The rise of a new giant–combination makes them stronger

Booking a car online has been legal in China. That is encouraging news for Uber China and Didi Chuxing. Recently, the ride-hailing app Uber agreed to merge its business in China with Didi Chuxing, who has been their rival taxi firm. That combination makes a new taxi giant brand in Chinese ride-hailing market.

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The product life cycle

Just like people, product also have life cycle. If administrators know exactly which stage their firm is and they take actions to manage their products, the firm will be full of vitality and keeps eternal youth. The methodology of Product Lifecycle Management is effective prescription to win in competition. It aims to narrow Research and Development, prolong Growth and Maturity, and delay the coming of Decline (Kobayashi, 2005).

Figure 1 The product life cycle

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How to make products maintain their mature appearance in the fierce market? The answer is its competitive and creative power (Peter, 2014). The market share guarantees their competition. So when firms encounter competitive rivals and environment, they will ask for help from their peer. Merge is a not bad choice. Not hard to see that the ride-hailing apps Uber China and Didi Chuxing have the same wisdom. Although they have been competitors, the same goal links them together. The two companies survived from the first stage Research and Development. They have occupied a certain Chinese market share. Now they face the problem of maturity and keep their youth with the minimum cost. They make a prescription together: to merge and cross-shareholdings, which make their respective comparative advantages into full play.

 

Their living environment

Although Chinese taxi-hailing market is a potential one, the competition in this market is tremendously fierce, too. In order to keep the brand competitive advantages, Uber China and Didi Chuxing choose alignment and collaboration of product life cycle management. Up to now, in china, there are many traffic tools to choose, such as taxi, bus and private car. Every kind of traffic tool shares part of passengers. Uber China and Didi Chuxing only have a “Part of the cake”. In addition, they have strong competitors from China and American. One is China Auto Rental Holdings Inc. This company supplies the service of tailored taxi service on the basis of self-owned fleet. Another one is Lyft, who is a rival in American. Lyft has entered the China ride-hailing market, too.

The merge puts an end to the battle of Uber China and Didi Chuxing for ridesharing dominance in China. It also collapses the coalition of global ridesharing alliance, which is a threat to Uber. The global ridesharing alliance is consisted by Lyft, Didi, India’s Ola and GrabTaxi Holdings Pte. Ltd. The merge of Uber China and Didi Chuxing makes a new brand in China taxi-hailing market. They make themselves stronger in the cruel competition environment.

 

Win in the competition——join hands

Uber China and Didi Chuxing are like twin brothers. There are so many common points between them. These similarities supply possibility to combine for these two big companies. Specifically, these two firms are all travel platform. They have the same products, the same operation patterns and the same marketing tools. There is effect of increasing scale in economic theory. So does it appropriate for Uber China and Didi Chuxing. If they joint together, they will share their information and clients. Their potential market is equivalent to double increase. The merge makes them stronger. They will have more preponderance in competition.

In order to establish brand awareness, Uber China and Didi Chuxing pay lots of money on it. They splash the cash in order to try their best to create a good brand image. The goal of products management is to make users form brand rely. By the endeavor of the first two stages: Research and Development, and Growth, Uber China and Didi Chuxing maintain good brand image among users. In the stage of maturity, users are used to use this software. So they have excellent brand competitiveness. Through the merge, they can share their loyal users. They will in an impregnable position in fierce competition.

Coexist: new mainstream of brand marketing

Management of products and brands are keeping pace with The Times. As the development of website, marketing approach has been greatly changed. The amalgamation patterns have been greatly changed, such as the merge of IQIYI and PPS, website YouKu and Potatoes. That is a new mainstream of brand operation mode. After the merge, the two brands don not disappear. The two brands coexist. Didi Chuxing and Uber China are following the new mainstream of brand marketing. They keep independent of brand and operations after their combination, so that they can reduce the internal friction of brand and save marketing resources. The orientation of Didi Chuxing is mainly the domestic market while Uber mainly aims to the overseas market. They exchange their user data and achieve the connection of the user account of both onshore and offshore. This kind of brand management proposes internal competition that can form refinement and diversified products.

Only the best product management can bring the maximum profit! Merge is the advisable way for Didi Chuxing and Uber China.

Published By CHENGXU ZHANG 216057786

chengxu@deakin.edu.au

 

Reference

Harriet, K. (2016) Uber to merge with China’s Didi Chuxing [online] Available at: http://www.theneweconomy.com/home/uber-to-merge-with-chinas-didi-chuxing [Accessed August 1st, 2016]

Kobayashi, H. (2005) “Strategic evolution of eco-products: a product life cycle planning methodology”, Research in Engineering Design, 16 (1), pp.1-16.

Peter, W. (2014) “What Can We Do To Be More Creative Today?”, Dealerscope, 56 (8), pp.12-13.

Riley, D. (2016) Didi Chuxing buys Uber China, compromises global anti-Uber alliance with Lyft, Grab and Ola [online] Available at:

http://siliconangle.com/blog/2016/08/01/didi-chuxing-buys-uber-china-puts-global-anti-uber-alliance-with-lyft-grab-and-ola-in-doubt/ [Accessed August 1st, 2016]

 

 

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