Mobike A Smart Bike Sharing Service Platform Case Solution

1. What are some distinctive characteristics of the bike-sharing industry?

In China, the bike-sharing industry has seen phenomenal growth within four years. Bike-sharing has grown in popularity across the cities of China. This system of bike-sharing is distinctive in the way that it offers convenience to the riders to pick and drop off the bikes at the stations at a minimal and an affordable rate. Moreover, bike-sharing companies enjoy the advantage of gaining wide acceptance from the environmentalists, as riding bikes doesn't harm the environment. Other than this, if China's bike-sharing industry is analyzed, it has thirty players. Only two of the players, Mobike and Ofo own 85% of the market share. Mobike is more inclined towards good quality bikes, efficient application system as compared to Ofo. Due to this, the competition in the industry is very tough and none of the bike-sharing company is making profits. Along with that, the industry is facing many challenges. These challenges are from the riders’ side that includes, destroying the QR codes, cushions being stolen, tires getting damaged, an issue with the private locks and the poor maintenance of the bicycles.

2. What are the keys to profitability in the bike-sharing industry?

According to the case study Guijie Qi (2018), the key to profitability is efficiency. Efficiency can reduce operational costs and increase profit margins. Moreover, the need for commute on shorter-distance has been fulfilled by the bike-sharing industry. When the expansion will be geared towards the demand on particular routes then it can be profitable. Customer education is the key to profitability. Due to vandalism, the operators face lots of issues this can be curbed by imposing strict measures such as fines on illegal parking and damaged bikes. The collaboration of the two major players is also a crucial aspect that can bring about the efficiency and growth of the entire bike-sharing industry. Another key to profitability is the successful targeting of the audience. Both Mobike and Ofo, target the same segments and on the same routes which are offered at similar and cheap rates. Therefore, differentiated marketing is the key to profitability. Price plays a very major role in the determination of profits. The operators haven't yet done price differentiation. This will allow taking advantage of the high prices at peak hours.

Thus, there is a need to have strong marketing strategies, coupled with socio-technological innovations and the need to have proper patents so that the barriers to entry could be low. 

3. How is Mobike using innovation, data and analytics, and alliances to develop a competitive advantage in the industry?

According to Porters’ model of competitive advantage, Mobike has been successful in the market because of the resource and capabilities it possesses. It has the resources that are superior to its competitors. Mobike manufactures its bikes in their production plants after extensive Research and Development. Mobike has been able to produce a bike that doesn't need maintenance, tires don't get flat easily. The tire changing system is quite a time saving and convenient. Mobike has completely designed the bikes on the shaft system rather than the traditional chains. The shaft bikes have low maintenance and running expenditures, they need a periodical oil change and are not affected by the weather conditions (MCN, 2018).