Redbus Report

Redbus Case Analysis
Objective – Help Redbus decide among 4 options
Tone – Highly formal, Well Written, Recommendation
Audience Analysis – Sama + 2
 3 Decision makers
 3 engineers
 Intelligent
 Knowledge level – Very high
 Expecting – How to hit 1 bn $ by 2025
 Well thought of report
Situation analysis
 Macro  Micro
 Industry redBus  Intercity bus transport  Link urban & rural
 Most affordable and accessible  Cheaper (esp U to R), Many busses & most
rural not have airport or other model
 Market size – 2.5 Bn $
 Avg ticket size = ~100 (total size/total ticket)
 Industry growing at 25%  Expected to grow as economy expected to grow
(migration from U to R and vice versa)
 Stakeholders:
o BT provider – RTC|Pvt (S|M|L)
o Traveller
o No middle agent
 Part of online industry  Size 379 Bn  expected to grow by 50%
o Air travel (60%)
 Company –
o Need met/ problem solved  Replace manual system (Issue –
overbooking, less transparency, delay 
 No direct communication,
 Price arbitrary by agent,
 Every agent not linked to every agent, biggest flaw – time
consuming process)
 How redBus solved
 Providing real-time data
 Directly connect customers to sellers
 Created virtual market place
 Benefit to travelers
 Fast, real-time info
 More choice (800+ bus operators)
 Reschedule and cancellation
 Easy hassle-free
 Transparent
 Feedback – better services, can guide other travellers
 Benefit to operators
 Analytics
 Timely payment
 Larger market
 Feedback – identify where service is going wrong
 Company doing how
 800+ operators
 65% online market share
 19000 busses daily
 Competitive strength of company  if start new company @2012
 First thing – Build the software
 Bus operators – Sign on to it  but already with redbus  Difficult
 Traveller  Difficult
 Redbus also constantly growing
 Redbus is in strong competitive position
 First mover
 Good system
 Large network  most valuable asset  need to keep adding
and upgrading, else lose customers and sellers
 Financials
o Grew from 0.4 mn to 345 mn 2012
o Growth rate decreasing
o Profit  10 mn profit  3% margin (low)
 Long term objective
o Revenue 1 bn by 2025
o Maintain & grow its competitive advantage  operator addn and
growing syste
 Option considering
o Vertical integration – Start own busses as well
 Identify most profitable routes  capability yes
 Benefits  not get 10% but 100% revenue, market can
accommodate a few more operators
 Risk  Backlashes (if bus break down 
 stain on image of redbus),
 focus more needed on bus running and maintaining
rather than current operations and ‘network’
o Going global
o Product is ready can be exported
o Potential
o Risk
 Limited information
 New regulation, customer, information, culture
 Might end up in loss
 Much much more difficult to integrate and develop network
 more effort
o Diversify into more markets
o Most logical – Air ticket  easy to onboard and only 5-6 companies
o Benefit – Going into much bigger market
o Risk
 Direct competition with 5-6 much larger better established
giants
 Profit margin – razor thin
 Even 10% is difficult
 Travellers  people shop around to look for best price
o Focus on the core
o Rationale – strong competitive position why risk it
o Lowest risk
o Issue/ drawback
 Less margin in the current bus market (3%)
 Losing out on opportunity
 Criteria for evaluation (Ideal option  Increase profit, maintain/ improve
competitive advantage, Revenue to 1B)
o Option 1
 Profit will
 Maintain probably yes
 Revenue 1B very difficult
o Option 2
o Option 3
o Increase P  if can handle
o Maintain  require effort but likely to maintain.
o Revenue  tough, and even razor thin
o Option 4
o Profit – at current rate
o Maintain – hell yes
o Revenue – to grow

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Redbus Case Analysis

Objective – Help Redbus decide among 4 options

Tone – Highly formal, Well Written, Recommendation

Audience Analysis – Sama + 2

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