Uber's Business Strategy: Macro and Micro Environmental Analysis

This report provides a comprehensive analysis of Uber's business strategy, examining the impact of macro and micro environmental factors on its operations and growth. The report delves into the importance of business strategy, highlighting its role in achieving organizational goals and objectives. It utilizes various frameworks, including stakeholder analysis, PESTLE analysis, Porter's Five Forces model, Ansoff's growth vector matrix, SWOT analysis, and benchmarking analysis to evaluate Uber's external and internal environments. The report further explores Uber's internal capabilities using the McKinsey 7-S model, emphasizing the significance of internal analysis in formulating effective strategies. The analysis covers market penetration, product development, market development and diversification and the strengths, weaknesses, opportunities, and threats. The report concludes by emphasizing the importance of aligning strategies with organizational objectives and the need for continuous adaptation to changing market dynamics.

Business Strategy

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 1............................................................................................................................................3
P1 Analysis the impact of macro environment on organisation and its strategies......................3
TASK 2............................................................................................................................................8
P2 Analysis of internal environment and capabilities of organisation........................................8
TASK 3..........................................................................................................................................12
P3 Applying Porter’s Five Forces model for evaluation of competitive forces in market.......12
TASK 4..........................................................................................................................................14
P4 Applying a range of concepts, models and theories, interpret strategic planning in
organisation...............................................................................................................................14
CONCLUSION .............................................................................................................................16
REFERENCES..............................................................................................................................17
Books and Journals:..................................................................................................................17

INTRODUCTION
Business strategy is refer to a plan that developed by management of organisation for
achievement of desired gaols and objectives (Fernandes, 2017). Every company has certain gaols
and objective that they want to achieve effectively. It can be achieved with the help of business
strategy because it is the road map for organisation that how they can achieve their targets. In
business strategy they make all plans related to organisation. It is the combination of all actions
and decision that taken by firm in order to achieve their desired target market. Continuous
increase in competition, business strategy become a important element that should be prepare
after evaluation of each elements of business. It is helpful in reducing the risk of uncertainties for
organisation. There are many factors that can be affect on organisations' operations and
functions. So that's why business strategy is important for success and growth of organisation. In
this context, Uber is undertaken for analysing the factors that can impact on organisational
growth. Uber is an American international organisation which established their business in
March, 2009 that run their business very well. They provide cab services and food delivery,
couriers, etc. to public. Uber is one of the organisation that face very hard situation but their
strategies help them to handle situations. This report analyse macro and micro environmental
factors that can impact on organisation. It also covers strategies that help in overcoming with
these issues.
MAIN BODY
TASK 1
P1 Analysis the impact of macro environment on organisation and its strategies
Business strategy is very important and essential element that should be make properly so
that organisation achieve their goals and objectives (Polemis and Stengos, 2019). Uber is the
largest company of gig economy that successfully run their business. It is found that they have
approximate 67% market share in ride sharing and remaining in food delivery. They achieve this
position on the basis of their business strategy. There are some reasons that why business
strategy is important for organisation:
 It is the part of business plan so when company wants to make a plan so business strategy
helps in to accomplish the task (Horbach and Jacob, 2018). It makes a way or road map
in which Uber has a capability to achieve their desired targets.

 It also helps in finding of strengths and weaknesses of organisation in the process of
business strategy. In a business strategy, organisation need to know their strengths and
weakness so that they can formulate plan accordingly.
 With the help of strategy Uber achieve their target with efficiency and effectiveness.
 Uber can take competitive advantage with the help of business strategy. They make best
strategies and plan to beat competition.
For effective business strategy, it is found that Uber always kept in their mind that their
strategy meet with their main objective and goals (Blitz and Kazi, 2019). So that's why
organisation need to know their mission and vision then make strategies. Uber's mission and
vision statement given below:
Vision:
“To make most trustworthy brand of cab services with the help of safe ride.”
Mission:
“To grasp opportunity with the help of moving all over world.”
Objectives:
 To build a best relationship with customers with the help of best services.
 To become a dominant in the market so that they can earn higher profits.
 To give transportation services to each and every individual.
Business strategy plays a significant role in organisation because it helps in achieving
organisational objectives and goals (Roscoe and et. al., 2019). Strategy provides a structure or
framework for firms' operations or functions that how employees can perform their duties and
responsibilities. Uber make their strategy in which it include all activities that are related to
operational functions. It also provide clear direction to each and every employees of organisation
so that they doesn't feel any ambiguity related to their job role. It increase organisational
effectiveness that leads to higher productivity and profitability. Uber make their strategy only
after analysing the macro environmental factors because they are uncontrollable. Macro
environment analysis can be done with the help of some important frameworks that are given
below:
Stake Holder Analysis
In strategy organisation should firstly need to perform stakeholder analysis so that they
can get approval from changing of business strategy (Tingbani and et. al., 2020). It is the process

in which organisation need to identify stakeholder before taking any decision regarding starting
of any project. It also covers the grouping of same level person so that they can assign duties and
responsibilities according to their level. It help in clearing all ambiguity and make effective
communication so that they can achieve their targets.
Stake Holder Matrix
Stakeholder analysis helps in creating and building stakeholder mapping in which
organisation need to laying out all things that are related to stakeholder in a one map. It is
analysed that people are getting confused worth the word of shareholders and stakeholders. So it
is very necessary for people that they should the different between both terms. Stakeholders
perform their duties on granular level whereas shareholder are the person who invest in project
and have a right to take some decision.
PESTLE analysis
PESTLE analysis is the important concept that help in identifying and analysing external;
or macro environment factors (Payne and et. al., 2020). Uber is the company which run their
business at global level. So that's why it is important that they analyse external factors.
Political factors:
Uber is the American company so that's why they have opportunity to their business very
well because they have strong political stability. They has less fear of terrorism so that's why
Uber run their business continuously in an efficient manner.
Economical factors:

Economical situation of US is very good because they have a high growth in their
economy (Franco, Hussain and McColl, 2019). Uber is the part of US so they has less risk of
uncertainties.
Social factors:
Uber's customers enjoy their rides because it is easily available in market. Customers
don't need to contact too much with Uber so it is identified that organisation's customers enjoy
their services.
Technological factors:
It is a threat and opportunity for Uber because if organisation do not adopt new
technologies in their cab services. Then it becomes essential for organisation to accept the new
changes in organisation so that they can achieve their desired targets and goals.
Legal factors:
Uber cab services should follow all traffic rules so that organisation make their best
position in the market place. Legal factors are important for Uber because they provide services
to public.
Ecological factors:
Uber use cars, bike, auto, etc. that emits pollution which harm the nature. So it becomes a
threat of organisation that they should consider emission of pollutants in environment. It is
opportunity also if Uber use those cars that doesn't emit pollutant gases.
Porter's Five Forces Model
It have mainly five forces that are mentioned below:
Threat of new entrants:
While organisation make business strategies then they should know the information about
new entrants (Rahimi, Møller and Hvam, 2016). Uber is the service providers which need to
make strategy only after analysis of new entrants because it increase competition.
Bargaining power of suppliers:
Uber has low bargaining power of suppliers because of their brand equity. They don't
need any suppliers so that's why they have low bargaining power.
Bargaining power of Buyers:
Uber already fixed their charges when a person book their ride. So that's why they have
low bargaining power of buyers.

Threats of substitute:
Threat of substitute refers to fear of switching to another company by customers. It is
analysed that Uber has more threat because of competitors available in market.
Rivalry:
There are many competitors are available in the market that give tough competition to
Uber. So it is necessary for organisation that they should identification of competition in the
market place.
Ansoff's growth vector matrix
It is also known as Product/Market Expansion Grid that is used for planning and
analysing strategies for success and growth of organisation (Dobni and Sand, 2018). In this
matrix, it have four strategies that are mentioned below:
Market Penetration: This strategy has main focus on increment of sales with existing
product in existing market.
Product Development: It is the stage in which organisation focuses on launching of new
products in existing market.
Market Development: In this strategy, firms focuses on entering with existing product in
new market.
Diversification: The last but not least strategy in which companies enter with new
products in new market.
SWOT analysis

SWOT analysis is a tool that helps in identifying and analysing internal factors that affect
Uber's operations and functions.
STRENGTHS WEAKNESSES
 Uber is the valuable brand that provide
cab services.
 They has high standard in their
services.
 It lacks in relationship betweens drivers
and Uber.
 There is lack of bond with customers of
organisation.
OPPORTUNITIES THREATS
 It capture overall market where taxies
are not available.
 They can be use economic or cheaper
electric vehicles.
 Low profit margins increase the
dissatisfaction in drivers.
 Increasing competition leads to
decrease in profits and prices.
Benchmarking analysis
It is the process in which Uber perform research which allows organizations for doing
comparison with their existing performance to others (Dawson, Ginesti and Sciascia, 2020). It is
beneficial for company when organisation make strategies for success and growth of business.
There are four steps of benchmarking that are mentioned below:
 Planning
 Analysis
 Action
 Review
From the above discussion it is analysed that organisation should apply these tools and
techniques when they are tried to prepare business strategy. It is important fort organisation that
they need to identify all factors which can be affect on organisational' strategy.
TASK 2
P2 Analysis of internal environment and capabilities of organisation
Internal analysis is also important in the same way such as external analysis is important
while making business strategy. Uber analyse all the factors that are controllable and in hand or
organisation. It is important for Uber that they resolve their internal problems so that they can

make best strategy for their success and growth (Demirel and Danisman, 2019). Organisation
should know their capabilities so that they can make their strategies accordingly. Business
strategies find all capabilities with the help of internal analysis. Organisation can identify their
internal capabilities with the help of following management tools:
McKinsey 7-S Model
It is the model in which organisation identify their 7s with the purpose of evaluation of
internal capabilities. It is the model in which Uber analyse “organizational design.” So that they
can take decision regarding strategy. Their main components are staff, skills, strategy, structure,
systems, styles and shared value. It is the model in which organisation need to analyse them and
try to improve so that they all become their key elements.
All of these elements that are shown in above figure is bifurcated in two segments such as
soft elements and hard elements:
Hard Elements
Strategy: In this element organisation shows the purpose of their business and way in
which organisation get clear directions to fulfil their targets and goals.

Structure: In this element, firm shows the division of activities, mechanisms and
integration.
Systems: It shows a procedure in which organisation perform their activities in a
systematic manner so that functions are smoothly done.
Soft Elements
Shared Values: Uber should know their values so that their strategy met with their
objectives and goals.
Skills: Skills are very important for success and growth of organisation, a business
strategy needs skilful employees so that they can implement strategy in practical situation.
Staff – Human resource plays a main role in successful implementation of business
strategy because if they are not agree or satisfied with the situations then they can achieve their
targets and goals.
Style – It is the behaviour of top management that how they can traet with their
employees so that they get maximum productivity.
VRIO
Organisation can analyse internal factor with the help of VRIO analysis (Hunt, Watts and
Bryant, 2018). VRIO is the tool that helps in identification and analysis of internal strengths and
weaknesses. They have fours components that are value, rare, imitable and organized.

Valuable: It is the first element in which organisation find their value in their products
and service that are provide to customers. Uber has strong financial resource that become their
valuable. Because it help in ointment in many activities such as Uber can be invest in more food
delivery so that their customers get satisfied and enjoyed Uber's services.
Rare: Uber's financial resources and employees become rare element because financial
resources is not a easy task for organisation. Firm cannot pool money easily so that's why it
become rare element.
Imitable: It is analysed that food products, financial resources and employees are not so
costly that cannot be imitable, they are easily imitable. But patent of Uber is not easily imitable
because in legal terms it is not allowed to imitate their patents.
Organisation: From the analysis of Uber's VRIO, distribution network is more organised
so that's why they give best services to customers.
Value chain analysis
It is the process in which firm identify primary activities which add in value of their
services and products. It helps in reduction of cost so that organisation can make their best
business strategy (Rivera and Clement, 2019). It also helps in making their products differentiate
so that they can take competitive advantage.

From the above figure, organisation can able to perform those tasks that helps in
increasing their values. Uber can generate values in their service so that they can attain their
targets. It increase the value of products which helps in increment of profitability of organisation.
It is identify that organisation need to raise their brand value so that customers get more attracted
with their brand value.
Cost-benefit analysis
It is the process in which organisation used this tool for measure the benefits from their
decisions and minus the cost from their action. It includes all measurable financial metrics so that
they can analyse the situations. It is very important for organisation because it helps in
identifying the liquidity of organisation and take actions accordingly. When organisation wants
to take a decision regarding for new project then it is important that they should analyse the cost
and then take decision. It is used for taking right decision and save from wrong opinion. Every
project has certain cost so it is necessary for organisation that they should analyse their cost and
profits from each projects (Campbell and Park, 2017). There are some steps that should take in
consideration by Uber while trying for any new projects. Those steps are given below:
 First step is to identify cost and profits so it can be categorized in one group.
 Calculate the cost with the life of project so that they can accurate estimate their cost.