Monday, January 29, 2018

Better to use one's competitive advantage

Comfort Taxis has to respond to the threat posed by Grab. They decided to have a tie up with Uber. I think that this is a strategic mistake.

Let me share my past experience. When I was appointed to head NTUC Income in 1977, I was quite inexperienced in running a big company.

But I adopted a "common sense" approach. I looked at the insurance products that were selling well by the other insurance companies, i.e. the competitors. I look at my strategic advantage - my low cost ofoperations.

I was able to "copy" the popular and successful products and offer them at a lower price. The customers were familiar with these products but they like the lower price. Many chose NTUC Income.

I did not win all the business. Some customers still like the big international insurance companies. But I managed to win enough customers for NTUC income to grow rapidly.

If I were to adopt this strategic for Comfort Taxis, I would copy what is successful with Grab. I would be able to offer lower fares - but they should be funded by the taxi company and not the taxi drivers. I would be able to win a large market share. Grab will not last long in the war of attrition.

It is important to compete based on one's competitive advantage. It is advisable to avoid introducing too many new and uncontrollable variables. It is importan to adopt the strategy of "copying" what has proved to be successful.

It is time for Comfort Taxis to reflect on this strategic approach.

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