Ubers Strategic Management - Case Study Example

Uber’s Strategic Management When examining the role of the company in encouraging its employees to handle the growing competition across the industrysome will examine the impact strategic and brand positioning have on the targeted goals. Some of the companies will seek to manage the intended goals and understand the role of knowledge management in entrenching good values and creative means of dealing with competition. The transportation industry did not realise that the entry of an app-based transport company would make competition rife. Uber appeared with a unique way of dealing with the stresses of getting cars for hire at one’s convenience. These services were becoming tedious for locals and Uber sought to provide a solution to the clients at their comfort. However, the impact of competition in any industry determines the way the company will position itself, grow its revenue and encourage others to deal with the growing need to remain relevant in the industry. Uber Uber started in 2009 as UberCab as a Smartphone-based application that would make the transportation industry capture the growing need for convenience and efficiency. Founded by Travis Kalanick and Garret Camp, it was launched as an operational service in June 2010 in San Francisco. Ryan Graves was the then CEO who later stepped down to take the position of the Vice President of Operations. Kalanick replaced him at the top. By early 2011, Uber had raised more than $11.5 million in funding, and by late 2011, the funding had reached $32 million. This allowed it to get interested parties to assist it make better trends in the global arena (Atkinson & Ezell 2014: 59). Uber began using its position in the US to gain popularity and actualise its services, ensuring that the service was effective and convenient for all its users. Uber was bringing a revolution into the industry and wanted to make good use of the upcoming technology to get more revenue. To achieve this, expansion was important because the service was a rescue for those who used taxis often and wanted to do away with the idea of tipping the driver after every ride (Brown 2013). Uber was providing a safer way of making payments, handling cash and getting around town without worrying about the time taken to wait for a cab. It created an alternative that caught many in the taxi industry unawares because no one thought such a service would come and overtake the investments made in the past. The goal was to create a niche and then expand to other parts of the world, and that has made Uber one of the greatest companies in the world. It is present in more than 230 cities in over 51 countries across the globe. Its expansion has its increased revenue and valuation (Brown 2013). Uber has managed to steal clients from seasoned taxi companies without even owning a single car. This has made it one of the biggest competitors across the globe that allows it to create more employment, achieve higher revenue margins, get more funding to finance its expansion, and enhance its position as the best app-based service in that area (Atkinson & Ezell 2014: 62). This means it has to position itself in a way that gains it more exposure to its clients and that allows it to gain more clients, get more taxi companies to work for it, and realise its goals as it ensures a ride is never more than five minutes away from the client (Brown 2013). This requires efficient systems that understand the role of handling big data within the accredited period. The goal is to assure clients that they will receive the services they want within the shortest time possible. Competitive Strategy The role of an organisation is to position itself for better market share in the industry. Most companies do not understand that they need to provide an answer to the problems facing the clients within the cities they operate in. Uber came up with strategy that would break the monopoly of major taxis within the industry and across the world. Their goal was to ensure the clients received the real deal and value for their money without fall prey to the monopoly operating in these cities (Williams 2015:153). The goal was to achieve this within the shortest time possible, allowing them to understand their market and utilise their ability to capture Smartphone users with the simplest yet important use of applications. Its ideas were quickly taken and the company managed to reinvent experience from the top to bottom of the ladder. They would allow the clients to be the dictators of what was happening and assure them of the advantageous positioning expected from the new venture. Uber realised the power it had when it came to answering the problems and queries of its clients. Sillince argues that one of the best ways of being a fast mover is to increase buyer-switching costs (2006: 801). The goal is to increase the monetary and psychological aspects of making changes in the products sold. Uber realised that this would be the case and decided to offer lower switching costs by offering services that would save the customer time, effort, and money (Neckermann 2015: 82). The app-based service was one good way of making others rival companies realise that its strategy was going to remain relevant in the industry for a while. To beat other services that would seek to use the mobile platform and attack the strongholds Uber has, the company resulted to increase funding from investors with companies such as Google investing close to 80% of their investment revenue in Uber (Williams 2015:154). This shows growing confidence that investors have in the company. This is a good move for anyone who wants to hire Uber’s services because they are assured of quality services at all times. Sillince attributes the use of the resource-based theory to the continued need for the legitimisation of strategy rhetoric. The aim is to understand that a company has various avenues of using its resources for growth. The resource-based theory seeks to create a platform where the valuable resources are acknowledged, which means the supported accorded is legitimate based on product quality, and thus, people should purchase the company’s products (Sillince 2006: 801; Balogun, Jacobs, Jarzabkowski, Mantere & Vaara 2014: 181). Uber recognised the need to set itself apart from the rest. The use of technology is something that everyone is making good use today. To make sure that it has made things even better, the use of Uber is connected to Google maps. This means that a client can track the nearest car and set up a meeting point still on the screen (Brown 2013). The client can then choose to walk to a convenient place and hail the car to meet him or her at that lace. Such convenience was rarely experienced unless one was calling a taxi booth to have a car dispatched, something that took close to twenty minutes. The client can also scout for other cars nearby and choose which one to take. Such choice is valuable to anyone who understands the goal of technology (Maradi 2014:125). Uber seeks to provide an answer to the frustrations of taxis users and provide a solution to the need for a tip whenever they board a taxi. Uber understands the plight of taxi users across the globe, giving them a chance to maximise on their services while they use they save time and effort. Uber also understands that some of the cab drivers may not turn on their meters so as to overcharge them based on what they presume as the ideal price for the distance covered (Brown 2013). Others lacked change when given money, forcing clients to part with more money than they had planned. Other cab drivers want tips, which many find absurd but have not alternatives. Uber came as an answer to these frustrations and changed the entire scene. In case of anything, the Uber driver has to message the client in advance to say they are on the way. This gives the client peace of mind. The cars, mainly SUVs and black cars are the main form of transportation, with sedans (well-maintained and conditioned) serving the lower-cost version of the Uber service, the Uber X. The driver already knows the client’s name, exchanges greetings as he or she gets in (Williams 2015:154). The goal is to provide personalised treatment and service to the client at a reasonable fee. Uber has achieved this. The main idea behind any competition strategy is to create the best approach that will assist the company achieve its goals. The evolution of the idea must reduce complexity of the service offered and cause a revolution in that industry. Baghai, Coley and White (2000: 5) note the three horizons of change, which deal with extending and defending the core business, building the emerging businesses and creating viable options to support the growth of the business. The idea is to enhance the objectives and place greater emphasis on the achievement expected from the set of activities occurring within the business at any particular time. This shows the need to continue producing ideas that meet the intended goals of the organisation within the required time. The growth of Uber has been a subject of discussion because the company has managed to evaluate its position, organise its resources, practice how to dispense them repeatedly with efficiency, and changed with the flow and according to the requests of the clients (Clegg, Carter, Kornberger & Schweitzer 2011:30-1). This has led to the new processes that seek to streamline transportation cross major cities without disrupting its strategic choices and position. Uber has been very essential in proving that the decision-making process is an essential part of any growing company. Decision-making allows those in power to make choices based on the several alternatives presented and still come up with one that defines the long-term organisational objective based on success factors (Buchanan & Huczynski 2004: 866). Uber understands that having access to a market and learning to control these resources will enhance performance and increase productivity. The goal is to entrench this into the employees and allow them to play a huge role in improving the company’s position (Hardy & Thomas 2013:322). The goal is to create a company that understands the impact of its services to the society as a whole. When starting the lower cost services, Uber was already feeling that its low-end customers were losing out. Lyft, one of its greatest competitors, was also making a major investment in the low-end category, and many thought that Uber would stick to the luxury cars especially in cities such as New York and San Francisco where they had a huge market base (Maradi 2014:126). However, Uber made a decision to cover all the income levels because of the immense potential in the community. As part of their entry into the market, Uber understand that whatever decision they took would have a great impact in its venture. It realised that fixing only one part of the deal was not going to make things work. It realised that the transport industry was a link of so many things and they all need to run smoothly for them to reach the expected level of organisation. This means fixing the hailing of cabs for clients, providing seamless payments which are charged to the clients debit or credit card, better and well maintained cars, as well as no tips for drivers (Brown 2013). They also provide a platform where the client can rate the driver and recommend the driver to others. This shows the importance of dealing with the issues that plague an industry before coming up with ideals that ought to revolutionise the industry as a whole (Jarratt & Stiles 2010: 32). The goal is to create policy that enhances the goals of the product in question, makes good use of the available infrastructure and satisfies the client at all levels of engagement. This has played a huge role in achieving what Sillince terms as the rhetorical construction of the non-imitability of knowledge (2006: 803). They have unique assets that sell it even without making advertisements. The goal that Uber seeks to expound on deals with fashioning a managerial response that befits the amplification of tacitness within the company. It still causes casual ambiguity amongst those seeking to steal any ideas. The competition is high in this industry and Uber knows this very well. To make sure that the company is using its resources well, it went for further funding of its services so that it can disrupt all other rivals and continue having a monopoly in most of the areas (Johnson, Melin & Whittington 2003: 10). In fact, their services are 20% cheaper than other major service providers, and this means that the company has to make good use of infrastructure as it seeks to accomplish its goals (Maradi 2014:128). Companies realise that they need to have better strategies in handling their services, and Uber has managed to use its resources, knowledge and unique positioning to assure clients of comfort and convenience. They have resulted to thinking big because they understand the potential they are yet to tap into in other cities (Kwon, Clarke & Wodak 2013:270). The world is slowly becoming a global village and this means it can shift its strategic model from one country to the next. This would save it a lot in making new investments in the new markets. However, it also has to conduct feasibility studies to ensure the provision of services will be an answer to the problems faced in that area (Neckermann 2015: 85). Uber understands that its market has been expanded by the increased services run at night in most countries. The nightlife has become part of major cities and they all need to make sure that they satisfy this market appropriately. Uber’s goal has been to ensure the achievement of goals within a specified period and within the company’s schedule (Neckermann 2015: 96). This has made it possible leverage on the distinct growth opportunities that include holiday events, sporting activities, restaurants and nightlife, as well as the changing weather patterns that may disadvantage some. Uber is looking or different strategic partnerships that will enhance its ability to meet the needs of people during such events, enhancing their position within the market. Further, having taxis near such avenues will be a great way of reducing the hassle of going outside and hailing taxis to take one home (Maradi 2014:131-2). The ease and convenience will sell and the number of clients who will spread the good word about them will increase. These recommendations are essential in getting the work done when it comes to advertisements. In conclusion, the role of any strategic positioning attribute is to enhance the visibility of the company while making good use of the available mechanisms in place. Uber realises that it has to catch up with the established companies, offer better alternatives to the clients, and maximise on its current possibilities across the globe. The idea is to make the provision of better services a lifelong avenue for achieving company goals at all levels of interaction. The employer knows that the employees require proper attention, and the only way of doing this is by providing them with what they desire. Uber must satisfy its employees so that its clients can also achieve the intended benefits. This also implies having a great understanding of the market and making good use of all resources presence. References Atkinson, R.D. & Ezell, S.J. (2014) Innovation economics: the race for global advantage, New Haven, CT: Yale University Press Baghai, M., Coley, S. & White, D. (2000) The Alchemy of growth, Knutsford: Texere Publishers. Balogun, J., Jacobs, C., Jarzabkowski, P., Mantere, S. & Vaara, E. (2014) Placing Strategy Discourse in Context: Sociomateriality, Sensemaking, and Power, Journal of Management Studies vol. 51, no. 2, pp. 175-201. Brown, M. (2013) Uber — What’s fueling Uber’s growth engine? [Accessed: 2/17/2015] . Buchanan, D. & Huczynski, A. (2004) Organisational behaviour, 5th ed. Harlow: Pearson Clegg, S., Carter, C., Kornberger, M. & Schweitzer, J. (2011) Strategy: Theory and Practice, London: Sage. Hardy, C. & Thomas, R. (2013) ‘Strategy, discourse and practice: the intensification of power’, Journal of Management Studies, vol. 51, pp. 320-48. Jarratt, D. & Stiles, D. (2010) ‘How are methodologies and tools framing managers’ strategising practice in competitive strategy development’, British Journal of Management, vol. 21, pp. 28-43. Johnson, G., Melin, G. & Whittington, R. (2003) ‘Special issue on micro strategy and strategising: towards an activity-based view’, Journal of Management Studies, vol. 40, pp. 3-22. Kwon, W., Clarke, I. & Wodak, R. (2013) ‘Micro-level discursive strategies for constructing a shared view around strategic issues in team meetings’, Journal of Management Studies, vol.51, pp. 265-90. Maradi, S. (2014) Ride the flat world: understanding why the CEO needs a CIO more than ever, Boston, MA: Notion Press Neckermann, L. (2015) The mobility revolution: zero emissions, zero accidents, zero ownership, New York: Troubador Publishing Ltd Sillince, J. (2006) “The Effect of Rhetoric on Competitive Advantage: Knowledge, Rhetoric and Resource-Based Theory.” In: Clegg, S.R., Hardy, C., Lawrence, T.B., Nord, W.R. (eds) The Sage Handbook of Organisation Studies, 2nd edition, London: Sage. Williams, C. (2015) Effective management, New York: Cengage Learning, pp. 153-154. Read More