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Assignment 2: redBus: The Next Step for Grow
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A report submitted to

Prof. Preeta Vyas

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 In partial fulfillment of the requirements of the cours
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Written Analysis and Communication –  I

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Letter of Transmittal

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To,
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Chief Executive Officer,
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redBus
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Bangalore, Karnataka
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Subject: Evaluation of situation of redBus along with recommendation and

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action

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 Sheet Music Dear Mr. Phanindra Sama

As requested, please find the evaluation of the current scenario of the comp
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have included possible options along with the criteria on which I have eval
 Documents them. I have arrived at a recommendation based on this evaluation and also

formulated a plan of action to go forward with that recommendation.

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One Page Summary

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By developing a nation-wide network and enhanced use of technology, redBus has created a
niche position in the bus-ticket booking industry. Positive socio-economic environment changes
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like internet penetration and migration to cities will ensure a stable growth for the company in
the future. The demand for bus transport, as a result of these changes, has also been growing at a
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steady rate. This increase in demand can attract bigger players in the online travel industry,
which poses a threat to the company. On the other hand, redBus can also use its brand to venture
into other online travel businesses. The key in choosing its future course of action would be the
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values and philosophies of the company, which have been instrumental in shaping its trajectory
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Learn more about Hence, the problem for the company is “What course of action should redBus take as its future
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growth strategy?” 
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1.  Vertical integration, i.e. venture into operation of buses

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2.  Expand into the global market
3.  Offer more services than its current portfolio 
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1.  Ensuring transparency and high-level customer service

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2.  Impact on relationships with existing bus operators
3.  Capital efficiency
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The evaluation for these options is as follows-

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1.  High on first criterion but low on second and third
2.  Low on first criterion and high on second and third
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3.  High on first and second criteria but low on third

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Based on this evaluation, it is recommended that redBus continue with the same business model.
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Situation Analysis

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redBus has created a niche position for itself in the online travel industry by specializing in the
 bus-ticket booking industry. It has created a nation-wide network of bus operators, a vast
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database of ticket-booking transactions, customers and bus routes, which has become its

 Podcasts competitive advantage over the years. Today it has a 65 percent market share in the bus ticket
industry, and its goal is to achieve $1 billion annual revenues by 2015.
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Achieving such a high goal is especially possible because of the continuous high-growth rate of

 Snapshots 45 percent in the travel industry. Socio-economic environment changes in the country like

increased penetration of internet and higher demand of skilled labour is encouraging higher
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online-bookings for bus tickets. Even in places where internet has not reached, ticket bookings
have increased due to higher demand of transport, which means that there is still a huge potential
market to cater. Many operators outside India have approached the company to expand in their
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countries because redBus has helped them grow in business and improved their operational
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efficiency.

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 buses in the country has grown at a steady rate of 7-8 percent every five years since the last
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decade. Although private bus transport industry has only 15-25 percent market share in the urban
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operations and the intra-district rural services, but in the inter-district services its share is 45
 percent and in the inter-state operations its share is more than state transport, going up to 55
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 percent. Also, demand for buses in this sector has been growing at 14.5 percent as opposed to 2.3
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 percent in the inter-district transport. This growth also reflects in the socio-economic changes
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happening in the country as more people migrate to the cities for better jobs. This is a good sign
West Lake Home Case Study - Michelle Levene is Rob Parson at Jensen Shoes: Assig # 3 Beta C
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to venture into bus operations, looking into the growth in bus service demand.

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The growth of redBus will attract competitors like MakeMyTrip, Yatra and Goibibo to enter in
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 booking which have higher margins but cater to a smaller customer segment. Bus-ticket booking

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