Progressive Solutions

Report by Marina Hong, Trevor Weston, Reed Rodrigues, and Liboria Carrillo-Melo

Biography PageTrevor Weston graduated in 1998 with a marketing degree from the Haas School of Business at the University of California, Berkeley. He later received his master’s degree in marketing from New York University’s Stern School of Business in 2001. Trevor spent 4 years working for Nike as an assistant marketing director and 7 years as a marketing director for Coca Cola. After working in these corporations, Trevor decided to create his own consulting firm in 2012. He has since been the CEO of Progressive Solutions, and is working to expand his client base and reputation.

Trevor WestonMarina Hong graduated from University of Southern California in 2000 and continued to earn her master degree in marketing at UCLA Anderson School of Management in 2005. She had worked as a consultant for different corporations that includes Johnson & Johnson and McKinsey. With 9+ years of experience as a marketing consultant, she is currently working on her dissertation at Sandford Graduate School of Business. She has joined Progressive Solutions in 2014 and is currently their company representative and public relation manager.

Marina HongReed attended the Charles H. Lundquist College ofBusiness at the University of Oregon. Studying business administration, he would go continue on to the MBA program for Sustainable Business Practices and receive a degree. Experience of 10+ years as a freelance business analyst for various companies. Throughout his career, Reed has witnessed global company’s successes and failures first hand. As a new addition to Progressive Solutions, he brings a keen sense for guidance and a wealth of prior experience.

Reed RodriguesLiboria Carrillo-Melo graduated from University of California-Berkeley in 1999 with a bachelor’s degree in business management. At Berkeley, she was chosen to internship for one of the UC Berkeley Global Internships in San Francisco. This internship led to her position in the Duncan Channon company where she held the Advertising Support Manager position for six years. She was admitted to California Polytechnic State University-San Luis Obispo in 2005 and earned a master’s degree in marketing. She held a position in Accenture before she secured a role with Progressive Solutions. She hopes to acquire further skills from the company in exchange for her knowledge with past professions.

Liboria Carrillo-Melo

Table of Contents

Table of Figures....................................................................................................................i

Letter of Transmittal............................................................................................................ii

Introduction..........................................................................................................................1

Main BodyI. Factors of Expansion................................................................................................1

A. Is the Timing Right......................................................................................1B. In a Position to Expand................................................................................2C. How to Expand............................................................................................2

II. The Predicaments of Past Companies......................................................................3D. Who is the Competitor with Common Issues..............................................3E. What are the Common Problems.................................................................3F. The Solutions...............................................................................................4

III. The Role of Social Media in Expansion..................................................................4G. How Companies Create Customer Engagement..........................................4H. Why Use Social Media?...............................................................................5I. Avoiding Digital Marketing Mistakes.........................................................5

IV. Brand Expansion and its Relation to Brand Image..................................................6J. Brand Image and Why It’s Important?........................................................6K. Are you ready to expand?...........................................................................6 L. Brand Image During Expansion...................................................................7

Conclusions/Recommendations...........................................................................................8

References..........................................................................................................................10

Author Page.......................................................................................................................12

Table of Figures

Figure 1: Protestors Gather to Show Their Frustration with Uber...............................................3

Figure 2: Uber's Legal Problems Worldwide................................................................................4

Figure 3: Time Invested on Social Media......................................................................................5

Figure 4: Tracking Internet Traffic...............................................................................................6

Figure 5: PCDL Model..................................................................................................................6

Figure 6: Lyft Rebranding...........................................................................................................................

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Letter of Transmittal- Trevor

Progressive Solutions500 Bellflower Ave. Long Beach, CA 90815

November 15, 2016

Brian Roberts, Chief Financial Officer568 Brannan St.San Francisco, CA 94107

Mr. Roberts,

Progressive Solutions is pleased to present this report regarding your inquiry about the possibility of Lyft expanding to increase its market share. This report comprises our research and provides our recommendations to help guide you in solving this dilemma.

Our goal with this report is to provide you with the most current and accurate information regarding expansion in order to assist you in making an informed decision. The scope of our research is based on the factors that go into expansion, prior experiences that companies have had, and the importance of your brand image through this process. To gather this information, we utilized reliable databases, such as Business Source Premier, to find credible academic journals and periodicals relating to your issue.

If you have any questions about the content in the report please contact us by phone at 800-555-5555 or by email at progressivesolutions@gmail.com. Should you find that our recommendations are feasible, we also offer a service that helps implement changes in the direction you choose to move forward with.

Thank you again for choosing Progressive Solutions.

Sincerely,

Trevor WestonCEO, Progressive Solutions

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Introduction- Trevor, Marina,

Expansion is the next step for a company that is wishing to improve on their growth. However, it can be a risky decision due to the amount at stake. Before a business can even think about expanding their products or services, they must be stable enough to handle this progressive phase. In the following report, our team at Progressive Solution will explain when the timing is right for you to expand your service, investigate whether your company is currently ready to expand, and provide recommendations as to how to increase your success rate at expanding.

The basis of our research revolves around a few central topics. First, we looked at common issues related to your market and how they could relate to Lyft. Next, we considered problems that may arise with competitors during this phase. Lastly, we discovered what you should do to avoid complications with that may arise. Many of the sources that we included in this report are from trustworthy databases such as ABI/Inform Complete and Business Source Premier.

Factors of Expansion- Reed

Is the Timing Right?

In a business atmosphere, timing is everything. The margin for error in decision-making is small. To succeed in a competitive market, companies must be able to determine the correct moments when an opportunity for an advantage presents itself. “…the difference between crushing it and getting crushed abroad is knowing when you’re ready to make the leap” (Rockwell, 2016, p.79). Reaching a desired outcome becomes an increasingly difficult puzzle to put together along the way. Creating a business plan will allow your actions, and use of funds to become clearer. It is important to present your direction in a “simple, precise, and logical form” (Blackwell, 2011, p. 5). With a guided, clear plan, assistance in future growth of a company will be easier to receive. Considering expansion, companies must probe their positions in order to determine whether or not such an action is feasible.

A successful business with recognizable value is able to take the necessary steps toward expansion. A prospering startup, though achieving success, will not be in a favorable position to expand. When entering a new market, a company’s goal is to achieve similar success to its other thriving markets. The difficulty lies in proving, “that the market is big enough to absorb the products of your expansion or that the new markets you hope to penetrate will be receptive to your goods or services” (Blackwell, 2011, p. 99). The timing of your decision must correlate with an unaddressed need, or an advantage over the competition currently occupying the targeted market. Untimely entrance into an occupied market is a waste of resources that can be used in other geographic areas.

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In a position to expand?

A company interested in expanding must have proven success throughout its lifespan. When companies are profitable, the option of putting those profits back into the business is available. In order to fund the additional units of output, to produce a final product, an excess of capital must be available. This is where past success comes into play. In large operations, “…experience does show that when a substantial amount of new money is needed for expansion, the business will also need a change of management style and an infusion of supplementary management skills” (Blackwell, 2011, p. 99). In addition to creating funding for the expansion, a new form of consideration for the company must be created. There will be an increased amount of responsibilities to be accounted for.

Raising capital can be done in forms of bonds, shares, notes, etc. With the creation of such funds comes flexibility. In order to garner interest in your company from investors you need to be proven. Small market share businesses have trouble expanding due to their inability to grow a large enough following. Companies that expand nationally, and thereafter internationally, are able to separate themselves from the competition. These companies can provide assurance to banks or lenders, making funding easier to obtain. The funding you desire, and what you ultimately receive, depends on your ability to instill confidence in the business plan.

How to Expand?

Determining how your company will increase their customer base depends on different approach methods. For example, “…if market penetration is sought by converting non-customers into the customers of the industry's products, it leads to increase in the primary demand. But if market penetration is brought about by attracting competitor’s customers, it leads to increases in the selective demand” (Bang, 2008). If a company is fortunate to create primary demand, the transition to a new market will be easier. The lack of competition is an advantage. Creating selective demand in a market assumes that you can overcome the competition.

In addition, deciding whether to position your company as either demand-oriented or supply-oriented, will determine the appeal to new customers. A demand-oriented approach focuses on the customer’s needs, while supply-oriented approach focuses on manufacturing and supply. A company must determine whether to approach their customers for quantity or quality. Depending on your target market, either approach may be considered. For Lyft specifically, the demand-oriented approach would most likely work better since the service is solely structured for the customer and their needs.

When attempting to expand beyond one’s borders, a company must understand the nature of the business environment in a target country.

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Integrating a company’s homeland strategy in a foreign country may lead to a dissatisfied customer

base with dissimilar values. For example, when competitor Uber attempted to disregard the licensing requirements for drivers in Germany, outrage followed. An angered customer stated, “That might work in the U.S., but that’s not how things are done here in Germany” (Scott, 2016). Uber was forced to exit parts of Germany due to a disgruntled market unaccepting of the company’s tactics. As a result, the expansion into the German market was a failure.

The Predicaments of Past Companies- Liboria

Who is the Competitor with Common Issues?

The online transportation network is a modern idea that is competitive among the few recognized companies that are currently available. This mode of transportation has risen among individuals due to the technical savviness of it, but this advantage can also have its disadvantages. Uber, a top competitor of Lyft, is the founding company and is the most familiar company; therefore, it has faced the complications of social media first.

Uber, founded in 2009, did not meet success in the beginning of its launch, but in the past couple of years, with technology advancing, it has become a trend. This app relies heavily on social media so it is inevitable that it has faced legal problems concerning its main platforms. Facebook, Instagram, and Twitter are platforms that Uber and Lyft use to advertise their services and to communicate with their customers.

What are the Common Problems?

Legal action was brought to Uber by the competition, the taxi companies, for falsely advertising being “the safest on the road” (Daniels Fund Ethics Initiative, 2015), when in fact they did not undergo the same in-depth background checks as taxi drivers, like fingerprinting. The taxi companies were heavily affected by the rising popularity of the taxi app services; they stated that the company was misleading the customers into choosing their services with false information. Uber chooses to embark in social networks; networks that “pose deeply philosophical questions

Figure 1: Protestors Gather to Show Their Frustration with Uber

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related to the justification and capacity of law and policy [and] also pose practical issues that prelude effective enforcement” (Motala, 2016).

Uber dedicates itself in expanding its services internationally. Unfortunately, due to the issues Uber has had with the drivers, whether it be the matter with the licensing of the drivers or cases where individuals have been sexually assaulted while in Uber, many countries have implemented a ban on Uber services. This problem has taken place in multiple countries and their solutions differ. In India, for example, the Uber websites are banned but the services still run in some locations, so the company must operate carefully (Daniels Fund Ethics Initiative, 2015).

The Solution

One should be careful when it comes to publishing its information on the internet; it should be accurate and honest to avoid being deceitful to customers and avoid legal processes. Lyft must be careful when it comes to the different policies that each country implements and must enforce a meticulous safety policy. With the accusations Uber has faced, Lyft should take customer’s concerns regarding safety into consideration by emphasizing the safety policies; presenting customers with the steps they take to accomplish that.

The Role of Social Media in Expansion- Trevor

How Companies Create Customer Engagement

The relationship between a company and its customers relies heavily on the quality of engagement between the two. Making the customer feel valued and treated fairly can go a long way in ensuring their business in the future. Some of the ways you can build this relationship exist in your marketing campaign and the direction you choose to go with it.

Recently, there has been a big push towards digital marketing through the use of social media. It is important to be able to use those platforms since they allow a business to connect with customers quickly and cheaply. At the same time, it captures the attention of a customer both physically and emotionally.

To achieve their goal of engaging customers, companies attempt to “generate occasions for consumers' interdependence by offering added value (e.g., news feeds, games, applications, extra content, contests, prizes) or exclusive access to their brand pages,” (Karpinska-Krakowiak, 2016,

Figure 2: Uber's Legal Problems Worldwide

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p. 204) through their presence on social media. Giving a customer the ability to participate in events such as these help them feel like they are a part of the business and its success. These

strategies are ones that brands lean on to try to build a powerful relationship with consumers and gain their loyalty.

Why Use Social Media?

In today’s times, one of the most popular avenues for marketing is through the use of social media. Sites like Facebook, Instagram, and many more are being checked constantly throughout

people’s days. As a result, companies have learned to rely on in order to build their customer base and gradually steal market share away from their competitors.

Many companies have begun to direct their advertising to these platforms because “social media allows an interactive, personal, transparent, engaging, dynamic, and conversational approach to communication,” (Alameddine, 2013, p. 31). This differs one-way communication that commercials and other traditional marketing methods offer. Social media goes well beyond that in connecting businesses with their customers and building the strong relationships that brands strive for.

Another advantage of social media marketing is that it is a very cost effective way to market your company. Since all of the popular social media sites do not charge to use

their service, a business can save some of the costs of marketing and direct them to areas that may need improvement. Similarly, most customers have access to the web which makes it easy to reach a wider and more diverse audience. This interaction benefits both parties and can lead to stronger bonds between them.

Due to the differences in users of each platform, social media marketing also allows for a company to target a specific audience with their message. Since the ridesharing service is still relatively new, only 15% of Americans have used ridesharing apps (Dupré, 2016, p. 25). In an industry dominated by a certain customer base, this strategy would work especially well for Lyft. Social media would allow you to market to each of these user groups more effectively by choosing the appropriate platform to broadcast your message.

Avoiding Digital Marketing Mistakes

Although digital marketing may prove to be helpful for your company, there are ways in which it

Figure 3: Time Invested on Social Media

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can be used ineffectively. One of the most common mistakes you can make is to not track the amount of traffic your posts are getting. Using “tracking results can help you react quickly when something isn't working quite right,” (Mancini, 2013, p. 19). This can help your marketing team

determine which strategies are best at grabbing the consumer’s attention and generating the most traffic. At the same time, it will increase the effectiveness of your social media campaign and make it easier to reach your target customers.

Additionally, some companies focus more on themselves rather than on the customer. Even though you may be tempted to mention your company’s reputation, “don't bother with marketing messages that don't point out how you can benefit [the customer],” (Mancini, 2013, p. 19). Consumers

naturally compare their options and want to be able to quickly see the benefits of the product or service. Making these your main focus in your advertisement can help them choose to give their business to your company rather than the competition.

Brand Extension and its relation to Brand Image- Marina

Brand Image and Why It’s Important?

The most important thing to businesses are their consumer market; customers are a company’s source of revenue. Corporation hires marketers to help propel their company brand to the world and one of the most important aspect is their brand image. Brand image is essentially a company’s appearance which can influence the customer whether good or bad (Zhang, 2015). A company portrays its attitudes, messages, promises, and its personality through their brand image. The goal of a corporation image is to gain a customer’s trust and loyalty in a positive and strong way.

Are you ready to expand?

A journal entry from the Journal of Product & Brand Management, written by Bhimrao M. Ghodeswar, talks about a conceptual model called PCDL. The model introduces the four-

important aspect to get an effective brand: positioning the brand, communicating the brand message, delivering the brand performance, and

Figure 4: PCDL Model

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leveraging the brand equity (Ghodeswar, 2008, p. 6). When a corporation start positioning its brand, it

provides the consumer what their attributes are (Ghodeswar, 2008, p. 6). Once the corporation position their brand, they move onto communicating the brand by sending out advertisement that portrays their image. Once the word is out there and the consumers are aware of the company, they need to deliver the brand by providing the service that they promised. Once the corporation gain the trust and loyalty of the consumer market, they can continue to grow their brand equity by expansion (Ghodeswar, 2008, p. 7).

Another reason why would need to create a brand image is due to the high competition that is in the market. A company should create their own unique identity that fits well into the characteristic of their target market. To be able to create a successful image, they would need to understand how their customers, competitors, and the business environment (Ghodeswar, 2008). If a company has a strong and positive brand, they would able to have a successful expansion. A company wants to hold a good reputation as that creates a positive outlook on the company.

Brand Image During Expansion

Brand extension is the process of expanding the service or adding a new product to the already existed line or expanding your service outwards. (Anway, Amir, Sohail, Akram, 2011). Before a company think about expanding their market reach, they need to make sure that they have a positive and strong brand image (Anway, Amir, Sohail, Akram, 2011). To extend the brand with an already existing brand image can save you money toward marketing the new product. If a target customer is loyal to a brand, they will trust in the new items or services.

Brand extension will prosper if it is strengthened by the parent brand. To help strengthen the brand image of the parent brand needs to be a long-term relationship with the customer and to gain their trust and loyalty. Only with a strong brand trust will there be an option to create a brand extension.

Ellen Hues, a staff at Forbes, wrote an article that talks about the rebranding of the Lyft image. When Lyft enter the scene in 2012, they were drawing attention with their large pink mustache. It wanted to be a ride sharing service that you can call a “friend” and are “able to sit in the front seat with” (Ellen Huet, 2015). They were a new and innovated service that differed from taxis because it was supposed to create a more comfortable feel like you are riding in a car with friend.

Figure 6: Lyft rebranding

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Lyft pink mustache did not attract the amount of customer as it hoped to achieve. The new creative director for Lyft, Jesse McMillin, have decided to leave the pink mustache as it people

did not feel as comfortable to “sit in the front seat”. The new brand image remains pink but is perceived as a more professional approach.

Conclusion and Recommendations- Trevor, Marina, Reed

Expansion is a very possible choice for Lyft to grow their market share and try to jump ahead of its main competitor, Uber. However, there are many things to consider before making this important decision. Factors such as timing and budget play a huge role into knowing if it is the appropriate time to think about expansion. By miscalculating these, it could set Lyft back significantly and delay the success of your expansion plan.

Also, social media usage and brand image determine how consumers will view your company if a change is made. Creating new ways to interact with the customer will make them more likely to feel a connection to your company and opt to choose you over your competitors. This is especially important because this is one of the best way to steal business from Uber and other top rivals.

Based on our research, we recommend that Lyft consider the following changes in order to maximize their success:

1. Expand into new markets. Since Lyft feels like they are lagging behind in market share, expansion would be a great way to help solve this. Entering new cities and markets would increase the number of customers that could be reached. To ease the transition to expansion, this is something that could be done slowly to ensure that Lyft can sustain itself in these new locations.

2. Create new promotions via social media or other types of advertising. The quality and quantity of advertising can help customers remember your brand when weighing their options. Choosing ways to engage them through contests or games will help grow your relationship. This interaction is key because it makes the customer feel important and; consequently, builds loyalty in the them.

3. Capitalize on the mistakes of competitors internationally. Mentioned in the report are issues that Lyft’s main competitor, Uber, has experienced throughout their tenure as a global company. Creating selective demand in the countries where Uber has been unsuccessful can lead to a more favorable company reception. Knowing the shortcomings of your competitors creates a great competitive advantage.

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4. Expansion with the new rebranded image. Lyft is falling behind on their growth compared to their competitors. Lyft has redesigned their image and learned their flaws

that made their original logo weaker. With the new brand image, you should begin to push your improved look to your target customers. Adapting to your new identity quickly will set you forward so that your expansion does not suffer.

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References

Alameddine, A. (2013). Perceptions of executives from seven selected companies of the use of social media in marketing practices (Order No. 3592694). Available from ABI/INFORM Collection; ProQuest Dissertations & Theses Full Text: The Humanities and Social Sciences Collection. (1436276259). Retrieved from http://ezproxy.library.csulb.edu/login?url=http://search.proquest.com/docview/1436276259?accountid=10351

Anwar, A., Gulzar, A., Sohail, F.B., Akram, S.N. (2011). Impact of brand image, trust and affect on consumer brand extension attitude: the mediation role of brand loyalty. International Journal of Economics and Management Sciences, 1(5), 73-79.

Bang, V. V. a. S. L. J. (2008). Conceptualization of market expansion strategies in developing economies. Academy of Marketing Science Review, 2008, 1. Retrieved from http://ezproxy.library.csulb.edu/login?url=http://search.proquest.com/docview/200825512?accountid=10351

Blackwell, E. (2011). How to prepare a business plan, 5th edition. [Books24x7 version] Available from http://common.books24x7.com.ezproxy.library.csulb.edu/toc.aspx?bookid=42568.

Cowley, S. (2011). Google Analytics adds free real-time website tracking [Online Image]. Retrieved from http://money.cnn.com/2011/09/29/technology/google_real_time/

Daniels Fund Ethics Initiative. (2015). Uber technologies inc.: managing opportunities and challenges. [PDF document]. Retrieved from Lecture Notes Online Web site: https://danielsethics.mgt.unm.edu/pdf/uber.pdf

Dupré, E. (2016). All ail uber. DM News, 38(6), 25. Retrieved from http://ezproxy.library.csulb.edu/login?url=http://search.proquest.com/docview/1825873343?accountid=10351

Forbes. (2016, June 30). Happy social media day! Fun fact: 12 minutes of every hour spent on a mobile phone in the U.S. is spent on Facebook or Instagram. [Blog post]. Retrieved from http://forbes.tumblr.com/post/146709879566/happy-social-media-day-fun-fact-12-minutes-of

Ghodeswar, B.M. (2008). Building brand identity in competitive markets: a conceptual model. Journal of Product & Brand Management,17(1), 4-12.

Huet, Ellen. (2015). In branding makeover, lyft lessens 'friendly' focus, drops fuzzy mustache. Forbes. Retrieved from http://www.forbes.com/sites/ellenhuet/2015/01/27/lyft-branding-makeover/#53bd81494598

Karpinska-Krakowiak, M. (2016). The effects of social networking sites onconsumer-brand relationships. The Journal of Computer Information Systems, 56(3), 204. Retrieved from http://ezproxy.library.csulb.edu/login?url=http://search.proquest.com/docview/1795622851?accountid=10351

Mancini, C. P. (2013). Oops, I Did It Again. Businesswest, 30(3), 19.

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Motala, M. (2016). The “taxi cab problem” revisited: law and ubernomics in the sharing economy. Banking & Finance Law Review, 31(3), 467-511. Retrieved from http://search.proquest.com.ezproxy.library.csulb.edu/docview/1806235141/fulltext/DFEA4F2F3BC74490PQ/2?accountid=10351

Rockwood, K. (2016). Ready to go global? Entrepreneur, 44(10), 78-83.Scott, M. (2016). Uber's no-holds-barred expansion strategy fizzles in Germany. The ride-hailing

company has retreated from several German cities. Its withdrawal from Frankfurt offers a case study of what went wrong.

Wall Street Journal. (2014, June 11). In Berlin, Germany, taxi drivers gathered next to the Olympia Stadium to protest against the ride-sharing apps. Retrieved from http://www.wsj.com/articles/photos-taxis-blockade-european-cities-in-uber-strike-1402495206

Zhany, Y. (2015). The impact of brand image on consumer behavior: a literature review. Open Journal of Business and Management, 58-62. Retrieved from http://file.scirp.org/pdf/OJBM_2015011615441425.pdf

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Author Page

Letter of Transmittal- Trevor

Introduction- Marina, Trevor

Factors of Expansion- Reed

The Predicaments of Past Companies - Liboria

The Role of Social Media in Expansion- Trevor

Brand Expansion and Its Relation to Brand Image - Marina

Conclusions and Recommendations- Trevor, Marina, Reed

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