Strategic Analysis of Uber: PESTEL, Porter's 5 Forces, Internal Analysis

This report provides a strategic analysis of Uber, including PESTEL analysis, Porter's 5 Forces analysis, and internal analysis. It covers the company's resources, competences, value chain, VRIO, TOWS, and power/interest matrix. The report also discusses the company's external factors, such as political, economic, social, technological, environmental, and legal factors. It concludes with an evaluation of the company's strengths, weaknesses, opportunities, and threats.

Report

Table of Contents
Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
External analysis..............................................................................................................................1
PESTEL......................................................................................................................................1
Porters 5 Forces...........................................................................................................................3
Internal analysis...............................................................................................................................4
Resources....................................................................................................................................4
Competences...............................................................................................................................5
Value Chain...............................................................................................................................5
VRIO..........................................................................................................................................7
Evaluation........................................................................................................................................8
TOWS.........................................................................................................................................8
Power/Interest matrix..................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
The Uber is technology organisation that is based on American technoogy along with this
comprise of food delivery, ride-hailing, courier, freight transportation and package delivery
along with this having partnership with electric bicyle, motorised scooter rental and Lime (Liu,
Brynjolfsson and Dowlatabadi, 2021). There are numerous services are offered by the Uber such
as UberX that is in resultant of affordable rides, Uber pool for shared rides, Uber comforts as
new cars with extra legroom and many ohers as well. It is a company of transportation industry
and contribute towards higher economy generation.
MAIN BODY
External analysis
It is an analysis that is based on micro environmental factors having direct and sustain
impact over the working of an organisation. Uber was founded in 2009 by Garrett camp and
Travis Kalanick with having headquartered in San Francisco, California, US. The company have
served the 69 countries as over 900 metropolitan areas as with own website and mobile
application. Uber works with 26900 number of employee and generate the revenue of
US$11.139 billion in 2020 with net income of US$−6.768 billion in the year 2020. In US Uber
have 22% of market share due to food delivery and 71% market share as due to ride sharing.
PESTEL
It is an analysis that more frequently dependent over regard of fastest and growing
application towards taxi sharing company and it is as explained below as:
Political: It is a factor that is dependent over the working consequences of business as
with this business must have followed all the rules and regulations so that working possibility is
processed in clear basis. In this Uber always faced endless of debates on global level and with
this many of government is affected due to sharing of economy and it induced trouble making
impact over traditional taxi services and it maintain lead towards rise of disapproval as against
various stages (Grabher and van Tuijl, 2020). It act as threat for the business for instance,
government of South African also initiated towards seizing of Uber cars as drivers doesnt have
the access to hold a taxi (Uber PESTLE Analysis, 2021). As business license is always be
required by the government with this prior documentation. The disruptive effect of traditional
1

taxi service induced opportunities for Uber but for this authorities have concern about to bring
suitable laws for transportation companies.
Economical: It is a basis that is dependent over the economy generation or its support
that is in respect of organisational working. As Uber provides employment and unique jobs to a
lot of people or drivers at larger scale. It induced many other benefit as well that reduced the
searching cost of Taxi and the traditional taxi service also forced to cut down price. The threat
for the company is that transportation industry induced extraordinary competition and it is
typical for traditional service. If any company provide service at low cost get ahead in terms of
competition as people always looks forward and prefer cheaper product in comparison to
economic downturn (Angrist, Caldwell and Hall, 2021). The opportunity for Uber is that
company has grown exponentially since its launch and have wider acceptance over a larger
market so that ability to induced sustained change in respective manner is processed with
regularity.
Social: It is a factor that is in favoured of the company as customers of Uber been more
happy about the different offered services by an organisation. In addition, the wider usage of
smartphone induced positive impact over the Uber and also generate sustained opportunities as
well. The smartphone make even more easier for the people to get to know about picking point,
drop time, picking up time along with that also get track overall route. In addition, Uber also
provide the service as less as compared to its competitor and it assist the company to maintain
suitable lead and in this awareness must have spread with support of social media, advertisement
and by word of mouth as well. Furthermore, there is a threat as well the enhanced rate of rides
make sufficient increment in urban areas which is not accepted by many of customers thus they
get easily switch towards other service providers Lyft, Didi Chuxing, Grab and many others as
well.
Technological: The working basis of Uber is completely depend on technological
advancement and innovation is a enormous foundation of company that induced wider range of
development within business. The sharing ride of Uber induced incredible range of innovation
that foster working possibility and market attentiveness that advance the working possibility in
collective manner (Mohamed, Rye and Fonzone, 2019). The opportunity for the company is that
its management induced unique changes that process remarkable benefits for company. Besides
of it there are few threat as well such as an improvised form of innovation and its uses induced
2

instinctive changes that is somehow not easy for all to make easy access as in today's era as well
people like to travel with bus and other transports as well.
Environmental: It is a factor that is based on sustainability as it is in concern of fuel
consumption as well as traffic congestion. The opportunities for Uber is that company increases
the traffic as people uses their services more instead of public transport. In this Uber also launch
the Uber Green project as per consideration of sustainability and it take a ride request of green
ride.
Legal: It is a factor that comprised of different laws and regulations that abides the
company to the government otherwise they have to pay certain fine as in laws are not complied
by business. The Uber has provide a platform as with this they have charged the fine for
customary administration as it is consist of laws that are applied towards regular working of
company (Wu and et. al., 2019). It is a threat for company as legitimate troubles the driver
against low wage as it put the business in trouble. Moreover, the human asset value is always
been challenge as California decide that Uber must regard its drivers as workers not as temporary
workers.
Porters 5 Forces
It is a strategic framework that is used by the business and its management to make
adequate control towards development of working proficiency and in concern of Uber it is as
explained below as: (Porter's five force model of Uber, 2017.)
Threat of new
entrant
It has low intense over the Uber as operate its working by inducing a lot of
effort and cost and have a wider and strong network along with this also
provide flexible hours service too. If the new entrant wants to work as same
as Uber than it requires lot of time and efforts that is next to impossible for
any new business.
Threat of
substitute
These are only competitors of Uber as they provide similar service to its
competitors with convenience and it induces direct competition to Uber.
The public transport also considers as substitute for Uber and they act as
threat for sales and market share.
Bargaining power
of suppliers
Uber doesn't have its own operating vehicle as of its own name and usually
dependent on their suppliers such as of drivers. The suppliers have higher
3

bargaining power as they themselves take care of its outsourcing as it
induced negative impact over the brand image and name of company
(Young and Farber, 2019).
Bargaining power
of buyer
It as higher intensity as the buyers are not permanent as it requires to be
loyal so that various favoured options are provided by the Uber to its
customers. In-regardless of it there are many options available for
customers so they could easily switch to any service with an ease.
Competitive
rivalry
Uber has operate its business in many of countries thus company have
numerous competitor in every country and it is high intense in US as
competitor like Lyft give tough competition in prospect of market share.
There are other competitors as well such as Curb, Ola, Grab and many
others thus Uber compete with aspect as customer service, convenience,
comfort, reliability etc.
Internal analysis
It is an analysis that is used by an organisation in order to make perfect balance in
between the resources and its capability so that working tendency and its proficiency get affects
on direct manner and it is as briefly explained below as:
Resources
It comprise of certain network that is used by an organisation in order to manage and
control integral resource with this improvised range of benefit is perceived on direct basis (Li
and et. al., 2019). It is as furthermore explained below as:
Physical resources: It is an essential asset of company that is comprised of suitable
business model with this effectual networking is processed in effective manner. The
access of resources used to build and nurture sustained insight as it is used to attain
higher growth and better networking in sustained mode. Uber is having a retail outlet and
hoardings that make easy for business to grab market attentiveness with this possibility to
achieve success and growth is achieved successfully. The manufacturing facilities of
Uber is dependent over technological usage so that supply and demand get predict in
systematic manner.
4

Human resource: The human workforce of the business induced wider impact over the
working credibility of business as with this ability to achieve sustained range of outcome
is perceived in balanced manner. There are various team and groups those are worked
successfully so that capability of business to attain strategic development is processed
systematically (Chan, 2019). In this Uber and its management provide various training
and development to its employee so that they have made easy access of working in
productive manner. The stronger workforce is able to process work in attentive manner
within this Uber and its human resource worked collaboratively so that working tendency
is enhanced and it is a major reason behind the success and repetitive growth of Uber.
Intangible resource: These are those resources that couldn't be touched by company but
get feels under which working suitability and its relatedness get controlled in clear basis.
These are the asset that consists of goodwill, copyright, patents, brand recognition,
customer list and many others as well. It is also be in responsive to link with external
stakeholder so that prominent relations are developed with the stakes having higher
interest towards working tendency of business such as customers, manager, employees
etc. In addition the financial basis of company also be in control through which
probability to make resulted benefits in better manner is processed as company is able to
induced various investment with appropriateness.
Competences
It reflects the ability of business with this organised form of outcome is processed with
timely constrained and it is as briefly explained below as:
Value Chain
It is a strategical analytical tool that is used to identify the long term value and
competitive advantage with this global transportation is processed in favourable manner (Pollio,
2019). It is as briefly explained below as:
5

Illustration 1: https://research-methodology.net/uber-value-chain-analysis-2/
(Source: Uber Value Chain Analysis, 2018)
Inbound logistics: It basically involves the storage and receiving of raw materials as
Uber is one of the largest transportation taxi company in all across world and doesn’t use own
vehicle to serve adequate service to its customer. In this vehicle own and rented by drivers as
they are not employee but contractors and they only need software to possess drives.
Outbound logistics: It is usually associated with the distribution and warehousing of
products as Uber operate in 760 cities all across world and its business model is dependent that is
a major source of value creation and advancement (Alemi and et. al., 2019).
Uber Marketing and Sales: The ride hailing is dependent on social media marketing as
well as word of mouth so that ability to business to communicate and target is segmented
marketplace is processed systematically.
Uber service: The customer service is an aspect related to core competitive advantage and
effectual customer service also integrates the working possibility with effectiveness.
Uber operations: The Company provide service in 760 countries as per requesting the ride
with this have an option of time, price and size with this pickup and drop location is tapped as
within minute, customer able to know drivers information and detail of vehicle that assure safety
and security to customers and pay and go as per reach towards destination.
6

VRIO
It is an analysis that provides clear framework about attainment of sustained competitive
advantage with this working standards and its acceptance both get advanced successfully.
Valuable Rare Imitable Organised
Yes No No No Competitive advantage
Yes Yes No No Human resource
Yes Yes Yes No Marketing
Yes Yes Yes Yes Financial funds
Yes Yes Yes Yes Sustainability
Yes Yes Yes Yes Customer loyalty
Valuable: It is a factor that induced higher competitive advantage as with this ability to
advance working tendency and its capability is surpassed with attentiveness. In addition, human
resource and marketing is also be a valuable aspect as it assist to grab sustained market
advancement along with managing the need and demand of customers in balanced manner
(Stanton and et. al., 2019). Moreover, the financial funds is an adequate aspect with this
favourable amount of investment is induced as per need and demand of marketplace with this
long term sustainability and its availability is controlled is systematic manner. The loyal
customer base also strengthens the ability of profit generation with this probability to attain
success and wider reach both enhance perpetually.
Rare: It is a basis that is selected by an organisation in order to advance induces
continuous efforts on regular basis. The human resource and marketing department is rare of
Uber as for this management provide continuous basis training and development along with
many other benefits as well so that ability to retain and attract potential employee is processed
systematically. The financial basis is also be rare as it is developed due to continuous efforts that
is induced by Uber to attain long term success moreover it also assist to develop sustainability in
this future success and development is perceived with attentiveness. The customer loyalty also
developed by Uber with continuous efforts to grab attention of them and also offers other
advantage as well.
Imitable: The marketing as well as financial funds are the fundamental basis with this
possible range of benefit is pertained with suitability. It is usually used to advance credibility of
7

market attentiveness so that ability to advance working all across world is processed with
perfection (Chen and et. al., 2019). In addition, the customer loyalty is only developed as per the
likelihood of individual with this working possibility and its credibility both advanced as per
provision of required and advanced services.
Organised: The financial aspect is much organised as it is generated due to implication of
favoured strategies and initiatives for this working possibility and its availability both developed
in progressive manner. The sustainability is only get maintained due to perfect implication of
required resources and by its optimised utilisation for this working prospect and its suitability get
controlled with productiveness.
Evaluation
TOWS
It is a tool that is used for strategic planning with this organisational strength, weakness,
opportunity and threat get analysed on clear basis with this ability to make sustained project
planning also processed with timely constrained.
Internal factors
External
factors
Strength Weaknesses
Opportunity Well recognised market
structure
Customers
Threat Economic recession Competitive advantage
S/O: The well recognised market structure is a strength as well as opportunity for Uber as
company is having a wider and secure workplace at many of countries and with this ability to
grab higher market share and profit both get processed in systematic manner (Jin, Kong and Sui,
2019). The recognised market develop higher acceptance with this possibility to process higher
working standards and wider potential is enhanced with appropriateness. The working at
different countries also advance the acceptance of Uber and it is only happen due to suitable set
of services that is provided by company to its customers.
W/O: The weakness and opportunity are the collaborative aspect within this management
worked over weakness so as to convert and transform it as an opportunity. For this possibility to
attain higher and sustained outcome is developed in systematic manner. The customers are the
8

weakness and opportunity both as weakness in terms of they have higher bargaining power so
that profit margin get reduced. In addition, the customers have different modes of transportation
with this probability to perceive better competitive advancement is processed with regularity.
Moreover, they also act as opportunity as if required and sustained services are provided to the
customer then they themselves perform word of mouth marketing which is always been the most
essential aspect of marketing.
S/T: It is a basis that comprise of both strength and threat within this management assure
to make repetitive work over strength so that ability to cope up with threat is reduced or
controlled perpetually. The economic recession induced wider impact over earning and spending
of customer thus many of people reduces their sense of expense and processed to work
attentively towards their investment. It induced negative impact over selling and profit
generation of Uber for this management assure to provide reliable services to its customer as by
taking shortest path and appropriate pricing for that particular path. In this probability to achieve
standardised objective and goal is processed with perfection and in systematic manner.
W/T: The Uber is facing tough market competition and with this possibility to achieve
competitive advancement get reduced or shared with many (Min, So and Jeong, 2019). Thus it is
the weakness of company for this management assures to analyse the strategy and initiative that
is taken by its competitor and then apply the appropriate strategies in systematic manner.
Moreover it is a biggest threat as well for that company and its management work to advance its
working implication with this probability to processed better working standards is controlled.
Power/Interest matrix
It is matrix that is used to categorise overall projects and stakeholder as per their increased
risk and interest so that sustained focus is maintained towards breaking of project with this risk
credibility and profit generation both get controlled and managed in moderate manner.
9

Figure 1https://www.brighthubpm.com/resource-management/80523-what-is-the-powerinterest-
grid/
Keep satisfied:
These are those stakeholders that are required to be satisfied on regular basis as with this
probability of working and its attentiveness both get controlled in favoured manner (Isaac, 2019).
It is required for the management that its potential stakeholder such as employee and customers
must get satisfied and in return of it Uber provide all the relevant information to them in
appropriate manner.
Managed closely:
It is an aspect that is required to be worked for closely and comprise of higher authority
of Uber. In this management induced sustained control over the working consequences of
business and also induced direct impact in ordinate manner so that all the authorities working at
different location and countries have verified information about the policy and initiatives.
Monitor:
The management of Uber must have managed the government policies as they are also
being the stakeholder that is essential for the flow of business. In this working tendency and its
capability both get controlled in direct basis.
Keep informed:
The contractors of the company are the major stakeholder and with this management
always assured to provide balanced information to its employee or drivers so that they would
have follow all the necessary aspects in clear manner.
10

REFERENCES
Books and Journals
Alemi, F. and et. al., 2019. What drives the use of ridehailing in California? Ordered probit
models of the usage frequency of Uber and Lyft. Transportation Research Part C:
Emerging Technologies, 102, pp.233-248.
Angrist, J.D., Caldwell, S. and Hall, J.V., 2021. Uber versus taxi: A driver's eye view. American
Economic Journal: Applied Economics, 13(3), pp.272-308.
Chan, N.K., 2019. “Becoming an expert in driving for Uber”: Uber driver/bloggers’ performance
of expertise and self-presentation on YouTube. New Media & Society, 21(9), pp.2048-
2067.
Chen, M.K. and et. al., 2019. The value of flexible work: Evidence from uber drivers. Journal of
political economy, 127(6), pp.2735-2794.
Grabher, G. and van Tuijl, E., 2020. Uber-production: From global networks to digital
platforms. Environment and Planning A: Economy and Space, 52(5), pp.1005-1016.
Isaac, M., 2019. Super pumped: The battle for Uber. WW Norton & Company.
Jin, S.T., Kong, H. and Sui, D.Z., 2019. Uber, public transit, and urban transportation equity: a
case study in New York City. The Professional Geographer, 71(2), pp.315-330.
Li, S. and et. al., 2019. Regulating TNCs: Should Uber and Lyft set their own
rules?. Transportation Research Part B: Methodological, 129, pp.193-225.
Liu, M., Brynjolfsson, E. and Dowlatabadi, J., 2021. Do digital platforms reduce moral hazard?
The case of Uber and taxis. Management Science.
Min, S., So, K.K.F. and Jeong, M., 2019. Consumer adoption of the Uber mobile application:
Insights from diffusion of innovation theory and technology acceptance model. Journal
of Travel & Tourism Marketing, 36(7), pp.770-783.
Mohamed, M.J., Rye, T. and Fonzone, A., 2019. Operational and policy implications of
ridesourcing services: A case of Uber in London, UK. Case Studies on Transport
Policy, 7(4), pp.823-836.
Pollio, A., 2019. Forefronts of the sharing economy: Uber in Cape Town. International Journal
of Urban and Regional Research, 43(4), pp.760-775.
Stanton, N.A. and et. al., 2019. Models and methods for collision analysis: a comparison study
based on the Uber collision with a pedestrian. Safety science, 120, pp.117-128.
Wu, Q. and et. al., 2019. Labor control in the gig economy: Evidence from Uber in
China. Journal of Industrial Relations, 61(4), pp.574-596.
Young, M. and Farber, S., 2019. The who, why, and when of Uber and other ride-hailing trips:
An examination of a large sample household travel survey. Transportation Research
Part A: Policy and Practice, 119, pp.383-392.
ONLINE
Uber PESTLE Analysis, 2021. [Online] Available through: <https://www.mbaskool.com/pestle-
analysis/companies/18032-uber.html>.
Porter's five force model of Uber, 2017. [Online] Available through:
<https://www.porteranalysis.com/porters-five-forces-model-of-uber/>.
Uber Value Chain Analysis, 2018. [Online] Available through: <https://research-
methodology.net/uber-value-chain-analysis-2/>.
11