Lime Case Study: Strategic Management

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Lime is a dockless electric scooter and bike-sharing company that entered the market in 2017 with venture capital funding. The company entered the market with “the goal of eliminating docking stations in order to make bikes more affordable” (Dess et al., 2021). Lime operates in more than 80 US cities and has entered the international market (Dess et al., 2021). In just six months of existence, Lime could penetrate 25 markets, and the service grew to 300,000 users (Dess et al., 2021). The company has successfully picked up and monetized the wave of using environmentally friendly and cheap transport that helps to move around quickly in an urban environment.

Strong Performance Factors

When Lime entered the market, it relied on the experience of Chinese dockless bike-sharing companies and the previous stages of the industry. However, the management and marketing strategy of the company allowed it to show strong performance for the following reasons:

  • Using the popularity of environmentally friendly and safe transport following the agenda of modern environmental problems;
  • Convenience, simplicity, and cheapness in using the service;
  • The company was selected to serve London, which increased its capitalization and recognition (Lime selected to serve London);
  • Lime Prime system for regular users provides discounts, free unlocks, and other promotions.

Challenges in the Business Environment

Lime’s main business environment challenges include high market competition, city policies and regulations, and vandalism. First, the company has many competitors in the US and international markets – Jimp, MoBike, Spin, and Bird (Dess et al., 2021). Second, dockless bikes are prone to theft and damage, the number of which increases in cities with a criminogenic situation or during protests and riots (Dess et al., 2021). Thirdly, each city has the right to establish its regulatory standards and limit the number of bikes and electric scooters (Dess et al., 2021). The city government and the police cannot afford to inspect and regulate too many sharing transports.

External Issues and Competitive Challenges in 2021

Moreover, in 2020-2021, Lime faced a tough external challenge – the coronavirus pandemic, which drastically reduced the use of shared transportation, including bikes. In 2020, the company was valued at 79% less than before the pandemic (Klebanov, 2022). Lime had to reduce the number of staff and wait for the situation to stabilize. The company then moved to be more proactive to address the issues and bring new users to Lime. The company’s marketing strategy is based on holding ongoing events and concluding contracts with city authorities using advanced environmentally friendly technologies (Unsal, 2022). Pandemic fatigue and the return of people to the streets coincided with active Lime marketing campaigns.

Strategic Management

Lime is best suited for a differentiation strategy, as it can provide customers with unique scooters that outperform competitors in terms of quality and ecological impact. The company should rely on its technological superiority, which combines innovative design, ease of use, and high-level customer service (Unsal, 2022). The target audience for such features coincides with common electric scooter users – young people who want mobility for little money and care for the planet’s future (Unsal, 2022). Perhaps Lime could use gamification in the app for loyal users who can earn bonuses for eco-activism and scooter riding. Weekly events and challenges can combine various tasks aimed at improving the urban environment and ecology. Customers will feel helpful, involved in the gaming and competitive process, and receive bonuses from the company.

References

Dess, G. G., McNamara, G., Lee, S. H. & Eisner, A. B. (2021). Strategic management: Text and cases. 10th edition. McGraw Hill.

Klebanov, S. (2022). The Business of Business. Web.

Lime Micromobility. (2021). Web.

Unsal, E. B. (2022). (Master’s thesis, University of Waterloo). Web.

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