Strategic group analysis and strategy Canvas for public transportation in Egypt

Inner layer of environment, strategic group analysis and the strategy canvas can help to identify strategic gaps and opportunities. Apply these analytical tools to an Egyptian industry of your choice.

The transportation sector in Egypt is considered as one of the important sectors. In my analysis I shall represent the different types of transportation an individual can use in order to navigate the cities of Egypt, and how this type of transportation can form different strategic groups. We will try to simulate how strategy canvas can be represented for this sector and what are the strategic gaps and opportunities we can find.

Starting with identifying different types of transportation available in Egypt and how they form different strategic groups. First let’s start with the common transportation type that most Egyptians use which is the microbus, there are 8880 microbus in Egypt, two million cairens use microbuses daily compared to 4.5 million who use public buses and minibuses and two million use the underground, this means that 23% of cairens use the microbuses, although microbuses are available almost in all Cairo, but we face today many consequences from the high volume of microbuses in Cairo. Due to the level of education an carelessness of microbuses driver you are badly treated inside the microbus, you are forced to pay the fare they set without any regulations. Moreover Egypt as a whole suffers from high accident rate caused by these microbuses, although microbuses facilitate transportation to the Egyptians but when using it to go daily to work it will accompany a financial load on individuals because its fare is considered moderate to most Egyptian

Another type of transportation which I consider it is in the same strategic group with microbuses is the underground. The underground in Egypt was first developed at the beginning of nineteenth. Due its high speed rather than other transportation means I believe the under ground in Egypt is one of the strongest means of transportation in Egypt and can strongly compete with microbuses. But the underground has two problems, the first one it is heavily crowded which means a lot of suffering while moving with it, the second problem it is not found all over Egypt just several places inside Cairo. The microbuses and underground can form one strategic group due to the following reasons:

·         Both of them offer relatively fast and cheap means of transportation

·         Both of them serve the same market segment

·         Both of them operate in Cairo, but the microbuses is more wide spread than Cairo

·         Both of them serve about 2 million daily.

Another type of transportation in Egypt is cabs, in Cairo there are thousands of cars running about that painted black and white cars, they are not air-conditioned and their state vary considerably from car to car, they contain no meter you have to negotiate with the driver about the fare, the benefits, these cabs are relatively more expensive than microbuses and underground, that’ why it serves another segment in the Egyptian society. Customers of these cabs suffer from debating with drivers about the suitable fare, the poor state of cars. In March 2006 Cairo introduced the modern yellow cab that includes a meter and air-condition, these cabs follow an organization they are not driven by individuals like ordinary cab. Actually these cabs were introduced to solve the problems of the ordinary cabs but of course they cost more than ordinary cabs. Cairo cab and ordinary cab can form a strategic group because:

·         They offer private rides to individuals.

·         Both serve in Cairo.

·         They serve the segment that can pay for taxi expenses.

·         Although service quality is different but it is in the same range of one group.

Another type of transportation in Egypt is the public transportation; they include buses, minibuses and trams. Actually these means of transportation are very cheap, very crowded and very slow compared to other means of transportation, that’s why in Egypt many people prefer microbuses and underground than these public transportation.

To identify strategic gaps and opportunities for the transportation sector we will how these groups can be illustrated in the following graphs;

From the previous illustrations we can find that Egypt most influencing problem in transportation can be illustrated with 3-D graph with these axes: exhaustiveness cost and speed.

The best one can show a problem on a 2-D graph is the first one, it shows a strategic gap between the cost and exhaustiveness of transportation.

This means that

Egyptians are searching for a cheap and comfort means of transportation.

According to my perception if we evaluated the extent to which offerings of different providers address the factors valued by customers, we will rank the following:

1.       Transportation cost

2.       Exhaustiveness

3.       Speed

4.       Coverage

According to these 4 factors we can map a strategy canvas perceived value by customers in the transportation means.

By strategy canvas model and the previous illustrations we can find out the strategic gaps and the opportunities suitable to apply for the transportation sector in Egypt.