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OFO BIKE SHARING: RIDING ON A BUMPY ROAD

Reference No. 17/006 Publication Year 2017
Author(s) Steve Yang, Minyi Huang
Company ofo Biking Sharing
Industry Biking Sharing
Geographic setting China
Functional Area Strategy/ General Management; CSR / Sustainability; Innovation/ Entrepreneurship

Synopsis

A new wave of bike sharing has emerged in recent years and is receiving increased public attention. On the one hand, it is a form of green transport which is both convenient to use and affordable for the general public. On the other hand, as an entrepreneurial innovation, it poses many new management challenges to bike-sharing companies. This case study uses ofo Biking Sharing, one of the earliest and largest Chinese bike-sharing companies, to illustrate the problems related to entrepreneurship and corporate social responsibilities. In terms of entrepreneurship, the company is a typical case showing first mover advantages and disadvantages. In terms of corporate social responsibilities, the company is facing some unprecedented challenges of working with governments, bike users and other stakeholders because the bike-sharing business, which is new and growing fast, is yet to be regulated. Therefore, this case allows students to apply their knowledge of entrepreneurship and corporate social responsibilities to deal with complicated issues facing a first mover in a real-world business setting.

Uber’s biggest challenge seems to be cracking China, the world’s most populated country and second-largest economy. To add fuel to the fire, in September 2015, Uber’s biggest competitor in China invested in Lyft, Uber’s strongest rival in the US. Half a year later, Apple invested US$1 billion into Uber's Chinese competitor, the exact amount Uber was losing in China a year. The enemy of your enemy is your friend. When your enemy teams up with your other enemy thousands of miles away, it is almost like having someone charging into your front door while someone else blows smoke in your back door. How should Uber deal with all this as it expands into China? 

Learning Objective

This case can be used to teach entrepreneurship and corporate social responsibilities courses on the master and MBA levels. Students can critically evaluate the business and social environments facing the company based on the information, concepts and evidence provided in the case study to develop creative responses to these business and corporate social responsibility challenges.
The case study provides an opportunity for students to learn some strategic issues facing first movers. It allows students to debate whether a business should choose to be a first mover. The case also allows students to make judgements on stakeholder-related corporate social responsibility issues based on the limited and incomplete information available, and come up with creative ideas.

Therefore, the teaching objectives of this case study are to:

1. Provide an opportunity for students to critically review, consolidate and extend their knowledge of advantages and disadvantages of first movers.

2. Enable students to diagnose complex corporate social responsibility issues in a real-world setting.

3. Allow students to undertake critical overall evaluation of a company’s business challenges and corporate social responsibility strategies.

4. Encourage students to make an informed judgement in complex strategic issues and communicate their recommendations in a proper way to business audiences.

Suggested Questions:

1. Apply the knowledge of first movers’ advantages and disadvantages to critically evaluate ofo’s strategic positioning in the bike-sharing industry in China.

2. Make recommendations on the company’s future strategies and explain the rationale behind your recommendations.

3. Critically review ofo’s corporate social responsibility approach, diagnose any problems, and make recommendations for future improvements.