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

2. 1. What is UBER?

3. Someone who needs a personal drive from any point at any time

4. Someone who wants to have a side business, or a full-time business,
or a revenue generation hobby by driving people for money

5. UBER connects these two needs
in simple, fast, and predictable way

6. 2. Industry before UBER

7. [Personal Transportation Industry - TAXI]
License Fare
Taxi supply Regulations
Protective! Costly! No invest!
Gov. Taxi Firm
Low customer satisfaction

8. 3. How UBER works?

9. GPS
RIDE
80% of Fare
20% of Fare

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)

11. Generalist Niche
ValueNetwork Effects
UBER X
UBER Black
[UBER focuses on Generalist strategy in network effects industry]

12. 4. UBER’s International Strategy

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

14. 5. Five Forces Analysis

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]

16. 6. Challenges & Group Suggestions

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