4.2 Discussion: Research-based Peer Alternative Response to 3.3

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Internal and External Marketing Environments

Analysis of Key External Factors in the Market

Porter's five forces model.

         JGJ Inc. is not the only new entrant to the market. Another rideshare company focusing on the same market as JGJ Inc. has just entered known as Lift Hero ("4 best," 2020). Lift Hero operates specifically in the San Francisco market, which is small when comparing the market that JGJ Inc. is currently entering ("4 best," 2020). Even though Lift Hero is also trying to obtain market share, JGJ Inc. has a higher likelihood of beating its competitor because of offering the service at a lower rate and partnering with Medicare, making the risk of entrants low. This partnership creates a competitive advantage for JGJ Inc. in comparison to its competition. Even though JGJ Inc. has a competitive advantage, it may still struggle to obtain market share from the two rideshare giants: Lyft and Uber.

Both Lyft and Uber have been competing for market share for many years (Jones, 2018). When one company creates a new service, the opposing company mimics the service. In this way, once JGJ Inc. enters the market, Uber and Lyft's market analysts will be researching ways for their own companies to mimic JGJ Inc's services. Mimicking business strategies helps show that the risk of rivalry competition is high. JGJ Inc. must continue to look for ways to reduce operating costs as well as increase market share. One way to help cut costs is for JGJ Inc. to enter the market using the critical path method (Barrow, 2016). Another way to cut costs is by having multiple suppliers.

JGJ Inc. needs to shop for insurance every year to ensure the company is achieving the lowest insurance rates ("How often"). Insurance companies have intense competition. It is effortless to switch from one carrier to another, making the insurance companies' bargaining power low. However, the risk for supplier bargaining power is high for drivers. JGJ Inc's suppliers are their drivers because their drivers provide the service of completing the ride. Thus, JGJ Inc. needs to perform a risk assessment of its current retention rate of drivers. If there are not enough drivers to conduct the business's essential functions, JGJ Inc. may not have a successful market entry. Another high risk is the bargaining power of buyers ("The five").

Upon entry to the market, buyers' bargaining power is high because of not having customer loyalty. Uber and Lyft have each obtained customer loyalty, which means JGJ Inc. must earn the trust and respect of its market if it hopes to grow its market share. Lack of loyalty and trust also shows that substitutes' risk remains high because of the large rideshare giants dominating the current market today.

Other macroenvironmental external factors .

         Since Covid-19 has been raging across the United States and Canada, JGJ Inc. may not have as much revenue at the startup than pre-Covid conditions. Many customers within JGJ Inc's target audience have been staying home more, which means not needing the transportation services JGJ Inc. offers. However, this is only in the short-term projections. After more customers receive the vaccine, JGJ Inc's market demand should skyrocket. The main macro-environmental external factors that Covid-19 has impacted include economic, social, and environmental ("Ellis, 2021").

Required Internal Resources and Competencies to Compete in the Market

            JGJ Inc. must have the following departments to maintain operations: Finance, Operations, IT, Marketing, Legal and Human Resources. The finance department is responsible for journal entries, preparing budgets and forecasts, paying invoices, payroll, and tracking the business's day-to-day finances. An employee in the finance department must have the following competencies: effective communication, analytical, Microsoft Office products proficiency, and time management.

            The operations department is responsible for the day-to-day functions required to run a business. Job classifications in the operations department are anywhere from C-level employees to associates. C-level employees must make the overall critical business decisions, whereas associates may help file paperwork or schedule appointments for clients. An employee in the operations department must have the following competencies: effective communication, critical thinking skills, leadership skills, decision-making skills, and teamwork skills.

            The IT department is responsible for keeping the app running and maintaining the internal software and file storage. An employee in the IT department must have the following competencies: effective communication, code writing, critical thinking skills, Microsoft Office products proficiency, and problem-solving skills.

            The marketing department is responsible for creating ways to gain market share. The marketing department works with both operations and finance to complete their ideas via the budget and per any new business strategy objectives. An employee in the marketing department must have the following competencies: effective communication, critical thinking skills, Microsoft Office products proficiency, time management, and flexibility.

            The legal department is responsible for handling any potential lawsuits.  Accidents may happen. Thus, it is in the best interest of JGJ Inc. to be proactive by either having a legal department or partnering with a reliable law firm. An employee in the legal department must have the following competencies: effective communication, critical thinking skills, decision-making, time management, and results-driven.

            The human resources department is responsible for disciplinary actions, investigations, job transitions, pay increases, and the hiring or firing processes. An employee in the human resources department must have the following competencies: effective communication, critical thinking skills, organizational skills, teamwork, and problem-solving.

Required Licenses, Patents, and Rulings or Legal Requirements to Compete in the Market

            Patents are not a requirement in the rideshare industry (Shah, 2014). However, patents would be helpful to JGJ Inc. by allowing the business to have sole ownership of its business strategy. The rideshare service requires JGJ, Inc. to have a business certificate to operate in all 50 states (Kloss, 2017). Along with the business certificate, JGJ Inc. also requires its drivers to be legally licensed. Currently, the legal requirements vary from state to state. For instance, Maryland requires the drivers' fingerprints while Arkansas, Indiana, and North Carolina require drivers to list themselves as independent contractors (Sloan, 2016). 

References

Barrow, C. (2016). The 30 day MBA in marketing: Your fast track guide to business success (2nd ed.). Kogan Page. Retrieved from https://search.ebscohost.com/login.aspx?direct=true&AuthType=sso&db=e000xna&AN=1135107&site=ehost-live&custid=s8876267

Ellis, J. (28 Jan. 2021). What are macro environment factors. Wisegeek, Wisegeek. Retrieved from www.wisegeek.com/what-are-macro-environment-factors.htm.

4 best rideshare services for seniors. (2 Jan. 2020). Retirement Living, Retirement Living. Retrieved from www.retirementliving.com/rideshare-services-for-seniors.

How often should you review your business insurance coverage? (n.d.). ITC, ITC. Retrieved from www.getitc.com/syndicate/2019/04/23/how-often-should-you-review-your-business-insurance-coverage.

Jones, H. (15 May 2018). Uber vs. Lyft market share. Kruze Consulting: Accounting, CFO, Tax & HR for Startups, Kruze Consulting. Retrieved from kruzeconsulting.com/blog/post/uber-vs-lyft-market-share/#:~:text=Uber%20vs.%20Lyft%20Market%20Share%20%20%20,%20%2036%20%205%20more%20rows.

Kloss, J. D. (8 Nov. 2017). What is a business registration certificate? Kloss Stenger & Gormley LLP, Kloss Stenger & Gormley LLP. Retrieved from www.klosslaw.com/business-registration-certificate/.

The five forces. (n.d.). Institute For Strategy And Competitiveness. Harvard Business School. Retrieved from www.isc.hbs.edu/strategy/business-strategy/Pages/the-five-forces.aspx.

Shah, M. (4 Mar. 2014). Uber and sidecar patent portfolios lead the ridesharing industry. Patent Vue from Envisionip, Patent Vue. Retrieved from patentvue.com/2014/03/04/sidecar-and-uber-patent-portfolios-lead-the-ride-sharing-industry/.

Slone, S. (14 Apr. 2016). State regulation of rideshare companies. Knowledge Center, CSG. Retrieved from knowledgecenter.csg.org/kc/content/state-regulation-rideshare-companies.