Strategic Management - Uber Company SWOT Analysis - Case Study Example

STRATEGIC MANAGEMENT Name Bachelor of Business Tutor Laureate International Universities Australia (UK English) The Date Uber company SWOT analysis Uber is among the highest top ranked high-tech company ensuring technology transportation to different organization along the world. It was founded in 2009 with the goal to back the world with high-tech connectivity. It is a valued company worth US$ 51 billion. The company has gone world because of its strength such as high liquidity, international recognized brand, strong lobby team and recognized technological system. However, the company has weakness such as lack of real connection, loyalty and privacy concerns (Zbaracki, M. J. & Bergen, M. 2003, 621-633). Uber company regardless of its weaknesses, it has a crucial opportunity to service it customer with cab services. It has the ability to exploit new product in the market to tag developing countries. Its main target is to expand more to meet its foreseeable future. It aims to provide valuable and satisfying product and interest to its customers and investor respectively. Besides having the opportunity, the threat of overwhelming growing competition can result to price decrease which makes the company fair to lose its customers (Zbaracki, M. J. & Bergen, M. 2003, 621-633). Describing various strategic inputs, actions and outcome management processes Strategic management process is the full commitments, action and decision that a firm requires to be able to achieve its strategic competitive objectives and earn more revenue. Strategic management process involves strategic action, strategic inputs and strategic outcome has indicated in the diagram below. Strategic management process Strategy formulation Strategy implementation Business level strategy Competitive rivalry and competitive dynamics Corporate level strategy Acquisition and restructuring strategy International strategy Corporative strategy Feedback According to Mahoney, J. T. & McGahan, A. M (2007, 80-89), strategic input takes the first priority in the strategic management process which involves analysis of internal and external environment in order to determine resources, core competitiveness and its capability. The strategic input which is the source of information enables the firm to develop its mission and vision. The process is assumed to implement action strategy for it to achieve the strategic competitiveness and return objectives. The second step involves strategy formulation and implementation which are the subset to strategic action. The effectiveness of the strategic action relies on the formulation and the implementation of the action which results to strategic outcomes (Mahoney, J. T. & McGahan, A. M. 2007, 80-89). The third strategic management process is a strategic outcome which involves dynamic market and competitive structures. Both dynamic market and the competitive structures are organized and coordinated by the firm with help of strategic inputs report analysis. Strategic outcome confirms the alignment of firm’s mission and vision as per its strategic plan. The plan highlights the key objectives, set patterns and set targets which are to be achieved through a chain of command defined by the firm management (Zbaracki, M. J. & Bergen, M. 2003, 621-633). Internal and external environment assessment and analysis Environment might be favorable or not depending on how the organization treat or handle situation. A favorable environment provides a business with an opportunity to examine and develop models that the firm can use to collect information and share knowledge in choosing the best strategies as well as deciding on how to implement them. The models’ insight serves as the firm foundation in developing its mission and vision (Zbaracki, M. J. & Bergen, M. 2003, 621-633). The first model which is industrial organization model suggests that the determinant to strategic action is the external environment. Industrial organization model identifies and competes attractively in the industry profitability. The second model which is resource based model gives a suggestion that a firm’s capabilities and unique resource are the key determinant to strategic competitiveness. In connection to that, the first model focuses on the internal environment of the firm and on the other hand, the second model concerns with the external environment of the firm. So besides the internal and external environment challenges, the company remain politically stable and even expanded more to reach local and international sectors. Again the company reduces the usage of credits cards despite the environmental challenges (Tallman, S & Fladmoe-Lindquist, K. 2002, 116-135). Strategic responses develop and critique based on the current and future issues affecting global corporate environment Strategic management process explains what the firm engages to do in order to earn returns and achieve it strategic competitiveness. The explanation is a paradox because through global competition performance, some firms achieve their strategic competitiveness while others fail to achieve theirs. In reality, global competition is a very critical portion when it comes to strategic management process because it causes significant influence to the firms’ performance. Meanwhile, learning how to compete successfully in the global market is a big challenge in the current situation. Currently, the great challenge is on the competitive landscape. The challenge specifically emerged as a result of global economy and rapid technology development. Besides the competitive landscape worthiness, it is no longer effective as it has been before. Advertising budgets and the economies of scale has the source of competitive advantages are less effective now a days. Due to the result, managers are forced to adopt new integration, flexibility, innovation, speed and challenges that result from condition changes (Eisenhardt, K. M. 1999, 65-72). Competitive landscape condition result to a business terrifying world where a firm is required to invest in order to compete in the global market scale. In addition, competing in a global market is backed with severe failure consequences. But strategy development and implementation remain the key important element to succeed in the global environment. The environment allows planned strategic actions appropriate to the environmental conditions when they emerge. The condition also helps in strategy development in order to compete in the market. In long run, hyper-competition is realized where the market is assumed to be replaced by change and instability notions. The situation result from dynamics strategic engagement among innovative and global combatants (Tallman, S & Fladmoe-Lindquist, K. 2002, 116-135). Evaluating issues that associate with business level strategy There are various levels of strategies such as leadership, differentiation and combined leadership-differentiation strategies which are vital to business. Every level of strategy has its own strategic issue that associate with it. For example, (1) the strategic issue that associates with leadership strategy includes loss of competitive benefit due to new technology evolvement. The evolvement changes results to failure to detect the inner customer needs and as well as hindering the ability of the business to compete effectively to earn competitive advantage in the global market (Zaheer, S & Mosakowski, E. 1997, 440-452). Then back to differentiation strategy, (2) the strategic issue that associate with it includes cost leader goods or services loses their premium price worthiness and customer decision on differentiated product. In connection, it means that a firm can provide a product with differentiate features that are beyond customer needs and can be provided by a competitor at an affordable price than that of cost leader and with a best combination features. Additionally, with the inability of customer to find the best differentiated product of his value and to meet the premium price, the risk emerge where a customer realizes that there are competitors in the market who offer the same product at a lower price. However, it results to doubt by the customer to identify which product is of better quality than the other. Another risk that associates with differentiation strategy is the threat risk to counterfeit goods or services (Zaheer, S & Mosakowski, E. 1997, 440-452). The third business level strategy is the combination of leadership and differentiation strategies. (3) The strategic issues that associate with the combination strategy include narrowing down of market segment and the decision to meet customer needs at the market place. Besides, the different customer needs might be homogeneous both in the segmented market and as a whole. Due to that, the firm reduces or eliminates its focus strategy. Another risk is due to hyper-competition in the global market, the firm might produce goods or services that do not satisfy the consumer needs (Tallman, S & Fladmoe-Lindquist, K. 2002, 116-135). Evaluating organization capability to implement business strategies Business capability to implement level strategies effectively can be evaluated through financial projections as specified out during strategic planning. So, for a business to be able to implement corporate strategies, it must ensure that all areas that relate to strategic planning such as information systems, reward scheme and budget are well initiated.The reason behind is that the firm has to meet its strategic plan through the achievement of set goals which are integrated in daily routine. The goals reflect strategic plan which is the key element to check on in order to be able to tell whether the business is in a position to implement corporate strategies or not. Meaning, to be able to evaluate business ability to implement corporate strategies, the business must be in position to avoid unnecessary implementation mistakes such as intuitive decisions by the management to discard strategic plan before the time set (Zaheer, S & Mosakowski, E. 1997, 440-452). The other thing to check out is whether the business has communication channels in order to reach its customers in the market. Communication strategy demonstrates good relationship between the business and its stakeholders. Availability of communication links indicates that the business is in a better position to implement corporate strategies (Tallman, S & Fladmoe-Lindquist, K. 2002, 116-135). Recommendations to strategic issues associated with business level strategy One of the mitigation by Uber to attract and retain customers was (1) to lower discount rate and giving promo codes to their customers. The services attract attention of many people to subscribe with Uber. Additionally, (2) the company can partner with other local agencies to pick-up more revenue in the market arena. As a result marketing efforts will increase. Also, (3) strategizing on quality of product differentiation can drive competitors out of the market. But for some to be more effective, strategic and logic marketing need to be placed in various localities in order to work with the agencies conveniently. (4) The company needs to win customers loyalty by adding them to credit programme. Credit programme offers short run incentives which are beneficial to customers (Eisenhardt, K. M. 1999, 65-72). References Mahoney, J. T. & McGahan, A. M., 2007. The field of strategic management within the evolving science of strategic organization, Strategic Organization, 5: 79–99. Zbaracki, M. J. & Bergen, M., 2003. Pricing process as a capability: A resource-based perspective, Strategic Management Journal, 24: 615–630. Tallman, S & Fladmoe-Lindquist, K., 2002. Internationalization, globalization, and capability-based strategy, California Management Review, 45(1): 116–135. Zaheer, S & Mosakowski, E., 1997. The dynamics of the liability of foreignness: A global study of survival in financial services, Strategic Management Journal, 18: 439–464. Eisenhardt, K. M., 1999. Strategy as strategic decision making, Sloan Management Review, 40(3): 65–72. Read More