By: Good Four-Tune
● Internal environment 01. Strategies 02.
● External environment
● Industry environment
● 3 existing business-level strategies
● 2 new business-level strategies recommendations
● 3 existing corporate-level strategies
● 1 new corporate-level strategy recommendation
● Defeated Republican charged with attack on New Mexico Democrats, showing growing political polarization (Reuters).
● Tesla to pay ex-worker $3.2 million over racial discrimination case, highlighting how society is holding people accountable nowadays (BBC).
● Current unemployment rate: 3.5% (Bureau of Labor Statistics).
● Annual inflation rate for the United States was 5.0% for the 12 months ended March 2023 (US Inflation Calculator).
● US GDP in 2022 was $25 trillion (Country Economy).
● US child population shrinks to a record low, sparking concerns about the future (Detroit Free Press).
● More CEOs are leaving their jobs, and it’s opening doors for women to step up in these high positions (Fortune).
● Asda launches self-driving grocery delivery trial, showing move towards autonomous technology (BBC).
● More than 50,000 US retail stores are expected to close in the next 5 years as e-commerce is on the rise (Business Insider).
● Supermarkets are offering more sustainable, plant-based foods in response to changing consumer tastes (Yahoo Finance).
● Electric and hybrid car industry is booming, with rising focus on sustainability within consumers (International Energy Agency).
● Several countries have evacuated diplomats and citizens from Sudan's capital as fierce fighting continues to rage in Khartoum (BBC).
● Poland gives Ukraine almost 1,500 tonnes of equipment for infrastructure restoration (Ukrinform).
● LOW: it requires a lot of time, technology, money, and consumers to enter the ride-hailing app industry.
○ Uber has already built customer loyalty and name recognition. It has first-mover advantage.
● LOW: Uber has 118 million active users across all services (Ridester).
○ No single consumer has overriding power over Uber.
○ However, consumers have come together and put pressure on Uber to instate safety measures; Uber has responded by stating that drivers get 3 “strikes” for bad behavior. Thus, consumers have power in numbers.
● LOW: Uber has 5.4 million drivers worldwide (Uber Q4 financial report).
○ No single supplier (driver) has an overriding power over Uber. A large number of suppliers correlates with little bargaining power of individual drivers.
● Relatively LOW: there are not many substitute products that will satisfy customers like the services of Uber.
○ Substitutes include public transportation (like trains and buses) or buying your own car.
■ Public transportation is not as customizable; it requires more time.
■ Buying your own car is very expensive and not feasible for many of Uber’s existing customers.
● HIGH: switching costs for consumers between Uber and Lyft are relatively low.
○ Uber and Lyft have different costs per mile and minute, but they usually balance to around the same price.
○ This is why Uber puts an emphasis on quickness and inclusivity; it sets them apart from competition.
● HIGH: Uber has created many different services for customers under the “Uber” name. These services can be used together and add value to each other.
○ For example, there is Uber Green, Uber Rent, Uber Reserve, UberX, UberX Share, Uber Taxi, Uber Intercity, Uber Freight, and Uber Eats.
● Tangible: Uber has 5.4 million drivers worldwide and 32,800 employees at Uber Offices (Macrotrends).
● Intangible: 42.5% of Uber’s global workforce are women, and the percentage has been steadily increasing over the years(Uber’s 2022 P&C Report).
● Tangible: More than 600 managers have participated in the 60-minute “Manager Connect” virtual program. Topics covered include: managing remote teams, manager readiness for hybrid work, and performance-focused management (Uber’s 2022 P&C Report).
○ Uber has a “drive your growth” philosophy; they promote employee development.
● Intangible: Uber invests directly in employee resource group (ERG) leaders as a way to support the communities and build diverse leaders for their organization.
○ ERG leaders are provided various growth and development opportunities, such as training courses, coaching, and executive mentorship (Uber 2022 P&C Report). Again, Uber promotes growth within its employees.
● Uber generated $31.8 billion revenue in 2022, a 82% increase year-on-year (Uber Investor).
● Net cash used in operating activities was $244 million in the fourth quarter of 2022 (Uber Investor).
● Uber has partnered with 6 other technology organizations to enhance cross-learning and shared best practices around accessibility for employees living with and supporting those with physical, mental, and emotional disabilities (Uber’s 2022 P&C Report).
● Uber is now offering the option on its app to hail self-driving taxis developed by another company, Motional (CNN).
● Uber has 74 offices across the 34 countries.
● By incorporating sustainable building standards into all new office builds, Uber has achieved global recognition through LEED and WELL certifications (Uber’s 2022 P&C Report).
● One of Uber’s niche markets are working people in the city, who previously relied on taxis.
● Uber, on average, has been found to be cheaper than taxi cabs, their rivals, across the country (Business Insider).
● Thus, Uber is a low-cost provider for the target market of people who work in the city and do not have their own car.
● Uber was the first ride-hailing app on the market, launching in 2009 with an app for iOS and Android (CNET).
● Uber offers consumers something attractively different: a ride-hailing service that is quick and relatively cheap, with an emphasis on inclusivity.
● To conclude, Uber is widely-recognized as a trailblazer in the ride-hailing industry.
03. blue ocean
● Now, there are many services that have similar prices to Uber. However, Uber is seen as the “most valuable for your dollar” because of its’ quickness, convenience, and ease of use.
● Thus, Uber utilizes the blue ocean business-level strategy in emphasizing that its convenient/quick service is what makes it so valuable.
01. Start being a differentiated ride-service for people who value sustainability (target group).
● An opportunity for Uber is to market more towards people that value sustainability.
○ Being a ride-hailing app, sustainability is not the first thing that comes to mind.
● With unique features that increase value, consumers are willing to pay a higher price.
● Expand the initiatives of “UberX Share.”
○ Emphasize to consumers that they can avoid extra emissions by sharing their ride.
02. Invest in differentiation initiatives to serve schools (target group).
● Another opportunity for Uber is to look to create partnerships with schools (most likely private schools).
● Instead of riding the bus, Uber can offer a different way to ride to school. It would be more customizable and allow students to have a quicker ride to school.
○ Uber can group students by street/neighborhood. Buses usually carry multiple neighborhoods, which is time-consuming.
Being a low-cost provider would be difficult for Uber, as there is the cheaper substitute of public transportation or walking. Thus, our recommendations are based around differentiation.
● Uber’s main business activity is ride-hailing (48% of revenues).
● It has since diversified, with services such as UberEats (34%) and UberFreigh (18%). (Uber Investor)
● Thus, Uber utilizes the related diversification corporate strategy, where less than 70% of revenues comes from a single business activity.
● After aggressive hiring in 2022, Uber is laying off a total of 150 workers at Uber Freight, which makes up about 3% of its employees (Investor Place).
● Uber’s business in Japan has been mostly retracted, after disastrous trial run (The Drinks Business).
○ This lessens the diversity of operations, so Uber can focus on other core services.
● Uber provides an app and access to multiple mobility services owned and operated by that company on a single platform.
○ The Uber app gives access to regular Uber rides, UberPool, and more.
● Uber’s competitor, Lyft, is considered more “vertical” — it is focused more on solely transportation (CNBC).
○ Uber has ambitions in food delivery, freight, etc.
● A strategic alliance is a voluntary arrangement between firms. It involves the sharing of knowledge, resources, and capabilities to develop processes, products, & services.
○ To work, the benefits must exceed costs.
● Tesla is an American multinational automotive and clean energy company. In recent years, it has exploded in popularity. Its stocks have been exponentially increasing and investing in it is a great opportunity.
● What does this strategic alliance look like?
○ Tesla will lend some cars to Uber, so Uber drivers can drive them. Uber can put these “Tesla Rides” under a new segment of Uber ride types.
○ Environment-conscious consumers may ride in a Tesla for the first time. They might decide that they really like the car and want to buy their own. Thus, both Tesla and Uber get more business.
○ People who want that feeling of luxury but cannot necessarily afford to buy a Tesla can instead buy an Uber ride. This would be great for big events such as proms and weddings.
● By executing this strategic alliance, both Uber and Tesla will benefit from a wider consumer range. Both of their competitive positions will be strengthened.
● https://www.usinflationcalculator.com/inflation/current-inflation-rates/
● https://www.bls.gov/lau/
● https://finance.yahoo.com/news/planet-based-foods-announces-pacific-123000955.html
● https://www.iea.org/reports/global-ev-outlook-2021/trends-and-developments-in-electric-vehicle-markets
● https://countryeconomy.com/gdp/usa#:~:text=The%20GDP%20figure%20in%202022,million%20with%20respect%2 0to%202021.
● https://www.reuters.com/world/us/republican-told-gunmen-aim-lower-attacks-new-mexico-democrats-2023-01-17 /
● https://www.bbc.com/news/business-65171071
● https://www.freep.com/restricted/?return=https%3A%2F%2Fwww.freep.com%2Fstory%2Fnews%2Flocal%2Fmichiga n%2F2023%2F04%2F15%2Fchildren-united-states-us-population-census%2F70107266007%2F
● https://fortune.com/2023/04/19/more-ceos-stepping-down-leaving-roles-for-women/
● https://www.bbc.com/news/articles/c0vzvj9v897o
● https://www.businessinsider.com/us-retailers-close-50k-stores-over-next-five-years-ubs-2023-4
● https://www.bbc.com/news/world-africa-65363586
● https://www.ukrinform.net/rubric-economy/3699451-poland-gives-ukraine-almost-1500-tonnes-of-equipment-for-i nfrastructure-restoration.html
● Uber 2022 annual report: https://s23.q4cdn.com/407969754/files/doc_financials/2023/ar/2022-annual-report.pdf
● https://www.ridester.com/uber-stats/
● https://www.macrotrends.net/stocks/charts/UBER/uber-technologies/number-of-employees#:~:text=Interactive%2 0chart%20of%20Uber%20Technologies,a%2028.51%25%20increase%20from%202020.
● https://www.uber.com/newsroom/uber2022peopleandculturereport/
● Uber’s 2022 People & Culture Report: https://www.uber.com/newsroom/uber2022peopleandculturereport/
● https://investor.uber.com/news-events/news/press-release-details/2023/Uber-Announces-Results-for-Fourth-Qua rter-and-Full-Year-2022/default.aspx
● https://www.cnn.com/2022/12/07/tech/uber-motional-self-driving-vegas/index.html
● https://www.cnet.com/tech/services-and-software/uber-vs-lyft-we-compare-the-two-ride-hailing-apps/
● https://investorplace.com/2023/01/uber-layoffs-2023-what-to-know-about-the-latest-uber-freight-job-cuts/
● https://www.thedrinksbusiness.com/2022/02/uber-eats-delivery-quests-cause-fatalities-in-japan/
● https://www.cnbc.com/2019/04/13/uber-is-way-more-complicated-than-lyft-and-investors-shouldnt-value-them-th e-same-way.html