Business Strategy for Uber

This report discusses the business strategy of Uber, focusing on its impact on the macro environment, internal capabilities, and evaluation of the market using Porter's Five Forces model. It also explores strategic management plans for Uber.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
The impact and influenced of macro environment......................................................................3
The internal environment and capabilities of Uber......................................................................5
Evaluation of Market with Porter's Five Forces Model...............................................................7
Strategic management plans for Uber Technologies...................................................................9
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business strategy means by which an organization set out to achieve the goals and
objective. It can be also simply described about the long term business planning. Therefore, it
also discusses how people though towards organization for making decisions and allocate the
resources in order for having their development by key objective (Balashova and et.al.,2018).
Uber is a technology company that includes the services such as food delivery, couriers, package
delivery and freight transportation. It can be done while by using the electric bicycle or scooter
on rental. This report explain about the appropriate frameworks that have impact and influenced
of the macro environment. Furthermore, analyze the internal environment and capabilities of
organization. This report also explain about porter five forces model for evaluating the
competitive forces of given market sector. Moreover, using the range of theories, concept and
models for interpret and preparing the strategies planning for an organization.
MAIN BODY
Vision
To provide the smarter transportation with having fewer cars greater access.
Transportation that being safer, reliable and cheaper, creates more jobs opportunities along with
higher incomes for drivers.
Mission
Uber mission is to bring transportation at everywhere, for everyone.
The impact and influenced of macro environment
Uber had become more frequently the fastest growing taxi sharing company. But is also
seems to be had their various types of taxi industry, at having their minimum wages and banning
in worldwide countries.
Political:-
Uber has faced too much of controversy fir having its initial development. It seems to be
more difficult to lie in insurance, if their any accident held than it is fault of driver or customer.
The political factor discuss the minimum wages, laws regards to their taxi industry as well as
requiring Uber to provide that documentation (PESTLE Analysis of Uber, 2017). In some

countries they have filed charged against the advertising and some of them that Uber driver do
not have their taxi licences.
Economic:-
The sharing economy of Uber might be generated from their economy in development for
large number of people. Many people shared their economy opportunities towards the drivers
that has been in the case of sharing taxi. As people would opt for having cheaper products and
services for bringing downturn economy. The development of Uber has been very quickly
adopted and challenges has become more at lower price by having their normal taxi maintaining
care they provide.
Social:-
In present time most of the people follow the market trends for saving their money and
time. As they try to go more digital in present time and for this Uber need to make company
more developed. Due to its availability people have been inclined to Uber greatly.
Technological:-
Uber have to make their company more developed from which they need to make the
advantage of technology. While by making the proper use of technology they might be had more
customer (Tesch and Brillinger, 2019). In recent time many people are moving towards online,
so for that Uber need to make their business more developed while by providing various types of
resources to the people through accessing online system.
Environment:-
The Uber has concern and given more importance to sustainability for making their
business. Due to increasing in traffic Uber people may have use public transport rather than
Uber. For this Uber have launched the Uber green pilot project for taking more sustainability into
their consideration.
Legal:-
Companies need to follow up the laws' ans they must have to pay fines and Uber being in
the transportation industry. In some countries state controllers have decided that Uber must
regards to more its driver as workers not as temporary worker and at some places hot with more
fines over unlawful driving.
Stakeholder analysis

Stakeholder analysis is the process of assessing a potential and system changes to that it
could be related to interested parties or with some relevant things. Here is the stakeholder
analysis of Uber:
Riders:-
Uber must consider first priority to rider. As without rider there is nothing for
organization and it could not be so developed (Stakeholder Analysis: Definitions, Tools and
Techniques, 2019). Riders have more expectations and demand with certain level of services
what they have provided. This is also mutually benefits for their organization in having their
more profits and also having their more partnership for better experience.
Investor:-
Investor play important in Uber technology organization through which they can also
have their more investor, and they can also have their huge amount of profits. Uber would never
be the company in today time. Furthermore, Uber have become more successfully, but its
massive expand of cash into new market and adopting new technology (Hawrysz and Maj,
2017). Due to having these reinvestments, Uber is still operating more loss in various countries.
It means that it is even with having more revenue dependent on their outside investor from its
investors, and they need to keep tries spinning on its operation.
Employees:-
Employee who runs the operation on daily basis and making their business more essential
in working with market. They also play important role for making their business more success
and build up more interest. This has possessed right as employee under taken the laws. In this
organization as employee have right to take their wages and in many countries, employee
healthcare being sponsored. Uber also have their right to provide it employee with workplace as
free of discrimination and harassments.
The internal environment and capabilities of Uber
The VIRO analysis of Uber seems to be more each of its internal resources one by one
whether that could be provided more sustained. Here is the analysis of Uber internal
environment:-
Valuable:-
The Uber analysis that they have highly valuable in financial resources and that could
easily help for making their more investing in external opportunities. Uber also have their

importance in employee training and this is more productive output (Introduction to the VRIO
Framework, 2017). In these patents are more valuable which allows firm to sell its products
without any competitive interferences. Research and development costing more than benefits it
provides more to form with having more innovation.
Rare:-
The financial resources are founded to be stronger which are only possessed by few
companies in this industry. This also means that Uber have competitors can use these resources
for more extreme and employee are highly trained and skilled. The distribution of network is rare
for identifying and because it also required for more investments and time to come up with
having their better distribution network than Uber company.
Imitable:-
Uber needs to have their stronger financial resources that been acquired through
prolonged profits over the year. The employees of Uber are also not costly imitate. As this is
because other firms can also have their trained employee for improving more skills (Chatzoglou
and et.al., 2018). Competitive have been taken more place in developing them and Uber have
also made their employee skilled through which they can easily complete the goals and achieve
their targets.
Organized:-
Strategies need to be prepared for investing in the right places along with these resources
of sustained competitive advantage of Uber. The distribution of network uses these strategies for
reaching out to customer while by ensuring that products what are their providing are available
for all its outlets. Uber patents in organization are not so well in working for achieving more
goals and also making their exists changed into sustainable competitive advantage. So for this
Uber have started selling their patents before its products gets expired.
McKinsey 7s frameworks is type of management tools which have developed for
business. This framework can be used for examining the likely effects of change in organization:
Strategy:-
Uber needs to make their strategies as maintaining the competitive advantage through
which they can easily have their goals to be complete (Buzatu and et.al.,2019). In organization
while by making the strategies that could be easier for working with employee and market for
earning huge profits.

Structure:-
The organization have their departments through which their employee will not get
confused in which they need to work and how they have to work. While by having various
departments that seems to be easier for other people and management team should be well-
structured.
Systems:-
In Uber daily activities that are procedures and making their business strategies that must
be more important for development. Systems should be used in such as way that the employee
will easier achieve their goals along with they can have satisfied in job.
Shared value:-
The core value in organization have their more sense through which they can have
growth and follow corporate ethics and general work ethic in business. Uber can easily have their
development while by taking more advantages and reduce their competitive in market.
Style:-
Uber basically used autocratic and democratic leadership style for having development.
Meanwhile, they are working at large number of operating countries (Razmi, Mehrvar and
Hassani, 2020). Through they are not much capable for taking all opinions and work with the all
employee. So for this they make their decisions without taking other employee opinions.
Staff:-
The employee and general capabilities have their set up, and they are well-managed from
which they can easily have goals, and they can also come to know about the various strategies in
which they are required to work.
Skills:-
The actual skill's employee are required as they should have power, confidence of
working and leadership style. It means that they can easily work with having their more skills
and that could make them more capable for working with various skills in organization.
Evaluation of Market with Porter's Five Forces Model
Uber is the first company to grow as transport firm over the world. In few years it was
able to develop a lot across the world. For understanding Uber's potential growth in the current
competitive market Porter's Five Forces are used. Porters five forces will analyse the available

strategies which can be used in this competition of transport industry and its effects over Uber
(Margulis and Goulding, 2017).
Threat of new Competition:
Considering the success Uber has received over the years in transport industry, It gives
rise to new entrants in this market, New entrants are seen to enter the market with an exact copy
of the ideas of Uber and sometimes with even better ideas. Uber have some advantages over he
new entrants such as the goodwill in the market, but transport market is all about prices and the
quality of services. Uber can analyse the market situations and react before the new comers. It
can also add new services and improved models of cars. Providing discount coupons on different
rides to the customers. If the company can provide full safety on its customers in the ride, it will
get the customers to start believing in Uber and avoid other choices.
Threat to Substitution:
In the industry of transport the risk of substitution is the most as different countries in
which Uber operates have various types of mode of transport usually cheaper than an Uber ride.
Some of those common cases are the interference of Government Transportation, these
transportation services, whether they are train, metro or Buses all are seen to be providing
cheaper transport services. In some countries private cabs are also cheaper than Uber. To
overcome private cabs competition Uber can offer those individuals to join their company for
benefits they might find hard to refuse. Uber cannot compete with prices of Buses or Train but
sometimes it is a need for the customer to use a Cab instead of public transport.
Threat of Suppliers:
Uber as a transport company has many suppliers for providing services to customers.
Those suppliers provide Uber threats in their own different ways.
Uber does not own any cars, it relies on drivers who own cars, and fulfil the minimum set
of requirements stated by the company. The availability of such drivers also less, without the
sufficient number of drivers company will not be able satisfy its customers.
Multi-Homing, this means that some drivers are working for multiple companies at once
this is a huge issue because the customers get options for payment for the same ride. Thus, Uber
doe not have any negotiating power.
Petrol and Diesel prices is the basic cost for transport industry and their prices have seen
a tremendous rise In the recent times. Increase in these prices result in the increase Uber cab

rates. This phenomenon is out of Uber's control. One solution to this problem is usage of
alternative sources of energy in Cab for example CNG and Electric cars.
Threat of Buyers :
Customers of Uber provide the biggest threat to its profitability. The buyers have full
power over negotiations in transport industry. The reason for this is the multiple options
available for the customers. The customers' mentality in many companies is using the cheapest
mode of transport due to the economic crisis. In such cases Uber suffers the most. Those
customers who have the need of using cab are also influenced by the low prices and offers by
other competitions of Uber.
Threat of Rivals :
Transport industry is a very highly competitive industry, Uber has competition from
many similar companies which results in Oligopoly. Oligopoly means the market where there is
more sellers than buyers giving buyers opportunities to negotiate. This competition is generally
won by the company with the best services and least prices with discount offers (Tarduno,
2021). Drivers of these companies who are also the owners of the cab also have the power to
choose the company suitable to them.
Balance scorecard approach
Latest study shows that Uber has been suffering losses over 1 billion since 2019 and
since then the loses have been started to getting bad to worse. This resulted in downfall of share
prices of Uber company. Balance scorecard adds indication to long term financial success to
financial objectives in the external and internal process. There are four main areas of framework
in a balanced score card,
Financial perspectives: This provides indication of strategies, implementation and execution to
improve a company's measurement of success.
Customer and stakeholder:This measures competition and required strategic efforts in a market
segment.
Internal Process : This the measurement of new internal process for ensuring future success in
the organization.
Learning and growth perspective : This keeps track of improvement of employee skills with a
measurement.

Strategic management plans for Uber Technologies
Identification of Strategic directions with certain theories :
Strategies of growth selected by the Uber for this market can be explained by Ansoff
Matrix
Market Penetration :
This strategy is about motivating the company to increase its Sales of the current product
and services which in the case of Uber can be done only by adding more cabs in its system. By
following this strategy the company can increase its market share in industry. Uber has adopted
this strategy successfully by engaging sales promotion in its market. Few examples of this sales
promotion is that Uber provides promotional codes to the customers for availing discounts on
their rides (Prananda and et.al.,, 2020). They have introduced a feature of subscription called
Uber prime in which the customer heavy discounts on every ride they take. Free ride are also
awarded to new customers and to those who refereed them. Along with that the company has
shown reasonable rates compared to other companies.
Market Development:
Motivation to the company to expand itself in new markets is called Market development.
Uber has been practising this strategy by expanding its business geographically in other
countries. The company has not limited its services to any fields including every gender,
individuals, or work group. The company has made a huge impact over the transport market. The
concept of booking online cabs was introduced by this company to the world.
Diversification :
According to Ansoff's matrix this is the riskiest strategy in which the company has to
enter a completely new market with a completely new product. Uber was successful in
replicating this strategy, as it has been seen buying Ice cream trucks and selling ice cream with it,
the Uber's application was used to promote this new completely different strategy.
Product Development :
This strategy is about developing a new product in the current market in which the
company is performing. Uber has adopted this strategy by adding new services such as providing
customers with transportation of international quality. Including this Uber has started many
different products which mainly include different types of vehicle which are required for specific
purposes.

Uber is also seen to be using the Generic Strategy which is based on the differences of
cost and technologies (Pratap, 2017). Uber differentiates itself by taking only 5 to 20% of the
total revenue from the drivers. Which is comparitivly less that other taxi services. Uber has
increased its capacity of cabs by introducing the networking effect. Which means anyone who
owns a car with certain terms and condition can become an Uber driver. This allows Uber to
provide benefits to both driver and rider. This is how the company manages cost leadership. This
leadership maintains the popularity of Uber among the people as everyone in this market is
looking for saving money one way or the other.
Another basis in which he company takes competitive advantages over its competition is
by using technology. Uber does this by its own application through which it connects both driver
and rider. Within this app there are also payment features with all kinds of new technologies
providing both the parties with convenience (Pelzer, Frenken and Boon, 2019). Uber has made
its application very user-friendly such that most of the people can operate it. This adds quality
in the service provided by the company with an upper hand in the competition.
CONCLUSION
According to this report it can be concluded that Uber has been successful in expanding
its business in multiple markets by analysing different strategies and planning. This report also
discusses the threats which are present in the markets in which it operates. These threats have
their consequences and solutions which are explained briefly. This report finalizes with strategic
plans and how they are applied in the company. Strategic direction are evaluated with the help of
Generic Strategies and Ansoff's Matrix. With the help of Balanced score card this project shows
the indication of financial objectives in both internal and external process. To conclude this
report it can be said that the Uber should change its strategies for future development of its
business in multiple markets.
REFERENCES
Books and Journals
Balashova, K.V. And et.al., 2018. Formalization and elaboration of a company’s business
strategy. Problems and perspectives in management, (16, Iss. 3). pp.80-91.
Buzatu, A.I. And et.al., 2019. Managing organizations for sustainable business development:
Interaction between VRIO framework and Mckinsey 7s framework. New trends in
sustainable business and consumption. pp.243-251.

Chatzoglou, P. and et.al., 2018. The role of firm-specific factors in the strategy-performance
relationship: Revisiting the resource-based view of the firm and the VRIO framework.
Management Research Review.
Hawrysz, L. and Maj, J., 2017. Identification of stakeholders of public interest organisations.
Sustainability. 9(9). p.1609.
Margulis, C. and Goulding, C., 2017. Waymo vs. Uber May be the next Edison vs.
Westinghouse. J. Pat. & Trademark Off. Soc'y.99. p.500.
Pelzer, P., Frenken, K. and Boon, W., 2019. Institutional entrepreneurship in the platform
economy: How Uber tried (and failed) to change the Dutch taxi law. Environmental
Innovation and Societal Transitions. 33. pp.1-12.
Prananda, N.I. and et.al.,, 2020. Go-Jek Company: Go-Jek’s Rise to Dominating Indonesian’s
Markets and Southeast Asean.
Razmi, J., Mehrvar, M. and Hassani, A., 2020. An Assessment Model of McKinsey 7S Model-
Based Framework for Knowledge Management Maturity in Agility Promotion. Journal
of Information & Knowledge Management. p.2050036.
Tarduno, M., 2021. The congestion costs of Uber and Lyft. Journal of Urban Economics. 122.
p.103318.
Tesch, J.F. and Brillinger, A.S., 2019. The Evaluation Aspect of Digital Business Model
Innovation. In Business Model Innovation in the Era of the Internet of Things (pp. 67-
86). Springer, Cham.
Online
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<https://getlucidity.com/strategy-resources/introduction-to-the-vrio-framework/>
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Pratap, A., 2017: Uber generic and Intensive Strategies, [Online]. Available through:
<https://notesmatic.com/2017/11/uber-generic-intensive-strategies/ >
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