PAKWHEELS.COM - THE NEXT CHALLENGE
PAKWHEELS.COM - THE NEXT CHALLENGE
PAKWHEELS.COM - THE NEXT CHALLENGE
THE CONTEXT
This case features the challenges faced by a start-up website, PakWheels.com, in the used-car market in 2015, when its founding partners were assessing potential sources of profitable growth and ways to maintain their competitive advantage. Founded in Pakistan, PakWheels.com was a vertically classified automotive portal that successfully revolutionised the used-car trade channel by bridging the gap between the traditional retail channel of car dealers and buyers. Key discussion points focus on the turning point of the PakWheels business, namely retention of users while sustaining the current business model, identification of key strategies for scaling up and monetization, and response to competitive threats to safeguard its market position. Through evaluating these options and discussing this case, students will learn about strategic problems faced by online portals as well as how these unique businesses create value for end users.
THE DECISION
During the monsoon season of mid-July 2015, Raza Saeed and Suneel Munj, the two co-founders and managing partners of PakWheels.com, grabbed a coffee en route to their office in Lahore, Pakistan. Their thoughts were consumed by the crucial upcoming investor presentation about the company’s growth strategy for 2016. Just when they thought that they were ready to develop an aggressive growth strategy, they received some unsettling news. There was speculation that one of the largest online classified websites—OLX—would commence a major three-week long media campaign costing about USD 0.5 million to launch its used-car section in the local market. According to Munj, PakWheels relied heavily on its loyal community members and their positive word of mouth for marketing, but this method may not be sustainable in the long run. For the first time in the history of Pakistan, online brands were deploying significant advertising budgets for mainstream media advertising. To compete with these deep-pocketed international giants, such as OLX, for market share was going to be a huge challenge for PakWheels. Saeed and Munj realised that they had to make some strategic business decisions. These included developing a profitable growth strategy for scaling up their digital platform without compromising sustainability and its competitive advantages and finally, making a decision on how to respond to OLX as an imminent threat to their market leader position.
Reference
Arif, F., & Sarfraz, S.S. (2017). PakWheels.com – the next challenge. Asian Journal of Management Cases, 14 (2), 137-159.
https://doi.org/10.1177/0972820117712315
About the Authors
Farrah Arif is Assistant Professor at the SDSB, LUMS. She teaches courses in consumer behaviour, marketing research and marketing management. She is also the director for the executive programmes in Marketing in the Digital Age and Marketing Strategy. Her research interests include consumer analytics, data-driven marketing strategy, marketing and digitisation. Her research has been published in the Journal of Business Research.
Email: farrah@lums.edu.pk
Sarah Suneel Sarfraz is Teaching Fellow at the SDSB, LUMS. She teaches courses in brand management, marketing communications, and principles of marketing. She is an avid case writer and her cases have been published in the Asian Journal of Management Cases.
Email: sarah.sarfraz@lums.edu.pk