2. Agenda
1. Company Background
2. Case Highlights
3. Business Model
4. Internal Analysis
5. External Analysis
6. SWOT Analysis and Recommendations
3. Company
Background
● Founded in 2009
● Founders: Garrett Camp and
Travis Kalanick
● Based in San Francisco
● Originally a private car service
for executives
● Communication through emails
and codes
● Started growth in 2010
● Use technology to bring
together passengers and drivers
4. Case Highlights
Pricing Strategy
● Surge Pricing
● Lyft and Taxi Competition
Marketing Communications
Market entry/Employee
recruitment
● Butting heads with Lyft
6. Product Definition
Tap the app, get a ride
Uber is the smartest way to get
around. One tap and a car
comes directly to you. Your
driver knows exactly where to
go. And payment is completely
cashless.
7. Customer Definition
● Do not own a car.
● Do not want to drive themselves to a party or function.
● Like to travel in style and want to be treated as a VIP.
● Want a cost-efficient cab at their doorstep.
Relationship:
● Social Media
● Customer Support
● Review Rating and Feedback system
8. Value Proposition
Customers:
● No need to wait for a taxi for long times.
● Free rides on certain occasions and
discounts from time to time.
● Prices lesser than the normal taxi fares.
● Uber’s tagline says – Your personal driver.
It lets customers travel in style.
● Fixed prices for certain common places
(Airport)
Drivers:
● Additional source of income.
● Flexible working schedules. Can work part
time or simply whenever they like.
● Easy payment procedure.
● Those who love to drive can earn money
while pursuing their hobby.
● Uber pays drivers to be online, even if they
don’t get any request.
9. Profit Proposition
● Surge Pricing
● Car rides on per KM/Mile basis
● UberX, Uber Black, Uber Taxi, Uber SUV
● Uber keeps 20%, drivers keeps 80% of fare
12. Internal Analysis
Mission Statement: Transportation as reliable as running water, everywhere for everyone.
Strategic Objectives:
● Aggressive growth and global expansion
Strategies:
● Recruitment strategies
○ Drivers/logistics and social media/public relations
● Promotional strategies
○ New user discount codes
○ Social Media - Twitter, Facebook, YouTube, and its website
○ Promotional Events - “Romance on Demand”, ice-cream delivery, Christmas tree delivery, etc.
13. Internal Analysis
Resources:
● Financial - $258 million in capital (2013) from investors
● Human - Founders, internal management team, recruiters, drivers, etc.
● Technological
Capabilities: “Tap and ride” technology, fast, reliable, “safe” and convenient transportation
Core Competencies: Customer service, User experience, Ride options
Competitive Advantages:
● First mover (2009)
● Customer loyalty
15. External Analysis - General Environment
Political
● Laws banning or limiting the
number of Uber drivers
● Registered with Federal Motor
Carrier Safety Administration
● Airport pickup not allowed
Economical
● Increased Competition
Social
● Low driver wages
● Certain areas
● Economic friendly alternatives
Technological
● Self driving cars
● Electric cars
16. External Analysis - Industrial Environment
Threat of New Entrants (Low)
● Barriers to Entry are high
● Regulations on amount of drivers
Threat of Substitutes (High)
● Existing Substitutes
○ Taxi
○ Public Transportation
○ Biking
● Quality performance and price comparisons
17. External Analysis - Industrial Environment
Bargaining Power of Suppliers (Low)
● Oil and gas prices
● Manufacturing leverage
● Switch to gas saving cars
● Supply of drivers
Bargaining Power of Buyers (Medium)
● Low to no switching costs
Threat of Rivalry (High)
● Competition - Lyft, Taxis, etc.
19. External Analysis - Competitor Analysis
Future Objectives: Expand and be able to offer rides at airports and areas where they are
currently unable to. Expand into highly populated, local areas such as Miami and Washington
DC and international markets such as India.
Current Strategies: Offer rides to areas where taxis have no presence or where taxis are too
costly.
Assumptions: Uber can assume that the future will lead to more success for their company.
Lyft and Taxi services will continue to improve so Uber must stay on top of their game.
Capabilities: Uber is capable of providing rides through the use of a smartphone app.
Response: Uber must expand into new areas and lobby for certain laws. Uber must pay drivers
more for better customer satisfaction.
21. SWOT Analysis
Strengths
● It is a well-recognized brand.
● As cashless payment system is used, Uber can track and
choose highly rated drivers.
● The prices are lower compared to traditional taxi
operators.
● It has a high standard of service, verified drivers and cars.
Uber Black users enjoy very high standard of service.
● Operational cost is quite low. As it relies on
customer-to-driver interaction, a dispatcher is not needed.
Weaknesses
● The idea can be easily copied. Nothing will prevent
competition from presenting the same product.
● Very unpredictable business model.
● The relationship between Uber and the drivers is ethically
questionable. It lacks the real connection. So, it is
expected that loyalty between Uber and its drivers is quite
low.
● There are privacy concerns within the application itself
with it’s users.
Opportunities
● Can tap growing markets in suburban areas where taxi
services are not available.
● It can exploit new and big markets in countries like India
where taxi services are inconvenient and expensive.
● Additional services like transporting older patients to
hospital, transporting children to school and transporting
pets to the vet can be offered.
Threats
● Some new legal regulations in countries like Germany will
ban Uber from operating.
● Problems with local authorities can lead to fines. It will also
earn a bad public relations.
● Increasing competition will ultimately decrease prices. This
will result in loss of customers.
● As new markets and drivers are joining, fraud and
scandals are also increasing. It is damaging for the brand.
22. Recommendations
● Maintain consistent pricing for customers in both rural and non-rural cities.
● Provide validated proof of safety for customer peace of mind.
● Expand business model into other facets of business (i.e. UberAlternate/
UberAlternateX, UberTour, UberFresh, UberEssentials).
● Allow users put in for a reservation hours or days in advance, and let drivers
commit to pick up a reservation.
