Impact of Macro Environment on UBER and its Business Strategy

This report examines the impact of macro environment on UBER and its business strategy. It analyzes the internal environment and capabilities of UBER, and applies Porter's Five Forces model to evaluate competitive forces in its market sector. The report provides insights into the strengths, weaknesses, opportunities, and threats faced by UBER, and suggests strategies for improving its competitive edge and market position.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
TASK 1............................................................................................................................................1
P1) Analysis of impact and influence of macro environment on UBER and its strategy ..........1
M1) Critically analysed macro environment to determine and inform strategic management
decision ......................................................................................................................................4
TASK 2............................................................................................................................................4
P2) Analysis of internal environment and capabilities of UBER ..............................................4
M2) Critically evaluate internal environment to assess strengths and weaknesses of UBER
with internal capabilities. ...........................................................................................................6
TASK 3............................................................................................................................................7
P3) Applying porter's five model to evaluate competitive forces for UBER in its market sector
.....................................................................................................................................................7
M3) Formulation of appropriate strategies to improve competitive edge and market position..8
TASK 4............................................................................................................................................8
P4) Applying a rang of theories, concepts and models to interpret and devise strategic
planning for UBER. ...................................................................................................................8
M4) Produce a strategic management plan that has tangible and tactical strategic priorities and
objectives. .................................................................................................................................10
D1) Critically interpret information and data applying environment and competitive analysis
to produce a set of valid strategic directions ............................................................................10
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................11

INTRODUCTION
Business is refers to an organisation, firm or entity which is engaged in commercial,
industrial and professional activities. It is also refers to the organized efforts of an individual or
group of people to produce and sell products and services with the aim of generating high
revenue. In addition to this, business strategy is refers to the combination of all decisions and
actions performed by organisation in order to accomplish organisational goals and secure a
position at a market place (Lim, Chalmers and Hanlon, 2018). It is the means by which
organisation set competitive moves and actions that are used to attract customers and build
strong competitive edge. Moreover, this is an course of actions and set of critical decisions that
outlines how business is to be carried out to reach at the desired goals. This report is based on
UBER Technologies Inc. which is an American based technology company, with headquarter in
San Francisco, California. It is specialise in providing ride-hailing, food delivery, package
delivery, couriers, fright transportation, electric bicycle and through partnership with motorized
scooter rental. Below report includes, impact of macro environment on UBER and its business
strategy, analysis of companies internal environment and capabilities. Moreover it includes,
analysis of market sector through using porter's five model and evaluation theories, models and
concepts for understanding strategic directions.
MAIN BODY
TASK 1
P1) Analysis of impact and influence of macro environment on UBER and its strategy
UBER Technologies Inc: It is a transportation based company in California, America
which is established in 2009 by Garett Camp and Travis Kalanick. This operates in more than 69
countries with different type of services. It is estimated to have over 78 million monthly active
users across the globe. Uber is consist of the 67% of market share for riding and 24% share food
delivery.
Vision: This is refers to an mental image of a possible and desirable future state of the
organisation. UBER vision is transportation with that will be safer, cheaper and more reliable
which will develops more job opportunities and higher for drivers (González-Rodríguez and et.
al., 2018).
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Mission: This is defined as a short statement of why an organisation is exits and what its
overall goals. Uber's mission statement is “transportation as reliable as ruining water, everywhere
for everyone” which reflects organisation is all about offering a services to its users for making it
memorable experience.
Objectives: It is described as the idea of future and desirable results that is need to
attained within specified period of time. UBER's objective is to serve all type of transportation
and logistic services to the customers. Along with being the most cheaper and easy rides across
the globe.
Macro environment
Macro environment of organisation is refers to the external factors that has an direct
impact on the productivity and decision making of a company. This has been closely related to
the the basic business cycle as opposed to performance of an organisation. Managers of uber are
focusing on increasing its growth at a market place along with the profit maximization. For this
company need to evaluate various external factors by applying PESTLE analysis framework.
Factors of this framework is explained below in relation to Uber (Quenum and et. al., 2019).
Political factor: This factor is refers to the political environment of a country that
influence the strategies and performance of the company. UK has an effective political
environment along with strong stability that ensures growth and sustainability of this
organisation within market. However, due to the anticipated events of Brexit could be threat for
the organisation as this could cause a major disadvantage to the company in to develop its
alignments with such unstable laws and legislations. In order to over come this Uber is need to
asses market conditions regularly to ensures that whether it could sustain in current political
environment or not.
Economical factor: This factor is associated with the overall performance of the nation
based on its economic grounds. This includes employment rates, interest rate, foreign exchange
rate, inflation rate etc. UK is the 5th largest economy in the world along with this, it is a popular
destination for foreign direct investment through which it is able grab many opportunities and
able to grow its business. However, inflation rate of UK is continuously rising by which Uber is
also increase its rates that direct influence companies revenue. In order to overcome this, Uber is
focusing on making better strategies and business planning so that impact of inflation can be
reduces (Kitsios and Kamariotou, 2019).
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Social factor: These are factors which are considered as effective in examine impacy of
social aspects which is imply on organisation. In terms of Uber, customers are happy with
services which is offered by company. With help of smartphones it becomes friendlier and easier
for people to get pick up time, picking point, tracking routes and dropping time. The fair which is
taken from guest is also less as compared to other taxis. In this awareness is spread by social
media, ads and word of mouth for create brand image. So by this prices may increase majorly in
urban cities which is considered as good for Uber but customers are not taken well about the
company.
Technological factor: All innovations and technological advancements are effectively
considered in this type of factor. In UK, environment is quite effective as there is advancements
in technologies. So by this industrial sector of country is investing their resources on adapting
and increase better equipments and techniques. In terms of respective company, innovation is
considered as foundation of everything in 21st century and development of any sector is not done
by without innovation. The business of ride sharing is considered as incredible innovation and
experience for guests and drivers. This is only considered with help of technological innovation
and advancements. Company coordinated various unique highlights in their application for
provide remarkable encounter.
Legal factor: In this factor, there is inclusive of all aspects of legal which involves all
laws and regulations which helps organisation for governing the procedures and policies. In
context of respective company, legal compliance is considered as important challenge as before
business and unable for comply may have outcome in huge fine for company. Uber is facing
various legal issues which is related to taxes and human resources also.
Environmental factor: This factor is consider as important which is basically associated
with environment of marketplace in which company is operating. In terms of Uber, sustainability
is concern for many business so this have importance for it. Fuel consumption, traffic congestion
which have increase having believed in many of customers (Bentley-Goode, Omer and Twedt,
2019).
Stake holder analysis: This is another method which is used for examine macro
environment of company and its product is stakeholder analysis. There are various stakeholder
which is related to Uber are discussed below:
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 Riders: Uber have to take into consideration its riders as their top most priority and
stakeholder. When there is no riders, app is not used and their revenue stream have to be
cease for exist. They have demand of certain level of services which helps to fulfil their
needs and wants. Employees: It is important for employees who are running day to day working of Uber
which is important and there is interest in success of business. In Uber there is personal
stake which are helpful for continue advancement for long term success of business. Thet
also possess all rights which is under law. Uber also offer their employees with proper
workplace which is free of discrimination and harassment.
 Investors: These are considered as essential stakeholder of Uber. As without adequate
capital which is infuse into business. They offers provide cash and also other assets for b
build up the brand image of company.
M1) Critically analysed macro environment to determine and inform strategic management
decision
As per the above discussion of macro environment, there are various factors which come
across to bring various opportunities and challenges for the company. External environment is
consist of the several negative impact that directly influence the growth of the company and its
productivity such as Brexit in political factor and high inflation rates. In order to overcome those
challenges managers are focusing on making effective strategies and better business planning so
that impact can be reduces (Fraser, 2019). Along with this technological and social factors
provides opportunity to Uber for upgrading its services for offering memorable experience to the
customers. Thus, pestle analysis helps in to improve decision making for accomplishing
competitive advantages.
TASK 2
P2) Analysis of internal environment and capabilities of UBER
Apart from macro environment, there is also essential for UBER to examine their internal
environment which helps company for identify their strengths and weaknesses in addition with
their capabilities which is develop by their strategies.
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McKinsey’s 7S: In terms of internal environment, company is use McKinsey’s 7S
model which have effective framework in terms of effectively examine core internal weaknesses
and strengths of company. The analysis is discussed below: Strategy: Uber is consider cost leadership business strategy which leads as cost
advantage which helps by internet based nature of their business model in terms of global
scale. Structure: Uber use Hierarchical organisational structure which leads as achievement of
goals & objectives in suitable manner. Systems: There is proper system is used for recruitment and selection of employees. After
this there is proper training which is related to technology is given to employees for
attainment of goals and objectives in effective way (Wadström, 2019). Shared values: Image of company is depends on behaviour of drivers towards customers,
as these individual are important face of company. The values are shared with all the
workers of company. Style: Uber use democratic leadership style for effective attainment of goals. Staff: The staff which are considered in Uber are basically considered as drivers or riders
who want their vehicle with registration of their vehicles.
 Skills: There is proper skills are provided to their employees for specific complete their
task in appropriate manner (Chen and Keung, 2019).
As according to analysis, firm is standing towards for their innovation and product
portfolio, it is considered as most effectively which increase scope of improvement in their
capacity of production and safety vehicle. There are various capabilities so for this VRIO
framework which is been utilised which is considered as appropriate technique or tool for
examine capabilities and capacity of company. The model is discussed below:
RESOURCE
S
VALUABLE RARE INIMITABLE ORGANISABL
E
COMPETITIV
E
ADVANTAGE
Innovation Yes No Yes Yes Temporary
advantage
Customer Yes Yes No Yes Parity
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loyalty
Service
quality
Yes No Yes Yes Competitive
Parity
Financial
position
Yes Yes No No Sustained
advantage
As according to analysis, there are various resources which is related to company, so
analysis is very important for highlight which of these are considered as valuable, rare,
inimitable and organisable. So this analysis is discuss below:
Valuable
In Uber, innovation, customer loyalty, service quality and financial position is considered
as valuable resources for organisation. As without these, company is unable to achieve there
performance and productivity of it. So this leads to temporary advantage for company.
Rare
In terms of respective company, there is customer loyalty, financial position is considered
as rare resources for organisation. So there is parity competitive advantage for organisation.
Inimitable
In Uber, inimitable resources are innovation and service quality which is leads as
competitive parity for organisation (Braun, Latham and Cannatelli, 2019).
Organisable
There must some organisable resources such as innovation, customer loyalty, service
quality which is considered as sustained competitive advantage for company.
M2) Critically evaluate internal environment to assess strengths and weaknesses of UBER with
internal capabilities.
There are various strengths of Uber as it is well recognised brand which offers high
standards of services to their guest. The major strength of company is there operational cost is
also very low and there is very little competition. But on other hand there are also some
weaknesses such as the idea for operating same business can be easily imitated. There is lack of
real connection among Uber and drivers which is quite low (Nagy and et. al., 2018).
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TASK 3
P3) Applying porter's five model to evaluate competitive forces for UBER in its market sector
For company, it is very important as their must be industrial attractiveness which is
assessed by organisation, to examine various forces which is prevailing in market sector, with
along their impact on company. So for this, Porter's five forces analysis is used, this is a
framework which monitors various forces in sector, which allow firm for determine their
position in industry. This framework is discussed below: Suppliers bargaining power: These are termed as organisations or individuals which
have responsibility for supplying raw materials to company, with aim of developing their
products or services which are offered. In terms of Uber, as company does not own any
of their vehicles in their brand name, as it is dependent on suppliers known as drivers for
their cars. Bargaining power of suppliers is high in terms of Uber, as company outsources
their vehicles and services of drivers which provide suppliers as an upper hand of Uber. Buyers bargaining power: Buyers are define as individuals who use and buy product and
services which is offered by company, so this is prominent reason for existence of firm.
In terms of Uber, buyers are not permanent as well as they are not become loyal to
organisation this is due to services which is provided by them. As there are various
options for customers for choose industry so they have upper hand as they shift from one
service to other. So shifting cost in market segment is low so there is reason for
customers as there is freedom for shift in easy way to another services (Aldea, Iacob and
Quartel, 2018). Threat of substitutes: Substitutes are define as commodities which are used in place of
services and products which is dealt by company. In terms of Uber, there is direct
competition as there are various business which use same model which provide same
convenience and price to their guests. Other business companies that are provided same
convenient transport are also considered as indirect competition with company and these
are termed as their substitutes. These substitutes are considered as big threat to Uber
operations all over world this is because as there are various other local services which
are taken by customers which leads to drive sales away from company. Threat of New Entrants: For sector such as automotive, there are majorly innovations
and inventions which are done for new organisation which is consider as appropriate for
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enter into market segment. In context of Uber, kind of business in which company is
operating is not hard or not take lot of efforts for enter into market. In this kind of
business which is based on concept as people who want employment opportunities as
drivers they just have to bring their cars and get registered and their they get flexible
working hours for work. So, if new company wants to enter into this type of business
having same model, barriers and cost is considered as low (CHA, HWANG and KIM,
2019). But there is also high threat of new entrants in industry as mostly people are prefer
for convenient way of travelling.
 Competitive rivalry: This is considered as most important force in automotive terms as
this associated with business model which is dealing in same products and services in
industry. In context of respective company there is intense competition in market
segment and there are major markets for Uber involves United States, there is
competition such as Lyft, which have same business model like Uber. So this provide
tough competition in terms of market share.
M3) Formulation of appropriate strategies to improve competitive edge and market position.
There is use of balance-score-card which is considered as appropriate strategy which is
helpful to improve market position and edge. This approach is strategic management
performance metric which is used for examine and improve many business functions on internal
terms and their results which have external outcome. This tool is useful for measuring and
providing feedback to company (Rogmans and Abaza, 2019).
TASK 4
P4) Applying a rang of theories, concepts and models to interpret and devise strategic planning
for UBER.
In terms of Uber, Ansoff matrix is define as marketing planning which helps ride-hailing
gaint for determine their products and strategy of market. In context of Uber Ansoff matrix there
are various different strategies which are available for business such as market penetration,
product development, market development and diversification are discussed below: Market penetration: This strategy is define as selling their existing products in existing
market segment. Uber engage in market penetration by application of many techniques of
sales promotion. This involves distribution of promo codes which allows user for having
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discount for their next ride. In addition, there is also users can earn free rides as by
having invitation for their friends for sign up and having ride with Uber (Pham, Pham
and Pham, 2018). Product development: This strategy is deals with finding new product segment for their
existing Market. The company of global transportation technology is enhancing their
range of services consistently. In current, there is extensive range of services which is
involves Uber X, XI, access, MOTO and so on. Market development: This strategy is associated with inspecting or finding new markets
for their existing products. In terms of Uber, this was basically launched in San Franciso
in 2009, noe company is operating their business in almost more than 760 cities globally.
The company of global transportation technology is now expecting for engaging new
market development in new CEO Dara Khosrowshahi.
 Diversification: This strategy includes developing new products or services for sell in
new markets. This strategy is considered as very riskiest strategy. Now Uber, is entered
their business in takeaway food delivery services with Uber Eats (Hsu, Moore and
Neubaum, 2018).
Evaluation:
As per the above porter five forces summarised about Uber company context where more
suitable factor would be Product Development to platform as it would better generate
positive fame of outcomes within effective manner. As product development help to Uber to
identified about modification in their services through different Uber model structure in
vehicles are is extensive range of services which is involves Uber X, XI, access, MOTO and
so on. This model cab service would have different price structure to pitch customers.
In addition, company also adopt Horizontal/Vertical integration in terms for decide which
type of direction the company have to choose. These integration are discussed below: Horizontal integration: This type of integration is define as combination of two
companies whose offerings and level of production is same. This is adopted by company
for increase their market size. In terms of Uber, there is maximise horizontal integration
all across as many market segments are possible. Company is leveraging cheap credit and
infusion of money which is private with aim of expand as quickly as they are considering
in local transportation.
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 Vertical integration: It is define as process when organisation can acquire any other
company which have same business model but on different stage. Uber try this
integration as Lyft's which is focused on transportation.
As from above strategies company effectively and appropriately adopt Horizontal
integration because company is going beyond ride-hailing in services like freight, food delivery,
driver less car technology and air taxis.
M4) Produce a strategic management plan that has tangible and tactical strategic priorities and
objectives.
The company is adopting strategic management plan which helps company for manage
their functions and operations in such way which help firm for growth in various different
market segment. So this plan is discussed below: Vision: Uber ignite opportunity as setting the world in terms of motion. Company is
taking initiative on big issues to help riders, delivery partners, drivers and eaters as
operate business in more than 10000 cities globally. Mission: Uber's mission is to ignite opportunities by setting world in motion. Objectives: Uber basically focus on offering readily and dependable available
transportation services. Main goal of company is to expand business globally and bring
their services for distinct cities for allowing drivers and riders to connect. Strategies: Uber uses competitive strategy which helps in retaining customers and build
loyalty (Kitsios and Kamariotou, 2019). Tactics: Technological advancement, human resources in effective manner and addition
of values are some tactics which are used by company for increase their market segment. Implementation: This is considered as prominent way in which company have to choose
appropriate implementing the strategies and tactics which are considered as essential
indicators for company.
 Evaluation: There must be system of feedback which is considered as important aspect
as for effectively acquiring response of their guests.
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D1) Critically interpret information and data applying environment and competitive analysis to
produce a set of valid strategic directions
There are various tools and techniques which is used for interpret data and information
for analysis the environment such as Ansoff model which is used for analyse the market segment
and also opportunities for company to diversify their business (Lavery, 2019).
CONCLUSION
It is concluded from above report as business strategy is most important factor which is
adopted by company in relation for increasing competent position of themselves and also
offerings in their potential market and niche market. It is very important for company for
examine macro environment of firm which allow for use appropriate strategies which is related
for increase their growth. Furthermore, there is analyse of internal environment which is very
important for effectively examine their strengths and weaknesses in addition with their
capabilities in which future strategy have base. In addition, Porter's five forces analysis helps
company for examine industrial position of company. Moreover, there are various strategy of
market strategies with devising the planning for their directions which allows firm in
appropriately company for direction in future for secure competent and effective position in
market place.
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