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Uber Strategic Analysis

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The firm Uber also follows the Ansoff matrix and using the all four strategies within the respective and innovative way to reach every customer with their unique services. Its corporate strategy involves the following:

Market penetration:

Uber has diversified its services to many levels, it engages in market penetration via application of various sale promotion techniques. These incorporate conveying promotion codes to enable clients to have a markdown for their next ride and “Uber VIP” unwaveringness program that prizes riders with extraordinary access to most noteworthy valued drivers. In addition, clients can acquire free rides by welcoming their companions to join and ride with Uber.

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Product development:

This engages in providing the new products or services to sell to the existing customers. Uber has been involved into taking this strategy to various levels, the international transportation technology steadily rises its service array. Presently, its broad variety of services include Uber X, XI, Pool, Go, Auto, Access, Moto, Premium and Rush. Uber also offers UberKIDS and it provides a car having the child safety seat, it also serves the UberBlack which offers a black luxury car.

Market development:

Uber at the beginning launched only in San Francisco in 2009, but now it currently operates in more than 760 cities worldwide. It is further planning and expected to be expanded in new market growth under the new CEO Dara Khosrowshahi. However, the business sectors that constitute the biggest offer of its client base and incomes are US, China, Brazil India and Mexico.

Diversification:

This is considered to be the dicey strategy because initially they started only as a taxi company, but later the ride-hailing firm entered takeaway food delivery segment with Uber Eats. Initially Uber Eats launched in 10 cities. This was a total different move of Uber and you can argue that the market was different too but, however, you can also argue that the move is less risky due to its current involvement with creating and advancing application based buyer facilities.

Business Strategy:

Porter’s generic strategies spread out two methodologies for market development – Product differentiation and Cost leadership (Johnson et al., 2014). The achievement can be ascribed to the mix of these strategies, bringing about more accomplishment than organizations utilizing one system (Downes and Nunes, 2013). Uber also follows these strategies for its market expansion.

Cost leadership:

Not at all like other customary taxi organizations, has Uber taken a little slice running for the most part between 5 to 20%. It doesn’t enlist full time riders or rides however utilizes the systems organization impact to develop its number of drivers. Any individual who claims a vehicle and can drive can turn into a driver for Uber and win cash working low maintenance. In this way, this permits cost cutting on framework and support. Thusly this advantage can be passed to the two drivers and rider which enables Uber to charge bring down expenses and without acquiring any budgetary misfortune.

Product differentiation:

Uber provides with a choice to the riders to select their preferred ride in terms of the comfort range from low-cost UberX to the premium Uber Black. It is the Uber app that allows the riders to connect to the driver’s device to pay for the ride and rate their experience harmonizing to their convenience.

SWOT Analysis of Uber

For the internal analysis, SWOT analysis can be carried out:

Strengths of Uber

Uber is a highly perceived Brand Globally with nearness in more than 50 nations. Uber is relied upon to develop quickly in the coming years. It is as of now esteemed at over $68 Billion. Uber has also preserved its high service level whether in terms of ride or customer service. The drivers are qualified to be respectful and welcoming and it also contains new and well-organized vehicles.

Weaknesses of Uber

In the past few years Uber has been in a lot of negative controversies, besides of being appreciated on being customer friendly it also has been hated by the existing business. The existing businesses lost a quite amount of their regular customers to Uber. Also it at least requires an internet connection to use the app which is convenient for the adults but not for the elderly generation.

Opportunities of Uber

Middle class consumer’s income has benefitted Uber, because it is mainly used by the middle class consumers or the tourists. Uber can merge into partnership with the hospitality and hotel brands to help and serve the millions of tourists because the tourists are mainly in a need of the taxi services while staying at the hotel.

Threats for Uber

As competition rises, it can become more difficult to retain customers and drivers for Uber. Due to the monetary advantage can easily sway the customers or drivers away.

VRIO analysis

Value: When it comes to value the competencies of Uber, they use their surging the price method, which allows them to increase their price when the demands are higher than the presence of drivers.

Rarity: While all Uber’s competing firms have taxi cabs, drivers etc to achieve their competitive advantage, Uber definitely has its patent on its price surging method which allows it to take the lead on environmental opportunities and threats.

Imitability: Having a patent technology does not make Uber completely safe from being imitated, especially when you have such appealing business model and everybody wants to be the next Uber. However, for the patent process it takes a firm to expose its information about its products, thus making it automatically difficult to imitate the product or service.

Organization: Uber being a popular ride-sharing company also needs to compensate on its resources and the drivers. However, 80% of the people recommend their friend on working with Uber, but it clearly gives less compensation to its drivers. For example, Uber driver makes 3 to 30 dollars per hour, but an average driver is compensated over 14 dollars only. This is 25% less as compared to the Lyft ride sharing company.

PEST ANALYSIS

For external analysis, PEST analysis needs to be done:

Political factor: Uber ignited some controversies globally, ever since Uber has come out it had some disruptive effect on many existed taxi businesses. This has offered arise to restriction which even turned political at a few phases.

Economic factor: Uber is influenced by and influences monetary components. Sharing economy has created work for individuals on a vast scale who might some way or another were looking for employments all over the place. It has made exceptional occupations and produced work for countless.

Social factors: Riders enjoy the easy to access platform Uber provides. From choosing the appointment to pick-up time, everything has been made easy to access on smartphones and it requires no big deal of effort to book your cab, just a few presses of button. After enjoying their rides the riders telling their review to their fellows about Uber, and the word of mouth spread the awareness quickly.

Technological factors:

Uber indeed spread like wildfire through social media. People sharing their experiences online, encouraging other fellows to have the same experience and convenience. The consumers mostly look for the cheaper service and Uber fulfilled this need.

Section 2

Strategy Plan

The Mission:

“Make transportation as reliable as running water, everywhere, for everyone.”

Their mission is simply beautiful and unique in its own way I believe, which simply means that they want to reach out to every place possible. Whether there be a need of water or a person needs to go somewhere, Uber just wants to fulfill the necessity of every person.

The Vision:

“We build globally, we live locally. We are customer obsessed. We work tirelessly to earn our customers’ trust and business by solving their problems, maximizing their earnings or lowering their costs. We celebrate differences. We stand apart from the average. We ensure people of diverse backgrounds feel welcome. We encourage different opinions and approaches to be heard, and then we come together and build. We do the right thing. Period. We act like owners. We seek out problems and we solve them. We persevere. We believe in the power of grit. We don’t seek the easy path. We value ideas over hierarchy. We believe that the best ideas can come from anywhere, both inside and outside our company. Our job is to seek out those ideas, to shape and improve them through candid debate, and to take them from concept to action. We make big bold bets. Sometimes we fail, but failure makes us smarter. We get back up, we make the next bet, and we go!”

My take on their vision would be quite agreeing. They being customer obsessed is true because of their customer friendly behavior they’re achieving it right. Not to mention they’re always diversifying into newer places and opportunities. Uber’s also striving to fulfill more consumer needs on its own platform. UberEats, UberRush, UberHealth and UberEvents are some of the few diversified projects Uber has gone into.

Resources and competence analysis:

The Tactics: This analysis would be carried out under the tangible and intangible way. For the tangible resources, Uber does not really own its vehicles or doesn’t happily present their employees as their key tangible assets, however few of their tangible assets are computers, printers, offices etc.

The intangible resources include gigantic measures of information identified with general travel, Pickup areas, and drop off areas, travel times and minor departure from times for the duration of the day, Client profiling in light of time of movement, pickup and drop off area, recurrence, and administration level, Comparable examination for drivers, Innovation/IP identified with booking and charging and ongoing activity clog examination.

The objectives:

Uber’s objectives include three phases, one of which is to create a largest taxi network, connecting the riders with safety, reliable, convenient transportation providers at some affordable rates and every point around the world. Uber has achieved this phase of their objectives. The other phase is to make the world’s greatest P2P logistics stage, enabling anybody to either ask for or give physical conveyance of a myriad of merchandise and amenities. This phase is in progress. Move from 100% human-driven coordination’s to 100% machine-driven coordination’s. Benefit tremendously.

This ride-hailing company is definitely not short on flying high and thinking blue. In an article by Jamie Condlife, 2017, it stated that Uber’s aims are now set even higher. It wants to build an on demand urban aviation system. That indicate towards developing some flying cars. Uber seems to be completely serious about it that it has gone as far as publishing the white paper that details its ambitions and for that it’s calling it Uber Elevate. The organization imagines ventures being made by a “system of little, electric air ship that take off and arrive vertically.” But similarly as Uber doesn’t assemble the autos that its drivers right now utilize, it likewise has no aim of building these vehicles either. Rather it focuses to any semblance of Zee.Aero, Joby Aviation, eHang, and Terrafugia, among others, which are on the whole making idea vehicles that could in theory be up to the job.

All in, Uber trusts that Elevate could be taken off inside the following five to 10 years. That is massively driven, skirting on the extraordinary. Be that as it may, as Uber surely understands, it’s additionally extraordinarily appealing.

Key performance indicators:

So logical KPIs would come from estimating their system, for example, number of drivers by area, driver appraisals, and number of missed calls, driver turnover/dedication, reaction times, and so forth. For drivers best KPIs would be income and expenses. The general driver rating is only one of numerous components Uber considers while evaluating drivers. They have an entire rundown of Key Performance Indicators (KPIs) that they use to make sense of who’s in and who’s out. So when all is said in done, a key KPI for Uber is to quantify its drivers on consumer loyalty and other client related measures, for example, Overall rating, surge rating, non-surge rating, acknowledgment rate, abrogation rate, charge surveys per trip, add up to 1-star evaluations, add up to 5-star appraisals.

Network Orchestrators: In this performance indicator, the companies create a network, in which all the peers interact and share the value creation, this includes selling the products or services, building relationships, share the reviews, giving advices, collaborate and more.

Recommendation for KPI:

I would first suggest using the Demand and Supply, which would be how many users are online for the demand and how many drivers are on the road to supply it. This way they can measure the success rate and as well as the drivers rating each month. Second way I would suggest measuring that how many actual demands of rides have been made and how many rides have been done in an acceptable mode.

Section 3

Strategy Implementation plan:

Uber is very easy and reliable to use, the amount of drivers and customers they have is a proof that they’re implementing their plans right and they are definitely following the right path. Initially mentioned, Uber is currently following the two strategies very efficiently, Cost leadership and Differentiation. Unlike other transportation organization, Uber takes a small cut of ranging between 5 to 10 % from their drivers. It doesn’t procure full time riders or rides however utilizes the networking impact to develop its number of drivers. Any person who owns a vehicle and can drive can turn into a driver for Uber and gain cash working low maintenance. Along these lines, this permits cost cutting on framework and upkeep. Thus this advantage can be passed to the two drivers and rider which enables Uber to charge lower costs expenses and without acquiring any money related misfortune. The drivers are procuring additional cash and the riders are getting the opportunity to pay less and have additional accommodation. This is the way the cost leadership advantage is working in the support of Uber and has made it famous. Talking about differentiation, Uber in order to be unique in its own way has launched different services including the UberBlack, UberRush, UberEat, UberKIDS etc. This strategy is leading Uber to the heights of distinctiveness and people from anywhere can now access to any of these services. Another technology Uber is using, is their price surging technology. Uber claims it almost tons of times that their price surging technology is what Uber needs sometimes whenever the demand is high and the number of drivers are less. They also let their drivers know whenever they predict the demand is high or going to be high by sending the message: “We would never tell you when to drive, but we’re pinging you to let you know that demand is super high right now and also probably will be this weekend.”

Loyalty program:

Not many shoppers know that Uber’s marketing strategy has included a customer loyalty program for about two years now. “UBER VIP” specifically for those who are actually loyal. Meaning, for the customer who’ve taken over 100 rides. The main tangible benefit of the program is that the VIPs will get the access to the highest-rated drivers. Though, this program also implies the commitment to and a thankfulness for these returning customers, who surely feels proud that they’re important.

Communication methods:

Uber marketing communication blend includes print and media publicizing, deals advancements, occasions and encounters, advertising and direct promoting. Uber marketing communication blend is planned to associate utilizing Uber facilities with cost-proficiency, adequacy and accommodation.

Print and media advertising: Uber utilizes conventional print and media promoting sparingly, for the most part focusing via web-based networking media and verbal advertising channels. Nevertheless, the worldwide taxi innovation organization still uses TV promotions, daily papers and magazine advertisements, publications and standards in chosen areas.

  1. The ride-hailing monster is known for unpredictable promoting strategies. These incorporate putting promotions on rambles and having them insult drivers stuck in rush hour gridlock in Mexico City.
  2. Marketing effort “Boxes” as similitude for exorbitant congested roads in Asian urban areas, where the advertisement proposes ridesharing as a key piece of the arrangement has been applauded as inventive and appealing.
  3. In the meantime, Uber’s utilization of publicizing has turned out to be questionable in a few occurrences. For instance, an announcement in Egypt which says “I got away from driving my relative home 64 times” was observed to be hostile by nearby people.

Through sales and promotions:

Promo codes: The promo codes are distributed among the users allowing them to get the discount on their next ride.

Another way of communicating to their external stakeholders or consumers, Uber clearly bets on using the social media platform and word of mouth. Their focus other than having the good professional drivers and the flawless vehicles is centered on the app. Not having any difficulty on selecting your next cab and driver other than the regular taxi ride where we need to carry the money with us is the Uber’s main advantage in their communication strategy.

Recommendations:

Throughout the analysis I figured that Uber besides having the advantages and all the positive fame, it also had some ups and downs and mishaps. Uber has faced some serious criticism over its handling of issues like sexual assault by drivers or passengers. What I recommend is that they first need to have a complete background analysis of the driver before hiring it and if by chance the driver turns out to be the harasser then they need to take an immediate action, if vice versa then they should support their drivers and reward them on being patient and professional drivers. Other thing I would recommend to Uber is that they should hire some quality people for the post of government relations issues. Any upcoming or new law the government put forward should be handled by these people very considerably and intellectually. Last thing, Uber is growing their business on a vast level, so the chances and danger they can have of the rival’s services are also high because every business wants to be the next Uber nowadays, so Uber should continue with their efforts and continuous innovative ideas and inventions in order to stay on their competitive advantage.

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