WeWork: Welcoming WeExplore3 WeExplore mission statement: To create world where people work to...
Transcript of WeWork: Welcoming WeExplore3 WeExplore mission statement: To create world where people work to...
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WeWork: Welcoming WeExploreDeGroote Consulting, Product Strategy Division
Sarah SchweinbergerBriana KnowltonMichael WidlickiShelby Gorelle
Opportunity Statement
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Given WeWork mission, culture, assets and strategic advantages, in what ways should the organization extend its product offering, specifically in the context of its DNA as a mission-driven company?
Recommended Solution
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WeExplore mission statement: To create world where people work to travel, not travel to work.
We recommend that WeWork leverages its deeply rooted mission, culture and strategic advantages to create a new product offering, WeExplore, for its target
millennial consumer base.
Key Considerations
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Key Considerations
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Product Synergies
Competitive Advantage
Market Opportunity
Mission and Vision
Key Considerations
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• Recommendations must complement, not cannibalize, WeWork existing product portfolio
• Successful synergy will allow WeWork to tap market shares of its other community initiatives
Key Considerations
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• Among WeWork core competencies include real estate and software development
• Business opportunities aligning with these core competencies require less upfront investment
• Level of competition within markets must also be identified
Key Considerations
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• Market size and speed of penetration must be understood and strongly considered when proposing a new product for WeWork
Key Considerations
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• The WeWork mission and its focus on community is truly the organization’s core
• Recommendations must align well with these values
• The mission and the business are linked (as the mission grows, so does the bottom line)
Key Considerations
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Key Takeaway: The identify of WeWork as an organization is essential; it must not be compromised when looking to expand the firm’s product offerings.
Analysis
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Strategy Mix Analysis
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Global Analysis
Industry Analysis
Firm Analysis
Target Market
Strategy Mix Analysis
13Key Issues Analysis Alternatives Solution Execution Contingency
Global Analysis
Industry Analysis
Firm Analysis
Target Market
United States• Pop’n: 316M• Individualistic• WeWork in 19 major
cities
Strategy Mix Analysis
14Key Issues Analysis Alternatives Solution Execution Contingency
Global Analysis
Industry Analysis
Firm Analysis
Target Market
United States• Pop’n: 316M• Individualistic• WeWork in 19 major
cities
Canada• Pop’n: 36M• Individualistic• WeWork in 1 major city
Strategy Mix Analysis
15Key Issues Analysis Alternatives Solution Execution Contingency
Global Analysis
Industry Analysis
Firm Analysis
Target Market
United States• Pop’n: 316M• Individualistic• WeWork in 19 major
cities
Canada• Pop’n: 36M• Individualistic• WeWork in 1 major city
China• Pop’n: 1.3B• Collectivist• WeWork in 2 major city
Strategy Mix Analysis
16Key Issues Analysis Alternatives Solution Execution Contingency
Global Analysis
Industry Analysis
Firm Analysis
Target Market
United States• Pop’n: 316M• Individualistic• WeWork in 19 major
cities
Canada• Pop’n: 36M• Individualistic• WeWork in 1 major city
China• Pop’n: 1.3B• Collectivist• WeWork in 2 major city
Europe• WeWork in 3 major
countries (UK, France, Germany)
• UK pop’n: 41M• France pop’n: 60M• Germany pop’n: 80M• Individualistic
Strategy Mix Analysis
17Key Issues Analysis Alternatives Solution Execution Contingency
Global Analysis
Industry Analysis
Firm Analysis
Target Market
United States• Pop’n: 316M• Individualistic• WeWork in 19 major
cities
Canada• Pop’n: 36M• Individualistic• WeWork in 1 major city
China• Pop’n: 1.3B• Collectivist• WeWork in 2 major
cities
Europe• WeWork in 3 major
countries (UK, France, Germany)
• UK pop’n: 41M• France pop’n: 60M• Germany pop’n: 80M• Individualistic
Mexico• Pop’n: 120M• Collectivist• WeWork in 1 major city
Strategy Mix Analysis
18Key Issues Analysis Alternatives Solution Execution Contingency
Global Analysis
Industry Analysis
Firm Analysis
Target Market
United States• Pop’n: 316M• Individualistic• WeWork in 19 major
cities
Canada• Pop’n: 36M• Individualistic• WeWork in 1 major city
China• Pop’n: 1.3B• Collectivist• WeWork in 2 major
cities
Europe• WeWork in 3 major
countries (UK, France, Germany)
• UK pop’n: 41M• France pop’n: 60M• Germany pop’n: 80M• Individualistic
Mexico• Pop’n: 120M• Collectivist• WeWork in 1 major city
India• Pop’n: 1.25B• Collectivist• Coming soon!
Strategy Mix Analysis
19Key Issues Analysis Alternatives Solution Execution Contingency
Global Analysis
Industry Analysis
Firm Analysis
Target Market
United States• Pop’n: 316M• Individualistic• WeWork in 19 major
cities
Canada• Pop’n: 36M• Individualistic• WeWork in 1 major city
China• Pop’n: 1.3B• Collectivist• WeWork in 2 major
cities
Europe• WeWork in 3 major
countries (UK, France, Germany)
• UK pop’n: 41M• France pop’n: 60M• Germany pop’n: 80M• Individualistic
Mexico• Pop’n: 120M• Collectivist• WeWork in 1 major city
India• Pop’n: 1.25B• Collectivist• Coming soon!
Key Takeaway: WeWork has proven that it can establish itself globally; it can leverage these connections to expand its business in these regions.
Strategy Mix Analysis
20Key Issues Analysis Alternatives Solution Execution Contingency
Global Analysis
Industry Analysis
Firm Analysis
Target Market
Industry Rivalry
Buyer Power
Threat of Substitutes
Supplier Power
Threat of New
Entrants
Porter’s Five Forces Analysis: The Sharing Industry
Strategy Mix Analysis
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Industry Rivalry
Buyer Power
Threat of Substitutes
Supplier Power
Threat of New
Entrants
Porter’s Five Forces Analysis: The Sharing Industry
Threat Level: High• Many substitutes available• Sharing option must be
perceived as a value add
Strategy Mix Analysis
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Industry Rivalry
Buyer Power
Threat of Substitutes
Supplier Power
Threat of New
Entrants
Porter’s Five Forces Analysis: The Sharing Industry
Threat Level: High• Sharing companies do not
own their tangible assets, the asset owner has high power in what they will or will not allow
• Suppliers have power to set price
Strategy Mix Analysis
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Industry Rivalry
Buyer Power
Threat of Substitutes
Supplier Power
Threat of New
Entrants
Porter’s Five Forces Analysis: The Sharing Industry
Threat Level: Medium• Sharing is trendy; firms want
to move into this trendy space
• First mover advantage is important
• High start up costs create barriers to entry
Strategy Mix Analysis
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Industry Rivalry
Buyer Power
Threat of Substitutes
Supplier Power
Threat of New
Entrants
Porter’s Five Forces Analysis: The Sharing Industry
Threat Level: Medium• Abundance of traditional
options (hotels, taxis, single homes, workspaces, etc.)
• People are looking for sharing options however, because it adds value (cheaper, less accurate in personnel projections)
Strategy Mix Analysis
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Industry Rivalry
Buyer Power
Threat of Substitutes
Supplier Power
Threat of New
Entrants
Porter’s Five Forces Analysis: The Sharing Industry
Threat Level: High• First movers become the
preferred choice; it is difficult to take away their customers
• There are a few large players owning the market share
• Accessible on a small scale
Strategy Mix Analysis
26Key Issues Analysis Alternatives Solution Execution Contingency
Porter’s Five Forces Analysis: The Sharing Industry
Industry Rivalry
Buyer Power
Threat of Substitutes
Supplier Power
Threat of New
Entrants
Key Takeaway: The Sharing Industry is trendy but competitive; first mover’s advantage, paired with creativity, is crucial.
Strategy Mix Analysis
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Global Analysis
Industry Analysis
Firm Analysis
Target Market
Strengths• Deeply rooted culture and value set• Focus on community; resonates with target
market• Mission driven employees with
complementary skillsets• Modern design, appealing space• Empowering environment• Strong valuation and investor support• Well established foundation that can be
translated into different business opportunities
Strategy Mix Analysis
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Global Analysis
Industry Analysis
Firm Analysis
Target Market
Weaknesses• Viewed by critics as pricy• Room for improvement with brand
awareness, particularly in smaller cities• Dependent on real estate industry and
overall employment rate of host countries
Strategy Mix Analysis
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Global Analysis
Industry Analysis
Firm Analysis
Target Market
Key Takeaway: With its deeply rooted philosophy and focus on community, WeWork is a established a strong foundation which it can leverage when exploring new business opportunities.
Strategy Mix Analysis
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Global Analysis
Industry Analysis
Firm Analysis
Target Market
Who is your target market? Introducing Pat the Millennial.
Who is Pat?
Strategy Mix Analysis
31Key Issues Analysis Alternatives Solution Execution Contingency
Global Analysis
Industry Analysis
Firm Analysis
Target Market
Who is your target market? Introducing Pat the Millennial.
Who is Pat?
• Age: 28 years• Gender: Male or Female• Values community, exploration and travelling• Wants to feel that he or she has a “purpose”• Work to live mentality, but has a passion for their job• Feels that the work they’re doing is meaningful• Travelling and working is an appealing combination,
not tied to a specific location• Comfortable with new situations/ambiguity
Strategy Mix Analysis
32Key Issues Analysis Alternatives Solution Execution Contingency
Global Analysis
Industry Analysis
Firm Analysis
Target Market
Who is your target market? Introducing Pat the Millennial.
Who is Pat?
• Age: 28 years• Gender: Male or Female• Values community, exploration and travelling• Wants to feel that he or she has a “purpose”• Work to live mentality, but has a passion for their job• Feels that the work they’re doing is meaningful• Travelling and working is an appealing combination,
not tied to a specific location• Comfortable with new situations/ambiguity
Key Takeaway: Pat’s needs must be considered when developing a recommendation.
Financial Analysis of Boston WeWork
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AssumptionsAverage of Dedicated desk and Private Office 400Number of Available Desks 20,000Average WeLive Pricing (murphy/4 bdrm.) 2,375
Financial Analysis of Boston WeWork
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Key Takeaway: WeWork currently has a large customer base that can be used to cross-sell complementary products to create value for both WeWork and the member
Alternatives
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Alternatives
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WeMove – Ride sharing for vehicles bikes and car sharing
Key Takeaway: WeMove has a large customer base and technological competencies, but vehicle management and legal/Government learning curve would be capital intensive
• Attractive in current locations
• Millennials are trending towards not wanting to own vehicles
• Doesn’t align well with competencies ( no vehicle experience)
• Insurance complications (experienced by Uber)
• Legal and public retaliation
Alternatives
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WeExplore – Shared Travel Space
Key Takeaway: Plan directly leverages competencies in both Real Estate and Technology, greater competencies will have to be developed in Foreign Markets
• Hostels are popular with millennials already
• WeWork has the competencies and assets (real estate & tech)
• Channel to foster community
• Experience resistance from landlords if community is disruptive
• Plan is heavily reliant on successful staffing
• Greater competencies will have to be developed in “travel” locations
Alternatives
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WeConnect – Bolster the app with: Marketplace, Social Network, and Job Board
Key Takeaway: WeConnect allows for the quickest roll out directly address the member community need to communicate. Unfortunately the offerings may be redundant in regards to existing solutions
• Quick rollout• Current Application base
already exists• Will directly address
members large engagement in the online community
• Social media space is rather crowded
• Not a directly revenue generating proposal
• Customer base may feel the offerings are redundant in comparison to existing solutions
Decision Matrix
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Key Considerations Weight WeMove WeExplore WeConnect
Mission and Vision 0.30 3 5 3
Market Opportunity 0.25 5 5 3
Competitive Advantage 0.25 1 3 3
Product Synergies 0.20 1 5 3
TOTAL 1.0 2.6 4.5 3
1 – does not address5 – fully addresses
Recommended Solution
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WeExplore mission statement: To create world where people work to travel, not travel to work.
We recommend that WeWork leverages its deeply rooted mission, culture and strategic advantages to create a new product offering, WeExplore, for its target
millennial consumer base.
Implementation Plan
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Implementation Overview
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WeWork mission statement: To create a world where people work to make a life, not just a living.
Implementation Overview
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WeWork mission statement: To create a world where people work to make a life, not just a living.
WeExplore mission statement: To create world where people work to travel, not travel to work.
What is WeExplore?
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• Another way for members to leverage their WeWork and/or WeLivemembership and recognize even more value
• An opportunity for members to experience new cultures and countries within the WeWork network
• A flexible plan that allows members to (a) work while they travel or (b) leave their work at home
How Does WeExplore Work?
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Pat is a hard worker, and decides that he deserves a break. He is already a member of WeWork and loves the service – and he’d love to take it with him when he leaves.
How Does WeExplore Work?
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Pat is a hard worker, and decides that he deserves a break. He is already a member of WeWork and loves the service – and he’d love to take it with him when he leaves.
Pat learns about WeExplore from his office mate, Jennifer. Curious he downloads the WeExplore app.
How Does WeExplore Work?
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Pat is a hard worker, and decides that he deserves a break. He is already a member of WeWork and loves the service – and he’d love to take it with him when he leaves.
Pat learns about WeExplore from his office mate, Jennifer. Curious he downloads the WeExplore app.
Pat sees a list of destinations, include major global cities such as New York, Shanghai and Berlin. Pat has never been to Berlin, so decides its worth exploring.
How Does WeExplore Work?
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Berlin? Great choice!
When would you like to visit?
Date
Time
Ben selects his date and time.
How Does WeExplore Work?
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Berlin? Great choice!
When would you like to visit?
Pat selects his date and time.
Pat then selects a travel plan that best suits his needs.
01/01/17
11:00am EST
The Travel Plans
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Visit
• Lowest price point• Dorm style
accommodation • Bunkbeds, shared
restroom• Shared kitchen unit
The Travel Plans
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Visit
• Lowest price point• Dorm style
accommodation • Bunkbeds, shared
restroom• Shared kitchen unit• Shared local
“WeWork” member guide
Experience
• Medium price point• Semi-private rooms (2
people) with double beds
• Shared kitchen unit and restrooms
• Shared local “WeWork” member guide
The Travel Plans
52Key Issues Analysis Alternatives Solution Execution Contingency
Visit
• Lowest price point• Dorm style
accommodation • Bunkbeds, shared
restroom• Shared kitchen unit• Shared local
BackPack buddy
Experience
• Medium price point• Semi-private rooms (2
people) with double beds
• Shared kitchen unit and restrooms
• Shared local BackPack buddy
Immerse
• Highest price point• Suite-style
accommodation• Shared kitchenette
and common area• Personal washroom• Shared local
BackPack buddy
How Does WeExplore Work?
53Key Issues Analysis Alternatives Solution Execution Contingency
Berlin? Great choice!
When would you like to visit?
Date
Time
Pat selects his date and time.
Pat then selects a travel plan that best suits his needs – he has determined that the “Immerse” plan offers him the best value.
Immerse Plan
$X,XXX.XX
How Does WeExplore Work?
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Berlin? Great choice!
When would you like to visit?
01/01/17
11:00am EST
Pat selects his date and time.
Pat then selects a travel plan that best suits his needs – he has determined that the “Immerse” plan offers him the best value. Immerse Plan
Location ALocation BLocation C
Please select a location.
Finally, Pat is prompted to select a location that best suits his needs – the location will include both accommodations, as well as the closest WeWork office building.
How Does WeExplore Work?
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Once details have been finalized, final payment will be prompted, and Pat will be able to finalize the details of his trip.
When Pat arrives in Berlin, he will be welcomed by a local WeWork employee, otherwise known as a “BackPack” buddy, to help him feel settled, and get to know members residing in his accommodations.
The BackPack buddy will then provide him with a list of potential tours that he may take advantage of, as well as fun excursions, allowing Pat to immerse himself into the culture of his host country.
Timeline
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0 months
1 month
2 month
3 month
4 month
5 month
6 month
7 month
8 month
Gather – scout locations
Recruit – find WeExplore staff
Understand - Train new staff
Organize – Design WeExplore space
Promote – utilizing existing apps and social media
*leases are signed
Assumption: assumes negotiations are immediate
Cost and Breakeven
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Visit Experience ImmerseRoom Price 55 75 95Revenue 30days 1650 2250 2850Cost (Lease Buidling Own 40% 660 900 1140Operating Income 60% 990 1350 1710
10% of Desks 2000 667 667 667
Operating Income 660,000 900,000 1,140,000
Upfront Cost to Building Owner 21,600,000 Full Year Lease Cost
Occupancy 100% 32,400,00090% 29,160,00080% 25,920,00070% 22,680,00060% 19,440,000
Contingencies and Risks
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Contingencies and Risks
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Situation Trigger Likelihood Solution
Unable to recruit adequate and skilled WeExploreStaff
Guests complaining about poor experiences or unenthused guides
Low Double down on social media promoand recruitment resources
Travelers are price sensitive and feel that prices are too high
Low traction and customer complaints about price
Low Reinforce added value and package services that WeWork provides
WeExplore fails to expand outside of current member base
Use of WeExploreservices coming only from existing members
Medium Look in to acquiring well known hostels for shared resources and knowledges
Recommended Solution
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We recommend that WeWork leverages its deeply rooted mission, culture and strategic advantages to create a new product offering, WeExplore, for its target
millennial consumer base.
Value Met? ExplanationInspire Gives members the opportunity to
experience the world in other culturesEntrepreneurial Learn from other cultures, tours that
involve industry knowledge from that areaAuthentic Staff are locals who know the cultureTenacious Expand ambitiously Grateful Tours that do social goodTogether Community building through shared
accommodation
Appendix
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KPIs
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• # of reservations made• Proportion using multiple products
(WeWork, WeLive, and WeExplore)• Traveller satisfaction• Portion booking each plan (are we
adding enough value with more expensive plans
• Marketing measure