Question 3 (20 mark) Conduct a product level analysis for GO-JEK, support your answers with examples provided in the case.

GO-JEK GO-JEK started out as a modest application-based transportation service provider in Indonesia, but today it is one of the few unicorn tech startups in the country that has expanded its reach in various service sectors- from food delivery to logistics and grocery shopping. GO-JEK recorded massive business growth within the first few years in business, which caught the attention of several online and offline businesses. In response to GO-JEKs high-speed growth, some online transportation companies operating in Indonesia are trying to consolidate. Considering the competitive business environment, GO-JEK must develop a creative business strategy with an integrated online-offline approach. GO-JEK: The Beginning and Massive Growth Established in 2010 as a motorcycle ride-hailing phone service, Indonesias GO-JEK has evolved into an on-demand mobile platform and a cutting-edge app, providing a wide range of services, such as transportation, logistics, and food delivery, as well as many other ondemand services. On the back of strong growth and rapid progression, the company is further advancing the development of mobile payment (e-money) solutions for its app users. GO-JEK was founded by Indonesian businessman Nadiem Makarim- a Harvard Business School alumnus who gave up a lucrative multinational consultant job to establish the company. Originally, the company was set up as a fleet of motorcycle delivers to offer rides to passengers on their motorbikes, take their couriers, or deliver food. This idea didnt kick off immediately; the company only got the much-needed jumpstart after being launched as an app in 2015. The app became an instant hit among the Indonesian users who began to use the service for rides. It has expanded its reach to dozens of cities across Indonesia. Since then, there has been no looking back for GO-JEK, which has now expanded its services to offer everything from food delivery, logistics, GO-JEK army of motorists with their chic green jackets can be easily spotted on Indonesias streets, fetching riders and bringing Indonesians their food, packages, and groceries. Page 5 of 13 This massive growth in GO-JEKs app users, fleet of drivers, and services did not go unnoticed by investors, In October 2015, the company obtained an undisclosed amount of funding from Sequioa Capital and other investors. Over the next 1 year, it officially achieved unicorn status after raising USD1.2 billion through a funding round led by the Chinese Internet behemoth Tencent (Pratama, 2016). Google, Singapores Tamasek, and the Chinese online platform Meituan-Dianping also reportedly participated in a new funding round for GO-JEK in January 2018 (CNBC, 2018).

Backed by a strong injection of funds, GO-JEK is well positioned to strengthen its business and support its services by making strategic acquisitions. In February 2016, the company announced the acquisition of C42 and Codelgnition, two engineering startups from India. In December 2017, it acquired three local startups- Kartuku, Midtrans, and Mapan- to strengthen Go-Pay, its mobile payment services (Reuters, 2017). Such strategic acquisitions bolster its backend operations and organic growth. Through a significantly expanded userbase, GO-JEK has successfully branched into a variety of services other than the original ride-hailing transportation.

Today, Jakarta-based GO-JEK is the largest Indonesian unicorn. As of February 2018, the company is valued at about USD5 billion. The additional funds and backing of well-known investors, including Google, Singapores Temasek Holdings, and Chinese technology giant Tencent Holdings, will help GO-JEK better compete in Southeast Asias cut throat market, where incentives to drivers and passengers are used to build loyalty (Daga, 2018). Competition with Conventional and Digital Players The emergence of GO-JEK and other online ride-hailing apps has certainly led to a disruption in the land transportation industry, especially in Indonesia. As the company began to gain a massive business penetration, unfavourable reactions began to pour in, decrying the existence of online transportation apps. Somewhat surprisingly, a kneejerk reaction was also demonstrated by some in the ojek driver community, who failed to view GO-JEK as a Page 8 of 13 lucrative opportunity to boost their income and efficiency. For conventional taxi drivers, GOJEK understandably posed a mounting threat with the rise of Go-Car. To counter the rise of such online ride-hailing apps, and particularly GO-JEK, detractors staged large-scale protests not only in Jakarta but also in other big cities. In order to defuse the looming tension, the Indonesian government made several attempts to mediate and issue revised regulations to provide a win-win solution for both parties. One of the new regulations that can allow transportation companies to lower tariff is expected to stir healthier competition among conventional and online transportation companies. GO-JEK, on its part, has attempted to join hands with conventional taxi operators in Indonesia by launching a new service called Go-Blue Bird- named after the largest taxi operator in Indonesia, Blue Bird. Under the collaboration, users can book a Blue Bird taxi through the GO-JEK app and Blue Bird taxi drivers can also obtain orders from passengers looking for a ride. This partnership represents a long-term commitment by Blue Bird and GO-JEK to jointly innovate and provide the best services to their community, as well as improve the well-being of drivers (Marzuki, 2017). As a mutual benefit, Blue Bird taxi drivers have the opportunity to acquire new passengers, while GO-JEK can also offer an additional fleet of transport to its users. Such a win-win collaboration could defuse the tensions previously occurring on the part of taxi drivers. GO-JEKs close competitors would certainly be fellow app-based online transport businesses. Malaysias Grab and Uber are its main rivals who are stirring competition in Indonesias online ride-hailing transportation industry. Grab is a Malaysia-based technology company that offers ride-hailing and logistics services through its app in the home country and neighbouring Southeast Asian nations such as Singapore, Indonesia, Phillippines, Vietnam, Thailand, Myanmar, and Cambodia. As a regional player, Grab enjoys deeper pockets to fund its expansion in the region. Uber is a peer-to-peer ridesharing, food delivery, and transportation network company headquartered in San Francissco, California, with operations in 633 cities worldwide. In March 2018, Grab announced the acquisition of Ubers Southeast Asia operations. This game-changing deal represented the biggest-ever acquisition in this space in Southeast Asia. Under the terms of the acquisition, Ubers ridesharing and food-delivery businesses will be integrated into Grabs existing transportation and payment platform. This combined entity Page 9 of 13 aims to be the number one online-to-offline (O2O) mobile platform and one of the major companies handling food delivery in Southeast Asia (Grab, 2018). Integrating Online and Offline Campaign To counter the increasingly fierce competition, GO-JEK focused its attention on the very diverse range of services it offers to its customers and the ways to meet their everyday needs. All GO-JEK services (e.g., Go-Ride, Go-Car, Go-Box, Go-Send, Go-Mart, Go-Food, GoAuto, Go-Med, and Go-Busway) provide solutions to problems faced by people in all major Indonesian cities, be it the ease of finding an Ojek (the motorcycle taxi) to wade through the infamous traffic snarls or a cab at the doorstep, delivering items easily and securely or buying groceries sitting at home. Unfortunately, not many users are aware of all these features. In fact, customers need to be aware of a service, show interest (appeal) in the benefits it offers, know more information (ask) about the service or product, and then take an action (download the app, opt to use a service). If they are wowed by the experience, they would often voluntarily share their stories with those around them (advocate). This is the 5A model (aware-appeal-ask-act-advocate) that represents a new customer path in the digital age (Kotler, Kartajaya and Hooi, 2016). This is why, GO-JEK continues to intensively work on introducing new services or enhancing the existing ones with new features that appeal to the current and new customers. To target those who have not yet downloaded the GO-JEK app and build awareness, the company carries out massive publicity drives through various media- online and offline. It uses various attractive offers, especially discounted rates, to stir the interest of potential customers and customer education to make the existing users of the GO-JEK app try out the diverse range of services on offer. As a technology company, GO-JEK takes full advantage of the digital media to introduce its services and benefits. However, as its competitors- especially Grab- are also proactive in campaigning on the digital and social media, it is re-emphasizing the importance of the wordof-mouth strategy (WOM) in order to attract the attention of its target audience. The main keys are story and placement. GO-JEK uses two types of story-based contents in its creative campaigns to stimulate WOM response from the audience: authentic stories told by drivers and stories that contain the Page 10 of 13 elements of fun and emotion. In the For My Country campaign, for example, the company presents an inspiring and emotional story from seven GO-JEK drivers. The company also encourages customers to create and share their personal stories (user-generated content) through social media. Funny experiences and inspirational and touching anecdotes from customer interactions with GO-JEK drivers are widely shared on various social media platforms. Many of these stories become viral that keeps the interest of people in GO-JEK alive while also educating potential customers about the app and its services. In addition to stories, placement is also a key determinant of the success of campaigns in the digital and social media because each social media has different characters and audiences (Wulandari, 2016). Despite a strong online presence through various campaigns on digital media, GO-JEK continues to utilize traditional media. The company invests heavily in outdoor advertising through billboards and print media, mostly advertorials, to boost its offline campaign. Belowthe-line advertising is also conducted to engage target customers, especially in fairs, festivals, and music events. Along with its digital media campaigns, GO-JEK pays special attention to the importance of creativity in campaigning. For example, some billboards installed by the company do not apply the rule of thumb commonly used by other advertisers. Instead of using attractive pictures and flashy words, it actually uses texts like those in classified print ads. Such creative execution of traditional campaigns then creates word of mouth on social media, triggered by audiences documenting such unique billboards and sharing the messages. Such integration of online and offline campaigning helps the company acquire new customers and stand its ground against competitors, who are also aggressively expanding their reach in Indonesias lucrative tech-savvy user market.