UBER Applied Strategic Management

Applied Strategic Management

UBER
Table of Contents
Strategies of Uber.......................................................................................................................1
 Eliminates various transaction costs..............................................................................1
 Cutting edge technology..................................................................................................1
 Strategy related with quality control through rating system..........................................1
 Easy and Frictionless payment options...........................................................................1
Swot analysis and the pros and cons..........................................................................................2
Strength...................................................................................................................................2
 Pros related to strength...............................................................................................3
Weakness................................................................................................................................3
 Cons related to weakness............................................................................................3
Opportunities..........................................................................................................................3
 Pros related to opportunity.........................................................................................4
Threats....................................................................................................................................4
 Cons related to threats................................................................................................4
Vision, mission and culture........................................................................................................4
How the competitors are better than UBER...............................................................................5
Acquisition and recommendations.............................................................................................6
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UBER
Strategies of Uber
There are various strategies considered by UBER such as:
 Eliminates various transaction costs
It is examined that taxi industry has more monopoly in the market and due to this the
company set fare rates and charges. Therefore, the public has no other choice but to avail the
services on the set transaction costs and base fare. But, UBER emphasized on reducing the
transaction costs. At the time of booking UBER, there are no charges to be paid through
mobile application. Therefore, it can be stated that this is one of the effective strategy which
is considered by the company to enhance the market share.
 Cutting edge technology
Mobile application introduced by the company is known as the best strategy considered by
UBER. In the present era, people are more towards using smartphones, so company focused
on introducing the mobile application through which customers can easily book their rides.
This strategy has assisted the company in expanding the services in different countries all
over the world. UBER also availed the benefit of the concept linked with collaborative
consumption by introducing mobile applications which are designed for the convenience of
the customers. By introducing the UBER application, the company has enhanced more
customer base by providing the facility related to reserving the rides, scheduling their pickup
and also online payment.
 Strategy related with quality control through rating system
This is also the effective strategy which is considered by the company in relation of boosting
customer satisfaction. The business model of the company allows the clients to rate their
drive at the end of trip. If the rating of the driver falls below the threshold given by the
company, then they are removed from the company. This enhances the responsibility among
the drivers to provide and boost their quality of the service by providing good services to the
customers. Hence, it is evaluated that company not only focused on customer satisfaction but
also encouraged their drivers to provide better services.
 Easy and Frictionless payment options
The Company also focuses on considering the strategy related to easy payments. UBER
provided the option to the customers in which the company will get credit and billing details
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once the customer sign up for an account. After every ride, the fare will be reduced from the
account and will be automatically transferred to the account of the driver. So, the strategy
related to cashless transaction also helped the company in boosting the customer base in the
highly competitive business world. Therefore, the strategies considered by the company are
effective and also helped to accomplish the set goals and objectives in the highly business
environment.
Swot analysis and the pros and cons
The SWOT analysis of the UBER Company is as follows:
Strength
 Largest ride sharing technology: It is examined that in the present era, UBER has
positioned itself as one of the biggest ride sharing technology on the global platform.
Presently, the transportation company has more than 40 Million monthly customers in more
than 760 cities. The company provides a platform to book their rides by sitting at their home.
 Good brand recognition: UBER has also focused on maintaining the brand
recognition in more than 50 countries. It has also overtaken the companies such as Honda,
Ford and GM in relation to the framework of brand value. With the incorporation with new
features of the technology, there are more chances of the enhanced services in next coming
years. Presently, the company values at $72 Billion.
 Low fixed investment: The Company also controls the functions by considering low
fixed investment and it has also accessed many cities in the communicative network. As there
is no set infrastructure, UBER focuses on expanding at the great pace.
 Dynamic pricing strategy: The company has considered dynamic pricing strategy
with the agenda of “Higher the demand, higher the price”. The policy has also proven
advantageous to the drivers and also for this industry. The drivers can easily earn a good
amount at night time and also at the time of holidays.
 Low prices in relation to other Taxis and commute applications: The Company
provides low prices in relation to other traditional taxis. The difference takes place in relation
to charge per mile and per minute. But on the other hand, the company charges on the basis
of per minute and per mile for moving and idling. The pro related with this strategy is that, it
has proved the organization to be beneficial for the customers. Also, UBER is considered as
cheaper than LYFT and SideCar. This strength has assisted the company in accomplishing set
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targets and goals and also boosted the overall success ratio among the competitors present on
the global platform.
 Pros related to strength
By examining the strength possessed by the company, it has been noticed that there are
various pros related to growth, profitability and also positive image. As company offers
services at low price as compared to the competitors, it has directly boosted the success rate
as customers will prefer more services offered by the company. More preference from the
customers will also enhance the profit margin and also maintain goodwill among the clients.
Weakness
 Different scandals: The Company has received negative coverage in relation to
different scandals and controversies. There are various cases linked with sexual harassment
and attacks which has negatively impacted the customers. There are various allegations
which resulted in #DeleteUber Campaign and due to this 500K customers deleted their
accounts.
 More dependency on the employees: The Company is highly dependent on the
employees and internet. In the present era, it is difficult to predict the behaviour of the drivers
and due to this the goodwill of the company is affected. In US, over 103 drivers of the
company were accused of sexual harassment and abuse which also showed the negative
image of the organization culture.
 Cons related to weakness
Due to the unpredictable behaviour of the individual the company has to suffer loss and also
it directly affects the goodwill on the global platform. Therefore, it is considered as one of the
cons which are related with the weakness of UBER and it is important to be controlled so that
positive image can be created among employees.
Opportunities
 Accountability and performance: It is analysed that clients are not impressed with the
unorganized cab services that have been in the market. This has boosted the opportunity for
the company as it can improve by providing its services in relation of accountability and
performance. By having proper track of the drivers, the company can easily evaluate the top
performers. So, this is one of the opportunities that should be grabbed by the company to
boost goodwill in the market.
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 Digitalization: The customers give preference to the interconnected network through
which the smartphones can be easily available. The company should focus on investing in the
services such as UBER Eats as it will help to enhance the customer base. There are also
companies where operations of the company are not conducted such as China and Denmark,
so the company should focus on expanding the operations through digitalization.
 Logistics: The company should also focus on launching its own logistics such as own
movers and packers for the public convenience. This is the best way for the company to boost
the market share.
 Pros related to opportunity
If company grab the right opportunity at right time in relation to accountability, digitalization
and logistics, then there are more chances of expansion and growth. The pro linked with it is
the overall growth which will lead to strong customer base.
Threats
 Retention of customer and employee: The major challenge for the company is linked
with retention of employee and customers. The financial incentives given by other companies
steal the customers and also the employees, so this is the major threat faced by UBER.
 Increase competition: The competitors in the market are enhancing such as Ola and
LYFT and due to this the overall services has been affected. So, this can also be considered
as the major threat for the company.
 Cons related to threats
It is noticed that company has to face issue in retention of employees and customers, so the
con can be related to lower productivity and profitability ratio. Also, the competition is
increasing due to which the negative affect has been examined on the market share of the
company.
Vision, mission and culture
Vision of UBER: The vision of the company is “Smarter transportation with less cars and
greater access”. The company focuses on the transportation that are safe, cheap and also
reliable; which also enhance more opportunities and high income for drivers. At UBER, the
opportunity is by setting the world in motion. The company also emphasizes on taking the
issues to assist drivers, rider’s ad also delivery agents in different cities on the global
platform.
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UBER
Mission: The mission of UBER is to make “Access of transportation for everyone,
everywhere”. The company also ignite the opportunity by focusing on setting the world in
motion.
Culture:
There are various cultural norms that are followed by the company such as the company
stated that “we build globally, we live locally”. The company focuses on harnessing the
power and scale of activities to link with the cities, communities and rides that are served
every day. The culture of the UBER aims at earning the trust of the customers by solving the
issues and also by boosting the earnings of the people. UBER make short term sacrifices to
maintain long time loyalty with both customers and drivers.
The company also stated that we celebrate the differences. In the culture of UBER, the
management ensures to maintain diversity among the different backgrounds of the
individuals. The different views and opinions are considered and also employees are given
chance to come together and build. Therefore, it can be stated that company focuses on
maintaining positive culture as it helps in achieving growth in the market.
How the competitors are better than UBER
There are many competitors of UBER present on global platform. The competitors of UBER
are LYFT, OLA, CURB, GRAB and DidiChuxing. It is difficult to compare with the
competitors as UBER is known as one of the top companies in the transportation sector. But
if emphasis is given on comparison of the competitors with UBER, it has been seen that
company lacks in many areas. One of the factors is linked with pricing as it has been
examined that competitors like LYFT offer services at low cost many a times. In UBER,
surge pricing is considered in which the prices are enhanced but on the other hand in LYFT,
“Prime time” is considered. LYFT is better than UBER has the surge charge leads to high
prices as compared to the prime time. LYFT wins this category in relation to transparency. It
is examined that when prices are enhanced due to more demand, the rider percentage
enhances but in UBER there is less transparency in term of pricing. Also, In OLA there is
more transparency in relation to the charges. Therefore, it can be stated that in terms of surge
pricing, other competitors are better than UBER.
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Acquisition and recommendations
In term of acquisition, UBER has acquired nine companies. The most recent acquisition in
2019 done by the company is with the companies such as Cornershop, Mighty Al, Careem,
JUMP BIKES, Swipe Labs, Otto, deCarta and Complex polygon. In reference to UBER, it is
recommended that the company should emphasize on maintaining transparency in terms of
surge pricing. The surge should be fixed and also it is important for the company to ensure
the availability of cars. If surge price are fixed as other competitors, then it would be easy for
the company to accomplish the set targets. Also, to boost the customer base it is
recommended that company should emphasize on offering discounts and benefits which can
grab the attention of the customers towards the services of the company. So, these are the
recommendations that should be considered by UBER.
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