOT analysis framework:
Strengths:
- First-mover advantage: Bird established itself as a pioneer in the micro-mobility market, building brand recognition and a strong user base.
- Scalable business model: The asset-light model allows for rapid expansion and adaptability to changing market conditions.
- Strong technology platform: Bird's proprietary technology enables efficient scooter management, data analytics, and user experience optimization.
- Focus on sustainability: Bird promotes environmentally friendly transportation solutions, aligning with growing consumer preferences.
Weaknesses:
- Regulatory challenges: Navigating varying regulations across different cities and countries can be complex and costly.
- Dependence on third-party operators: Bird's reliance on independent contractors for scooter maintenance and deployment can lead to inconsistencies in service quality.
- Competition: The micro-mobility market is becoming increasingly crowded, with established players and new entrants vying for market share.
- Profitability concerns: Bird's rapid growth has come at a cost, and achieving profitability remains a challenge.
Opportunities:
- International expansion: Expanding into new markets with high urban density and growing demand for micro-mobility solutions.
- Product diversification: Introducing new electric vehicles like e-bikes, e-mopeds, and cargo bikes to cater to diverse user needs.
- Technology advancements: Leveraging AI and machine learning to optimize scooter deployment, improve user experience, and enhance safety.
- Strategic partnerships: Collaborating with cities, transportation authorities, and other businesses to integrate micro-mobility solutions into urban infrastructure.
Threats:
- Increased competition: Existing players like Lime and new entrants are aggressively expanding their market presence.
- Regulatory uncertainty: Governments may impose stricter regulations on micro-mobility services, impacting operations and profitability.
- Economic downturns: Economic instability could lead to reduced consumer spending and lower demand for micro-mobility services.
- Technological disruption: Emerging technologies like autonomous vehicles could potentially disrupt the micro-mobility market.
Applying Porter's Five Forces framework:
- Threat of new entrants: High, due to the low barrier to entry and potential for disruption from new technologies.
- Bargaining power of buyers: Moderate, as users have alternative transportation options but value convenience and affordability.
- Bargaining power of suppliers: Low, as Bird can source scooters and components from multiple suppliers.
- Threat of substitute products: High, as users can choose from various transportation options, including public transport, ride-hailing services, and personal vehicles.
- Rivalry among existing competitors: High, as the market is fragmented and players are aggressively competing for market share.
Analyzing Bird's value chain:
- Inbound logistics: Sourcing scooters and components from various suppliers, managing inventory, and ensuring timely delivery.
- Operations: Deploying scooters in urban areas, maintaining and repairing scooters, and managing rider safety.
- Outbound logistics: Providing access to scooters through mobile apps, facilitating user payments, and managing scooter retrieval.
- Marketing and sales: Building brand awareness, attracting new users, and promoting the value proposition of micro-mobility services.
- Customer service: Providing support to users through various channels, addressing complaints, and resolving issues.
Identifying key business model innovations:
- Asset-light model: Minimizing capital expenditure by relying on third-party operators for scooter management and deployment.
- Subscription-based pricing: Offering flexible subscription options to cater to different user needs and generate recurring revenue.
- Data-driven operations: Utilizing data analytics to optimize scooter deployment, improve user experience, and enhance safety.
- Partnerships with cities: Collaborating with local governments to integrate micro-mobility services into urban infrastructure and address regulatory concerns.
4. Recommendations
1. Expand into Emerging Markets:
- Target high-growth markets: Identify cities with high urban density, growing populations, and favorable regulatory environments.
- Adapt to local needs: Tailor marketing campaigns, pricing strategies, and scooter designs to meet local preferences and cultural nuances.
- Leverage strategic partnerships: Collaborate with local businesses, transportation authorities, and government agencies to facilitate market entry and navigate regulatory complexities.
2. Diversify Product Offerings:
- Introduce e-bikes and e-mopeds: Expand into the e-bike and e-moped market to cater to longer distances and different user needs.
- Develop cargo bikes: Offer cargo bikes for commercial and personal use, tapping into the growing demand for sustainable delivery solutions.
- Invest in technology: Develop innovative features and functionalities for scooters, e-bikes, and e-mopeds to enhance user experience and safety.
3. Enhance Technological Capabilities:
- Invest in AI and machine learning: Utilize AI algorithms to optimize scooter deployment, predict demand patterns, and improve user experience.
- Develop predictive maintenance systems: Implement predictive maintenance algorithms to identify potential issues with scooters and minimize downtime.
- Enhance data security: Strengthen data security measures to protect user information and comply with privacy regulations.
4. Strengthen Corporate Governance:
- Improve transparency and accountability: Enhance transparency in operations and financial reporting to build trust with investors and stakeholders.
- Establish a strong ethical framework: Implement robust ethical guidelines and compliance procedures to address concerns about worker safety and environmental impact.
- Foster a culture of innovation: Encourage a culture of innovation and risk-taking to drive continuous improvement and product development.
5. Foster Strategic Alliances:
- Partnerships with cities: Collaborate with local governments to develop integrated micro-mobility solutions and address regulatory concerns.
- Strategic alliances with ride-hailing companies: Explore partnerships with ride-hailing companies to offer seamless multi-modal transportation options.
- Collaborations with technology providers: Partner with technology companies to develop innovative solutions for scooter management, user experience, and data analytics.
5. Basis of Recommendations
These recommendations are based on a thorough analysis of Bird's strengths, weaknesses, opportunities, and threats. They align with the company's core competencies in technology, operations, and marketing, while addressing key challenges related to competition, regulation, and profitability.
Key assumptions:
- The global micro-mobility market will continue to grow, driven by increasing urbanization, environmental concerns, and consumer demand for convenient transportation options.
- Bird can leverage its existing technology platform and expertise to develop new products and services.
- Bird can successfully navigate regulatory hurdles and establish strong relationships with local authorities.
- Bird can attract and retain talented employees to drive innovation and execution.
6. Conclusion
By pursuing a multi-pronged strategy focused on sustainable growth, international expansion, and technological innovation, Bird Scooters can solidify its position as a leader in the micro-mobility market. This strategy will enable the company to mitigate risks, maximize long-term value creation, and achieve sustainable profitability.
7. Discussion
Alternative options:
- Mergers and acquisitions: Bird could consider acquiring smaller competitors or technology companies to expand its market reach and enhance its technological capabilities.
- Focus on a single market: Bird could choose to focus on a specific region or country with favorable regulatory environments and high growth potential.
- Focus on cost leadership: Bird could prioritize cost reduction measures to achieve profitability and compete on price.
Risks and key assumptions:
- The market for micro-mobility services may not grow as expected, leading to reduced demand and profitability.
- Regulatory hurdles may become more stringent, impacting operations and profitability.
- Bird may face difficulty attracting and retaining talented employees, hindering innovation and growth.
Options Grid:
| Option | Pros | Cons |
|---|---|---|
| Multi-pronged strategy | Sustainable growth, international expansion, technological innovation | Requires significant investment and resources |
| Mergers and acquisitions | Rapid market expansion, access to new technologies | Integration challenges, potential for overpaying |
| Focus on a single market | Reduced complexity, targeted marketing efforts | Limited growth potential, dependence on a single market |
| Focus on cost leadership | Increased profitability, competitive pricing | Reduced product quality, potential for customer dissatisfaction |
8. Next Steps
- Develop a detailed strategic plan: Outline specific goals, timelines, and resource allocation for each strategic initiative.
- Establish a dedicated team: Assemble a team with expertise in international business, technology, and regulation to execute the strategic plan.
- Conduct market research: Gather data on potential markets, competitor analysis, and consumer preferences to inform decision-making.
- Pilot new products and services: Launch pilot programs in selected markets to test new product offerings and gather user feedback.
- Monitor progress and adapt: Regularly assess the effectiveness of the strategic plan and make adjustments as needed.
By taking these steps, Bird Scooters can position itself for continued success in the dynamic and evolving micro-mobility market.
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Case Description
Bird Electric Vehicle Sharing (Bird)'s value proposition seems to be to offer inexpensive, on-demand transportation that can deliver riders directly to their destination in metropolitan areas. Electric scooters can be unlocked with a smartphone and left anywhere after use, minimizing the burden on consumers but also causing tremendous traffic problems for city administrators. The disruption created by Bird not only drew the attention of urban commuters but also resulted in its product being banned in cities like San Francisco and Denver. This case explores these issues in depth and sets up the challenge that Bird faces in extending its initial success. Bird must contemplate not only the individual components of its value chain but possibly also the business model itself, in evaluating the best course of action to ensure its future success.
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