CASE 10
Uber: Feeling the Heat from Competitors and Regulators Worldwide
10–12
i. Subsidizing drivers to increase supply aligns
with the strategy of spend for growth now and reap
the profitability later.
ii. Created efficient operational system that
f) Uber aggressively challenges outdated regulations. The
company sometimes launched in new cities without approval
from the local governments. (W/T)
g) Operations and logistics adjusted to conditions in each
5. Human Resources Management (HRM)
● Classifying drivers as independent contractors is a
crucial element in Uber’s business strategy
(1) Uber’s current HRM strategies, policies,
and programs are clearly stated. (S)
(2) Yes, it is consistent. Because they are
● Uber is currently facing a class–action lawsuit due
to the corporation’s HRM in terms of improving the
fit between individual employee and the job. Because
the drivers are classified as independent
contractors, they do not have reimbursements for
business expenses and are not entitled to employee
benefits. (W)
(1) Aggressive behavior (seen with governments
and competition as well).
(2) Allowed for low costs, however, may not be
CASE 10
Uber: Feeling the Heat from Competitors and Regulators Worldwide
10–13
(4) Low cost (contractors not entitled to
● Lyft and cab companies encourage tipping. Uber
stresses contractual agreements with drivers
(entrepreneurial spirit).
● Yes, Uber uses appropriate concepts and techniques
to evaluate and improve corporate performance. The
● N/A
● No, HRM does not adjust to the conditions in each
country. All drivers are treated as independent
contractors rather than employees.
● N/A
Information Systems (IS)
● Uber uses a differentiation strategy to gain a
competitive edge over their competitors via their IS
strategies.
(1) Uber’s current IS objectives are implied.
(2) Yes, they are consistent with the
corporation’s mission, objectives, strategies,
● In general, Uber’s IS is performing well, where they
have purchased deCarta mapping, which saved the
company money. (S)
(1) Gaining competitive advantage where
possible and avoiding dependency relationships
CASE 10
Uber: Feeling the Heat from Competitors and Regulators Worldwide
sensitive geolocation data). They had to adjust
its data privacy policies. (W) At the same
time, they could sell deCarta services to
competitors to yield additional revenue stream
(O).
(3) Yes. Using cutting edge technology for
cutting edge ridesharing solutions.
(4) Yes. Uber’s “surge pricing,” dual-star
rating system for both the driver and passenger,
system for calculating tolls all gave the
● Lyft’s user interface was an almost exact replica of
Uber’s simple mobile app.
● As previously mentioned, Uber has been criticized
for their inappropriate use of customer data. (W) In
some ways, they have not been appropriately using it
to evaluate and improve corporate performance under
● N/A
D. Summary of Internal Factors (See IFAS)
V. Analysis of Strategic Factors
A. Situational Analysis—See SFAS Table
B. Review of Mission and Objectives
1. Current mission and objectives still appropriate and
relevant to key strategic factors.
VI. Strategic Alternatives and Recommended Strategy
A. Strategic Alternatives
1. Current objectives are good:
CASE 10
Uber: Feeling the Heat from Competitors and Regulators Worldwide
10–15
c. More product variety i.e in markets where cars are
not prevalent use bike or scooter for Uber services
and name it Uber tuk-tuk, Uber bike, Uber scooter
ect.
d. Grow organically, not through acquisition.
Alternate strategies
a. Cost leadership—Part of current Strategy
i. Pros:
1. Competitive advantage
b. Differentiation—Not part of current Strategy
i. Pros:
1. Utilize current technology and resources.
2. Hard to compete with substitutes.
c. Stability—Not currently employed
i. Pros:
1. Stable revenue to make up for losses and debt.
2. Lean and efficient operations.
ii. Cons:
1. Unattractive to Wall Street.
3. Higher revenue.
ii. Cons:
1. Higher cost.
2. Quality control.
e. Retrenchment—Not currently employed
i. Pros:
1. Cut cost, bring more profit.
B. Recommended Strategy
1. Differentiation via technology and acquisition:
● The company has reached its global presence in term
of size, but in some current area where possible,
CASE 10
Uber: Feeling the Heat from Competitors and Regulators Worldwide
Uber should move into improving its service via new
2. Spending more on researching of driverless technology will
bring huge profit to Uber to make up for the losses, make
the service much harder to imitate and may even avoid many
lawsuits against human driver.
3. The company needs to issue guidelines on acquiring new
resources.
VII. Implementation
A. Organizational Structure:
1. Restructuring the company into different units based on
service/technology is necessary.
2. Product managers of current services should be head of
these programs.
B. The programs are feasible with current venture investment at
Uber but will add more risks.
C. No new operating procedures need to be developed.
VIII. Evaluation and Control
A. Current information system is sufficient to provide feedback
for new implementation activities since Uber is famous for
having scalable analytics system to track any operation data.
B. Control measures will need to be improved to enforce
conformance with recommended strategic plan.
1. Discussion of control measures is not available in the
CASE 10
Uber: Feeling the Heat from Competitors and Regulators Worldwide
10–17
EFAS Table: External Factor Analysis Summary (EFAS)
External Strategic
Factors
Weight
Rating
Weighted
Score
Comments
Opportunities
Driverless Technology
0.15
5
0.75
Cut costs by
eliminating driver
commission.
Untapped Markets
0.1
4.5
0.45
Leverage global
brand in new
markets.
GrowingNnumber of
0.05
4.5
0.23
Increase in supply
Threats
Class Action Lawsuit
0.15
4.75
0.71
Recognizing drivers
as employees incurs
costs.
CASE 10
Uber: Feeling the Heat from Competitors and Regulators Worldwide
lobbying.
Driverless Technology
0.15
5
0.75
Could eliminate
relevance.
0.05
Increased Competition
0.1
0.5
Spend more cash for
IFAS Table: Internal Factor Analysis Summary (IFAS)
Internal Strategic
Factors
Ratin
g
Weighted
Score
Comments
Strengths
Product Diversity
4.5
0.68
Meeting needs of all
segments.
4.75
Uber App
4.75
0.67
Unparalleled user
experience & tech
platform.
Global Presence
4.75
0.62
Operations in 300
cities (58
countries).
Weaknesses
3.75
CASE 10
Uber: Feeling the Heat from Competitors and Regulators Worldwide
10–19
(w/ governments &
competition).
Easy to Imitate
4
0.2
Low barriers to
entry. High
competition→ market
share unsustainable
w/out
differentiation.
SFAS Table: Strategic Factor Analysis Summary (SFAS)
Strategic Factors
Weight
Rating
Weighted
Score
S
h
o
r
t
I
n
t
e
r
L
o
n
g
Comments
CASE 10
Uber: Feeling the Heat from Competitors and Regulators Worldwide
m
e
d
i
a
t
e
(O) Driverless
Technology
0.14
5
0.7
x
x
Cut
costs/eliminate
drivers.
(T)Class Action
Lawsuit
0.1
4.75
0.48
x
Classify drivers
as employees
(costs)
(T)Increased
Competition
0.08
5
0.4
x
More spending on
gaining market
share (longer to
profit).
segments.
CASE 10
Uber: Feeling the Heat from Competitors and Regulators Worldwide
10–21
(returns on
investment.)
(W) Negative
Publicity
0.07
3.75
0.26
x
Weakens brand
image/reputation
.
Total Weighted
Score
1.0
4.71