QAB020X603A - Applied Corporate Strategy: Uber's Strategic Analysis

This report provides a comprehensive analysis of Uber's corporate strategy, focusing on its ride-hailing and food delivery services, including the acquisition of Postmates. It employs external analysis tools like PESTLE and Porter's Five Forces to identify opportunities and threats within the industry. The internal analysis evaluates Uber's resources and competencies using the VRIO framework and Porter's Value Chain model, highlighting strengths and weaknesses. The report assesses the suitability, acceptability, and feasibility of Uber's strategies, considering factors like political stability, economic growth, technological advancements, and legal constraints. It also discusses the competitive landscape, including the threat of new entrants, substitutes, rivalry among existing firms, and the bargaining power of suppliers and buyers. The analysis aims to provide insights into Uber's strategic positioning and potential for future growth.

Applied corporate strategy

Table of Contents
Introduction......................................................................................................................................3
Main body........................................................................................................................................3
External analysis..........................................................................................................................3
Internal analysis...........................................................................................................................6
Evaluation....................................................................................................................................9
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

Introduction
Corporate strategy is the most important strategy. As with the help of corporate strategy
company will decide its moves which they will be taking in the future. Uber is the multinational
company. Company is worldwide famous for its ride hailing services. Uber has also came in food
delivery industry by launching other company in the name of Uber eats. Uber has acquired
Postmates because it is also food delivery company and competition of Uber. This report will
discuss pest and porters five forces to know about opportunities and threats. Further it will
evaluate resources and competence. Report will also discuss about suitability, acceptability and
feasibility of the company.
Main body
External analysis
External analysis is done so that business can know about what external factors which is present
outside can affect their current business operations. Pestle analysis and five forces model is used
to evaluate factors.
Pestle analysis
It has six factors which are as follows:
Political factors:
This factor gives long term effect on profitability and sustainability of company. Good political
stability will provide opportunity to Postmates to grow and make profits and also increase its
market share. Whereas instability in political environment can hurt shareholders expectations. In
order to increase the growth of different industries government also provide with favourable
policies in order to grow them. When the governance system of the country is well managed than
it make comfortable business environment for the company (Soto Setzke and et.al., 2017).
Economic factors:
Economic growth of the country can provide opportunity for Postmates food delivery company
to grow. High economic growth can improve organisational performance and also help company

to achieve its targets easily. GDP growth rate of any country can determine that company can go
for long term growth strategies or not. High GDP also means that customer have more
purchasing power and more purchasing power means more sales to the company. If the country
have high unemployment rate than it give opportunity to company to get workers at low wage.
And that can also reduce production cost of the company.
Social factors:
The factors which includes lifestyle, trends and values have great impact on the company’s
performance. As demographic patterns which involves socio economic variables, population etc
can become threat for company. As Postmates is the food delivery company. So change in the
taste and preferences of customers can affect their growth and market. So it is very important for
the company to study the general attitude of the company. Income inequality is another challenge
for the company because then they have to fix prices for their products according to income level
of customers and there is high income inequality.
Technological factors:
Technology brings innovation and also provide opportunity to food delivery company to deliver
online easily. As communication system is developed and social media users has also increased.
So this is better indicator for company to grow and get more customers. By using social media
company can run their campaign and do promotion of their products easily (Sheth, Uslay and
Sisodia, 2020). In today’s time internet and electronic device in the form of mobile is available
with everyone. So by using phone customer can place food order easily.
Environmental factors:
Nowadays public is more aware of environment and expect from company to carry their business
operations in such a manner so that it does not harm the environment (Shaheen and et.al., 2020).
Recycling and waste management can be difficult for the company or threat for them. As food
delivery company have to go through waste material daily and if they face difficulty to do waste
management than customers can shift to their rival company. There is continuous trend for eco
friendly products. So company should bring such packaging which is eco friendly.
Legal factors:
Data protection law can become issue for the company because data of customer is private and it
has to be secured with company. As leakage of data from company side can damage the
reputation of customers through blackmailers and company can also has to face legal troubles.

This can be threat for the company. so in order to deal with this company has to make sure that
they are using software which ensure data protection.
Porters five forces
It has five forces which are as follows:
Threat of new entrants:
It will be high because any company can enter in food delivery business because it is easy to start
and also requires minimum investment. New company can bring innovative products in order to
attract customers. Hence existing food delivery company can lose their market share by loosing
their existing customers but it can be minimized if company comes with innovative products and
services. New company can take data of existing companies and can target their customers by
giving them tempting offers (Godlewska, 2019). Food industry is vast so new company can bring
different cuisine or dish which Postmates food delivery is not offering so that they can take its
customer base.
Threat of substitutes:
It is moderate because easily substitute are not available in the market. In case of food products
it is difficult to get same products which give same level of quality and satisfaction. And
customer can also not get same utility from substitute product. So that is why there is less
chances that customer can shift to substitute products. Postmates food delivery can reduce its
substitutes by offering innovative and better product to their customers.
Rivalry in existing firms:
It is high because there are many firms which can give high level of competition to the company.
So company can face strong pressure from its competitors and that can also affects its growth
rate. Rival companies can also lowers the rate of profitability for Postmates food delivery
because rival company can attract customers by providing them low cost product and that can
reduce profitability of the company. Rivals are more because switching cost is low. So it can be
said that companies under this sector have easy entry and exit.
Bargaining power of suppliers:
It is low because there are many suppliers available in the market which supplies same product.
So that is why food delivery company have option to easily shift to new suppliers if its existing
supplier is causing delay in giving supply or has reduced the quality of raw materials or has

increased the prices. As the switching cost is low so that is why company can easily shift to other
supplier. Raw material which supplier is providing its substitute are also easily available in the
market.
Bargaining power of buyers:
It is high because there are other firms also who is offering same products. Customer have low
switching costs because Postmates food delivery company is offering food items which are easily
available with different company (Wang and et.al., 2021). If company will increase price or
compromised on food quality then there customers can get easily shifted to its rival firms. So
company have to make sure that they are doing something different or providing different range
of food to the customers so that they do not switch to competitors. product differentiation will
help company to retain their customers.
Internal analysis
This analysis deals with the resources and capabilities of Uber. So that is why VRIO framework
and porters value chain model will be used.
Physical resources:
Uber is having its head office and also have different offices at different places where
company’s employee is sitting. Workforce of the company solves the query of its customers if
they have any. So it can be said that they provides customer service and good customer services
create good brand value for the company. It is company’s strength.
Human resource:
As Uber is the multinational company. So it can be said that their drivers are their important
human resource. As drivers are representing company to the customers. Uber have talents
workforce which works hard so that company can achieve expected growth. Along with drivers
company also have technical staff which have knowledge related to algorithms because Uber
works on application which is their in electronic device. So that is why it is prone to many issues
like bugs, other app running problem etc. so that is why Uber requires such employees which
have technological related skills and knowledge. Company also have employees which provide
basic services to their customers like solving their queries or helping them in case of emergency.
They are the strength for the company.
Intangible resources:

It can be said that patent portfolio of the company is small and company expand its patent
portfolio by acquiring new companies. As Uber have 272 US patents and in total they are having
367 patents worldwide (CRAFTING AN EFFECTIVE PATENT STRATEGY: HOW UBER
BUILT ITS PORTFOLIO., 2019). Moreover patent digit of the company is of double digit
number but company is regularly increasing the number of its patents. Uber is continuously
focusing on quality of patent and this is the strength of company. Uber is also taking or
acquiring innovation from various companies. Company has acquired patents from companies
like Microsoft, HP and AT&T.
Reputation:
Although Uber have good reputation in the market but has stuck in various controversies and that
has hurt its brand name. uber is receiving negative publicity because its drivers are misbehaving
with customers. Customers who are filling complaint about it. Although Uber is doing
continuous efforts to correct but some of the customers are posting negative posts on social
media regarding Uber services and that is immensely damaging the reputation of the company. It
is the weakness for the company (Etter, Fieseler and Whelan, 2019).
Competencies
Value chain model of Uber:
Secondary activities-
Secondary activities are important because it acts as the support to the primary activities. So
company can take benefit from these activities which is also called support activities.
Firm infrastructure:
The firm infrastructure signifies many activities like legal matters, quality management, strategic
management, planning, accounting etc. if Uber will manage its infrastructure properly than it can
give opportunity to the company to increase its value. So to increase its market share they can
control its infrastructure activities.
Human resource management:
Human resource management can be done by Uber by setting proper recruitment and selection
practices. Personal management activities are very essential (Skok and Baker, 2018). If company
want to retain its top performer employees in the company. Effective HR policies will increase
the level of motivation in the workforce and they also work hard and which increases their
productivity. If company will be able to retain its talented employees than it will be helpful for

company to reduce its hiring and training costs. Uber also organises training programs in which
they educate their staff. human resources of the organisation are unique and company must retain
them in any manner.
Technology development:
In this era all the activities of the company is dependent on technological support. Uber needed
technological development in every department like marketing, production, human resource and
distribution. Technology development can be divided into two which is process and product
technology development. Examples of technology which is helping company are data analytics,
automation software, product design research etc. are the unique capabilities.
Procurement:
It refers to the procedure which is involved in buying inputs which includes raw material,
suppliers and other items. So that is why Uber should have focus on procurement activities to
take operational, inbound and outbound value chain (Garud and et.al., 2020).
Primary activities:
Inbound logistics
Uber should have maintain good relations with its suppliers so that they receive products on time
when needed. Its inbound logistics are storing inputs, retrieving data and elements to start
production.
Operations
Company should have operational capacities to process raw materials into finished products. Its
operational activities are packing, collecting, testing and machinery.
Outbound logistics
It includes the procedure through which the product reaches to the customers. Its activities are
order processing, warehousing etc.
Marketing and sales
Only making innovative products and services could not provide value to the company until they
invest of sales and marketing (Teece, 2018). Company is using social media for promoting itself.
As through social media they can target their customers easily.
Services

If Uber want to develop its customer loyalty than they have to focus on its pre sale and post sale
services. Customers are demanding post sales services. If Uber will not provide better customer
services than it can hurt its market image.
VRIO of Uber:
Resources Valuable rare imitate organisation Core
competency
Innovation Yes yes yes Yes Yes
Customer
loyalty
yes no yes Yes No
Service
quality
yes no yes Yes No
Financial
position
yes yes no Yes No
From the above table it can be observed that innovation is the core competence. As innovation is
valuable to the company. It is rare and no other company can imitate this easily and it is also well
organised. Customer loyalty is also valuable but it cannot be said as rare. The service quality of
company is not rare but is organised and valuable. Financial position of company can imitate by
other rival companies but it is valuable and rare.
Evaluation
TOWS matrix
Internal/external Strengths
 Physical resources in
the form of office are
its strength.
 High skilled human
resource.
 Quality patented
 Fast decision making
Weaknesses
 Damaging reputation
 Multiple scandals
Opportunities
 Political stability
SO strategy
Acquisition of patents from
WO strategy

 GDP growth rate
 Innovation and
technology
 Digital capabilities
Microsoft.
Threats
 Legal troubles
 Proper waste
management
 Socio economic
variable
 competition
ST strategy WT strategy
The above TOWS matrix is telling that high skilled workforce is their biggest strength and they
ate also having capability to take fast decisions (Kiron and Schrage, 2019). Innovation and
opportunities are the biggest opportunities for the company. As with the growing digitalisation.
Company is also witnessing more growth and profit. Although company has stuck into many
scandals and that has damaged the reputation or image of the company in the market. But if
company will work on them then they can improvise their image. In order to increase its patent
portfolio company has acquired patents from Microsoft. Uber have less patents so they want to
increase its patent portfolio.
Acceptability
To evaluate the acquisition strategy this matrix is used so that stakeholders reaction can be
analysed.
LEVEL OF ATTENTION
LOW HIGH

POWER
HIGH LOW
A Minimal effort B Keep informed
Competitors
Uber’s Employees
Uber’s drivers
Postmate’s employees
Postmate’s suppliers
C Keep Satisfied
Government
stakeholders
D Key Players
Uber management
Postmate management
Uber shareholders
Postmate shareholders
Uber management and Postmates employees
Management of Uber has been agreed on the terms and conditions of the acquisition. So Uber
will provide employees of postmates same salary as they were getting in the company previously
for sometime (Malos, Lester and Virick, 2018). Company will also give same benefits to the
employees including compensation and incentives which were getting in the previous company.
Management members of postmates company will also gets included in the management of Uber.
The benefits to employees which they are providing is giving on temporary basis then after that
they have to agree on company terms and conditions. Uber management is already considered as
the strong management and if it will get support from Postmates management then it can be said
that its management has also become strong. Employees or workforce of Postmates are high
qualified and efficient so Uber will get more skilled workforce. That will help company to
achieve growth and competency. Uber will also gets opportunity to increase its market share.
Uber’s shareholders and competitors:

As Uber has acquired Postmates at 2.65 billion which is the huge amount. Postmates is the
competition of company and by acquiring it company has made good decision. Shareholders of
company is also satisfied because acquiring rival company means reducing competition. As
competition of the company is increasing day by day so acquiring its competitor can be the better
option. Shareholder of Uber is happy with the decision. This will definitely give kick to the
company’s operations because when company will get merged with the rival company than its
capacity definitely gets increased. Competitors of Uber will also gets reduced if company will
acquire its rival company. so it can be said that it is good acquire the rival company.
Feasibility
Uber has agreed to acquire Postmates at 2.65 Billion. Postmates which is food delivery company
is the rival company of Uber so that is why company has acquired it so that to reduce its
competition (Uber Buys Postmates for $2.65 Billion., 2020). As Uber will going to combine
Postmates with its food delivery subsidiary which is Uber eats. It is also observed that food
delivery apps has combined eating, drivers and customers very easily and this trend is growing
continuously. Both Postmates and Uber will have 37 percent of share in the food delivery market.
Uber also wanted to grow in this pandemic. So that is why company want to expand its food
delivery business. As due to the pandemic people are not coming out from their home so that is
why it is affecting its hide hailing business (Chen and Tao, 2020). Company is grabbing the
opportunity and focusing on food delivery business because it is on boom in this pandemic. As
due to pandemic Uber has witnessed loss of $ 2.9 billion. But also revenue in Uber eats has
raised to 53 percent.
SAF:
SAF which means suitability, acceptability and feasibility.
suitability: Uber is framing such strategy which helps them in achieving goals.
acceptability: Uber is the company which takes risks in order to grow and achieve success. their
risk taking factor is high.
Conclusion
From this report it can be concluded that Uber has acquired Postmates by seeing its various
benefits. As Uber is already doing good in food business so to reduce its competitor, company
has acquire this food delivery company. Report has discussed pestle and porters five forces of
Postmates. Technology and innovation is the biggest opportunity for company. Report has also