Should Cabify prioritize expanding to new cities or deepening market share in existing locations?

Introduction

The trade-off between expanding to new cities or deepening market share in existing locations is a critical decision for Cabify's growth strategy. This scenario involves balancing the potential for rapid expansion against the benefits of consolidating our position in current markets. I'll analyze this trade-off by examining key business factors, user impact, technical considerations, and resource allocation.

Step 1

Clarifying Questions (3 minutes)

• Business Context: I'm thinking Cabify's current market position is crucial here. Could you share our market share percentages in our top 3 cities compared to competitors?

Why it matters: Helps determine if we have room for growth in existing markets Expected answer: Varied market shares, some dominant, some emerging Impact on approach: High market share might favor expansion, low share could prioritize deepening

• User Impact: Based on user behavior, I'm curious about our customer retention rates in mature vs. newer markets. How do these compare?

Why it matters: Indicates where we're delivering the most value Expected answer: Higher retention in mature markets Impact on approach: Strong retention could support deepening strategy

• Technical Feasibility: Considering our platform scalability, how much additional load can our current infrastructure handle for new city expansions?

Why it matters: Determines if rapid expansion is technically viable Expected answer: Significant headroom for growth Impact on approach: High scalability could favor expansion strategy

• Resource Allocation: Thinking about our team structure, how are our operations teams currently split between expansion and existing market support?

Why it matters: Indicates our current operational focus and capacity Expected answer: 70% existing markets, 30% expansion Impact on approach: Heavy existing market focus might suggest rebalancing towards expansion

• Timeline Considerations: Given our current growth rate, what's our target for market presence in the next 2-3 years?

Why it matters: Aligns strategy with long-term company goals Expected answer: Aiming for presence in 50 major global cities Impact on approach: Ambitious target would lean towards expansion strategy