Structure and Competiveness of Go-Jek

GROUP ASSIGNMENT

STRUCTURE AND COMPETIVENESS OF GO-JEK

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Name：

Maryaam

Aryaa

Yashwin Sherwani

ID：0333577

Subject name: Managerial Economic

Subject code: ECN70204

Lecturer:  Dr. Maryam Moradbeigi

Table of Contents

Introduction        1

Nature of The Product        1

Product Differentiation        1

Body        2

Market Concentration        2

Barriers        2

Vertical Integration        2

Pricing Power        3

Market Competitiveness        3

Diversification and International Operation        4

Economic Objectives or Goals        4

Managerial Problems        6

Porters Five Forces        7

Market Structure of Gojek        10

Price Elasticity of Demand        11

Price Determination        11

Price Competition        13

Gojek’s Strategy to Attract and to Increase Consumer’s Demand for its Services        14

Conclusion        15

References        16

Introduction

Nature of The Product

Go-Jek started as a motorbike ride-hailing mobile service, it has progressed into an on-demand mobile platform and a cutting-edge app, offering many services; food delivery, transportation, mobile payments, logistics and so on.

Product Differentiation

Go-Jek provides various services from massage to grocery delivery. Go-Jek started a service named Go-Car, which is like the service of Uber. Go-Jek has also get to in digital payment, which became a path for making engagement and customers loyalty. Go-Jek is different from its competitors by providing many different services which includes G0-Glam, Go-Auto (car repairing), Go-Tix (event ticket booking), Go-Massage and Go-Clean. In addition, Go-Jek now has more than 200,000 drivers and perform trucks, motorcycles and cars and trucks (Benzinga, 2018).

Body

Market Concentration

Go-Jek as local ride-hailing beats the international competitors Grab and Uber in Indonesia. Grab, Uber and Go-Jek offer various transportation options in Indonesia such as regular taxis, motorbikes and cars. However, Grab and Uber tested with food delivery, but the way Go-Jek connect with restaurants is more progressive, while providing additional services which its rivals don’t cover. Therefore, Go-Jek has almost 10 million weekly active users, almost 40 million downloads of the application (Techinasia.com, 2018).

Barriers

Conservative taxi and motorbike taxi drivers are unsatisfied by the Go-Jek as it is weakening them, threatening their incomes and oversaturating the market. There has been fight in some of the cities between conventional taxi and motorbike drivers and Go-Jek drivers. Go-Jek drivers with the fear of conflict refuses to wear the company uniform and avoiding the routes where conservative taxi drivers wait for passengers for distress that a fight could happen (Inside Indonesia, 2018).

Conflict moved to peak levels. Go-Jek drivers attacked the group of conventional taxi drivers by throwing rocks and sticks. Moreover, Go-Jek facing barriers from conservative motorbike taxi drivers urging the government to ban the Go-Jek application. There were pressures sometimes consequential in physical violence between these drivers (Novák, 2017).

Vertical Integration

Go-Jek is driving vertical integration through its 12-different business. Go-Ride is Motorcycle transportation service which take customers to different locations which is more convenient while providing satisfaction for them. places. Go-Car is a Car transportation service. It has speed and many facilities and customers can select the type of car and so on.  Go-Food provides food delivery with 30,000 restaurants in their list. Go-Send is immediate messaging service, enabling users to send goods, mail and documents within 60 mins. Go-Mart is a service which allows customers to do immediate shopping from many shops near to the app users. Go-Box is a service to move goods through van, truck or lorries. Go-Massage is a massage health services provided directly to the user’s home. Go-Clean is a cleaning services to clean home, and office. Go-Glam is a beauty treatment services for a waxing, manicure-pedicure, and so on, to the user’s home. Go-Tix is an information service and enabling customers to buy event tickets and delivering that ticket to the customer’s home. Go-Busway is a service to screen the bus service timetable and ordered. Go-Pay is a e-wallet service for the transactions within the application. Go-Med is an integrated service between Go-Jek and HaloDoc, enabling customers to buy medicines. Go-Auto is towing, emergency, car care services (Shettigar, 2018).

Moreover, SMEs, for instance, producer of herbal drink in Bandung uses Go-Jek to deliver herbal drink to their Bandung customers (Novák, 2017).

Pricing Power

Pricing Power is the firm’s capability to raise their prices over time. The Go-Jek has ability to raise the price for its services without affecting its demand. As Go-Jek is unique and offers many convenient services for the customers which Uber and Grab are unable to do so. Therefore, Go-Jek has a high pricing power (Aseantoday.com, 2018).

Market Competitiveness

Marketing Competitiveness is the capability of a firm to continuously improve marketing procedure competences and provide better value to consumers than their competitors. Go-Jek add more value for its customers and reach a position of relative advantage. Go-Jek has advantage over Grab and Uber by offering better service, value and quality.