Disruptive Service Innovation

This report explores the concept of Disruptive Service Innovation with a focus on Uber's ride-sharing service. It discusses the impact of the service on the market and provides recommendations to improve business strategy. The report also includes a study of adoption categories and an analysis of the service design, start-up potential, and application of business analytics.

Running head: DISRUPTIVE SERVICE INNOVATION
DISRUPTIVE SERVICE INNOVATION
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DISRUPTIVE SERVICE INNOVATION
Executive Summary
Ride Sharing service of the Uber serves reliable experience to the customers.
Uber consists of various option of services such as UberX, bicycle-sharing service,
pool, etc. Uber Eats, Uber Freight matches are some other services associated. It
is considered to be the Disruptive Innovation as it has created a great value in
economy by beating the other similar service and taxi business. It has also created
an edge for other competitors in the market. Every new innovation has its own
drawbacks, this one also has some of it. How Uber is being disruptive innovation,
is explained in this project and few recommendations are included to improve the
business strategy.
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Table of Contents
1. Ride Sharing Service, Uber:.........................................................................................................3
1.1 Introduction:..............................................................................................................................3
1.2 Study of Adoption Categories:...............................................................................................4
2. Analysis of the Service:...................................................................................................................6
2.1 Evaluation of the Design:........................................................................................................6
2.2 Start-Up Potential and Entrepreneurship:.......................................................................7
2.3 Application of Business Analytics:.......................................................................................8
Conclusion.................................................................................................................................................9
Appendix 1.................................................................................................................................................9
Infographic Representation:..........................................................................................................9
Bibliography:...............................................................................................................................................10
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1. Ride Sharing Service, Uber:
Ridesharing service is one of the disruptive innovations which have enhanced proficiency,
intelligence. It deals with design, operation and usage, which needs control through processing of
information technology. For this report, as a Ride sharing service Uber’s Dispatch system has been
chosen which falls under the category of service innovation. It has geared up the transportation
services through its innovative strategy which serves the people to gain easy access to
transportation modes according to their needs.
1.1 Introduction:
The Ride sharing service have various modes of transportation, such as platform-based services
Uber, Lyft, etc. bike sharing, car sharing, etc. As a transportation start-ups, Uber has created a
great value in the market. It is an online taxi business, which have real-time application in the
market platform and it is one of the most successful startups. It’s Dispatch system assist in
allocating drivers to the riders using smart phones. It follows two services one is supply service and
another one is Demand service.
According to Clayton Christensen’s theory, Disruptive innovation can be defined as a
process by which a product or service which have minimum application at the initial stage and
results in bottom position in the market. Later there due to the enhancement product or service
eventually able to create an edge for the competitors. Uber have been successful in business to
disrupt the existing cab transportation by serving an impressive experience of quick response,
availability of cabs and transfer payments. Using Uber, people can save time and can book a cab
anytime according to their needs with affordable prices.
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1.2 Study of Adoption Categories:
Five adopter categories have been found while researching, which are innovators, early
adopters, early majority, late majority and laggards. Everett Roger has explained these categories
based on the research as explained below:
Innovators: People who are always prepared to take risks and ready to adopt innovative
technologies. They are very young in age and young minds accepts the change very easily.
Relative Advantage: According to Roger’s 5 innovation, the relative advantage of this
category is that an innovation is an enhancement of the technology. The online system of
ride sharing service has made the taxi business to create a great value within a short of
period of time. Many users have found it to be a great service.
Compatible: The innovation of ride-sharing service is very much compatible, as it meet the
need of the customers for which people are adopting this online taxi service.
Observability: This characteristic arises when the outcome of the innovation are easily
accessible to the users and they find it to be effortless innovation. Uber taxi system has
attracted many users and people are finding it accessible and beneficial.
The innovators always seeks for something new, they believe in research for
modification, innovation to achieve that firstly the they have to examine how much
advantageous the innovation would be to use, then its compatibility if the users are
comfortable or not and finally
Early Adopters: People in this category have tendencies to create opinions, they also tend to adopt
innovation and people in this category are similar to innovator.
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Trialability: The main feature of Uber is that it serves quick response with instant tracking
and people can use it wherever they are, whenever they want and these feature engage the
users to use this.
Availability: Uber does not own cars or cabs to serve, they assist in evaluating the demand
and provide services. People can use the Uber-pool system in which the ride is shared and
the rates. Other options are Uber-XL, Uber-mini, etc. These many options attract the
customers to adopt this innovation.
Complexity: Uber has built its effectiveness to a great level by the active performance
through the smart phones. Although sometimes, the fare are high but tt has now become the
strongest innovation to beat.
People who falls under the category who believes in innovation and creating opinions hence,
to create these, above sequence of the characteristics are required.
Early majority: The early adopters are those who ensures adoption only after making decision
based on productivity and benefits of the innovation. People who are start-up founders and young in
age belong to this category.
Relative Advantage: They embrace the change if this innovation can influence them to use.
Although early majority seeks for new and easy platform. The Uber cars and Uber-Eats has
always been able to serve better service.
Trialability: People of this category are always ready to try therefore, there are not any
barriers for this business according to early majority people.
Observability: After usage it can happen that they are suggesting others to use this, which
is a great advantage for the business to expand.
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People in the early majority are like innovators but they first analyse the advantage after use
then they try and observe. After all these process they takes a decision of whether to use it in
future or not.
Late majority: In the category, the type of people that exists are similar to early adopters but they
are very cautious and examine whether the innovation can be of great help and support or not.
They are not young in age but younger than the senior citizen.
Observability: The late majority kind of people observes the majority of people whether
others are adopting this or not.
Complexity: They adopt the change if it can be seen that many other users are getting
benefitted. The features of Uber has been successful in making the innovators and early
adopters to use it hence, there is a possibility that late majority can accept this change.
Relative advantage: The adopters can find it to be very easy and beneficial if the prices are
low.
To analyse the service of Uber, the people in this category focuses on the complexity and
how beneficial it is for the people. The late majority adopters believe in customer feedback, buying
rate of the innovation and after evaluating the price proceed towards the decision making process.
Hence, people in this category would prioritise the characteristics as mentioned above.
Laggards: This group of people are slow to adopt any new system. Moreover, they are prone to
adopt when they are forced to do so. People in this category are generally very old in age and who
does not know the usage of smart phone.
Trialabilty: The Uber app comes with proper guide at every step there is mentioned what to
do next therefore, the users can decide whether it is adoptable or not. Even after the
recommendation they may fail to adopt.
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Complexity: The laggards feel uncomfortable with the uncertainty and change as they find
it difficult to use the ideas.
Observability: They get ready to adopt, if there is an emergency.
According to the laggards the business of innovation may get down in the market, if they find it
difficult after use then there is less possibility that people would adopt this innovation.
2. Analysis of the Service:
2.1 Evaluation of the Design:
The design of Uber is gradually evolving, as a service it has expanded its business by
launching the food delivery system called Uber-Eats, in which the activities are same but the
service is of food delivery to the selected destination. This is again a great innovation as it deals
with exclusive offers to offer better services to the customer. It contains modern methodology for
which the demand of Uber has increased due to the on-demand availability logistics
Phase1: Ex ante evaluation consists of strategic information regarding the choices at the
initial stage which made the business to make a good approach. Since the number of users have
increased, the availability of the cars during weather change such as rain the availability gets
decreased and rates become high.
Method1: It is recommended to increase the availability of the cars by providing the
drivers more benefits and few privileges. And by providing them a quality assurance scheme
for achievement.
Method2: It is recommended to keep the rates a bit reasonable during the rainy or
stormy weather because many users are there who cannot Uber due to the high price. If the
users gets increase then the economic benefit can be achieved.
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Phase2: Ex post evaluation focuses on the survey and do the assessment over the other
similar projects. This phase helps to improve the strategy to gain more economic benefits. Although
there are other similar projects in the market such as Lyft, Easy Taxi, Juno, etc. Uber always try to
keep a different strategy. Its business have increased after launching Uber-Eats, a food delivery
system.
Method1: It is recommended that, in order to establish the quality that the deals in
Uber-Eats should be increased for the users and also the availability. It has been observed
that the deals get over very early and many people cannot use on time. But according to the
other business this is not an issue.
Method2: To avoid expensive and ineffective solutions, because people are still
finding it to be expensive than other similar projects.
2.2 Start-Up Potential and Entrepreneurship:
The strategies that are implemented by the IT start-up companies are:
Most important one is to do the referral system, the people get more influenced regarding
any business if they are recommended by their friends and family members. Next one is to do the
publications by contact the journalists. Videos, info-graphic representation helps to know the users
about the innovative start-ups. Social media marketing involves establishing of profiles in facebook,
twitter, etc so that the users would get to know about the apps. Next efficient strategy is to do
personal branding which helps to do the promotion of the start-up business across social media
platform or internet.
As mentioned earlier Uber is a ride sharing company and was founded in 2009. The founder
of Uber were Garrett Camp and Travis Kalanick, who are the successful entrepreneur launched this
Uber app in SanFrancisco. Uber was a start-up business which gained popularity throughout the
world later because of its convenience as compared to the traditional organizations of cabs.
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The relevant strategies that can be applied in the ride sharing service, as a designer of the
innovation it is suggested to do the referral system in order to explore the business. People get
easily influenced if they are recommended by their group of people and friends and if it is observed
that their friends are getting benefitted then they gets tend to accept the start-up.
Publications through news in smart phones or newspapers can evaluate the business. With
the videos and posters, Social media platforms helps a lot to spread the knowledge of the start-up
business. Social media helps a lot in spreading any new service, app, etc.
Proper promotion should be there to make people can analyse about the usage. The Uber
focuses on the convenience of the users by making the users monitor the drivers after booking a
cab, let the users give feedback which helps in improving the business.
2.3 Application of Business Analytics:
Uber is simply a platform that provides the privilege to the riders for hailing a cab through
their smart phone. The users easily get the contact details of the assigned drivers and can track the
drivers.
Although according to the data in various forms evaluates that this innovation helps is going
to have high value in the market as comparison to other similar projects still it is recommended
that strong investors should only be dealt with to have proper amount of investment.
The management team of Uber have professional experts but it is recommended to build a
good relationship with the customers by analysing the feedbacks given by them.
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Conclusion
This innovation is affordable and easy to use, the features that is consisting in this service
are attractive because of its instant availability. The users will be getting various benefits if this
innovation is adopted by them furthermore. It has attracted many customers towards it by ditching
the traditional taxi business. Although traditional taxi business is still running but according to the
economic benefits there is loss has been observed. This innovation can help many adopters to
expand their business. The recommendations that have been provided can help to improve the
business strategy.
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Appendix 1
Infographic Representation:
Bibliography:
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