Grab Will Not Engage GO-JEK in Singapore Price War

Arya Diputra . December 10, 2018
Grab's Singapore Executive Officer, Lim Kell Jay has a plan to make a new affordable service after taking feedbacks from customers. He also made another surprising decision, which is, to not engage GO-JEK in a price war. This only happens in Singapore as in other countries, both companies waging price war for ride-sharing market dominance. The decision he made was a rational one. Since GO-JEK now continue to advance with their promotion, he believes that Grab will sustain itself in the future. This because if GO-JEK suddenly withdraws or no longer able to sustain the promotion, customers will move itself to Grab naturally. Singapore already gives regulation for ride-sharing so both companies need to play along and adjust themselves to the regulation.

Grab Will Continue to Advance

The reason this strategy was made is that for long-run sustainability. Coca-Cola uses this strategy to save itself from its brink of bankruptcy under the leadership of Robert W. Woodruff. They reduce the expense for commercial and promotional and focus on selling what was available right now. He believes that Grab will only give a promotion when necessary is a good strategy in a long run. Following the regulations made at Singapore related to ride-sharing, Grab try to convince a taxi to work side-by-side. This because they need to prevent anti-competitive methods after learning from a mistake at past. Grab company will continue to advance even GO-JEK now is waging war on them. Like how trade war goes as the global can witness right now, Grab will not make their move at Singapore. One of consideration is because of Singapore's main vehicle is a car while GO-JEK's primary vehicle is a motorcycle. Grab also want to try a large-scale for ride-sharing, mainly aiming for a vehicle with the capacity of 7 to 13 passengers

Will Focuses on Long-Term Business

Despite the price can be more expensive than using a commuter line provided by the government. People are willing to use it as long as they can reach the destination faster. Due to regulation that limits the existence of vehicles for pollution control, Grab took this as an opportunity to expand their network. While GO-JEK continues their promotion, Grab focuses on subscription for those who use Grab application. They will receive some privileges such as a discount for transportation and fees. However, they want to make this for permanent since promotion that happens in a set amount of time or amount of use, only effective in short-run. Permanent privilege is the same as when you become a lifetime subscriber on a certain company. While Singapore becomes a new battleground for ride-sharing after the arrival of GO-JEK, other countries in Asia also prepares for the competition between these two companies. Grab itself decide not to engage GO-JEK in price wars on Singapore due to preparing for a business that can determine their survival in the future.
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