Required information Skip to question Uber Continuing CaseChapter 6: Strategy This part of the Uber continuing case focuses on Chapter 6 and covers principles related to strategic management. This cumulative cases real-world application of management knowledge and skills is designed to help you develop critical thinking ability and realize the practical power of sound managerial skills for solving problems in your job and career. Read the cumulative case and respond to the questions that follow. Ubers business model is based on providing value to both drivers and passengers. It provides value to passengers via the principles of simplicity and convenience: simplicity in that passengers only need an Internet connection, a credit card, a smartphone, and the companys mobile app; convenience because the app shows your exact geographical location and a driver will immediately inform you when you will be picked up. (You can follow the progress of your approaching ride on the screen of your smartphone.) Strategic Implementation Ubers strategic implementation relies on the following tactics: Ease of use and transparency. Uber allows riders to conveniently order or hail a car from their smartphone instead of outdated taxi booking mechanisms. Riders also receive a fare estimate before committing to a ride, which they usually cannot do with a taxi, and the total cost is automatically charged to their credit card and paid to the driver. The rider does not have to worry about having the right amount of money or being ripped off by a dishonest driver. Drivers also benefit because they dont have to carry cash in a potentially unsafe environment. Ease of employment for drivers. Uber allows drivers to use their idle cars to earn extra income on their own schedules. All they need to do is tap a button on their phones and they are at work. The app also allows drivers to make extra cash when demand is higher than normal, which increases their earning potential. Rare technology that may still be subject to imitation. Ubers variable pricing technology, also known as surge pricing, is patented. The technology is based on an algorithm that allows the companys app to raise or lower a ride price based on demand for the service at a specific point in time. The patent makes it more difficult for competitors to replicate Ubers technology. However, Uber exposed a good amount of information when it filed for a patent, potentially making its product more vulnerable to imitation. Maintaining quality control. Uber ensures quality by checking drivers backgrounds for criminal history and requiring them to show proof of insurance. In addition, the company seeks feedback by allowing customers to rate drivers on a 1- to 5-star scale, and drivers are expected to maintain a prescribed level of service quality. Similarly, drivers may also rate their riders, who can be blackballed from using the service if they rack up too many low ratings. Investing in the future. Ubers growing valuation (an estimated $72 billion in 2018) allows for continued investments in new lines of business, such as self-driving vehicles. The company is also positioning itself for an initial public offering (IPO) in 2019. A successful IPO would allow Uber to be even more innovative in the long run by investing in new projects such as Uber Air, which would be an air taxi. Ubers Current Reality Competition Uber has outlived some competitors such as Sidecar, but still faces others, both in the United States and overseas. Its principal U.S. ride-hailing rival is Lyft, founded in 2012 and now in roughly 220 American cities. Lyft works just like Uber as users see their location on a map; are provided with an estimated fare to be charged to their credit card on file; and have multiple ride options (e.g., Lyft Plus for larger cars and sport utility vehicles). Smaller competitors include Curb, which operates in 60 U.S. cities. Curb is a bit different than Uber and Lyft, though. For example, its drivers can accept credit cards or cash. Outside the United States, Lyft directly challenges Uber in Canada and partners with Grab in Southeast Asia. Americas second biggest ride-share company also launched an office in Munich, Germany, in January 2018, causing speculation that it is looking for a footprint in Europe. Ubers greatest overseas rival however is Didi Chuxing in China. Didi is the worlds largest ride-sharing company, operating 25 million rides per day, mostly in mainland China. Didi Chuxing outmaneuvered Uber in China, resulting in Didis purchase of Ubers Chinese business in 2016. Both organizations retained minority equity interests in each other though, making them invested in each others success. SWOT Analysis An analysis of Ubers strengths and weaknesses reveals the following: Strengths. The company has an unlimited number of drivers and vehicles, and since it does not own its own vehicles, there is no product cost. Its drivers are classified as contractors, not employees, which lowers labor costs. Its prices are lower compared to those for taxis. Weaknesses. The company is highly dependent on the Internet, which means it cant move to countries with poor Internet connectivity. Many legal battles and internal scandals have hurt its image, especially under former CEO Kalanick. Highly dependent on manpower, and if they dont pay enough, a lot of their drivers can go to competitors like Lyft. Known to have an unpleasant, aggressive and sexist corporate culture, which is difficult to change. Uber faces a wealth of opportunities, offset by a multitude of threats, that may affect the firms strategies: Opportunities. Expansion of delivery services such as Uber Eats. Development of Uber Air in order to offer transportation across cities. Refinement of self-driving cars. Increased global popularity of a sharing economy. New CEO Dara Khosrowshahi has a better reputation than former CEO Kalanick. Threats. The company has growing legal action in the United Kingdom, France, and Spain. Some countries, such as Denmark, Bulgaria, and Hungary have officially banned it from operating. Competition in South America, Europe, and Asia is intensifying. Growing retaliation from traditional taxi services.

Are Ubers strategies consistent with the results of their SWOT analysis? Explain using examples from the case.?