Archive - 11/07/2017

I live in Perth, the capital city of Western Australia.

It’s no secret that we have a terrible public transport system, and our roads are clogged. So if you don’t want to drive, you tend to leave public transport and look for a taxi.

Now if you run a taxi business, you are almost in a monopoly. There are only a handful of taxi companies, most contract self-employed drivers. The taxis are licensed by our State Government – that means they regulate how many licenses are available at any one time, supposedly through a needs basis (but ask any Perthite and they’ll tell you the taxis don’t meet the demand).

So if you did run a taxi company your competitive advantage is the fact that there are a limited number of competitors and that there was a high barrier to entry into the industry.

So, you create strategies around that competitive advantage. Your strategies might include better advertising that others, better technology to get your cabs there first, more efficient cars to reduce operating costs, and so on.

So what’s wrong with this picture of strategy creation?

Uber. Read More

0

0