Uber faces challenge from car-booking app backed by Chinese or not really?

Last weekend I read the following FT newspaper article: Uber faces challenge from car-booking app backed by Chinese. It is talking about Taxify, which already operates in 19 countries, and it is opening in London with "the aim of taking thousands of drivers and passengers away from Uber". While reading the article my biggest question was, why would a Uber customer switch to Taxify anyways? The article offered only one answer to this question: lower price.

Taxify founder and chief executive Markus Villig is quoted in the article saying that he expects the business to get up to 50 per cent of the London market for ride-booking by undercutting Uber on price, but paying higher rates to drivers. That sounds like a double negative hit on their P&L. I'd be curious to see their business plan.

When your marketing objective is acquisition of customers, you have basically two options, convert non-users by stimulating demand or earning share from the competition. Therefore based on what I read, Taxify is going to earn share from Uber by differentiating on price. That is an older strategy than marketing itself, but it's also a low profit and high risk strategy. And to even work, market research must have shown that the answers to two key questions: "Why do they use Uber? What would make them switch?" are price and cheaper offering, respectively.

Now the sustainability of such a strategy is even more risky if you take into account that according to another FT article Uber makes vast losses — $3bn last year. FT states that Taxify aims to increase payments to drivers compared to Uber by charging lower commission, of about 15 per cent. It could be that Taxify expects to "recruit" the majority of the drivers and therefore improve their customer KPIs (waiting time, response rate, etc). But that's never mentioned.

While I do believe in competition and would be happy to see other players competing with Uber, I don't think that a price cut as strategy is sustainable in the long term. It's important to notice that Mr. Villig believes that Uber is profitable in developed countries such as the UK. But even so, a solid strategy should be based on sustainable competitive differentiation. Unless Taxify has a very different business and/or operating  model from Uber. One that allows Taxify to charge less and still be profitable (for example, like Walmart or Dell supply chain capabilities  allowed them to be profitable at lower prices and at the same time almost impossible to copy).

And then there's the discussion on self-driving cars and that will certainly disrupt the business model, but I'll leave that for another time. You can read more about it here:

https://www.cnbc.com/2017/05/24/goldman-sachs-ride-hailing-companies-will-dwarf-taxis.html
https://seekingalpha.com/article/4031752-will-uber-ever-make-money-bezeks-daily-briefing

Disclaimer: I'm no expert in this industry and I solely based this blog entry on the referred publications. 

"You're either at work and dead, or you're living"

Today I want to reflect on the concept of Work-Life Balance (WLB).

Back when I was doing my MBA, I remember talking to my professor and former Baxter CEO Harry M. Kraemer who said “this phrase (WLB) sounds like you are either working OR living, and if work isn’t part of living, we may have a problem!”. Daphne Scott from DS Leadership Life has humorous spin on it: “The phrase "work-life balance" implies that you're either at work and dead, or you're living”.

Semantics aside, Mr. Kraemer further reflects on that in his book “From Values to Action” and refers to WLB simple as Life Balance. The book outlines his framework in which work and career is just one of the six buckets that each one of us must manage to achieve life balance. The other buckets being: Family and friends, spirituality, health (including sleep and exercise), fun and enjoyment, and being a “best citizen”, that is “making a difference” in the world.

While today I don’t want to advocate for semantics changes, I do think that the rationale behind this criticism is worth discussing. The first being that work is part of life and secondly that balance is open to interpretation.

It comes down to the fact that work is not just a means to an end. More and more employees are looking for jobs with meaning, purpose and aligned with their values. Our work is not separated from our lives, but it’s part of it and it needs to be balanced in face of the other important things in life (all buckets).

What about balance? Oxford defines balance as “a situation in which different elements are equal or in the correct proportions.” The key words for me here are “correct proportions”. The challenge is that everyone has a different version of his/her own proportions. There’s no “magic bullet” to solve it. You can only achieve Life Balance if you know what balance means to YOU. The proportion that you assign to each bucket is unique to you.

Whether you use the term work-life balance (I hope you don’t) or a substitute, the point is that high performance is driven by aligning our work with our values and higher purpose. You need to understand your core values, purposes and priorities so that you can create your own life balance which will include your work and career.

SUPER BOWL ADVERTISING: My top 3 Commercials of 2017

Every year since I went to Kellogg, I follow the Kellogg School Super Bowl Advertising Review which uses a strategic academic framework known as ADPLAN to evaluate the effectiveness of Super Bowl spots. The acronym instructs viewers to grade ads based on Attention, Distinction, Positioning, Linkage, Amplification and Net equity. This year, as I did in 2016, I again selected my 3 favorite ads and the biggest disappointment. I hereby summarize them by using the Kellogg framework.

Febreze 
This ad was truly engaging with good narrator, cinematic score, and great images. Moreover, yes, it is kind of funny and first time you see it keeps you wondering "where this is going?". So yes, it's an unique delivery. A commercial about the break itself with unusual imagery. All of it build up to deliver the benefit" Febreze eliminates the stink after people do the number 2". Although the ad is long, the Febreze logo is displayed at the very beginning and comes back strongly at the end. Therefore, clear linkage.  The funny element and unusual topic (toilets, smells, #2) will certainly get people to talk about it. Finally, the ad is consistent with their brand.

Google Home

The ad engages the audience with an emotional touch, a catchy song and depicting family situations that we all (or at least Americans of several races and backgrounds) can relate to. It may not be the most distinct ad but for the reasons above it does it sufficiently. We can clearly spot the category and their goal is to introduce the product. We clearly get a glimpse of the benefits of the product can offer. Within 15 seconds the brand name "Ok Google" is mentioned and we see the product in action. It's very clear what this ad is all about. The emotional and personal touch will make this ad memorable to the target audience. And it's pretty consistent with the Google image. Great product intro!

Ford

Great ad as well, some interesting and funny situations that most of us can relate to. It does grab the attention. The humor, the images,good song but specially the award situations make the ad unique enough to stand out. The key here is that the category is auto makers and not a particular car brand. In that category Ford position themselves as a company of the future which is and will continue to deliver benefits to customer via a series of specific products/examples (beyond the car itself). The logo is always at the screen corner, is part of several scenes  and when the voice enters the commercial, the narrator immediately tell us this is Ford and what they are doing. Clear brand linkage. It's a positive and interesting add that will get people to talk about it, specially because brings up self-driving cars.  Great ad to build the corporate brand further. 

Wix.com
Now I want contrast my favorite ads with a weaker one. And like last year this is an interesting one because as a film, the Wix.com ad is great. But from a Marketing perspective, not perfect. The ad gets an A for attention grabbing, gotta give them that. Is it unique? Not necessarily, I mean, we all have seen an action movie before. But more importantly, there's a positioning problem while the category is described (tools to build a website), the benefit is totally unclear. Why should I use Wix.com instead of another option? What benefits will it bring me to do that in "the disruptive world"? And the ad is so packed with action that the brand gets diluted (even if they tried to avoid it). At times it makes you even wonder if the brand is actually the restaurant (Chez Felix). There will be amplification because the film itself is fun and with great action actors. But will it help build the brand further? Maybe a little bit, don't get me wrong, it's not all that bad. However, I think they miss a golden opportunity to instead of an OK ad make it a great one.

For more info on The Kellogg School Super Bowl Ad Review and the ADPLAN framework:
http://www.kellogg.northwestern.edu/news-events/superbowl/about/adplan-framework.aspx