Business Strategy -Power Point

Uber Technology, Inc

Introduction

Travis Kalanick and Garrett Camp could not get a ride in cold winter of Peris, this is time to think about a smart idea, that is exactly the idea for Uber , this is time that idea was born, so very soon with a heart of entrepreneur they came created a smartphone app, where people instead waiting for taxi, so taxi will wait for them.

Uber Technologies is an application-based platform for transportation, with its headquarters located in San Francisco, California. The company was launched in 2009 and its founders are Garrett Camp, Travis Kalanick. Uber is popularly known as the pioneering business of ride-hailing. However, in 2016, Uber had acquired Otto, a Silicon Valley start-up, whereby it incorporated its software and hardware into a self-driving truck.

Situation Analyses

Uber is a public company that offers ride-hailing, taxicab, as well as transportation, and food delivery services. Uber offers unique services such as Uber freight a service for truck drivers and transportation companies. Uber also offers Uber med which service offers a unique service to delivery medicine from pharmacies. Also, Uber is in first step to offer grocery buying and delivery, which service is offered in Canada.

Uber has attempted to Grubhub a food delivery company but failed due to not reaching agreement. But very soon Uber in reached an agreement to buy Postmates for $2.65 billion in stock. This deal will make Uber stronger in market. Uber is planning to keep Postmates separate from UberEats, so it makes service more efficient in market.

Mission/vision analysis:

Uber’s vision is to bring in the future with development and implementation of automation technology (self-driving) and with air transportation in urban areas for example in New York City Uber offers Helicopter Service from Manhattan to JFK Airport, with very affordable price and finger tips, and one request makes them all, just request uber to JFK, by helicopter, so you will have car to heliport and then fly with helicopter to JFK Airport, and then Uber Car will wait for you to take to terminal, all by one click on the uber app. Along with ride-hailing, the mission of Uber is to achieve faster and affordable food ordering, removal of healthcare barriers, creation of new solutions in freight-booking, and also providing companies with a seamless travel experience for their employees. Uber is constantly improving their board and governance oversight, to build a more cohesive and strong management team, and ensure long-term commitment. Uber wants to optimize for customer happiness and loyalty but would also take up short-run financial sacrifices if clear benefits are observed in the long-run. Uber is committed to safety and is involved in creating new standards to technology development for reducing any incidents affecting the safety factor.

Internal analysis of the following:

Strengths 

Uber has become the largest technology for ridesharing, in the world. It was among the first applications for ridesharing across the world. Uber has kept up with a strong brand recognition across over 50 nations. Uber is continually striving to incorporate new features, for enhancing its services in the future. Uber operates on low cost of operation, that is, low fixed investment. The company is expanding at a fast rate. Uber has consistently followed the strategy of dynamic pricing, with higher the demand leading to higher price rates. Uber’s adaptive nature is greatly recognized worldwide. Uber has been able to gain trust and be reliable due to blending with different nationalities and cultures. Uber charges lower prices as opposed to conventional taxis. Uber offers prices per minute and per mile, both for idling and moving, which has benefitted the customers. The business structure is ideal for an interaction between the customer and the driver, with an available rating system for both.

Brand name in less than eight years Uber was able to write history and became largest private company in United States. A business model that changed the transportation for good, from classic hailing taxi to fingertips, instead waiting for a taxi, driver will be waiting for you. This has changed the way of transportation first in United States and later in entire world. App created as triangle Business (Uber) – Employee (driver) – Costumer (rider) through internet and mobile. Uber app is very easy to use (almost everyone has one in their phone), from riders to drivers. Think about few years ago, before GPS, and before internet, and before smart mobile technology, if you are from California or any State other than your State, City where you live, if you had to travel by car, then it was not easy, you had only two choices to use paper map or ask someone, either way time consuming, and not accurate.

Professional Standard of service verified drivers – Uber has made a big change in aspect of safety. They have offered safety feature such as 911 option for riders and drivers. During the COVID-19 Uber is asking drivers not to pick up riders without mask. There is ad going on “NO MASK, NO RIDE”. Uber is dedicated to safety of drivers and rider. Uber is offer sick pay for effected drivers, if a driver has been impacted by Covid19 and has report from doctor that he/she is positive, then Uber is going to deactivate drivers account for 15 days and is going to offer sick leave payment. Uber has lunched an feature to test drivers before they turn app to drive by asking them to take live picture to make sure if driver is using face mask, so if Uber driver takes a picture without the face mask, he/she cannot go online, so also they have to answer question about current health situation, by asking them are fit to drive, do you have fever, and I there anyone in you house has been sick due to Covid-19, so this is driver statement, before they go online, any time and every day since June 15th 2020 (Uber).

Weaknesses – 

Uber has been involved in several controversies, which harms the reputation of the brand. This results in a significant loss of customers. Uber has faced substantial losses since its foundation while trying to outgrow its competitors. The company had started offering bonuses to drivers and discounts to customers which resulted in a significant net loss.

Uber is heavily dependent on its own workforce and the internet, which has not been an advantage. Wrong behavior of drivers has often defamed the company. Uber had faced a serious backlash from the public when it set a high price during Hurricane Sandy. This had forced Uber to reform its policy. Scandals has bring in to attention of public a revolutionary founder of best ride app, to most heated person in the world. For eight years uber Kalanick’s leadership Uber earned negative publicity not only in US, but all over the world especially from Taxi drivers, because of way of operation

Financial analysis of the current year suggests that the year 2020 might not be profitable for Uber, owing to quarantine order for handling the pandemic. Therefore, the growth of ridesharing has been the lowest among all other segments of Uber. Also, the company is stated to have a significant amount of unrestricted cash, but despite this, can incur heavy losses during the quarantine period. Uber needs to raise required money and increase its market capital, before it can make profits.

 

Internal   Factor Evaluation (IFE) Matrix

 

Company   Name: Uber

 

Key Internal Factors

Weight

Rating

Weighted Score

 

Strengths

 

1)   Uber Brand Name

0.09

4

0.36

 

2)   Professional Standard of service, verified drivers

0.09

4

0.36

 

3)   Growing Customer loyalty

0.09

3

0.27

 

4)   Low cost carrier

0.05

3

0.15

 

5)   Diversification; Uber Rideshare, UberEATS, Uber Elevate, Uber Fright, Uber   Meds, Uber work

0.09

4

0.36

 

 

Weaknesses

 

1) Scandals

0.08

2

0.16

 

2) Poor Employees moral

0.04

1

0.04

 

3) Competitive

0.05

2

0.06

 

4) Dependency in workforce and internet

0.08

2

0.08

 

5) Very unpredictable business model

0.08

2

0.16

 

 

TOTAL:

0.74

2.12

External analysis of the following:

Opportunities –

Uber has a lucrative opportunity to improve its services by focusing on performance and accountability parameters. The tracking feature helps in identifying both high rated drivers as well as low rated drivers. Uber should continue investing in digitization and expand its customer as well as geographical bases. Uber should work on its potential of venturing into automation technology and other special services of transportation, such as ambulances and other emergency transports. Uber should focus on logistics and could think of launching their own moving and packing facility, as they do not face any resource shortage.

Threats –

Lyft, and Ola have proven to be significantly affecting the business of Uber, but this is only in ridesharing aspect, because Uber has other competitors in delivery business.

·        With increasing competition, retention of customers and employees can be a challenge for the company. The lawsuits filed by the drivers of Uber, against the minimum wage policy of the company, threatened the public image of Uber. Uber is experiencing lawsuits from employers and so-called partners (self-employed or drivers) that are most important capital for Uber. They are several lawsuits in California, followed by other like Massachusetts sued uber for disqualification of drivers a self-employed, so this could lead to other stated to follow same initiative force Uber to regulate drivers status as employees and pay employees benefits for them.

External Factor Evaluation (EFE) Matrix for Uber 

 

External Factor   Evaluation (EFE) Matrix

 

Company   Name: Uber

 

Key External Factors

Weight

Rating

Weighted Score

 

Opportunities

 

1.   Self-Driving car

.05

2.45

0.126

 

2)   Uber is laser focused in Market penetration

.10

3

.30

 

3)   Uber partnership with telecommunication companies

.05

1

.05

 

4)   Hybrid and electric cars and lower margins for drivers

.10

3.5

.35

 

5)   Expansion Globally

.20

5

1

 

 

Threats

 

1) Challenge with rules, regulations, and law.

.05

2

.10

 

2) Market penetration will force Uber to work with   lower margins.

.10

2.5

.25

 

3) Drivers key factor

.05

3.5

.176

 

4) In 2017 in late protest in New York City

.05

1

.06

 

5) Incentives to drivers and riders

0.5

2

.15

 

 

TOTAL:

1

2.562

Porter’s Five Forces:

·        Threat of new entry: At the beginning, when Uber was just launched, a high-startup capital implied that less rival companies would enter the market. But at present, when required capital investment is not that high, the rival companies can penetrate with much ease. Therefore, the threat of new entrants is very high.

·        Threat of substitutes: There are several companies that offer transportation services and can be immediate substitutes for Uber. The threat of substitutes is regular and high. Lyft, Ola and Didi are working hard to attract potential customers like ads on airport, highways, and public places and even though inside public transportation. Lyft has lunched very aggressive marketing, they have installed ads all over the places, inside public transportation, in airports, and in the other important places. Lyft has also created lines in LaGuardia Airport, so in moment that you have arrived at the airport, first thing is LYFT ads, and also they have signs to let people know where they are, also they have their special separations and lines for customers. Same thing in JFK airport, they have ads all over the airport. I have been able to see them also in very important landmarks, such as Disney Land in Orland, Florida. Uber in cooperation with CORNERSHOP is offering grocery delivery in Latin America and Canada. So Cornershop competitor Instacart instead competing, they have filed law suit against Cornershop (for intellectual property conflict or theft), because of fear that one day Uber will buy Cornershop just like last week Uber was able to reach a deal with Postdates (A delivery company just like Uber) for about $2.65 billion. So Uber is stronger in every aspect of market, and with new deal with Postmates, they have less companies to compete with.

·        Bargaining power of suppliers: The suppliers have a strong influence in impacting the performance of Uber. However, a large market share can result in increasing switching cost for the drivers. Also, the oil and gas suppliers have a high negotiating power in the operations of Uber.

·        Bargaining power of buyers: Customers are price-sensitive as there exists several transportation services to choose from. This leads to high bargaining power of consumers.

·        Threat of rivalry: Uber is operating in several countries, with varying competitors. Uber faces strong competition in the majority of the countries, for instance, Lyft in the US, and Ola in India.

Net Assessment and critique of the company’s potential:

The macro-outlook on Uber’s strategies represents not a very attractive picture. However, this company can increase profits by focusing on the potential of a large customer base which still remains untapped. Uber has resource accessibility to secure the untapped markets and customer base. If the company can withstand the stiff competition, then it can position itself at a higher level. Uber has the potential of a promising future. Uber can strive through effective marketing and expansion, at a global level. The company requires new leadership, with an accountable management for effective handling of future challenges.

 

References

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https://www1.nyc.gov/site/tlc/drivers/get-a-drivers-license.page

https://dmv.ny.gov/mydmv/mydmv

Etherington, D. (2016, August 18). “Uber and Volvo put $300M into building self-driving cars ready for sale by 2021”. Retrieved from https://techcrunch.com/2016/08/18/uber-and-volvo-put-300m-into-building-self-driving-cars-ready-for-sale-by-2021/

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