Disruptive strategy and acquisitions by OYO.

1. STRATEGIC MANAGEMENT
STUDY ON
“DISRUPTIVE GROWTH STRATEGY OF OYO”
SUBMITTED TO : Dr S N PRASAD
SUBMITTED BY : GROUP C3

2. COMPANY OVERVIEW
OYO Rooms was launched as a
website for booking budget
lodging in January 2013.
Ritesh Agarwal is the founder
and CEO of Oyo.
Today OYO’s portfolio comprises
more than 23,000+ hotels in
800+ cities in 18 countries
around the World.
OYO is world’s 3rd largest chain
of operated hotels, homes,
managed living and workspaces.
OYO Hotels & Homes has
16,000+ corporate clients
including Reliance industries,
ITC, Aditya Birla group , SBI etc.
Recently OYO was valued at $10
billion.

3. GROWTH PHASE

4. WHY AND HOW ?
• By 2023 OYO aims to be the biggest hotel chain, not just by rooms, but by sales, franchise fees,
bottom line, rental yields and internal rate of returns (IRR).
• OYO is targeting the largest 15-20 markets of the world which are characterised by fragmented
inventory.
• Their goal in these markets is not just to capture a handsome market share but to be bigger than the
top three-four chains combined together.
• Mainstream brands (like Marriott, Starwood, and others) are primarily focussed on the premium or
luxury segments and no brand has really tried to organise the low end of the market which shows a
huge opportunity for OYO.

5. • OYO is adding approximately 64,000 rooms every month across India and international territories
which is backed by strong operational capabilities and technology.
• OYO runs pilots in other geographies before committing to them.
• It starts with a few properties in a new market, understands the nuance, makes tweaks and only
starts scaling when it sees that something is working in the way it has seen work back home.
• OYO emphasises on building local leadership and working teams.
• Localisation is the key for OYO. Ex : Japan and Saudi.
Continued…

6. PESTEL
FRAMEWORK
Political factors
• Startup India, Make in India, Digital India.
Economic factors
• Increase in investment for start-ups, there start-ups like Oyo became viable with
reduced risk.
Social factors
• Oyo rooms was started mainly keeping in mind the middle-class people.
• Requirement of systematic hotels in India.
Technology factors
• Introducing the mobile app in both android and OS platforms.
• Concentrated aggressively on mass and digital market.
Legal factor
• Oyo have signed MoU with Uttarakhand government.
• Oyo has also partnered with Indian railways to provide budget accommodations.
Environmental factors
• Standardized aggregators of budget hotels.
• Use of social media and other advertising platforms.

7. BUSINESS MODEL
• In the last year 2018, OYO Hotels & Homes completed it’s transition to becoming a 100% leased &
franchised hotel chain.
• The entire hotel is renovated as per OYO brand and quality standards with capex invested in assets
primarily by asset owners.
• OYO sells the whole inventory of hotels under its brand name.
• OYO trains their hotel staffs in their dedicated skill institutes.
• OYO provides 24*7 customer service support.
• Over 93 % of OYO’s demand comes through its own channels signifying low dependence on third party
online travel agents (OTAs).
• Oyo charges 22% as commission from its hotel partners and this percentage is subject to change based
on the service provided.

8. BLUE OCEAN STRATEGY
• Eliminate: Fancy aspects of specially 3-star
hotel
• Reduce: Price per room
• Raise: Overall standard of hospitality
• Create: Location choices and value to
customers

9. COMPETITIVE STRATEGIES
• The company has invested heavily in technology to have an extra edge in the hospitality industry.
• ‘Krypton’ an in-house software, enables the company to guide auditors to perform targeted audits,
thus working towards providing a better customer experience.
• ‘Dubbed ORBIS’, instantly calculates a hotel's projected occupancy rates and revenue after joining
the Oyo platform.
• The booking software of OYO resets room rates at about 15 million of times a day based on real time
data to optimize occupancy levels.
• Appointment of the new CEO Aditya Ghosh, who was IndiGo's former president and CEO and was
instrumental in making Indigo the most profitable airlines.
• From a mere hotel booking company OYO has become an asset management company as they
manage and run hotels, motels and homes.

10. STRATEGIC
ACQUISITIONS
OYO’s acquisitions started in the year 2018 and till date it has done a
total of 6 acquisitions.
‘Novascotia boutique homes’ is a Chennai based service apartment
company.
‘Ableplus Solutions Pvt Ltd’ Mumbai based IoT technology company.
‘Weddingz’ an online marketplace for wedding venues and vendors.
‘Islands hotel’ hotel franchising in China.
‘Innov8’ a co-working spaces provider having pan India presence.
‘Leisure Group’ vacation rental company in Europe.

11. RECOMMENDATIONS
• Rapid growth may be backed by high technology, but OYO need to focus on quality, standardised
services and safety of guests.
• Oyo needs to expand in weekend destinations, they need to increase their existing market share
from 5% to 10% in at least 50 plus weekend destinations.
• As the company has seen success in their Oyo homes and Oyo townhouses they need to focus
more on this vertical.
• OYO has been accused of ‘Predatory Pricing’ which has to be stopped and keep a healthy
competition within the market.

12. THANK YOU