Strategic Management of Uber: Market Positioning and Competitions

The present study examines the dynamics of business operations and planning in relation to business strategy and environmental factors. It focuses on Uber's strategic management and market positioning, exploring the impact of external and internal environmental factors on the company's performance. The analysis reveals that sustainable growth and market entry are crucial strategies for Uber to regain its market position, competing effectively with other businesses.

Business Strategy

Table of Contents

INTRODUCTION
In this contemporary business environment era where lots of uncertainty and market competition
an organisation need to formulate strategies and action plan to achieve set goals. Business
strategy is a high-level plan developed by an enterprise to reach set goals by providing a set of
guidelines through which is required to conduct business operations for attaining strategically
business goals. Business strategy in an organisation is the art and process of developing and
planning operational planning and providing adequate numbered of resource and investigate of
skills and competences of employees to delegate task role and accountability in the eye of
organisational goals and vision. The given report is based on the business strategy of Uber
Technology Inc. which is a known name in online delivery both of both food and vehicle for
hire. The report covers and outlines the impacts and effectiveness of a macro-environmental
factor on the business laterally by analysing internal environmental competency. Porter’s five
model and VRIO analysis and Ansoff matrix also used to cover and analyse the market and
various other theories are also used to form tactical and strategic planning to formulate a
business strategy for Uber.
Task 1
P1. Apply appropriate framework analyse the impact and influence of the macro environment on
Uber and its strategies.
Organisational overview
Today online taxi industry is an emergent trend in our live moreover, online taxi and
delivery trend subsequently providing many opportunities to the Technology company and Uber
are one of them. Uber Technology Inc. is providing hire and ride taxi service, food delivery
service (via Uber Eats) and package and parcel delivery facility to the public by using the
internet and mobile application. Currently Uber have approx. 110 million active users all around
the world. The gig economy Uber also indulging in introducing and developing self-driving cars.
Moreover, through a partnership with Lime Uber is also providing electric bicycle and motor-
powered scooter on hire charge.
Vision= To explode opportunity by citing the world in motion, uber has a vision that good things
happen when people move and they are eager to provide ease in the movement to improve
people lifestyle in this busy life.
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Mission- - Uber have mission to make transport as reliable as running water for every person
anywhere, the main reason for existence of business is to leverage memorable customer service
by providing ease of movement.
Objective- some of the primary objectives and business goals of uber are-
 The key focus of Uber is to offer steady and readily available transportation service to
everyone and everywhere.
 To consistently expands business globally and brings its services in other various cities to
let rider and driver connect to move on
 To be one of the cheapest easy and convenient ride provider company in the world.
Core competency
Uber core competency is an expansion of its business services by its ability to see new potential
markets and providing a better ride and delivery experience in comparison to another cab
provider. Uber currently have active 110 million users all around the world. Uber competency on
account of technological innovation makes it much easier to match with its driver and rider
effectively with a live tracking system.
PESTEL analysis of Uber
Uber has strategically and tactical business operations that are running smoothly and effectively
in many regions across the world. However, the strategic management of the company gets
severely affected by external environmental factors due to the complex and contemporary market
environment. PESTEL analyse would be more useful in the context of Uber to access and
analyse macro-environmental factors that affect organisational strategy and functions. PESTEL
analysis of Uber are as follows-
Political- Political factors mean rules, regulations and guidelines of government in a country
where Uber is operating. With igniting its operations in various countries, Uber is experiencing
both opportunities and political pressure because of not having clear regulations and bending
rules in general. Additionally Government of many countries are considering into price control
tool to discourage Uber vigorous pricing strategy to safeguard and protect traditional taxi
provider companies. Moreover, in some country like South
Africa and UK, government seizes the uber cars because drivers didn’t hold a taxi permit and
some cases of harassment and, in this sense government in many ways control the driver working
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in many ways. Business licenses are also being asked by the government so Uber need to give
documents to obtain commercial license.
Economic- Uber is modelled on the gig and shared economy where Uber acts as a link among
the vehicle held driver and passenger that shows it share intellectual and physical resource to
operate its business by a mobile application. Uber have disruptive economy impact on traditional
taxi provider business, but it help the develop country to provide more employment opportunities
to lower down the unemployment rate of the country. With the shared gig economy Uber
leverage both advantages and disadvantages on economy of nations. This is because Uber have
adopted niche marketing strategy that create unfair competition with private taxi provider this
invite government to restrict its operations in many ways. Despite with this controversy, Uber
has alarming growth in compare to its competitor like Ola and Lyft. Moreover, Uber don’t have
much impact of national recession in compare to other industries. Uber not only growing
themselves but direct affects the business of other sector like cinema, restaurant, hotels and high
footfall shopping malls to
Social- Uber really followed their mission to provide transportation as reliable as water because
they help in the uplifting lifestyle of people spends on the hire and other transport for their
movement. Moreover, Uber also contribute much to the society by providing employment
opportunity. Even in this pandemic crises Uber helps the society by providing transportation,
food delivery and parcel service to make life of people easier and convenient.
Technology- Business like Uber existed today because of advancement of the technology,
Internet penetration and rise of smart phone made life of present generation more convenient and
flexible. Technological adherence and adaptability supports Uber to capture large taxi market. In
present mobile application, Uber add on several feature to give memorable experience to
customer and made their ride more impressive. Few examples like relocation feature, online
payment via using cards and wallets, coupon code system on Uber Eats etc.
Legal –When it comes to have business in transportations service, a business needs to oblige and
follows various laws and regulations to avoid fine charger, same thing has been applied in
context of Uber. Legal factor however impact business of Uber very badly because many country
forms certain laws regarding the gig economy which shared resources and intellectual property
of others.
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Environmental – In order to contribute in business sustainability Uber is planning to move into
electronic and hybrid cars as this damage environment in little manner. Moreover, it has found
that Uber helps in reducing traffic conjunction as people use Uber cab instead of personal and
public transports. Furthermore, cars that are arranged by the Uber are new and more fuel
efficient with low carbon emission.
Stakeholder analysis of Uber Technology Inc.
For a shared economy company it is more important to manage the stakeholder interest to do
business effectively, Stakeholder analysis is a process of collecting and analysing the qualitative
information to demonstrate interest of which stakeholder should be taken into account when
setting business stargy and policy programmes. Stakeholder analysis in context of Uber can be
performed in three steps
Step 1 determination of main stakeholder of Uber
In first stage, Uber identify its main stakeholder which are likely rider, driver,
Step2. Prioritise stakeholder by analysing level of influence and level interest of stakeholder
In second steps, Uber segregated its stakeholder based on level interest and influence
which can be done by using power stakeholder analysis grid which are as follows in context of
Uber-
 High power, highly interested people- These are more important stakeholder of Uber, so
they need to fully engage with these people and makes the best practices to satisfy them,
for instance government and internet rider. High power, less interested people – Uber need to satisfy these stakeholder but noy so
much that they become boarding with Uber message.
 Low power, highly interested people- People in this category (partner driver) can be more
helpful for Uber to support its projects and business objectives.
 Low power, less interested people- so, Uber have to monitor these people , but don’t bore
them with excessive communication (driver contractor)
Step3. Undersetting key stakeholder of business
After identifying and prioritise its key stakeholder, Uber need to formulate management
communication plan to put these key stakeholder in business strategy.
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P2. Analyse the internal environment and capabilities of Uber using appropriate framework
It has been found that not only external environment but also internal environment og a
organisation can influence and impact operations and business strategies. Internal environment
consist the factor within the business which are primarily employees, partners driver, and
internal rider respectively in case of Uber Technology Inc. Board of director and partner of good
example when elaborating effect of internal business environment, several times driver went on
strike and denied their duty, due to this it disrupt Uber operations. Uber’s has brokerage type of
business model, the driver of the vehicle is the supplier while the rider is the consumer in this
model business. Furthermore, successful organisation like Uber has wide range of resource and
capabilities which uber can use to uphold its success and growth. Internal environment is
accumulation of attitude, culture, believes and shared value within the firm. Internal inveronment
consitude stakeholder of the Ubers which are-
 Partner driver (Supplier)
 Rider (Customer)
 Director and company executive (investors)
 Government and legal bodies
Value chain of Uber is a progression of actions it commences too transportation movement
service that customers willing to pay for. Uber should be accumulating value at each of the chain
of phases it follows to to provide a service. The goal is for the firm to enhance enough value so
that its customers will believe that service of Uber is worth buying for a price that is
sophisticated than the costs the firm incurs in providing service.
VRIO Analysis of Uber
Value: When it comes to value the competencies of Uber, they use their surging the price
method, which allows them to increase their price when the demands are higher than the
presence of drivers. It just the value of the brand that made customer still ordering dspite chargin
more prices.
Rarity: While all Uber’s competing firms have taxi cabs, drivers etc to achieve their competitive
advantage, Uber definitely has its patent on its price surging method which allows it to take the
lead on environmental opportunities and threats.
Imitability: Having a patent technology does not make Uber completely safe from being
imitated, especially when you have such appealing business model and everybody wants to be
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the next Uber. However, for the patent process it takes a firm to expose its information about its
products, thus making it automatically difficult to imitate the product or service.
Organization: Uber being a popular ride-sharing company also needs to compensate on its
resources and the drivers. However, 80% of the people recommend their friend on working with
Uber, but it clearly gives less compensation to its drivers. For example, Uber driver makes 3 to
30 dollars per hour, but an average driver is compensated over 14 dollars only. This is 25% less
as compared to the Lyft ride sharing company.
Capability Valuable Rare Inimnesable Organised
Human resource YES YES YES YES
Brand value Yes Yes Yes Yes
Profitability Yes Yes Yes No
Marketing
essentials
Yes No NO NO
The McKinsey 7s model
The McKinsey 7s model is a strategic tool and framework that helps managers and businesses
assess their performance.following the various 7s in context of uber-
 Strucutre
 Strategy
 System
 Staff
 Skills
 Shared value
 Style
Task 3
Ubers Five Force analysis.
Threat of new entrants (High)
With the rise of technology advancement and technology upgradation many new
organisation are entering into online taxi and delivery providing, therefore, the threat of new
entrants it is high in context of Uber. Business model of Uber is based on mobile application, and
in this present era of technological revolution a new tech idea comes out so often, Just after 4
years of Uber incorporation, Lyft in 2012 and other some cab provider are following the business
model of ubder which has been called Uberification because of all the company are using the
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Uber concept. THerfore it is presenting alarming to Uber that many more organisations will
come twith sme business model with different capabilities and resources
Bargaining power of suppliers (High)
The supplier threat in context of Uber is high, the primary supplier of the Uber is its driver of the
Uber taxis, IN such situation when driver realises that they have power over business of Uber it
can impact business operations and strategically business goals. Therefore, in order to establish
strong relationship with its customer Uber is providing various incentive programs like
commissions on rides driven and on good ratings, To be capable to transformation this supplier
power Uber can provide training to more employees with an aim to have a readily aviavle
soursce of replacement for the left driver. In order to control its supplier Uber can adopt
mechanism of contract with its employees to sidestep various tax, and benefits programs around
the world .
Buyers power (high)
The bargaining power of buyer in context of Uber is significantly high, the cause for this
it is that Uber has indulges in offering low prices to attract many customer who price centered.
Controary to this, whenever rider experiencing they are being overcharged by Uber or have
other kinds of issue with the firm they can switch to other cab provider like Lyft, ebcasuese there
is no bondation on using multipule application for transport Moroever, rider often complaints
about the surge pricing done by the uber whenevery they are expericing high demands.
Threat of substitute (Moderate)
The threat of entry of substitute in this competitive business environment in context of Uber is
moderate. This is because, Uber has only threats within its local market territory i.e. USA but in
the other 52 countries Uber is flourishing as alone taxi service provider. There are numerous
substitutes to Uber which are using the same business such as Lyft and zip caar taxi. Tese
substitute are offering cheaper price in compare to Uber but due to many loyalty program
strategy og the Uber and its long tail in online transport provider with giving extra service like
food delivery, Uber can be fearless from the entery of the substitute.
Rivalry with competitors (moderate)
.Bascially no specific industry are equal in terms of abreacting with market competition. Uber
relied in a business where with a small innovation in the technology many other small industry
creates prolonged which would further create oligopoly in the market. Uber is experecing stiff
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comeptiton in the USA and UK area with Lyft, Uber, Zip and Ola cab provider. Ola acquire the
foodpanda and also providing food delivery serice that binds Uber to enter in the food delivery
by introducing Uber Eats.
.Task 4
Bowman’s 9 clock
Bowman’s Startgic Clock is a model through which UBer can explore options of strategic
positionin g which is how service should be position to give the compest competiibe psotion in
the market.
Low Price and Low Value Added (Position 1)
This is not a very competitive position for a business. The product is not differentiated
and the customer perceives very little value, despite a low price.
This is a bargain basement strategy. The only way to remain competitive is to be as
“cheap as chips” and hope that no-one else is able to undercut you.
Low Price (Position 2)
Businesses positioning themselves here look to be the low-cost leaders in a
market.
A strategy of cost minimisation is required for this to be successful, often
associated with economies of scale. Profit margins on each product are low, but the
high volume of output can still generate high overall profits.
Competition amongst businesses with a low price position is usually intense – often
involving price wars.
Hybrid (Position 3)
As the name implies, a hybrid position involves some element of low price (relative to
the competition), but also some product differentiation. The aim is to persuade
consumers that there is good added value through the combination of a reasonable
price and acceptable product differentiation.
This can be a very effective positioning strategy, particularly if the added value involved
is offered consistently.
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Differentiation (Position 4)
The aim of a differentiation strategy is to offer customers the highest level of perceived
added value. Branding plays a key role in this strategy, as does product quality.
A high quality product with strong brand awareness and loyalty is perhaps best-placed
to achieve the relatively prices and added-value that a differentiation strategy requires.
Focused Differentiation (Position 5)
This strategy aims to position a product at the highest price levels, where customers
buy the product because of the high perceived value. This the positioning strategy
adopted by luxury brands, who aim to achieve premium prices by highly targeted
segmentation, promotion and distribution.
Done successfully, this strategy can lead to very high profit margins, but only the very
best products and brands can sustain the strategy in the long-term.
Risky High Margins (Position 6)
This is a high risk positioning strategy that you might argue is doomed to failure –
eventually. With this strategy, the business sets high prices without offering anything
extra in terms of perceived value. If customers continue to buy at these high prices, the
profits can be high. But, eventually customers will find a better-positioned product that
offers more perceived value for the same or lower price.
Other than in the short-term, Risky High Margins is an uncompetitive strategy. Being
able to sell for a price premium without justification is tough in any normal competitive
market.
Monopoly Pricing (Position 7)
Where there is a monopoly in a market, there is only one business offering the product.
The monopolist doesn’t need to be too concerned about what value the customer
perceives in the product – the only choice they have is to buy or not. There are no
alternatives. In theory the monopolist can set whatever price they wish. Fortunately, in
most countries, monopolies are tightly regulated to prevent them from setting prices as
they wish.
This position is a recipe for disaster in any competitive market. Setting a middle-range
or standard price for a product with low perceived value is unlikely to win over many
cons
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umers who will have much better options (e.g. higher value for the same price from
other competitors).
CONCLUSION
As per the dynamics of carried out study, it has been found that business operations and planning
were more depends on the business strategy and external and internal environmental factor of the
business. Present study analyses the macro and internal environmental factor of Uber and its
influence on the strategic management of the business and market competitions. The present
study has justified that sustainable growth and market entry are two strategic improvement
strategy for Uber to regain its market positioning.
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REFERENCES
Books and Journals
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