Business Plan Dr.

Deepali

1. Elevator pitch

▪ What does the Company do?

▪ What new benefits do you provide?

▪ What pain points are addressed?

▪ How are you differentiated from competitors on a sustainable basis?

▪ Restrict the speech to 30-60 seconds

▪ State the Problem

▪ Present Your Solution

▪ Explain Why People Should Trust You

▪ Describe Your Value Proposition

▪ Offer a CTA (Call to Action)

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Airbnb Elevator Pitch

▪ Most tourists booking online care about price- and hotels are one of the
highest costs for when traveling.

▪ On the other hand, platforms like Couchsurfing have proven that over half a
million people are willing to lend their couches or spare bedrooms.

▪ We have created a platform that connects travelers with locals, letting them rent our
rooms, or even entire places. Travelers save money, and locals can monetize their
empty rooms- we just take a 10% commission.

▪ How does that sound?

▪ Again, assuming that this is being pitched in 2009

▪ A few pointers here:

 ▪ - Notice how I started mentioning tourists, not just any traveler. Airbnb doesn't
necessarily target business.
- It's easy to agree that people looking to travel care about price, so there's no
market research or validation needed to come up with that statement,
- On the other hand, it might be arguable that people will be willing to rent out
their homes to strangers. I used the Couchsurfing validation to avoid that
statement being questioned.
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K J Somaiya Institute of Management, India
2. Vision & mission

▪ Define vision & mission

statement ▪ Should be

powerful and realistic

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Marriott International ▪ started as a root beer stand

▪ Marriott’s Vision Statement

▪ “To be the World’s Favorite Travel Company.”

▪ The mission statement

▪ “To enhance the lives of our customers by creating and enabling unsurpassed
vacation and leisure experiences.”

▪ Marriott’s Core Values

▪ Putting people first

▪ Pursuing excellence

▪ Embracing change
 ▪ Acting with Integrity

▪ Serving the World

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3. Market & industry ▪ Size of target segments

environment
▪ Growth rates

▪ Key market trends

▪ Industry
▪ Challenges and issues in market
▪ Competition
▪ Critical Success Factors of company
▪ Market definitions

▪ Key segments
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Market & industry environment- OYO

▪ Company: Oyo Rooms
CEO: Ritesh Agarwal
Year founded: 2013
Headquarter: Gurgaon, Haryana, India.
Number of Employees (2019): 9,195
Type: Private
Valuation (2018): $ 5 Billion
Annual Revenue (Dec 2018): $1.8 Billion

▪ Products & Services: Online room-booking services (Oyo

Rooms) | Oyo Flagship | Oyo Townhouse | Oyo Home | Oyo
Capital O | Oyo Collection O | Oyo B Direct | Oyo SliverKey
Competitors: Treebo Hotels | FabHotels | YourOwnRoom |
VistaRooms | Keys Hotels | NestAway | NoBroker |
SquarePlums | Airbnb
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Business Model Canvas of Oyo ▪ Oyo

started as a hotel aggregator and used to lease some rooms and sell them
under its brand name. However, it changed its business model
from the aggregator to the franchise model.

▪ Franchise model:

▪ Oyo does not own hotel properties that are listed on their
website. Oyo renovates the hotels according to its
checklist of standard services, and make the hotel
property a part of its “standardized budget hotel chain”
with Oyo’s branding.

▪ What makes Oyo’s business model unique and different from other
hospitality companies is its standardized hospitality
services. It focuses more on user experience rather than
only hotel’s room availability and prices.
 ▪ To become Oyo’s partners, every hotel has to meet a set of
guidelines for services, pricing, staff quality, features of
rooms, security, etc.

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Customer Segments of Oyo ▪

Adventure Travelers – All those travelers who want to explore different
destination independently (in the low budget) or in a small group. Also
known as backpack travelers.

▪ Leisure travelers – Travelers who want to take a vacation

from everyday busy life.

▪ Family travelers – Those who travel in large groups and look for a
spacious and comfortable stay, where they can also arrange parties,
family events, weddings etc.
 ▪ Business travelers – Oyo also has commercial places on its platform
where customers can book office spaces and conference
rooms for their business purposes.

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4. Value proposition

▪ Ability to build sustainable, profitable & scalable business

▪ Why the customer is passionate about product/ service?

 ▪ What benefits the target customer gets?

▪ Profile of typical customer

▪ Describe key product/ service

▪ Three year Roadmap

▪ Differentiation?

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Value proposition - OYO

▪ The value propositions of Oyo are its standardization of
services to enrich the guest experience.

▪ Customer experience: Unlike Airbnb that only connects

travelers with local hosts, Oyo takes full responsibility of
services of the hotels listed on its platform.

▪ Other value propositions are:

▪ Well-designed app

▪ simple and easy-to-use app for booking

▪ speed and reliability in finding hotels, bars, theatres

▪ personalized room features

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Value proposition - OYO

▪ To refine its value propositions, it has launched separate banners of
unique services.

▪ Oyo Townhouse: Through Oyo Townhouse, millennial travelers can get smart services for their smart
needs. ‘Smart rooms’ with specially-designed beds, formulated toiletries, power sockets, and TVs
with Netflix installed are offered with 24/7 kitchen services. ‘Smart menus’ can be ordered by a
mobile application.

▪ Oyo Studio Stays: Through Studio Stays, people can book rooms for their internships, jobs, or
corporate stays. They can rent rooms for either single occupancy or twin sharing.

▪ Oyo B Direct: It is primarily for business stays, which provide simplified reimbursement by

GST ready invoices. ▪ Oyo Homes are fully designed private homes for people who are on their

holidays.

▪ Oyo Flagship: Oyo leases whole buildings/apartments for its Oyo Flagship brand. These buildings
give a homely atmosphere as well as the comfort of the hotel. Friendly staff, vibrant decorations,
theme-based rooms, and building walls with lovely quotations are some of its unique features.
▪ Oyo Silver Key: it’s another exclusive service that provides executives and corporate clients
executive apartments with private, spacious, and multi-utility services.

▪ Weddingz.in: Oyo has also partnered with several banquet halls’ vendors to allow people to
book their wedding venues through its easy booking services and within best prices.

▪ Oyo Wizard: Oyo has introduced a subscription model where wizard members can avail exclusive
discounts, offers, deals, and cash back advantages. Oyo offers popular packages and hot selling
deals for travelers.

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5. Competitive scenario & entry barriers

▪ Competition scenario tabulated

▪ Name

▪ Business line
 ▪ Geography

▪ Customer list

▪ Strengths & weakness of competition

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6. Business model & sales/ marketing strategy

▪ Revenue & cost drivers of business

▪ Overall product/ brand positioning

▪ Sales & distribution strategy

▪ Key business development alliances & partnerships

▪ Pricing approach

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K J Somaiya Institute of Management, India
Market traction

▪ Customer

▪ Historical traction with key

accounts ▪ Key accounts

▪ Unique users

▪ Distribution partners

▪ Average revenue per account

▪ Forecasts

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 7. Management team

▪ Specific facts about team’s past

▪Why it will be able to meet the challenges

posed by a very dynamic market
environment?
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8. Customer Relationships of Oyo ▪ Self-Serve

Platform – Oyo has self-serve website and app, which is a primary tool for
customers to access Oyo services.

▪ Hotel accommodation Staff – the hotel staff interacts with customers

at the time of check-in and provides hotel services.

▪ Customer Service Support – It maintains 24/7 active customer support

to respond to customer queries. Moreover, to ensure customer
loyalty and increase their trust, Oyo tracks their Net Promoter Score
metric thoroughly. And that’s its why customer repeat rate of Oyo is
highest in the industry.

▪ Social Media – It does brilliant digital marketing and social media

networking to reach customers.
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9. Channels of Oyo

▪ Website and mobile application

▪ Blogs

▪ Social media networks like Twitter, Facebook, and Instagram

▪ Neighborhood hotels

▪ Student organizations
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10. Key Resources of Oyo ▪ Hi-tech app

architecture

▪ 458,000 fully leased and franchised hotel properties.

▪ Customer Database – Oyo has a large database of loyal repeat customers

▪ Employees with technical knowledge like programming,

development, and maintenance, and other staff for
business management.

▪ Venture Funding – Oyo has secured funding from many

venture capital firms such as Sequoia Capital, SoftBank’s
Vision Fund, etc.
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11. Key Activities of Oyo ▪ Platform –

Creating, developing and maintaining Oyo’s website and app ▪ Partnership–

Partnering with hotels, vendors, event planners, etc

▪ Customer experience – Ensuring the hotel services and maintaining quality

▪ Sales & Marketing – Performing advertising and marketing activities. Active

social media activities including updating pages of Facebook, Instagram.

▪ Recruitment – Hiring and retaining talented employees

▪ Business growth – Developing a friendly and promising community to

invite friends and attract people to sign up

▪ Communication – Sustain effective communication with hotel partners,

vendors, service providers, clients, and customers
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12. Key Partners of Oyo ▪ Hotels, clubs,

corporations, banquet halls, etc.

▪ Event organizations

▪ Booking confirmation, location, navigation details, and

cancellation can be managed through communication
platform such as WhatsApp.

▪ Electronic payment services such as Paytm

▪ Taxi service providers such as OLA

▪ Dinner Reservation Services such as Dineout

▪ GPS services with Google maps

 ▪ In-room entertainment services with Netflix

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organization ▪ Board of directors

▪ Board of advisors

▪ Human resource

structure ▪ Number of

employees ▪ Locations
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financials

▪ INR only

▪ Audited annual high level P&L statement ▪

Projections (3 years)

▪ Assumptions underlying financial

projections ▪ Likely acquirers and why

▪ Recent exit valuations in market

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capital

▪ INR only

▪ Money to be raised

▪ High level breakdown of

deployment ▪ Current capital

shareholding structure ▪ History of

earlier funding
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13. Cost Structure of Oyo

▪ Platform (website and app) development and maintenance costs

▪ Renovation and branding cost

▪ IT infrastructure cost

▪ Marketing and advertising costs

▪ Employees salary costs

▪ Hotel Partners’ commissions

▪ Legal cost
 ▪ Other operational and administrative cost

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14. Revenue Stream of Oyo

▪ Commissions

▪ Oyo charges around 22% of commissions every month from hotels owners. Commissions may vary as per the
services and features offered.

▪ Room Reservation Fee

▪ Customers pay a room reservation fee according to their services chosen. The room fee is charged with a few
percentage margins of the hotels’ prices. For example, if a room is priced at Rs. 1,000 per night, Oyo makes only 10-
20% commission from it, and that is their actual revenue.

▪ Membership fees

▪ Users who subscribe to Oyo Wizard memberships are charged with premium fees ranging from Rs
 500 to Rs 3000. ▪ Advertising

▪ Oyo also charges different companies to place their ads on Oyo’s app and website. It also generates sizable

revenue for Oyo. ▪ Sponsors and Partnerships

▪ Oyo also charges some amount from its sponsors and key partners by promoting their brand name through

advertising on their ap p. ▪ Consulting Services

▪ Oyo charges for its business consulting and data analysis services, it provides to its clients, including hotel, clubs,
organizations, etc. It provides these services as it owns an extensive database of locations, hotels, event organizations,
users, and their preferences.

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15. Risks and gaps ▪ Specific risks that venture and market face

▪ Reasons for under achieving of targets ▪

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Steps to be taken to mitigate risks ▪ Gaps in

company

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Thank You

simsr.somaiya.edu
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