GoCatch Strategic Analysis - growth through digital

goCatch

Strategic Analysis

SMBA6002 | Strategies for Growth: Assignment 1

INTRODUCTION

INTRODUCTION

The taxi bookings & payments industry in Australia presents a compelling showcase of how technological

advancements can disrupt entire industries. Through an analysis of Australian based start-up, goCatch, this

report provides deep insights detailing how a business model that delivers enhanced customer value can

challenge the incumbency of a multi-decadal competitor.

Section One, drawing upon an in-depth analysis of the organisation, the value it delivers to customers and

the competitive environment within which it operates, provides a number of specific recommendations

detailing how goCatch can differentiate and improve its competitive position.

Section Two, delves into Blue Ocean Thinking and proposes that goCatch, in the pursuit of higher profits,

expand operations into the mobile advertising industry. As is the case within Section One, these

recommendations are supported through evidence, analysis through various strategic frameworks and

thorough research.


TABLE OF CONTENTS

SECTION PAGE

PART 1 | Improving Competitive Position 3

PART 2 | Expansion Into New Market 9

APPENDIX 14

REFERENCES 20


PART 1 | IMPROVING COMPETITIVE POSITION

How goCatch can be more attractive to the customer:

Customer Jobs

Market share of smart-phone based taxi-hailing and payment apps

within the taxi bookings and payments industry is growing exponentially

as these new services undercut the traditional taxi industry’s model with

convenience, reliability and affordability (Francis, 2014). In analysing

how these services can be more attractive to the customer, one must

start by identifying the specific jobs these individuals are seeking to

fulfil. For goCatch’s customers, these jobs can be broadly classified into three distinct categories, namely;

(i) Hail / book a taxi; (ii) Pay for a taxi fare and finally; (iii) Travel from point A to B.

An understanding of the specific jobs that customers are seeking to fulfil underlies the strategists’ capacity

to adopt a customer-centric perspective as they seek to define more compelling value propositions. Having

identified the core jobs of the goCatch customers, one must assess what factors cause customer pains or

gains as they go about fulfilling these jobs. This is crucial as, viewing customers as rational actors who will

seek to maximise the gain whilst minimising the pain caused in performing a specific function, will underpin

goCatch’s ability to attract and retain its customers. For the typical taxi-using citizen in Australia then, what

are the challenges they have grown tired of? McMahon, in a recent article in Victoria’s The Age newspaper

summarises these customer pains; “the cost, the waiting, the fruitless hailing, the no-shows, the endless

time on hold” (McMahon, 2014). A more complete analysis of customer pains & gains as they relate to the

aforementioned jobs is detailed in Table 1.1, completed for the taxi-using customer segment in Australia:

Table 1.0: Core Customer Jobs

Hail / book a taxi

Pay for a taxi fare

Travel from point A to B

Table 1.1: Customer Value Proposition Canvas (Customer-Side)

Customer Jobs Customer Pains Customer Gains

Functional Jobs 1. Hail / book a taxi 2. Pay for a taxi fare 3. Travel from point A to B

What is too costly?

10% surcharge / overall taxi-fare What makes me feel bad?

Waiting in taxi for payment to process/handling cash

Uncertain wait time for taxi arrival

Fare uncertainty How are current solutions underperforming? Having to talk to robot

No-shows when made a booking

Uncertainty about quality of driver and cleanliness of car

What are my main difficulties and challenges?

Finding a taxi

Not having cash

Having to help taxi-driver find me What risks do I fear?

Losing a receipt

Leaving a credit card in the taxi

Booked taxi not arriving / no-shows

Smelly cabs and unprofessional drivers

What barriers exist for me to adopt new solution? Reliance on smartphone that is really

heavy on power usage

Availability of taxis

Only available in English.

My loved-one child can’t travel alone.

What savings would make me happy?

Reduction in surcharge / overall fare What outcomes would go beyond my expectations?

Instant confirmation and ability to see driver eta approaching

View driver ratings

Ability to monitor ETA

How do current solutions delight me? One process nation-wide with certainty that I will

at least be able to make a booking

What would make my life easier? Having the driver be able to locate me on GPS

Ability to call driver directly

Being able to multi-task – e.g. book a taxi while talking on a conference call

Make the booking myself

What would increase the likelihood of my adopting a new solution? Ability to leave cab immediately on arrival i.e no

wait time for payment processing

Increased likelihood of being picked-up outside of CBD

Loyalty programs for repeat users

Remember frequent routes, pick-up locations, destinations etc.


The customer value proposition canvas above is a very useful diagnostic tool and action framework from

which we can now build a more complete of what goCatch offers, to this our attention now turns.

What does goCatch Offer?

In essence, goCatch offer a means of fulfilling the very same core customer jobs identified previously. The

specific value proposition, however, is one that centres on reliving many of the pains experienced by users

of the incumbent solution whilst simultaneously introducing new capabilities to accelerate/create customer

gain. Prior to exploring these in detail, it is useful to provide a short overview of the enterprise to aide in

further analysis.

goCatch is a smart-phone base application that facilitates for an individual wishing to secure a taxi to

circumvent the centralised bookings process of the incumbent by (i) Registering their details; (ii)

Communicating their current location and desired destination to all drivers within the immediate proximity;

(iv) Offer an optional financial incentive (i.e. tip) in advance to expedite process of securing a driver. Once a

driver has committed themselves to the job, the customer receives the driver's mobile number should they

need to contact them directly and a real-time feed (via the GPS-enabled map within the app) that shows the

driver’s location. It does all of this whilst also reducing the overall payment surcharge to 5% (i.e. a reduction

of 5% relative to the incumbent) which delivers a cost-saving to the customer. The complete goCatch value

proposition is captured in Table 1.3:

In assessing both components of the Customer Value Proposition Canvas (Tables 1.2 & 1.3) one can

clearly conclude that goCatch’s customer value proposition, founded on their core offering, is one that

relieves many customer pains whilst also presenting them with new gains. This in essence is the foundation

upon which the business’ early success in the Australian market has been built.

Table 1.3: Customer Value Proposition Canvas (goCatch)

Customer Jobs Pain Relievers Gain Creators

Functional Jobs 1. Hail / book a taxi

2. Pay for a taxi fare 3. Travel from point A to B

Produce savings

5% surcharge (i.e. reduction of 5% relative to incumbent)

Make customers feel better

Ability to clearly see how soon taxi will arrive

Fix underperforming solutions

Make booking yourself using your smart-phone, no more robots

Choose driver based on rating rather than random selection

Eliminate risks customers fear

Booked taxi not arriving / no-shows

Payment in the app means you don’t have to take out your credit card in the taxi, helping you not to lose it accidently

Driver rankings (Platinum, Gold, Silver, Bronze) help you to choose a professional driver with clean car

Get rid of barriers to adoption

Significant and effective recruitment programs (via Airport queues) of new taxi drivers – increases chances customer can hail / book a cab through the app

Produce outcomes customer expects or that go beyond their expectations

Increase certainty of booking and arrival time via points system that provides access to reliable drivers to lucrative pre-bookings

Copy or outperform current solutions that delight your customer

Instant confirmation and ability to see driver eta approaching within app

View driver ratings within app and make selection with this information

Ability to monitor ETA to destination Make customer’s life easier

Driver able to locate you via GPS – no need to navigate them to your location

Call driver directly within app

Being able to multi-task – e.g. book a taxi within the app while talking on a conference call

Help make adoption easier?

Attractive user interface of app with streamlined user experience


What do the Competitors Offer?

With a low capital cost to entry, the wide availability of technical resources with the specialist expertise to

develop a mobile-based app for bookings & payments, supplemented by the enormity of the economic

opportunity as over 480,000 passengers travel in taxis each day in NSW alone (Deolitte, 2013), it is not

surprising to witness a proliferation of competing offerings in the marketplace. This analysis will focus on

three distinct groups, namely; (i) The incumbent competitor, the Australian Taxi Industry; (ii) Fellow

challengers InGoGo and Uber; and finally; (iii) More recent competitive substitutes, UberX and

RideSharing. Whilst not an exhaustive list of competitors, these have been selected as they represent

either those seen by goCatch founder Campbell as posing the greatest threat (Campbell, 2014), or those

which serve to illustrate the speed of change within the sector.

The Australian Taxi industry

The Australian bookings & payments industry consists largely to two separate, yet highly interrelated,

systems. All NSW taxis, by law, must be affiliated with an authorised network which, as well as accrediting

and configuring the vehicle for use as a licenced taxi, provide the booking & dispatch services (via call-

centre, internet bookings and some apps) for the taxi once it is on the road (Deloitte 2013). A number of

card payment solutions are present in taxis to supplement cash-payment. Cabcharge, however, would

appear to be the most prevalent, having its credit facilities in around 97% of Australian taxis (Deloitte 2013).

Direct Competitors: InGogo and Uber

Ingogo, which is perhaps most similar (Campbell, 2014), offers a similar service delivered via current taxi

drivers, but also installs payment and booking hardware in cabs. The payment system that sits behind this

hardware bypasses the incumbent’s Cabcharge system. The driver interface for this system is a smart-

phone style device that is supplied to the driver once registered with the service. Uber bypasses the

common taxi industry entirely, connecting its own drivers (i.e professional chauffers or current taxi drivers

who accredited themselves with the Uber service). The Uber service is commonly held as a more premium

offering.

Substitute Competitor: UberX and RideSharing

The third classification of competitors parallel developments in the Sharing Economy (The Economist,

2013). Both UberX and RideSharing facilitate for peer-to-peer transportation solutions rendered by non-

professional drivers. UberX allows for anyone over the age of 25 with a driver’s license, a health check and

a registered and insured car with four doors made after 2005 to pick up and transport paying customers to

their desired location (Adhikari, 2014). RideSurfing offers a similar peer-to-peer service, however it

circumvents some legislative barriers around payment-for-service by giving car owners the ability to drive

passengers who, are not obliged to pay them, but are instead encouraged to give a donation (Grubb,

2014).

Dimensions of Customer Value

Having identified the specific jobs that customers are seeking to fulfil within the taxi bookings and payments

industry and having introduced the key competitors and substitutes, it is critical to establish the specific

dimensions of customer value. A more complete understanding of these factors allows for deeper strategic

assessment of how goCatch can differentiate as the seek to create more customer value.

The key dimensions of customer value considered herein include; (i) Operational Excellence; (ii) Product

Leadership and finally; (iii) Customer Intimacy. Table 1.4 captures the value delivered by goCatch and its

key-competitors against these three key dimensions:


To clearly capture & convey the relative strength/weakness of goCatch against their key competitors,

scores have been calculated for each of the criteria above, (one point for each entry) within a matrix. Both

this matrix (Appendix 1.1) and a graph (Appendix 1.2) depicting the results can be found in the appendices.

In assessing both goCatch and its main competitors, against these dimensions of customer value, two

immediate observations can be made. Firstly, there is a high-degree of convergence across the competing

platforms in regard to the features they offer to customers. Secondly, there appears to be a relative lack of

emphasis placed in the Customer Intimacy Dimension by goCatch or its main competitors. With such a high

degree of convergence in some dimensions, accompanied by some clear-air in others, attention must be

placed on how goCatch can differentiate itself from its industry competitors by moving into the latter

dimension so as to ensure ongoing returns & profitability.

Table 1.4: Dimensions of Customer Value

Operational Excellence Product Leadership Customer Intimacy

Price:

Elimination of surcharge: UX, RS

Reduction in surcharge relative to

incumbent CC: GC, U, IG,

Reduction in overall expense relative to

taxi booked-through incumbent CC:

GC, IG, RS

Selection:

Broadest availability of taxis at any

given time/location: CC

Convenience:

Highly intuitive smart-phone based app

facilitating for direct contact with

individual drivers: GC, IG, U.

NB in reviewing app store some individual

taxi carriers have apps.

Ability to pay with app even if you do

not hail taxi through the app: IG

Pay by credit card or cash: IG, GC

Pay by credit card: U

Split fare across users within the app: U

Zero Defects:

Reduce # of “no shows” i.e. bookings

made with no driver arriving through

ability to call driver directly and view

position in real-time via GPS: GC, IG, U

Reducing ambiguity of wait times

through ability to call driver directly and

view position in real-time via GPS: GC,

IG, U

Use of licenced drivers only: GC, IG, U

Ensure high standards through driver ratings visible to customers: U, GC, IG

High Performance Product

Characteristics:

Comfort of service

rendered (i.e. premium

vehicle) : U

Entering New Market Spaces:

Introduction of ridesharing

solution: UX, RS

Product & Service

Introductions:

Advanced bookings : GC,

IG, U

Flat-rates on popular

routes: U

Fare quote in advance: U

Translation service to

facilitate for taxi-bookings

and payments by tourists:

Nil

Customer Knowledge:

Ability to request specific driver in the

future: Nil

Ability to customise preferred route in

offered: Nil

Customer offers presented to them on

basis of their known preferences/patterns

of behaviour: Nil

Solutions Offered:

Availability of consultant to assist in

formulating plans for more complex (e.g.

multi-stop) trips: Nil

Solutions providing enhanced security &

peace-of-mind for especially vulnerable

travellers (e.g. children, teens, elderly): Nil

Translation service to facilitate for taxi-

bookings and payments by tourists.

Share of Wallet:

Corporate and private offerings: GC, IG, U

Bundled offers for transport,

entertainment/dining/accommodation

solutions, all paid for through app: Nil.

Retention:

Free-vouchers for repeat/loyal users: GC,

IG,

3rd

-party promotions, incentives, special offers for valued customers: GC

RideSharing

(RS) goCatch (GC)

InGoGo

(IG)

Uber

(U)

Cabcharge

(CC)

UberX

(UX)


How can goCatch be different?

With competition intensifying and goCatch’s cutomer value curve aligning with that of the competition, some

clear recommendations as to how goCatch can be different emerge. At the foundational level, goCatch’s

success in the short-medium terms will be defined through;

(i) Continuing to increase speed, reliability and certainty of hailing a cab through goCatch. Enabled

through ongoing recruitment of new drivers across a broadening geographical base and hours of

operation spectrum.

(ii) Maintaining or accelerating the goCatch price advantage relative to the incumbent by

holding/decreasing/eliminating the surcharge over time.

(iii) Increasing mind-share among the general public and within the taxi-driver community.

Four specific recommendations, informed through this strategic analysis, that will assist goCatch in

delivering to these core strategic objectives include;

The first recommendation would be to execute strategies to increase Customer Intimacy. Fortunately,

goGatch are well placed to offer complete solutions for their customers as they capture, through the

registration process key demographic information and could supplement this information with detailed

insights into their travel patterns. Specific measures, ranging in complexity and accompanying privacy

concerns, include;

(i) Remembering common trips and allowing the user to pre-populate with a click of a button;

(ii) Providing a news feed/alert from frequently visited locations/venues;

(iii) Offering a service within the app to make a reservation at a venue and hail/book a taxi

simultaneously;

(iv) Accelerating loyalty promotions & discounts to repeat users such as goCatch’s recent campaign

with start-up CLIP;

(v) Offering targeted promotions & offers as the passenger is en-route to a destination.

Whilst there are definitely privacy concerns that would need to be fleshed out in greater detail to enable

these capabilities, the unspoken agreement is that users will give up some personal data if the utility that

they receive through doing so is of greater value. (Spence, 2014). Through highly targeted offerings and

communications, goCatch would be able to deliver this value whilst simultaneously enhancing their

customer retention and share of wallet.

The second recommendation, relating to the Product Leadership (Product & Service Introductions)

dimensions would be to offer a translation service to capture an increased share of the bookings revenue

from the tourist traveller. At present, NSW taxi-drivers are only required to pass an English exam despite

the fact that tourist commuters are most likely to account for a large proportion of rides during the day

(Deloitte 2013). The solution could be promoted cost-effectively via popular online travel forums or through

display adds in international airport arrivals terminals. Such a service would increase bookings volumes to

drivers whilst simultaneously helping to relive challenges they may encounter in fully understanding the

customer’s requirements, which when considered together could represent a virtuous cycle of value to both

customer and supplier (i.e. driver).

The third recommendation would be to leverage the uniqueness of the service rendered by the taxis to

offer tailored solutions for more vulnerable traveller/non-traveller. With approximately 45% of survey

participants indicating that they have not used taxis within the past six-months (Deloitte 2013), efforts to

capture revenues from these non-users represent a significant strategic opportunity. Despite the challenges

associated with identifying non-users, several experiences from the authors’ own experience and

preliminary investigations warrant further exploration.


One large group of non-users, are school children and young teenagers whose loved ones elect, through

concerns about safety & welfare, to pick them up themselves despite the inconvenience this may cause to

them or others. Specific features could include:

(i) Alert a friend when entering a cab, having the details and real-time progress of the trip

broadcast to a specific individual;

(ii) Allowing for a parent/guardian to undertake accompany the passenger & driver virtually via the

app;

(iii) Pre-programed coordinates for home or a parent’s office location that a child could easily

communicate to a driver;

(iv) Interlocking the above initiative by accrediting/certifying (i.e completion of a Working with

Children clearance) only specific drivers for jobs where the passenger is deemed “vulnerable”.

These recommendations/tactics relate to the Customer Intimacy (Solutions Offered and Share of Wallet)

dimensions of customer value.

The final recommendation as to how goCatch can be different centres more on what they should not do,

rather than what they should. Specifically, the author is of the view that goCatch should make a clear and

definitive statement to the effect that they will not offer a peer-to-peer ride sharing service.

Passenger and driver safety is quickly becoming the core battleground upon which the debate about the

respective merits of the incumbent relative to new competitors and substitutes is being waged. So too are

the broader employment ramifications of competitors such as Uber that divert revenues from licenced taxi-

drivers. The extent to which arguments of this nature resonate with the general public is best captured by

commentators who are of the view that the incumbent’s PR strategy, formulated to combat their decline in

market share, will largely focus on safety concerns (McMahon, 2014). By making a clear and definitive

statement to this effect, goCatch will;

(i) Ensure that they do not alienate a key supplier (i.e. taxi-drivers) whose uptake of their offering

underpin customer desirability;

(ii) Proactively address a core criticism levelled at the new entrants en-masse by serving to remove

goCatch from the collective to which the incumbent is attempting to define and;

(iii) Provide a compelling alternative model that will likely receive airtime, and hence broader general

awareness of the goCatch app, as the debate intensifies.

A summary of these recommendations and the specific tactics that would allow goCatch to differentiate and

thus deliver greater stakeholder value can be found in Appendix 1.3.


What goCatch can do to create more customer value?

To realise the recommendations made above, goCatch will clearly need to operate in new ways and place

focus on new areas. As is the case with any resource constrained enterprise competing within an

established industry, this altered focus must be supplemented by a reduced/eliminated focus on other

areas. To assist in mapping the analysis and recommendations made within Section One of this report in its

entirety, a completed Four Actions Framework I provided below to aide goCatch in crafting a new value

curve for their enterprise:

Table 1.5: Four Actions Framework

ELIMINATE:

Safety concerns by not following competitors entry into

ride-sharing services.

The surcharge (over-time) the cost of booking a taxi entirely by establishing new revenue streams (e.g. corporates).

RAISE:

Investment in customer loyalty programs (such as CLIP cross-

promotion).

Public awareness of the solution by entering into contentious

safety debate being waged in the press by showing leadership

on these issues.

Investment in advertising in locations frequented by tourist

travellers (e.g. airport arrival terminal, international arrivals

terminal at circular quay)

Recruitment/adoption programs of new drivers through

educating/lobbying key industry bodies about the risk to their

revenues presented by competing products Uber/RideSharing

as these offerings cut out the existing taxi industry entirely.

CREATE:

New safety practices to proactively address rising

public concern and the incumbent’s central argument

within their PR campaign about the relative safety of

app-based taxi-bookings/payments services relative to

their offerings.

New safety-capabilities such as (i) Alert a friend/loved-

one when entering cab; (ii) Real-time monitoring of

Allowing friend/loved one to monitor your trip in real-

time to capture increasing revenues from non-users

(e.g. schoolchildren, teenagers etc).

New premium offerings of certified-only drivers to

deliver services to the aforementioned “vulnerable

traveller”.

New revenue streams through data, advertising and 1-

to-1 marketing (explored further within Part 2).

New customer-intimacy campaigns such as (i)

Expanded loyalty & reward programs; (ii) Memorised

common trips; (iii) bundled offerings with

entertainment/hospitality venues and deliver these

campaigns to goCatch users in a highly targeted

fashion to increase share-of-wallet, retention and

customer-knowledge.

REDUCE:

In the short-medium term reliance on surcharge revenues to

deliver shareholder return. Maintain at current levels 5%

surcharge by entering new market spaces such as vulnerable

traveller and tourist traveller to drive revenue uplift through total

booking volume.

Focus/investment on product/offering leadership as analysis

above would indicate that igher shareholder return can be

delivered through focusing on other dimensions (i.e. Customer

intimacy) of customer value.

Risk (reputational and legislative) presented by safety

arguments through the creation of safety practices, statements

Wait-time for a driver and loiter time for a driver by raising

driver enablement/attraction efforts.


PART 2 | EXPANSION INTO NEW MARKET

It was noted in Section One, having reviewed goCatch and its main competitors’ offerings, that a high degree of

convergence exists across the various players (ref Table 1.4, Appendices 1.0 & 1.2). From the perspective of

delivering shareholder return, this is a concerning observation as when a company's value curve converges with its

competitors, it often signals that the entity may be caught in the profit-depleting cycle of trying to outperform its

competitors on the basis of cost or quality alone (W. Chan & Mauborgne, 2005). Effective strategy encapsulates a

review as to the value that could be created outside of one’s own industry, an approach known as Blue Ocean

thinking. This superior approach is based on the view that market boundaries and industry structure are not given and

can be reconstructed by the actions and beliefs of industry players (W. Chan & Mauborgne, 2005). With all of these

factors taken into consideration, this report recommends that goCatch seek expansion into the mobile advertising

industry.

How attractive is the opportunity? Size and growth of the opportunity

Smartphone usage in Australia has become so ubiquitous that many of us could not imagine having to function in their

absence. Ownership is becoming increasingly universal. Nielsen in their May 2014 Australian Online Landscape

Review, indicated that; “Smartphone ownership has almost doubled since 2010, now exceeding two thirds of

connected consumers” (Nielsen, 2014). As ownership proliferates so too do the opportunities for organisations to

reach and connect with consumers in new, more engaging ways.

As these new routes proliferate, the mobile advertising industry is booming. Sweeny speaks to the “seemingly

inexorable” growth in mobile usage as underpinning an exponential 96% increase in mobile advertisement spending

this year, bringing the market to £2.2B in the UK (Sweeny, 2014). Kennedy, drawing upon US data, observed a 75%

growth in mobile advertising in 2013 (Kennedy, 2013). Where is this investment coming from? Essany, drawing upon

figures from influential industry analyst Mary Meeker, understands it to reflect a drastic shift & increase in advertising

spend away from print media and toward mobile media as organisations seek to redeploy their advertising spend in-

line with relative usage rates across these mediums (Essany, 2014).

This is not solely a global phenomena with Australia lagging and playing catch up. These very same trends are at play

and impacting the Australian landscape. IAB, in their recent quarterly report into the Australian market concluded;

“Mobile display advertising contributed 21.5% of general display expenditure - more than double its contribution of

8.1% in the March Quarter 2013 – accounting for $163.6 million in the March Quarter 2014. Mobile is becoming an

increasingly important component of online advertising expenditure. Digital’s momentum is undeniable as mobile

advertising has proved itself to be an incredibly powerful channel for reaching consumers as they spend more time on

digital screens than ever before (Manners, 2014). With a strong & growing mobile user base, goCatch are perfectly

placed to expand operations into this new market.

Profit potential of the opportunity

In assessing the profit potential of this opportunity, several variables must be calculated and working assumptions

made. Given this is a preliminary exploration, key variables have been estimated following consultation with IBM’s

Global Business Services practice and digital media agency Ogilvy, via the author’s own professional network. It is

recommended that more detailed analysis be performed by goCatch as they set their expanded strategy within the

period ahead.

The first variable to be calculated, is overall audience/booking volume within the goCatch app. Taking the FY13/14

figure of 500,000 bookings and multiplying by the 291% yty growth in bookings achieved in this same period

(Campbell, 2014) results in an estimated overall bookings volume of 1,455,000 in FY14/15. It is assumed that goCatch

can build over time to the point that they can offer a promotional advertisement that is highly targeted and aligns with

the user’s personal interest for each & every one of these booking.

The second important variable is Click-through-Rate (CTR). CTR is a essentially a function of the % of users

displayed with an advertisement who click through to access more information on the promotion offered. Given

goCatch’s unique position, in that it can make use of vast amounts of demographic (captured when the user registers

to use goCatch) behavioural (captured over the course of time the goCatch user makes use of the app to travel

between specific locations) and real-time location data (as they currently travel between two specific locations) the

capacity for advertisements to be highly targeted to specific individual’s interest areas is anticipated to yield a high


CTR. The importance of this data in underpinning goCatch’s expansion is reflected in it featuring as a Key Resource

within the revised Business Model Canvas (Appendix 2.1). Taking all of these factors into consideration, a CTR of 9%

is assumed in-line with recent mobile benchmarks published for the entertainment industry (DG Media Mind Mobile

Benchmarks, 2013).

The third and final variable, is Cost per Click. The price that the digital media agency will set for their client, the paying

retailer, to a large extent reflects, the degree to which they can specify a target recipient and said recipient’s capacity

to pay for the advertised product. Reflecting once more the specificity to which these promotions can be targeted to

individuals, given the data goCatch captures/can-capture on its users, one can assume that a cost-per-click revenue

of $15 is reasonable.

With all assumptions made and variables calculated, the revenue potential of the expansion into this industry can be

determined. This report estimates total revenues of close to $2m/annum through expansion into the mobile advertising

industry as per workings within the table below. This new Revenue Stream is captured within the Business Model

Canvas (Appendix 2.1).

Synergies with existing goCatch business

The Vice-President of Mobile at Ebuzzing, in identifying mobile as a growth sector, paints a very clear picture of how

synergistic goCatch’s existing business is with a foray into this new market; “Land at Gatwick, check your smartphone,

be targeted by an ad for the Gatwick Express and simply click on that ad to buy your ticket” (Coggins, 2014).

Advertising which has this potential to be so targeted and related to what the customer is doing at a specific point in

time will clearly be more efficient, lead to more engagements and be able to attract higher revenues. In goCatch’s

context, they have a consumer who (i) For the duration of their trip and the time it takes to make the initial booking, is

exposed to their app on their smartphone; (ii) They understand where they have come from, where they are going,

what trips they have made in the past and (iii) Have captured their demographic details via the initial registration

process. Building upon these existing capabilities to enable a client experience such as that described by Coggins

above is a logical next step as goCatch seek expansion into a new market.

The capabilities inherent within goCatch’s existing business model can be supplemented by minor changes to enable

their expansion into this new market. New Key Resources including (i) Engagement of an external consulting practice

to work with the existing mobile development team to enable the app for mobile advertising and the database for

intelligent customer segmentation; (ii) Hiring two new Business Development Mangers to sell the new advertising

space to digital media agencies and finally; (iii) New partnerships with digital media agencies who will take 10% of all

revenues earned. The new Resources, Partnerships and the Cost Implications to enable this expansion are captured

within the Business Model Canvas (Appendix 2.1). How the new resources and their associated cost implications

impact upon the profitability of the revenue potentials detailed earlier (Table 2.1) are calculated in the table below:

Clearly then, the opportunity presented through expansion into the mobile advertising industry is huge, the synergies

that exist between the current and future business models numerous and the profit potential very real. Not only does

this represent a great opportunity in the short-term, expanding into this booming industry represents a truly

transformative opportunity for goCatch. In a recent analysis of economic-profit performance across a range of

Table 2.1: Predicted Revenues

Annual Booking

Volumes (BV)

Click Through Rate

(CTR)

# Estimated Clicks

(EC)

Revenues / click

(CR$)

Estimated Annual Revenue Potential ( R$)

1,455,000 9% 130,950 $15 $1,964,250

Calculation: (BV/100)*9(CTR) = EC EC*CR$ = R$

Table 2.2: Predicted Profit Potential

Estimated Annual Revenue

Potential ( R$)

Agency Cut (@ 10%)

of revenues earned

Salaries of new Business

Development Managers

External consultants fees Estimated profit potential in Y1

$1,964,250 $196,425 $200,000 $80,000 $1,567,745


industries and organisation size the importance of riding these transformative megatrends was identified as being

central to generating industry-beating returns (Bradley et. al 2013). Should this be the outcome of the proposed

expansion into this market, and reiterating recommendations made in Section One, it would be highly advisable that

some of the revenues be reinvested to reduce/eliminate the surcharge applied on taxi bookings made through the

app.

The changes to the business model described throughout Section Two will fundamentally alter the customer value

proposition, the dimensions of customer value delivered to users and move goCatch into a Blue Ocean of enhanced

profitability. This and the accompanying recommendations made throughout this report are reflected in the revised

chart below, the workings for which are detailed within Appendices 2.2 & 2.3 and within the Business Model Canvas

(Appendix 2.1):

How feasible is entry & how will the business model need to change (if at all)?

It is exceedingly simple for goCatch to expand into the mobile advertising industry. Their entry would necessitate that

they firstly enable their app to display advertisements to users. The second step would be for them to open up

depersonalised data (demographical, historical and real-time) to digital media agencies in Autralia who would on-sell

this to their existing customers. Although no work is required to open this data up, as Campbell indicated that it is

already being captured, it is assumed that two new roles for Business Development Managers (BDM) to broker the

agreements with the digital media agencies be put on staff. The remaining work of targeting and selling the advertising

space to paying retailers would be performed by the digital media agencies who would take 10% of all revenues

earned. The specific sequence of steps to enable the expansion i detailed below:

This four-step sequence has been designed following resource driven analysis and, to a large extent, seeks to lend

added organisation to goCatch’s existing rare, valuable & imitable resources, namely; (i) Their active user community

of smart-phone equipped consumers and; (ii) A data set that includes demographic, behavioural and real-time

information on these users.

00.5

11.5

22.5

33.5

44.5

Cu

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d

Chart 2.0: Dimensions of Customer Value: goCatch vs Avg.of Competitors post recommendations being implemented

GoCatch

Avg Competitor

1. Engage external consultant to (i) enable the

display of mobile advertisements within the

goCatch app and (ii) Structure customer DB to

aide intellignet segmentation/targeting of

goCatch users.

2. Recruit/hire/enable 2 Business Development Managers (BDMs) to lead in the engagement / sale of advertising opportunity within the goCatch app to digital media

agencies.

3. Provide access to the goCatch user database (de-personalised

data) to the partner digital media agencies to allow them to target

their advertisments to individuals with a high

propensity to buy.

4. Advertisments sent to targeted users within the

app. Each click earning revenues for goCatch who

pay the agency a 10% commision


A potential concern would be if the skills that goCatch require to enable their expansion into this new market,

including;

(i) The external consultants who will enable the advertising capability within the app and who will structure

the customer data so as to facilitate for customer segmentation.

(ii) A pool of talented professionals form which they can recruit their new Business Development Managers

or finally

(iii) Sufficiently skilled and creative marketers within Australia’s digital media agencies with the specialist skill

to deliver ROI via mobile advertising campaigns.

Fortunately it would appear that this is not the case and that Australia is quickly accelerating its leadership in this area.

A recent BRW article concluded that a key reason for this “has been the huge investment by Australian agencies and

publishers in their mobile offerings, infrastructure and talent and this has been recognised on a global stage by our

success at Cannes this year” (Manners, 2014). These new resources have been updated in the business model

canvas (Appendix 2.1).

APPENDICIX

Appendix 1.0: Assessing competitor’s offerings relative to goCatch:

Dimension of Customer Value:

Operational Excellence Product Leadership

Customer Intimacy

Pri

ce:

Sele

ctio

n:

Co

nve

nie

nce

:

Zero

Def

ects

:

Hig

h P

erfo

rman

ce P

rod

uct

C

har

acte

rist

ics:

Ente

rin

g N

ew M

arke

t Sp

aces

:

Pro

du

ct &

Ser

vice

Intr

od

uct

ion

s:

Cu

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ledg

e:

Solu

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Off

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:

Shar

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alle

t:

Ret

enti

on

:

GoCatch 2 0 2 4 0 0 1 0 0 1 2

Uber 0 1 2 4 1 0 3 0 0 1 0

Incumbent 0 1 0 1 0 0 0 0 0 2 0

UberX 2 0 1 0 0 1 0 0 0 0 0

RideSharing 2 0 0 0 0 1 0 0 0 0 0

InGoGo 2 0 3 4 0 0 1 0 0 1 2

Avg Competitor 1.2 0.4 1.2 1.8 0.2 0.4 0.8 0 0 0.8 0.4

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

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Chart 1.1: Dimensions of Customer Value: goCatch vs Avg.of Competitors

GoCatch

Avg Competitor

Appendix 1.3: Key Recommendations

Recommendations Key Tactics

Increase customer intimacy: Remembering common trips and allowing the user to pre-populate with a click of a button;

Providing a news feed/alert from frequently visited locations/venues;

Offering a service within the app to make a reservation at a venue and hail/book a taxi simultaneously;

Accelerating loyalty promotions & discounts to repeat users such as goCatch’s recent campaign with start-up CLIP;

Offering targeted promotions & offers as the passenger is en-route to a destination.

Accelerate product leadership to add more value to existing users:

Launch a translation service to capture an increased share of the bookings revenue from the tourist traveller. Promote the above via popular online travel forums or through display adds in international airport arrivals

terminals.

Accelerate product leadership to capture current non-users:

Launch tailored solutions for more vulnerable travellers/non-travellers including o Alert a friend when entering a cab, having the details and real-time progress of the trip broadcast to a

specific individual; o Allowing for a parent/guardian to undertake accompany the passenger & driver virtually via the app; o Pre-programed coordinates for home or a parent’s office location that a child could easily communicate

to a driver; o Interlocking the above initiative by accrediting/certifying (i.e completion of a Working with Choldren

clearance) only specific drivers for jobs where the passenger is deemed vulnerable. This recommendation relates to Customer Intimacy (Solutions Offered and Share of Wallet).

Proactively manage PR campaign by entering the safety debate:

Make a clear and definitive statement to the effect that they will not offer a peer-to-peer ride sharing service.

Appendix 2.1: Business Model Canvas OLD Business Model NEW / CONTINUING BUSINESS MODEL

Key Partners:

Digital media

agencies.

Taxi drivers.

Shareholders / Venture capitalists.

NSW State Govt. (co-

funding).

Telecommunications network.

Cloud-hosting

company for customer database and app.

NAB to handle

payments.

Key Activities:

Recruit new drivers to use the app.

Recruit new digital media agencies to buy advertising opportunity

within the app.

Recruit new users to the app and continue to capture demographic,

behavioural and real-time data within a database to enable intelligent customer segmentation for advertising.

Closely monitor advertising metrics, in particular CTR as a measure of

how promotions offered align to customer interests.

Value Propositions:

Hail a taxi with greater

convenience, reliability and at a lower price (i.e. only 5%

surcharge).

Hail a taxi with greater convenience, reliability with

no surcharge.

Hail a taxi through an application that knows me as

an individual and that provides me with compelling

and valued promotions that align with my specific interest

areas.

Customer Relationships:

Self-service

within the app.

Self-service

within the app with personalised

promotions aligning to

interest areas

Cost Structure:

95% of taxi-booking revenues flow to

driver.

Salary of new Business Development Managers.

Internal app development / mobile-

engineer team.

One-off engagement of external consultants to (i) structure customer data

to aide in mobile advertising segmentation for agencies and (ii) enable

the display of advertisements within the app (e.g. IBM Global Business Services).

Ongoing 10% of mobile advertising

revenues flows to digital media agencies (e.g. Ogilvy).

100% of taxi booking revenues flow to

driver.

Key Resources:

Internal app development and mobile-engineer team.

External business consultants to enable expansion.

Business Development Managers (X 2) to sell advertising opportunity to digital media Agencies.

Office space.

Database that captures & structures user-data

Channels:

Mobile-app.

Promotion by proxy through

entering into the “safety debate”.

Customer Segments:

Taxi users with smart phones.

Tourist traveller.

“Vulnerable” non-user (e.g. Schoolchildren, teenagers etc.

Revenue Streams:

5% surcharge on booking revenues.

Mobile advertising revenues with 0% surcharge applied on

bookings revenues.

Appendix 2.2: Dimensions of Customer Value – Post Recommendations being implemented

Operational Excellence Product Leadership Customer Intimacy

Price:

Elimination of surcharge: UX, RS, GC

Reduction in surcharge relative to incumbent CC: GC, U, IG,

Reduction in overall expense relative to taxi booked-through

incumbent CC: GC, IG, RS

Selection:

Broadest availability of taxis at any given time/location: CC

Convenience:

Highly intuitive smart-phone based app facilitating for direct

contact with individual drivers: GC, IG, U.

NB in reviewing appstore some individual taxi carriers have apps.

Ability to pay with app even if you do not hail taxi through the

app: IG

Pay by credit card or cash: IG, GC

Pay by credit card: U

Split fare across users within the app: U

Zero Defects:

Reduce # of “no shows” i.e. bookings made with no driver

arriving through ability to call driver directly and view position

in real-time via GPS: GC, IG, U

Reducing ambiguity of wait times through ability to call driver

directly and view position in real-time via GPS: GC, IG, U

Use of licenced drivers only: GC, IG, U

Ensure high standards through driver ratings visible to customers: U, GC, IG

High Performance Product Characteristics:

Comfort of service rendered (i.e. premium

vehicle) : U

Entering New Market Spaces:

Introduction of ridesharing solution: UX, RS

Product & Service Introductions:

Advanced bookings : GC, IG, U

Flat-rates on popular routes: U

Fare quote in advance: U

Translation service to facilitate for taxi-

bookings and payments by tourists: Nil

Customer Knowledge:

Ability to request specific driver in the future: Nil

Ability to customise preferred route in offered: Nil

Customer offers presented to them on basis of their known

preferences/patterns of behaviour: GC

Solutions Offered:

Availability of consultant to assist in formulating plans for more

complex (e.g. multi-stop) trips: GC

Solutions providing enhanced security & peace-of-mind for

especially vulnerable travellers (e.g children, teens, elderly): GC

Translation service to facilitate for taxi-bookings and payments by

tourists: GC

Share of Wallet:

Corporate and private offerings: GC, IG, U

Bundled offers for transport, entertainment/dining/accommodation

solutions, all paid for through app: GC

Retention:

Free-vouchers for repeat/loyal users: GC, IG,

3rd

-party promotions, incentives, special offers for valued

customers: GC

RideSharing

(RS) goCatch (GC)

InGoGo

(IG)

Uber

(U)

Cabcharge

(CC)

UberX

(UX)

Appendix 2.3: Assessing competitor’s offerings relative to goCatch – Post Recommendations being implemented

Dimension of Customer Value:

Operational Excellence Product Leadership

Customer Intimacy

Pri

ce:

Sele

ctio

n:

Co

nve

nie

nce

:

Zero

Def

ects

:

Hig

h P

erfo

rman

ce P

rod

uct

C

har

acte

rist

ics:

Ente

rin

g N

ew M

arke

t Sp

aces

:

Pro

du

ct &

Ser

vice

In

tro

du

ctio

ns:

Cu

sto

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Kn

ow

ledg

e:

Solu

tio

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Off

ered

:

Shar

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f W

alle

t:

Ret

enti

on

:

GoCatch 3 0 2 4 0 0 1 1 3 2 2

Avg Competitor 1.2 0.4 1.2 1.8 0.2 0.4 0.8 0 0 0.8 0.4


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