External Environment and PESTEL Analysis of Uber

This report examines the external environment of Uber using PESTEL analysis and discusses its importance in decision making. It explores the political, economic, social, technological, environmental, and legal factors affecting Uber's operations.

Global Business Environment
1

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
External Environment.................................................................................................................3
PESTEL analysis.........................................................................................................................3
Importance of PESTEL environment..........................................................................................3
Components of PESTEL analysis...............................................................................................3
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6
APPENDIX......................................................................................................................................7
2

INTRODUCTION
Every organisation works in certain surroundings and it becomes very important to study
impact of this external environment on working of organisation (Fosher, 2018). This study is
done with an aim of formulating effective strategies so that desired goals and objectives are
achieved. In this report, there is an inspection into external environment of Uber, a private
company headquartered in United States. It is working in transportation industry. For the purpose
of this investigation into macro environment, PESTEL approach is used.
MAIN BODY
External Environment
An external environment refers to the group of situations or considerations those are
outside the premises of organisation and affect the operations of business in huge manner. In
context of business, this part of environment refers to those elements which are out of control of
management, for example, society, technology, political system, governmental regulations, etc
(Islam, 2017).
PESTEL analysis
A PESTEL analysis is a framework that sets an investigation into external environment
of business. This factor helps business to climb the ladder of success by forecasting any threats
and opportunities posed by these factors (Tesch and Brillinger, 2019).
Importance of PESTEL environment
It is an important tool that assists management of organisation in the process of decision
making. This is done by establishing a coordination between departments of organisation and
factors of external environment. Different segments of this theory helps in analysing their impact
on operations of business so that if any actions are required, they can be taken on time.
Components of PESTEL analysis
Political environment: This segment relates with the most important pillar of any
country. This is governmental regulations and related strategies (Political Environment, 2020).
3

Economical environment: This is the driving force that determines the profitability level
of any business. Economic factors like exchange rates, unemployment rates, interest rates, etc. In
context of Uber, there are various economic factors that poses opportunities and threats for
business as listed below:
4

Social environment: This is a framework that discusses the shared belief and attitudes of
society like demographic factors, etc (Samusenko, Plaskova and Prodanova, 2020).
Technological environment: This factor related to proliferation of use of internet and
other technological advancements in company (Technological Environment, 2020).
5

Environmental: There is increased use of things that are impacting the natural
environment. For example, increased level of population, scarcity of resources, etc.
Legal environment: These are the regulating laws and policies effecting the operations
of business. Such as, health and safety, equal opportunities, etc. (Legal Environment, 2020).
CONCLUSION
6

From the above report, it can be concluded that examination of macro environment is
necessary so that efficient strategies can be formed. It will assist in decision making for
management.
7

REFERENCES
Books and Journals
Fosher, H., 2018. Understanding the Marketing and Management of trails using PESTEL
Analysis.
Islam, M.A., 2017. SWOT Mix and PESTEL Analysis: Effective Tools of Risk Management of
Leasing Companies. The Millennium University Journal. 2(1). pp.1-18.
Samusenko, A.S., Plaskova, N.S. and Prodanova, N.A., 2020. The Analysis of the External
Environment to Determine the Practical Focus of Applied Research and Development in
the Framework of Innovation. In Complex Systems: Innovation and Sustainability in the
Digital Age (pp. 245-255). Springer, Cham.
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
Political Environment. 2020. [Online]. Available through:<https://pestleanalysis.com/pestle-
analysis-uber/>
Technological Environment. 2020. [Online]. Available
through:<https://www.swotandpestle.com/uber-technologies/>
Legal Environment. 2020. [Online]. Available
through:<https://www.swotanalysistemplate.com/uber-swot-analysis/>
8

APPENDIX
OPPORTUNITIES THREATS
Political Environment  Political stability
 Flexible governmental
policies
 Rigid foreign trade
policies
 Brexit laws
Economical environment  Employment
opportunities
 Low taxi charges
 Intervention of social
unions
 Unsatisfactoriness in
drivers
Social environment  Efficient service
 Advantage to first
riders
 Increased competitions
 Controversial news
Technological
environment
 Friendly relations with
customers
 Standing pillar
 Invites intervention from
employee unions
 Loss of customers
Environmental  Uber green
 Pool cab services
 Increases pollution level
 Scarce resources
Legal Environment  Strict compliance rule
 Easy for the company
to expand
 Confusion regarding
application of laws
 Problem relation to filing
of taxation
9