Uber's Business Model in Australia

This assignment requires a detailed analysis of Uber's business model within the Australian market. Students must examine various aspects including market entry strategies, the role of technology, financial resources utilized, and the company's commitment to research and development (R&D) and innovation. The analysis should also consider Uber's challenges and successes in the Australian market.

Running head: MGMT6010 CORPORATE STRATEGY
MGMT6010 Corporate Strategy
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MGMT6010 CORPORATE STRATEGY
Table of Contents
5. Other industry characteristics......................................................................................................3
Value creation methods and costs....................................................................................................3
Inputs/suppliers................................................................................................................................4
Markets............................................................................................................................................5
Technology usage............................................................................................................................6
R&D and innovation........................................................................................................................6
Finance.............................................................................................................................................6
References........................................................................................................................................8

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5. Other industry characteristics
Value creation methods and costs
The process of creating value is a major aspect of the customer relationship management
that focuses on how the production of products and services can deliver value and other benefits
to the customers other than just fulfilling their needs and requirements. Within the sharing
economy of Australia, the customers demand good quality services, and so organisation like
Uber and Lyft have provided value through the delivery of good quality services to the
customers (Grinblatt, Mark and Sheridan Titman 2016). The sharing economy has allowed the
business organisation to connect the customers with the suppliers with the help of an online
platform. A facilitator manages the online platform, which is neither a consumer nor the provider
of services.
The business organisation Uber has avoided market and regulatory issues to enter new
market segments properly and deliver value to its customers. It is done by exposing the value
that is required to manage the resources and match the demands and supply of services for the
customers effectively. It is also valuable for the Uber owners because it will fetch them good
amounts of money as well as respect the requests for rides all throughout the country. It is also
easier for the customers regarding value proposition because the taxis are booked quite easily
online, and then the services are delivered to the customers within a quick time for ensuring that
the passenger reaches his destination within time (Johnson et al. 2013).
The product creation process has facilitated the company's skills to deliver the right
output, and the outcomes generated have been distributed in a differentiable manner to the

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customers. The creation of production process also included the differentiation process, which
has allowed Uber and Lyft to add some unique features and even keep the cost under control as
well. It has influenced the consumer buying behaviours and even allowed them to understand the
value offered by the products of the company (He, Hong-Wei and John MT Balmer 2013).
Inputs/suppliers
Though there is the availability of good numbers of manufacturers and suppliers, still the
company has put pressure on them to decrease the prices of the supplies and raw materials and
ensure that the cost of products and services is kept lower too. The company has been put on
pressure to ensure that the prices of services remain competitive so that the customers get more
influenced to purchase the services of Uber and Lyft rather than any other taxi companies in
Australia (uber.com 2017). Due to the environment-friendly supplies, the sharing economy is
also termed as environment friendly because the sharing of services by multiple passengers has
helped in decreasing the consumption and even maintained good social relationship between the
consumers and service providers.
The inputs for the sharing economy included the use of information technology system
that had created an effective platform for providing the good quality sharing services to people
and made it easy for them to visit from one place to another with ease and convenience. The
individuals no longer have to get involved in conventional markets, and because of that they can
purchase the services online and make immediate payments as soon as they reach the destination
point.
The company has imported directly, bypassed the suppliers and maintained good
relationships with the customers to assess their needs and requirements. This would help in

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determining the most suitable price that could be set for satisfying the customers effectively
(Litov et al. 2012).
One of the major rivals of Uber is Lyft, which has managed to deliver similar kinds of
services of the shared economy to the customers in Australia. To adjust within the competitive
business environment, it is important for Uber, the largest ride sharing platform in Australia to
make the customers obtain the services by hiring the taxi at first through online platforms. Uber
also provides luxury hire cars and registered taxis that can provide to be an effective way of
managing transportation.
The inputs could also be provided as managing investments through obtaining capital,
and that could be possible by crowd funding. The crowd funding helps to raise funds and manage
innovation within the evolving industry for fulfilling the changing demands and preferences of
the customers efficiently. According to Porter's five forces model, the bargaining power of
suppliers is quite low, but the power of customers is comparatively high. This has increased the
sales revenue for the company as well as provided additional value to them through the delivery
of innovative services that can match up to the standards of the organisation (uber.com 2017).
The valuation of the organization is nearly $70B, and thus the prices are competitive. The
value-based pricing strategy has helped in setting the right prices for the services though not
exclusively based on the value that has been estimated by the customers. The value-based pricing
strategy has helped in increasing the prices of services without making any negative impact on
the volumes of sales. Cost-plus pricing strategy is another effective way of adding some value to
the products and services and ensures that the company generates good amounts of profit in
business by attracting more customers (Grinblatt, Mark and Sheridan Titman 2016).

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Markets
The shared economy has enabled the organizational assets that have not often be utilized
to become peer to peer services that can be hired by the people in Australia. Uber has faced
challenges like customers not hiring the taxis due to higher prices when compared to other
private taxis. The company has raised venture capital and launched the smart phone app to make
it easier for customers to book the taxis online and even get a price quote regarding the distance
from source to destination. This approach has facilitated the ways for Uber to enter new markets
and enhance the transportation services' efficiency (uber.com 2017).
The B2B distribution has helped in managing good relationships with other businesses
and with the suppliers who manage the online platform to enhance the production capability. The
B2C distribution has further helped in selling the services to the consumers directly without the
involvement of any third party (Johnson et al. 2013). Due to this a huge number of market
segments have been targeted, thereby leading to more than 1100 new users signing up every
month in Australia.
Technology usage
The use of information technology system has enabled to create effective online
platforms such as smartphone app. By using this, customers can easily rent cars and taxis on a
daily or hourly basis (He, Hong-Wei and John MT Balmer 2013).
Markets
Uber has created accessibility and connectedness to deliver best quality customers'
services and ensure that the services are delivered perfectly. Obtaining data about consumer
profiles could help in keeping contacts with them and ask for their feedbacks regarding the

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services (Litov et al. 2012). To fetch other markets, proper organisational systems are developed
to integrate the resources and manage intermediary between the supply and demands for the
services in Australia.
R&D and innovation
Research and development activities could help in enhancing the uniqueness of services
delivered by Uber and manage better productivity with new technologies. This would also record
the customers' preferences and deliver the services accordingly to keep them satisfied. The level
of innovation is high for Uber is high, and this has constantly brought up new changes and
innovation of services to fulfill the demands and preferences of customers easily.
Finance
The various sources of finance are starting capital, money obtained by selling few
organisational assets and even collecting the debts. The shared capital, retained earnings, loans
taken from banks at an interest rate and managing events to get funds is other sources of finance
for Uber, Australia (uber.com 2017). The finance is obtained to purchase a tax and work as a
permanent employee of the company to deliver taxi services to the customers and make them
reach their destination within quick time.

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References
Grinblatt, Mark, and Sheridan Titman. Financial markets & corporate strategy. 2016.
He, Hong-Wei, and John MT Balmer. "A grounded theory of the corporate identity and corporate
strategy dynamic: A corporate marketing perspective." European Journal of Marketing 47, no.
3/4 (2013): 401-430.
uber.com. 2017. Uber.Com. https://www.uber.com.
Johnson, Gerry, Richard Whittington, Kevan Scholes, Duncan Angwin, and Patrick
Regnér. Exploring strategy text & cases. Vol. 10. Pearson, 2013.
Litov, Lubomir P., Patrick Moreton, and Todd R. Zenger. "Corporate strategy, analyst coverage,
and the uniqueness paradox." Management Science 58, no. 10 (2012): 1797-1815.