Category: Uber

Executive Summary

Undoubtedly, Uber is a game changer in the global taxi industry. However, two major issues emanating from poor governments’ regulations or lack of thereof and hostility from traditional taxi drivers pose serious operational risks to Uber. Nevertheless, Uber will survive and perhaps focus on technologies that are more advanced such as driverless cars to cut costs.

Introduction of Uber

Uber is one of the service tech startups to have obtained a global appeal with only six years in operation. The company has penetrated the world market due to its ability to narrow the gap that has been there in the transportation industry, especially in the world cities. Currently, it operates in 58 countries and has great potential for growth. Uber, which uses apps, aims at connecting drivers to clients and, thus, making movements within cities more efficient.

Uber International Inc. provides its services in collaboration with drivers who own private cars. The company creates and runs apps, which clients use to request curbs. Drivers then collect clients and ferry them to their desired destinations. Clients make payments using their credit cards, a method that is more appealing than the use of cash. Uber collects the transportation fees (about 20%-30%) and pays its drivers.

A management team, which is competent and conversant with technological dynamics and changes in public transport, heads the company. Their major role is to scan for market niches in cities’ transportation industries. The team then comes up with possible solutions. With great emphasis on values such as innovation and best talents, Uber has grown rapidly. Consequently, the team has set higher and greater goals like having self-driven cars to enhance efficiency transportation further.

Uber’s core competence

Though the taxi industry is quite competitive, Uber has services that are seemingly ahead of others. One of these aspects is the comprehensive approach, and the view it has on city transport. Using a combination of smartphone supported apps, GPS trackers, rating apps and online payment, the company has made quiet formidable work in creating core competence.

The ability to provide services to wide and varied markets has also given the company a competitive advantage. Uber has a global customer base alongside services that can easily be provided by any contracted drivers.

Uber offers customer- oriented services. That is, the customer tends to have added benefits. Customers opt for Uber because of convenience relative to regular taxi.

Uber has an edge over their competitors due to the type of employees it possesses. From the CEO, the top management to junior employees, Uber has a team that is visionary, innovative and aggressive with a focus on the global market. The annual rating of employees uses scores that have a direct influence on their compensation, bonus awarded and future referrals. This compels the employees to give their best and achieve greater success.

Competitive

Uber is ranked among the most valuable, aggressive startups globally. The company has achieved its competitive edge through its abilities to recruit and retain talented employees who are mainly innovative, talented executives and software engineers. For instance, Uber recently poached an expert from Google to enhance its mapping and geospatial capabilities.

The company has gained its competitive edge from technology. The company did not have to create every technology it relies on deliver services. Instead, Uber has harnessed the power of mapping, location, optimization for closet drivers, payment services, and feedback and rating services to create competitive advantage, which its competitors, traditional taxi failed to exploit. The company did not have to invent new technologies but leveraged cloud to gain access to them.

The company is not restricted with the taxi medallion system, but it relies on a global fleet of cars of willing drivers with minimal investments.

The company controls costs because it does not have full time drivers. Users can opt in and out at their own convenience.

Distinctive

The company also leverages smartphone and mobile capabilities to create distinctive advantage. Mobile technology has disrupted many sectors, including traditional banks and taxi industry. Before the introduction of Uber, the taxi industry enjoyed relative calm. Uber focused on taxi business but with greater convenience to customers. Uber continues to revamp its mobile app based on user reviews and ratings.

Consequently, the power of mobile technology has given the company few distinct advantages over its competitors. First, Uber is known for fast and reliable ride commanding based on GPS and mapping solutions. Second, Uber uses mobile payment for user convenience and simplicity. Finally, user rating and feedback are used to improve experiences.

Sustainable

Competition has intensified for Uber. For instance, new players such as Lyft, Flywheel and Sidecar have emerged based on the mobile on-demand taxi services. Some of these firms run on mobile ridesharing platforms. They are major competitors for Uber.

Financials

For fierce critics of Uber, its current valuation is wrong. For investors, the company recently recorded an operating loss of about $470 million with revenue of $415 million. However, the loss could be justified because Uber has become a global firm within few years after its launch. Thus, it is extremely early to claim that the business model is not sustainable. Overall, Uber will have to appeal to many customers and drivers to increase revenue stream.

Legality

Legal challenges are threats to sustainability of Uber. Globally, the company must deal with governments’ regulations and protesting traditional taxi operators. Thus, these challenges limit Uber’s ability to transform the global taxi market. Taxi drivers claim that Uber operates outside regulations on pricing and city by-laws and, therefore, it presents unfair competition.

In France, India, the Philippines, South Korea, the Netherlands, and Belgium among other countries, for instance, Uber must contend with crackdowns on its drivers while many accidents have been blamed on its unlicensed, inexperienced drivers. Thus, such lawsuits come with legal and reputational costs.

The UN Women, for instance, had to pull out of a deal with the company citing privacy, safety, and legal issues.

Given these challenges notwithstanding Uber’s rapid expansion and disruption in the global market, it is still difficult to determine the sustainability of its business model. Thus, it might also be difficult for Uber to maintain competitive edge.

Key trends to affect Uber in the coming years

Court decisions

Uber is most like to face several court rulings, which are most likely to be both favorable and unfavorable globally. California and Florida, for instance, rejected Uber’s claim that its drivers were independent contractors.

Uber also refers to itself as a tech firm with the sole purpose of connecting passengers and drives. This model will favor it in new markets while avoiding laws and regulations on labor relations.

With such rulings on drivers being employees, Uber must meet minimum labor requirements, including wages. Alternative, Uber may close its operations in hostile cities, states and nations.

Taxes

Governments currently are confused on how to handle tech startups because there are no adequate laws and regulations to account for their operations, taxation, and labor relations among others. Many governments now want Uber to pay taxes based on its revenues.

As such, Uber may be forced to increase costs of ride in the affected cities.

Uber Drivers face Risks

The so-called independent contractors face constant police harassment and hostility from other taxi drivers. Some countries have outright banned Uber, others call for stringent regulations while others refer to the carpool app as illegal.

Further, some airport authorities do not want Uber drivers while others have introduced access fees, which ultimate increase costs of operations.

Rapid globally expansion

Internationally, Uber will have to face some operational risks such as competition, for instance, in India where taxis could be many relative to other regions. In China, Tencent – a tech firm reputable for imitation, has already copied Uber business model through its Didi Dache app while also leveraging mobile phone payment. Thus, competition will erase Uber’s competitive edge.

Uber in the next ten years

Uber is most likely to survive once regulations are adopted. Consequently, Uber will focus on driverless cars in the future to cut operating costs while leveraging better technologies that would be available by then. Meanwhile, the company must contend with poorly defined government regulations and hostility from other taxi operators.

References

Alspach, K. (2014). Why Uber—and whatever is coming next—is really about the rise of APIs. The Boston Globe. Web.

Hyder, Y. (2014). Uber’s Evolution: From San Francisco to International Disruption. Information Technology & Solutions. Web.

Lee, D. (2015). Is Uber’s Growth Sustainable? The Market Mogul. Web.

Marshall, J. (2014). Understanding the Economics of Uber. Web.

Uber. (2015). The Company. Web.

Wingard, J. (2015). What Uber is getting right that other startups aren’t. Fortune. Web.

The article titled “Job Licenses in Spotlight as Uber Rises” was found on the New York Times news portal in the Economy section. The author of the article Eduardo Porter raises an important question about the demand for license in some professional fields. Porter notes that getting a license certainly has a purpose, yet this purpose is rather different from what it is believed to be.

The author starts with the exploration of the outcomes that occurred since Uber gained popularity in New York. The appearance of this service quickly revealed that the population appreciates the ability to find a driver online and have a cheaper ride with an Uber driver-partner instead of calling a much more expensive cab with a licensed cab driver. As a result, cab companies are gradually put out of business.

After discussing Uber and its impact on cab drivers the author moves on to discussing other professions that require licenses among which there are dental assistant, cosmetologist, locksmith, athletic trainer, and emergency medical technician. The author admits that demanding a license makes a lot of sense in cases where a certain specialist in responsible for their clients’ health and welfare, for example, a surgeon is to be appropriately qualified and licensed to be allowed to practice medicine (Porter par. 5).

At the same time, in a business such as cab transportations licensing serves mainly to raise the prices and create boarders around the profession. In the article it is pointed out that the difference between the cost of the services performed by licensed professionals and the same services provided by their unlicensed peers often reaches fifty per cent or even more.

The author uses the dentist professionals as an example and notes that licensed dentists perform teeth whitening procedures for 350 dollars while their unlicensed competitors provide the same services for only 150 dollars (Porter par. 28).

In the article it is noted that licensing is believed to be the practice directed at the protection of the safety of customers and the preservation of quality of the services. Yet, in reality, when licensing is implemented the rates of malpractice and errors do not become lower, the quality of services also remains the same. The major aspect that is affected by licensing is price.

This way, licensing harms the customers instead of protecting them. Low income individuals suffer the most because as prices rise they become unable to afford certain services (Porter par. 7). Moreover, the unreasonable demand of licenses that has grown significantly over the last several decades is one of the sources of unemployment for the unlicensed specialists.

Millions of job opportunities could have been created if only licensing policies were milder. The administration of the President is worried by this tendency, this is why the costs and benefits of licensing in various fields should be studied and properly evaluated. In the article it is emphasized that that “the workers that can do the job should be able to get the job” (Porter par. 11).

In conclusion, licensing is a necessary practice for a number of professions such as doctor, cook, teacher, or personal trainer. At the same time, when licensing is applied unreasonably it starts to harm both the workers and the customers since the former start having issues with getting employment and the latter stop being able to afford the services. Both of these tendencies can be inverted once the policy makers start paying more attention to the costs and benefits of licensing.

Works Cited

Porter, Eduardo. Job Licenses in Spotlight as Uber Rises. 2015. Web.

Executive Summary

The Uber and Airbnb are companies that entirely depend on the internet to carry out business activities. The companies have grown from simple to complex online businesses that have a strong customer base. The two companies, alongside their competitors, have grown to more than 40 countries and offer very competitive prices. The Uber, Lyft, and SideCab offer ‘ridesharing’ services to customers across the US through the use of Smartphone technology.

On the other hand, the Airbnb, HouseTrip, and Travelmob companies offer customers opportunity to rent out lodging from the comfort of their homes, offices, and any other place that has internet connectivity. The companies have advantages such as competitive prices, convenience, expansive market coverage, low operational costs, and variety of products.

However, their internet model is a challenge to the traditional business model and government regulations since the online mode of operations are subject to challenges such as customer insecurity, vulnerability to abuse and manipulation, misrepresentation of products, and non-binding transactional relationship. As established in the research, companies stuck on the traditional business model oppose the two companies because of unsteady customer security and inconsistency in following government business regulations.

However, the benefits of the internet platform are better than that of the traditional platform. In order to address the concerns raised, the paper recommends integration of a Secure Online Shopping System (SOSS) to guarantee customer security and consistent government regulations.

Introduction

Purpose or overview

The purpose of this research paper is to establish the benefits of the internet business platform of the Uber and Airbnb, alongside their competitors such as Lyft, SideCab, HouseTrip, and Travelmob, to customers in the form of convenience, affordability, and diverse services. At the same time, the paper will establish the threats that the internet platform of the two companies poses to traditional business practices of their competitors and government regulation for customer protection.

Specifically, the research will attempt to explicitly establish the scope of online business for the Uber, Lyft, SideCab, HouseTrip, Travelmob, and Airbnb, their method of business operation, the conveniences they guarantee customers, threats that their internet platform have on traditional business practices, and the fundamental consequences upon society and culture.

Background or the problem

The Uber and Airbnb companies have been very successful in their internet business models. Founded barely five years ago, the Uber Company has been very successful in expanding its customer base in the ridesharing service across the US and in more than 45 countries. Due to a large customer base and ability to serve many customers every day, the Smartphone technology-based ridesharing business has passed all the traditional taxi companies in the US and is currently valued at US$18.2 billion.

Specifically, the UberX program, which targets all drivers across the US, has vigorously increased the company’s market segment. Since the overhead costs are low, the company has managed to offer very low prices (Uber, 2014). Besides, the lack of government regulations, the prices offered by the company cannot match with those of the traditional business taxi operators.

As a result, there has been protest from taxi companies, taxi drivers, and different representative bodies who are convinced that the Uber Company, alongside its competitors such as Lyft and SideCab, are illegal taxi operators with an unfair and unethical business model, which has real threat of customer security compromise.

Founded barely six years ago, the Airbnb operates on a similar internet platform and has expanded to more than 192 countries. The company’s website provides potential customers with the opportunity to rent out their premises as lodging to any interested party. Same as the Uber model, the Airbnb and its competitors such as HouseTrip and Travelmob have tremendously benefited from the increased market, competitive pricing, and customer convenience.

However, the same concerns of compromised customer security and lack of government regulations have been raised by traditional lodging service providers, who believe that these companies are illegal lodging service providers with unfair and unethical business model since their low overheads have made them to lower prices to unreasonable levels (Airbnb, 2014).

Apparently, there are similar and serious complaints by traditional companies offering the same services as those of the Uber and Airbnb, alongside their competitors. The complaints are lack of proper government regulations and illegal business platforms which compromise competition through extremely low and unreasonable prices.

Therefore, there is need to establish the authenticity of these challenges in order to establish a middle ground business model for Uber and Airbnb, as a proposed settlement that will allow for uninterrupted continuance of the traditional enterprises along with the cooperation of the internet at the two companies.

Discussion

Methodology/Analysis

In order to establish the underlying problem with the internet platforms of the Uber, Lyft, SideCab, HouseTrip, Travelmob, and Airbnb, the research was based on secondary findings from past academic researchers done on the challenge of internet business platforms to the traditional business platforms. The research was based on past findings in several academic articles, books, and reputable online journal.

Specifically, the scope of the study was to establish the scope of online businesses, their method of business operation, the conveniences they guarantee customers, threats that their internet platforms have on traditional business practices, and the fundamental consequences upon society and culture. The findings were then related to the internet business platforms of the Uber, Lyft, SideCab, HouseTrip, Travelmob, and Airbnb companies against their competitors who operate the traditional business model.

The research was based on theoretical perspective, such as the contingency paradigm, organization culture, customer centricity, and regulatory benefits in the business environment. The contingency paradigm describes a company’s ability on the basis of situational possibility. There are two kinds of contingencies according to this theory. The first develops a good relationship with the customers in the process of task delivery. The second assists those that are only oriented towards the task at hand.

They make the accomplishment of the task as their primary aim and take all the steps towards achievement of this goal (Amit & Zott, 2012). On the other hand, government regulations in the business are significant in managing unethical business practices such as accountability, value for money, and following the due process in serving customers.

The aspect of customer centricity guarantees customer safety in transaction since there are physical structures or frameworks that are tangible and visible to the client. Lastly, organization culture ensures fair competition through observance of the acceptable pricing or competitive advantage strategies in a business (Coulson, 2013).

Presentation of data

According to Kashmanian, Wells, and Keenan (2011), the major part of the success puzzle for the online business management delivery operates on the periphery of the soft skills involving the timeless vision of organizational principles, defining value of the business, determining requirements, and clarifying the vision. Besides, the success puzzle is proactive in building teams, mitigating task, resolving issues, and providing direction as incorporated in the operations management system.

The management of the online businesses operates on the B2C strategy, which should be modified to function on the customer satisfaction. The traditional businesses are based on the traditional marketing, localized human resource, and efficiency of the monitoring units, especially in interacting with the customers. On the other hand, the internet platform is not modified to guarantee the localized experience among its customers, who have to carry out everything online (Kashmanian, Wells, & Keenan, 2011).

The traditional businesses have a very unique organization structure. These businesses exhibit distinctive and unique organization configuration that is shaped by the organization’s goals. In advancing organizational learning, the system helps the businesses avoid compromising customer safety besides being proactive in responding to the needs of customers, since every form of interaction is physical.

For instance, the traditional taxi companies have strategies to ensure that the customers directly and positively associate with the businesses due to services such as the premium service experience through physical interaction (Amit & Zott, 2012). However, this is not the case in the Uber and Airbnb companies where there are very weak structures of ensuring that the customer is protected from scrupulous sales and service agreements.

The benefit of the internet business platform is that a company can roll out an interesting entry into the market by concentrating in the most affordable methods of advertising, unlike the traditional business model. This strategy ensured that such an internet business platform company is sustained even when it is offering free services within the first three years of operation (Coulson, 2013).

The affordable and visible internet methods of advertisement ensured that the targeted market is in a position to distinguish the business from its rival. Besides, an internet based business can introduce very low charges for its services, which cannot be matched by its traditional rivals. The administrative costs of the internet business platforms are less costly as compared to the same costs at companies based on the traditional business platforms.

Despite the numerous benefits associated with internet platforms such as that of Uber, Lyft, SideCab, HouseTrip, Travelmob, and Airbnb, there are several underlying challenges such as minimal government regulations and unrealistic competitive advantage. Apart from the US and some few nations in Europe, the government regulations on internet business platforms are very weak and unsuccessful in tracking fraud or persecuting unethical business practices.

For instance, the Uber and Airbnb cannot be held responsible by the government business regulatory bodies in instance of customer complaint since all the transactions are held online.

Besides, it is almost impossible to regulate the unethical business practices such as pricing games since the overhead for the internet business platform is very low. As a result of lack of government regulations, coupled with the pricing games, traditional business platforms find it very challenging to compete with the online business platforms (Coulson, 2013).

From the discussion, it is apparent that the internet business platform is more efficient in knowledge and experience in uniqueness of products and services due to faster interaction with customer, unlike the traditional business models.

The experience is in terms of standardization in order to present high quality services to the market. In order to improve on the internet business platforms of the Uber, Lyft, SideCab, HouseTrip, Travelmob, and Airbnb, there is a need to revise their operational efficiency, customer centricity, functional teams, and revision of online content to guarantee customer security and minimize pricing conflict.

The recommendations for improvement on the internet business platform to minimize customer insecurity are discussed in the next section. The recommendations are meant to ensure that the internet business platform guarantees the same level of customer safety as the traditional business platform.

Conclusion/Recommendation

Customer relationship management

The level of activity for the Uber, Lyft, SideCab, HouseTrip, Travelmob, and Airbnb has remained relatively stable despite threat of competition and constant change of taste and preference. Customer relationship management is the first step towards customer relationship and to expand the distribution channels that attract near markets.

Reflectively, the concept revolves around a comprehensive review of ‘push and pull’ factors which determine the functionality of a retail business to offer an alternative strong marketing tool in the quest for quality, reliability, and trust among clients (Rai, 2012). A properly CRM is crucial in presenting brand knowledge, awareness, penetration strategy, and passing information to target audience.

For instance, adoption of the hybrid system of management by the Uber and Airbnb will ensure direct contact with customers within the shortest time possible through an active customer care initiative. The hybrid system is very successful in contact management and positive attitude reassurance (Rai, 2012).

Consumer centricity

Properly designed online marketing and product distribution management facilitate the success and sustainability in online marketing. To increase credibility and maintain professionalism, the current channels of reaching the consumers at the Uber and the Airbnb should be tailored to encompass processes and features that flawlessly facilitate a healthy and a lifetime relationship between the business and its clients.

Among the new development elements that the companies should incorporate include trust, liability acceptance, distribution, fair retribution process, and passing accurate information to target audience to restore confidence within these networks. This strategy will ensure that the businesses are sustainable (Coulson, 2013).

As opined by Amit and Zott (2012), the desired awareness created in the online platform and different distribution packages is essential in sustaining online trade. For instance, the safety and security of the customer over the cyberspace trading platform have become such an important issue in determining consumer behavior (Amit & Zott, 2012).

Thus, introduction of a Secure Online Shopping System (SOSS) is vital towards survival of the Uber, Lyft, SideCab, HouseTrip, Travelmob, and Airbnb businesses. Secure online shopping system is a platform where consumers are able to make orders on particular product and make payments using their credit cards. Introducing the modified SOSS platform at the two companies will ensure the safety and security of clients interested in the company’s product.

Functional team

Reflectively, the Uber, Lyft, SideCab, HouseTrip, Travelmob, and Airbnb companies should introduce a functional team with the essential knowledge in social media and tools used in marketing via the Internet. Besides quality in service, delivery and customer satisfaction depend on the support team as indicated in the distribution channels of the traditional business platforms.

Therefore, customer retention is achievable through the creation of reliable, informed, and the passionate support team at the two internet platform businesses to ensure that complaints of clients are proactively resolved (Amit & Zott, 2012).

Creation of content and integration of government regulations

Creation of content is extremely essential when dealing with internet business platform within the industries that the companies operate in. It is necessary to determine the online behavior of the target market before selecting the best channel for internet service provision to minimize the issue of changed consumer preference. The new content on the two internet-based businesses should be aligned to the terms and conditions of trade are stipulated by the regulatory laws.

This will cushion the businesses against eventualities such as conflict of interest and pricing games. In order to successfully implement this recommendation, the companies should create a legal branch within their internet business model to update the regulations and solve any case of unethical practice as a means of ensuring sustainability through customer safety guarantee (Coulson, 2013).

Conclusion

Apparently, there are differences in perceptions between the traditional business model and the internet business model. The operators in the traditional business platform disagree with the unhealthy competitive business strategies and compromised customer safety, which are common in the internet business platform due to minimal government business regulation.

In order to survive these challenges, the internet-based businesses should implement several recommendations ranging from improved customer centricity strategy, operation efficiency strategy, and integration of different ethical business practices and laws within the online platforms.

Through adoption of a highly structured and broad differentiation strategy in designing market segmentation policies, the Uber, Lyft, SideCab, HouseTrip, Travelmob, and Airbnb are positioned to improve on their customer safety standards and delivery of quality and competitive services.

References

Airbnb. (2014). About us. Web.

Amit, R., & Zott, C. (2012). Creating value through business model innovation. MIT Sloan Management Review, 53(3), 41-49.

Coulson, C. (2013). Implementing strategies and policies. Strategic Direction, 29(3), 33- 35.

Kashmanian, R. M., Wells, R. P., & Keenan, C. (2011). Corporate environmental sustainability strategy. The Journal of Corporate Citizenship, 2(44), 107-130.

Rai, A. (2012). Customer Relationship Management: Concepts and Cases, London, UK: Kogan Page.

Uber. (2014). About us. Web.

Executive Summary

Uber Technologies Inc has come up with a unique business model in the transport sector that enables its users to access rental cars and taxis using mobile applications. This technological invention has enabled it to expand its products to all parts of the United States. As it seeks to expand its operations to the international market, this firm should be ready to overcome global market challenges.

Product Description

Uber Technologies Inc offers unique services in the transport industry. It has come up with a mobile application that allows users to request transport services using their smartphones. According to Mason and Reyes (2015), the business concept developed by Uber is exceptional. Car rental services have been in existence for a very long time. It is one of the oldest industries in the transport sector. People always know where to get a taxi whenever they need it. Some people even have specific phone numbers for taxi drivers so they can easily make a call whenever they need these services. However, Uber noticed that international visitors had problems accessing the taxis. This new app was meant to solve this problem. These visitors, and even the locals, can now locate rental cars that are nearest to them and request for the services in an online platform.

The new feature in this service is that clients do not have to look for the taxis physically, as was the case before. The new app allows them to identify cars that are available for hire and are conveniently located near them. They can also know the car models and the fee needed to hire them. For instance, one may need to hire a Mercedes Benz because of personal reasons. In the traditional model of this industry, this would be a great challenge. However, this firm has made it possible. Uber services satisfied the needs of people who want to rent cars in various parts of the United States. The model was originally designed to meet the needs of travelers who lack information about the right places to get cars they needed. However, the product became very popular among the local Americans, especially because it offers its clients a variety of products.

The product is suitable for people of different ages, gender, social status, or any other demographical groups. However, the most appropriate market segment for this product is the youths and young adults. The largest groups of people who use smartphones are youths and young adults, hence they were chosen as the appropriate target market. In terms of sales revenue and population, the target market is very large, especially if the firm expands its operations to the international market. Geographically, the target customers are found all over the country. The main advantage of this market segment is its psychographic and behavioral patterns when making purchasing decisions. Most of them are impulse buyers.

External Analysis

The macro-analysis of the service’s industry can be done by looking at factors such as the economy of the country that defines the purchasing power of the clients, emerging trends in the industry, among others. The United States has enjoyed economic stability since the end of 2008/2009 economic recession. This means that the purchasing power of the target audience is relatively high. The new trends where many people prefer hiring cars may also be considered favorable to this firm (Hall, 2006). The improved security is also very critical for the progress of this firm. The micro-analysis of the industry can be conducted using Porter’s Five Forces Model.

Bargaining power of suppliers

The bargaining power of suppliers is a major factor that may affect ability of this firm to achieve success. When suppliers have a stronger bargaining power, then they can set unfavorable terms for this firm. Uber relies on car hire companies as its main suppliers. It has developed a close relationship with these car hire companies to ensure that its clients’ needs are met. This close relationship with suppliers has enabled it to dictate most of the terms of trade between it and the companies offering the cars.

Bargaining power of the customers

According to Doole and Lowe (2008), bargaining power of the customers is another major factor that may affect competitiveness of a firm in the market. If the clients have a stronger bargaining power, then they can always ensure that they dictate terms of trade that is only favorable to them. Uber has not faced this challenge in the market. It has developed an effective business model where consumers have everything they need but little power to dictate the price. A client can get any car he wants through this app at the desired location, but their choices come with unique prices. It means that the bargaining power remains with the firm.

Threat of new entrants

The threat of new entrants may affect a firm’s ability to excel in the market. For Uber, this threat is real. Its business model is unique and it came at the right time. That is why the firm has been very successful since it came to the market. At the time the firm launched its services, there were no firms offering the same products in the market. However, new entrants have come to the market posing serious challenge to this firm. The biggest problem that this firm faces is that its business model is so easy to emulate. Firms have emulated the model in various parts of the world. This has eliminated the uniqueness of the business model. This firm is relying on the strength of its brand to manage the threat posed by new entrants.

Threat of substitutes

According to Gondek (2011), many firms are currently faced with the threat of substitute in various industries. The closer the substitutes are to the services of a given company, the greater the risk of stiff market competition. The service offered by Uber can be substituted by the traditional taxi services that many people are used to all over the world. Instead of using the app, one can easily walk down the street and pick a taxi without any stress. The threat of substitute is greater among the elderly who may not understand how to use the app. Moreover, they do not trust services offered in the online platforms. Targeting this market segment may offer this product prospect of growth in the market.

Industry’s level of competitive rivalry

Frisman (2014) says that the level of industry’s competitive rivalry is another factor of concern that a firm must consider when analyzing the market. Uber has identified a unique market niche within the transport sector. Instead of using the traditional models that people have been using in the past, it has come up with a new model that uses modern technology. However, the easy with which other market rivals can enter this niche has increased the level of competition in the market. In various parts of the world, businesspeople are now emulating the business model that was developed by Uber. Even in the United States, this firm faces stiff market competition from firms such as Lyft and Sidecar. The major strength of these two firms is that they have relatively large fleet of cars. However, their brand name is weaker than that of Uber.

Internal Analysis

Uber is currently expanding to other countries outside the United States. Conducting an internal analysis of the firm will make it possible to understand its ability to achieve success in the global market. Of interest will be the strengths and weaknesses of the brand and services it offers. The strength of this brand lies in its originality. According to Hill (2015), many Americans prefer brands considered to be original. They tend to believe that imitations cannot offer the same value and experience as the original products. This means that compared to other brands that have recently come to the market, Uber has a huge base of loyal customers who believe in its products. The brand is also known in the international markets. It means that international travelers who come to the United States on a tour or for any reason are likely to use this product.

The main weakness of the brand is that it is almost impossible to create unique experience for its clients that differ from that of competitors. The business model itself was unique, but once it has been imitated, it becomes almost impossible to come up with additional services that the firm can offer its clients. It may force the firm to become more innovative and find alternative means of delivering superior value or additional services to its clients. Another major weakness of this brand is its inability to attract the elderly. According to Grünewälder (2008), the number of elderly people in the United States is on the rise, and any successful firm should not ignore this segment. This brand should be redefined, including the services it offers, to enable it become more attractive to the elderly.

Marketing Mix Recommendations

Uber is very successful because of the business model it developed in the transport sector. Analysis of its marketing mix clearly shows that it is performing well in terms of the product and pricing elements. The product, although widely imitated, offers unique services to its customers. The popularity of this brand is a confirmation that its products meet the market expectations. The pricing has not been a major issue of concern based on the business model of this firm (Ferrell & Hartline, 2014). The place element is excellent because its products are always available to the clients at the places where they are needed. Clients do not have to travel far to have access to the services offered by the firm. The firm has performed fairly well in terms of promoting its brand and products in the international market. Uber has been very active in social media marketing as it seeks to promote its popularity among the target group. It has specifically been using Facebook, YouTube and Twitter to reach out to its clients. The management should consider the following marketing mix recommendations.

• Youths love trendy products. For this reason, the management of this firm should position the product as the latest fashion.
• The firm should rely on both social and mass media in its promotional campaigns to reach out to a larger audience.
• Promotional campaigns should emphasize on the superiority of the firm’s brand. It should emphasize on the originality of the business concept and the need for the clients to stick to this brand.
• The firm should reinvent its product to offer additional value to the clients. This will make it to be seen as a unique brand in the market.

References

Doole, I., & Lowe, R. (2008). International marketing strategy: Analysis, development and implementation. London: Cengage Learning.

Ferrell, O. C., & Hartline, M. D. (2014). Marketing strategy. Mason: South-Western Cengage Learning.

Frisman, P. (2014). Uber’s on-demand car service. Hoboken: John Wiley & Sons Publishers.

Gondek, C. (2011). The product Ford Fiesta: A Marketing Analysis – Part I & Part II. München: GRIN Verlag GmbH.

Grünewälder, A. (2008). Analysis of Nokia’s Corporate, business, and marketing strategies. München: GRIN Verlag GmbH.

Hall, L. D. (2006). Brands and their companies: Consumer products and their manufacturers with addresses and phone numbers. Farmington Hills: Thomson Gale.

Hill, S. (2015). Raw deal: How the “Uber economy” and runaway capitalism are screwing American workers. New York: St. Martin’s Press.

Mason, H., & Reyes, M. I. (2015). Trend-driven innovation. Hoboken: John Wiley & Sons Publishers.

Introduction

The article by Osborne reflects on the decision of the court that obliged Uber, an international transportation network, to pay a living wage to its self-employed drivers to promote their labor rights. In response, Uber declared its intention to appeal this decision. The company supports its views by the following argument: the implementation of the mentioned rule would lead to the rethink of the very concept of the gig economy that is characterized by the use of the Internet as an intermediary between customers and workers.

Main Body

In my opinion, this decision can have large implications related to other similar companies and their self-employed workers, clarifying the employment status of the latter. According to Osborne, “many people were locked out of employment tribunals by fees of up to £1,200” (par. 21). This proves the fact of exploitation of those workers who are self-employed. It appears that Uber steals its money, refusing to pay a minimum wage or overtime. In this connection, the new law can be regarded as rather beneficial for workers because it is likely to enhance their social status. I would like to point out that the court’s verdict is based on a similar decision related to the collective lawsuit of Uber drivers in California and Massachusetts. These solutions promise to become a precedent in disputes between Uber and its drivers in other countries. In addition, the decision can affect the other technology companies that operate as marketplaces and connect freelancers with their clients.

However, the company intends to defend its business model in the framework of the gig economy in which people are engaged in the in-line schedule with a minimum of labor safety and labor rights that, in fact, allows maintaining a low cost of transportation services. The representatives of this international company consider that drivers want to be self-employed rather than full-time employees because it allows them to preserve freedom and flexibility, independently determining working days and hours. Considering the situation from this point of view, I can note that it is likely that the cost of taxi service can increase, breaking the core value of this kind of business. Furthermore, the mentioned tendency can cause reduction of demand for such kind of service and subsequent significant losses. At the same time, the government has its own interest in changing the attitude of Uber toward its part-time drivers. On a large scale, self-employment means arrearages of taxes in all areas of business, thus leading to the fact that it is better to provide workers basic labor rights so that they were obliged to pay taxes.

Conclusion

In conclusion, I would like to emphasize that I believe that the court’s decision proves that the success of Uber is based not on drivers who are self-employed, but on those who work as an integral part of the corporation. Having similar rights with the full-time workers, the self-employed workers would feel cohesion with the company and, moreover, have fundamental rights for pension and other social bonuses. However, the reaction of the gig economy in case of implementation of this new rule remains ambiguous. It appears that this issue can be revealed only with time, whether the decision would be implemented or not. In any way, this case clearly shows that many similar services can encounter the same issues related to the provision of basic labor rights.

Work Cited

Osborne, Hilary. “Uber Loses Right to Classify UK Drivers as Self-Employed.”The Guardian. 2016, Web.

Introduction

Clayton, describes industry disruption as the process in which smaller businesses with less income effectively challenge established businesses using technological innovation (par. 6). It happens when new businesses come in the market and transform the variables that control the performance of established businesses, eventually forcing them to counter to uphold their stable position. Technological innovation and its quick evolution can introduce both positive and negative aspects in a market.

It is one of the factors leading to industry disruption and every day there are discussions and thoughts in regards to the same. This essay seeks to show how new entrants can use technological innovation to disrupt an industry to their advantage by examining a successful company that is currently doing so on an international scale.

Uber’s background

Uber is a company that provides transportation services through the internet (Clayton et al par. 7). It basically uses a mobile app to connect clients who need quick and reliable transportation services with drivers who are ready to provide it. The application assists in quick and reliable bookings using the Global Positioning System Technology and also offers convenient payment systems. It means that as long as a customer has access to the application they can quickly get transportation without having to go through the usual method of calling or hailing down a taxi (Gredig par. 4).

It uses a peer to peer business model which runs on a technological platform. The company was founded in 2009 and has enjoyed a considerably substantial growth over the years due to the ease of use, reliability and popularity of its service. Clayton states that Uber started as a small company serving in one location but it currently operates in over sixty countries and three hundred cities worldwide, it is still expanding (par. 7).

Gil states that one of Uber’s main advantages at startup was their small size. It meant that the company did not require expensive hardware equipment that is both difficult and time-consuming to set up and maintain. Instead, they had a simple system that afforded them a rich array of functionalities. It means that they adopted and implemented technology at a faster and cheaper rate as compared to larger companies. (par. 6) Though it was a small startup company, they managed to cause disruption within the age-old taxi industry in many countries.

One of the main aspect affecting established businesses is how new businesses in that industry choose to compete in the market. Clayton further states that if a new entrant can identify a segment of the market that is underutilized or not utilized at all by the existing competitors, they can target the segment and use it to their advantage (par. 6). Uber is a perfect example of such a new entrant that achieved growth and immense success by targeting an underutilized market segment.

Uber did their research and realized that the taxi industry was comfortable with the taxi industry setup thus they did not see a need to employ the use of the ever growing world of technology to market their services and broaden their reach (Clayton et al par. 12). When Uber launched, it caused massive disruption to the taxi industry. Clayton states that other individuals witnessed the growth of Uber and they started a slew of imitation companies on a technological platform and under a similar business model (par. 7). Uber’s success essentially led to a change in variables that influence the traditional taxi businesses performance.

Clayton states that automatically, the entry of new competitors in a market leads to a reduction in the market prices. When more companies compete for the same share in the market, it gives customers the freedom to choose companies with lower pricing and better services, and this leads to a reduction in the overall market pricing. Uber being a technological company generally has lower operating costs as opposed to its competitors. This means high profits for low labor costs (Nayar & Willinger).

First Uber owns its own application which is free to download from the internet. Uber does not charge the driver or client for using their application but gets its profits from a percentage of what the customer will pay. Uber’s drivers use their own cars thus they handle their own maintenance and insurance costs (Nayar & Willinger).

It places Uber at an advantage since the low operating costs translate to lower pricing for the customers. Clayton states that the low pricing affects the market prices thus causing a pricing disruption within the industry (par. 6).

Taxi driving is a profession that has been operational for many years. Since it is a profession legally recognized by the government, taxi companies are required to pay a yearly permit fee as per the city regulations. The taxi company drivers are also individually charged for their driving permits. Gil states that taxi drivers have opted to quit their traditional jobs and sign up with Uber (par. 4). This has caused a major disruption in the traditional taxi industry as their sales have significantly reduced.

Uber reiterates that it merely provides a technology that enables ease of networking and is not a taxi company thus it should not be subjected to paying permits as well as conform to taxi licensing standards. Gill also states the companies are going at a loss since they are paying permit and insurance charges, yet a majority of customers use the Uber service.

Conclusion

In conclusion, Uber’s employment of a clever business model and the use of the technological platform aided in their sudden growth. (Gredig par. 4) The same caused a disruption in the taxi industry. Gredig states that the fact that Uber is not required to follow regulations that traditional taxi companies do means that they have an unfair advantage that enables them to cause even more disruption in the industry.

Works Cited

Clayton, M. Christensen, Raynor E. Michael, McDonald, Rory. “What Is Disruptive Innovation?” Harvard Business Review. 2015. Web.

Gil, Elad. “Uber And Disruption.” TechCrunch. 2014. Web.

Gredig, Peter. “Uber disruptive technologies challenge old business models.” Technology and Innovation. Farm Credit Canada. n.d. Web.

Nayar Nandkumar, Willinger G. Lee. “Financial Implications of the Decision to Increase Reliance on Contingent Labor.” Pennysylvania State University 32.4 (2001)662-663. Web.

Analysis of Uber’s Customers

The business model of a given organization dictates the nature of its strategy, clients, stakeholders, and goals. Uber started as a technologically-driven corporation relying on the Internet to attract individuals in need of transportation services. This means that some of the leading customers should be in a position to use smartphones, handheld devices, and computer systems (Mahapatra & Telukoti, 2018). The company has a unique app that individuals can consider to locate nearby cars. These aspects are critical whenever trying to analyze a typical Uber customer.

In most of the countries where Uber operates, many people appreciate the power of modern technologies to achieve their potential. For example, around 8 percent of adults who use the Internet prefer Uber’s services (Mahapatra & Telukoti, 2018). The majority of the customers in the developed world are between 17 and 34 years of age (Ezrachi & Stucke, 2016). This group forms the biggest customer base for Uber in most of the urban areas.

Individuals above the age of 40 prefer the use of app-based transportation services (Schneider, 2017). These people focus on specific issues, such as comfort, convenience, and cost. Most of the customers within this age bracket focus on affordability while at the same time pursuing their goals (see Figure 1). In another study by Mahapatra and Telukoti (2018), it was revealed that over 60 percent of Uber’s key customers were living in urban areas. They selected the company’s app because of the convenience associated with it. Another attribute considered whenever analyzing the profile of such customers is that of age (see Figure 2). There is also another group of technology-savvy people who order food packages using the Uber app.

Due to the nature of this company’s business model, Uber serves many customers in the health care sector. For instance, patients in different facilities can receive supplies and deliveries using the Uber app. Hospitals and pharmaceutical outlets can order and receive drugs using this company’s services. Restaurants and hotels also benefit significantly from Uber’s model. Such firms can place orders for different supplies or use its services to deliver food products to their consumers. Shippers, logistics companies, and freight services providers continue to use Uber app (Schneider, 2017). The elderly, school children, and patients also consider the strengths associated with this corporation’s transportation services.

It is notable that most of the identified customers are usually middle-to-high income earners (Schneider, 2017). They can cater for their transportation fees while at the same time pursuing their economic goals. Additionally, the company meets the needs of around 6 percent of the people living outside suburban or urban areas in different countries across the world (Mahapatra & Telukoti, 2018). The issue of gender is also critical whenever monitoring the customers Uber serves. Schneider (2017) observed that the percentage of male and female clients comprised 52% and 48% respectively. From this analysis, it is evident that Uber meets the transportation needs of many people living in different regions.

Summary

In conclusion, Uber is a major competitor in the technology-based transportation sector. From this analysis, it is notable that it serves citizens aged between 17 and 34 years. The elderly, children, patients, shipping companies, restaurants, and hospitals also benefit from this organization’s business model. Citizens living in urban areas and those with better salaries also seek such services frequently. This executive assessment is, therefore, relevant since it can empower Uber’s leaders to implement the best business strategy.

References

Ezrachi, A., & Stucke, M. E. (2016). Virtual competition: The promise and perils of the algorithm-driven economy. London, UK: Harvard University Press.

Mahapatra, S., & Telukoti, P. (2018). Challenges faced by Uber drivers and customers satisfaction in Pune City. Global Journal for Research Analysis, 7(2), 358-360.

Schneider, H. (2017). Uber: Innovation in society. New York, NY: Palgrave Macmillan.

Introduction

Unlike other companies, Uber and other similar disruptive business models, like the Spreadshirt business, threaten to dismantle the existing status quo and demand the introduction of new legislation to regulate them. At the same time, effectively regulating such new businesses has been immensely difficult, for the same reasons governments have had trouble regulating the Internet.

This has successfully worked in Uber’s favor around the globe and in its homeland, and it has been said to expand into a city per day, as of 2014 (Huet 2014).

However, the company has run into difficulties in East Asia, particularly in Japan, where the progress has been slow. While the fast-growing multinational company has not lost its enthusiasm to add Japan into its coverage area, it is clear that they would have to rethink their Expansion Opportunity Plan in order to successfully build a competitive advantage in the Land of The Rising Sun.

Executive summary

In Japan, Uber’s attempts to expand within the capital have found little success due to strong resistance from the government, which has taken actions to protect its local businesses from the outside threat, and local service providers, who, by that point, have already begun to integrate some of the innovations introduced by Uber into their own business model. Outside of the capital, expansion was almost immediately halted by government regulations.

Since it is evident that Uber drivers would find it hard to compete with the local services through the quality of service itself, the best course of action would be to win over the populace by finding the gaps in the local taxi service, in order to develop their own competitive advantage. This requires an in-depth study of the strengths and weaknesses of not only Uber’s business model but also of the taxi services in Japan.

However, while the Japanese market is a much-desired target for Uber, it also needs to establish the conditions under which the expansion will be considered a failure, to avoid the problem of commitment escalation. If it continues investments, it would need to carefully weigh its options, in order to satisfy the regulators’ demands.

Description of the venture

In the US and most Western countries, Uber Inc. had a significant advantage over local businesses due to their high quality of drivers an service, simple, intuitive, and comfortable to use the hailing system, and smaller fees. However, in Japan, its expansion outside the country’s capital was quickly halted by the Ministry’s of Transportation decision to ban the business, due to the drivers not possessing a license to transport passengers (Jie 2015).

Additional problems are posed by the taxi services themselves, which who is some of the best in the world, in terms of quality of service, availability, and innovation, exemplified by the integration of an app service very similar to that of Uber’s (Hornyak 2015).

To counter these problems, Uber will need to rethink its expansion opportunity strategy to suit the Japanese population better, and will likely be forced to give up some of its benefits in order to be granted legal right to operate within Japan.

The high quality of Japanese taxis comes at steep costs, which creates opportunities. Also, while there is strict regulation over the transportation, there is no state subsidy for taxis, which means that businesses cut costs by focusing on densely populated areas, with little coverage for the rural areas. (Brasor & Tsubuku 2016). Finally, a very good opportunity for expansion is on the horizon as the 2020 Olympics approach, which would see a major influx of Western tourists into Japan, who would be more familiar with Uber.

Literature review

Since the topic discussed in this paper is very novel and has few precedents, the majority of the materials used in this study are contemporary and provided by well-regarded and high-quality new magazines, such as Forbes Huffington post, and other well-regarded web sources detailing the peculiarities of the relationship between the company and the country in questions.

A majorly important work for this paper is the book “Business Ethics: Japan and the Global Economy”, which provides insights into the approaches taken by the Japanese businesses, the business culture and ethics, and the expectations of the population (Dunfee & Nagayasu 2013).

Finally, “International Expansion: A roadmap to a successful growth for entrepreneurs” is a report by Ernst & Young audit service, which provides a guideline to international expansion and reaffirms the ideas studied in this module (International expansion: A roadmap to a successful growth for entrepreneurs 2015).

Assessment of associated theories

Building a successful Expansion Opportunity Plan requires Uber to consider three relevant associated theories which are vital to the success and profitability of this endeavor.

Competitive advantage

In Japan, Uber will have to rethink its competitive advantage, due to many services and benefits it offers already being part of the local services. However, the business does have several advantages, particularly in terms of pricing, which should emphasize and develop in order to carve itself a niche in the market.

The Uber app has higher functionality, allowing the users to have more control over the choice of their driver, and a better estimation of the waiting times and the final fees. Finally, Uber has a unique opportunity to replace the transportation infrastructure in the “aging” areas of Japan, which can become a strong foothold for future expansion into the city.

Foreign Direct Investment

The nature of Uber’s business model means that the company has successfully avoided the need for high FDI due to mostly being built around an online software platform, and using local drivers. However, to successfully integrate itself into the market and gain more rapport both with the government and the populace, the business will need a stronger local representation, both physical, in terms of Expansion Managers, as well as marketing and public relations managers, who will require such investments.

Corporate Social Responsibility, sustainability, and ethics

Corporate social responsibility, high-quality service, respect, and impeccable manners play a very important part of the Japanese work ethics and are something that Uber will need to work to build better relations with its clients (Dunfee & Nagayasu 2013). Tradition and respect are very important to taxi companies. While many companies fear that introduction of Uber may destroy that part of the business, it can also become a very important tool in its arsenal.

Commitment Escalation

Finally, it is very important to plan out the budgeting for the expansion plan and to be prepared that it may not succeed. Japan is a competitive market, and its taxi services are quick to integrate innovations and new approaches to both better serve the customers and to keep the outsiders away. Uber needs to determine the conditions under which its program will be considered a failure and a success, and be willing to, even temporarily pull out of Japan if it fails to find success.

Strategy formation

The business needs to focus on differentiating itself from the taxis and building better rapport with the government, who are under strong influence from the local transportation industry.

Operations overview

Despite strict regulations from the government, Uber can charge its customers less for their trips, especially during the night. The company needs to emphasize itself as a cheaper alternative, while at the same time working with its drivers to provide the same quality of service and human interaction as is expected from taxi drivers. It also has been allowed to provide services to the aging regions of the cities and the country.

Japan is an aging county, which means that this market will continue to grow, while also giving Uber grounds to slowly take over the market share of taxis and increase their popularity with the citizens through marketing and word of mouth while integrating itself into the infrastructure.

The company should not ignore its cooperation with taxi drivers in Tokyo and other locations. By giving the drivers a viable alternative to their current employment, more flexible schedules, and better payment conditions, Uber has a chance to win over them as new partners, circumventing the issue of lacking registration altogether.

Finally, Uber needs to use the 2020 Olympics as an opportunity to undermine local businesses by drawing Western tourists. A strong marketing campaign will be required.

Financial overview

Uber is facing large expenses if it seeks to continue its efforts to expand into the Japanese market. However, this is somewhat mitigated by the support the company is receiving from a number Chinese and Japanese investors, including Toyota Motor Corporation in Tokyo, which can give it support in negotiations with the regulators Who Are Uber’s Biggest Competitors? 2016).

Timeline

By autumn 2016 – finalize an infrastructure for servicing the elderly in and around Tokyo. Negotiate more freedom from the government to cater to this segment of population.

By 2017 – establish an effective infrastructure to cover the rural areas of the country. Create a benefits package for taxi drivers partnered with Uber.

2019 – begin a marketing campaign aimed at Westerners coming to Japan for the Olympic Games.

References

Brasor, P & Tsubuku, M 2016, ‘Whither the taxi in a withering Japan?’, The Japan Times. Web.

Dunfee, TW & Nagayasu, Y 2013, Business Ethics: Japan and the Global Economy, Berlin: Springer.

Hornyak, T 2015, In Japan, Uber dons white gloves to battle an elegant rival. Web.

Huet, E 2014, ‘Uber’s Global Expansion In Five Seconds‘, Forbes. Web.

International expansion: A roadmap to successful growth for entrepreneurs. 2015. Web.

Jie, M 2015, ‘Uber Ordered to Halt Ride-Sharing Pilot Program in Japan’, Bloomberg Technology. Web.

Who Are Uber’s Biggest Competitors? 2016. Web.

Problems and Analysis

Challenging legal frameworks is one of the problems experienced by Uber in China. The country’s legal frameworks are not receptive to companies that operate without a license. Therefore, when Uber entered the Chinese market and used privately owned cars to provide taxi services, it experienced issues relating to legal frameworks in the country. A good example is evident on the first page of the case when the country’s authorities raided Uber offices claiming that the company was operating illegally.

Solutions

To manage the aforementioned problem, Uber has to institute a number of policies. Intensive lobbying and cooperation with competitors and likeminded organizations are some of the policies or solutions that Uber needs to undertake. Notably, the problem of policies and legal frameworks requires intensive lobbying from the company and its competitors. It is important to explain that lobbying is an initiative that needs cooperation from all taxi and chauffeur service providers in the country. Moreover, the companies providing taxi services can also work together with organizations such as transport organizations to present their perspectives to the government. By working together as a team, they will be in a better position of explaining their relevance to the government successfully and convince it to license their operations. Initiatives such as the one advanced by the Shanghai transport committee need amplification so that the government realizes the importance of allowing taxi and chauffeur services offered by companies like Uber.

Advantages and Disadvantages of the Solutions

The initiative by committees such as that one of Shanghai, which strives to persuade the government to accept unlicensed taxi operators, can help Uber enjoy a market that has minimal legal impediments. The disadvantage of the initiative can take place if these organizations demonstrate bias and champion for the rights of domestic companies excluding Uber. Moreover, the competitors may not accept to work together with Uber because of the fear that it may only advocate for its interests. It is imperative to state that the absence of support and cooperation from Uber and its competitors is a disadvantage because the effort to persuade the government requires teamwork. In instances where one company or committee undertakes the initiative alone, the results may not be practical.

Recommendations

Some of the recommendations championed by the case comprise research and cooperation. Research is the main recommendation because it helps the company understand various strategies that it can utilize in order to address the legal problems prevailing in the country. Through extensive research, Uber can understand the strategies needed in order to convince the Chinese government to license its operations. Moreover, the company will know the tactics that are useful in convincing other competitors and organizations to work together for a common goal of ensuring that the government legalizes its operations. Through research, the company will identify teams that they can work together alongside its competitors towards having taxi operations accepted in the country. Research also helps the company prepare a good defense that will not only convince the government to license its operations but will also go a long way in justifying the relevance of its initiative in the country. Through cooperation and research, the company can present its suggestions to the government and effectively convince it to license its operations and those of its competitors.

John Doe

Uber Technologies Incorporation is a leading American firm in the technology industry. The company is headquartered in San Francisco. It is known for its famous Uber mobile app (‘Uberworld’ 2016). The application allows individuals to get transportation services to the nearest driver. The chauffeurs are informed about the location of the customers. The app is able to calculate transportation cost (Uberworld 2016).

This company operates in a unique industry that might be hard to analyse. This is the case because Uber is a revolutionary firm that has disrupted the transportation industry. This fact explains why several scenarios characterise Uber’s industry. To begin with, the industry is associated with the use of technologies to transform the manner in which people travel from point A to B. The industry is defined by the use of modern technologies to connect passengers and drivers (‘Uberworld’ 2016). That being the case, the industry has borrowed numerous ideas from the technology sector. Since this is a disruptive technology, Uber must embrace different strategies in order to compete with more players in the industry.

Uber’s Long-Term Vision

The mission statement embraced by Uber can be used to understand its long-term vision. The firm’s mission is to make transpiration reliable for every person across the globe (‘Uberworld’ 2016). Through the use of this mission, Uber plans to attract more clients and deliver reliable transportation to them. The ultimate goal is to ensure more people acquire their primary needs and go wherever they want within the shortest time possible. In the autonomous or self-driving society, Uber is expected to operate and own its fleet. The move is also expected to transform the industry. The corporation’s superior shows conclusively that the whole world is on a new road to Uberworld even if it does not dominate it. Travis Kalanick, Uber’s cofounder, believes that the firm is focusing on ‘the best approaches to make ride-sharing so cheap and convenient’ (‘Uberworld’ 2016, p. 16). The model will make it easier for more people to travel without necessarily disrupting the current taxi market.

Analysis of the Industry: PEST and Porter’s 5 Forces

PEST Analysis

Political Factors

The taxi, transport, and technology industries are regulated by many governments across the world. The political environments experienced in different countries will dictate the performance of many firms in this industry. New policies are being considered to ensure more drivers receive allowances and sustainable wages. These regulations will dictate the future of Uber’s business. This is the case because ‘the AV technology has the potential to put truck drivers and chauffeurs out of work’ (‘Uberworld’ 2016, p. 19). The other issue to consider is that of corporate social responsibility (CSR).

Economic Factors

The economic developments experienced in different nations continue to catalyse the emergence of new ideas and technologies. More people have disposable income in the developing world. The uncertainties affecting many economies might have significant impacts on this industry (‘Uberworld’ 2016).

Social Forces

Social networks are making it easier for more people to embrace this new subsector. The increasing number of people in different nations is a new opportunity. People currently want ‘to lead fast paced lives’ (‘Uberworld’ 2016, p. 19).

Technological Factors

Many firms in the global automobile industry are focusing on the idea of autonomous vehicles (AVs). Mobile apps have become common than ever before. The industry is ‘open for new innovations and technologies’ (‘Uberworld’ 2016, p. 18).

Porter’s Five Forces

Threat of New Entrants

This industry is characterised by modern technologies. That being the case, new players will find it easier to join and realise their objectives. Many programmers can start their companies without incurring numerous startup costs (‘Uberworld’ 2016).

Bargaining Power of Suppliers

Many firms in this industry depend on suppliers in an attempt to achieve their business goals. Uber, for example, has to hire cars from different suppliers (‘Uberworld’ 2016). The bargaining power of every supplier is high in this sector.

Threat of Substitutes

Uber’s industry is associated with many products and services. Passengers can use taxis in different cities. Public means of transport are also available in every surbub across the globe. However, Uber offers cheaper services in an attempt to minimise the level of this threat (‘Uberworld’ 2016).

Competitive Rivalry

There are several competitors in the industry such as Lyft. Traditional taxi networks and public transportation systems explain why the level of competition is high. Uber faces competition from firms such as Google and General Motors (‘Uberworld’ 2016). This competitive rivalry will definitely increase in the future.

Bargaining Power of Buyers

The buyers in this sector will dictate the success of many players in the industry. Most of the customers do not require the available services every single day (‘Uberworld’ 2016). The customers can choose the services from differences providers. This fact explains why the bargaining power of such customers is extremely high.

Asset Light Strategy: Advantages and Disadvantages

Uber embraces the asset light strategy in order to expand its operations. This model entails the use of existing models in an attempt to dominate the industry. This model has a number of advantages. For example, the company will find it easier to achieve its goals within the shortest time possible. Uber can use this model to replicate the businesses of existing companies and eventually become profitable (‘Uberworld’ 2016). On the other, the model can attract competition from newcomers. The strategy is also known to minimise the profit margins of a company. Uber must also work hard in order to improve its model and attract more customers.

Possible Strategies and Risks

Through the use of asset light model, Uber can consider a number of strategies in order to remain profitable. The firm is planning to use revolutionary ideas to pursue its business goals. For instance, ‘the last mile concept is expected to take passengers to their houses’ (‘Uberworld’ 2016, p. 16). UberPool is ‘capable of putting passengers heading in the same direction into one vehicle’ (‘Uberworld’ 2016, p. 16). The company is focusing on the best approaches to support the production of autonomous vehicles. This invention will definitely transform the manner in which people travel from point A to B. accidents will also be reduced significantly. AVs will make it easier for the ‘disabled, the sick, and children to go wherever they want’ (‘Uberworld’ 2016, p. 17).

Additionally, Uber is expected to face numerous challenges such as competition. Some rivals such as India’s Ola and America’s Lyft will affect its profitability. The firm is also focusing on the transition to ‘the idea of driverlessness’ (‘Uberworld’ 2016, p. 17). This strategy is pursued by automobile companies and technological firms such as Google. Uber is a disruption in the technological and automobile industries. This means that the organization’s future is uncertain unless appropriate measures and precautions are put into consideration.

How Uber Can Improve its Marketing Strategy

Several measures should be considered in order to improve Uber’s marketing strategy. To begin with, Uber should establish positive relationships with the existing members of the public (‘Uberworld’ 2016). This approach will deliver new opportunities to more people in different cities. Uber should also address the issue of sustainability without disrupting the existing taxi businesses.

The use of reduced prices for its services will attract more customers. Social media platforms have the potential to inform more people about its superior services. The existing customers should be encouraged to inform their relatives and friends to use the services (‘Uberworld’ 2016). More cities across the globe should be targeted. Such measures will ensure the company serves more customers across the globe.

Financing the Company: Considering an IPO

Uber has been receiving its finances from different funders and sponsors. The founders of the firm received over 200,000 US dollars in funding in 2009 (‘Uberworld’ 2016). By the year 2010, the company had raised over one million dollars. Several companies have been investing in the company. The practice has continued to support Uber’s financial needs. In 2013, Google Ventures invested over 250 million dollars in the firm. Companies such as Toyota have been making investments in the organisation. This approach has made it possible for the company to empower its drivers.

Current statistics show that Uber has managed to convert such finances into profits (‘Uberworld’ 2016). Many people believe strongly that the company has the potential to maximize profits and empower its stakeholders. An initial public offering (IPO) is expected to maximise Uber’s finances. The move will eventually make Uber profitable.

Reference List

‘Uberworld: The world’s most valuable startup is leading the race to transform the future of transport’ 2016, The Economist, vol. 1, no. 1, pp. 16-19.