International Business – Global Online
This graded assessment accounts for 90% of your final grade and is based on the following
Lyft case study. Read carefully the case study, questions and marking criteria (that can be found
on Moodle). Answer all questions.
Lyft Case Study – Global Strategy
In recent years, several tech start-ups have grown in size and scale to become dominate players
in the modern global economy. Amongst these are Lyft Inc and Uber Inc, both American tech
start-ups offering ridesharing services. Lyft was launched in 2012 under the name Zimride,
changing the name to Lyft in May 2013, and it is viewed as a smaller rival to Uber.
Lyft was initially only a ridesharing/ride hailing firm, but has since expanded into offering
vehicles for hire, a bicycle sharing system, motorised scooters, and more recently food delivery.
In 2017, Lyft entered the food delivery service, initially partnering with Taco Bell for a short
period. In 2020, the firm entered a partnership with another tech start up, GrubHub to develop
a takeout delivery service. This strategic move was chiefly undertaken in response to the outbreak of COVID-19 and reduced ridership.
The scooter services offered by Lyft are motorised scooters that can reach speeds of 15MPH;
customers unlock them for a small charge, and then pay additional fees per minute of usage. In
2019, Lyft partnered with Segway-Ninebot, in order to offer a more durable scooter. Lyft had
previously partnered with Chinese multinational, Xiaomi, for its scooter service, yet this relationship ended in 2018. Lyft’s car rental service is offered in partnership with the German
multinational car rental service, Sixt. This allows Lyft customers to rent a vehicle through the
Rental tab of the app. Customers can get a Lyft ride to a Sixt location where they can pick up the rental vehicle.
Lyft holds around 30% of the market share in ridesharing service in the US (second only to
Uber), and in 2018 its revenues reached $2.2 billion. In 2018, there were 4.2 billion rides given
by Lyft. Whereas Uber has an extensive global presence, as it pursued a rapid internationalisation strategy, Lyft is restricted to North America. This presents Lyft with the opportunity to learn from Uber’s global activity and strategy. When comparing Lyft and Uber, Lyft has made several attempts to present itself as the more ethical alternative to Uber. Lyft has taken this approach as in recent years Uber has experienced a series of public relations failures, with allegations of systemic sexism, sexual harassment, and a disregard for regulation (at a global level). Lyft has seized on this opportunity to present itself in a different light, with substantial donationsto charity, and allowing customers to round up their fare to make a charity donation. However, these attempts to be viewed as a more ethical alternative have only been moderately successful.
The outbreak of COVID-19 has presented challenges and opportunities to Lyft. Lyft has launched a program called “Essential Deliveries”, this service involves the delivery of medical supplies, test kits and meals for vulnerable individuals (with a focus on children or seniors) that can be picked up from distribution centres for contract free drop off. However, COVID-19 has provided disruptions for the firm, not only has there been a decrease in ridesharing and ride hailing activity, but it has also presented challenges for the Lyft Scooters segment of the business.
Lyft has appointed you as a consultant, once the current coronavirus pandemic is over, the
company is considering investing overseas in Southeast Asia as global expansion is perceived
at this time to be a potentially important element of the company’s long-term strategic goals.
The country that Lyft is considering is Vietnam.
- Carry out a critical evaluation of the benefits, costs, and risks associated with doing business in Vietnam. (1000 words)
- Lyft has narrowed down its entry mode (into Vietnam) to three options: licensing, a joint venture with a host country firm or setting up a wholly owned subsidiary in Vietnam. Critically evaluate these three options. Which one would you recommend? (1000 words)
- Use the Geert Hofstede framework on international workplace culture to compare and contrast the cultures of USA and Vietnam. Discuss how cultural differences would influence business/management practices. (1000 words)
- Debate the relative merits of fixed and floating exchange rate regimes. From the perspective of Lyft, critically appraise the most criterial in the choice between systems. (1000 words)
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