Uber Company’s Industry: Main Scenarios

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Table of Contents

Uber’s Long-Term Vision
Analysis of the Industry: PEST and Porter’s 5 Forces
Asset Light Strategy: Advantages and Disadvantages
Possible Strategies and Risks
How Uber Can Improve its Marketing Strategy
Financing the Company: Considering an IPO
Reference List

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.

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