Case 12 : Uber in 2016: Can It Remain Dominant Leader of the World’s Fast-Emerging Ride sharing Industry.

2. Company Background
Founded in 2009
Founded by Garrell Camp & Travis Kalanik
Based in san Francisco
Its mainly a private car service
Communications through apps
Use technology to bring together passenger and drivers

3. 1. What is Uber?
2. Someone who needs a personal drive from any point at any time
3. Someone who wants to have a side business or full time by driving
people for money
4. UBER connects these two needs in simple fast & predictable way

4. Strategies of UBER
Growth Strategy Product Differentiation StrategyPricing Stagey
400 60
160,000
Drivers

12. 1. Degree of Rivalry among competitors is High, with Strong Impact.
2. Potential of New Entrants is High, with Strong Impact.
3. Threat of Substitute Products High, with Strong Impact.
4. Bargaining Power of Buyers (riders) is Low, with Strong Impact.
5. Bargaining Power of supplier is Low Bargaining power of drivers.
Porter’s – Five Forces Assessment Low to High
Total Number: 16
16 X 100
25
56%

13. Industry Analysis: Porter’s Five-Forces Model Porter’s – Five Forces
Assessment for Industry
Impact on the Industry Competition
Increases
Competition
Decreases
Competition
Degree of Rivalry among Competing Firms Industry Assessment
Number of competitors High Yes
Market growth rate High Yes
Industry growth rate High Yes
Asset intensity Low Yes
Product differentiation Low Yes
Concentration ratio Medium Yes
Exit barriers Low Yes
Overall Assessment High Degree of Rivalry Strong Impact
Degree of Rivalry among competitors is High, with Strong Impact:
 236,000 business operating in the industry companies and more than which increasing the impact of rivalry.
 Small companies entered niche market that isn`t previously targeted.
 Marketing and branding plays a huge role in stealing customers and increasing rivals market share.
 The industry has low exist barriers.

14. Potential Entry of New Competitors Assessment Increases
Competition
Decreases
Competition
Economies of scale Low Yes
Absolute cost advantage Low Yes
Brand identity High Yes
Access to distribution High Yes
Switching costs Low Yes
Government policy / barriers High yes
Overall Assessment High Potential Entry of New
Competitors
Strong Impact
 Potential of New Entrants is High, with Strong impact:
 Entry to the industry could be expensive in terms of regulatory restrictions and obtaining licensing.
 The ease of technological use made it easier for new entrants to copy other compete
 Ride experience contributed to differentiation in service
 Technology facilitated access to distribution Channels.

15. 3.Potential Threat of Substitute Products
and Services
Assessment Increases
Competition
Decreases
Competition
Functional similarity: similar products High Yes
Functional similarity: alternative products High Yes
Products' demand– price change (trend) High Yes
Overall Assessment High Potential Threat of
Substitute Products and Services
Strong Impact
Threat of Substitute Products High, with Strong Impact
- High price changes in the industry
- High alternative of providers
- Low differentiation

16. Bargaining Power of Buyers (riders) Assessment Increases
Competition
Decreases
Competition
Buyer concentration Low Yes
Quantity and size of purchase High Yes
Number of suppliers (competitors) High Yes
Switching costs Low Yes
Substitute services High Yes
Threat of backward integration Low Yes
Overall Assessment Low – Medium Bargaining Power
of Customers
Strong Impact
Bargaining Power of customer is Low, with Strong impact:
- Barging power of riders is low: The only form of “bargaining” that is given is options for different price points of
rides.
- Switching barriers for demand is low
- Buyer information availability is high through rating system

17. Bargaining Power of Suppliers (Drivers) Assessment Increases
Competition
Decreases
Competition
Supplier concentration Low Yes
Service differentiation Medium Yes
Number of buyers High Yes
Switching costs Low Yes
Substitute raw materials Low Yes
Threat of forward integration Low Yes
Overall Assessment Low– Medium Bargaining Power
of Sellers
Strong Impact
Low Bargaining power of drivers.

18. N+1 vs 0+1
0+1

20. PESTLE
 Political-
• Have to follow minimum wage rules
 Economical-
• GDP growth
• Oil price got high
 Social-
• Reduce unemployment
• Tourism increased
• Experience of own private car

21. Technological-
• Mobile app
Legal-
• Filling forms and passing criminal background
Environmental-
• Noticeable success
• Popular everywhere
PESTLE

23. Strength
Customer centric
Renowned band
Less investment & liabilities
Unlimited fleet of vehicle
Mobile friendly applications
easy payment system
Private investment plenty
Convenient for driver

24. Weakness
Lack of loyalty between Uber and driver
Low driver earning in comparison to high cost of operation
Privacy concern- records of customer movements having by Uber
Crimes conducting by Uber drivers hampering uber
Surge pricing

25. Opportunity
Increasing valuation which can attract more investor
Additional service old people, patient, children to hospital
Cheaper electric cars can be used
More Uber car means shorter waiting time

26. Threat
Law suits in multiple countries
Fraud and scandals also increasing in Uber
Drivers aren’t happy because of low profit margin
Easy to copy the business model which will lead to more competitor
Problem with local government

27. • Driver Treatment
• Inadequate Background Check
• Drivers Violence
• Passenger Refusal
• Surge Pricing
• Undermining Competition
Problems

28. Recommendation
• Apply the finger print system to check the criminal history of the
new drivers.
• Fixable business model to be adopted in the new market with
specific regulations.
• Launching a new services for disabled persons.
• Invest more in the relationships with drivers, through a unique social
security and insurance programs.

29. Any Questions???