OYO - Re-Defining Budget Hotels

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Purpose: The case revolves around the success story of OYO as an aggregator of budget hotels. It discusses about the business model that was adopted by OYO and the circumstances which fuelled its exponential growth. Though OYO maintained a standard quality parameter and regularly infused it with value addition, it did face a slew of challenges in terms of customer satisfaction and managing its hotel partners. The high cost of operating and pressure to become a profit company undoubtedly forced the organization to undergo phased restructuring, which further dented its image. It probes the dilemma which Ritesh Agarwal must have faced as to how to maintain a balance between growth and quality. Target Group: Post Graduate Management Students / Undergraduate Management Students. Courses: Applicable for MBA & BBA Courses. Design/Methodology/Approach: This case has been written based on the available secondary data, along with references from magazines, websites and journals. Findings: The case highlights the factors which led to the growth of OYO and the decision-making skills of the management that resulted in the exponential growth of OYO globally. It also explores the business model developed by OYO and the challenges it faces in terms of dilution of service standards and resentment among the hotel partners. It focuses on the crisis the organization has been dealing with and the measures that have been adopted to handle them. Research Limitations/Implications: Since the case is based on secondary data, there is room for further updating of the facts and figures related to the company. Information could have been more specific if case was written with direct interaction of management of OYO. Practical Implications: The case highlights the need for the organization to develop a robust strategy that could sustain growth and profitability in the long-run. Expected Learning Outcome: Students/Readers should be able to comprehend the flaws in the business models and skills required to handle them. Students/Readers should be able to analyse the importance of decision making skills in demanding situations. Students/Readers will understand the importance of maintaining a healthy communication with the customers and business partners to avoid complicated situations. Key Areas to be Discussed Status of Hotel Industry in India Major players as hotel aggregators Factors for Oyo Success Business Model of Oyo Major Challenges faced by Oyo Possible Solution for the Problem Teaching Strategy: Before the case, discussion students must be aware of major hotels aggregator in the Global Market.

Keywords: Customer Service, Consumers, Hotel, Online Bookings

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