Marketing Management UBER Analysis Essay

1. IntroductionApplication softw atomic form 18 has been precise popular as distribution platforms since 2008 due to rapid dispel of smartphones all around the worldwide. According to a commercialiseing research done by Gartner (2013), there is an increasing shorten in mobile apps usage worldwide, He indicates that 21.58 billion dollars of  revenue has been do by mobile apps in 2013. Uber was accomplished in 2009 as a digital platform that connects cab number one woods and client, by downloading the online habituatement. Uber typesets the location of nodes and shows the location of the cabs nearby. at a time the customer accepts to pull a get to with push of a botton, the industriousness is thus authorized to take the pay offment based on the extension posting information that has been registered under the customers name, without any nonwithstanding exchanges.Uber was established in San Francisco and has become the worlds most worth(predicate) startup i n the past cinque years. Ubers latest commercialize place value has been determined as 18.2 billon dollars in June 2014. However, as a disfavour of developing markets, the entrance of Gett and Hailo in the UK market, decreased Ubers market value.The study wages of Gett in this comptitive market a exculpatest Uber is charging flat fees unlike Uber. Uber has a gasp pricing dodging depending on the train, weather and distance, which is not a woo efficient way for customer.Therefore Uber it is not the equal haveer in the UK e-hail market. On the other hand surge pricing has persuaded more driver to work for Uber, as it is more in their prefer so that, they give not learn to go by bad weather conditions or give rides in the rush hour with the usual flat f bes.2. visit2.a Organizational environmentThe increasing trend of smartphone usage especially in younger generation, technological improvements and increasing value for time perception established Ubers increasing va lue.2.b Ubers crinkle imitateUber employs driver aft(prenominal) they and their cars maintain been screened by Uber to ensure comfort and sanctuary of customers, Drivers argon besides given an iPhone once they have become a member of Uber. Uber drivers have senior high income comp ard to traditional hack drivers also they do not have to pay for the taxationi independence and the taxes that black cab driver atomic number 18 obligated to pay. On the consumer side, after downloading Uber, they privy track the car as it approaches them on their as well as having nigh information about(predicate) their driver before arrival such(prenominal) as previous reviews and ratings and their photo. Uber s pricing schema is based on the demand, distance and the car type, shut in of high demands or bad weather conditions customers may have to pay a higher fee for their journey or depending and the type of car they request wrongs argon different.Payment is done by the credit card information that the customer is registered the app with. Transactions are totally safe and secure. Uber splits the ride receipts with the driver. Uber originally used to take 20% margin of the feat between the customer and the driver, which is now reduced to 15% due to high comptitions with Gett and Hailo. Uber covers its Research and technology growths, marketing and employees expenses by the portion they take on all(prenominal) action.Another vantage is that Uber does not own a turn over of cars so they are much less costly than their competitors, This down in the mouth cost byplay model enables Uber to keep the large percentage of its revenue as kale. Uber grows by reinvesting in R&D and acquisitions earlier than investing in cars or expensive infrastructures. In the spotlight of this information, it is mathematical to say that Ubers business model is low inventory, high transaction and high margin. Moreover, its business model is receiving the studyity of fu nding from Google Venture.2.c External and immanent abbreviation of UberAnalyzing Uber from the resource-based view is crucial to understand agonistic advantages of it in capital of the United Kingdom hack hailing app market. Constraints imposed by environment give the sack have a big impact on Ubers strategic planning and marketing. Therefore, half dozen external conditions (Political, environmental, Social, Technological, economic and Legal) go out be examined in relation to Ubers business situation by using PESTEL abbreviation.Political factors performances jinx operate external environment in terms of CO2 emissions and humor change. Even though Political factors are more in favor of public deport in post to decrease CO2 emissions and swear out with the climate. Uber however is providing a superior inspection and repair comparing to their competitors for instance Uber is offers loan-blend cars, which is low in emissions and makes it easier for Uber to have aroun d advantage when it comes to the political factors.Environmental factors such as weather conditions stool affect Uber for instance higher demand due to bad weather conditions is evident. The price of the journeys also increases when the demand is higher.Social factors including the change in lifestyle and high percentage of younger population using smartphones, indicates the customer needs, which brings them to the market.Technology developments have a major impact on Ubers business. Increasing role of Internet in peoples life is also crucial for Uber to make innovations.Economical factors such as recessions influence railly the customers budget, therefrom their buying role. On the other hand volatile fuel prices dirty dog have a huge impact on pricing and they are also quite unpredictable.Legal constraints also have a direct impact on Uber. Governments have the possibility to ban Uber, which is already the look in Ger many another(prenominal), or even set in the altogeth er regulations for Taxi hailing apps such as Uber which trick affect their performance in the market.In the following section we under take a SWOT analysis in devote to analyze Ubers Capabilities, which enables us to determine the troupes Strengths and Weaknesses as well as pointing out curses and Opportunities. It is essential in a competitive market to be aware of the weaknesses and nemesiss in order to be able to find solutions for them and also use the opportunities to gain more of them market handle and hence increase the revenues.Figure 2 Presents SWOT analysisStrengths which consist of internal capabilities, Uber was first in the market which creates a competitive advantage by high consumer sensation. One of the carriages of Uber is that, it has different alternatives for different customers. For typesetters case, Uber democratic and UberX car alternatives are available for a cheap and fast drive, whereas if the customer is searching for quality it offers them the U ber Black Car and Uber SUV. Another strength of Uber is that it has spread worldwide starting from USA. It has expanded through 200 cities worldwide. Moreover, the transactions are light-colored, safe and trustworthy. It offers a convenient way of travelling for costumers.Weaknesses indicate the areas that could be improved internally. The major point that is considered as a weakness for Uber is that they do not charge flat fees whereas Gett, which is their main competitor, offers flat and predictable prices. Moreover, Uber drivers do not have a taxi license, which fag end cause jural problems by time. However it operates in many cities, Uber does not operate in rural areas, which can be considered as a weakness. One of the complaints that Uber is face is the poor consumer service. Uber offers a surge pricing for its drivers and do not consume them, but find them through agents.Analyzing the opportunities in depth we can determine that the most influential aspect in Ubers b usiness model is the fact that its a service rather than a output hence they do not have the high sunk be that their competitors have to deal with. Moreover, being a mobile platform and not having a fleet of taxis, which is highly costly, has enabled the firm to turn most of its revenues into profits. These revenues are made from transaction costs rather than production cost. Uber does not employ drivers, which in this case allows the drivers flexibility also permit Uber to employ more drivers.The most important external threat for Uber in UK e-hail app market is the change magnitude market share due to competitors such as Gett. The flat prices of Gett and round other competitors are creating a disadvantage for Uber. Not having the proper taxi license is another disadvantage for Uber. aside from that, there have been many protests by taxi companies in Germany, France, England and other nations accusing Uber to be prohibited due to the fact that their driver are not paying the similar tax rates as other taxi drivers, and other taxi companies accuse Uber of compromising passenger safety, and undermining legislations which exists for them.CompetitorsAccording to the statistics of market shares of taxi hailing apps in capital of the United Kingdom, Gett with 20-30% of market share is the market leader, Uber with 20% shares is the market challenger and Hailo with 10% is the follower in the market. Uber as the challenger is in a patch where they can undertake some of the facilities and services that Gett is already providing for their customers in order to be able to improve their service, gain more customer and thence gain more market share over time.Outlining the competitive embellish is important to appraise competition and indicating the strengths of the competitors can give the company targets on what can be improved and examine weather they can be put oned by Uber. According to national statistics from department for transport, it is estimated that there are 78 thousand taxis and 153 thousand licensed cliquish hire vehicles in England. The fgures present that the number of PHV are twice the number of taxs operatng in England. 31% of total licensed taxis and private hire vehicles in England are in London from which we can go into that private hirng is a popular choice for Londoners.Analyzing Gett-Taxi as the market leader we can imply that some of their most influential advantages areCompeting with flat and predictable prices People who take taxis are not normally loyal to a specific brand and most people would recognize the cheaper option and Gett has the advantage by having predictable prices without surge pricing. Enables Advance fight Unlike Uber, Gett offers advance booking 2 weeks prior to journey whereas Uber has failed to implement this feature in their app. Offers 24 hours customer service for driver and customers Uber has turn out to be quite poor at following through with customer enquiries.On the other hand th e only major advantage of Hailo that we came crosswise is the fact that they are the only company, which has a real taxi license for all their cars.3. Strategic OptionsAccording to Porter, competitive advantage is derived from the value a firm is able to create for its vendees that exceeds the firms cost of creating it. returns of Uber can be increased by the following three categories suffice Reducing the time to reach customers when they need the service can enhance Ubers service. The cab and the driver have to be reliable and can submit modern and comfortable cabs for service. Personnel service can be provided with professional drivers, drivers must be trained to provide personalised customer service. Image Advertising, promotions on special days and to first users.Porters Generic StrategiesPorter called the generic strategies has three direction where the market can be segment or tensioned on particular path. They are1. Cost leadership,2. Differentiation3. FocusThe Focus strategy has been subdivided into two move Cost Focus and Differentiation Focus. (Refer below figure)The Cost Leadership schemaThis strategy will help to gain competitive advantage through two main methods such as maximising profits by declining costs while selling for average price in the particular indus puree or growing market share through selling for lower prices, although still producing a even-handed profit on each sale as youve focused on lowering the cost.The Differentiation StrategyThis strategy involves in creating your uprights or services different from others and more catchy for your customers as well as to your competitors. Differentiation strategy can be achieved in a success way through good exploration about the goods or services, expansion and innovation of the goods or services, and the ability to provide superior quality products or services. This will create an inimitable control in the particular industry and alongside some scopes will lead to be valued by consumers.The Focus StrategyThe Focus strategy is concentrating on specific ceding back markets through considerate the associations of that specific niche market and the exceptional needs of consumers in it. This can be but low-cost or well-specified goods or services on that particular industry. This will construct strong brand loyalty among consumers. This will lead the market segment to be less attractive to the competitors. Ubers marketing strategy is to provide a premium service at premium price and have loyal customers. It aims at hip, tech-savvy customers whose time is valuable and who are willing to spend money for convenience. The running play of Uber focuses on the service.The ice cream campaign in NYC is an example of the difference in convenience and experience. Where else could you have an on demand ice cream truck pull up in front of your house delivering ice cream for few people? The focus is on providing an extraordinary experience for the customer and let them do the lecture about the brand and the unique service. Uber is having coalitions with Virgin America, which offers Ubers points to its flyer members which increases awareness and credibility to their service. And Trulia is a real-estate company provide prospective r pull ins a dissolve for up to three apartment visits as long as they registered for this promotion. tinkers Five Forces Analysis states that business can be touched by some facts which are determine the competitive power of the business to drive in reality. The fact can be classified into five important forces. They are Supplier power, Buyer power, Threat of substitute, Threat of spic-and-span Entry and Competitive Rivalry.1. Supplier Power the number of suppliers touch on determines the supplier power in the particular business and the exclusivity of their goods or service, their business strength and power over your business, and the cost of swapping from one supplier to another. UBERs suppliers pow er is high because UBER dont employ drivers, free-lanced drivers get register with UBER and get the training and the guidelines before start their self-employment.2. Buyer Power the number of buyers involved determines the buyers power in the particular business, the cost to the buyer to swapping from your goods and services to someone else. UBERs buyer power is high because its a mobile platform and customers have different alternative services like Gett and Hailo.3. Competitive Rivalry the number of capability of your competitors determines the competitive rivalry. When the business has more competitors, and if the competitor can offer equally attractive products and services, then the competitive rivalry is high. UBERs competitors are Gett and Hailo, they provide service in lower cost and they have their own drivers.4. Threat of Substitution the number of alternative options of your customers determines the threat of substitute. When the service or the goods has more substitu te, then the threat of substitute is high. UBERs threat of substitute is high because in London there is many substitute such as tubes, trains, buses, and black cabs.5. Threat of New Entry the capability of other business can wear into your market space by starting up a similar business like you is the threat of pertly entry. If the startup cost is low in terms of capital, time, and technology the late competitor can enter in to your market easily. Ubers threat of innovative entry is very high because entering to taxi service business is very easy because the new business needs a simple mobile application and some free-lanced drivers.Alternative Market Directions for UberDiversification strategies/pathUber can focus on Event specific marketing like special events such as Valentines Day, Harvesting day, Childrens Day, Christmas and New Year days. Uber can provide special offers or promotions for its loyal customers. Personalised Car/ hacker with the special trained driver for bus iness people, celebrities and high-class tourists. Market development Strategies/Path Expand the market with average pricing in nearby small cities and rural areas to attract more new customers. Initiating and developing new long term partnership with local anaesthetic hotel chains and airport local travel unit to provide transport service such as site seeing, and airport pic & drop to their customers. Initiating and developing new long-term partnership with local schools to proved service for their students. Initiating and developing new business wing/unit for disable people to accommodate their transport need with the special features they need. Initiating and developing new long term partnership with courier service organisations like Royal Mail, DHL, and FedEx to provide their delivery service to their customers. Initiating and developing new long term partnership with local manufacturing companies to go their logistic service such as transporting to shipping, del ivering goods to their customers, and transporting their raw materials for their production.4. merchandising StrategiesUber focuses on hiring local drivers in each city. They are trying to localize the company in each city in every aspect they see. The effect of that is building a trust between the company, the drivers, and the customers all together. After hiring local drivers, Uber give these drivers trainings and guidelines to teach them the Uber Way. They also provide their employees with a ball-shaped chat room that they interact in, talk, give ideas and suggestions, and best practices are divided up across the company. So by cultivating collaboration and building trust internally and externally, Uber is trying to gain a competitive advantage in order to increase their market share, therefor increasing revenue.Uber likes to surprise and delight their customers. For example they delivered kittens and ice cream in New York. This is on of Ubers ship canal to allow customer actio ns to go viral on social media and offline to try to send their message to new markets in order to gain new opportunities. Uber uses a unique way in serving their customers. They have a special team whose mission is to make sure customers get their taxi when and where they need them in no more than 9 minutes.They created a referral computer program integrated in the Uber app. It gives customers the ability to share a special jurisprudence between their friends, and in that way Uber can track how many shares made, which indicates the percentage of Ubers customers acquisition.Ubers Marketing Objectives1. Offer best Service.2. More Reliability.3. Improve Customer Support.4. Unique Style.5. Provide Comfort.6. Reduce Frustration.6. fine AnalysisThe SMART analysis indicates that Uber can have many ways to improve every aspect in the company. Their objectives are not time-oriented. On the other had, their objectives are all achievable and relevant to the companys mission. The analy ses also show that most of the strategies and suggestions given are specific, achievable, and relevant. That indicates that Uber has many opportunities that they can benefit from in order to gain more competitive advantage and to operate better in the market.7. ConclusionOverall market share of Uber in e-hailing market can be increased by implementing some strategies.The report shows that Uber has many opportunities to increase their market value, market share and gain a competitive advantage over their competitors. Looking at the analysis we realise that Uber has a very high authorisation in achieving their objective about gaining customers and eventually increase their revenue. Along the side of improving some of their services, following some of the strategies mentioned above and solutions suggested by us, proves that Uber has a high potential and can use the first mover advantage. Distribution channel of Uber can be improved by targeting other parallel industries and move custo mers into great contribution. Branding image of Uber can increase its value by providing good service and the operating areas can be increased to reach a higher volume of customers. Moreover, the opportunities discovered by using the analysis cleverness be considered as a useful way of taking Uber to a higher position in the e-hail market in London.10. ReferencesAnon, How is Uber different from a standard taxi? ready(prenominal) athttps//support.Uber.com/hc/en-us/articles/201968463-How-is-Uber-different-from-a-standard-taxi- Accessed November 13, 2014a.Anon, The Business Co-Founder. acquirable at http//businesscofounder.tumblr.com/post/34572063959/lessons-from-Ubers-marketing-strategy Accessed November 13, 2014b.Damodaran, A., 2014. A Disruptive Cab Ride to Riches The Uber Payoff.Forbes. 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