Business Strategy: Analysis of Uber's Macro Environment, Internal Environment, and Competitive Forces

This report analyzes Uber's macro environment using PESTLE and Stakeholder analysis, internal environment using VRIO and McKinsey 7S models, and competitive forces using Porter's Five Forces model.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Apply appropriate frameworks to analyse the macro environment for a given organisation
................................................................................................................................................3
TASK 2............................................................................................................................................6
P2 Using appropriate frameworks analyse the internal environment and capabilities of a given
organisation............................................................................................................................6
TASK 3............................................................................................................................................9
P3 Apply Porter’s five forces model and to evaluate the competitive forces of a given market
sector for an organization.......................................................................................................9
TASK 4..........................................................................................................................................10
P4 Apply a range of theories, concepts and models, interpret and devise strategic planning for
a given organisation..............................................................................................................10
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Business strategy is a document which works as a blueprint for company holding all
respective guidelines and directions for the company in order to cope up with all the emergency
and present marketing opportunities as well as friends with focusing over profit maximization.
Also enable the organisation in understanding its competencies and capabilities which leads to
strategic direction and decision making in the most productive style (Alkan, 2020). In regards to
this report, Uber Technologies, Inc. is chosen is commonly known as Uber around the globe
offering vehicle for hire services, food delivery (Uber Eats), package delivery, and freight
transportation services. The company was founded in 2009 in United States and headquartered in
California serving to over 69 countries the world. In the study for the report internal and external
analysis is conducted by using models like PESTLE, Stakeholders analysis, VRIO and
McKinsey's 7S. Along with it Porter's Five Forces model is applied as well for examining
competitive forces existing in the market. Finally at the end of the report with the help of Ansoff
growth Matrix and Porters Generic model strategic management plan is developed with proper
strategies and tactics.
TASK 1
P1 Apply appropriate frameworks to analyse the macro environment for a given organisation
Macro environment of an organisation refers to the overall business surrounding. In
simpler words it is a condition that exists in the economy as a whole that is around the globe
rather than a particular region or in a geographical location. In order to study and develop a
critical interpretation of Uber's macro environment PESTLE and Stakeholders analysis models
are used.
PESTLE ANALYSIS
This is external environmental study guide that includes several factors that exist in the
surroundings of a business and effects it in both positive or negative manner depending upon the
size scope and nature of the business. Thus, Uber’s PESTLE analysis is presented beneath: Political: The host major factor which can affect and entities operations is the political
environment in which it is operating or dealing with (Schultz and Hernes, 2020). Uber is
operating in different countries which expose it to multiple political environments. Thus,

Uber has to follow respective regulations such as laws for designation of drivers and
conductors in respective location, there pay scales and others. Economical: Current, the world economy is suffering from a recently outbreak pandemic
of coronavirus bringing a disease named as covid-19. Economies is been affected in all
over the world imposing severe negative impacts on Uber’s sales and revenues and as per
say on the whole transportation industry with other connected industries like hospitality,
retail etc (Cardoni, Kiseleva and Lombardi, 2020). Social: As per the social environment is considered Uber is dealing with the most
dynamic and rapidly changing social environment and trends in in recent decades. Uber
established itself with a social opportunity provided by technology. Thus, company is in
close contact with the changing social trends and development taking place in the society.
In present situation, Uber has to establish itself according to the new trend off social
distancing and sanitization brought in due to the pandemic. Technological: This one of the most prominent external environmental factor that is the
most beneficial for Uber. The company basically established itself over technological
revolution and increasing internet penetration in the society. Moving along as per futures
sake technology is bringing more options for the companies such as scars and effective
CSR through social media. Legal: In consideration with legal environment of Uber the company is liable to follow
and incorporate with all the laws and regulations established by the governments for the
specific actions and business regulation (Trabucchi, Talenti and Buganza, 2019). In past
years Uber have faced number of lawsuits and legal battle with other competitors due to
inefficiency in understanding and implementation of legal laws. For which company is
working in order to make better regulative structure according to the region in which it is
operating. Environmental: This element has been added to the external surroundings and conditions
that exist and for which and that are have to look towards. Impressive and value adding
initiative which Uber took in favour of environment and uplifting of society was of
introducing carpools. Through which and limited resources are been benefited as well as
potential contribution to the society is being made by the company. In the same way
according to today’s environmental condition company has initiated to hold their cargo

services for an uncertain period until the pandemic ends. More over Uber is now taking
more chair and initiatives to maintain social distancing norms support the environment.
STAKEHOLDER ANALYSIS (Power Interest Grid)
Stakeholder’s analysis is a process of identifying all the group for individuals who has
influence over the entities decision making and processes. It is the process which enables in
determining, grouping and communicating to all the interested and powerful parties associated
with the business and respective projects. In order to conduct stakeholder analysis of Uber
Interest Power grid is used and presented below.
 High Power, High Interest: The stakeholders belonging to the first quadrant of the grid
are the most important and need to be managed closely as well as kept informed properly
by effective communication means. The major stakeholders with high power and high
interest in Uber are the shareholders of the company who invest money in company’s
projects and future initiatives (Chen, Jing and Tan, 2019).
 High Power, Low Interest: These are the stakeholders who belong to the second
quadrant of the grid according to which then needs to be kept satisfied with enough
information provision. Thus, the customers of Uber are located in this grid with huge
influence over the processes and needs to be satisfied.
 Low Power, Low Interest: The third quadrant of the grid represents those stakeholders
who have minimal interest and power in the company. The suppliers belong to this grid in
relation to Uber. For instance, the food and beverage partners of Uber Eats, suppliers
need to be managed to properly and monitor over quality standards (Vlados and
Chatzinikolaou, 2019).
 Low Power, High Interest: The fourth and last quadrant of the great represents those
shareholders needs to be kept informed as they have high interest in the company but low
power. For instance, government of different nations and countries in which Uber
operates have a high interest in functions of Uber but holds very low power in regards to
company’s processes.

TASK 2
P2 Using appropriate frameworks analyse the internal environment and capabilities of a given
organisation
Internal environment of a company refers to its competencies and capabilities which is
possessed by the business over the period and with which the company started its operations. It
includes all the resources, competencies, skills sets and potentials a company holds that
showcases over the competitive edge and future strategic movement of the business processes.
Uber is a public organisation which was recently established in United States and has gained a
very renowned position in the market and in the competitive environment. In order to study the
internal environment of Uber VRIO and McKinsey 7S models are utilised (Cusumano, Gawer
and Yoffie, 2019).
VRIO MODEL
VRIO model is a strategic tool that was developed for businesses to learn about its
resources or unique competencies and protect them for attaining long-term competitive
advantage in market. The model determines the competitive power of potential resources of
business and assist in keeping them unique and lone. It stands for Valuable, Rare, Inimitable and
Organized.
Resources Valuable Rare Inimitable Organized
Customer
Loyalty
Customer Loyalty - - -
CSR CSR CSR - -
Technological
Advancement
Technological
Advancement
Technological
Advancement
Technological
Advancement
-
HR HR HR HR HR
Valuable: Customer Loyalty: Uber is the first organisation of its kind that provided it a great
customer base who are loyal towards it. The reason behind is companies hospitality and
service offering that is the greatest strength of it.

 CSR: Uber have taken initiatives for the environment such as Uber pool and now when
the society is in danger due to it and social distancing is being affected the company have
stop data for uncertain period. This is a valuable CSR step adopted by Uber that is
supportive of the industry, society and the world as well. Technological advancement: Change is constant in market and it is an ongoing process
which introduced technology and an opportunity to transportation industry that resulted
in in both of Uber. Thus, it is a very valuable and essential resource of the business. HR: Another, valuable resource of an organisation is their workforce and it is one of the
commonly valued resource. The employees of Uber are is backbone offering unlimited
value to company and its operations with their expertise and skillsets (Daily, 2019).
Rare: CSR: The CSR initiatives or the concept is not rare but the practices and ideas
implemented by Uber are unique. The first CSR initiative taken by Uber for fulfilling
their social responsibility was introducing car pools. Technological advancement: The rarity of technology is dependable upon the users
about how they are implementing and utilising the new emerging technologies in the
market. The technological advancement and its rare utilisation by the teams in Uber for
company’s operations is what make it rare. HR: Every company has their workforce and specific number of employees within who
falls under the umbrella of human resource of an organisation. Human resource lies in
the skill sets and working practices. Every individual is unique and different holding
separate experiences and power over their capabilities and knowledge. The expertise and
continuously updating knowledge of employees in Uber is what makes them there for the
company providing a competitive edge (Wang and et. al., 2020).
Inimitable: Technological advancement: Technology a common artificial resource that is made
available to the public and organisations running in the marketplace. These technologies
can be easily indicated but in order to stop that Uber make use of different patents and
trademarks. This restricts others and makes their technology inimitable.

 HR: The workforce is a unique resource that a company has with their personal set of
experiences and knowledge. Does imitating human resource for competitors and other
emerging companies in the market of Uber is not possible.
Organized: HR: Employees or workforce needs to be marriage and are located in the right place at
the right time for the right job in order to accomplish all the targets according to the
strategic vision set by the management. In the same manner Uber also have organised its
workforce in a specific way by adopting different leadership styles, Management
practices and motivational tactics (Ellitan, 2020).
MCKINSEY’S 7S MODEL
This is a model that is applicable in wide variety of situations for examining the Synergy
level between different departments and aspects of business when they are integrated and made
to work together. It also enables in understanding the likely effects that will be taking place in
future in the organisation. It has seven different elements that looks over 7 aspects of Uber for
identifying their effectiveness once aligned together.
Hard Elements:
 Strategy: The business strategy according to which Uber pursues its operations is of cost
leadership and gaining cost advantage through it. Uber's internet-based nature of business
distracted traditional taxi industry global scale.
 Structure: The Company is making use of hurricane organisational structure.
 Systems: There number of systems on which Uber is dependable for its long-term growth
and success such as employee recruitment and selection, team development, section
processing system, customer relationship management and many other.
Soft Elements: Shared Value: These are the foundation of Uber that represents companies behaviour
standard and culture according to which it operates and conducts business actions. Skills: The respective element highlights about the skills of the personnel’s possesses as
well as the overall competencies of Uber. Style: The management style of Uber’s managers and leaders is based on hierarchical
nature of the entity as well as the respective situations in which they are being involved
engaged.

 Staff: The workers or employees of Uber are being recruited by the experts and HRM
department of the company effective and scrutinizing recruitment processes or systems
engaged in the entities functioning.
TASK 3
P3 Apply Porter’s five forces model and to evaluate the competitive forces of a given market
sector for an organization
Competitive fossil are the external factors that exist in the market place which affects the
competitiveness of the entity and influences profitability. In order to study the competitive forces
affecting the business of Uber in the international market the porters five forces framework is
applied and presented underneath.
PORTERS FIVE FORCES FRAMEWORK
The model was established with the aim of enabling the organisations or tool to understand
and determine their competitive forces that affects and have potential influence over the business
in future. It has 5 elements that are known as forces (Hong, 2020).
 Bargaining Power of Suppliers: The bargaining power of suppliers refers to the power
of those external parties that offers raw material and equipment’s to company completing
their offerings and reaching out to maximum customers. In case of Uber the company do
not own any vehicle among its fleets and the company's business model is highly
dependent upon the drivers and those partners owning their cars and rides. Thus, it
automatically showcases that Uber is entirely dependent upon its suppliers according to
its business model and strategies. Thus, power or influence suppliers have over the
company is huge and can affect the operations in an if respective manner.
 Bargaining Power of Consumers: The power of customers that is their influence over
the operations and productivity of Uber. It is significantly highlighted that consumers do
have influence over the business and specially over service sector organisations.
According to which Uber’s customer base has a moderate influence over it as the
offerings and service quality of Uber develops a unique place in the market.
 Threat of new entrants: Uber's competitiveness against the potential new market entrants
is low as the company lacks protection from new ride-sharing firm that can influence its
Market by unfairly charging lesser for the same distance in order to become competitive

with the brand. Uber is having a practice to willingly its offer their application software
for free to interested customers for switching the services at zero cost. But this is
becoming a threat for company as it is making other forms to easily penetrate the industry
(Hsueh and Gomez-Solorzano, 2019).
 Threat of substitute: Uber lies under the umbrella of network transportation industry in
which numerous other organisations are members which can easily substitute Uber. The
threat of substitutes for the company is high and can have potential influence over the
operations.
 Rivalry among companies: Uber works in a highly competitive and dynamic
environment. The company has a similar business model and operative values with its
biggest competitor Lyft. In case of competition from rivalry Uber an apple hand because
of its well established business Network and large capital investment. The company is a
market leader and existing competition is a weaker force in front of it as Uber is
dominant in the market place.
TASK 4
P4 Apply a range of theories, concepts and models, interpret and devise strategic planning for a
given organisation
POETERS GENERIC MODEL
In order to develop a competitive basis every organisation goes through a number of
strategically changes and development. The porter's generic model offers strategical ideas to the
business which can be easily adopted in accordance to the firm’s suitability and scope.
Therefore, in order to attain above average performances in the whole industry three generic
strategies can be e adopted for reaching to above average standards.
 Cost Leadership: This is the first strategy which suggested that the form is setting out to
become the lowest cost producer in the industry by focusing over cost advantage.
 Differentiation: The next competitive strategy is of differentiation that states, that
companies should seek towards uniqueness in the industry along some dimensions that
are widely appreciated and valued by the customers. Basically this strategy states that
company should offer something unique and rare to people according to their preferences
and requirements.

 Focus: The third generic strategy rest on the choice of a narrow competitive scope within
the industry. This strategy has two variants that are cost focus and differentiation focus.
o Cost Focus: According cost focus strategy the form 6 to gain a competitive
advantage by becoming the lowest cost producer in the industry and offering
goods in the lowest price to the targeted segment.
o Differentiation Focus: The differentiation focus strategy highlights the entities of
seeking uniqueness in the targeted audience (Kon and et. al, 2020).
Uber is a market leader working with hierarchical business structure and the reason
behind being a market leader is its cost leadership strategy. The company offers its services to
targeted audiences in the lowest cost possible.
ANSOFF MATRIX Market penetration: This is business strategy which suggests that company should in the
existing market and induces its promotional programs for processes for presenting the
existing offerings to the existing target segment in an innovative manner and adding
value to their satisfaction. According to this strategy Uber is just to stay in the respective
marketplace with their existing offerings and make creative plans to market their products
and services in the market place for keeping the customers loyal towards the brand. Product development: The product development strategies states that company should
add a new offering to that product portfolio and establish it according to the preferences
of people by staying in the similar market. Market development: The third strategy of Matrix suggest that Uber should move to a
new geographic location with their existing products and services and develop a new
customer base in the new market bye fulfilling their needs with their existing product
portfolio. Diversification strategy: The last and the most riskiest market strategy is of
diversification in which company is suggested that it should move its operations into an
entirely new geographic location and establish their foot in the respective market with a
completely new offering that is developed with innovative means and for or fulfilling the
requirements of the people targeted segment.
From the discussion above for market strategies the most suitable and less risky strategy for
Uber to adopt is of market development. Uber is adjusted to move its operations in new countries

and geographical locations by adopting expansion opportunities provided by the markets to it. In
the current scenario of economic development and digitalization the market development
strategy will enable Uber were to expand its presence in the most productive and efficient
manner.
STRATEGIC MANAGEMENT PLAN Executive Summary: A strategic management planning is the systematic and an
organised process which highlights number of aspects an entity needs to follow for
accomplishing their goals. The management plan includes organisations aim, objectives
and respective strategical steps entity is planning to pursue in order to move in a
particular direction. It is a guidance provided to company that leads them to render
highest performance levels for customer satisfaction and effective performances of the
business. Does in relevance with Uber strategic management plan is designed below
(Rogmans and Abaza, 2019). Vision: Uber’s clearly highlights the level of influence company is aiming to develop and
has on not only in the transportation needs market but also on other II life processes that
depends on what Uber is providing to people. Mission statement states that “we ignite
opportunity by setting the world in motion”. Mission: Uber mission statement is to provide transportation reliability to everyone and
everywhere. Objective: The major objective of Uber is to establish its presence in greater
marketplaces and inducing its market share by 5% in the next one year and the revenues
by 15 % in the similar time period. Strategy: The major strategy which is adopted by Uber for providing value added
services to customers and continuously expanding its presence in diverse locations is off
market development by entering in new places which appropriate offerings and providing
best to satisfy customers and their preferences.
 Tactics: The approach which Uber adopts becoming a market leader and maintaining its
position in the market is of cost leadership by providing services to potential buyers in
the minimal cost possible and leading the whole industry over cost basis (Rondi, De
Massis and Kotlar, 2019).

CONCLUSION
From the above report develop the overall business strategy it is summarised that it the
blueprint and guidelines provided in the strategy plays an integral role for the company as it is a
road map with assess management and its activities in the right POS for accomplishing desired
objectives in the most productive manner. Moreover, it is identified that a potential business
strategy enables the entity to gain better insight of its market trends, customer segments and
preferences as well as the potential product or service offerings that are helpful in gaining a
competitive edge and strengthening the company.

REFERENCES
Books and Journals
Alkan, D. P., 2020. Re-Shaping Business Strategy in the Era of Digitization. In Handbook of
Research on Strategic Fit and Design in Business Ecosystems (pp. 76-97). IGI Global.
Cardoni, A., Kiseleva, E. and Lombardi, R., 2020. A sustainable governance model to prevent
corporate corruption: Integrating anticorruption practices, corporate strategy and
business processes. Business Strategy and the Environment, 29(3), pp.1173-1185.
Chen, D., Jing, Z. and Tan, H., 2019. Optimal Bidding/Offering Strategy for EV Aggregators
under a Novel Business Model. Energies, 12(7), p.1384.
Cusumano, M. A., Gawer, A. and Yoffie, D. B., 2019. The business of platforms: Strategy in the
age of digital competition, innovation, and power. New York: Harper Business.
Daily, F. W., 2019. Tax Savvy for Small Business: A Complete Tax Strategy Guide. Nolo.
Ellitan, L., 2020. The information technology industrial revolution and its role in building
business strategy of global retail. Jurnal Manajemen Maranatha, 19(2), pp.151-158.
Hong, N. H., 2020. The Effect of Business Strategy on Cost Asymmetry according to Corporate
Life Cycle. Journal of Digital Convergence, 18(5), pp.145-155.
Hsueh, J. W. J. and Gomez-Solorzano, M., 2019. Social tie heterogeneity and firms’ networking
strategy. Entrepreneurship Theory and Practice, 43(2), pp.352-359.
Kong, D., Yang, X., Liu, C. and Yang, W., 2020. Business strategy and firm efforts on
environmental protection: Evidence from China. Business Strategy and the
Environment, 29(2), pp.445-464.
Rogmans, T. and Abaza, W., 2019. The impact of international business strategy simulation
games on student engagement. Simulation & Gaming, 50(3), pp.393-407.
Rondi, E., De Massis, A. and Kotlar, J., 2019. Unlocking innovation potential: A typology of
family business innovation postures and the critical role of the family system. Journal of
Family Business Strategy, 10(4), p.100236.
Schultz, M. and Hernes, T., 2020. Temporal interplay between strategy and identity: Punctuated,
subsumed, and sustained modes. Strategic Organization, 18(1), pp.106-135.
Trabucchi, D., Talenti, L. and Buganza, T., 2019. How do big bang disruptors look like? A
business model perspective. Technological forecasting and social change, 141, pp.330-
340.
Vlados, C. and Chatzinikolaou, D., 2019. Strategy perception and implementation on less
developed business ecosystems micro and small enterprises: The service sector of
Eastern Macedonia and Thrace. Business Management and Strategy, 10(2), pp.27-63.
Wang, S. H. and et. al., 2020. Strategy, capabilities, and business group
performance. Management Decision.
Online:
Porter’s Fiver Forces Analysis on Uber, 2020. [Online] Available Through:
https://www.academia.edu/34374683/Porters_Five_Forces_Analysis_on_Uber/>
Uber McKinsey 7S Model, 2018. [Online] Available Through: https://research-
methodology.net/uber-mckinsey-7s-model-2/>
UBER MISSION AND VISION STATEMENT ANALYSIS, 2020. [Online] Available
Through: https://mission-statement.com/uber/>

Uber Technologies SWOT & PESTLE Analysis, 2020. [Online] Available Through:
https://www.swotandpestle.com/uber-technologies/>