a) Explain the importance of any three (3) key attributes of Strategic Management to

Sunlight Taxi Group (STG). (10 marks)

The first key attribute of strategic management is the company must include
multiple stakeholders in decision making. Stakeholders are defined as shareholders,
employees, customers, suppliers and the community at large. Any decision taken by the
company will have an impact on the stakeholders in the future. Sarah, the Chief Executive
Officer of Sunlight Taxi Group (STG), proposed to the Board of Directors of the company to
re-examine their ways of doing business and to venture into digital technology. The
company should focus on the needs of multiple stakeholders before coming to a decision.
By taking the consideration from multiple stakeholders, the implementation of the decision
will become successful.
Besides, strategic management requires the company to incorporate both
short-term and long-term perspectives. Managers must maintain both a vision for the
future of the organization and a focus on its present operating needs. Referring to the
case, Sunlight Taxi Group (STG) might face challenges to attract passengers because of
the current conventional operation, even though the government has legalized the
ride-sharing services companies. Hence, the company should abolish the current
conventional operation and instead, venture into digital technology so that they can align
themselves with the development of the industry and also, gain competitive advantage as
they are up-to-date with the current technology. Therefore, Sunlight Taxi Group (STG)
needs to consider decision making that gives impact not only in the short term period but
also in the long term as to keep the company sustaining the industry.
Last but not least, the key attribute of Strategic Management is to recognize the
trade-offs between effectiveness and efficiency. Effectiveness is tailoring actions to the
needs of an organisation rather than wasting effort, or doing the right thing while efficiency
is performing actions at a low cost relative to a benchmark, or doing things right. Based on
the case, Sunlight Taxi Group (STG) needs to make decisions that give the best results
and at the same time can give cost savings to the organizations. The Board of Directors
understand the position the company is in and are willing to take up Sarah’s
recommendation to adopt a similar mobile application like OberCar despite some concerns
of possible retaliation from rival companies. It is important to make this decision in order to
drive the organization towards the overall organizational goals and objectives.
b) The general environment is composed of factors that can have dramatic effects on
a firm's strategy and it varies across industries.

i) Discuss how together the demographic and technological segments have

influenced OberCar’s business. (5 marks)

Aging population
The impact of a demographic trend, like all segments of the general
environment, varies across industries. The Millennial Generation who are in the
age of 18 to 35 prefer the ride-sharing services due to its accessibility via mobile
applications instead of using the regular taxi. This is because they can access
the mobile application using their smartphones as they are familiar with
communications, media and digital technologies.

Technology development
Developments in technology lead to new products and services and
improve how they are produced and delivered to the end user. Referring to the
case, OberCar is leveraging mobile technology by enhancing the functionality of
its mobile application to provide convenience and further improves the
experience for its users.The accessibility of the company’s product is a huge
advantage for young people since it brings convenience in their daily life.

ii) Discuss the impact on STG if the government legalises ride-sharing

services. (5 marks)

If the government legalises ride-sharing services, it will bring negative impact to

Sunlight Taxi Group (STG) in terms of their competitive advantages and
sustainability.
Competitive advantages
The existence of ride-sharing services is considered as a threat to
Sunlight Taxi Group (STG) as they need to compete with another competitor.
Sunlight Taxi Group (STG) experienced decline in taxi bookings as there is
advancement in technology which indicates the low competitive advantage of the
company. This can be seen when OberCar’s services are more convenient to the
customer.
Sustainability in industry
Sunlight Taxi Group (STG) is difficult to sustain in the industry due to the
advancement of technology. This is because of the existence of substitute
transportation services that provide a similar but better concept which is
ride-sharing service. The users prefer to use the more convenient service
provided by OberCar instead of regular taxis. It has reduced the customer’s
demand and thus affected revenue of Sunlight Taxi Group (STG). Customers
have the right to choose which services that will give them more satisfaction.
c) Evaluate using the four criteria of sustainable competitive advantage whether
OberCar’s mobile technology will be able to sustain forever in the taxi industry.
(10 marks)

Valuable
Organizational resources can be a source of competitive advantage only when
they are valuable because they enable a company to formulate and implement
strategies that improve its efficiency and effectiveness. OberCar exploits its opportunities
and neutralizes threats by expanding its core competencies to include quick and reliable
ride booking, plus transaction convenience and simplicity. The mobile technology
application appeals to most people nowadays in the present Information
Technology-savvy society and has become the choice for passengers. Thus, OberCar
can improve over time by using mobile technology in terms of its availability and quality
of services without additional cost to the driver who owns a car.

Rare
Rare is something which is uncommon, rare relative to other competitors or
difficult to exploit. OberCar’s mobile technology is currently top notch in its industry,
however, the rarity is only temporary. This is because other competitors who aim for
ride-sharing services will emerge with similar methods of using mobile applications which
then will allow customers to have more choices to choose from. Then, OberCar’s mobile
technology will be considered as common since the competitors are able to develop a
more convenient or better version of mobile application than what OberCar currently has.

Difficult to imitate
Difficult to imitate or inimitability is a key to value creation because it constrains
competition. If a resource is inimitable, then any profits generated are more likely to be
sustainable. OberCar mobile technology is imititable by the other competitors. Mobile
technology is easy to be copied because it does not have any features of physical
uniqueness, path dependency, causal ambiguity or social complexity. Competitors may
imitate OberCar’s concept which provides ride-sharing services by submitting a trip
request using a mobile application. In the future, Obercar’s mobile application might not
be relevant anymore when the competitors are established and get more well-known.

Difficult to substitute
 Substitutability may take at least two forms. First, though it may be impossible for
a firm to imitate exactly another firm’s resources, it may be able to substitute a similar
resource that enables it to develop and implement the same strategy. Second, very
different firm resources can become strategic substitutes. Currently, the mobile
technology developed by OberCar is difficult to substitute since there is no other
strategic alternative in the industry. Nevertheless, in the future, OberCar may come up
with a better version and up-to-date mobile technology which is easier to use, more
convenient and attractive looking for customers. Furthermore, OberCar can develop a
better mobile application that requires no internet access and is more suitable for people
from various ranges of age to use the apps.
d) The competitive environment consists of many factors that are particularly
relevant to a firm’s strategy.

i) Discuss the impact of the existence of OberCar in the country by analyzing

the intensity of rivalry in the taxi industry. (5 marks)

Rivalry tactics include price competition, advertising battles, new product

introductions, increased customer service or warranties. The existence of
ride-sharing services will increase the intensity of rivalry in the industry. The
existence of OberCar reflects the numerous or equally balanced competitors since
Sunlight Taxi Group (STG) is facing difficulty to attract passengers with the current
conventional operation. Competition among competitors is likely to be more
intense since the OberCar can make more convenience tools. Referring to the
case, the impact of OberCar on Sunlight Taxi Group (STG)’s performance is that
almost 70% of the taxi’s loyal passengers have stopped their booking resulting in
financial strain on the company.

ii) Discuss the impact on the bargaining power of passengers if STG made its
entrance with mobile application similar to OberCar. (5 marks)

If Sunlight Taxi Group (STG) makes its entrance with a mobile application
similar to OberCar, the passengers of the Sunlight Taxi Group (STG) will have
strong bargaining power. This is because the passengers could have the power to
threaten the industry by forcing down prices, bargaining for higher quality or more
services, and playing competitors against each other. As Sunlight Taxi Group
(STG) made an entrance with similar mobile applications, the customers are able
to make comparisons between the company’s mobile application and their
competitors’ mobile applications in terms of prices, the quality of services, the
accessibility of drivers in certain areas and the convenience of using the mobile
applications. Even though there is not much difference between Sunlight Taxi
Group (STG) and OberCar to implement mobile applications, it is the passengers’
decision to choose which is more convenient and suitable for them. This shows
that the passengers have bargaining power as they can demand lower price and
better service quality from the companies so that the companies’ mobile
applications are chosen by the passengers instead of competitors’ mobile
applications.