Scribd
Upload
19 views26 pages

Presentation Case 2

This document provides an overview and analysis of OYO, an Indian hospitality startup. It recommends waiting to pursue employment at OYO due to uncertainties in their US expansion strategy. Specifically, it questions whether OYO's global strategy is sustainable in developed markets and whether they can gain a competitive advantage in the US. The document analyzes OYO's goals and financial projections, noting risks from high capital expenditures. It suggests monitoring website traffic and a potential shift to selling technology as a service model.

Uploaded by

reddyraj036
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
19 views26 pages

Presentation Case 2

This document provides an overview and analysis of OYO, an Indian hospitality startup. It recommends waiting to pursue employment at OYO due to uncertainties in their US expansion strategy. Specifically, it questions whether OYO's global strategy is sustainable in developed markets and whether they can gain a competitive advantage in the US. The document analyzes OYO's goals and financial projections, noting risks from high capital expenditures. It suggests monitoring website traffic and a potential shift to selling technology as a service model.

Uploaded by

reddyraj036
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 26

A Future at OYO:

Check In or Check Out?


Prepared exclusively for

Jakayla Michel
ALAN NAPIER | ASHLEY BRUNER | JUSTIN BOSLEY | RYAN
MCCARTY
JANUARY 7, 2020
Agenda
•Overview of OYO
•Recommendation
•Analysis of OYO
•Financials
•Implementation
Overview of OYO
•Founded in 2012 by Ritesh Agarwal
•Secured large venture capital funding
•Experiencing rapid growth
•Recent entry into U.S. markets
•Goal to issue IPO
Recommendation
Background Recommendation Analysis Financials Implementation

Recommendation

Pursue a job at OYO

Wait to pursue a job at OYO


Background Recommendation Analysis Financials Implementation

Recommendation

Pursue a job at OYO

Wait to pursue a job at OYO


Background Recommendation Analysis Financials Implementation

Indicators of OYO American Success

Selling their Strong


Profitability
product as appeal to
in the US
a service millennials
Analysis
Background Recommendation Analysis Financials Implementation

Analysis – OYO’s goals


Hotels in the US
1000
Estimated commission
900
920
revenue, Jul – Dec:
800
$41.4 million
700
620
600

500 Estimated signing


400 380
revenue, Jul – Dec:
300

200
$43.5 million
200
140
100 80
50

0
June July August September October November December
Background Recommendation Analysis Financials Implementation

Analysis – Burning Through Capital


Before OYO: After OYO:
• $60 per night • $15 per night
• Average 66% • Average 95%
occupancy occupancy
• $14,454 annual • $5,201 annual
revenue per room revenue per room
Background Recommendation Analysis Financials Implementation

Analysis – Decision Criteria


Does OYO’s strategy • Global strategy is sustainable
• American competitive advantage is challenged
make sense?
• Higher average occupancy rates to “top”
Probability of • Higher average OYO room rates to compensate
American success • Results in burning through capital

Probability of global • The business model works in underdeveloped countries


• Selling tech as a service would allow global expansion
success
Financials
Background Recommendation Analysis Financials Implementation

Financials: Assumptions
• High Growth Potential
• Global Brand Recognition
• $1.8 Billion in Funding
• $300 Million to the United Stated
• 30% US Market Share Viability
Background Recommendation Analysis Financials Implementation

Financials
Expected Revenue
1500
1300
1100
900
700
500
300
100

2016-2017 2017-2018 2018-2019


Expected Revenue 120 416 1481
Expected Revenue
Background Recommendation Analysis Financials Implementation

Financials
Background Recommendation Analysis Financials Implementation

Financials
• Developed Market
• Competition
• Unexplored Market
• Costs
Background Recommendation Analysis Financials Implementation

Financials
Implementation
Background Recommendation Analysis Financials Implementation

OYO’s Path Forward

US Market

Add an average
of 5 hotels per
day
Background Recommendation Analysis Financials Implementation

Timeline (Short-Term)
2019 2020
US Market
Opens >50 hotels
Gains $300k in Investments
Open 5 hotels per day
Background Recommendation Analysis Financials Implementation

Marketing Actions
Website and App
•Average of 350,000 daily visitors
•10 million app downloads
•Search Engine Optimization (SEOs)
Background Recommendation Analysis Financials Implementation

Risks & Mitigations


Entering the US • Targeting the budget hotels
Market
Open 5 Hotels • Invest portion of their capital
per Day
Unexpected • Marketing via website and mobile app
Occupancies
Background Recommendation Analysis Financials Implementation

What to Watch For


If the company
decides to sell
product as a service

If the amount of
website and mobile
app visits increases
To Review
Background Recommendation Analysis Financials Implementation

Summary – wait to pursue employment


Key indicators of US success:
• Appeal to millennials/successful marketing campaign
• Selling technology to other US hotel chains
• US profitability

Benefits to waiting:
• Mitigate risk of US failure
• More attractive opportunities may exist
Questions?
THANK YOU

You might also like