This assignment focuses on strategic decision making within businesses. It examines different frameworks and models used to analyze and make strategic decisions. Students will be required to apply these concepts to real-world case studies, demonstrating their understanding of how strategic decisions impact organizational success.
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Strategic Management
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Executive Summary Strategic management is the essential part of the organisation that undertake the essential activities to enhance the company value and productivity level. Moreover, it brings new opportunity and growth in terms of making good outcomes and productive level of growth. Present study will be summarizing the overall importance of strategic management on the case study of Uber. It explains the factors challenges faced by the company during promotions. Overall, study also consider and taking care of good things and better resources.
Table of Contents INTRODUCTION..........................................................................................................................1 UBER's Business Environment.......................................................................................................1 Key success factor..................................................................................................................1 Success factors.......................................................................................................................1 Factors Affecting UBER.......................................................................................................2 Appraisal of the organisation strategy.............................................................................................5 Business canvas model..........................................................................................................5 Value chain model analysis....................................................................................................7 Resources and Capabilities.....................................................................................................7 Strategic proposal.............................................................................................................................7 CONCLUSION................................................................................................................................9 REFERENCES.............................................................................................................................10
INTRODUCTION Strategic management is the most crucial and effective process, it is the formulation and implementation of the major goals and initiatives taken by the company. The main purpose of the strategic management is to make the effective business plan in order to grab the customer attraction and with compete with other rival companies. Present report will base on strategic management of Uber company. It is the most impressive and high earn start-up in the world among other companies such flip kart, Pinterest, Dropbox etc. this report will discuss about the Uber business environment in order to determine the best possible action. Further apart it also will explain about the appraisal of the organisation strategy through which they grab the market attention. Besides, it will also discuss about the issues and development of strategic proposal of the company. UBER's Business Environment Key success factor Success factors Business environment is the environment which is dynamic and unstable in the business scenario (Aihara and et.al., 2017). It includes external or internal environment of business organisation such as political, legal, social, environmental, ecological, technological etc. these are the external environment which affect business environment. Along with that, internal environment is the another environment which affects business functions and growth such as customers,employees,suppliers,government,shareholdersetc.thesearetheinternal environment which impact on the business activities. Business organisation adopts models in order to determine the negative and positive impacts. For analysing the external environment company adopts PESTLE analysis. Besides, in order to analyse internal environment company adopts Porters Five forces model. Uber is the Cab providing company through which they provide different services to customers like high deep seated cars with luxurious cooling services along with Wi-Fi services (Augusto, and Souza, 2017). Besides, there are some competitors and economicenvironmentaffectthebusinessservicesorgrowth,todetermineallthose environmental issues inservice industryneeds to analyse external environment. Uber is the well knowing taxi company that has been providing new plan and strategies. This gives new way of learning and presenting good goals and set the strategic criteria in front of 1
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their competitors. Present study will be presenting the overall depth of the case study of Uber. This also provides the opportunity to get over from the threats and constraints of Uber. Factors Affecting Service Industry. PESTLE analysis Political (P):Uber is the car servicing company which provides services to the customers as per their needs and wants (Uber PESTLE Analysis, 2017). During the period service industry facing the controversy during its initial periods without having clear regulations. During the ride in case of any damage and accident they are not liable to pay compensation or not nay kinds of insurance services. Moreover, they faced many public issues and questions. Some more issues related to not having licence in order to which they bane on the services.Political issues are the same issues which influence by governmental policies, changes in rates, demographic changes etc. in order to face the challenges service industry facing lawsuit and the California authorities ruled. In order to that company also facing the issues in south Africa related to the licensing, this issues gives high impact on the service industry operations due to which they facing the huge customer loss. Economic (E):Uber company also affected by the economic factors. Sharing economy is the great impact on the economy growth in order to increase employment growth (Uber PESTLE Analysis, 2017). It is the effecting process. In terms of service industry they provide different types of employment services for every large number of drivers. This impact positively in terms of searching for taxis.In order to get the customer attraction and customer focus company reduce their prices in order to compete with other companies. Economic factors influence the company positions and policies in terms of changing in interest rates, inflation rates, foreign exchange rates etc. in order to compete with the rivalry firms this gives the impact on the business. Economic factors are the most influencing factor that directly impact on customer demand and supply. Economic factors also influence and change the different rates as result customer face high prices of services and products. Social (S):social factors is the highly affected factor in business organisation. This is the another external factor which is influenced by the people changes needs, market trend, demand of the customers etc. In order to maintain the respectful image in the market or with the customers (Uber PESTLE Analysis, 2017). Service industry needs to adopt fair services and legal environment to get the customer attraction. service industry needs to adopt High safety 2
precautions to safe the life of client. It helps to enhance the customer faith and loyalty. It gives high value to customer services and enhancement of brand value. Social factors influence company brand image and market share in among other competitors. Technological factors:it is the another factor which impact on the company function. Technological factors are the root of everything according to remove the addition la time cost. This is the another factor which impact on the business services.Without having the presence of effective technologies' nothing is impossible (Dиdnуkand et.al.,2016).Service industry has introduced high class technology for customers as well as business which express the growth of economy.They introduce high prime app services through which customer or driver can easily connect with each other and grab their ride. Beside, they also adopt technology which reduce the waiting period of the customer and drivers. Overall, changes affect the service industry and their priority customers. Overall, it gives new ways of working as well. Overall, technological factors are influence changing behaviour of industry and target market goals. Overall, it brings new effective technologies and growth in order to take the opportunity growth. In terms of security context, It involves threats and uncertainty and risk. Environmental(E):Itistheanotherenvironmentalfactorswhichaffectsthe organisation growth.This factor influenced by the environmental growth. Like Uber facing the issues of about the ride sharing services of the company. In order to stable the environmental issues company adopts Pilot projects calledservice industry Green where the rides can request a green ride at the tap of a button. Through which they get good and effective response (Elert and Henrekson, 2017). Legal (L):legal is the another affecting factor which gives adverse impact on the major factors. Legal factors influence by the government legislations or terms and policies. It is the most challenging and effecting process in order to maintain the process (Uber PESTLE Analysis, 2017). On the other side,service industry facing the issues related human resource related to the wrong behaviour of buyers with the customers or not follows the rules of the government. Fromtheanalysisofabovegivenfactors.Serviceindustryrequirestotaking technological better growth making task. Technological and social factors can providing the best success and fast growing performance. This helps service industry to take new changes and new development process. Major opportunity and growth will make new process which makes new growth and challenge. 3
Porter's five forces model: It is the model in order to take the internal analysis and growth opportunities. This model of internal analysis the internal threat and opportunities. This model is very helpful in order to get the best effective strategies. Threat of potential new entrants:Service industry is highly affected by the new competitors. The focus of the company is on the effective environment which gives the high potential level to the company. On the other sides, another aim of the company is to fill the gap between customers and employees. In order to that, Service industry has facing high impact if in case new entrants adopt low penetration price strategies to getting good attraction of the customers. This is the threat of the company which affects in some future times (Ibrahim, Dumas and McGuire, 2015). On the other side, in order to stable in the market company needs to adopt strategic policies and business plans in order to retain the attraction level of the customers. Threat of alternatives or substitute services:it is the another threat for the Service industry may arise trouble for the companies. Substitute is the most common fear for the existing companies.There are various substitutes for the customer in transportation industry. It is the higher complex and tough task to stop the development technologies and new ideas. Due to other public transport offers may threaten for the company growth (Porter's five forces analysis on Uber, 2017). It is the best opportunity for the company to adopt the best market share in order to reduce the external issues and challenges (Mueller and Naffziger, 2015). In order to retain the existing customers company need to grab effective development and adopts new pricing policies to maintain the customer retention. Along with that, as per the current situation this factor is weak in this scenario. Substitute services or products likely affect the industry or a particular company. That might giving less opportunity and growth to given negative factors. It happens when number of threats are high and influencing. Supplier Bargaining power:This is the ability of suppliers to drive the prices of the company. The leading supplier of this industry is availability of drivers. On the other side, it is the another great opportunity for the company. service industry adopting the car owning drivers. Uber have the limited supplier they control their business through web technologies. In order to face the challenging situations.Company contribute some effector in order to grab the attraction of drivers. service industry gives the free freedom to drivers to choosing between organisation or rivals. Another supplier of the company is oil and gas suppliers. This is the threat which affects 4
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company profit level (Ramos,and et.al.,2016). Due to fluctuations of prices of oil and gas increasing the high risk for the company. Threat of buyer bargaining power:The customer power may affect the company profit level margin. On the other side, customer is the major factor or source of income. It is necessary for the company to adopt the customer oriented pricing or services in order to grab the attraction of customers towards the services.Service industry clients are sensitive and dynamic. Due to threat of rival firms or company they may attract towards them as well due to price fluctuations. This is the threat for the company to maintained the good relation with the customers.Moreover, buyers power is the high power in order to get the customer attraction and objectives. Industry rivalry: this is the strength of the company the focus of the concentration industry arrears the new higher than previous years. In this threat company needs to compete with both customers and competitor. There are many competitors of service industry who affect the business operation in the market. It gives different opportunity to adopt in order to beat the competitors strategies (Salmerón and et.al., 2015). Curb and Digi Chuxing, Lyft is the principle competitor of Uber. Today's generation are demanding more for new technologies and services. This approach or enhance the customer focus and attraction towards the company. Appraisal of the organisation strategy Business strategies and techniques they adapt to take the customer attraction and attention. In order to appraisal the business model and strategies, there are two models for analysing the organization strategies (Son and Kim, 2016). Uber is the kind of ride sharing company which provides taxi services to the customers. In order to analyse the business canvas model there are six segments in order to analyse the business strategies and functions. Business canvas model Customer segments: Service industryhas two group of partners. There have two passengers that is customer and drivers. This is the another main segment of the company which require more attention and effectiveness. The biggest difference between traditional cabs and modern taxi is that, today's taxi require smartphones. Customer does not need to go to the company and book the cab now things have changes. On the other side, Uber uses freelance drivers. Uber make the smart appearance of technology. Value proposition:it is the another segment of the company which express the value of the company. It provides customer values and their safety manners. The main value of the 5
company is that they provide rides when customer wants and for drivers their values are we give you passengers when you want them (von Rosing, Scheer and von Scheel, 2015). It is the best value given by the company in order to maintain the flexibility in the working. It is the unique concept through which customer get attracted. Customer relationship:company provides the best practices to the customers in order to grab the customer opportunities and attention. In terms of customer relation company provides customers various services and approach such as with the helps of location driver can easily tract the customer location and place. This feature helps to reduce the customer efforts which gives flexibility to the customers. They help to get the best effective position and give comfort to the customers. Channels:Another element is channels. The channel of distribution of the company is very flexible and time saving such as customer use the app and service of the company by registered itself on the app (Wagner Mainardes, Ferreira and Raposo,2014). It cannot restrict the place or city. This is the another main objective of the company. It is the another very effective and sufficient channel for the customers. Revenue:in terms of Service industryrevenue is very much effective and based on unique concept which gives more flexibility to the customer. Its GPS technology on the phones helps to track the location where customer wants to reach. And then charges according to that manner. Its revenue is pretty simple and average (Elert and Henrekson, 2017). Basically, Surge algorithm comes into consider on cab aggregation platform like Service industryand Ola when customers have to pay a multiple of the usual fares. In this situation fare has automatically increased when the demand for taxis is higher than the drivers available in a particular neighbourhood. These kinds of apps show customers that the fare are surging and if you accept the surge. In that case fare will automatically increase. Key resources:there are three resources of Uber which they adopt without those resources Service industrycannot achieve the target goals. Those resources connect customer to drivers. Like pricing algorithm are used to maintain the supply and demand in the market and help to meet the demand. It is the another focus of the company through which they meet the needs of customers. Besides, routing algorithm try to make sure that customer wait time is always short and limited. 6
Key activities:the main key activities of the Uber is to providing the can services at any place where customer demand. Company always looking to add some more values in order to meet the needs of customers (Elert and Henrekson, 2017).They having lack of geographical effects through which they connect customers. Key Costs :Key costs is the another factor that should be according to the matter of fact. That shows the matter of fact that shows the better effective services or growth.service industry business model has been all about transferring capital costs to partner drivers. In terms of investment Saudi Arabia has invested $3.5bn in Uber. Value chain model analysis It is the another model to analyse the strategies of Uber. This model includes five factors through which company strategies will easily analyse. According to this business canvas model will help to analysis the business capabilities and helps to create new values by developing core business. Through creating the integration of different elements. This helped to analyse the model through visual manner. Overall, it brings new major opportunity and growth. Uber Inbound logistics:Inbound logistics means receiving and storing the raw material. In terms of Uber it is the largest taxi technology company in the world, they doest not own cars or any vehicle to serve the services to the customers. They all are owned and rented by the Uber drivers. They provide drivers to carry smart phones in order to connect with the company. Company inbound logistics relate to the internet based nature of business operation (Brusa and et.al., 2017).Such as company needs to introduce many new services and attractive customer offers. Such as taxi on demand, cash free rides, cabs for customers and on demand passengers. It helps to enhance the value chain. Uber operation: Service industryworks in more than 760 cities worldwide they are usage they requesting the ride by tapping on the phone screen. Through which driver can easily approach the customer. Another service of theservice industryis ride where customer wants to go driver will take them on that position. Customer also can easily track the position of the driver in order to secure the safety reasons. In terms of payment customer can easily pay the amount at the last arrival. 7
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Outbound logistics:it is the next value chain element is outbound services. This is the process of warehousing and distribution of products. Outbound service is not applicable for services sector (Brusa and et.al., 2017.). Marketing Sales:the main marketing source of the company is social media source it is the best process for getting the best effective services or customer feedback. They adopt print media and advertising tools in order to get the best services. Service:High level of customer satisfaction is the core advantage for the company, good customer services is always good motivation of the customers (Augustsson, Holmstrom and Nilsson, 2015). In order to getting customer feedback customer can easily give feedbacks in terms by giving rating stars to the services of drivers. Resources and Capabilities In order to take resources and capabilities key resources include global presence and technology under physical resources, skilled workforce and driver advocates under human resource management. Competency level ofservice industryhas excellent services to provides to customer. This process will help to take better resource's and growth. Besides,service industry having strong image and comparative level of performance and growth. Moreover, it brings new opportunity and growth. Strategic proposal RACE is the model that helps company to implement the strategic plan in order to overcome from the market challenges. This brings new opportunity and growth in order to introduce new services and growth. That helps to full fill the company probability area. With the help of RACE model company needs to evaluate company strategic proposal. RACE model means Research, Analysis, Communication, Evaluation. Research:it is the first process in order research the market opportunities and issues through which company lacking behind in the market. Industryneeds to adopt this model in order identify the best business opportunities (Ibrahim, Dumas and McGuire, 2015). Being a CEO, company needs to adopt creative and innovative technology through which they reduce the customer safety concern and get good customer feedback. Action and planning:in this next process of RACE model is to analyse means, company needs to analyse the model and their pros and effectiveness in order to implement in the company.Company needs to adopt some techniques and strategies in order to implement the 8
whole process. Analysis process may give some more ideas and strategy tools in order to get the best outputs. Specifically Measurable Attainable Realistic Time Communication & Relationship Buildingit is the another process of the model through which make best and productive strategic model (Son and Kim, 2016). Communication tool process helps to communicate information to all company members in order to implement the process. This helps to take the best possible returns from the customers. Communication process helps to implement the model or strategic proposal plan into action. On the other hand communicationhelpstocommunicatetheplantoendconsumers.Withthehelpdigital technologies company can easily connected with the customers. This makes process successful and effective. Along with that, communication also helps to get the feedback from the customers. Evaluation:it is the another way to implement the process or model and then evaluate the model in order to take the response from the customers. Evaluation helps to check the process weather it is implemented properly or not (von Rosing, Scheer and von Scheel, 2015). It helps company to make corrective changes as per the needs. Evaluation process helps to make changes according to the business needs. In order to measure the performance company needs to measure following points. Focus group and interviews Media Content analysis Secondary data Press clippings. This model of strategic model helps Service industryto make attractive services or business opportunities. This model helps to grab the business opportunities in order to stable the market position (von Rosing, Scheer and von Scheel, 2015). CONCLUSION From the above section, it can be concluded that, Service industry is the fast growing company in order to get the best possible outcomes. Present report based on macro and micro 9
environment through which company get affected. In order to minimize the negative impact report also discussed about the strategies' appraisal in order to select the best possible outcomes. With the helps of identifying company needs to adopt the latest technologies and innovation ideas in order to come the external environment. This is the best possible action and strategies company would adopt. With the help of effective outcomes it will also get to know that company needs to adopt the best possible outcomes and approach in order to give the outputs level. 10
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REFERENCES Books and Journals Aihara, H. and et.al., 2017. First data release of the Hyper Suprime-Cam Subaru Strategic Program.Publications of the Astronomical Society of Japan. Augusto, C. A. and Souza, J. P. D., 2017. Governance Structures: A Complementary Study Of Transaction Costs, Measurement Costs And Strategic Resources.Revista GEPROS.12(4). p.204. Augustsson, N. P., Holmstrom, J. and Nilsson, A., 2015. From Technological Transitions to Service Transitions: A Study of Attenuation Effects in IT Service Provisioning.Journal of the Korea society of IT services.14(2). pp.337-354. Brusa, P. and et.al., 2017. Community pharmacies as epidemiological sentinels of headache: first experience in Italy.Neurological Sciences..38(1). pp.15-20. Dиdnуk,E.andet.al.,2016.Theroleofstrategiesindevelopmentofenterprise management.Oxford Economic Papers.p.1127. Elert,N.andHenrekson,M.,2017.EntrepreneurshipandInstitutions:ABidirectional Relationship.Foundations and Trends® in Entrepreneurship.13(3). pp.191-263. Ibrahim, B., Dumas, C. and McGuire, J., 2015. Strategic decision making in small family firms: an empirical investigation.Journal of Small Business Strategy.12(1). pp.80-90. Mueller, C. B. and Naffziger, D. W., 2015. Strategic planning in small firms: Activity and process realities.Journal of Small Business Strategy.10(1). pp.78-85. Ramos,V.andet.al.,2016.STRATEGYANDINNOVATIONINORDERTOBE COMPETITIVE IN A GLOBALIZED WORLD: AN EVOLUTIONARY ANALYSIS OF THE EMERGING WINE SECTOR IN VALE DO SÃO FRANCISCO (BRAZIL).Revista de Ciências Empresariais da UNIPAR,16(2). Salmerón, L. and et.al., 2015. Strategic decisions in task-oriented reading.The Spanish journal of psychology,18. 11
Son, I. and Kim, J., 2016. The Effect of Samsung Pay Release Event on Samsung Pay’s Strategic Alliances in Korea Equity Market.International Journal of u-and e-Service, Science and Technology.9(3). pp.121-130. von Rosing, M., Scheer, A.W. and von Scheel, H., 2015. Process Owner Training. WagnerMainardes,E.,Ferreira,J.J.andRaposo,M.L.,2014.Strategyandstrategic management concepts: are they recognised by management students?. Online UberPESTLEAnalysis,2017.[Online].Availablethrough: <https://www.cheshnotes.com/uber-pestel-analysis/>. Porter'sfiveforcesanalysisonUber,2017.[Online].Availablethrough: <http://www.expertwritinghelp.com/blog/2017/07/28/porters-five-forces-analysis-uber/>. 12