Analysis UBER's strategy.
1. Define the problem UBER has tried to solve. (from both supplier and consumer's points of view)
2. Transportation industry(Taxi) before UBER
3. How UBER business actually works
4. Their international strategy
5. Five forces analysis
6. Challenges and suggestions
10. • Easy to start
(no license)
• Individual business
(have full control)
• Earn more than taxi
(simple cost structure)
[Incentive to join the network]
Dynamic Pricing Model
(stably balancing quantity of
demand & supply)
• Easy to use
(thru smartphone app)
• Reliable
(arrival time & Fare)
• Cheaper than taxi
(simple cost structure)
• Better quality
(ratings & feedback)
13. Global Multi Domestic
UBER services are available in 50+ countries and 300+ cities around the world
• Govt. regulations
• Communication infrastructure
• Cultural adaptation
• Organizational structure
• The transferability and sustainability of
the technology & information systems
(Navigation system, apps, telematics)
• A very well positioned and easy-to-
recognize brand
UBER
15. Threat of new entrants
Threat of substitutes
Suppliers’ power Buyers’ power
Intensity of rivalry
BARRIERS TO ENTRY: MEDIUM-HIGH
Government policy
UBER’s strong brand identity
UBER first mover advantage
RIVALRY DETERMINANTS:HIGH
Large number of firms
Fast market growth
(industry in apps segment)
Similar cost structure
Low switching cost
Low diversity within rivals
DETERMINANTS OF BUYER POWER: HIGH
Many substitute available
Switching cost is cheap
DETERMINANTS OF SUBSTITUTES THREAT : HIGH
High buyer inclination to substitute
(Strong public transportation system/taxi/car-sharing…)
Price elasticity is high
[DRIVER] DETERMINANTS of SUPPLIER POWER: LOW
Many competitive suppliers
Low bargaining power
Low impact of input on cost
[Others] DETERMINANTS of SUPPLIER POWER: MED
Navigation or Background check companies
[Porter’s five forces analysis]
17. [Three big challenges & Group suggestions]
Regulations1 Imitators2 New Technology3
Challenges
• Current law systems says
UBER is illegal in most
cities (No licensed drivers)
• Total or partial prohibition
of the services and
advertising, fines,
confiscations of cars and
other penalties
• Basically anyone with a
car and a driver’s license
could be a competitor
• There are many
companies operating in
very similar ways as UBER
(e.g. LYFT and Sidecar)
• New disruptive
technology
• New business model
• Driverless cars
Suggestions
• Establishing better and
earlier relationships with
government
• Pushing drivers to obtain
such permits by
themselves
• “Too big to fail” strategy
• Reinforce safety system
& Improve PR
• Lock-in strategy through
Google synergy (e.g.
maps)
& UBER brand synergy
• Retain critical mass and
achieve economy of
scale
• Leverage big data
• Partnership/Acquisition
of technology
companies
(Leverage Google)
• Invest R&D