Relationship between macro environment and business strategies of Uber

Business Strategy
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Table of Contents
INTRODUCTION...........................................................................................................................3
Task 1...............................................................................................................................................3
P1 Relationship between macro environment and business strategies of company...................3
Task 2...............................................................................................................................................6
P2 Study of internal environmental factor so as to match them with capabilities of Uber.........6
Task 3...............................................................................................................................................8
P3 Application of Porter's five forces model on Uber................................................................8
Task 4.............................................................................................................................................10
P4 Theories, concepts and models of strategic planning..........................................................10
Conclusion.....................................................................................................................................12
References......................................................................................................................................13
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INTRODUCTION
Business strategy can be defined as the roadmap that helps a business to survive in cut
throat competition in industry. It basically acts as the backbone of the company so as to provide a
map through which the organisation can reach to its desired goals and objectives. Under business
strategy, company forms a combination of decisions that management follows to accomplish
goals and also to secure a good position in the market. Business strategy is a master plan that
assist the management of the organisation to secure good market share in the industry and also
helps to reach desired objective and goals. In this report, an in depth study has been performed
on Uber, to understand how strategies can be implemented so as to secure a competitive position
in the market. Uber is a company operating in private sector and it is working in transportation
industry. It is registered in California in 2009. there are various services that are offered by the
company, namely, cab services, food delivery, package delivery, couriers, rental vehicles and
many more. This report explains concepts relating to internal and external macro environmental
analysis that affects operations of business, application of Porter's five forces model so as to
evaluate company's competitive strategies and it last, there is an attempt to determine theories
and models for performing strategic planning in Uber.
Task 1
P1 Relationship between macro environment and business strategies of company
Business strategy is a scheme that is designed by the strategic planners of the company
with careful planning and flexibility and the main purpose behind this is to achieve effectiveness
and optimum utilisation of resources in order to achieve desired goals and objectives (Abu
Amuna, Al Shobaki and Abu-Naser, 2017). It is an universal fact that company operates in an
environment which consists of various factors that impact the process of strategic planning of
organisation. In given case, the chosen company is Uber and there are several macro
environment factors that impact its operations. To study the impact of these factors, technique of
PESTEL analysis is being used. It is a tool that studies six dimensions of external environment,
namely, Political, economical, social, technological, environmental and legal factors.
PESTEL analysis is a framework under which effectiveness of a strategy is being
determined and also the pros and cons of that business strategy (Androsova and Simonenko,
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2016). In this specific part of the report, effect of macro environmental factors on strategic
planning of Uber is being understood:
Political Factors: These basically refers to government policy and actions that are
affecting the economic conditions and other important aspects of business. For instance, tax
policy, trade restrictions, tariffs, bureaucracy, etc. These factors affects the business in both
favourable and adverse ways. In case of Uber, the most prominent factor affecting the business is
the problem that the company is confronting due to unclear business concept of company for
governments around the globe. The business line of company is very new to the market,
therefore, it becomes difficult to accept it and also apply it in the environment. These issues
forces company to shut down their services for specific time period and also they find it difficult
to fix their position as a permanent brand in the market. Government of every country wants to
improve the employment rate, therefore, it becomes important that company offers permanent
employment contracts. But in case of Uber, company is offering jobs on the basis of contracts
and not on the ground of any other driver. Once the contract is completed, company tries to
terminate the employment contract (Ansoff and et.al., 2018). Therefore, this activity also invites
government intervention which is an important political factor to consider.
Economical Factors: These are the aspects that characterizes the economy of the country
and how each factor impacts the operations of business. For example, economic growth rates,
interest rates, inflation, exchange rates, unemployment rates in the country. There are other
significant factors also. Economic factors are of extreme importance for the business as they may
impact the ultimate objective of any business i.e., to earn maximum profits. In case of Uber, the
dynamic pricing model is one of the significant economic factors affecting the company. In times
of high demand in market, issue of fix price has been overcome by this strategy as it means that
prices can differ for the same route at the same time. This policy has been accepted by both
customers and drivers with welcoming hands and has been proved to be very favourable for the
company. In peak times, as it is difficult to get cab service, therefore, customers are ready to pay
higher prices as well. In case of drivers, financial benefits acts as a good motivating technique
for making them work for more hours (Baškarada and Hanlon, 2017).
Social Factors: These factors relates to cultural and demographic dimensions of the
society. These elements are necessary to consider as they play the key driver in determining the
consumer behaviour in market. There are several social factors that impact the operations of a
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