An UberlyFantastic New Business Model

Recently ride-share programs have been all the rage. I myself cannot remember the last time I took a cab. In my opinion these ride-share programs, and I will specifically be speaking on the behalf of Uber as that is the only one I utilize, have massively decreased the amount of money I spend on cabs. On a Friday night, I can get from downtown to Lincoln Park area for about $10-$12 which is far cheaper than the usual $20 with tip I give to cab drivers.

The operations of Uber itself are quite unique and they have been as successful as they have found a way to thrive on the free-market system in the United States, as well as other countries in the world. There has been recent political pressure to shut-down the companies but it looks like those demands will not be fulfilled.

Uber has morphed together the fast smartphone world of today as well as finding a massively over-priced market and have completely changed the world know to cab drivers. We all have had experiences were you sit in a cab feeling uncomfortable as they make no effort to talk to you, are on their phone talking the entire time, and the inside of the car is beat up. Uber has change that by operating a unique manner few have tried to do. The operations of Uber itself have always impressed me as they literally have a network of hundreds of thousands of driver and they have penetrated the global markets as well.

I will always take Uber now over taking a cab, except for one instance. Surge pricing has always confused me and at times will annoy me to no end. Last season my friend and I attended a Blackhawks game and we took an Uber. Since it was snowing there was a surge pricing in effect; however, we failed to look to see the multiplier of the surcharge. Our ride ended up costing us about $60. At the time Uber was not super transparent about surge pricing but since then they have made it clear to the consumer by making sure to have the consumer actually accept the surcharge before the car is ordered.

Another thought is if Uber’s growth will sustain itself, or will there eventually be too many drivers for too little of consumers? This in my opinion directly relates itself to our class in Week 4 where we were discussing forecasting. With a new company such as Uber being in a newly created market space it is hard to look to comparables. Using forecasting techniques such as weighted average will be useless as the amount of high growth will through of the long term sustainability Uber is looking to achieve. Other techniques such as Exponential Smoothing and Trend Projection will be useless as there is not enough years to look to when performing research. It will be interesting to see in the upcoming years if Uber avoids the over forecasting pitfall so many new companies do and continue to transform the car industry as we know it today.

Uber-Taxi-NYC2-1024x615

How would you go about and forecast Uber’s growth?
Have you ever used a ride share program? If not, what would your reason be?
Have you found the ride-share programs to be dramatically cheaper than cabs?
What is your opinion about surge pricing? Is it a necessity for Uber to efficiently maximize profits or will it ends up hurting the company by turning away consumers?

Sources

http://consumerist.com/2014/09/18/how-do-uber-and-lyft-work-and-why-should-i-even-care/
https://www.uber.com/cities
http://www.nytimes.com/2014/10/01/upshot/uber-improves-life-economists-agree.html?ref=technology&abt=0002&abg=1

Forecast Schmore-cast: Is Forecasting pointless in today’s economy?

 

World leader and the largest in the advertising and marketing corporation, WPP, has decided to cut its full year growth outlook forecast after the discovery that clients have cut on spending for advertising due to the economic crisis. http://online.wsj.com/article/SB10001424052970203897404578077941669547434.html?KEYWORDS=marketing

WPP has has looked into expanding into more international markets. Currently making more than two third sales in Latin America the Middle East, Central and Eastern Europe and Asia Pacific, WPP’s goal is to increase sales by forecasting for the next three and four years. However, their forecasting hasn’t been 100% accurate recently after showing that the markets in Brazil have slowed by 1.9% in their third quarter from 3.6%, sales in North America have dropped .4% and a 2.1% decline in Europe (Bender). In August, WPP ended up changing their forecasts of high expectations to lower growth expectations that advertising needs from clients would decrease, which ended up decrease particularly in the health care, call center and public affairs market. Even in their most popular time of client expectancy was at an all time low in September.

I believe that there have been many challenges for many companies to forecast the growth rates in the market with the current economic crisis which has set many companies back. Large companies such as Fannie Mae, GMC, Bank of America and many more major corporations primarily in the financial sector have had the greatest impact.

The question is, if forecasting isn’t providing a beneficial outlook for the future of a business, what else can businesses do to try to predict their future outlook within the market place? With the economies aggregate behavior of employment, output, and prices shifting since 2008, is cutting off the full year growth outlook such as WPP has decided to do, the best option?

Twitter Is Growing !!

 

 

 

I guess most of you have an account on Twitter or is thinking of opening an account in Twitter because you are starting to get bored from Facebook.

One of the main lessons I learned from my operations management class is the Product Life Cycle. A product goes through the following stages: Introduction, Growth, Maturity and Decline. In my opinion, Twitter is currently in the growth stage due to the huge increase in the number of users per day. Twitter was established in March 2006 and by the end of 2007 it only had around 5 million users worldwide. In 2012, the number of users reached 200 million users worldwide. Twitter moved up to become the social networking site with the second highest number of users after Facebook which currently has around 900 million users worldwide. Twitter is very popular especially during important events. For example, Twitter users were actively using Twitter during the 2010 FIFA World Cup, 2010 NBA Finals, the day Michael Jackson passed away and during the 2011 Arab Spring. Moreover, many users are using Twitter to follow their role models, famous celebrities, professional athletes and even famous academic scholars.

                During Twitter’s introduction stage, the company was able to invest in research and development and determine what exactly a social media user want from a social networking website. They discovered that social media users demand instant updates and latest news that is even faster than the famous news channels on TV such as CNN and BBC. During the 2011 Arab Spring, almost all Twitter users were using Twitter to read about the latest updates and breaking news rather than watching the TV. As a result, both CNN and BBC and other main global news channels opened an account on Twitter in order to provide the users with the latest updates. Therefore, people usually followed those users who provided the latest and breaking news that are credible and reliable.

                Due to its extensive research and development and its ability to identify what exactly does the customer require, Twitter decided on October 2010 to introduce the “New Twitter” which allowed the sharing of videos and pictures as well as links to other websites. These developments increased the popularity of Twitter because now users can share their latest updates and breaking news with pictures and videos to support their claim or latest update. Moreover, Twitter created “hashtags #”. Those hashtags assist users to search the latest news about any topic in the world such as political events, economic events, entertainment events as well as sports event such as the World Cup and the Olympics.    

Twitter is still in the growth stage because it was capable of improving and developing its product and conducting ongoing research and development to understand what exactly does the user want and then identify the strategies that will enable Twitter to satisfy the needs and requirements of all its existing and potential users. It is very important to mention that many companies all around the world are using Twitter as their main advertisement media to gain new customers and increase its market share.

My question is how can Twitter defeat Facebook and become the number one online social networking website in the world?   

And finally I would like to take this opportunity to thank you all for reading my blog and since we are talking about Twitter, kindly follow me @mohammedashoor

The Raise and Fall of a University

Our recent class discussions about Product Life Cycles made me think about the rise and fall of the New York Institute of Technology (NYIT) – Bahrain. After being one of the best universities on the island, the Management decided to phase-off their program from Bahrain, leaving behind thousands of Alumni, a team of staff members and two large campuses.

If I can make it there.. I can make it anywhere! was the thought of NYIT’s Middle East Chairman, Dr. M. Husain, after he succeeded in entering the United Arab Emirates education market with the first NYIT campus in the Middle East. His next mission was Bahrain; he believed that a campus in Bahrain could attract potential students living in Saudi’s eastern provinces and other GCC countries as well.

Like other organizations, Universities have a life cycle. They introduce their products as degrees to the market.

Introduction:

In October 2003, NYIT-Bahrain opened its doors for new applicants in a medium size villa in Juffair with a small team of academics and staff members. It was the first American university in Bahrain, offering limited Majors in Business and Information Technology. Students liked the idea of studying locally and earning an international degree and many were looking forward to attend the annual graduation trip to New York once they complete their programs.

 

Growth:

A year later, NYIT had to triple its intake capacity to fulfill the increasing demand. A new campus was built, more sections and classes were offered and the many part-time professors converted to full-timers. Several universities were established in the same year, but NYIT managed to stand out and to gain a large share of Bahrain’s higher education market by introducing new degrees in Interior design and Computer graphics as well as having a very creative and active student life.

 

Maturity:

The university was running at an ideal capacity, where the number of the graduated students was equal to newly accepted freshmen. NYIT was doing great until 2009, when the Higher Education Council of Bahrain decided to come up with a new set of regulations, aiming to standardize all private universities in Bahrain. This would be done by standardizing courses, degrees and majors names and interfering with the Management and the Board’s regulations. NYIT could not adapt to the changes like the other local competitors, as all NYIT campuses around the world must follow the same American standard programs, otherwise they would be threatened to lose their International License and Accreditation.

 

Decline:

Many attempts were made with the ministry to prevent further downturn, but all were unsuccessful.

Unfortunately in May 2010 NYITs’ Advisory Board officially declared the phase-off plan of the Bahrain branch, and started cost-cutting and shutting-down departments in order to reduce capacity. NYIT-Bahrain will continue to run until all students graduate by 2013.

 

Do you think that NYIT made the right decision by closing the Bahrain Campus? Were there any alternative solutions that they could’ve taken to extend their life cycle in Bahrain?