Competitive Analysis 2014

Presented by: Taj Zadhra-Ogunsola

Afro Technologies ® Nigeria 2014 ©

Competitive Analysis

2

Afro Technologies competitive analysis assesses Lagos taxi service market. The analysis focuses on three core areas of Afro Technologies business - ‘technology’, ‘service’, and ‘innovation’ forms the key goals. As a new company entering a market with strong competitors, extra efforts needs to be made to weigh the threat and opportunities. Thereby enabling the organization to position the business to compete favorably in cities across Pan-Africa.

Technology Technology must be developed and designed with users in mind. Therefore, a friendly UX/UI that’s easy to navigate, easy to use but simplifies a process in any market operating a mobile taxi service.

Service Provide an experience different from traditional taxi service. It must seek to win customer loyalty on service offered; service promised; service experienced; and service delivered where consistency is imperative.

Innovation Innovation is setting a foundation and giving customers a virtual price haggling experience they can relate with, across different cultures to differentiate the product and service globally.

Information in this presentation is a competitive landscape for the marketing team to devise an appropriate strategy that favors Afro Technologies. Furthermore, position the business in the premium segment to aggressively combat their main competitor for market share to drive growth and sustainability going forward.


Agenda Competitive Analysis

Technology Services Innovation

Help customer hail a taxi electronically by connecting drivers to them and allowcashless payment methods in-line with CBN laws.

To offer the service in as many cities across Africa, with the aim of expanding into Europe or America once Lagos becomes financially profitable.

The brand aim to compete with it main rival by position the brand into the high-end taxi service given customers much needed taxi service offerings such as ‘Taxi’-Standard, , ‘Private’- Executive and ‘Lux’s’- premium car service.

App New Cities Options

Current SituationInternal issues – Technology


It’s mobile Convenient

ComfortableCashless

(future UPS)

Current SituationWhy would customers use Afro Technologies AfroCab?



Cloud Computing(use locally or globally)

Application (not a call centre/agent)

Web-based Apps (Services &

Mashups Software as Service Cloud Computing)

Mobile App

Current SituationAccessible



Transportation Application AfroCab Future Products


Current SituationService by Afro Technologies

?


Current SituationInnovation Process



Primary Strategy Secondary Strategy

Primary strategy is services that improves traditional norms of how transportation is

used by incorporating technology applications to simplify its purpose.

AfroCab’s digital marketing will include Google’s Ad-Sense and Yahoo Ad-Sense to

increase potential ride requests.

Differentiation Factors are as follows:Product knowledgeBrand cultureBrand communicationThe teamGrowth process

Current SituationDifferentiation


Secondary strategy is to focus on related product/service across the African global by

creating demand-based services within carrier logistics, breakdown services, laundry

services, and car sharing service as the market requires it.

Focus on refining the technological product experience’s interface for better look and

feel of the brand culture and inline with charging consumers needs as well as

technological developments.

Current SituationInnovation

Primary Strategy Secondary Strategy


Partnership Route Sponsorship Alliances

Forming strategic partnership will drive the business to compliment the brand whilst

building long-term customer loyalty across service categories to benefit customers.

Strategic alliance are as following:

Creating Pan-African PartnershipInvest in custom application Flexible API for corporate client requirements Celebrity endorsements to strengthen brand and grow customer base

To positively positioned the brand in the minds of clients using available opportunities.

Current SituationPartnership Alliances


Digital age has challenges - the tyranny of ‘more’

Marketing is the only public function

Ready, Fire, Aim - experience is better than planning

80/20 rule

Avoid the short-term trap

Marketplace results matter most

ROI total vs. Individual totals

What is new vs. Last year

Balancing Afro Technologies Innovation

Current SituationBalancing Innovation, Results & Predictability


Strengths Weaknesses Opportunities Threats

Visionary leader Financial Expertise'sMobile tech-productsAfrican readiness for

ePayment channels

Technology applicationHigh price of vehicle

leases Limited market data in

some African cities Unknown brand nameManagement control

New middle-class growth Launching new serviceCheap Labour marketPotential tourist marketDevelopment of social

media/social networkGrowing consumer

markets

Uber (competitor) Access to FinanceMobile devices usedCultural & Political

issues Economic down turnsRoborts

SWOT Analysis

Current SituationSWOT analysis


Competitive Analysis

Market Development Strategy

Diversification Strategy

Market Penetration Strategy

Product Development Strategy

Existing market New market

Exis

tin

g p

rod

uct

N

ewp

rod

uct

Market Penetration Strategy

(MPS) is selling existing products

to the present market. This

strategy is applicable but is likely

to change when the business

expands across the Africa market.

Furthermore, this would open

opportunities for the business to

attract potential investors.

Current SituationAnsoff matrix

Afro Technologies


Geographics

Main Cities Growth cities across Africa Lagos 6.4% of Nigeria’s population live in this cityAbuja FCT 1.0% of Nigeria’s population live in this cityPort Harcourt 2.6% of Nigeria’s population live in this city

Launch City Lagos with 21m population

Growth 2nd-fastest growing city in AfricaDemographics

Male pop. 51% Female pop. 49%%

Age Young Career Adults (26-40) 39%Professional Adults ( 41 – 50) 19%Matured Management Adults (50+) 10%

Income Low Income (above Naira NGN100,000 p/m)Middle Income (above Naira NGN350,000 p/m) Higher Income (above NGN 550,000)

Product: AfroCab Taxi Services

Source: WPR World Population Review 2014Strategy Nigeria, Renaissance Capital, 2011

Young Adults 26-4039%

Adults 41-5019%

Matured Passengers51

+10%

Others 32%

AfroCab’s Target Customers

Young Adults 26-40

Adults 41-50

Matured Passengers51+

Others

Market Segmentation

Current SituationMarket segmentation


15

Target market

Age group: 30 – 51+

Lifecycle: Young adults/Adults & Matured

Gender: Male and Female

Occupation: Middle-class university students, persons in managerial, executive, and professional positions.

Income: Middle and higher income earners

Target Locations Main cities (Ikeja, Ikoyi, Surulere, Victoria Island, Lekki (1-6 arounds) Ikeja GRA, Airports (Domestic/international) Lagos Island business areas, local jetty points shopping malls, train stations Main Land, Lagos Island, and outer Lagos (anywhere within 30-40 mile range).

Target


Current SituationAfroCab Target Market


Customer-Oriented Service Provider AfroCab Users in detail

Name Size Revenue Problem Solution

Young Career Adults 30- 35 y.o with an Income aboveNGN100,000 p/m), works in the city centre

Smartphone Users Device: Android Tecno/Blackberry Q5/Q10Cities: Lagos, Port-Harcourt or Abuja

Represent 35% of our market interest

Our Young Career Adults spend on average of NGN2,500 on rides p/w

Late to work or needs a taxi but doesn’t want to stand outside to hail for one.

Hailing a taxi electronically without sweating in public.

Targeted product; ‘Afro Standards’

Adult Professionals 35 – 40 y.o. with Income ranging above NGN350,000 p/m, works in the city or is self employed

Tech-Savvy Users Device: Android Samsung /Apple iOS 5sCities: Lagos, Port-Harcourt or Abuja

Represent 45%of our market interest

Our Adult Professionals spend on between NGN3,500-NGN4,500 on rides p/w

Works in the big city, and married with 2.4 children owns a used car but only drives at weekend. Has access to company pool car during the week but uses taxis regularly for convenience.

Requires a taxi service ASAP but worried about the state and condition of the vehicle. They are tech-savvy mostly but want a comfortable ride.

Targeted product; ‘Afro Executive’

Matured Management Adults 41 - 50+ y.o. with Higher Income above NGN 550,000 or more, owns two or more vehicles but dislike driving when driver is not around.

Business Users Device: Apple iOS 5s/Windows Lumia range/Android High-end Samsung or HTCCity: Lagos or Abuja

Represents 20% of our market interest

Our Matured Management Adults spends on between NGN6,500-NGN7,500on rides p/w

Dislikes any form of disruption and is willing to pay for a premium service to maintain the status-quo.

On-demand services is second nature to them. They prefer no questions asked but wish to reach their destination without paying cash.

Targeted product: ‘Afro Lux’s’


Customer-Oriented Service ProviderCustomer Segments

Cu

sto

mer

Seg

men

t

This customer segment is divided into two groups rather than three. ‘Tech-savvy’ and ‘business users’ are one demographic but are targeted differently, using two separate service categories (Afro-Executive and Afro-Lux’s).

Smar

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on

e ta

xi u

sers

The smart taxi users mainly uses taxi services for airport trips; shopping; eating out; going to bars or nightclub; business appointments; and generally anytime when driving is not the preferred option.

Tech

-Sav

vy a

nd

Bu

sin

ess

Use

rs-

Uses taxis because: personal driver is off duty, and it is too late to have a family member pick them up or too intoxicated to drive.

Frequent taxi users with smartphones, opened to technological changes, and considered ‘early adopters’ with positive traits for market entry,

People who have smartphone People accessible to big cities

People who don’t mind spending more for reliable and convenient services

People who work professionally (new middle-classes’)

People who like change as the way forward

People who move around 24/7 People who dislikes traditional

taxi services and prefer the mobile app version for simplicity

Segmentation


Customer-Oriented Service ProviderSegments by Trip type and by User Type

Segment by Trip Type:

Inter city point to point – the traditional 8 hrs. or 4 hrs. charter service.

Intra city – daily usage.

Airport drop-offs.

Segment by User Type:

Smartphone Users - Young Career Adults (individual

personal travel – (retail)

Tech-Savvy Users - Adult Professionals (for meeting,

going places and airport drop- offs and OTA – online

travel aggregators)

Matured Management Adults - Business Users

(corporate business travel/companies and third-parties

offering the service to their direct client/customers).


Afro Technologies' offers a low cost pricing strategy where the company bears no financial costassociated with running a taxi operation, government fees, unnecessary employees (driver) or itsvehicle maintenance overheads.

Specifically:No inventory No fees as a “taxi service operators” No toll gate chargesNo drivers pays any Afro Technologies any fees to deliver the serviceconnect passengers to drivers from a large pool Drivers are our partners not employees

Attractiveness:Ease of becoming driverWork when you want Constant jobs at your footNo pressure, you’re your own boss Drivers on the network can accept lower revenues than normal taxi drivers

Competitive AnalysisUnique value proposition


Afro Technologies Local Taxi/Car Hire Companies

Advance Booking No Yes

Hiring Method Smartphone App Flag/Call Centre/Dedicated taxi queue

Payment Cash/Credit card Cash

Driver/Passenger Rating Available NA

Pricing Structure Negotiable/ Flexible Structured

Fare Sharing Anyone Limited to friends

ETA to Destination Available NA

ETA of the Ride Available Available (Apps Only)

Car Self Rented from Taxi Company

Driver’s perspectives Flexible Rigid

Law & Regulation (more on this later) Grey Area Well-defined

Value Capture to Company Commission Fe Rental Fee, Advertisement

Competitive AnalysisAfro Technologies VS Taxi


021

Competitor/As a Brand Quality Price/fare Service Awareness

AfroCab (Afro Technologies) Poor Average Poor Poor

Afro Taxi Segment Good Excellent Average Poor

Afro Comfort Segment Poor Average Average Poor

Pure Lux’s Segment Bad Poor Average Poor

Uber (Uber Technologies) Excellent High Very good Very good

UberBlack Segment(Locally)

High HighVery good (locally)

Very Good

Easy Taxi (as a brand) Average Very Good Poor Average

Taxi/Private Good Average Very good Average

Competition

Awaiting time

Poor

Poor

Poor

Poor

Excellent

Poor

Average

Average

Competitive AnalysisCompetition


Afro Technologies VS Taxi Pricing Structure

Afro Technologies

- Base fare - Negotiable - Fares based on distance and competition- Surge pricing (toll gate only)

- NA

Taxi

- Base fare - None metered fare based on distance- Additional cost

- Peak hour / midnight surcharge- Public Holiday surcharge - Advance booking fee- Presentation based surcharge - Tool Fee surcharge- Area based surcharge - Airport - City


Competitive AnalysisCompetitor’s unique value proposition against AfroCab Product


Competitor’s StrengthsCompetitor’s unique value

propositionCompetitor’s Weaknesses

Incumbent: Recently raised Series C funding for $307 Million,

mostly from Google, at a valuation of $3.5 Billion.

Best funded and highly innovative company

Present in 50 cities in North America, Europe, Asia-Pacific.

Payment through credit card only, splitting of fare option,

vehicle selection. Costs depend on demand.

Revenue is based on percentage of fare, time and mileage.

Great selection of robust

service offering at a

premium price.

Excellent global brand

appeal to High Life Seekers

Limited African presence and understanding of the

local markets despite an aggressive push into

emerging markets

Testing the waters in Cape Town, Johannesburg and

Durban, with limos only

Business Model not entirely adaptable to the whole

of Africa

Strongest on high end limo service, not well suited

for scale in African markets

Credit cards use very limited in Africa

Decision: Act

Challenger: Low cost; charges not more than 5% of total

revenue.

The company has raised $25 Million to date.

Network of more than 45,000 taxi drivers with presence in 41

cities across 14 countries, mostly in Brazil and the rest of Latin

America.

Has announced intention to enter Africa, including Nigeria.

Has the best understanding of emerging markets of all the main

players.

Parallel user experience to

AfroCab targeting taxi and

private passenger segment

(with rebranding and new

user experience AfroCab

can overcome this).

Like the others, focused largely on the formal taxi

market, which limits scope

Application functionality similar to competitors

With 7.2% YoY growth, Easy Taxi is the category thought

leader

Decision: Act

OGA TAXI


Competitive AnalysisCompetitor’s unique value proposition against AfroCab Product

Wanna-be competitor Propositions Response

Incumbent: Oga Taxi is new to the market and offers

nothing new with no market share.

Average licensed taxi app technology (Taxi Hawk) that

lacks UX, UI and brand personality.

Oga Taxi, operates in Abuja. The company may pose a small threat to

the business.

Challenge: Threat to Abuja space and ‘Afro Taxi ‘TA segment

Decision: Monitor

Incumbent: SayTaxi has a small but unique TA but this

is hard to determines

Say Taxi's UX and UI experience is pretty impressive in

the interaction between the passenger and the (app)

product.

The company operates in over 25 countries with a

global presence.

Strategy is to act slowly by fitting in culturally but is likely to deploy an

aggressive Market Penetration campaign to increase market in

AfroCab’s space - Lagos.

Challenge: ‘Afro Taxi ‘and ‘Afro Comfort’ TA segment

Decision: Act immediately

Challenger: Tranzit is a low value Taxi, car hire and

carrier service. It has a growing target audience unique

to their service offering but not significant enough to

disrupt AfroCab’s market space.

Implemented a diversification strategy to serve three

sectors from passenger to carrier transportation.

Spends minimum amount on passenger acquisition and

brand awareness to grow market.

Likely to steal our market and TA in Lagos, if they are successful with

additional venture funds, can become a real competitor.

Challenge: ‘Afro Taxi ‘TA segment

Decision: Close monitoring

Strengths

Has raised over $50.6 Million to date. Available in 14 cities including London, Barcelona, Madrid,

Boston, Chicago, New York and Tokyo. Both cash and card payment accepted. Interested in emerging markets but is focused on launching

in some Asian markets first and preoccupied with regulatory issues in the US.

Weaknesses

Limited Global presence Application functionality similar to competitors; no real

differentiation Focused only on regular metered cabs, therefore unsuited to

African markets

Minor players in parts of Africa include SnappCab (South Africa), Tranzit (Nigeria).

Unique Selling PropositionsDefining the Customer - AfroCab

Drivers and passengers are thetwo most important customers toAfro Technologies.

‘The Diamond Effect’,demonstrates their impact to the business and how each corner of the diamond generates an income for the growth of the company.

The Diamond Effect

DriverPassenger


Cost based pricing

•Cost plus pricing/basic cost covering

•Contribution pricing

•Working back method/ expected return

Market oriented pricing/demand

based pricing

•Transparent pricing

•Market skimming

•Penetration pricing

•Price to meet customer expectation

•Free rides, discount & sales

Competition based pricing

•Destroyer pricing

•Price matching

•Price bidding

They are three basic pricing strategy as suggested in the

diagram across. However, a review of our product service

indicates the company will benefit by applying a pricing

strategy based on volumes of completed and requested rides.

Hence, the reason ‘market oriented and demand pricing’ has

been selected, based on the nature of the business.

Currently, monthly expenses cannot cover revenues

generated working on a ‘flat’ 10% commission. AfroCab’s

commission is lower than competitors operating in the same

city (Lagos). A review upward (20%) is imperative to sustain

long-term financial returns. Furthermore, the more rides

completed the likelihood of incurring additional marketing

cost.

Competitive AnalysisPricing strategy


Pricing strategy Value Based Pricing- AfroCab

Total

22

3

Rated from 0 to 5 max

0

5

10

15

20

25

30

1- Overall brand 2- Customer service 3- Experience 4- Premium product Total

Comparison of attributes of AfroCab against competition

Afro Technologies Uber


Pricing strategyValue Based Pricing – AfroCab

Total

4

10

4

0

5

10

15

20

25

Speed Comfort Cleanness Friendliness Total

Comparison of attributes among Lagos transportation options

BRT Buses AfroCab Local taxi

Speed Comfort Cleanness Friendliness

AfroCab 3 2 2 3

BRT Bus 1 1 0 2

Lagos Taxi 2 0 1 1

Rated from 0 to 5 max


Afro Technologies VS Taxi Driver’s Perspective

Afro Technologies

- Requirements - No professional taxi license required - Use your own vehicle

- Income - Flexible timing – part time work - Surge pricing may provide higher hourly

wages

- Expenses - Petrol - Personal insurance - Maintenance of personal vehicle

Taxi

- Requirements - Professional taxi license /

“medallion”

- Income - Full time work (i.e. cover daily

rental work) - Fixed surcharges

- Expenses- Fixed rental fees payment - License fees payment as a taxi

driver


Drivers

- Partner Loyalty rewards program

- Possible Vehicle Financing Possible discount Car Insurance

- Possible Life & Health Care insurance for partners

- Ride growth Incentives

Customers

- Partnerships with local establishments e.g. restaurants, shops

- Price promotions- Sponsorship Activities- Celebrities involvement - Service offering (Wi-Fi)

Retain & Gain New

Afro Technologies VS Taxi Strategic control


Adopted using Uber’s Strategic Control concept.

ThankYOU!