May 12, 2020

Zomato Business model || Zomato case study

Smart Business Strategy of Zomato

Zomato is a food delivery service founded by Deepinder Goyal and Pankaj Chadda. Zomato is a food-chain service that gives a huge discount on its orders.
zomato
Zomato


But, How they give a huge discount? The interesting thing is that Zomato is in loss, even then, investors are investing Zomato. is that mean Zomato is burning the cash of its investors? actually it is not the case here.


How Zomato works and earns



Zomato works in the 3 business segments.

  1. Food Delivery Services
  2. Advertising Services
  3. Business Consultancy Services
These are the three main strategies adopted by Zomato then you will understand, the reason behind heavy investments of investors in Zomato.


Food Delivery Services

Food Delivery Service
Food Delivery Service Source-Freepik

Let's understand this by an example. suppose you have ordered a dish from Zomato, with MRP of 100 rupees if you purchased it from the hotel itself.

But, the question is how Zomato is capable of Giving a discount of 30-40% every time. is Zomato is burning the cash of the investors? the answer is no, Suppose you have to order a dish from a restaurant on Zomato, and you have chosen a dish of 120 Rupees, but the actual price of that dish in the restaurant is 100 rupees.

That means you are paying 20% more on that order, and when you apply any promo code you will get around 30% of the discount every time.

So, Now that dish is cost you around 85 Rupees, now include the packaging cost of rupees 10, now your dish is of 95 rupees.

So, Are you going to order from Zomato, yes why not you still getting the order at home, with 5 rupees off.
online ordering Source
online ordering Source-Freepik

Here is the opportunity for Zomato, They charged 15% of the MRP of the dish as a commission, so now the MRP of the dish for the Zomato is 85 Rupees and they are selling it at 95 Rupees.

The restaurant owner is happy with parcels orders because there is no need to deal with problems like table occupancy, don't have to put a waiter at the tables, utensils, electricity, cleaning and etc. that's the reason the owner of the restaurant is happy with online orders.


Still Zomato is in Loss! because the salary of the delivery boy of Zomato is high as compared to other online food delivery services. They paid around 25k net rupees to the delivery boy.

Online Application maintenance expense and customer support workforce expenditure is very high, these are the reasons, Zomato is still is in loss.


Advertising Services/ Priority listing


priority listing
priority listing Source-Freepik

This is an amazing strategy of Zomato, they charged the fees from the restaurant for promoting their restaurant for the search query.

For example, if you are searching for a biryani, Zomato gives an option to the restaurant to priorities their name at the top results. so when someone is search for that query then their restaurants appear at the top. because most often people open the results which are at the top.

New Restaurants and Hotels promotion


New restaurants and hotel promotion Source-Freepik

For new restaurant promotions, Zomato charged the fess for sponsorship. So if someone wants to promote their hotel they have to pay the amount and when customers search for the query then their sponsored ad will appear in the search list of restaurants.

Zomato charged for advertising, priority listing, and for restaurant visibility on Zomato application.

Benefit of Adverting of restaurants

If the 50% of the sales of the restaurant is coming from the Zomato,  then that restaurant is heavily dependent on the Zomato service, to remain at the top position they will pay a good amount of money, and for the competition perspective, the amount will increase and eventually Zomato makes a huge profit.


"Smart move of Zomato is, they used this money of advertising to attract more customers by giving them discounts on that particular restaurent dishes"

 Because of that cycle, the hotel is heavily dependent on Zomato. most of there Business is coming from that platform, so they pay more to remain in a secure position.

Business Consultancy Services

Business Consultancy service
Business Consultancy service Source-Freepik
Around 10 lakh restaurants are listed on Zomato in India, Zomato is present in 150 cities of India, and every 30 seconds they are listing a new restaurant on their platform.

huge data of customers
huge data of customers Source-Freepik

Zomato has tremendous data of its customers, Zomato knows in Mumbai which restaurants have maximum sales of south Indian food, they also know in which state which dish is at what price.

Let's take an example(assumption) of Pizza, Zomato knows if the price of the paneer pizza is around 100-150 Rupees then it has higher sales in North Delhi and Mexican pizza of 200-250 will sales better in South Delhi. 

Zomato knows the popularity of dishes with respective regions. and this is the important point of the Zomato business model.

Zomato uses data for restaurant building

If you want to open a new restaurant then Zomato gives you the proper data of,
  • What kind of restaurant you should open as per the data of your locality.
  • They will suggest the type of dishes you should provide in your area.
  • What should be the appropriate price for particular dishes?

Zomato uses that data to create a restaurant business plan and help you grow your business.

Zomato charges heavily for proving this data and building the business plan for your business.

What Zomato can do with huge Data?

Zomato has the data of millions of users and they can open their own restaurant chain across the country, well Zomato is now working in 24 countries so its now a global brand.

Investors investing, because of the data, that Zomato has, Investors know the potential of this data, hence they are invested in Zomato.


May 10, 2020

Manufacturing Operations vs Service Operations

In this post, I have explained the difference between manufacturing operations and service operations. and some main differences between manufacturing operations vs service operations.

Manufacturing Operations vs Service operations

Manufacturing operations vs Service Operations
Manufacturing operations vs Service Operations Source-Freepik

Operations can be categorized into manufacturing and service operations. manufacturing operations is the conversion process of raw material to a tangible output. for example the manufacturing of steel pipe.

Service operations are the conversion process that includes service yield intangible output. for example performance and effort of hotel services.

Difference between manufacturing operations and service operations

We can differentiate manufacturing and service operations with the help of the following points.

  1. Nature of work
  2. Consumption of Output
  3. Tangible or Intangible nature of Output
  4. Customer participation in Conversion
  5. Measurement of performance
  6. Degree of customer contact
Manufacturing is characterized by tangible outputs, output that consumers consume over time. job that uses more equipment and less number of labors.

Little customer contact and no customer participation in the production process and the sophisticated method of measuring production.

Service is characterized by Intangible outputs, outputs that customer consumes immediately. service is the type of job which uses more labors and very few equipment as compared to manufacturing. in-service operation there is direct contact with the customer.

In services, there is frequent customer participation in the conversion process. elementary methods are used to measure the activities in the service sector. some services are namely equipment based services such as railroad service, internet services, and telephone services.

Nature of Work

the main difference between manufacturing operations and service operations is the difference between the Nature of work.

Manufacturing


Manufacturing work
Manufacturing work Source- Freepik
Manufacturing operations include the conversion of raw material into finished product. the operations perform in manufacture are drilling, boring, molding, shaping, machining and etc.

The main objective of the manufacturing operations is to produce as much output with maximum efficiency. and the quality must be under the tolerance limit.

Services

Services
Services- Source-Freepik
In services, the requirement of employees is very high because in service sector customer is interacting with the organization is very high, the customer communicates directly with the organization.

Consumption of Output

The manufacturing industry produces products such as cars, mobile, TV and etc. Hence we consume their product as per the life of that product. suppose you bought a phone and assumes that its life span is 3 years, so for approximately 3 years you can use that phone.

The service industry consumption is totally different from the manufacturing here we utilized the service of the company. and we pay for the particular period in which we are using that service. for example internet service you recharge your pack as per the validity and after that your pack expires.

Tangible and Intangible nature of Output

The manufacturing industry has the physical products and the output coming out of this industry is tangible. tangible means we can touch and feel that product. for example a car we can touch that and feel that.

while the service sector provides services such as maintenance and this is intangible. intangible means we can't touch that and feel that for example hotel industry- here we get service but we cannot touch that and feel that we just experience that service and give feedback as per the service experience.


Customer participation in Conversion

In the manufacturing industry there is no involvement of customers during the production of the product. customer buy that product once it finished.

In the service sector, customer involvement is very high, because we provide service to the customer for example in the hospitality sector if there is a customer then there is business. if that industry has customers then only they can provide the service and hence the customer participation in conversion is very high.

Conclusion

We have properly understood the difference between the manufacturing operations and service operations and we conclude that these industries are totally different from each other in terms of output, customer interaction, and the number of employees, etc. These are the points we understood in manufacturing operations vs service operations.

May 9, 2020

How to make money with Airbnb |How to make money on Airbnb| Airbnb Business Model


In this blog post, I have explained briefly, how to make money with Airbnb, the Airbnb Business model, and the best strategies for making money from Airbnb. If you are curious to know how to make money on Airbnb, then this is the best post for that, I have explained briefly all the points which will make you understand how to make money on Airbnb.

So, Are you excited? Let's get started.



How to Make Money with Airbnb | Make Money on Airbnb



Table of Content
  1. What is Airbnb
  2. How to list with Airbnb and what to consider when listing with Airbnb.
  3. How to make money with Airbnb 
  4. How much you can earn with Airbnb
  5. Law, Legalities, and Taxes in your locality (Get familiar)
  6. Good review and rating leads to more earnings. (Simple trick)


1) What is Airbnb

What is Airbnb
What is Airbnb
Airbnb is an online platform that allows us to connect with the people, who want to rent out their homes with people who are looking for accommodation in that locality.

Airbnb allows people to rent out their properties or spare rooms. Airbnb takes a 3% commission on booking from the host and between 6-12 % from guests.

Airbnb is launched in 2009, Today Airbnb operates in 81,000 cities of 191 countries and they have over 5 million spaces to stay.

Airbnb
Airbnb

You can search for places to stay, monthly stays, and experiences, Just entered the location where you want to accommodate, date, and number of guests. results show you the photos of homes with prices very convenient. 


2)How to list with Airbnb

How to list your home on Airbnb
Simple tips and tricks to list your house with Airbnb, these are the most crucial steps for making money with Airbnb.

Visit to Airbnb site create your account and click on the host your home as you can see on the above image.


Step1: What kind of place do you have?

It asked you,  What kind of place do you have the entire place, private place, and share placed? so you have to select the one as per your property.
details to be entered here
details to be entered here


How many guests can be accommodated in your property? entered the exact location of your property. Then it shows the estimated earning, you can make per month, but according to many individuals who are earning through Airbnb, these estimates are completely wrong because they say, the earning is much higher than the estimation. to earn money as an Airbnb host you have to fill the details precisely.


Step2: What kind of place are you listing

First narrow things down
First narrow things down

Select one option. it could be flat, house, secondary unit, unique space, bed and breakfast or boutique hotel.


What type of property you own
What type of property you own

Now select what type of property you own, it shows you various options,  select one from them.


Then you have given the two options select as per your convenience. 


is this setup as a dedicated guest space?


  1. Yes, its primary setup for guests
  2. No, I keep my personal belonging here.

So you need to add the following information for listing on Airbnb.

  • How many bedrooms can guests can use?
  • How many beds can guests can use?
  • How is the sleeping arrangement? (Single bed,  double bed, sofa, etc)
  • Where is your place located? (Detailed)
  • Select the pin in the map of your exact location for hosting.

Step3: What amenities do you offer?

Small tip: Try to provide comfort for your guests as much as you can, If they rate you high the value for your hosting is improved, and making money on Airbnb will be a very easy task for you.

The site asks about the amenities and my suggestion is you should provide the following amenities to your guests.

  1. WIFI
  2. CLOSET/ DRAWERS
  3. HEAT AND AIR CONDITIONING
  4. BREAKFAST COFFEE AND TEA
  5. DESK/ WORKSPACE
  6. IRON
These are the essential elements that should be provided to the guests.

along with that you can provide safety amenities such as Smoke detectors, Carbon monoxide detectors, first aid kit, and fire extinguisher.

Step4: What spaces can guest use

You have to give the appropriate allowance to the guests in terms of spaces such as,
  • Pool 
  • Kitchen
  • laundry-washer
  • laundry- dryer
  • Parking 
  • elevator
  • hot tub
  • gym
Note: only mentioned these spaces if you can definitely provide to the guests.

Step5: Show travelers whats your space looks like

Upload photo of your place
Upload photo of your place
Make sure you will upload the images of the entire place, so that it gives a better understanding to your guests about the place.

Take photos in an appropriate lighting condition or try to take photos in daylight. sometimes shooting from a corner gives you a better shot than the straight one.

Remember that people are not able to touch or feel your property they all have the photos, review, and description so make sure you will provide them an adequate amount of data so that they can analyze that and take decisions accordingly.

Step6: Edit your description

How to write description
How to write a description

Describe briefly about your place, hows the lighting, about the furniture and amenities you are providing, etc.

You have to provide the other details such as neighbors, whom to call in an emergency, how to get around (give them your preferred choices).


The last step is to provide the name for your place and add other personal details such as IDs, etc.



3) How to make money with Airbnb

Before investing in the property you have to consider the various aspects of that region, locality, etc. there are hundreds of factors you have to consider before even thinking of making money from Airbnb.

1) Destination city and highly traveled area

You have to choose the city properly because when lots of people visiting the town, you have higher chances of earnings.

Property in the middle of the city performs well on Airbnb or near to football stadium or university performs well as rental houses.

2) Gives at least 4 bedrooms in your property to Guests

People traveled in large groups and they are looking for the Airbnb to stay, if you are providing accommodation for just 1,2 or 3 people then the guest will consider hotels.

For large groups they loved to stays in Airbnb if there is space according to the number of people. they need space for hangouts and parties and other stuff.

"IF YOU ARE INVEST IN RIGHT PROPERTY AND STARTS EARNING WITH AIRBNB AFTER YEARS PROGRESSIVELY THE WORTH OF PROPERTY IS INCREASING, IF YOU SELL THAT YOU WILL HAVE VERY GOOD PROFIT WITH THAT PROPERTY SO INVEST PROPERLY"

3)Give Style to the place

This is the most important point for renting on Airbnb, Style your place, make it beautiful, put some plants, better color.

people look for unique style such as pool table in the house things like that attracts lots of people. you have to give something unique to the visitors, where they can relax, chill and enjoy.

So, when they leave the house they must have a unique experience as compared to other Airbnb houses.

When they look at the place in the photos, they must say, I want to stay at that place it looks cool.

4)Cleaning fee (Important to mentioned)

this is a very important step, always mentioned the cleaning fee on Airbnb.

Here is the trick, you should have at least two groups in contact so when you are not able to clean the house these groups can do that for you. this depends on how much involvement you can have with this,  you can hire someone for managing all of your properties so that you don't have to do anything by yourself.

And when you have time clean it by yourself and keep that extra money in your pocket. yes you can money from Airbnb without even getting inside of your property.


4) How much You can earn with Airbnb

The answer to this question is vary from location to location, number of properties you listed on Airbnb, and other factors, but with the help of experiences of people we can predict the amount you can make it. this is very important when we consider the question of how to make money on Airbnb?

Number or reservations in the month, more the reservations higher the earnings. higher the rating higher the earning.

well average earning from a property of Airbnb is $2000-$4000.

IF YOU HAVE HUGE APARTMENT AND NUMBER OF PEOPLE ARE MORE THEN THEY MIGHT STAYS FOR LONGER TIME AND HENCE THE MORE PROFIT YOU WILL EARN ON THE SINGLE RESERVATION.




5) Law, Legalities, and Taxes in Your Locality

First you need permission to list your house on Airbnb. your locality must require a business license. you might owe local taxes on any income you earn. 

For example, you might have to pay Transient occupancy tax, the same tax that applies to hotel and rental properties. but hotels are smart enough they pass these taxes to the guests.

You will also owe federal tax on Airbnb income. Some cities have laws that restrict your ability to host paying guests for short periods. 

These laws are often part of a city's zoning or administrative codes. In many cities, you must register, get a permit, or obtain a license before you list your property or accept guests. 

Certain types of short-term bookings may be prohibited altogether. Local governments vary greatly in how they enforce these laws. Penalties may include fines or other enforcement.

In some tax jurisdictions, Airbnb will take care of calculating, collecting, and remitting local occupancy tax on your behalf. 

Also the occupancy tax is calculated differently in every jurisdiction.  Airbnb gives you support when there are legalities is involved just call them.


6)Review and rating leads to Making money through Airbnb 

Give the best experience you can give to the guest and they will give your feedback in the Airbnb portal. if the feedback is good it will attract more people and your reservations increase for each month.

Rating on the Airbnb portal is also crucial when you listing your property people tends to give the rating to the house as per there experience so make sure you provide them the proper accommodation facilities

Also make sure the address you have gives is properly mentioned the exact location of your property and it will be near to the city center or bus or train station.

Thank you soo much for reading if you want to ask anything then comment section is all yours, I hope you understand the concept of how to make money with Airbnb.

Thank you.





May 5, 2020

OYO Business Model | OYO Case Study | Business model of OYO rooms

In this post, I have explained the Oyo Business model and Oyo case study. how the business model of Oyo rooms works.


OYO Business Model | Oyo Case Study

Oyo rooms business model
Oyo rooms business model
OYO rooms or Oyo hotels and homes started in 2013 in India, the founder of Oyo is Ritesh Agarwal. He is 26 years old with a net worth of $1.5 billion. He has studied at the Indian School of Business Finance.


OYO Rooms is the largest hotel management network in India, they have around 17000 employees globally and 8000 employees in India and particularly in South Asia. Headquarter is in Gurugram India established in 2013.

OYO introduced themselves as the budget accommodation service. Oyo operates in 80+ countries. They have entered in China in 2017 and becomes second-largest hotel management company in just 18 months.

How OYO Rooms Started?

How Oyo expands
How Oyo expands Source-Freepik
Ritesh Agarwal a college dropout with an entrepreneurship dreams. Back in 2011, he has started a budget hotel accommodation service called Oravel, which later becomes Oyo Rooms. Then in 2013 he was selected for Thiel fellowship, which gave him funding of $100,000 to transforms his idea into reality. by using these funds he has launched Oyo Rooms.

In 2015 Oyo received funding of $25 Milion from Sequoia, Lightspeed India, and others. In April 2015 Oyo app was launched. This app is the reason for the amazing success of Oyo rooms. Oyo app plays a crucial role in the success of the hotel chain management startup.


What is the Business Model of Oyo Room

Oyo business model focused on increasing the number of rooms and the appropriate utilization of digital platforms such as mobile app.

Oyo room business model
Oyo room business model Source-Freepik

"Main objective of the company was to provide the quality to its customers"

Oyo rooms are different from Airbnb, because not only they want to show the listing of rooms online, but also their goal is to provide the same quality of service, in its all accommodation facilities.s

Oyo rooms presently works as a franchise business model. the company gets revenue of around 90% of the franchise business model strategy. this is the most important point for the Oyo case study.

How Oyo works

The business model of Oyo rooms is similar to that of Uber where the company gives the platform to its customers via a mobile app or a website.

  • Some of the hotel rooms are under the brand Oyo.
  • Oyo gives its terms and condition to the owner of the hotel and he prepared the rooms as per the guideline.

Partnering with hotels

Oyo allows the hotels to link with them and use their brand name for accommodation in hotels. by doing this the owners of the hotels to maintain in the hotel as per the standards given by the Oyo team.

Oyo flagship

Oyo flagship is Oyo owned property, the staff is also from Oyo itself, when you visit the Oyo flagship you will find the whole hotel is acquired by Oyo and they provide a great facility to the customer.

Oyo Townhouse

This Townhouse specially made as per the need of millennials and hence they provide amazing facilities in this Townhouses and hence this townhouse is specially designed for millennials. these townhouses have smarter rooms which consist of TV with Netflix Installed, Showers, Wifi and etc.

Smarter space for printing, stationery, etc.

Studio Stays

Oyo Rooms also provides fully furnished rooms and flats for long stays like internships, corporate stays, etc.

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