Strategic Analysis of UBER: Macro, Micro, and Strategic Planning

This report provides a comprehensive analysis of UBER's business strategy, examining its external and internal environments. The analysis begins with an overview of UBER's mission and vision, followed by an examination of the macro environment using PESTLE analysis, considering political, economic, social, technological, legal, and environmental factors. The report then delves into UBER's internal environment, utilizing the McKinsey 7-S framework and VRIO analysis to assess its capabilities and resources. Furthermore, it applies Porter's Five Forces model to evaluate the competitive landscape and concludes with a discussion of strategic planning approaches, theories, and models, including the Ansoff matrix. The report highlights key strategies for UBER's growth and success in the dynamic business environment.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1) Discuss impact of macro environment over organization and its strategies by applying
appropriate tools...........................................................................................................................3
TASK 2............................................................................................................................................7
P2) Discuss internal environment and capabilities of organization.............................................7
TASK 3..........................................................................................................................................10
P3) Apply Porters five forces model for organization...............................................................10
TASK 4..........................................................................................................................................12
P4) Discuss approaches, theories and models to develop strategic plan...................................12
CONCLUSION..............................................................................................................................14
REFRENCES.................................................................................................................................15

INTRODUCTION
Business strategies are the set of future actions that are taken by manages in order to
attain predefined business objectives in stipulated period of time. In current business world, it is
vital to prepare effective strategies to face competition effectively (Lokuwaduge and
Heenetigala, 2017). In addition, strategies are future course of actions which guides individuals
to take appropriate decisions. In present report, UBER is taken into consideration that is a
renowned company and provides services of food delivery, ride hailing, and freight
transportation. It is headquartered in US and founded in the years of 2009. In the current report,
detailed overview regarding strategic framework of company has been discussed. It comprise
ample of tool such as PESTLE, Ansoff and more in order to analyze external environment of
organization. Further, it also included detailed internal analysis with the help of appropriate tools
such as SWOT, VRIO and more. At end, different models, theories are also included in the
following report in order to prepare a strategic plan for future growth and success of entity.
TASK 1
P1) Discuss impact of macro environment over organization and its strategies by applying
appropriate tools
Company Overview: UBER is a well known technology based company that is renowned for its
quality as well as reasonable rides. It is headquartered in America and currently working in
nearly 69 countries across the globe. Apart from ride hailing services, it also deals in food
deliver, courier and freight transportation.
Vision: “To make transportation available at each and every place and provide affordable, safe as
well as reliable rides to riders”.
Mission: “To making transportation a simple process so that people can easily access to
vehicles”.

Macro environment concerned with several external factors that affect business
performance significantly. It includes a lot of element and stakeholders that are related to outside
environment but put a great impact over its overall productivity and efficiency. So, managers are
required to prepare effective strategies in order to deal with macro environmental factors in an
efficient manner. Here, some models are used for this purpose which are given as under:
PESTLE analysis:
It is a model which is widely used for external analysis and helps to prepare effective
strategies. It comprises different factors of external analysis that are related to outside business
environment and cannot be controlled by managers (Ocasio and Radoynovska, 2016). In context
of UBER, managers undertake PESTLE analysis to assess external environment. Here, different
factors of PESTLE model are given as under:
Political factors: It refers to policies, trade rules, regulations and more that are related to
political environment of a country. It is analyzed that changes in current government policies put
a great impact over business. So, managers need to give due consideration to political
environment while preparing strategies for business growth and success. In reference of UBER,
it is operating business in several countries across the globe so highly affected with change in
political environment of respective country. Initially, UBER has faced several difficulties and
controversies. In France and Netherland, charges have been filed against company of not having
license to drivers. In several countries, government has made it mandatory to have commercial
license to drivers of organization.
Economic factors: It comprises elements such as job opportunities, interest rate, demand,
supply and more. Different countries are having different economical conditions. There are some
developed as well as developing nations across the globe. Thus, managers need to prepare
strategy in such a way by which they can target domestic and international audience. In regards
of UBER, it is based on sharing economy concept which is well known for providing cheaper
rides to customers (Van Clieaf, 2016). It is analyzed that business model of organization is
creating higher job opportunities for people globally that will lead economies towards higher
growth and development.

PESTLE Analysis, 2021
Social factors: These factors are concerned with personality, attitude, beliefs, status of
individuals. It is analyzed that customers are crucial part of company so it is vital to give
important to their needs and requirements. Now, customers wish to get fast services. Here,
UBER is providing easily accessible services to customers at affordable price range. Customers
have feasibility to choose their pick up time and also review the rating of drivers. By this way,
UBER ensured to provide highly safe ride to individuals. This is also a reason that organization
is gaining high popularity among people across the globe. They are also getting benefit of Word
of Mouth publicity due to great faith and trust of customers.
Technological factors: In current scenario, technological factors play a crucial role in
enhancement of business. It is concerned with use of highly efficient, creative as well as advance
techniques. These techniques are also crucial in order to provide better services to customers. In
reference of UBER, it is an entirely technology based platform which ensures to bring drivers as
well as riders at same place in minimum possible time (Maas and Rosendaal, 2016). Apart from
this, it provides ample of other features such as reviews of drivers, fair and more. With the help
of technology, UBER make it possible to provide necessary services to customers at their
convenient place in time as well as cost effective manner.

Legal Factors: It includes elements such as trade rules, regulations, compliances and
more. It is analyzed that UBER is working in overseas countries so need to abide laws,
regulations of respective countries. It is stated that company has faced ample of criticism,
controversies regarding wages of drivers. So, managers need to follow different laws such as
copyright, patent, customers as well as employee safety laws and more.
Environmental factors: Now, it is essential to give importance to environmental factors
while undertaking business functions. It also helps to maintain positive image of brand at market
place that is essential to ensure long term sustainability. In this, managers take initiatives to
protect environment and societal benefit. It is monitored that UBER has been reduced use of
public transportation and own vehicles that minimize use of fuel. In addition, it is providing
riders in lower price which can be easily afford by all segments of customers. By this way,
UBER is protecting environment & simultaneously also contributing in wellbeing of society.
Ansoff’s growth vector matrix:
It is a model that is related to growth opportunities which help in enlargement of
business. It helps to prepare strategic plans for expansion. This model is crucial to identify
growth opportunities in present competitive market place (Wright and Snook, 2016) . It provides
opportunities to inflate in current revenue by introducing a new product range and tapping into a
new market place. Therefore, managers of UBER use this tool to analyze growth opportunities.
Elements of this model as discussed as under:
Market Penetration: It is considered as the simplest strategy in which business is
continued with existing product in existing market place. Here, managers adopt appropriate
strategies such as reduction in price, quality products to sustain in current market place for longer
duration. In context of UBER, managers can use this strategy as they already have loyal
customer base that will benefitted organization in future.
Product Development: Here, company launches a new product in existing market place.
However, UBER is working in diversify fields such as food delivery, ride hailing and more.
Nevertheless, there are some fields such as retail and more in which organization cab explore
business.

Market Development: In this, managers tap into a new market with excising products and
services. In context of UBER, they can expand business in more countries that will enhance
current level of sales and profit margin (Yang, Jiang and Zhao, 2019).
Diversification: It is considered as a risky strategy in which organization introduce new
products in new market place which requires higher investment. It is monitored that UBER can
diversify business in different fields to gain higher competitive advantage.
Out of above stated strategies market development is considered as the most suitable
strategy for UBER as it will help to expand its operations in different countries at global level.
TASK 2
P2) Discuss internal environment and capabilities of organization
It is stated that internal environment consists ample of resources, strategies that are used
by company for its betterment. Here, UBER is a global brand that is working in different
countries and have build higher trust & faith among customers. In this regards, there are some
tools have been used to examine internal potentials of company. These tools are given as under:

Mckinsey 7 s framework:
It is tool which is designed to analyze internal capabilities and performance of an
organization. Main aim of this model is to enhance overall effectiveness of business with the
help of seven key elements which are discussed as under:
Strategy: It refers to plans and tactics that are formulated by company with an aim to
achieve desired goals. These are prepared by anticipation of future which help to face future
uncertainties in an appropriate way (Landrum and Ohsowski, 2018) . There are ample of
strategies are prepare such as reduction in cost, increase in efficiency as well as production and
more. In context of UBER, managers prepare strategy to inflate overall sales and profitability of
company. Their main aim is to enhance business efficiency in terms of providing cost as well as
time effective services to customers.
Structure: It includes hierarchy in which information is transmitted between individuals
at work place. It determines roles and responsibilities of different individuals who are working
within company. It is analyzed that UBER follows hierarchical structure in which roles as well as
responsibilities of each members are clearly defined. With this, they are able to maintain higher
coordination at work place.
Systems: It includes technical infrastructure and chain of decision making used by
company. It is monitored that UBER believes in performing each and every task in systematic so
decisions are taken by higher authorities with concern of subordinates within organization
(Martí, 2017).
Shared Value: It comprises beliefs, values of entity that govern behavior of work force.
These factors are foundation of business and plat a crucial role in aliening efforts of all
individuals in an appropriate direction. Here, main aim of UBER is to provide better services to
customers to get higher competitive edge in market.
Style: In this, leaders and managers of UBER have democratic style where they allow
employees to take part in decision making process of organization which leads towards better
relationship between employer and employees.

Staff: It is sated that staff of UBER is highly efficient as well as productive. In addition,
managers also give motivation to work force through monetary and non monetary techniques to
enhance their satisfaction level (Wonglimpiyarat, 2016).
Skills: It is analyzed that all the individuals who are associated with UBER have great
competency, skills as well as knowledge that will help company in attainment of organizational
objectives in stipulated period of time.
VRIO analysis:
Resource Valuable Rare Inimitable Organized
Brand value Yes No No No
Specialised capability Yes No No No
Financial resource Yes Yes Yes NO
Human resource Yes Yes Yes Yes
With VRIO analysis, it is monitored that Human resource is core competency of
company. In case of UBER, HR refers to drivers who are highly efficient as well as trustworthy.
It provides competitive edge to entity over other competitors such as OLA, and more. Here, this
resource is highly valuable as well as rare for company. It is not easy to imitate behavior, attitude
of work force which plays a crucial role in enhancing faith of customers in brand. In addition,
Human resources of UBER are highly organized and able to provide timely services to
customers. By this way, company is getting higher competitive edge with competent and skillful
work force.
SWOT analysis:
Strength Weakness
 It is highly recognized brand which
have exponential presence in global
 Business model of company can be
easily imitated by others so it is easy
for new firms to enter into existing

market.
 Here, operational cost of UBER is
lower as its business model is based on
interaction between drivers and
customers (Cho and Song, 2017).
market place.
 It has been faced several controversies
and criticism regarding lower wages to
drivers which harmed existing brand
value of organization.
Opportunities Threats
 It can expand business in emerging
countries such as Asia and more where
travelling in taxi and public transport is
highly expensive.
 There is an opportunity to use electric
cars to reduce down operational
expenses and earn higher profit margin.
 There are some legal restrictions such
as Germany has been banned UBER in
operating within country.
 It is monitored that UBER has to face
extensive competition due to presence
of competitors and other substitutes in
market.
TASK 3
P3) Apply Porters five forces model for organization
Balance score card:
It refers to a performance matrix that is used to identify, control as well as improve
business outcomes and results (Lude and Prügl, 2020). Here, it is used to analyze business
performance over some predefined aspects and provide feedbacks for further improvements.
Here, four crucial aspects of Balance score card are discussed as under:
Learning and growth: It comprises training and knowledge resources. It describes the
way in which employees use available information for betterment of company. In context of
UBER, they arrange necessary training and development sessions for improving IT skills of
employees.

Business process: It comprises internal process of company that is crucial to ensure its
growth and success. It is stated that UBER has efficient operations management which make
company enable to earn potential profit margin.
Customer and stakeholder perspective: Stakeholders are those individuals who have
great interest in business. So, it is crucial to maintain positive image in the eyes of customers and
other stakeholder to ensure long term sustainability. In regards of UBER, customers have higher
faith and trust over brand.
Financial perspective: These are the indicators of financial performance of company. For
this purpose, it comprises analysis of financial data, ratios, budget, income level of organization.
In reference of UBER, it is able to maintain operational cost at lower level which leads towards
higher profit margin.
Porter’s five forces model:
This model is designed to analyze market performance of company. Main aim of this
framework is to identify current level of competition prevailing at market place. Thus, it makes
company enable to formulate effective strategies in order to ensure long term sustainability. Five
forces of Porter’s framework are given as under:
Industry rivalries: In current scenario, there is higher competition prevailing at market place so
it is vital for managers to prepare appropriate strategy. This factor depicts competition in current
market which needs to analyze in an effective manner (Bhimavarapu, Kim and Xiong, 2019). In
regards of UBER, industry rivalry is really high as there are several other competitors present in
market that are also based on identical business model. These competitors are OLA, Curb and
more that are also in similar field. So, managers need to prepare effective strategies to create a
differentiation.
Threats of new entrants: Under this, probabilities of entry of new firms in existing
market are taken into consideration. It is monitored that if there are higher barriers in current
market them it will be quiet difficult for any new firm to enter in market. In case of UBER, threat
of new entrants is higher due to simplicity of its business model. So, new firms can easily enter

in curret market but it will be not easy for them to replace UBER as customers have higher trust
over company.
Bargaining power of supplier: Suppliers are crucial stakeholders of organization that
provides necessary resources for business. It is not possible to conduct business in absence of
supplier so managers need to maintain better and long term relationship with them. In refremce
of UBER, bargaining power of suppliers (drivers) is high as business model of company
completely rely on them. UBER do not have own vehicles rather depend on drivers to provide
timely services to customers. This practice is enhancing power of suppliers and providing them
an upper hand over company.
Bargaining power of customers: Customers are considered as most crucial party of
business as they drive sales and profit margin for company by availing its services. So, it is
imperative to give due respect and importance to customers. It is monitored that in case of UBER
bargaining power of customers is high due to availability of other companies who are providing
similar services. In addition, now people are price conscious and seek for better services in lower
price. So, they can easily switch to other brand if they get same and better services at affordable
price range.
Threats of substitute: It refers to availability of other products and services as
replacement of products being offered by company. More number of substitute provide broader
choices to customers to choose between different brands. In reference of UBER, threats of
substitute is higher as there are a lot of other service providers. Apart from direct competitors
such as OLA, Curb, there are some other local transportation service providers that are also in
competition of company. So, there are a lot of substitutes available to customers that provides
higher competitive advantage to organization.
TASK 4
P4) Discuss approaches, theories and models to develop strategic plan
Ansoff Matrix

Market penetration: As per this strategy UBER can earn potential profit by decrease
price so that more number of customers avail their services. In addition, they also need to
improve in quality of services with an aim to sustain in competitive market place for longer run.
Market Development: Here, UBER needs to enter into a new market with existing
services that will help to expand business at large level. For this, they can target emerging
markets such as Asia and more where is higher scope of sales and profit. They can also explore
in rural areas to target large number of audience.
Product Development: In this, managers of UBER need to expand their current product
mix by adding some new services to existing group of customers. It is sated that it will be easy
for UBER to get acceptance for new services as they already build strong brand image in market.
Diversification: It is considered as one of the riskiest strategy as here market as well as
product both is new. In this regard, UBER is already working in diversify fields such as ride
haling, online food services and so on. It can also diversify in more areas by making required
investment.
Porter’s generic strategy:
Under this, managers focus on two aspects that are cost and differentiation. These factors
are crucial to grab the attention of buyers and earn substantial amount of profit in order to get
higher competitive edge at market place. Strategies of this framework are given as under:
Cost leadership strategy: It is analyzed that cost is a crucial factor that affect overall
efficiency as well as productivity of company. So, it is vital to maintain cost at minimum level so
that organization can earn sufficient profit margin. In this regards, managers of UBER formulate
strategies to keep proper control over cost and earn sufficient profit margin to cover all the
expenses. By this way, they will be able to provide products and services to customers at lower
price.
Differentiation strategy: There is higher competition prevailing in market so it is
imperative to differentiate products from competitors in order to grab the attention of buyers. For

this purpose, managers are required to adopt creative approaches so that they can provide unique
products to customers. It is monitored that UBER can also differentiate its services by providing
some additional benefits to customers. It will provide higher competitive edge to company that is
crucial to ensure long term sustainability.
Cost focus strategy: Under this, managers focus on cut down expenses to reduce price of
products and services. It will make them enable to offer products to customers at lower price. In
context of UBER, managers give emphasis to bring operational efficiency by minimizing overall
cost. So, they can provide better services to riders within affordable price range.
Differentiation focus strategy: In this, organization focuses to produce different and
unique products through creative and innovative strategies. In reference of UBER, they emphasis
over unique methods to enhance customer’s experience and retain them for longer run.

CONCLUSION
Out of above discussion, it is summarized that business strategies need to prepare by
organizations to meet with their desired goals and objectives. It is monitored that analysis of
internal as well as external environment is essential to prepare appropriate business strategies for
betterment of company. There are different tools such as PESTLE analysis, Ansoff matrix have
been applied for external analysis. It is concluded that porter’s five force framework is vital to
assess level of competition in market. Moreover, it is imperative to prepare business strategies
for future growth and success of company.

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