Porter’s five forces analysis for Uber

The competitors of Uber (for example - Ola, Curb, Didi Chuxing) compete on different aspects like
price, customer service, convenience, comfort and reliability and if we see the overall competition that
the Uber is facing in its industry, the industry rivalry is very high.
With so many options available in the industry to choose from, highly price sensitive customers have
an upper hand as they can shift from one service to another. The shifting cost in the market is also low
thus we can conclude that the buyers in case of Uber has high bargaining power.
Likewise, the suppliers in case of Uber also has a high bargaining power because Uber outsources
their cars and the driver’s services which gives the suppliers an upper hand on Uber.
There is a high threat of new entrants into this industry because the costs and barriers to entry are low.
Also people are now looking for convenient ways of travelling which makes the market attractive so
anyone who want to work as their drivers can just bring their own cars, get it registered and work for
Uber at flexible hours
The other transport companies that are based on the same business model and provides same
convenience and price to the customers are considered as a threat of substitutes.
Opportunities- Scope for future improvements
With increasing internet penetration and smart phone users, technology based applications like Uber
can expand their services to other cities and enlarge its footprint over the country. Uber can provide
special transport services such as paid ambulances or urgent and emergency vehicles for dedicated
transport operations. Uber can bring in more environment friendly methods such as electric cars ,
battery cars usage. A smart idea for Uber can be to launch movers and packers support whereby
people can search movers and packers in the nearby area via Uber. Uber being a recognized brand
worldwide has got a high potential in emerging market.
Blue Ocean Strategy
Uber started with the taxis, car sharing, rentals, premium high end cars, and outstation with cheaper
price and hassle free booking but now Uber has created a new market where Uber not only offers
transportation facility, but also provides food delivery service with Uber Eats.
Tabulation Bar Graph
Value Chain Analysis
Uber operation involves requesting the ride, ride, pay and go in more than 760 cities worldwide.
Outbound logistics in value chain analysis is associated with warehousing and distribution of
products. When it comes to Uber marketing and sales, it relies on social media marketing and word-
of-mouth marketing to communicate its marketing message to the target customer segment.
Moreover, Uber also uses print and media advertising, sales promotions, events and experiences and
public relations as part of its marketing strategy. Uber provides high level of customer service.
Drivers have an incentive to maintain a clean car and provide good service. Each ride receipt includes
a map and a GPS track. Customers can complain if their driver took a longer route to reach the
destination. Uber is assessed to be prompt in issuing refunds in such situations.

Key Success Factor of Uber

Benefits for Customers- Hassle free booking of taxis, easy payments and refunds, faster and secure
service. Customers get to track the GPS of the taxi and a cleaner safer ride.
Benefits for Uber Drivers-Uber drivers are highly benefitted since the company are creating good
revenue. They get incentives on the basis of ratings from the customers.
Word of Mouth Marketing- Word of Mouth Marketing has created wonder for Uber. Uber has used
sales promotions, events and experiences and public relations as part of its marketing strategy.
Evolution of New Industry- Uber has also come up with UberEats with which one could order food
through the app, and UberEats would deliver the food very fast.

Generic Strategy Of Uber

Uber started as a simple app to connect riders with drivers which has evolved a lot and included a lot
more features to make users’ task simpler. The generic strategy used by Uber is a mix of cost
leadership and technology based differentiation. Anyone who owns a vehicle and can drive can
become a driver for Uber and earn money working part time. So, this allows cost cutting on
infrastructure and maintenance. Customer convenience here becomes an important differentiating
factor for the brand. Since the level of convenience is higher, it adds quality to the service and
therefore becomes a source of competitive advantage for the business. The strategies adopted by
Uber are market penetration, market development, product development and diversification. Uber
has adopted a price surge policy where by simply increasing the price, Uber encourages more drivers
to get on the road, till there is enough supply.