Applied Corporate Strategy Assessment: Strategic Analysis of Uber

This report provides a comprehensive strategic analysis of Uber, a prominent American technology company offering rides, food delivery, and transportation services. The analysis begins with an external assessment using PESTLE, identifying political, economic, social, technological, legal, and environmental factors impacting Uber's operations. Porter's Five Forces framework is then applied to evaluate industry rivalry, the threat of new entrants, the threat of substitutes, and the bargaining power of suppliers and buyers. The report subsequently delves into an internal analysis utilizing SWOT to highlight Uber's strengths, weaknesses, opportunities, and threats, covering aspects like its technology, brand presence, investment levels, and customer interaction. The analysis also identifies challenges such as scandals and losses, concluding with a strategy evaluation based on the findings. Desklib provides more solved assignments and study resources for students.

Applied Corporate Strategy
Assessment Strategic Analysis
Report

Table of Contents
Introduction......................................................................................................................................3
Question 1........................................................................................................................................3
External analysis..........................................................................................................................3
Question 2........................................................................................................................................6
Internal analysis...........................................................................................................................6
Question3.......................................................................................................................................10
Strategy evaluation....................................................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................11
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Introduction
The following report demonstrated about corporate strategy. Corporate strategy refers to
the portfolio approach of making various strategies by checking the overall business of the
organization and it also helps the organization to create valuable strategies (Basu, 2019). The
main purpose of forming Corporative strategies is to make the company ahead of its competitors
and gain competitive edge in the market. The entire report focuses on Uber. Uber technology
which is popularly known as Uber refers to an American technology. It is providing services
which include rides, food delivery, package delivery couriers and transportation. This company
is operating most of the countries in the world and therefore it is one of the largest companies in
providing rides to their consumers. The entire report provides detailed information about the
external analysis, which states about various factors which impacts the overall industry. Apart
from this porter’s five forces is also being mentioned in this report which assess various high
moderate and low impact to the attractiveness of industry. Apart from this internal analysis of the
organization has also been mentioned in this report in which various strength weakness
opportunities and threats of the organization has been explained in details.
Question 1
External analysis
For explaining the external analysis of Uber company Pestle analysis is utilized.
Political factors :
This company has never made it clear whether it is the drive's fault or the company's fault
in case of an accident. Due to this phenomenon the company had to face a lot of issues and
threats in its worldwide business. Along with these issues this organization had to face the risk of
getting banned in many countries. These factors are the threat for this company as builds
uncertainty to the success of the organization. Some opportunities which these factors may
present is that in some countries the government policies are not as strict as others therefore by
following these rules the business can develop (Frue, 2017)
Economic factors :
The economy of the country in which this business operates can be a big influence to the
business of the company. Uber mostly operates in a sharing economy, in which the economy is
based on physical sharing of intellectual resources. For such economy this organization can
provide cheaper services to the customers than the local transport. The growth of the market of
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this company has been in very alarming rate. However, in certain economy where there is
economic recession the business of this company suffers a lot and for the favourable business
economy the organization has to face threats of new entrants in the business (Borowiak, 2019).
Social Factors :
The customers of this company are very fond of the easy accessibility of the Uber's
application. The company is social accepted because it is very easy to choose an appointment
and pick-up time with the help of the application. In addition to that the prices of this company is
also judged fairly by many of its customers. There fore the social popularity of this company is
an opportunity on which it needs to develop. Some customer share their experiences over social
media which has increased the popularity of the company. This popularity ultimately affects the
business of the company as the prices of the cab increases which is good for the company but not
for the customers (Viswanadham, 2018).
Technological factors :
Social media has been the very influential for the increase of the market popularity of the
product. This is the way technology helped Uber to grow. The application of this company has
also been very effective for its success as it provided very easy user interface that allows the
customers to easily book cabs and fair rates. The application has proven to be a great opportunity
for this company as it can use it to promote other business activities as well. This application has
been so important for the success of the company that it calculates the fare rate by determining
the demand, location and weather conditions. Despite being an opportunity this application can
also affect the business of the organization as without the application the business operation will
stop making it a threat as well.
Legal factors :
The laws made by the governments affects the business of Uber. In some countries the
laws are so strict that the businesses like Uber are banned. Whereas, in some countries due to the
laws the Uber has to make changes in it operation. Generally Uber creates a partnership with its
drivers who own the car. In some countries the law has been such that Uber cannot make
partnership with the riders it can only hire them as employees. This changes the operation of the
company and poses a huge threat over its business. The only opportunity which Uber can general
from this factor are the laws of some countries which allow the business of the company to flow
with fluidity.
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Environmental factors :
Uber provide Cab rides to its customers. These cabs generally use fuel, the exhuasion of
which is harmful for the environment. However, according to some studies it has been found out
that Uber has not increased its congestion. For balancing out the effects this company has on the
environment this company plans on using electronic cars and also plant more and more trees for
the protection of the environment.
The application of Porter's fiver forces will help in the determination of how the
following external forces affect the business of Uber.
Industry Rivalry :
The operations of this company are present in many countries therefore this organization
has to face competition from different company in different country. Generally speaking the
competition of this company is very high in most of its markets. The reason for this is the
business model of this company, which has proved to be very successful in the past years. Some
of these competitors with similar business operations are Lyft, Curb, Didi Chuxing. Grab, Ola
and many others. All these competitors have very similar business model and some of them get
the benefit of being the local business due to which the prices are lower than that of the Uber's.
Threat of New Entrants :
For the kind of business model in which Uber operates in, does not take a lot of effort for
starting the business. This is because this business model work on the concept that those people
which want to work as a drivers and own a car can just get themselves registered with a company
like Uber and work according to their flexible hours. This is the same model which many of its
competitors use. Due to the easy operation involved to this business model there is always threat
for this company to face new competitors no matter which market is it operating on. This
company was the first to come up with this idea therefore it has experience and popularity more
than other new companies which gives it an advantage in the market.
Threat of Substitute :
The substitute for this company are not the direct competition of this business but are the
local transportation facilities which is a very big competition to this business because in certain
markets. These local transports are generally run by the local government due to which their fare
is very less than that of the Uber's. Its very concerning for the business of the organization as
customer if feel like are not getting enough services worth the price difference tend to use the
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local transport which is more affordable. The local taxis in some locations are also very big
threat for the business of the organization as they provide similar services with less fare. The
only opportunities for this organization in this scenario is that local transport including the local
taxis are not available everywhere however, the in which the Uber application works it can call a
cab to the location of the customer (Pollio, 2019).
Bargaining power of suppliers :
This organization does not own any of the car which are used by its customers for
travelling. Due to which this organization is very much depended on the drivers of the car for
getting the services in provide to its customers. This results in the suppliers of the company
having higher power which is a threat for the organization. However, the number of suppliers for
this organization is very high due to which the affect of their bargaining is not as much.
Bargaining power of the buyers :
The customers of this company are not permanent, and those people which are loyal to
the organization are because of the services which they have got in the past. The reason for the
irregularity of the customers of this company is that its customers have many option available to
them for travelling. Due to this the bargaining power of the customers is high. However, this
organization has the opportunity of providing the customers emergency services which is
difficult to get from other local transport (Piracha and et.al., 2019).
Question 2
Internal analysis
Internal analysis refers to the examination of company’s internal strength. It speaks about
the internal components of the company whether they are tangible and intangible. Analysis also
refers to the resources Assets and various procedures which has been adopted by the company.
There are various sources available through which company can conduct their internal analysis.
SWOT analysis
SWOT analysis is one of the useful Framework through which organization can analyse
their strength weakness opportunities and various threats. It helps the organization to build
various strategies so that they can easily face the business and convert them into their strength.
Strength of Uber
Uber has many strengths which has been mentioned below
Biggest light providing Technology
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Uber has secure the largest position in providing rides by using modern technology throughout
the world. Uber has started first ride sharing app and it is operating throughout the globe. This
company has millions of active users who are enjoying the ride of Uber.
Strong brand presence
Uber has a strong brand presence in the world. Apart from this it has maintained an oldest brand
in the top 50 countries (Kokotilo and et.al, 2018). Apart from this Uber has take over various big
companies such as Ford and Honda in the terms of branding.
Low investment
Uber operated by investing low capital and it is easily accessible in most of the cities throughout
its delivery partners and networks. So the overall infrastructure of this organization is fixed. So
Pricing strategy
Uber works on dynamic pricing strategies it takes high charges when the demand is high so the
policies benefits drivers the most.
Adoption
This company works on adaptive nature therefore continuously adopting new technologies and
new market demand as well.
Low prices in the comparison of local taxis
It is one of the biggest strength of Uber because it is taking low prices as compared to the local
taxes of the country and therefore has become the first choice of customers.
Customer and driver interaction
This is one of the approach of uber and a company try to create an interaction among customer
and driver so that customer feel safe while taking right of this company.
Training
Uber focuses on providing training to their drivers so that they can provide a safe write to their
customers.
Supply network
Uber has the biggest and largest supply network of drivers and therefore these companies able to
provide services in most of the countries.
Weaknesses of Uber
Scandals
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Uber has received various negative images due to some controversies (Al-Sulaiti, 2020). In some
cases driver did some sexual harassment with their customers due to that Uber has to face lot of
negative response of their customers.
Losses
Uber has to go through from various significant losses due to high competition and providing
various discounts to their customers. Therefore Uber has to face different losses.
High dependency on workforce
Uber is totally dependent on workforce and internet. This company is totally dependent on the
drivers.
Opportunities
Performance
Uber is continuously increasing their performance because customers do not want unorganised
cab services. This is an opportunity for Uber that it is continuously offering new and latest
services and accountability.
Digitalization
People are getting more digitalised and therefore this company is focusing on providing
interconnected network so that people can easily access and book ride from their smart phones.
Threat
Customers and employee retention
As a competition is continuously increasing it is very important for the company to maintain
good customer employee retention.
Increase competition
There are various new companies are introducing in this market and giving the competition to
Uber.
VRIO analysis of uber
Valuable
The VRIO analysis of this company states that the financial resources of this company
are highly valuable and it is very difficult for the competitors to imitate (Lacaze, 2020). Apart
from this Uber is totally dependent on their employees especially on driver so they are also
valuable resource for the company. Along with this patent right of the company is also a valuable
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resources and it is generating revenue for the company as well. Patent is providing licence to
Uber and therefore this is one of the important resources.
Rare
All the strategies and financial resources of the company are rear because company uses
storm strategies to earn high revenue. As the company is focusing on employees as they are also
their resources and company is continuously giving them various training and increasing their
skills. But employers can be imitating by paying high salary. To get growth like Uber is also
hard to imitate for the competitors because there is growing very fast and introducing new
business in the market as well. Along with this Uber has opportunity for brand extension as well
and which the company is doing effectively.
Imitable
As employees are the immutable resources because take and get influenced by other
companies who will pay them better salary package. Apart from this the supply network of Uber
is very costly to imitate for the competitors because Uber is one of the oldest brand and therefore
it has established a huge distribution network. Apart from this organization who are entering in
the market they have to put a lot of money on establishment search supply network then only that
can imitate the distribution network of uber.
organization
This company is poorly organised and well managed and that for Uber is using all the
resources in a proper manner. This is the reason that Uber has become one of the leading players
in the market. This organization is using various digital strategies so that they can get in touch
with bank regular customers. Apart from this Uber is also entry into business such as providing
delivery of food related services and therefore this company is potential to attract new to
customers. These are very difficult for the new competitors to imitate from Uber. Apart from this
Uber is known for providing best quality training and development opportunities to the
customers and therefore this company is able to attract new talent. Uber has a strong position in
the market and it is giving tough competition to the new entrants as well as existing companies
now Uber is ruling the market because in many Countries there is no strong competition
available to uber.
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Question3
Strategy evaluation
Strategy evaluation is a continuous procedure which determines the effectiveness of all the
strategies which is being used by the organization. Initially Uber is focusing on two major
strategies first is cost leadership and other is differentiation. As Uber has diversified business and
working in most of the countries and therefore it has to establish various strategies so that it can
get good profitability.
Cost leadership
Uber is continuously using cost leadership strategy and offering less expensive rides. All the
rights which is being offered by Uber s not that expensive and it is cheaper as compared to the
local taxes of that country. This is one of the reasons that Uber is getting popularity in all the
countries. Apart from this Uber is allowing those drivers who have a proper driving licence and
car and by providing them training they can become a employee of Uber.
Differentiation
Uber is continuously providing various choices to their customers in taking rights and also
providing comfort to their customers. Along with this Uber is trying to make a connect to driver's
device so customers can track them.
Suitability :
The strategy of cost leadership of this company make a lot of sense as in most of the
markets it is facing competition from businesses with similar business model due to which it is
important for the organization manage its prices in such a way that it is lower than all the other
companies. Such that Uber can gain an upper hand in its business operations. Some issues which
this company can have from using this strategy are that it will not be able to generate enough
revenue and will still not be able to decrease the prices below the local transportations.
Acceptability :
The main aim of the strategy used by Uber should be to satisfy the stakeholders. The
group of stakeholders of this company can be divided into three. Users, Providers and
Influencers. The users are the customers which will appreciate the cost leadership strategy as it
will provide them low cost rides. Providers are the company owners, share holders and directors,
the revenue generation will be less but will help the strategy will help in the growth of the
business. Lastly the influencers, these are the drivers and the loyal customers of the company
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which are not going to be influenced by this strategy directly but due to the increase in demand
will be benefited.
Conclusion
Analysing the entire report has been concluded that this report focuses on providing
external analysis about the industry so that various factors can be recognise who impact the
overall industry. Apart from this five forces which impacts the overall performance of the
industry has also been mentioned in this report. This report focuses on providing internal
analysis of the company and which it gives information about strength of the companies
weakness threats and opportunities so that somebody can easily overcome their weaknesses.
Strategy evaluation is also being mentioned in this report so that company can use appropriate
strategy and get growth in the market.
.
References
Books and Journal
Al-Sulaiti, G., 2020. An Investigation of Multisided Digital Platform Boundaries (Doctoral
dissertation, University of Cambridge).
Basu, A., 2019. Viability assessment of emerging smart urban para-transit solutions: Case of cab
aggregators in Kolkata city, India. Journal of Urban Management. 8(3). pp.364-376.
Borowiak, C., 2019. Poverty in transit: Uber, taxi coops, and the struggle over Philadelphia's
transportation economy. Antipode. 51(4). pp.1079-1100.
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Heimes, M., Tipold, A., Ehlers, J. and Dilly, M., 2020. Simulation-based medical education in
veterinary medicine: SWOT analysis of a clinical skills lab. Berliner und
Münchenertierärztliche Wochenschrift.133(1/2). pp.74-85.
Kokotilo, C., Derian, E. and Graf, S., 2018. UberECO: sustainable ridesharing.
Lacaze, A., 2020. Adding value to the VRIO framework using DEMATEL (Doctoral dissertation).
Piracha, A., and et.al., 2019. Racism in the sharing economy: Regulatory challenges in a neo-
liberal cyber world. Geoforum. 98. pp.144-152.
Pollio, A., 2019. Forefronts of the sharing economy: Uber in Cape Town. International Journal
of Urban and Regional Research. 43(4). pp.760-775.
Stalmašeková, N., and et.al., 2017. The impact of using the digital environment in
transport. Procedia engineering. 192. pp.231-236.
Viswanadham, N., 2018. Performance analysis and design of competitive business
models. International Journal of Production Research. 56(1-2). pp.983-999.
Online
Frue, K., 2017. Pestle analysis on Uber.[Online]. Available through:
<https://pestleanalysis.com/pestle-analysis-uber/>
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