Analyzing the Impact of Macro Environment on Business Strategies of Uber

This report analyzes the impact of macro environment on the business strategies of Uber. It discusses the PESTLE factors affecting Uber, the internal environment and capabilities of the organization, and evaluates the competitive forces in the market sector using Porter's five forces model.

Business Strategies

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
P.1. Applying appropriate frame works analyse the impact and influence of macro
environment on given organisation and its strategies?...........................................................3
M.1. Critically analyse the macro environment to determine and inform strategic
management decisions?..........................................................................................................5
TASK 2............................................................................................................................................6
P.2. Analysis the internal environment and capabilities to a given organisation using
appropriate framework?..........................................................................................................6
M.2. Evaluate critically the internal environment to assess strength and weakness of an
organisation ?..........................................................................................................................8
TASK 3............................................................................................................................................8
P.3. Applying porter's five forces model evaluate the competitive forces of given market
sector for an organisation ?.....................................................................................................8
M.3. Apply appropriate strategies to improve competitive edge & market position on the basis
of outcomes?...........................................................................................................................9
TASK 4............................................................................................................................................9
P.4. Applying a range of theories , concepts, model, interpret and devise strategic planning for
a given organisation?..............................................................................................................9
M4 : Strategic management plan that includes strategic priorities and objective?..............12
D.1. Critique as well as interpret information and data applying, environmental and
competitive analysis to produce a set of valid strategic directions , objectives and tactical
actions ?................................................................................................................................12
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Business strategy is referred as a set of different decisions and tactics that benefits a
business person in attaining particular business goals and objectives. It is defined as a master
plan which is implemented by an individual so that a high competitive position can be achieved
within marketplace. This assignment is based on the organisation UBER . This report is going to
discuss about impact of macro environment on business strategies of a company. Various
analytical frameworks to acknowledge macro environment is discussed. Internal capabilities and
environment of organisation is acknowledged along with evaluation through Porter's five forces.
At last, different models, concepts and theories to understand strategic directions are mentioned.
TASK 1
P.1. Applying appropriate frame works analyse the impact and influence of macro environment
on given organisation and its strategies?
PESTLE Analysis
It is a strategic tool that are used by company to analyse external business environment
and competitive market so that managers of the organisation make some strategies to overcome
with the challenges and tends to leads business survival and growth. In context to Uber ,analysis
of various factors related to PESTLE are explain in below paragraphs-
Political factor: It covers various elements related to political stability, taxation policy,
trade restrictions, business incentives , corruption, competition policies, , government policy.
Uber has always faced endless debated globally. Increasing in the number of trouble that makes
impact on business. There were existence of political discussion regarding minimum wage act in
taxi industry and it is to be notices that whether the company Uber follow these rules. As
commercial licences are important to take from government by paying fees.
Economic factor: deals in exchange rate , inflation rate, unemployment rate, disposable
income, Foreign direct investment, interest rate, economic growth etc. In large number it
generate employment for audience. For drivers large number of job opportunities are created
through shared economy in taxi service industry. As in low prices the services are provided by
uber, as it is a major tension to other taxi drivers of their competitors. To survive in the market
there is need to cut rates of traditional taxi services. As audience choose that alternative which is

cheaper. So when economic recession is there uber not to be affected deeply in comparison to
other related industries.
Social factor: are related to age distribution, health consciousness, population growth,
age distribution, lifestyle attitudes, seasonal buying, cultural barriers and so on. Sharing economy
is depends on physical as well as intellectual resources by Uber. One good thing about it is that
they make their customer's happy. Smartphones help people to book the ride. As compare to
other taxis prices are less. Through social media, advertisements awareness among audience are
created. Due to this fame in the urban areas prices of rides are increased which is good for uber..
As due to their usability most of the times clients pick uber only. For its availability customers
inclined uber greatly.
Technological factor: involves various term like level of innovation, R& D activity,
technological change, automation, technological awareness, technology incentives. Innovation is
at the foundation of every enormous in 21 st century and development doesn't work without
innovation. For both riders and drivers uber has incredible innovation as well as experience. It
not become possible without innovation and technological advancement. Uber has coordinated
some highlights in to their applications so that to provide remarkable encounter. Uber use
geolocation, message pop ups, with this latest technology the organisation provide convenience
to customers which leads to business growth and survival. Innovation is significant components
driving Uber quick development.
Legal factor: are concerned to various laws like consumer protection, discrimination,
employment law, copyright and patent, minimum wage , health & safety law, etc. Different laws
in the country abide companies to pay fines if not work according to law and provisions. Uber is
in great trouble if minimum wage act is not follow and low wages are given to drivers. As it
results to increase labour turnover due to non payment of sufficient amount as per the law.
Which make negative impact on uber because if shortage of driver is there than it may affects
business profit also.
Environmental factor: are linked to climate, environmental policies, weather, etc.
Sustainability has great concern for Uber. Fuel consumption and traffic congestion are tends to
increase due to availability of large number of ubers. Now people are more interested to use cabs
or motor bike rather than using public transport.

Stakeholder Analysis: It is a method to find out those people who affected with
performance of company and sometimes they make impact on business also. It helps company
uber in grouping shareholders as per their level of participation, interest , To do stakeholder
analysis three steps are followed by organisation as these stages are describe in detail in context
to uber in below paras-
STEP first: Through preparing list number of stakeholders can easily be determine .
the list covers the details related to name of shareholders, date of share acquisition, number of
share holding, etc. Uber take all their stakeholders into consideration. For uber main
stakeholders are drivers, investor, mobile operating system provider, riders and their workforce.
Uber consider their riders on top priority.
STEP second: After preparing records of stakeholders and preparing list , than they
needs to be prioritize as per different categories like influences, level of participation, interest
etc.
High power , high level of interest: Such type of stakeholders will be most significant
for Uber and prioritizing them support firm to do their business activities in efficient and smooth
manner.
High power, low interest level: The respective stakeholders influence organisation
working but they do not have high interest in activities of uber.
Low power , high interest:These shareholders are tends to be informed regarding
business so that uber project can not create a problem to them.
Low power, low interest: These type of stakeholders not show their interested in
activities of company and also not to hold sufficient power to affect their working.
STEP three: In last step, uber managers will communicate with the stakeholders
according to their priority so they can take support from different stakeholders and can be gain
to complete project without facing any type of difficulty.
M.1. Critically analyse the macro environment to determine and inform strategic management
decisions?
It is necessary for every business to analyse the external environment properly so that it
becomes easy to understand their positive and negative impact. As these factors helps marketers
to take effective decision to handle the situation. If deep study is not done than business
environment are not properly analyse so it is not possible to do decision making because

effective decision can only be taken if all the factors are observe deeply. In context to
organisation uber it is said that manager of the company must analyse the environment through
PESTLE and than appropriate decision is taken to overcome with the challenges that most
commonly face by company.
TASK 2
P.2. Analysis the internal environment and capabilities to a given organisation using appropriate
framework?
Mckinsey's 7 S Model
It is a tool that supports in analysing and observing organisational design of a company
through identifying important key internal components. It is the responsibility of the managers to
aligned these components properly so that it results effectively. With the help of this Uber able to
achieve their objectives and goals. These components are describe in details in below bullet
points-
 Strategy: It is like a plan that is developed by an organisation so that competitive
advantage can be gain by it and they can easily compete with their competitors. If Uber
not formulate any strategy than it face many problems at the time of implementing plan
which results as reduction in customer base as well as on sales.
 Structure: It shows the way in which divisions and unit in the business are
systematically organised and also share with each other the information which are
relevant. If Uber not follow appropriate structure in the company than it tends to make
reduction in effectiveness as it support competitors to gain advantage.
 System: It is a process that aims to depict activities which performed daily and for for
that important decision making is done. Preparing & maintaining suitable system become
beneficial for manager to adopt and follow organisational change properly.
 Skills: It includes caliber, competence as well as capabilities of workforce in uber at the
time to perform their duty. Capable employees of uber handle the complex situation
smartly and in most effective manner.

 Style: It is type of method that adopted by managers to do management. In uber
participative style are follow where opinion of workforce are given into consideration.
 Staff: It is concerned to number and type of employees who are engaged to work in
uber . It covers the ways to which needed workforce tends to hire, trained, rewarded &
also to be motivated.
 Shared values: It is the core of this respective model it covers standards & norms that
tends to guide in proper manner the actions of company uber.
VRIO framework
In this analysis is done with regards to value, rarity, imitability and organisation. With the
help of this tool it become possible for company to identify resources that are easily available as
well as it also includes internal capabilities. The respective strategic tools beneficial to achieve
high competitive advantage. VRIO analysis are done in context to uber in the below mentioned
paras.
Valuable: In uber it is necessary for management team to make proper use of their
available valuable resources so that it become possible for them to give tough competition to
their rivals . By properly utilising valuable resource , “uber” can easily earn high level of profit.
Rareness: This aspect provides benefit to company in understanding whether the service
that are offered to audience by them are rare or not. Uber provide good services to their clients
which leads to gain loyalty of audience which results to increase sales and revenues in
considerable manner. With regards to it uber provide innovative & unique services to audience
which leads to indicates firm rareness.
Imitable: company uber needs to provide those services which are not exactly follow by
their competitors . If the rivals offer same services at low cost than audience prefer to choose that
particular option because people like to spent less for the services which are similar in both the
companies
Organisation: It is very important for every type of business for the purpose to manage
already available resources in most optimal manner. The costing will be increase if
systematically resources are not used by the company. This results as loss in revenues due to this
it creates difficulty in facing challenges.

M.2. Evaluate critically the internal environment to assess strength and weakness of an
organisation ?
Strength and Weakness of Uber.
Strength Weakness.
 Uber has high standard of services as
well as have verified drivers along with
their cars.
 As it is most suitable for drivers. They
can work for part time or can work with
flexible hours and also the drivers have
option to reject those customers which
are not wanted.
 The relationship among drivers and
company uber is ethically questionable.
The real connection is lack in this so
the loyalty between driver and uber is
tends to quiet low. Also the operating
cost are so high so it is not possible for
drivers to earn more.
 The model is so unpredictable so it
involves high risk for business failure.
TASK 3
P.3. Applying porter's five forces model evaluate the competitive forces of given market sector
for an organisation ?
Porter's five forces in context to uber.
INDUSTRY RIVALRY: as uber operate their business worldwide and in different
countries it has different competitors but involves intense competition. On different aspects their
competitor competes as some of these are related to comfort, customer service, reliability,
convenience , price etc. So it is observe that industry rivalry is too high for uber.
THREAT OF NEW ENTRY: Uber operate business on the concept that person are
interested to work as drivers can just arrange or bring their personal cars and then make it
registered and after that work at flexible time for uber. There fore if new organisation wants to
take entry in similar industry than cost & barrier to entrance are low. On the other hand audience
look for convenient way of transport that makes this type of market attractive. So in this industry
there is high threat of new entrants.

THREAT OF SUBSTITUTES: Taxi companies are the competitors as well as substitute
of uber. As there are many public transport which are also a good substitute of it. At operation of
uber these substitutes have great threat.
BARGAINING POWER OF SUPPLIER: Uber totally depends on their drivers for cars .
So suppliers has high bargaining power there fore uber had to take care of their suppliers because
if something goes wrong than it may affect their brand image.
BARGAINING POWER OF PURCHASER: As uber customers are price sensitive so
leaving Uber is a disadvantage so it is conclude that Uber has high bargaining power.
M.3. Apply appropriate strategies to improve competitive edge & market position on the basis of
outcomes?
The most generic strategy that are most commonly adopted by company Uber are cost
leadership as well as differentiation on the basis of technology. Unlike other traditional taxi
services , uber takes very small cut ranging between 5 to 20% . As uber not to hire full time
riders but leads to uses networking effects for the purpose to increase their number of drivers.
TASK 4
P.4. Applying a range of theories , concepts, model, interpret and devise strategic planning for a
given organisation?
Porter's generic strategies: In context to Uber three types of strategies are explain as
follows-
 Cost leadership: By using this strategy , customer who are price sensitive can easily
targeted by company. As per this strategy, Uber provide their travel service at low prices
to their audience. Offers and coupons are also given by it to their customers. Customers
recommend these offers to their family members and friends which indirectly attract large
part of audience so that high revenues can be generated by it.
 Differentiation: In such type of strategy, organisation provide their people some new
services that provide comfort to customer which make them different from other in same
industry. As Uber provide technological advance and innovative services to their
customers which leads to improve revenues and tends to raise business survival and
growth rate.

 Focus : It emphasise in both the aspects such as cost focus & on differentiation. In cost
focus uber provide their customers services which involves less cost so that every one can
afford their services which results as attracting large audience. On the other hand in
differentiation concept uber offer their services with advances technology which tends to
easy the work. And the services can easily hire without being so price sensitive.
Ansoff's matrix
Ansoff's growth matrix is a strategic tool used to do planning as it is mostly handle by
company's manager so that they can formulate appropriate strategy for growth . with regards to
company uber this framework is listed below:
company in increasing their revenues and shares without introducing new products or without
targeting any new market.
 Product development: In this strategy, a company introduces new services and products
in market so that their already exist and potential clients can purchase them in wide
quantity. With the help of this, sales as well as revenues of uber will tends to increase as
it leads to business growth and survival.
 Market development: In this growth strategy, the products which is already exist are
offered to new customers so it become possible to increase customer base of uber . This
tends to benefit uber in increased their services and profit margins.
 Market penetration: In this strategy, firm tries to enhance their market shares with
existing products in existing markets. In such strategy, company uber reduces their price
as well as offers complementary services to public so that it can engage large number of
customers in this way market share increase which leads to high revenues.
 Diversification: This strategy is considered so risky because in it new products are
introduced in new market and offer product and services to customers. If company fails
to please customers by their product, it tends to face huge loss of revenues of
organisation. In case, audience will like and prefer new services, it will make high
impact on market shares & profits.
As per above discuss strategies, manager in UBer is recommended to adopt market
penetration in which existing services with offers and various cash back facility and discounts
will be given to audience of existing markets so that high revenues can be earned. This will

benefits the company in increasing their revenues and shares without introducing new products
or without targeting any new market.
Bowman's strategic clock
It is a model that helps company in exploring suitable strategic positioning like. the
manner by which Uber can position their services so it become possible to gain high level of
advantage over other rival companies in efficient manner. Few Aspects are mentioned below:
 Low price & low value added: For Uber it is less competitive position . As products are
not differentiated, customer perceive low value regarding service even their price will
be less.
 Low price: Uber can position itself and consider themself as low cost leaders by
adopting cost minimisation technique. It has low profit for their services but due to
reason high level of sale volume, the whole profit will be increase.
 Hybrid: low price elements are included in this type of strategy and product
differentiation. This positioning strategy in uber will be every effective.
 Differentiation: In this Uber is required to concentrate on providing technological
advance service to audience so that considerably sales can be enhanced.
 Focused differentiation: Here, Services/ product are placed at high price level consumer
can purchase product due to its highly perceived value. luxurious brands used this
strategy which operates their business at global level.
 Risky high margins: Organisation tends to face high risk in this strategy that leads to
increase chances of business failure. Here, uber can set high price without offering
anything extra in context to value.
 Monopoly pricing: only one company offer product in market in case of monopoly
market In monopoly business is not concerned regarding the price. If end-users are
requires that item, than they have to purchase even it is so costly.
 Loss of market shares: such strategy is a disaster in competitive market. In this,
organisation set standard price of middle range for their item. Due to that market shares
earned by organisation are less.
In context to uber it is observed that after analysing two model company adopts the strategy “
differentiation” . In this new product or services are given to audience so that organisation can

easily gain high revenues and profits. It allow uber to enhance their revenues and sales due to
which it captures large customer base.
M4 : Strategic management plan that includes strategic priorities and objective?
Strategic planning support company to identify various activities , priorities, operations,
focus etc. as it also tends to ensure that workforce in the company engaged in the activity to
achieve common objectives. To implement strategy uber follow such strategic plan.
Vision: the main vision of uber is that make available everywhere for every one. And also
to conquer comfort as well as convenience transportation.
Mission: In context to uber, its mission focuses on experiences & limitless services that
organisation strategic model has on the customers it serves.
' Strategies:Skimmining pricing strategies are adopted by uber to attract audience.
Objectives: the objectives of the company is that to provide services to large number of
audience of different location and tends to increase their customer base by 25% in next five
months.
Tactics: Through marketing strategies like social uber create awareness regarding their
services.
D.1. Critique as well as interpret information and data applying, environmental and competitive
analysis to produce a set of valid strategic directions , objectives and tactical actions ?
From the environment and competitive analysis it is observe that market position for the
company is so competitive because there is high competitor are tends to available in the market.
Therefore any competitive firm can capture the market share by attracting large number of
customers towards themselves through providing better service. Thus to overcome with these
threat or issues, workforce of Uber can develop smart policies as well as create such type
strategies that help them to enhance large market share. Through making enhancement in their
services and by doing innovation, company can easily retain their customers because due to this
it creates goodwill in the market which provide satisfaction to the audience in this manner it can
support company to retain their market for long term.
CONCLUSION
After deep study and analysis, it can be concluded that without adopting suitable business
strategies, it is very difficult for company to achieve set goals. Analysis such as PESTLE,

stakeholders analysis, SWOT, Ansoff's matrix benefits a firm in understanding external
environment so that effective decision making is done . With the help of VRIO framework,
organisational capabilities can be identified. By using Porter's five forces, organisation can
acknowledge their competitive edge in market. Through following various different theories,
frameworks as well as models like Bowman strategy, porter's generic strategy, establ;ioshment
can implement correct strategic planning for themselves.

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