Comprehensive Strategic Analysis of Uber: Environment and Competition

This report provides a comprehensive strategic analysis of Uber, examining its macro and micro environments using frameworks such as PESTEL, VRIO, and Porter's Five Forces. The PESTEL analysis covers political, economic, social, technological, environmental, and legal factors impacting Uber's operations globally, including tax rates, employment generation, and legal compliance. The VRIO analysis assesses Uber's internal capabilities, focusing on valuable, rare, imitable, and organized resources like employees and customer loyalty. Furthermore, the report explores Uber's organizational structure and skill-set, highlighting strengths in communication and weaknesses in rigidity. Porter's Five Forces model evaluates the competitive forces in the industry, and the report concludes with an analysis of strategic management plans and priorities. Desklib offers this document and many more solved assignments for students.

Unit 32

Table of Contents
INTRODUCTION ...............................................................................................................................3
TASK 1 ................................................................................................................................................4
P1 Discuss frameworks and analyse impacts and influence of macro environment on given
enterprise .........................................................................................................................................4
M1 Examine macro environment to determine along with to inform strategic management
decisions...........................................................................................................................................6
TASK 2 ................................................................................................................................................7
P2 Critically examine internal environment & capabilities ...........................................................7
M2 Examine internal environment to evaluate strength and weaknesses of organisational
structure and skill-set.....................................................................................................................10
TASK 3...............................................................................................................................................10
P3 Critically Apply Porter's Five forces model to evaluate competitive force in Uber.................10
M3 Apply strategies to improve competitive edge and market position based on outcome.........12
TASK 4...............................................................................................................................................12
P4 Analyse theories, concept and models to execute strategic plan ............................................12
M4 Analyse strategic management plan which has strategic priorities.........................................14
D1 Interpretation of environmental and competitive data to form set of strategic directions.......14
CONCLUSION..................................................................................................................................15
REFERENCES...................................................................................................................................16
Books & Journal: ..........................................................................................................................16

INTRODUCTION
In business, it is essential to be well aware about business environment so that goals are
accomplished. Business strategy is defined as strategical actions and tactics that are used to access
competitive benefits and higher productivity (Akan, 2016). Main aim of this report is to understand
the importance of business strategy in the contemporary environment. Uber, an American
technological company headquartered in U.S. It is at located at global scale and has number of
subsidiaries such as Uber Eats, Postmates, Careem etc. It as founded by Travis Kalanick on March
2009. Uber has many competitors such as Lyft, Grab, Curb etc. This report comprises of macro
environment PESTEL Analysis, internal environment, VRIO and SWOT analysis, Porter Five Force
model and strategic planning.
TASK 1
P1 Discuss frameworks and analyse impacts and influence of macro environment on given
enterprise
Macro environment refers to how condition of micro economic influences performance of a
company. It includes external factors that impact on business performance and progress. So, in
context of UBER, they operates at global scale and are affected by macro environment at larger
level. So, PESTEL analysis has been discussed as follows-
PESTEL Analysis
It refers to framework which is used to do scanning of business environment with strategic
management. To conduct this model, wide range of information is needed and it is a time
consuming process. It comprises of several elements which are described as follows-

Political factors-
It refers to components which comprises of factors such as political stability, corruption,
government policy etc. It focuses on intensity up to which government interfere within a economy.
In relation of Uber, due to rising of their services the tax rates are becoming higher. Also, in South
Africa Uber is facing political issue like the government of country is seizing Uber car because
driver doesn't hold a taxi permit (Braun, 2019).
Advantages
 Main benefit of this factor is that Uber is taking effective decisions within every country
where they are facing political issue.
Limitations
 Drawback of this factor is that it leads to disrupting relations between government and Uber
which affects their productivity.
Economic factor
In this element it comprises factors such as inflation and deflation rate, disposable income
of consumers etc. In relation of Uber, they have been known for generation of employment within
economy. Also, company is providing taxi services at lower prices Ciasullo, 2017).
Advantages
Illustration 1: PESTEL Analysis
Source: https://blog.v-comply.com/pestel-organization-
success/

 Advantage of this factor is that it is they are able to provide better services to people and
also improving transportation line.
Limitations
 Limitation of this element is that it due to changing market situation, it is not possible for
Uber to execute business activities in proper manner.
Social factor
It is another element of PESTEL in which it consists of age distribution, cultural barriers,
growth rate and many more (Decock, 2017). In context of Uber, they have been affected by this
element as because individuals and customers are happy towards service Uber as they can easily
travel one place to another.
Benefits
 This factor is also beneficial because Uber is able to generate profit from urban areas as due
to change of prices at higher scale. Also, with rise of number of users, entity is expanding its
activities.
Limitations
 Due to flexible prices of Uber, consumers and users are switching to other alternative
options like Lyft. Ola cabs etc.
Technological factor
In this, it focuses on factors such as use of artificial intelligence, advanced software and
hardware etc. In relation of chosen firm, they have been able to updating their technology and hiring
skilled employees. For example- selected firm is focusing on innovation such as adoption of
geolocation, message pop ups etc.
Benefits
 Main benefit of this factor is that it helps in increasing productivity level and efficiency
scale of business of company (Desai, 2019).
Limitations
 Drawback is that it leads to cost expensive procedure because technology changes from time
to time.
Environmental factor
It is a element in which it comprises of elements like raw materials, climate change etc. In
relation of selected organisation, Uber has been focusing on this factor and paying attention to
sustainability.
Advantages
 Main benefit of this element is that it assist in increasing of goodwill of firm when
environment is protected.

Limitations
 Drawback is that this element require proper implementation and access of environmental
resources and practitioners.
Legal factor
In this, it focuses on component which includes rules, regulations, etc. In relation of Uber,
they have failed to follow government rules for example- drivers of Uber has been charged for
harassment, rude behaviour etc. (García, 2021).
Benefits
 Uber is being properly updating their legal policies which is beneficial for their business
activities.
Drawbacks
 Limitation is that it is difficult to adopt rules & procedures because it is time consuming
process for chosen firm to follow governmental considerations.
PESTLE analysis is a strategic framework which is used to analyse the key factors
influencing the performance of an organization. The management uses the results of this analysis to
guide strategic decision making. The above discussed advantages and disadvantages of PESTLE
analysis suggest it is an effective strategic planning tool in scanning the external environment.
M1 Examine macro environment to determine along with to inform strategic management
decisions
Macro environment has deep impact on business and it is crucial to be well aware about
these factors so that appropriate strategies are being implemented. Also, strategic management
decisions required to be taken with proper considerations of these external factors in proper manner.
This is stated that selected organisation conduct proper business environment on the basis of which
they are able to gain benefits through taking effective strategic management decisions. Furthermore,
it is too examined that it is necessary to have appropriate knowledge about market so that effective
tactics are used.
PESTEL Analysis have deep impact on strategic management decisions as because within
management of chosen firm, external factors affects the overall organisational structure at wider
level.
Advantages
 Main benefit of macro environment is that it helps in accessing to relevant information
which are needed for implementation of strategies. In relation of selected firm, they by

accessing to macro environment they are able to make decisions in appropriate manner.
Limitations
 Drawback of macro environment is that deep level of market research is required to conduct
analysis.
The strategic management of chosen firm focuses on accessing to competitive benefits
which is done by them through applying HR practices and strategies in well effective manner. It is
seen that strategic management of Uber is at developing stage and they are aiming towards growth.
(Gökdeniz, 2017).
TASK 2
P2 Critically examine internal environment & capabilities
In this contemporary environment, it is essential for entity to use internal capabilities so that
effective strategies are being used. Main aim of this model is to understand the impact of internal
capabilities within enterprise. It provides an simple overview about the resources of firm. So, VRIO
is discussed as follows-
VRIO analysis

It is a framework which is used by entity to examine and access internal capabilities so that
goals are accomplished and strategic objectives are achieved. It comprises of several elements
which are described as follows-
Valuable-
It is a element in which it focuses on resources that are most important for business and
growth. So, in context of Uber, they also have valuable resources such as innovation, customer
loyalty etc. With these valuable resources they are able to access business opportunities in
appropriate manner (Kornelius, 2020).
Rare
It is another element in which it focuses on resources that are rare and increases value to
organisation. In relevance of chosen entity, they too have resources which are rare such as
employees, financial resources, and many more.
Illustration 2: VRIO Analysis
Source: https://expertprogrammanagement.com/2019/11/vrio-framework/

Imitable
In this element of VRIO it focuses on the level up to which resources can be copied. In
relation of chosen firm, customer loyalty is imitable at moderate because of availability of
alternative options (Lopes, 2020).
Organised
It is last element of framework in which it states about how well the organisation is
organised. In relevance of Uber, they have a well organised a staff and resources on basis of which
they are able to access positive outcomes.
Resources Valuable Rare Imitable Organised Impact
Employees Yes No Yes Yes Higher
Financial
resources Yes Yes No Yes Higher
Customer
loyalty Yes No Somewhat No Higher
McKinsey 7s model
It is another model which is used by entities to determine internal capabilities and situation.
Main purpose of this framework is to examine the internal structure of organisation in appropriate
way. This model consists of seven components which are discussed as follows-

 Strategy- It is a first element in which it focuses on tactics which is used by organisation
within workplace. In relation of selected entity, they also implement strategy of market
development.
 Structure- It refers to the way decisions and work is being carried out within entity. In
relation of Uber, they have a long structure and follows divisional structure (May, 2017).
 System- A system refers to collection of different systems which reflects their working way.
In context of chosen entity, they too have many system such as employee recruitment
system, customer relationship management system.
 Skills- These refers to capabilities that help in achieving of achieving of competitive
benefits. Uber has claimed that they have skilled employees that are able to increase
productivity.
 Style- This component refers to the way entity is being managed by supervisors. So, in
reference of selected entity, they have large members in firm and accordingly decisions are
undertaken.
 Shared Values- This refers to element in which it focuses on guidelines, principles, etc. In
viewpoint of chosen firm, they too are focused towards their ethics and values (Narayanan,
2016).
Illustration 3: McKinsey 7s Model
Source: https://www.mbaboost.com/mckinseys-7-s-and-pascales-adaption-thereof/

 Staff- It refers to people who has ability to deliver better productivity at workplace. Uber
operates at global scale and large employee size which generates revenue to business.
Therefore, it is analysed that it is essential to have proper knowledge about use of models
that can be applied within firm. In viewpoint of Uber, by analysing of internal capabilities it is
crucial for firm to use such models which increases the effectiveness of brand.
M2 Examine internal environment to evaluate strength and weaknesses of organisational structure
and skill-set
Internal environment impacts on Uber operations and functions at wider scale. In relation
of Uber, they too uses skill set and organisation structure on the basis of which they are able to
achieve competitive benefits. It is also seen that organisational structure of Uber is very strong and
well organised. In case of selected entity, internal environment includes internal components such as
raw materials, employees, management, organisation structure etc. The skill of employee is wide
and broader which is used by them to increase productivity of firm at higher scale (Powers, 2019).
Internal strength of organisational structure
 Main strength of Uber organisational structure is that they have good communication and
proper level of understanding .
Weakness
 Drawback is that the structure is not rigid and that can leads to conflicts in Uber.
TASK 3
P3 Critically Apply Porter's Five forces model to evaluate competitive force in Uber
Market is wider as well as broader and it is important to focus on development of business
goals. To do so, it is essential to be well aware about competitors within market. In context of Uber,
it is necessary to have appropriate knowledge of competitive forces so that decisions are taken in
most efficient way. So, Porter Five Forces has been explained below-
Porter Five Force Model
This is model which is used with aim of accessing competitive environment. It is necessary
to be aware about such competitive forces so that appropriate decisions are undertaken. It is
analysed that it is necessary to states about components of Porter Five Forces which are described
as follows-

 Threat of new entrants- It is element in which it focuses on entries of new firm in market.
It is necessary to for organisation to be aware about the new entries in firm so that strategies
are implemented accordingly. In context of Uber, they also have high threat of new entrants
such as Lyft, Ola cabs etc. (Riwanto, 2019).
 Threat of substitutes- In this force, it reflects about replacement of a existing product. In
relevance of Uber, they also have high threat of substitutes such as Lyft is being mostly used
by many users due to affordable services.
 Bargaining power of suppliers- In this, it focuses on suppliers as they are one who assist
in reaching to customers and resources. In reference of chosen entity, suppliers are important
without which is to not possible to access customers in easy way. It is seen that they Uber
do not use their own cars instead drivers have their own cars and then policy is made. So,
power of supplier is relatively high (Wu, 2020).
 Bargaining power of buyers- It is another element in which it focuses on power of buyer. I
this, it is crucial to be well aware about buyers attention and needs. In relation of selected
entity, bargaining power of buyer is relatively high, due to strong competition in market. So,
Illustration 4: Porter Five Force Model
Source: https://strategicmanagementinsight.com/tools/porters-five-
forces.html