Business Strategy: Frameworks and Analysis for UBER

This document provides an in-depth analysis of UBER's business strategy. It covers the application of frameworks such as PESTLE analysis, SWOT analysis, and Porter's Five Forces. It also explores UBER's internal environment, capabilities, and competitive forces. The document offers valuable insights for understanding UBER's strategic planning and decision-making process.

Business strategy

Table of Contents
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................5
P1: Application of framework or analysing the impact of macro environment.....................5
TASK 2............................................................................................................................................7
P2: Analysing the internal environment & capabilities of a organisation by application of
appropriate frameworks..........................................................................................................7
VRIO of UBER......................................................................................................................1
TASK 3............................................................................................................................................2
P3: Application of porters five forces for evaluation of competitive forces..........................2
TASK 4............................................................................................................................................3
P4: Application of range of concepts, theories and interpretation for preparation of a effective
strategic plan ..........................................................................................................................3
Strategy formulation:.......................................................................................................................5
Tactics formulation:.........................................................................................................................5
CONCLUSION................................................................................................................................8
REFERENCE...................................................................................................................................9

INTRODUCTION
Business strategy is defined as the combination of different decisions that are taken by
organisations for accomplishment of their business objectives and then securing of a competitive
position in the external market. For this there are certain frameworks that are used to lay down
effective strategies so that external threat can be minimized and benefits can be maximized with
availing of attractive opportunities (Bentley-Goode, Newton and Thompson, 2017) Presently the
report is based on UBER technologies that is a brand offering vehicles for hire, package delivery,
food delivery, couriers, freight transportation and partnership with electric bicycle, lime and
scooter rental. There is discussion based on several frameworks such as PESTLE analysis,
SWOT analysis, Porters five forces model for understand the present competitive positioning and
then based on such analysis a strategic business plan is prepared according to specific laid
objectives in the given time frame.
TASK 1
P1: Application of framework or analysing the impact of macro environment
Macro environment consist of large number of factors that are affecting the functioning
of organisation and the way they are affected in a positive or negative manner through such
changes. It is crucial for organisations to identify the way in which different organisations are
getting affected by such changes at a given time period (Bhatia and Srivastava, 2018). In UBER
being a ride hailing brand and for the purpose of making a detailed overview of the external
environment factors there is discussion of the PESTLE analysis elements as given below:
Political: Political factors are the ones that are related to the government policy formulation and
implementation in prorogations.
Negative: UBER has faced scrutiny situations worldwide when France filed the charges on
advertising and Netherlands ruled UBER for the drivers not having licenses for taxi and desist
orders from Portland that lead to additional ban in ASIA countries of UBER.
Positive impact: There has been discussions related to minimum wage rate in the taxi industry
but later it was discovered that all such laws were properly abide by UBER. The government has
already provide the commercial license that si required by UBER for completing the pro0cess of
documentation.
Economic: These factors are part of the economy of a country.

Negative: UBER is hiring drivers to respond customers and then driving them to the location that
is often cheaper than taxis and easy to schedule (Lim, , Chalmers and Hanlon, 2018).
Positive impact:Many countries gave restricted or banned the services of UBER because of
unfair competition because of regular taxis. It has lead to career opportunities in country.
Social factors: these aspects are related to the society that is being served at large.
Negative: Many people who are opt that technology friendly find it difficult to use UBER leads
to emphasis on traditional taxis as a medium of public transport.
Positive impact: When customers are enjoying rides of UBER they are posting about their
positive experiences, the word of mouth leads to spreading of promotion and with increase in
popularity UBER has been able to increase their fare rates (Maniora, 2018).
Technological factors: With the changing external environment there is adoption of latest
technologies by organisations.
Positive impact: UBER is using latest social media applications as their promotional tool for the
purpose of making the target segment aware about the new offers and timely added benefits.
Many drivers are using 4G network for connecting with the application.
Negative impact: Many times there is issues of Network connectivity and passengers are getting
fare high as Compared to estimated then it has lead to negative impact on mindset of customers.
Legal factors: Legal factors are those that are part of different legal laws and regulations formed
by concerned authorities.
Positive impact: UBER is adhering to all legal rules regarding the emission of carbon and
harmful gases.
Negative impact: UBER has been facing legal battles with Mayo and various lawsuits that is
resulting into negative impact on their established brand image. UBER has been hit by unlawful
fines and in 2015 California state controllers regarded that UBER must regard their drivers and
workers and not as temporary workers.
Environmental factors: The external environment factors also posses a impact on the way
organisations are functioning.
Positive impact: People are having preferences for UBER as compared to public transportation
as analysts have compared the UBER fuel with public transport and this has resulted into low
emission of harmful gases.

Negative impact: There is a belief that UBER is increasing the traffic congestion and the use of
fuelled that is lead to harmful impact on the external environment (Martinez and Ferreira, 2019).
Analysis:
From the above made PETSEL analysis it can be said that UBER has to enhance their
legal adherences because their drivers has complained about low wages, sustainability must be a
major concern for UBER that is supported by their pilot project of GO green.
ANS off growth vector matrix:
Market penetration: It is a strategy that is based on selling of products in the existing markets.
UBER is engaging in use of market penetration by selection of promotion techniques such as
“UBER VIP” program.
Product development: In this UBER has used development of new products in the exiting
markets that is launch of services such as UBER X, GO, AUTO, MOTO, premium and rush.
Market development: It is a strategy where new products ca be launched.
Diversification: It involves development of new products to enhance the sale in existing market.
It is one of strategy that involves high risk. Launching as a taxi company and expansion to a food
delivery segment is part of diversification strategy of UBER.
TASK 2
P2: Analysing the internal environment & capabilities of a organisation by application of
appropriate frameworks
For making a internal analysis of UBER there is application of SWOT analysis:
Strength Weakness
 UBER is one of the largest ride sharing
technology having presence in 760
cities.
 Strong brand recognition
 Lower fixed investment
 they are having a dynamic pricing
Strategy
 Brand image of UBER has been
affected by numerous scandals.
 In 2016 net losses of UBER exceeded
2.75 billion dollars
 There is heavy dependency on
workforce
Opportunities Threats

 UBER can identify their top performers
and provide them growth opportunities
in order to retain them for a longer
duration.
 Driverless technology can be adopted
by UBER in special vehicles such as
emergency vehicles and ambulances.
 There is high employee turnover
 There are approx 300,000 UBER
lawsuits
 High competition from Lyft and Ola
has significant affected UBER.

VRIO of UBER
VRIO analysis is defined as a strategic tool through which organisation can determine
their resources and capabilities that are offering them long term advantages. It is mainly an
acronym that basically stands for value, rarity, imitable and organisation. It has been evaluated
that it is one of the most important tool through which organisation can undertake strategic
planning and decision making process in more effective manner (Sheikholeslami. and Ganji, ,
2017).
Resources/
capabilities
Valuable Rare Imitable Organisation Competitive
advantage
Positive
market
reputation
Yes Yes Yes Yes Long term
competitive
advantage
Leadership
team
Yes Yes No Yes Strong
competitive
advantage
Awareness of
brand
Yes Yes No Yes Sustainable
competitive
advantage
High
customer
rating
Yes Yes Yes Yes Realized
sustainable
competitive
According to the above mentioned VRIO analysis of UBER it has been evaluated that
company is having effective or positive resources. It has been identified that company is having
positive market reputation, which is valuable, rare, imitable and organisation and further
facilitate entity to ensure more competitive advantages (Yuliansyah, , Rammal and Rose, 2016).
While it has been underlined that leader team of company is valuable, rare, organisation and
offer strong competitive advancements. In context with awareness of brand it is valuable, rare,
organisation and provide sustainable competitive advantage to company. Lastly, if it is talked
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about high consumer rating, this resources in valuable, rare, imitable, organisation and offer
realized sustainable competitive advantages to UBER.
However, according to the above mentioned evaluation of VRIO analysis of UBER it has
been determined that it is essential for company to reduce worker turnover rate, provide training
and development courses to employees in order to increase their performance level and fulfil
their job expectations. In addition to this, company can also undertake advantage of trusted cloud
based worker examination software with the application of which UBER can effectively make
significant improvement in team efficiency as a whole (Mavridou and et.al 2017). This will
allow company to improve employee efficiency, increase employee engagement and reward
employees for more growth and development. In addition to this, in order to increase awareness
of brand by making their booking more quicker and powerful. In addition to this, entity can also
increase efficiency of their reservation process with the help of efficient automated functionality.
Thus, by undertaking all these measures into consideration UBER can enhance their sales and
marketing synergy and can assure higher growth, profitability and long term sustainability in
respective industry.
Balance score card:
It is a framework that is used for the purpose of making a detailed evaluation of elements
that are part of BSC frameworks as mentioned below:
Customer & stakeholder perspective: UBER took a strong position regardless of their
seamless customer prince that is leading to minimization of client driver interaction. The KPI
includes customer satisfaction ranking, overall rating, surge or non surge rate, alliance rates, fare
reviews, star ratings.
Internal process: UBERF is focussing on conventional performance metrics such as
improvement in quality, cost and scheduled UBER is focussing on internal processes from
expectations and demands of external stakeholders,
learning and growth perspectives: There is a central group of drivers that is based on measures
that are used by UBER fr tracking of performance. UBER has also adopted VIP status of drivers
receive when they are proving excellent services over a time period.
All such perspectives are measure by UBER are linked to their general strategic
objectives that is enhancing transportation, to be more affordable and reliable. These strengths
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can be further expanded to achieve the required strategies according to the present business
strategic plan.
TASK 3
P3: Application of porters five forces for evaluation of competitive forces
Michael porters five forces analysis is used for the purpose of analysing the level of
competition in the external market and the way it can shape in development of future business
strategy for business. It is used for drawing on the different organisational perspectives to
analyse the five basic frameworks that are affecting UBER in the following manner:
Potential threat of new entrants: It is a aspect that is related to the affect in company's
position by other organisations willing to enter the same industry of UBER. There is high threat
of substitution because UBER cannot stop any other new entrant from imitating its features,
UBER Has been involved in controversies in Netherlands, Thailand, France, UK and India. One
factor that is lowering down this threat is the requirement of high amount of initial capital to start
the operations by UBER (Yuan and et.al 2020).
Threat of substitution: There are many factors that are part of the automotive industry
and posses a high threat of substitution for UBER that includes traditional taxi service that are
already available and most trustworthy options still for many people. These are providing
services with high efficiency and user friendly designing, the abundance if such services is
enough to curb UBER, from elevating to the services fees. Customers are highly price sensitive
that is leading to presence of other services such as self driving cars (google cars), private cars,
metro, local public transports easily replacing UBER.
Bargaining power of suppliers: In the transportation industry the leading suppliers
includes the availability of drivers to drive the cars. The model of this brand is depended on the
owning of cars. The concentration of supplier group for UBER is generally not very high
because of strong requirements that are required to be hired by UBER. UBER is using a
subcontracting policy for their employment -process so that individuals can meet their terms of
web application. Supplier of oil and fuel is also major service provider of UBER. The oil prices
are increasing since 2015 high fluctuation of prices is leading to high level of market uncertainty
and no predictability of oil for power vehicles in UBER.
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Threat of bargaining power of buyers: the total strength of customers can affect the
performance of a organisation. UBER target group of customers is highly price sensitive because
of high price variations that are present in the market. The bargaining power of customers is high
for UBER because they are free to choose between number of options such as Curb, UBER, Lyft
and other merging competitors of UBER.
Industrial rivalry: This is a factor that is associated with the overall strength of
competition in the transportation industry. The overall trend of concentration of the industry is
high. There is high competition experienced by UBER because of competitive brands such as
Curb, Lyft & Didi chuxing. UBER is facing higher competition from Ola.
From the above made discussion of porters five forces analysis it can be summarized that
there is high bargaining power of buyers is very high for UBER and the amount of industrial
rivalry is also high so there is a need to focus on formation of effective strategies that can lead
towards lowering down of negative impact of high competition that is present in the external
market.
TASK 4
P4: Application of range of concepts, theories and interpretation for preparation of a effective
strategic plan
Bowman's strategic clock:
Bowman's strategic clock is used for exploring of different options that are available for
strategic petitioning and the way product has to be positioned to achieve a competitive position
in the market. The purpose of strategic clock is to understand the position of UBER Based on
two dimensions that is perceived value and price.
Low price & low added value ( position 1): It is not a competitive position for the UBER as
product is not differentiated as customer is perceiving a very low value despite of low prices.
Low prices ( position 2): In this the strategy for UBER is of minimization of cost is used where
the profit margins are low but volume of output is high.
Hybrid (position 3): Hybrid position involves UBER the Element of low prices but there is
some amount of product differentiation.
Differentiation (position 4): The major aim of differentiation strategy for UBER is to perceive
high value where branding plays a crucial role.
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Focussed Differentiation (position 5): In this strategy UBER is positioned at the highest level
as customers are purchasing product because of it sigh value.
Risky high margins (Position 6): It is a strategy that involves high roles for brands are as there
are high prices set without offering anything extra of high value to customers.
Monopoly pricing (Position 7): It is a strategy that can only be used by UBER if there is only
one sole business that is offering a particular product in the market.
Loss of markets share ( Position 8); In this UBER can loose their market share as the overall
perceived value is low and there is setting up of middle range or a standard prices for the
product.
From above discussed elements it can be summarized that most effective strategy for
UBER is to use focused differentiation where there will be positions of the product at higher
levels to achieve the premium prices for the targeted segment of market.
UBER is a well known ride hailing transportation brand.
Objectives: There are some strategies that are formed in the present strategic business plan for
the upcoming time period of five years such as:
 Enhance the market share by 10 percent in present locations of UBER in coming time
period of five years.
 Increase the present revenue by 5 percent by year ending 2022.
Strategy formulation:
For the purpose of formation of effective strategies here is need to lay emphasis on
adoption of certain laid frameworks that can lead towards achievement of laid objectives of the
present business strategic plan. There is use of Porters generic strategies in order to analyse the
way strategies can be achieved by UBER as mentioned below:
There are four basic growth strategies that can be used by UBER for the purpose of achievement
of higher markets share and expand their presence in market. These strategies are:
Market penetration: UBER stared up as a simple ride sharing application where the
main aim was to connect with customers looking for a viable option as a substitution of pubic
transport. The additional convenience of app has lead to growth of high popularity and the initial
launching offers attracted their customers which lead to growth of fast customer base (Chen and
et.al 2018).
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Market development: This strategy involves introduction of products and services in
new regions and markets. With time UBER kept on increasing its services by addition of variety
of services. They are having presence in 83 countries and across 674 cities. These markets are
constituting the largest share of customers in china, Brazil, Mexico and India. With application
of intensive and generic strategy along with high technology based differentiation lead to
building up of higher market share and intensive strategy of market development.
Product development: It is a strategy that involves development of new products to
enhance the sales of existing markets. Presently UBER is focussing on extensive range of
services that is UBER X, UBER GO, ACCESS, MOTO, Premium & rush.
Diversification: this strategy involves development of new products to enhance the sales
in new markets. It is one of strategy that involves high risk but in present time to achieve the
strategy laid down in the strategic business plan it is considered as most suitable for UBER. For
instance like UBER entered in a complete new range of UBER eats that is food delivery
segment.
Diversification strategy can help UBER in expansion of their existing markets hare and
approaching of a complete new industry that may not be possible in the present situation.
From above ANS off matrix it can be summarized that diversification is the most
suitable strategy for UBER to be used for the present strategic business objectives.
Tactics formulation:
For the purpose of achievement of the laid objectives there has to be focus on some of the tactics
that can help UBER in achievement of their laid strategies:
Marketing mix elements Tactics
Product UBER is providing their elastomers with taxi
rides based on its app sharing, transportation
services, wi-fi enabled cabs, care pooling
services. With options of UBER moto, UBER
GO, UBER pool, UBER X.
Place Initially UBER stared its operations from
America in year 2008 but since 2012 they are
having international expansion where they
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have revolutionised their entrance in new and
developing countries to change the nature of
public transport.
Price UBER is offering their customers with
comfortable and air conditions options of
transportation. Metros and other public
transports are affordable but do not provide the
individuality and comfort that is offered by
UBER. They have been using price
penetration as a strategy to initially enter in
new markets as their motive was to provide
comfort with affordable prices to their target
segment of customers. This tactics can further
be used for expansion of UBER across other
different new location in order to expand their
market share.
Promotion UBER is using focussing on application of
online mediums in order to promote their
brand. They have created a differentiated base
marketing by generation of lot of publicity by
word of mouth marketing and indirect
promotion tools. Active promotion on social
media is the bets tactics that can be adopted for
achievement of objectives in the present
strategic business plan.
Evaluation: It is the process where the performance of a organisation have to be
evaluated by keeping a regular check on all the activities based on the laid plan. It is crucial that
various aspects of strategic business has to be according to the laid objectives. If there is any type
7

of deviation then it is identified at this particular stage so that adequate actions can be taken to
deal with the gaps.
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CONCLUSION
It can be summarized from the information that strategies are very crucial in very
business to achieve the laid objectives. It is necessary to identify the impact of external and
internal environmental factors that are affecting the business organisations in both positive and
negative manner. Techniques such as PESTLE and SWOT analysis are very helpful in making a
detailed analysis of such factors that are affecting the business organisations. Porters five forces
is used for making a analysis of Competitive advantage based on the a business strategic plan is
prepared.
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