Corporate Strategy for Uber: External and Internal Analysis

This report analyzes the corporate strategy of Uber, including external analysis using PESTLE analysis and Porter's Five Forces model, internal analysis of resources and competencies using VRIO analysis, and evaluation of strategies that best suit the organizational objectives.

Corporate Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
External analysis..........................................................................................................................3
Internal analysis...........................................................................................................................6
Evaluation..................................................................................................................................12
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Business environment is that place where in the business operates, the environment
contains certain set of factors that might positively or negatively impact the business
performance. The business needs to evaluate the most appropriate strategies and policies by
identifying the challenges and opportunities in order to rightly manage the organizational
objectives irrespective of any circumstances or uncertainties. In the context of Uber as the
chosen business organisation. Uber is an American multinational company which is operating in
the transportation industry. The company was founded in the year 2009 by Travis Kalanick and
Garrett Camp. The company is headquartered in California; US Uber operates in 69 countries
including UK. It is a public limited company delivering its services such as ride hailing, food
delivery, package delivery, couriers, fright transportation. Taking Uber as the chosen
organisation this report delivers external analysis for which pestle analysis and porter five forces
model is used to evaluate the threats and opportunities and industry attractiveness. The internal
analysis of Uber is to evaluate the strengths and weaknesses, lastly the report delivers strategies
that best suits the organizational objectives based on the evaluation of internal and external
business analysis (Adamides, 2015).
MAIN BODY
External analysis
Pestle analysis
It is a framework of different elements that helps to evaluate the impact of macro environment or
macro environmental factors on the business performance. Pestle analysis has six elements such
as political, economic, social, technological, legal and environmental factors. These are
discussed below in brief:
Political factors
Political factors have a very specific and crucial role for ethically running and operation of the
business. The government in UK implements legislations such as taxation, minimum wages et
cetera. If the government changes or modifies these business laws, it directly impacts favourably
or unfavourably different businesses such as if the tax rates are increased this might directly

impact the profitability margins of the businesses in the country (Basu, 2017). With the
implementation of BREXIT, it has impacted transportation industries in UK at a larger extent.
Transportation industries faced challenges such as restrictions over exports and imports,
increased prices of excise duties, increased rates of raw materials and so on. Thus, the increased
rates of transportation cost and restrictions over exports and imports has become a threat for
different transportation businesses. Moreover, political uncertainties and government instability
becomes a threat for businesses operating in UK that impacts the net profit as all the business
activities pertaining to exports imports, transportation and shipping is directly dependent and
operated as per the governmental measures.
Economic factors
Economic factors are those factors that are determined by the economy, conditions of a specific
country. With stable economic conditions in UK, that brings high employment cost, easy access
to different technologies and so on brings number of opportunities for transportation industries.
Moreover, the fluctuations in hyperinflation also lets to loss of profitability margin, other factors
such as unemployment rate and reduction in disposable income becomes a threat for businesses
in UK (Brewster, 2017).
Social factors
Social factors are determined by the living standard and the social lifestyle pattern of the people
in a specific country. With higher living standards and higher purchasing power of people living
in UK where a large number of people have high income earning capacity all these turns as an
opportunity for transportation industry in UK.
Technological factors
Technological factors directly impact the business performance, as technology helps in bringing
out efficiencies and productivity in organizational functioning. With high technological
advancement in UK. Where in UK is also known as the fourth technologically advanced country
in the world brings number of growth opportunities for transportation industry (Chen and et.al.,
2019).
Legal factors

Legal factors are such mandatory laws and framework framed by the government of a country
that has to be adhered by all the businesses and industries operating in a country. Legal factors
might affect positively or negatively to the businesses operating in a specific location. The
government of UK implements minimum wages, employer rights and other such business
legislations that are to be adhered, these impacts the business in a positive manner as the
business is operated in the most ethical and legal manner. The legal factors might also impact the
transportation industries in a negative manner as in order to introduce new business ventures or
contracts, the businesses might have to go with along procedures so that the government accepts
the proposal of the companies Which turns a threat to businesses.
Environmental factors
With the rising environmental concerns and issues, it becomes a major threat for businesses
especially for transportation industries as they have been blamed for the emission of harmful
greenhouse gases from the vehicles (Keyes, 2016). The rising environmental concerns become a
threat for the transportation industries. Moreover, weather conditions might also become a threat
for transportation industry such as heavy rain might cause traffic and delay and ineffective
services.
Porters five forces model
Porters five forces model is an analysis of the macro environment that helps to determine the
competition in the market place. It is basically a framework of determining the competitive
analysis and evaluate the positioning of the industry or the business in the market place. The
elements of porters forces are discussed below in brief pertaining to the transportation industry:
Threat of new entrant
Threat of new entrant is determined by number of new businesses in the marketplace. These new
businesses in the marketplace also incurs higher investment on marketing activities. Though
there are other well established brands in the marketplace with strong brand identity and market
positioning. The pressure of new entrants in the transportation industry is considered medium
(Kim, 2015).
Threat of substitute product

There are different transportation businesses that provide numerous services such as shipping,
Food delivery, package delivery, couriers, freight transportation and others. there are a total of
20,382 businesses operating in courier activities in UK as per the research of 2017. It also made
the transportation industry the second largest number of businesses in UK. Each of these
businesses delivers innovative products and services in the transportation industry that makes
every business selling unique proposition. The threat of substitute products in transportation
industry is medium.
Competitive rivalry
With large number of businesses in the transportation industry, delivering innovative services in
the country, makes a high competitive environment in UK for transportation businesses. There
are different brands in the market with international and domestic identity delivering variety of
services such as food delivery, taxi and cab services and others that results to higher competition
in the market place hence the pressure of competitive rivalry among the transportation industry is
very high (Pidun, 2019).
Bargaining power of suppliers
In transportation industry there are suppliers who wants to deliver products and raw materials at
higher cost. Wherein suppliers delivering vehicles, the logistic partners and other suppliers
brings a crucial role play in the transportation industry. The supplier can mold the high demand
into profit earning opportunity, hence the bargaining power of suppliers in the transportation
industry is high.
Bargaining power of buyers
The bargaining power of buyers is determined by the power of the customers influencing the
prices of the products that negatively impact the profitability margin of the business. In
transportation industry all the prices a predetermined and delivered to the customers or buyers as
per the distance and the capacity of the transportation services delivered which reduces the
power of the buyers to influence the pricing decisions. The bargaining power of buyers in the
transportation industry is low (Puranam and Vanneste, 2016).

Internal analysis
RESOURCES
Uber a certain key resources that includes its network which is integrated by number of deployed
drivers and the riders (customers). Uber uses technological tools and software applications that
both the riders and drivers uses to connect. Apart from that Uber uses number of algorithms in
order to manage the business performance and track the growth of their network. With 26,900
corporate employees as per the research conducted in the year 2019 makes Uber huge business in
the marketplace.
Tangible resources – properties, finances and technologies
Uber has long-term venture in contracts by the vehicle is providing companies it maintains a
strong relationship with its suppliers in order to manage and meet the demand in the market
place. The research shows that over 93 million people used Uber in 2020 and 111 million people
used it in 2019. Financially the associations have on the huge number of revenues, the search
also shows that Uber eats increased revenue by over 200% in thousand 2020. In the year 2021
the revenue earned by the Association On at £2.6 billion and a net income More than £4 billion
with a market capitalization of more than £64 billion and the Association and revenue of more
than £8 billion in the year 2020. The total revenue of the association fell down by 14.3 in the
year 2020. The company made a net loss of more than £4 billion in the year 2020. The market
capital of Uber is more than £69 billion (Rugman and Verbeke, 2017).
In terms of technology, Uber is famously known for ride hailing service whose Uber application
downloaded in the electronic devices of the customers matches the consumers looking for ride
services. Uber advanced technology group and other technology programs are developed for
delivering self-driving vehicles and ridesharing technology.

Source: https://techcrunch.com/2020/08/06/ubers-delivery-business-is-now-larger-than-ride-
hailing/
Intangible resources reputation and relationship
Uber is one of the best known transportation service providing company and a global brand in
the world. Uber is famously known for its ride hailing services. The company has also
diversified its services for delivering food order and Delivery businesses as Uber eats, Uber
freight. Uber largest revenue its ride hailing business which is also the largest segment of the
business that makes up most of the profit. Uber has also introduced sale of its self-driving car in
the year 2021. Uber has strong brand identity in the global market and the company focuses on
delivering value to the customers to connect with the customers at emotional level. Maintain
relationship with its business partners including virgin America Julia on Spotify to integrate the
company partnership and deliver brand awareness and recognition to attain competitive
advantage and positioning in the marketplace. Uber has dropped 53 spots in the Fortune 500 in
the year 2021 as its revenue fell down due to the global pandemic. In spite of that Uber eats is
the another business segment of the Association that made growth of the business. Uber is on the
96th rank of the best global brands in the world as per the research of 2021 (Silverman, 2016).

Thus the well-recognized brand identity and the global presence becomes one of the
strengths of the association and the other in tangible resources such as standard of services and
verified drivers and cars by the association makes it a strong brand in the market place. The
business also highlights certain weaknesses of the intangible resources such as the relationship
between Uber and a driver it lacks connection and reliability for customers.
COMPETENCES
Value chain
Primary
activities
Inbound
logistics
Operations Outbound
logistics
Marketing
and sales
Service
Support
activities
Firm
infrastructure
Human
resource
Technologica
l development
Procurement.
VRIO Analysis
Resources
and
Competence
Valuable Rare Imitable Organized Impact on
Competitive
advantage
Uber
operations
Yes No Yes Yes Realized
competitive
advantage
Uber
marketing
and sales
Yes No Yes Yes Realized
competitive
advantage
Uber
outbound
logistics
Yes No Yes Yes Realized
competitive
advantage
Uber services Yes Yes Yes Yes Sustainable
competitive

advantage
Human
resource
Yes Yes No Yes Sustainable
competitive
advantage
Technology Yes No Yes Yes Temporary
competitive
advantage
Core competence
Uber services: Uber uses non-commercial cars and the drivers deployed avoids any costly
commercial expenses insurance that makes Uber services a cost advantage and cost effective
than the traditional taxi service utilities. Ride hailing services offered by the association makes
up earning large revenue than other services offered by the association. The quality of Uber ride
hailing services offered, wherein the customers need to order a ride with convenient steps adds
value to customer experiences and build strong consumer perception that makes the brand stand
out in the competitive marketplace (Sull and et.al., 2018).
Strengths and Weaknesses and the evidence of the reasoning behind VRIO analysis
Uber operations
Strengths: The services involve requesting the ride where customers book a ride to a specific
location from the Uber app, ride it includes the information of the drivers and the complete
details on the application, pay and go is where the customer reach the destination and space for
the ride.
Weaknesses: Lack of connection with the drivers.
Uber marketing and sales
Strengths: Uber uses digital media marketing and word of mouth marketing in order to deliver
the marketing objective to its targeted customers.

Weaknesses: The other traditional methods of marketing used by the association includes print
media, sales promotion, events and experience and public relation are included in the marketing
strategies of the Uber turns huge investment and loss of profit margin.
Uber outbound logistics
Strengths: Outbound logistics includes warehousing and distribution of the products. As Uber is
the global taxi technology company operating in more than 760 cities, outbound logistics does
not completely apply to the service industry but Uber uses internet base nature as the business
model in order to deliver services to the customers.
Weaknesses: Lack of track over customer experiences
Uber services
Strengths: Uber promises to deliver value to the customers. The rider can also deliver feedback
to the company of its ride and accounts of the drivers. All the rides are being tracked by the GPS
tracker, customers can even complain for any inconvenience faced during the ride, Uber does all
these in order to deliver quality services and experiences to the customers.
Weaknesses: Lack of growth on other services offered by the association apart from ride hailing
services.
Human resource
Uber has a total of 26,200 employees, Uber manages the employees by segregating them into
different functional units to manage the business activities. Uber recruits and retail candidates
who are perfect fit for the determined job requirement (Surijah, 2016). Uber Also manages the
ride hailing services by delivering additional incentives to the drivers for maintaining cleanliness
in the vehicles. Other approaches used by Uber to Stimulate working by offering additional
training in development and growth opportunity to derive skilled working capital in the
organisation.
Weaknesses: Lack of detailed information about the drivers
Technology

Strengths: Uber uses edge cut technologies and establishes a mobile app which is convenient to
navigate and use for customers. Individuals using smartphones can conveniently book rides by
using the mobile app. The association also collect feedbacks from the users about their
experiences. Uber technology is also named that is driven by joint consumption but developing
mobile application that consist of different innovative features which convenient to use. The
mobile application is invented by the GPS technology in order to track the real position of Uber
drivers and the location of the riders.
Weaknesses: Lack of privacy and safety of the customer data.
Evaluation
Suitability
SWOT analysis
Strengths:
Use of edge cut technologies helps the
customers to use mobile friendly applications
conveniently with new embedded software to
reduce the time taken while navigating in the
application by the users.
Weaknesses:
Using new enhanced technology with
embedded software in order to retain the
complete details and information about the
drivers and maintaining link with the drivers
for ride hailing services.
Opportunities:
Growing online presence of the business
supports to connect to large number of
customers Through effective digital
marketing approaches.
Threats:
By seeing the rising competition, Uber
formulates strategies in order to improve its
services by offering services with verified
drivers in cars and embedded technology to
protect the consumer data and maintain
privacy.
Acceptability

Power/Interest matrix
High power, High interest
Key players
Investors
Mobile operating system
Employees
High Power, Less Interest
Keep satisfied
Riders
Low power, High interest
Keep informed
Employees
Low power, Less interested people
Minimal efforts
Drivers
Riders: Delivering privacy and safety to the riders Will positively impact on customer
relationship as it will help these riders to feel Engaged by conveniently using the mobile
application, feeling safe and secure about the private information and availing quality services by
verified drivers.
Investors: new strategies and changes will stimulate investors of the business to invest More, as
the business is enhancing the current functioning and turning weaknesses into opportunities
(Tanriverdi and Du, 2020).
Operating system provider: for using edge technology, operating system provider will feel
satisfied and will for collaborating with The association by embedding new technologies and
software into the operating systems That will benefit both the company and the OS providers.
FEASIBILITY
In order to Implement the strategies Uber needs to acquire most skilled and proficient workers in
the organisation with highly skilled knowledge and experience about advanced technologies and
project management skills. The association also needs to have proper financial structure in order
to turn the strategies into real action plan with the help of the skilled manpower. For which Uber
needs to collaborate with the top three shareholders of the business that includes SB investment
advisor UK Limited that has 222.2 million shares of Uber, the association can also acquire

financial sources from the other keys shareholders of the business including Morgan Stanley that
owns 101 .5 million shares of Uber and FMR LLC that has 82.3 million shares of Uber.
Acquiring financial resource availability from these key stakeholders of the business would help
Uber to a large extent in order to meet the expectations and objectives as determined in the New
business strategies (Wadström, 2019).
CONCLUSION
In a nutshell, this can be concluded that businesses are affected by number of factors and
events in a positive or negative manner. Businesses needs to identify and highlight the
opportunities and threats from the external business analysis, businesses should also evaluate
own strengths and weaknesses to establish that how far and how good the business is in the
current marketplace. Evaluation of external and internal analysis helps to determine appropriate
strategies to improve the business functioning and determine the positioning of the business in
the marketplace. Evaluation of the strategy from the business environment analysis, also helps to
determine that what changes the business should adopt in order to bring continuous growth and
improvement in the business activities.

REFERENCES
Books and Journals