Aya ElSakka

15.11.2023
Assignment 01
Prof. Reham Adel
Management Role of the Information

Careem is a Dubai-based super app with operations in over 100 cities, covering 12 countries
across the Middle East, Africa, and South Asia regions. The company, which was valued at over
US$2 billion in 2018, became a wholly owned subsidiary of Uber after being acquired for $3.1 billion
in January 2020. Careem expanded into the food delivery business with Careem Now in November
2018 and launched a digital payment platform, Careem Pay in April 2022. Careem's Super App
business was divested by Uber in April 2023 to become a private company again, with e& taking a
50.03% stake, while Uber retains Careem's ride-hailing business.

1 Vision

Careem's vision is to "simplify and improve the lives of people in the region by building a
transportation network that is safe, affordable, and reliable." This vision reflects its commitment to
providing accessible and efficient transportation solutions that cater to the needs of its customers in
the Middle East and North Africa region.

Core Business

Careem's core business lies in providing a multi-service platform for transportation and delivery
services. Its main offerings include:
• Ride-hailing: Connecting riders with drivers for on-demand transportation within cities.
• Delivery: Partnering with restaurants and retailers to deliver food, groceries, and other
goods to customers' doorsteps.
• Micro-mobility: Offering electric scooter and bike rentals for short-distance travel.
• Payments: Facilitating cashless transactions through its mobile wallet and other payment
options.

Markets

Careem operates in over 100 cities across 15 countries in the Middle East, North Africa, and
South Asia. The company has a strong focus on emerging markets, where demand for convenient
and affordable transportation solutions is growing rapidly.

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 Industry

Careem operates within the highly competitive transportation and logistics industry, specifically
the ride-hailing and delivery sub-sectors. This industry is characterized by rapid innovation, intense
competition, and evolving regulatory landscapes.
Core Competencies
• Technology and data: Careem leverages its cutting-edge technology platform and data
analytics capabilities to personalize user experiences, optimize operations, and drive growth.
• Local market adaptation: Careem tailors its services and pricing to specific markets and
customer preferences, increasing its relevance and competitiveness.
• Network effects: Careem's large user base creates a self-reinforcing cycle of growth and
attracts more customers and drivers.
• Operational excellence: Careem focuses on efficient operations, dynamic pricing, and
resource optimization to maintain a competitive edge.
• Brand recognition: Careem has built a strong brand reputation for reliability, affordability,
and customer service, attracting both customers and drivers.

External Challenges
Despite its success, Careem faces several external challenges:

Using the Five Forces:

• Threat of New Entrants: Low barriers to entry and the

growing attractiveness of the ride-hailing and delivery
markets attract new competitors, intensifying
competition.
• Bargaining Power of Suppliers: Drivers and delivery
partners have some bargaining power due to their role
in service delivery, potentially affecting costs and
service quality.
• Bargaining Power of Buyers: Customers have a high degree of choice due to the availability
of alternative transportation and delivery options, impacting pricing strategies.
• Threat of Substitutes: The emergence of alternative transportation solutions like public
transportation, carpooling, and personal vehicles can pose a threat to Careem.
• Competitive Rivalry: Intense competition from established players like Uber and regional
competitors in specific markets puts pressure on pricing and market share.

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 Using PESTEL:

• Political: Political instability and regulatory

changes in certain markets can disrupt operations
and increase compliance costs.
• Economic: Economic slowdowns and
fluctuations in currency exchange rates can
negatively impact demand for transportation and
delivery services.
• Social: Changing customer preferences, increasing environmental awareness, and evolving
social norms can influence service offerings and business practices.
• Technological: Rapid technological advancements and the emergence of disruptive
technologies can necessitate adaptation and investment in new technologies.
• Environmental: Environmental concerns and regulations require sustainable practices to
minimize the company's environmental impact.
• Legal: Compliance with local laws and regulations can be complex and costly, especially
across diverse markets.

Overall, Careem possesses both internal strengths and external challenges. By leveraging its core
competencies and adapting to the evolving external environment, Careem can navigate these
challenges and maintain its position as a leading player in the transportation and delivery industry.

Input → Organization Operations → Output (Service)

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Examining Careem's Value Chain and its Impact
on Organizational Performance
Careem's value chain, like any other company, is a series
of activities it performs to create and deliver value to its
customers. Analyzing this chain helps us understand how
their operations affect their performance and identify
opportunities for improvement.

PRIMARY ACTIVITIES:

1. Inbound Logistics:
• Managing the procurement of vehicles, fuel, and other resources needed for operations.
• Impact: Availability of resources directly affects operational efficiency and service quality.

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 • Strategies: Careem leverages technology to optimize resource allocation, partners with fuel
suppliers, and implements cost-effective procurement methods.
2. Operations:
• Matching riders with drivers, managing trips, and ensuring smooth travel experiences.
• Impact: Operational efficiency is crucial for customer satisfaction and profitability.
• Strategies: Careem utilizes advanced algorithms for driver-rider matching, optimizes routes,
and employs technology for real-time tracking and communication.
3. Outbound Logistics:
• Facilitating payments, managing customer service, and ensuring a seamless post-trip
experience.
• Impact: Efficient outbound logistics contribute to customer satisfaction and loyalty.
• Strategies: Careem offers various payment options, invests in customer support channels,
and promotes positive customer interactions.
4. Marketing and Sales:
• Promoting Careem's services, attracting new customers, and maintaining brand awareness.
• Impact: Effective marketing and sales drive revenue growth and brand recognition.
• Strategies: Careem utilizes various marketing channels, including digital marketing,
partnerships, and local engagement initiatives.
5. Service:
• Providing support to both riders and drivers before, during, and after trips.
• Impact: High-quality service is critical for customer satisfaction and retention.
• Strategies: Careem invests in driver training programs, offers in-app support features, and
implements resolution processes for customer complaints.

SUPPORT ACTIVITIES:

1. Procurement:
• Acquiring vehicles, fuel, and other necessary resources at competitive prices.
• Impact: Cost-effective procurement optimizes resource allocation and improves profitability.
• Strategies: Careem negotiates favorable contracts with suppliers and utilizes technology for
automated procurement processes.
2. Human Resource Management:
• Recruiting, training, and motivating drivers and employees.
• Impact: A skilled and motivated workforce contributes to operational efficiency and service
quality.
• Strategies: Careem invests in driver training programs, offers competitive compensation
packages, and fosters a positive work environment.
3. Technology Development:
• Developing and maintaining the technology infrastructure that supports operations.
• Impact: Technological advancements can improve efficiency, reduce costs, and enhance
customer experience.
• Strategies: Careem invests in research and development, utilizes cutting-edge technology for
its platform, and continuously innovates to improve its offerings.

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4. Infrastructure:
• Maintaining the IT infrastructure and physical assets needed for operations.
• Impact: A robust infrastructure ensures operational stability and scalability.
• Strategies: Careem invests in its IT infrastructure, maintains its network, and ensures the
availability of resources to support growth.

IMPACT ON ORGANIZATIONAL PERFORMANCE:

1. Cost Efficiency: By optimizing its value chain and leveraging technology, Careem can achieve cost
efficiency through resource optimization, reduced operational expenses, and improved pricing
strategies.
2. Customer Satisfaction: By focusing on service quality, operational efficiency, and customer
experience, Careem can enhance customer satisfaction and loyalty, leading to repeat business and
positive brand perception.
3. Operational Excellence: A well-managed value chain enables efficient resource utilization,
optimized routes, and reduced disruptions. This contributes to improved operational performance
and on-time delivery of services.
4. Competitive Advantage: By effectively managing its value chain and leveraging its strengths,
Careem can differentiate itself from competitors and gain a competitive advantage in the ride-hailing
and delivery markets.
5. Sustainable Growth: By adopting sustainable practices across its value chain, Careem can
minimize its environmental impact and ensure long-term sustainability. This aligns with its vision
and promotes responsible corporate citizenship.

Overall, Careem's value chain plays a crucial role in its success and performance. By
continuously improving its value chain activities, the company can achieve cost efficiency, enhance
customer satisfaction, and maintain its competitive edge in the dynamic transportation and delivery
industry.

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VRIO (Valuable, Rare, Inimitable, and Organizationally Supported) is a framework used to
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evaluate a firm's competitive advantage. Let's analyze Careem's resources, capabilities, and
competencies using VRIO:

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Resources:
Resource Valuable Rare Inimitable Organizationally Competitive
Supported Advantage
Technology Platform:
Cutting-edge app and data
analytics capabilities Yes Yes Partially Yes Yes
Local Market Knowledge:
Deep understanding of
specific markets and
customer preferences Yes Yes Partially Yes Yes
Strong Brand Reputation:
Recognized for reliability,
affordability, and customer
service Yes Partially Partially Yes Yes
Network Effects: Large user
base and self-reinforcing
cycle of growth Yes Yes Partially Yes Yes
Driver and Delivery Partner
Network: Extensive network
of qualified and motivated
partners Yes Yes Partially Yes Yes
Financial Resources:
Access to capital for growth
and investments Yes No No Yes Yes

Capabilities:

Capability Valuable Rare Inimitable Organizationally Competitive

Supported Advantage

Dynamic Pricing and

Revenue
Management:
Optimizing pricing and
maximizing revenue Yes Yes Partially Yes Yes
Operational
Efficiency:
Maintaining a high
level of efficiency and
minimizing costs Yes Yes Partially Yes Yes
Network
Management:
Optimizing routes and
matching riders with
drivers efficiently Yes Yes Partially Yes Yes
Customer Service:
Providing excellent
service throughout the
user journey Yes Partially Partially Yes Yes

Marketing and Sales:

Effectively reaching
target audiences and
acquiring new
customers Yes No No Yes Yes

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Competencies:

Competency Valuable Rare Inimitable Organizationally Competitive

Supported Advantage
Local Market Adaptation:
Tailoring services and pricing
to specific markets and
customer preferences Yes Yes Partially Yes Yes
Data-Driven Decision
Making: Leveraging data to
personalize experiences,
optimize operations, and
drive growth Yes Yes Partially Yes Yes

Innovation and Technology

Adoption: Continuously
innovating and adopting
new technologies to improve
service and gain an edge
Yes Yes Partially Yes Yes

Building Strong
Partnerships: Collaborating
with drivers, delivery
partners, and other
businesses for mutual benefit
Yes No No Yes Yes
Promoting Sustainability:
Implementing sustainable
practices to minimize
environmental impact and
align with customer values Yes Partially Partially Yes Yes
Analysis
Careem possesses several valuable, rare, inimitable, and organizationally supported resources,
capabilities, and competencies that contribute to its competitive advantage. These include its
technology platform, local market knowledge, strong brand reputation, network effects, and driver
and delivery partner network. Additionally, the company's capabilities in dynamic pricing,
operational efficiency, network management, customer service, and marketing & sales provide a
significant edge.
However, it's important to note that some resources and capabilities are not entirely unique
or inimitable. Careem's competitive advantage relies on its ability to leverage these strengths
effectively and integrate them into its core competencies. The company's organizational support,
including financial resources, employee expertise, and technology infrastructure, plays a key role in
sustaining this advantage.

Moving forward, Careem needs to continue to:

• Invest in technology and data analytics to maintain its technological edge.

• Deepen its understanding of local markets and adapt its offerings accordingly.
• Nurture its brand reputation and build customer loyalty.
• Expand its network of drivers, delivery partners, and other strategic collaborators.
• Address potential imitators and stay ahead of the competition by continuously innovating
and adopting new technologies.

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 • Promote sustainable practices to attract environmentally conscious customers and align with
long-term goals.

By focusing on these areas, Careem can continue to leverage its VRIO resources,
capabilities, and competencies to maintain its competitive advantage and achieve long-term success
in the rapidly evolving transportation and delivery industry.

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4 Careem's Internal Factors: Strengths and Weaknesses Categorized into Social and Technical

Social Strengths:
• Strong brand reputation: Careem is recognized for its reliability, affordability, and
customer service, attracting both customers and drivers.
• Deep understanding of local markets: Careem tailors its services and pricing to specific
markets and customer preferences, increasing its relevance and competitiveness.
• Large and loyal user base: Careem's network effects create a self-reinforcing cycle of
growth and attract more customers and drivers.
• Focus on building strong partnerships: Careem collaborates with drivers, delivery
partners, and other businesses for mutual benefit, expanding its reach and offerings.
• Commitment to social responsibility: Careem implements initiatives like driver training
and community support programs, enhancing its public image and attracting socially
conscious customers.

Technical Strengths:
• Cutting-edge technology platform: Careem's app and data analytics capabilities are
advanced, enabling efficient operations, personalized user experiences, and dynamic pricing.
• Efficient network management: Careem utilizes sophisticated algorithms and data analysis
to optimize routes, match riders with drivers, and ensure efficient service delivery.
• Continuous innovation: Careem invests in research and development and actively adopts
new technologies to improve its platform and services.
• Focus on data-driven decision making: Careem leverages data analytics to personalize
user experiences, optimize operations, and make informed business decisions.
• Robust IT infrastructure: Careem maintains a strong IT infrastructure to support its
operations, ensuring scalability and reliability.

Social Weaknesses:
• Limited brand awareness in certain markets: While Careem is strong in its core markets,
it may still need to increase brand awareness in new or smaller markets.

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 Potential for driver and delivery partner dissatisfaction: Concerns about pay, working
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conditions, and treatment of drivers and delivery partners could damage Careem's reputation
and lead to employee turnover.
• Negative perception in some communities: Careem may face negative perceptions in
some communities due to its perceived impact on traditional transportation systems or its
association with specific demographics.
• Limited cultural sensitivity: While Careem adapts to local markets, it may need to further
improve its cultural sensitivity to cater to diverse user groups effectively.
• Potential for labor unrest: Labor strikes or protests by drivers and delivery partners could
disrupt operations and damage Careem's reputation.
Technical Weaknesses:
• Potential for technological disruptions: Emerging technologies like autonomous vehicles
or alternative transportation solutions could significantly impact Careem's business model.
• Cybersecurity vulnerabilities: Careem needs to constantly invest in cybersecurity measures
to protect user data and prevent potential attacks.
• Potential for reliance on third-party technology: Dependence on third-party vendors for
critical systems could create vulnerabilities and increase reliance on external factors.
• Limited digitalization of certain processes: Some processes within the company may still
be paper based, hindering efficiency and customer experience compared to fully digitized
competitors.
• Scalability challenges: As Careem expands its operations, it needs to ensure its technology
infrastructure and systems are scalable enough to accommodate growth without
compromising performance.

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Careem's Sustainable Competitive Advantage and Competitive Strategy

Sustainable Competitive Advantage:

Careem's sustainable competitive advantage stems from a combination of factors that are difficult
for competitors to replicate:

1. Strong Brand Reputation: Careem has built a strong brand reputation for reliability,
affordability, and customer service. This reputation attracts both customers and drivers, creating a
feedback loop that reinforces its market position.

2. Deep Local Market Understanding: Careem tailors its services and pricing to specific markets
and customer preferences. This deep understanding allows them to cater to local needs more
effectively than competitors with a more generic approach.

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3. Network Effects: Careem's large user and partner network creates a self-reinforcing cycle of
growth. As the network expands, it becomes more valuable to both customers and drivers, making it
difficult for new entrants to compete effectively.

4. Technological Edge: Careem invests heavily in technology and data analytics, enabling them to
personalize user experiences, optimize operations, and make data-driven decisions. This
technological edge allows them to be more efficient and adaptable than competitors.

5. Focus on Innovation: Careem continuously innovates its business model and services to adapt
to changing market trends and customer preferences. This focus on innovation helps them stay
ahead of the competition and maintain their competitive advantage.

6. Strong Partnerships: Careem has established strategic partnerships with various businesses,
including restaurants, retailers, and other transportation providers. These partnerships expand their
reach, offer integrated services, and unlock new market opportunities.

Competitive Strategy:

Careem's competitive strategy is built on leveraging its sustainable competitive advantage to achieve
its long-term goals. Key elements of this strategy include:

1. Network Expansion: Careem continues to expand its network into new markets and increase its
presence in existing ones. This allows them to capture a larger share of the market and strengthen
their network effects.

2. Service Differentiation: Careem focuses on offering personalized and locally adapted services to
cater to specific customer needs and preferences. This differentiation helps them attract and retain
customers in a competitive market.

3. Operational Efficiency: Careem continuously improves its operational efficiency through

technology and data analytics. This allows them to reduce costs and offer competitive prices to
customers.

4. Strategic Partnerships: Careem seeks strategic partnerships with complementary businesses to

expand its reach, offer integrated services, and unlock new market opportunities.

5. Investment in Technology: Careem continues to invest in cutting-edge technology to maintain

its technological edge and develop new innovative services.

6. Focus on Sustainability: Careem integrates sustainability into its operations and business
practices, aligning with customer values and attracting environmentally conscious users.

Overall, Careem's sustainable competitive advantage and competitive strategy position it as a

leader in the transportation and delivery industry. By continuously leveraging its strengths, adapting

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to market trends, and investing in innovation, Careem can maintain its long-term success and
achieve its strategic goals.

Sustainable Competitive Advantage:

[cost/time/ price/ efficient / quantities / volume/ meet coverage/cut down]

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Careem's Business Model Innovation: Creating and Capturing Value

Careem has consistently innovated its business model to adapt to the dynamic transportation and
delivery industry and create value for both its users and the company. Here are some key examples:

1. Expanding Beyond Ride-Hailing:

• Careem has diversified its services beyond its core ride-hailing business to include food
delivery, grocery delivery, micro-mobility rentals (e.g., bikes and scooters), and payments
(Careem Pay). This diversification caters to a wider customer base, increases revenue
streams, and reduces reliance on a single service.

2. Personalization and Local Adaptation:

• Careem personalizes the user experience by suggesting preferred drivers, recommending
nearby restaurants, and offering customized deals based on data analytics. Additionally, it
adapts its services and pricing to specific market needs and cultural preferences, including
offering local payment methods and incorporating local languages in the app. This caters to
specific customer needs and increases local relevance.

3. Data-Driven Decision Making and Dynamic Pricing:

• Careem utilizes data analytics to optimize routes, match riders with drivers efficiently, and
set fares based on demand, location, and traffic conditions. This ensures a balance between
affordability for customers and profitability for the company.

4. Strategic Partnerships and Third-Party Integration:

• Careem collaborates with various businesses, including restaurants, retailers, other
transportation providers, and payment platforms. These partnerships expand its reach, offer
integrated services, unlock new market opportunities, and provide access to additional
resources.

5. Technological Advancements and Automation:

• Careem continuously invests in cutting-edge technologies like artificial intelligence, machine
learning, and big data analytics. This allows for more efficient operations, proactive
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 maintenance, improved decision-making, and automated processes for tasks like route
optimization and driver onboarding.

6. Focus on Sustainability and Social Impact:

• Careem implements eco-friendly practices like electric vehicle adoption, carbon offset
programs, and waste reduction strategies. Additionally, it invests in driver and delivery
partner training, financial assistance, and insurance plans. These initiatives align with its
vision for a sustainable future, attract environmentally conscious customers, and contribute
to the local community.

Value Creation and Capture:

These business model innovations enable Careem to create and capture value in various ways:

• Cost Leadership: Optimizing operations, leveraging technology, negotiating favorable deals

with partners, and implementing automation help Careem reduce costs and offer
competitive prices, attracting price-sensitive customers.
• Differentiation: Personalization, local adaptation, a diverse range of services, and strategic
partnerships differentiate Careem from competitors and allow it to cater to specific customer
needs, attract premium customers, and increase brand loyalty.
• Network Effects: The large user and partner network creates a self-reinforcing cycle of
growth, attracting more users and partners, further enhancing network value and
profitability.
• Data-Driven Decisions: Utilizing data analytics enables personalized offerings, dynamic
pricing, and optimized operations, leading to increased revenue and profitability.
• Enhanced Customer Experience: Personalized experiences, convenient service options,
and integrated services through partnerships contribute to increased customer satisfaction
and loyalty.
• Positive Brand Image: Careem's focus on sustainability, social impact, and driver welfare
enhances its brand image and attracts environmentally conscious and socially responsible
customers.
Overall, Careem's continuous innovation in its business model enables it to create and capture
significant value for both its customers and the company. By adapting to changing market trends,
embracing new technologies, and focusing on sustainability and social impact, Careem can maintain
its competitive edge and achieve long-term success in the dynamic transportation and delivery
industry.

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