Uber's Expansion Strategy and Diversification

The case study analyzes Uber's business model evolution from a ride-sharing platform to a diversified service provider. It examines the company's expansion into new markets, including food delivery, transportation for businesses, and potential entry into freight and trucking sectors. The document also discusses the implications of this diversification on Uber's profitability and future plans.

Uber Case Study

Table of Contents
EXPANSION STRATEGY FOR NEW BUSINESSES.................................................................1
REFERENCES ...............................................................................................................................5
APPENDIX .....................................................................................................................................5

EXPANSION STRATEGY FOR NEW BUSINESSES
Uber has expanded and achieved growth by focusing on various strategies such as finding
new customers demographics, penetrating new regions or markets and expanding into new
businesses to increase their revenue and market value. Uber identified that expanding the into
new business can help in achieving more marginal growth and profit opportunities. The CEO
Dara Khosrowshahi highlighted that the company's food delivery service – Uber eats is one of
the most profitable business of Uber company. The company values up to $120 billion this year
in which Uber eats alone worth $20 billion. There is a huge competition in the Uber ride business
as there are various alternatives for the customers to order a taxi. The logical target for a
company is to rapidly expand its business portfolio or products offering so that it can target
various customers in the global market. Alongside introducing Uber eats the company is also
focusing to provide more innovative services their customers using its logistics technology such
as flying cars and autonomous vehicles. Another unexpected new market Uber is trying to enter
into is on-demanding staffing. Uber's payroll may include not just drivers but also private waiters
and security guards in the future.
1

Uber works is a project which is currently being develop in Chicago, Uber already offers
a wide range of business to business operations including Uber to business which is a platform
for employers to provide rides for staff and Uber health that coordinate picking up patients with
health care professionals. The CEO believes that the company can use the same dynamic pricing
software and same contactor pool in order to enter into new markets too.
2

The strategy is a completely different from the mission of Uber under Travis Kalanick
who invested huge amount into the international expansion of the company. Pursuing a series of
3
Illustration 2: Uber expansion strategy
(Source : Uber expansion, 2018)
Illustration 1: Uber eats
(Source : Uber expansion, 2018)

setbacks in Russia and China, the company finally recognised that it can generate more money
by offering new products and services rather than global expansion. Uber sees itself as the next
potential Amazon. It implies that investment in global ride sharing companies DiDi Chuxing in
China and Yandex in Russia are the just beginning. Uber also owns driverless car IP. The
company also made investments in electric scooter start-up Lime and an urban transport known
as Uber Elevate. Uber already achieving success in food delivery and the CEO also state that the
company may also step into grocery delivery market in the future. The critics also assumes that it
can also be possible that the company can eventually expand into the freight and trucking sector.
These new product offerings are a strategic acknowledgement that Uber's present business model
which is based primarily on ride sharing can be enhanced in a highly profitable business
organisation. The company effectively aligns its business model with innovative operating
activities and strategies such as diversification of products or services. Uber has been
diversifying its core on-demand transportation services beyond car rides. The company added
electric bikes ans scooters to its ride hailing application this year and its targetting more futuristic
options such as all electric short range aircraft.
The company has already launched Uber Freight app that matched shipper with carriers.
Whether its customer rides or employee travel, Uber for Business gives customers easy way to
manage their transportation needs. Along with expanding its taxi services globally the company
effectively used product diversification strategy to increase the profitability of the company.
4
Illustration 3: Uber expansion strategy
(Source : Uber expansion, 2018)

Uber works could become another potential source of income for the millions of drivers who are
contracted by Uber, they can already replace or supplement their driving by taking jobs with
Uber Eats, the on-demand food delivery service. It may also provide a fresh angle for critics who
claims the organisation misclassifying the drivers as independent contractors, avoiding the other
benefits such as minimum wage and health insurance. Uber works is the latest outcome of the
organisation's efforts to diversify the business ahead of its plan to go public in the year 2019. The
CEO of Uber has stated that the company may make the initial public offering in the second half
of 2019.
5

REFERENCES
Books and Journals
Härer, A., 2018. Of eyes and gut microbiomes in Nicaraguan cichlid fishes: convergent
diversification at different levels of biological organization (Doctoral dissertation).
Collier, R.B., Dubal, V. and Carter, C., 2017. The Regulation of Labor Platforms: The Politics of
the Uber Economy. Berkeley Roundtable on the International Economy. http://search. proquest.
com/docview/1946289401.
De Giorgi, E.G. and Mahmoud, O., 2017. How elementary is diversification? A study of
children's portfolio choice.
Online
Uber expansion. 2018. [Online]. Available
through:<https://www.theverge.com/2018/10/18/17995398/uber-works-staffing-business-test-
trial>.
APPENDIX
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