MKT362: Vehicle leasing and distribution company Gold bell Group announced on Monday its finalization on the acquisition of electric car-sharing: Pricing Assignment, SUSS, Singapore

Learning Outcomes:-

• Develop a deep understanding of conceptual frameworks and techniques of
  making strategic pricing decisions.
• Differentiate how various pricing practices are used in different markets, products and services.
• Discuss how pricing decisions are enabled by data-driven pricing analytics
• Recommend appropriate pricing strategies based on market segments, customer sensitivity, competition environment, ethical and legal constraints.

Goldbell acquires BlueSG; plans up to $40m investment by 2023

Vehicle leasing and distribution company Goldbell Group announced on Monday its finalization on the acquisition of electric car-sharing player BlueSG after the announcement was made in February 2021.

The group, in a press statement, highlighted that out of the planned S$70 million investment capital for the next five years, 60 percent or S$40 million will be made by 2023, as part of its growth acceleration strategy. A key priority of the investment will be the establishment of an open innovation platform in Singapore through BlueSG, which will act as a testbed for new and experimental pilot technologies.

Goldbell also noted that it is on track to expand the BlueSG fleet size with immediate effect and that it will increase its staff strength by 20 percent at the end of this year. To realize BlueSG’s business and technical capabilities expansion potential will be among Goldbell’s immediate priorities. It aims to achieve this by developing a business model that will be replicated among
other smart cities in the Asia-Pacific.

The group said that this effort will be kicked off from the establishment of BlueSG’s global headquarters for car sharing by the end of 2021, which also “sets the stage” for overseas expansion. With the finalization of the acquisition, Jenny Lim, who was previously BlueSG’s commercial and network director, has now been appointed by Goldbell as BlueSG’s head of Singapore, responsible for overall operations.

Goldbell chief executive Arthur Chua commented that since the announcement of the acquisition eight months ago, the company has been laying the groundwork to bring BlueSG to its next level of growth. “Not only are we interested in deploying newer generation, experimental technologies in our car-sharing fleet, we are also looking forward to working with companies, as well as local institutes of higher learning and research institutes, to realize our vision to evolve the BlueSG fleet into a living lab for future mobility innovations,” he noted.

Goldbell also affirmed that BlueSG customers will continue to enjoy the same services as before, following the proposed acquisition and rebranding of the BlueSG island-wide network of more than 1,500 electric vehicle charging points by a global multi-energy company, TotalEnergies.

“We look forward to working with a variety of charging infrastructure providers in Singapore and are excited about the interest that this is already generating among potential international original equipment manufacturers who are looking to tap into our BlueSG brand to showcase their new electric vehicle models, as part of our fleet expansion quest,” added Chua.

Question 1

• Collect and compare BlueSG electric car rental prices against that of two internal combustion engines car rental companies such as GetGo, Chariot, Car Club, or Whizzer. Assess the differences in price structure and price metrics.
• Identify and examine two operational constraints and advantages of BlueSG business model.

Question 2

• Describe BlueSG existing pricing metrics and discuss if these are consistent in unlocking the value of BlueSG’s business potential.
• Propose new pricing metrics and price structure for BlueSG electric car rental business to increase revenue growth and profits.

Question 3

The current fleet size of BlueSG in Singapore is 667 cars. With your proposed new pricing structure, estimate the annual revenue of BlueSG based on your assumption of the number of rentals and the average distance traveled per rental. Illustrate the change in revenue with the price sensitivity of 5% and 10% reduction in per km charge resulting in a corresponding increase of 5% and 10% in the number of monthly rentals.