Management

Accounting
Assignment
Submitted toC.A.
Harshawardhan Patil

Group No. 43

Aishwarya 43116
Ananthakrishnan
Karan Khatri 43202
Nishant Jain
Prakhar Kapoor 43245
Shri Krishna
2
Question

Prepare a report in soft copy (PPT presentation not allowed) on the Lifecycle of these two
companies explaining in your words the journey of these two companies from start till today, and
also discussing the performance of these companies’ vis a vis its competitors. Your explanation
should include in detail your analysis of the reasons of their Successes or Failures, as per your
thinking and in your words. Please note that the reasons should be in Your Own Words.

Companies chosen

1. OYO
2. BYJU’s – The Learning App
3. General Electric
 OYO

Introduction
Oyo Rooms, better known as OYO is an Indian hotel chain. It is currently the fastest growing
hospitality chain of leased and franchised hotels, homes and living spaces. It was founded by
Ritesh Agarwal, a college dropout, in 2013 as a chain of budget hotels in India but for last six
years it expanded itself globally and is now present in Malaysia, China, UAE, Nepal, Mexico,
Philippines, Brazil, UK, Japan, Saudi Arabia, Sri Lanka, Indonesia, Vietnam, US and many
more. The company has got investment from SoftBank Group, Green oaks Capital, Sequoia
India, Lightspeed India, Hero Enterprise, Airbnb and China Lodging Group.

In 2012, Ritesh Agarwal launched Oravel Stays. Later the name was changed to OYO in 2013.
OYO received its first funding of $ 100,000 from Peter Thiel. OYO has around 1700 employees
globally and has generated a million job opportunities.

OYO has raised a total $ 3.2bn in funding from 23 investors as of December 2019. SoftBank,
Airbnb, Lightspeed venture partners are among the top investors. In September 2018, OYO
raised
$1 bn via Star Virtue Investment Ltd and in October 2019 it got funding of $1.5 bn from Sequoia
India, Lightspeed venture Partners and SoftBank Group.

Statistics suggest that in 2019, OYO reported 3.5x growth in revenue in FY 2017–18 at Rs 416cr
for India operations with a marginal loss of 360 cr. OYO has total 7 acquisitions in which the
most recent one is Danamica for $10M in 2019.

SWOT Analysis
Strengths

 Excellent use of advertising for high brand recall

 User friendly interface
 Budget hotels
 Constant innovation

Weaknesses

 Restricted to budget hotels and lodges

 Fast expansion may lead to compromise on quality
 Questions are raised on trust and credibility
 Public image as hotels at cheap rates, not so reliable
 Not very popular among old age people / families
 Not more than 3 people can stay in a room which makes difficult for families to stay
Opportunities

 Budget travelers in India is on a rise

 Technology based hotel booking is done by everyone
 Social media can be explored
Threats

 Local competitors
 Back pack travel and tourism in India is still unpredictable
 Fewer repeat customers

Segmentation, Targeting and Positioning

Segmentation

 Luxury travelers (destination holidays, 5-star accommodation and no compromise on

quality)
 Backpackers (frequent travelers, can compromise on quality)
 Business travelers (technology savvy and cannot compromise on quality)
Targeting

 It targets the business executives and backpackers

Positioning

 OYO rooms have chosen a standardized budget hotel aggregator spread across the nation
 Value for money
 No compromise on quality

Product Lifecycle
It is the life cycle through which a product goes through. It starts with product introduction, then
its growth, maturity and finally product decline.

1. Currently, OYO Rooms is still in the introduction stage. This because it is still spreading
awareness through advertising and promotions. Thus, it is still earning increasing returns to scale.

2. However, in the long run, due to high competition, there is a very high chance reaching the
maturity stage.

Impact of Customers (Successes of OYO)

There is a lot of power in the hands in the consumers. This is the reason why OYO has been
successfully retained its customer strength. While travelling consumers prefer-:
Semi-free independent travel – most will pre-book / package parts of their holiday before arriving at
their destination. This includes accommodations like OYO Rooms.

1. Group travel/tours are popular options for less experienced travelers – group travel is considered
safer for a new destination so far from home.

2. Convenience, value and safety are the main reasons these consumers pre-book parts. This a positive
aspect with respect to OYO ROOM’s business model.

OYO aims to reach out to masses and plans to foray into 200 cities by next year.

The brand position’s itself on the promise of accessibility, affordability and predictability. Its
commercials highlight the ease of booking and standard amenities that all OYO Rooms provide.

The brand also wants to establish a relationship or at least register in the minds of all age groups
(especially elders whose hotel bookings are mostly done by their children) before it becomes a mass
brand.

OYO Products and Services

 OYO Hotels (formerly OYO rooms): Budget accommodations but that promise to offer much
better Wi-Fi and aesthetically pleasing design.
 OYO Townhouse is a neighborhood hotel targeting millennial travelers
 OYO Home are private homes fully managed by OYO
 OYO Vacation Homes is the world’s 3rd largest vacation brand having brands like Belvilla,
Danland and Traum-Ferienwohnungen
 Silver Key was launched in April 2018 for majorly business travel purposes
 Capital O are premium hotels and premium locations
 Palette offers the perfectly curated staycation for those in search of an intuitive experience at
competitive prices, an upper-end leisure resorts category
 Collection O is the newest category for discerning business travellers
 OYO LIFE is fully managed homes on long-term rentals, at affordable prices

Product Strategy
 Product: The main product here is budget rooms with basic facilities like Wi-Fi, cleanliness,
television, and air conditioners.
 Price: Since these are budget conscious hotels, price is very low. The main goal is to offer at an
unmatched price which matches with the budget of user.
 Promotion: OYO has majorly focused on a digital presence like Facebook, twitter, and its app.
Recently it has launched its first ever TV ad commercial.
 Place: Large part resides in city outskirts but also present in metros.
 Ritesh Aggarwal – CEO, OYO

Challenges Faced (Failures of OYO)

 Biggest challenge was to get the customers reach the exact hotel. Also, if the hotels did
not agree to this collaboration then again, the model would have failed. Even today,
despite of having all sorts of navigation features, many customers fail to reach the
destination and no one is held accountable for this situation and ultimately the customer
faces the problem.
 A lot of small hotels use OYO rooms branding without the permission of OYO has been
there. This still exists in many small towns and OYO is facing such issues.
 In 2018, OYO decided to provide customer data in real time to Government, which was a
threat to privacy of the customers. This did not work out.
  Another big challenge which OYO faced to get a good and reliable senior and mid-level
management for its operations. In 2018, it had sent emails to its competitors’ employees
for the same which did not work out.
 In 2020, OYO made a hastened decision to enter Japan. However, the failures of we-work
and Uber made it difficult for OYO to get a product launch.

Competition
Following are some of the competitors of OYO:

I. Yatra: Yatra online offers a booking service that enables individuals to find and book
flights, hotels and holiday packages. It started in 2006.
II. Fabhotels: It is a hotel aggregate site, started in 2015.
III. Treebo: A new age hotel brand offering comfortable stays at budget prices. Say no to
mediocre rooms & indifferent service. Unlock affordable luxury. It started in 2015.
IV. MakeMyTrip: MakeMyTrip is an online travel company which provides a range of
travel products and services. It started in 2000.
V. ClearTrip: Cleartrip is an online travel platform where travellers can search for and book
flights to any destination. It started in 2005.
Why OYO stands out of its competition:

 While most of its competitors are older than OYO, it has managed to get a valuation of
$10b. The next best is MakeMyTrip with $1.5b valuation.
 OYO does not use celebrities for its endorsement. Hence, saves a lot of money in that. Its
competitors like MakeMyTrip, Treebo and Yatra have used celebrity endorsements and
television advertisements. Only recently in 2019, OYO started its very first television
advertisement.
 OYO has more than 16,000 employees directly working and over a million indirectly
working under it. No other competitor is able to provide this amount of employment.
Even Yatra and MakeMyTrip have a little over 2500 employees despite the fact that they
started more than a decade ago to OYO.
 The net income of OYO is Rs 3.3b. Whereas its competitors have not yet crossed Rs
300m mark.
Where can OYO improve as per its competition:

 OYO’s biggest competitor is MakeMyTrip in India. It has nearly 500 thousand hotels
under it. Whereas OYO has only 23 thousand. OYO is expanding and this is the best area
to explore for this company.
 MakeMyTrip includes premium hotels as well like Ginger Hotels, trivago, etc but OYO
majorly concentrates on the budget segment. OYO can explore this area to increase its
bar to next level.
x-x-x-x-x-x-x-x
 BYJU’s
THE STORY OF BYJU'S: From a small village in Kerala to creating a global EdTech start-up.

BYJU’s – The Learning App is the popular name for the company Think and Learn Pvt Ltd,
is a Bangalore based Ed-Tech company. It offers comprehensive learning modules for K3, K10,
K12, NEET, CAT and other major examinations in the country. It was founded by Byju
Raveendran in 2011. From 2011, Byju’s has noticed an upward growth trend and the current
valuation of Byju’s is $12 billion dollars as of 2020. During these past 8 years, Byju’s has
emerged as a global EdTech startup and has managed to diversify its portfolio by investing in
various other startups (will be discussed further).

“Entrepreneur by chance and a teacher by choice” are the words of the great entrepreneur
Byju Raveendran. After scoring a 100 percentile twice in CAT, Byju Raveendran decided to not
pursue an MBA degree and instead start coaching classes for preparing for CAT. The legend goes
he was just helping his friends who were preparing for the CAT examination; and he gave the exam
with zero preparation yet managed to score a 100 percentile. To ensure it was not a fluke, he gave
the examination again next year; and to his surprise he scored a 100 percentile.

Thereby, Byjus realized he can use his potential to train the millions of students who give these
examinations. In 2007, he was teaching around 1000 students in the auditorium. Classrooms
were large but personal interaction was lacking. Visualization and conceptualization became
their strengths. And Word of mouth was a major weapon for expansion for Byju’s.

In 2011, Byju Raveendran started this company along with his students. They initially created a
product for students of 4th to 12th classes. They wanted to train students to study uniformly & use
the tool of visualization to ensure the content is easily remembered by the youngsters. He
wanted to build a learning app for school students to get their fundamentals clear in those early
crucial years when they start learning so that it will have long term impact.
SWOT Analysis
Strengths

 Byju’s acquired TutorVisa, WhiteHat, Osmo to now offer services from Kindergarten to
Post Graduate (in a variety of fields)
 Byju’s was the first into this segment which gave it first movers advantage.
 Strong brand awareness among people in India with series of advertisements
 Byju’s provides huge margins and has maintained good relations with suppliers.
 Byju’s is a leader in the E-learning field offering high brand recognition.
 Byju’s used the combination of Visualization & the Digital World to offer a world-class
product.

Weaknesses
 The workforce of Byju’s is not diverse creating problems for future expansions.
 It lacks critical talent in the field of digital transformations.
 Low return on investment
 Byju’s is not managing the inventory properly.
 Byju’s employment culture is very target oriented and slightly toxic.

Opportunities

 Byju’s can start a new business model where customers can start paying as they use
 E-commerce and social media-oriented business models
 Byju’s could launch as an IPO in the upcoming years
 Byju’s can launch Professional Courses
 Byjus can offer the medium in different languages to adopt to Rural India

Threats

 Increasing bargaining powers of the customer is the biggest issue faced to sell the product
 Culture of sticky prices exist for Byju’s
 Government regulations have posed problems for Byju’s in the past and can pose in the
future
 WhiteHat acquisition created a Bad PR for the Firm
 Only a single source Revenue Model
 Competition Imitation of Business Model still possible

BYJU’s Valuation, Funding and Acquisition

With the onset of the pandemic, Byju’s has truly emerged as a huge problem solver for those
seeking education at relatively lower costs & accessibility from every nook and corner of India.
Byju’s current valuation stands at about $12 billion due to a fresh round of funding by BlackRock
and T. Rowe of $200 million. Byjus has raised $500 million in September 2020 from a group of
investors such as Silver Partners, General Atlantic, Owl Ventures, at a valuation of $10.8 billion.
Byju’s took a very strategic step in 2020 by diversifying the product range and acquiring a bunch
of firms. Some of its well-known acquisitions are:

 TutorVista, Edurite from Pearson

In July 2017, BYJU’S acquired TutorVista, Edurite from Pearson. It is one of the largest
online tutoring brands catering to school and college students, majorly in The United States
of America. 

 Osmo
In January 2019, BYJU’S acquired US-based Osmo for $120 million. Osmo is famous for
its blended learning educational games crafted for children aged 3-8 years. They have been
pivotal in creating ‘play-based learning’ for young children. This acquisition has been at the
core of BYJU’S offering of Disney- BYJU’S Early Learn. 

 WhiteHat Jr.
In July 2020, BYJU’S acquired WhiteHat Jr. for $300 million which teaches online coding
to students through live lessons and interactive classes.

 Scholr
In February 2021, Byju’s acquired Mumbai-based doubt clearing platform, Scholr.

 Aakash Educational Services

Byju’s has signed a deal with to acquire Aakash Educational Services which offers NEET
IIT-JEE training.

Competition
Following are some of the competitors:

I. Vedantu: It’s a company providing personalized learning.

II. Toppr: Toppr is a platform for students to prepare for entrance exams.
III. Meritnation: Meritnation is an online education platform for K-12 students.
IV. Simplilearn: It provides online education and professional certification courses.
V. Khan Academy: Khan Academy is an educational non-profit organization focused on
providing free education-related services.
VI. Wonder school: Wonder school is a provider of a network of in-home early childhood
programs.
VII. Age of learning: Age of Learning is an educational technology and digital learning
company that created and continues to develop ABCmouse.com.
VIII. Smart School: Smart School offers education from Grade 1 to Grade 12 using
interactive digital platforms and it is approved by CBSE.
Byju Raveendran – CEO, BYJU’s
Why Byju’s stands out of its competition: (Successes)

 As compared to its competitors, Byju’s has a greater number of employees.

 Its valuation is much more than its competitors.
 Total raised funding of Byju’s is greater as compared to others.
 Only Byju’s has opened its doors for collaboration with US based company Osmo.
 Byju’s opened its K3 segment recently which is not done by its competitors.

Where can Byju’s improve as per its competition: (Failures)

 Khan Academy provides online free coaching and Byju’s can provide the same.
 Byju’s has not opened its platform for all competitive exams like others.
 Byju’s has not opened its platform for professional certification courses like Simplilearn.

Some of Byju’s Failures:

1. Byju’s as a company is really good but yet it failed for its customers
Byju’s is a successful company due to its model. But there were instances where customers are
facing problems from the product. Many customers have complained that the product their kids
are using after purchasing the product is no longer helping them. Since they had already
purchased the item and there was no return policy after 15 days of purchase, they had to
necessarily use the product even if they did not want the product.

2. High attrition rate of employees

Byju’s as a place to work is shown as culturally proactive; however, many ex-employees have
reported a bad work culture over there. Salary offered is meeting industry standard and incentive
system is adequately structured, but the excessive target-oriented atmosphere and the insufficient
long working hours were taking a toll on the mental health of the employees.

3. Difficult to maintain family life

Working at Byju’s as a sales rep is difficult as your work life balance would be disrupted. More
than 70% of the employees are working away from their hometown and almost 98% of them are
unmarried and in their late twenties. Mid-level management positions are not open to outsiders as
they hire from inside only. So, you can only start from the basic position of Business
Development. Even with a role of Business Development, the organizations sets extremely high
and unrealistic sales target that employees need to put in extra effort for the same