Uber's Business Strategy: Macro and Micro Analysis

This report provides a comprehensive analysis of Uber's business strategy. It begins with an introduction to business strategy and its importance, followed by an examination of Uber's mission, vision, and objectives. The main body of the report delves into the impact of the macro environment on Uber, utilizing frameworks such as stakeholder analysis, PESTLE analysis, Ansoff Matrix, and Porter's generic model. The report then analyzes Uber's internal environment and capabilities using the VRIO model and McKinsey 7-S Model. Furthermore, it applies Porter’s Five Forces model to evaluate competitive forces in the market and discusses appropriate strategies for gaining a competitive advantage. Finally, the report constructs a strategic plan for Uber, incorporating various theories and models, and concludes with a summary of the key findings.

Business Strategy

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 1............................................................................................................................................3
P1. Impact and Influence of macro environment on Uber and its strategies..........................3
M1. The macro environment factors that determine and inform strategic management decision
................................................................................................................................................6
TASK 2............................................................................................................................................7
P2 Using appropriate frameworks analyse the internal environment and capabilities of a given
organisation ...........................................................................................................................7
M2. Assess the strengths and weakness of Uber..................................................................10
TASK 3..........................................................................................................................................11
P3 Apply Porter’s Five Forces model for evaluation of competitive forces in market........11
M3 Appropriate strategies to gain competitive advantage and market position..................12
TASK 4..........................................................................................................................................12
P4 Utilisation of various theories and models to construct a strategic plan for the company12
M4 Strategic management plan which includes tactile strategic precedence and aims .....13
CONCLUSION .............................................................................................................................14
REFERNCES:................................................................................................................................15
Books and Journals:..............................................................................................................15

INTRODUCTION
Business strategy is a plan that is formulated by business to achieve the goals and
objectives. It is like a road map that guides company to grow. The strategy is made after a good
research of current trend and needs and wants of customers. A effective business strategy helps a
business to achieve competitive advantage. Along with that it helps the business to deal with
uncertainties that may arise in future (Puspitasari, and Jie, 2020). This report is based on Uber
that is an American international organisation. The company was established in March, 2009.
Uber provides cab services, couriers, food delivery, and etc. to the customers. There is discussion
related to impact of macro and micro environment on the business. There is use of various
models to better understand the concept.
MAIN BODY
TASK 1
P1. Impact and Influence of macro environment on Uber and its strategies
Business Strategy helps a business to operate smoothly and achieve the goals and
objectives on time. Uber is one of the largest company of gig economy which is successful by
making effective strategies. The company has around 67% market share in ride business and
remaining in food delivery (Özsaçmacı, and Dursun, 2020). The importance of business strategy
is explained below:
 Business strategy is an essential part of business plan as it is road map that helps buiness
to attain its goals an objectives.
 It helps business to identify strength and weakness. Along with that work of weakness to
operate successfully.
 Effective Business Strategy helps a business to gain competitive edge.
Business strategy is made in elation to mission, vision and objectives of the organisation. As it
helps the business to effectively achieve the goals and objectives (Ciasullo, Cardinali and
Cosimato, S., 2017).
Vision:
“To become trustworthy brand for cab services that provides safe ride.”
Mission:
“To grab opportunity by setting the world in motion.”

Objectives:
 To build healthy relation with all customers by providing quality services.
 To become dominant player in market to gain higher profits.
 To give effective transportation services to all individuals.
Macro environmental analysis with the help of various frameworks is mentioned below:
Stake Holder Analysis
Stake holders are the people that have stake in the company and decision making power
in company. Stakeholder analysis in elation to Uber is discussed below:
High Power, High Interest: This is the first quadrant. People who invest money Uber are
shareholders of the company. They have interest in company and power of decision making.
High Power, Low Interest: The customers come in this quadrant. As it is important to
keep them satisfied and provide relevant information.
Low Power, Low Interest: Suppliers do not have mush interest in information related to
the company and they have less power in decision making (Samygin, and Baryshnikov, 2017).
Low Power, High Interest: Government comes in last quadrant. It is important to provide
all the relevant information to government.
PESTLE analysis
This framework helps to study the impact of macro environment factors of business. The
PESTLE Analysis in respect to Uber is explained below:
Political factors: Uber has operations in various countries so it has to follow rules and
regulations of every country. They have benefit as America has stable political conditions.
Economical Factors: Uber has provided job to various people and they provide the rides
at cheap prices (Ho and Wang, 2020). This gives tough fight to competitors.
Social Factors: The belief and attitude of society comes under social factor. In relation to
Uber, the provide quality services to all the customers and have gained a positive image. They
have created loyal customer base due the relations they have build with customers.
Technological Factors: It is one of the major factor that has impact on operations of
business. Uber conducts research and use updated technology to achieve goals and objectives.

Legal Factors: It is vital for a business to follow all the laws that are applicable.
Transportation industry have there own laws. In respect to Uber they have take care of al the
laws so that they can operate successfully.
Environmental Factors: It is duty of every business to take care of environment. Uber
uses resources in a sustainable manner. That has contribution to environment. It is vital to take
care of environment as business uses the resources that are provided by environment.
Ansoff Matrix of Uber
This model helps company to make marketing plans for growth of the organisation. The
strategies are mentioned below: Market Penetration:This strategy helps the company to increase the sales of products
and services offered by the company (Habib and Hasan, 2019). In relation to Uber uses
this strategy to promote its products and services and attract more customers. Product Development: This is another strategy that is opted by various companies. This
means enhancing the portfolio of the company. Uber offers its services through various
cars such as Auto, Uber X, Go, Xl, Rush,Access, Premium, and Moto. Market Development: This strategy focuses in entering new market and attracting more
customers (Arieftiara, Utama and Wardhani, 2017). Uber has its operations it various
countries. This shows Uber is using the strategy of market development.
 Diversification: This is a risky strategy that can be adopted by company. Uber researches
a lot and successfully adopted this strategy.
PORTERS GENERIC MODEL
To gain competitive advantage it is important it is important for a business to formulate
various strategies. As it is important ton form a image that is above average in the industry.
Porter's generic model in relation to Uber is discussed below:

Cost Leadership: This is the first strategy Porter's generic Model. The focus is to gain
leadership by means of cost. In relation to Uber, the company provides quality services at
affordable price and has gained cost leadership in the market. This strategy has helped them to
gain advantage over the competitors.
Differentiation: Herein, company has top provide some alterations in already existing
product and service (Mohanty, and Vyas, 2018) . It helps to attract more customers as they like
innovative products. This also helps to create an image above the competitors in the market.
Focus: As the name suggests the company has to focus on two criteria and that are
mentioned below: Cost Focus: Herein company mainly focuses on the cost at which they are offering goods
and services. This strategy has helped Uber to gain loyal customers and establish a
position above the competitors in the marketplace
 Differentiation Focus: As per this strategy a company focus to provide unique product
and service to its customers (Elias Mota and et. al., 2020). This is a way in which a
company can attract more and more customers. Uber provides different services to its
customers.
M1. The macro environment factors that determine and inform strategic management decision
The external factors are not in control of business. It is an important task to study all the
macro economic factors as they have impact on business. These impact the decision making of
the company (Trevisan, 2016). In relation to Uber theses external factors help a business to
achieve competitive advantage in the business. It is vital for a business to focus on these factors
as they help them be successful. PESTLE Analysis help to know about the factors that have
direct impact on the strategy formulation. Also to decide the cost and pricing strategy Uber uses
Porter's generic Model as it helps Uber to know about the focus of company and how to
formulate effective strategies. As Uber focuses of providing affordable services to the customers
and gain cost leadership. Along with this Ansoff Metrics also helps the company to determine
the best strategy hat will help them to deal with the macro environment. Uber uses product
development and provides various options to its customers that provide competitive edge. These

models help Uber to determine the impact of external factors and then formulate strategies based
on same by taking strategic decision.
TASK 2
P2 Using appropriate frameworks analyse the internal environment and capabilities of a given
organisation
Internal environment means all the internal factors that have impact on decision making
of the organisation. It includes values, culture, members that are important for an organisation. It
also includes the strategies that are formulated by the organisation to gain advantage over
competitors (Madhani, 2021). The business has its own competencies and powers that help them
to achieve the goals and objectives on time. The leadership and management style followed in
the company also impact the decision making of that company.
VRIO MODEL
This model shows how the resources can be used efficiently to gain competitive
advantage in market. The model was given by Barney, J. B. in 1991. It is discussed below in
respect to Uber:
Resources Valuable Rare Inimitable Organized
Customer Customer Loyalty - - -

Loyalty
HR HR HR HR HR
Technological
Advancement
Technological
Advancement
Technological
Advancement
Technological
Advancement
-
CSR CSR CSR - -
Valuable
Customer Loyalty: Customers are most valuable part of an organisation. Uber has loyal
customers because they provide quality services to all the customers.
Technological advancement: The world is dynamic so is expected by the business.
Technology improvement helps a business to gain advantage and serve customers effectively.
HR: All the work is done by the human resource in an organisation. The employees of
Uber are skilled and work with dedication to help company to achieve the set goals and targets in
time. Workforce is valuable resource for Uber.
CSR: Another important aspect is social responsibility (Heileman, and Pett, 2018). Uber
takes care of environment and take measure to reduce pollution that is caused by vehicles. This
helps to create a positive image in market.
Rare:
Technological advancement: It is dependent on the company that how it uses the
technology. In relation to Uber the company uses the technology wisely so that it is available for
future. That is the reason technology is a rare resource for company.
HR: The employees of Uber are dedicated and work for the benefit of organisation. It is
seen that they are loyal towards the organisation and help to achieve the goals and objectives. the
proper training and development provided to them makes them rear.
CSR: It is important for every organisation to follow the concept of corporate social
responsibility (Raghunath and Rose, 2016). In case of Uber they use unique ideas. The concept
of Uber pool is also an example of CSR followed by them.
Inimitable:

Technological advancement: Technology is a resource that can be used by everyone.
Also it is vital to use it optimally (Christ, Burritt, and Varsei, 2017). In elation to Uber the
organisation uses updated technology and that cannot be copied by others.
HR: Uber has given training and development to its employees. It can be seen that they
work with dedication and full efforts to accomplish the goals and objectives on time. Also the
human resource of Uber is inimitable. As all the humans have there own skills that are different
from others.
Organized:
HR: It is essential to keep every thing organised. In case of Uber the human resource of
company that works for the organisation is properly managed. This helps them to achieve all the
goals and objectives on time.
McKinsey 7-S Model
The model is based on effectiveness of business. The 7s of business are studied and to
value the internal capacities of the business. It helps to take decisions related to strategy
formulation by the business. The aspects in relation to Uber are discussed below:
Hard Elements:

 Strategy: Uber follows the strategy of cost leadership that has helped company to serve
more customers. Along with that the idea of booking the cab online has created ease for
people. Structure: The structure and division of activities is shown under this factor. Uber uses
Hurricane organisational structure.
 Systems: It is important to follow all the activities in a systematic manner. Uber takes
care of all the operations are working in a systematic manner.
Soft Elements: Shared Value: There are employees that come from different places and religion. Uber
respect them and celebrate all the festivals together (Centobelli, Cerchione, and Ertz,
2020).
 Skills: The capacities and skills of a company is shown under this factor. The manpower
of Uber is skilled that is reason company is able to become successful. Style: Uber follows hierarchical nature and the top management take decision as per the
situation.
 Staff: A proper process is followed by the company to hire the staff. They select skilled
and knowledgable people that will work with dedication to accomplish the tasks on time.
This makes the staff of Uber skilled that work for the benefit of the company.
M2. Assess the strengths and weakness of Uber
The strengths and weakness of Uber are stated below:
STRENGTHS WEAKNESSES
 The company has attained high brand
image in market.
 They provide quality services to its
customers.
 The relationship between drivers and
company is not strong.
 There is lack of bond with the
customers (Brandenburger, 2019).
OPPORTUNITIES THREATS
 The company is able to target more and
more customers.
 The services provided by the company
are cheap.
 The company has low profit margins.
 There are various competitors of Uber.

By conducting a proper internal research about the company the SWOT Analysis can be
done. It is seen that the company has good brand value and they are able to provide quality
service to their customers. Uber should work more on the strong factors and formulate strategy
accordingly. Also they focus on providing affordable service to its customers. Along with that
that Uber is unable to form strong relations among drivers and with customers. For this they
should work and start employee engagement programmes that would help them and build strong
relations. They should make strategy to enhance the profit of the company. All these factors
helps the company to know the weak and strong areas on which they have to work.
TASK 3
P3 Apply Porter’s Five Forces model for evaluation of competitive forces in market
Porter five forces model helps an organisation to know about the competition in the
market. It helps a business to make strategies that will help them to gain competitive advantage.
In relation to Uber the model is discussed below:
Threat of new entrants: The threat that company faces from new entrants in the industry
is called threat from new entrants. In case of automotive industry there is low threat as it is not
easy to comae and establish a position in the market. Uber has made this image after so many
efforts and hard work. Along with that there is requirement of huge capital to enter the
automotive industry.
Bargaining Power Of Suppliers: The suppliers are important is case of Uber. As the
business does not uses it own vehicles, it is dependent on supplier and drivers (Arasti, Khaleghi,
and Noori, 2017). It can be said that the suppliers have high bargaining power in relation to
Uber. This means that they suppliers can charge high prices from company.
Bargaining Power Of Buyers: Buyers are the one for which business operates. Every
company wish to satisfy its customers. In case of Uber they have always provided quality
services to its customers. Due to competition the bargaining power of buyers is increasing. They
should give offers and discounts to its customers so as to attract and retain them.
Threat Of Substitute: Nowadays various new businesses have opened in the same field.
As they saw the business to be profitable. There is threat of substitute as customers get the same
services from the competitors. There is threat of substitute in case of Uber.

Competitive rivalry: Competition is present at every level of business. In case of
automotive industry the competition is high. Company has operations in various countries and
has to face competition with them. Uber should formulate strategies to gain advantage over
competitors (Anderson, 2019).
The porter five forces model helps the business to know about the competition in the
market. This also helps the business to formulate strategies that will help the company to gain
advantage over competitors.
Balanced scorecard
This is used by Uber top track the performance of employees so as to know the
performance of their staff. They perform this activity to find deviations in the performance of
employees. It helps to provide corrective measures to employees so that their performance
enhances (HunTer, 2016). Along with that it helps to solve the problems of customers. That
directly helps to enhance the profitability of Uber. Overall balance score card helps to enhance
the performance of Uber.
M3 Appropriate strategies to gain competitive advantage and market position.
It is important to evaluate about the competition present in market. To gain competitive
advantage a business should know about all the internal and external factors that have impact on
business (Halpern and Graham, 2018). In relation to Uber they should know about the major
competitors and evaluate the strategies made by them. It is important to form strategies that help
the company to gain competitive advantage. They should offer discounts to its customers. The
pricing policies should be made after analysing those of competitors.