Analyzing Uber's Postmates Acquisition Strategy with PESTLE & Porter

This report provides a comprehensive analysis of Uber's strategy to acquire Postmates, utilizing various strategic management tools. The external analysis employs PESTLE and Porter's Five Forces to evaluate the opportunities and threats within the transportation industry, considering political, economic, social, technological, legal, and environmental factors, as well as the competitive landscape. The internal analysis uses the Value Chain and VRIO framework to assess Uber's resources and competencies, identifying strengths and weaknesses. Finally, the report likely evaluates the viability of Uber's acquisition strategy using a framework like SAFe, determining its potential for success and sustainability in the market. The analysis aims to provide insights into Uber's strategic decision-making process and the factors influencing its competitive position within the industry.

UBER to Acquire Rival Post mates
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Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
TASK 1............................................................................................................................................3
External analysis with the help of Pestle and Porter....................................................................3
TASK 2............................................................................................................................................7
Internal analysis with the help of Value Chain and VRIO..........................................................7
TASK 3..........................................................................................................................................10
Evaluation of strategy with the help of SAFe framework.........................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
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INTRODUCTION
Strategic formulation is an important exercise that not only help to gain competitive
advantage but simultaneously providing opportunities to hold large market share. It is important
for all organisations that work in direction of building effective strategies so able to deliver
positive outcomes as per the existing demand in market. In this regard, it is important for
management to do external and internal analysis. This will not only be providing the information
about trends and needs in market but aid in effective decision making over building and selection
of effective strategies. Management of an organisation is also responsible for evaluating
strategies. This is so because it not only helps to determine the viability but aid to made further
changes as per flaws. The main aim of this report is also to ascertain the contribution of business
environment conditions towards development of effective strategy (Arbogast and Kumar, 2018).
Here, covering about the functioning of Uber in same respect of strategy formulation and
assessment. Uber is an American technology company which having global level operations. The
main services in which this organisation deals include ride-hailing, food delivery (Uber
Eats), package delivery, couriers, freight transportation etc. This organization has business
operations in transportation industry where it holds around 71% of market share in area of ride
sharing. It was founded in 2009 and currently having around 27000 working employees at global
level. Now, the main strategy of an organization is about acquirement of post mates for
improvement of market share.
The aspects going to cover in this report are external analysis with the aid of Pestle and
Porter, internal analysis with aid of Value Chain and VRIO and evaluation of strategy by use of
SAFe framework.
MAIN BODY
TASK 1
External analysis with the help of Pestle and Porter
External analysis is an aspect of analyzing existing conditions in business environment and
their impact over industry and organizational operations. There are many tools that can be used
for the purpose of completing exercise of external analysis. The main which are commonly uses
by all different organizations are Pestle and Porter. Both are having their own level of
contribution in determination of conditions and their impact. Pestle analysis help to determine
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factors and their impact such as political, economic, social, technological, legal and
environmental. On the other hand, Porter help to analyze industry. This includes the use of points
such as power of suppliers, power of buyers, threat of substitute goods, threat of new market
players and competitive rivalry. It is a duty over management of an organization that effectively
use both tools in the direction of analyze market conditions so able to determine appropriate
nature of opportunities and threats. This exercise has further amount of benefits to an
organization such as development of strategies and procurement of resources as per the current
nature of trends. In overall manner, it helps an organization to gain sustainability in market.
Currently, going to analyze external environment to determine the significance of Uber strategy
about acquirement of post mates through analysis of industry based opportunities and threats
(Cardoni, Kiseleva and Lombardi, 2020).
PESTLE
It is a tool that has effective contribution in direction of analyzing business conditions in
external environment. It focuses over the analyzation of various aspects such as political,
economic, social, technological, legal and environmental. Here, this is use to determine
opportunities and threats existing in transportation industry in which Uber having its business
operations. Its main purpose is to determine viability of Uber strategy.
Political: This includes the analysis of all political influences that having further impact on
business operations either in positive or negative manner. Uber is global organization and having
worldwide operations. So, it is necessary for an organization that focus over political situations
of all nations and then build different strategies as per the existence of condition. At global level,
political parties are concerning towards strengthen transportation sector for improvement of
overall infrastructure and visitors experience. Also, at global level political parties are
strengthened and having proper decision making authorities that focuses over effective
regulation of transportation industry. This is creating opportunities for organizations that grab
benefits at different business level and diversify business in terms of servicing and fulfilling new
consumer needs.
Economical: It help in determining economic conditions existing at different nations. It is
necessary to determine because it help in expansion and starting of business activities. This
factor is also help to determine viability of business operations at some particular location or
nation. In current condition, economies are not strengthened due to the situation of pandemic.
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The flow of cash is low along with number of benefits that will exist due to the presence of
strong economy. Transportation is important growth factor for very nation and governments are
also investing in this direction but this will not be serving the same impact as determined before
to the pandemic. This creates a threat in front of all organizations that have to bear high cost of
operation along with low amount of support growing support from an economy.
Social: In this factor determines about consumer needs and demands. It is important to
ascertain because success of every business depends over consumer’s experience. In current
business environment, consumer needs are changing rapidly as per the trends. In respect of the
transportation sector at global level, consumers having the major need of safety, sanitization and
cleaning irrespective to the cost of transportation. This creates an opportunity among all
organizations that can invest in recourse procurement and safety standards for the fulfilment of
consumer needs because it helps to attract and fulfilling their demands (Chen, Yu and Hu, 2018).
Technological: This factor focuses over the technological changes. In current business
environment, the amount of changes in technological environment are high. This also brings an
obligation over business organizations that adopt these changes for continuation of business. If,
they unable to do so then they have to bear high amount of losses, loss of market shares and
discontinuation of operations due to non fulfilment of standards. Change of technology is also
high in transportation industry due to involvement of AI and AR. This creates an opportunity that
fulfillment of requirement automatically helps to attract potential users. Also, change at this level
improves productivity and quality of service that ultimately helps in covering cost of investment
by increasing profit margins.
Legal: This is about determination of legal working conditions. In respect of the
transportation industry, all the nation’s government is strict towards regulating business
operations. This is so because any miss happening directly impacting a life of person. Also, in
current situation of pandemic, government becomes stricter towards implementation of new
policies and standards related to carrying passengers and their sanitization. This creates the threat
in front of organizations that have to assess and fulfill policies otherwise have to bear penalties in
form of monetary fines or discontinuation of business activities.
Environmental: This is about fulfilling environmental conditions. In current business
environment, government of all nations is concerning about the safety of environment from
business operations. This is the reason that lots of rules, regulations and standards are existing
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relation to reduction of carbon emission. The contribution of transportation industry is greatest as
compared to other industries in pollution at environment. Also, government is very strict towards
the functioning of transportation companies through restricting or limiting options that leads to
higher amount of carbon emission. Initially, it creates the threat for operators as they have to
invest at valuable or carbon efficient resources. At final level, this will turn into an opportunity
for operators because they can get government benefits, higher bran image and large market
share (Eccles and Youmans, 2016).
Porter Five Forces
It is tool to analyze market conditions and competitiveness. Currently, this uses to determine
the scenario of transportation industry at global level for the purpose of ascertaining viability of
Uber business strategy i.e. acquirement of post mates. The description of all relevant factors is
presenting below;
Power of buyers: The number of users are high in transportation sector along with
operators at global level. This depicts the moderate level of power among both i.e. buyers and
operators. This is so because the operators will not be affected when consumers shift from one
operator to another as large number of other buyers are still existing. Similarly, buyers also not
affected due to the process of shifting because they can easily find the other alternatives.
Power of suppliers: The number of suppliers in transportation industry are high at global
level. This depicts that the power of companies is high because they can manipulate with their
existing supplier and can shift in cost effective manner to others. This is an advantage situation
because this will be providing an opportunity to use power for providence of effective end
services to consumers.
Threat of substitute: The amount of competition is high in market that simultaneously
demonstrates that the threat of substitutes is also high. There are large number of organizations
that working in transportation industry at global level. Some of them are big and some are small
but ultimately at certain pint creating substitute for each other. In this respect, the power of
substitution is high and creating threat for organizations within transportation industry that
perform well otherwise will be charged over by competitors (Madden, 2017).
Threat of new market entrants: The scope of new market entrants is low in industry
because it requires large amount of investment and fulfilment of government regulations. This
clears the fact that it is not possible for small investors and new organizations to easily enter in
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transportation sector. This depicts that power of existing organization sin sector at global level is
high because they can grab opportunities by improving services without focusing over the threat
of new entrants.
Competitive rivalry: The existing level of competition is too high in transportation
industry. This clearly depicts that power of organizations is moderate against to the level of
existing competition. This is so because competitive factors negatively affecting an organization
ability to sustain in market. Here, organizations have to made effort to gain success and getting
higher positions in market.
TASK 2
Internal analysis with the help of Value Chain and VRIO
Internal analysis is important for the purpose of ascertaining information about
organizational resources and competencies. It helps to build effective decisions according to
existing capability and changes in resources if existing ones are ineffective towards the direction
of continuing business activities. This assessment also has contribution towards analyzing
viability of strategies as an organization will able to get success or not while working with same
in future. In overall manner, it helps to bring alliance in between different aspects such as
strategies, resources and existing conditions because allowing to build one which is consistent
with all possibilities. The tools like value chain and VRIO are generally use to determine the
internal strengths and weakness of an organization. Both are having their own different level of
contribution in exercise of identifying internal values. In current report, internal analysis is doing
to ascertain the value of Uber for determining the viability of their strategic decision i.e.
acquirement of post mates in market (Minár, 2016).
Resources
This includes the analysis of existing resources of an Uber for the purpose of gaining
information on internal value. In actual, resources are the supporting determinants that help in
carrying business functions. The number of resources and their detailed level assessment in
respect of Uber is presenting below;
Manpower: Uber is large organization and having presence at global level. The total
number of working in this organization are around 27000. After being founded in year 2019, it
has global presence. This depicts that an organization has effective human power. It is so
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because employees are the only asset that help to grab success less period of time through
optimum utilization of other resources. This means Uber have manpower as strength because
help in gaining success, competitive edge, optimum utilization of resources and global brand.
Vehicles: This includes the all vehicle resources which help in daily operational activity
of an organization. Uber is large organization and at current level having effective amount of
physical resources to effectively serve their consumers. But, the amount of changes in
technology and current scenario of market presents as threat in front of Uber. Technological
changes and environmental concern brings pressure on organization that change their operative
methods so able to fulfill all demands. This presents as weakness of an organization as they have
to invest high amount to sustain in market irrespective of less amount business.
Brand image, goodwill and intellectual property rights.: This includes the resources
that cannot be felt like brand image, goodwill and intellectual property rights. In respect of Uber,
they have effective level of intangible resources that contributing in success of an organization
such as brand name because it is significant in own to attract consumers toward services. The
others are online application, website and presence over various social media platforms. In
current period of time, these exists as strength of an Uber because all are having contribution
towards improvement of business activities (Pícha and et.al., 2017).
Infrastructure: This includes the assessment of office premises. Uber is large and global
organization where thousands of employee working to run business operations. The success of an
organization in short period of time and global presence depicts effective working of operations
from various locations. This is only possible when they have effective nature of infrastructural
requirements for working of employees. So, everything clears the fact that an Uber have
significant amount of offices at worldwide level which present as their strength in direction of
running continuous level operations.
Competencies
This is an aspect about identifying asset/resource that able to deliver higher amount of
value to an organization. So, it includes the process of identifying organizational ability to
deliver business offerings in market with the aid of existing resources. Currently, it is using to
ascertain the competence of an Uber with help of models like value chain and VRIO.
Value Chain
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It is a tool that help in analyzing the link between primary and supporting activities of an
organization. The primary activities are related to inbound logistics, operations, outbound
logistics, marketing & sales and service. On the other hand, the supporting activities includes
about firm infrastructure, human resource management, technology development and
procurement. The link in between these activities along with outcome for an Uber is presenting
below;
Identifications of gaps: It is identified from the overall comparison and assessment that
there is gap in operational requirement from the side of vehicle requirement. It is present because
of the technological changes, safety regulations and environmental concerns. Here, an
organization has to focus over procuring vehicles of an advance technology so not only able to
fulfil environmental concerns but can improve safety of users. The other aspect like manpower
usage in inbound and outbound logistics is perfect and fulfilling all matching requirements.
Human resource management and technological concerns in other areas are also fulfilling
properly (Pidun, 2019).
Development of objectives: Procurement of advance nature vehicles that has less carbon
emission and provide higher safety to users in case of crash or accident.
Implementation of strategies: Here, an Uber have to focus on analyzing conditions
because it varies in each nation as per the nature and working of government. So, management
has to work in same direction and requires to make effective decisions. Here, they also can make
alliance with another organization or acquire one from market to fulfill the future need of
consumers and nation.
VRIO
This model helps to analyze a core competence of an organization out of all existing
resources. In respect of Uber, it is explaining below with the aid of table;
Competencies/Resources Valuable Rare Inimitable Organized
Employees Yes Yes yes yes
Technology yes No No yes
Brand image yes yes No yes
Financial ability yes No No yes
Infrastructural ability yes No No yes
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It is clear from the above table that employees are the only resource that fulfill all
criterion of model. These are valuable because help an organization to work unique against to
their existing competitors. These are rare because all have unique capabilities that cannot be
identified in others. Also, these are inimitable in nature because not possible to copy as everyone
having distinct characteristics. Organized in nature because of an organizational capability where
they have sufficient resources to perform functions (Poplawska and et.al., 2015).
TASK 3
Evaluation of strategy with the help of SAFe framework
SAFe is effective framework to evaluate the strategy. The detailed level evaluation of Uber
strategy about acquirement of post mates is presented below;
Suitability: To determine the suitability of strategy, TOWS matrix will be used. The
information in respect to same is presented below;
TOWS Matrix External factors
Opportunities
 Technological
growth
 Strategic
alliances
 Acquirement of
competitors
 Social support
 Low level entry
of entrants
Threats
 High cost
and low
growth
options
 Large
competition
 Threat of
substitution
Internal factors Strengths
 Employees
 Technology
 Brand image
 Financial ability
 Infrastructural
ability
The strengths among
employees, technology
and financial ability is
effective in direction of
acquiring operations of
other organization. This
further benefits in form
All the mentioned
strengths are
effective in direction
of minimizing
threats and their
impact.
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of fulfilling all other
needs and limiting the
negative scope of
weakness
Weaknesses
 Vehicles
The opportunity related
to acquirement is
effective in direction of
limiting weakness
because can get
technological and other
nature benefits from
acquirer organization.
High level of
competition and
investment for
growth further leads
to strengthening of
weakness about
vehicles quality.
Acceptability: This will be ascertained on the basis of stakeholder mapping (Spear and
Roper, 2016). Here, strategy impact will be calculating on stakeholder;
Stakeholders Power Interest Impact
Employees High power High interest The strategy having
positive as they
getting new
opportunities of
development.
Government High power Low interest The impact over
government is also
positive as they are
getting additional
amount of revenues.
Consumers Low power High interest The consumers are
also getting benefit as
they can get large
amount of quality
services along with
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higher safety features.
Feasibility: This will be determined on the basis of analyzing skills and available financial
resources. Uber has competent employees whom are having effective amount of skills and
knowledge. It is assessed that employees having skills related to communication, problem
solving, decision making and management. All these are necessary for running and expanding
business (Velikorossov and et.al., 2020). So, it is clear that expansion through acquirement can
be effectively supported by employees further in future years. Also, the finance sources needed
includes bank loans and private investment. These are already available to an organization along
with the option of open market funding. This clears that an Uber has effective amount of sources
towards carrying strategy further (Viscelli, Hermanson and Beasley, 2017).
CONCLUSION
It has been concluded from the above report that there is huge requirement of external and
internal analysis for the purpose of gaining success in market. These also help an organization to
build effective strategy or to analyze the viability of same. Overall market assessment providing
an opportunity to make advance level of changes for bringing consistency in operations
according to current trends.
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REFERENCES
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