ofo: Innovation and the Little Yellow Bicycle
(6 pages of text)
Ofo (stylized “ofo”), a Beijing-based bicycle-sharing company, had grown bicycle sharing from nothing into a dockless mobile application (app) service industry with over 120 million monthly active users sharing 30 million bicycles in cities across China and around the world. Founded by five bicycle enthusiasts in 2014, its dockless system used a smartphone application to unlock and locate nearby bicycles, charging an hourly rate for use. Although only two years old in 2017—and yet to turn a profit—the company was valued at over USD 1 billion in a recent E round of private-equity financing. ofo’s new funds would be used to buy bicycles for international expansion and hire more talent, but in a rapidly changing, highly competitive environment, the company needed to assess its current and future position.
This case can be used in innovation management or entrepreneurship courses at the senior undergraduate or graduate level. Students should have a basic foundation in microeconomics. Alternatively, the case may be placed in an industrial organization course. After working through the case and assignment questions, students will be able to do the following:
- Explain the nature of innovation.
- Describe the management of innovation in China.
- Outline the interaction between public policy and socially influential entrepreneurship.
- Define competition, oligopoly, monopoly, strategic games, and two-sided platforms.
Transportation and Warehousing
China, Large, 2017
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