Uber Final
Uber Final
Uber Final
Economy
2019-2
1
TABLE
Uber markets
Example 6
Scope of the company's strategy 8
Shape of the competition 9
Profitability
Three questions 10
Critical factors 11
Strategic market 11
key factors 12
Conclusions 20
References 20
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UBER STRATEGY ANALYSIS
Uber manages a strategy based on price and easy access for any type of person,
through any mobile device with internet access from anywhere. Uber offers price,
characteristics of the car and the driver, also provides a suggested route to the
destination, giving security and confidence in each of the services. On the other hand,
uber offers different types of services, adapting to the different needs of users.
Uber has been characterized by having the greatest amount of safety filters for drivers,
so that each passenger travels as peacefully as possible
Some of its most important characteristics are:
- verification of documents and background of drivers
- insurance policy for each trip
- customer service all day
- option to share the route of the trip with a family member
Uber based its strategy on the price because where it was founded (California-United
States), public transportation is too expensive, additionally difficult to find, so Uber has
been solving the main needs or problems in a matter of transportation in each of the
countries where it has positioned itself. Even so maintaining its line of different
services, for the different economic accesses.
Strategic positioning
The strategic positioning of uber is based on the variety anchored to the price,
therefore it covers the need to transport different people without exclusion, since it is
additionally possible to use its platform from any mobile device.
But currently it has an uncertain destination, because it is under legal uncertainty and
low safety for drivers. Additionally, more applications have been joined to take
transport that have also bet on the price but uber remains at the top thanks mainly to
the security it offers compared to the others.
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Company DNA
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Planning process in the company
Uber started offering a transport service principally to those who were looking for a
different option from the traditional transport service, their main strategy was a good
service at low cost. When this company managed to position himself in the market, he
managed to make the first trade off, expanding the service options offered, both
individual and group services, now focusing on a safe service.
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UBER MARKETS
Uber, in our country has 3 types of service: UberX, UberPool and UberBlack; the first
two services are available or rather, are usually taken by people belonging to Sector
B and C; UberX: it is the most common and economic option of Uber, it includes 2006
model vehicles onwards (although this depends on the policies of Uber for each city),
it accepts a maximum of four passengers and optionally allows to divide the fare
among the passenger users, Uber POOL: It is a shared edition of UberX, giving up to
3 users from different locations requesting a trip to a destination that is common to be
close to all users who share the trip, so a considerable amount is saved by comparing
it when requesting a service from UberX; However, the UberBlack is a more Premium
service, aimed at users of sector A, it consists of dark cars last model with capacity of
four passengers, is often used by organizations and companies for the transport of
staff.
Within the same country there are different markets, so uber in Colombia has its
services sectorized according to the needs of its market.(Uber,2018)
- BARRANQUILLA AND CARTAGENA: In these cities you can only find uber x
and uber black, due to the number of tourists
- CÚCUTA AND BUCARAMANGA: In this city you will only find uberx, because
it is characterized by its educational institutions and its industry.
- CALI AND MEDELLIN: Because it is one of the main cities of the country, it has
uberx and uber black
- POPAYAN, RISARALDA, IBAGUE AND PEREIRA: only uber x is found,
because it is a smaller city than the others
- BOGOTA: being the capital of the country, where its population is most housed
and its cultural and economic diversity, it is where more is found diversification
of products such as uberX, uberPOOL, UberBLACK, UberVAN and UberÁngel.
One way to exemplify the different markets is to observe the different offers that have
been generated in the different regions of the country, although at some point this
service was expanded to 19 cities in the country and 9 cities in the country have
withdrawn their coverage in the cities of, Armenia, Manizales, Monteria, Neiva, Santa
Marta, Sincelejo, Valledupar and Villavicencio.
Currently we can only analyze 10 cities, where the application demand if it was viable
represented in the following tree.
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One of the most representative features, is the amount of services offered in the city
of Bogota with 5 different services of uber that does not have any city in the country,
the cities with less demand and smaller demographic space, only the services are
provided of uber x as the average value of uber services, while premium services such
as Black are found in certain cities with higher revenues.
Another of the big differences in the markets is the number of drivers, while in Bogota
the waiting times do not exceed 3 to 5 minutes, in cities with fewer affiliated drivers the
times increase to 10 to 15 minutes.
There are clearly large gaps between some cities in the country given the different
markets in which the application works in which the difference in rates and vehicle
ranges is highlighted.
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Scope of the company's strategy
It also creates local strategies, in order to meet the demand and adapt to the economic
and social conditions of the market to which it is directed, in the Colombian case it has
a basic service in most cities, uber x which is an exclusive service for traveling privately
at a standard rate, only 5 cities in Colombia have a premium uber black service, which
provides services and amenities, such as a range of high-average vehicles with Wi-Fi
services, smarphone charging and greater comfort.
Its main market is located in the capital of Bogota, where it has decided to expand its
offer of services such as uber pool, a low-cost service, shared travel and premium
services such as uber black with high-end and high-end cars, uber van and uber angel,
a specialized service of chosen drivers.
Although initially its strategy was to expand to most cities, it has had to adapt to the
Colombian market, for example, abandoning its operations in cities with high legal
problems such as small cities and unions, or also in front of government institutions
agreeing to include The value of VAT in their services or also for users include a
payment method in cash. Through several strategies in the 5 years of operation, I
managed to be a leading platform in transportation services after facing multiple
problems when installing in the country, today it has 2.3 million users and 88,000
affiliated drivers
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Shape of The Competition: Uber
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PROFITABILITY
The profitability of uber is obtained when the company charges drivers a percentage
of the value of each service, this charge is between 25% to 34%, so Uber can to do
the support of the platform.
But this income also depends on the rate proposed by the company is accepted by
the users who request the services
The success of Uber, owes several factors that the company uses in its favor; five can
be highlighted (S.A, 2018)
A. It is the use of technology, it is known that today most people have access to any
technological element, the implementation of a service by this means ensures they
reach many people.
B. Simplicity, the application is very simple to use and understand, its installation and
the entry of information is fast and without cost
C. Confidence, the application allows users to rate their drivers and this rating is public,
the company knows the performance of the drivers and can allow or deny that people
continue working
D. Security, drivers must pass several filters to be able to work on the application,
while users know that their data is on a secure basis, also while they are transported
users have a panic button and can share their location
E. Loyalty, through promotions and the constant updating of the services offered in the
application, it is assumed that people continue to use the application and
recommended
Uber seeks to facilitate the mobility options of people, according to its official website
its mission is to give different possibilities to users and job options to drivers, the
company seeks to raise the level of customer satisfaction to maintain an advantage
over the market traditional transport (Uber, SF2), in addition to facilitating the lives of
people by allowing them to access a service through a simple to use platform.
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Critical Factors
Uber as one of the most important firm in the technology world is at the time a new
productive system that could be the most important revolution in all the economics
classical views in the society, this is because the way that Uber work is the mixture of
a competitive perfect market and a monopolistic organization, this is related of the
concept that Uber has about their owns, because they do not say that the transport
services is offered by them if not is only a platform that connect the real owners of the
service (drivers) and the buyers (customers of Uber), so with this the competitive
market that we can see inside the application connection with the drivers, when the
need of transportation is shown in the app and the first driver that take it (Uber help,
SF), in that moment we can see the behavior of a competitive perfect market where
they all have the same information, skills, and anyone that have a car and a license
have the possibility of enter to the market (Mankiw, 1998), beside of that in a bigger
view where Uber own all this market inside their app the monopolistic behavior is
shown in the moment where they can decide the cost of the services and the rules
that the offerers and consumers have to follow.
In such an age where the organization of the world related to economic, social, political
and technological revolutions are happening so fast, the case of Uber specially in the
social aspect is very interesting, because the opportunity that the platform can give to
all the people that have a car to earn some extra money or in some cases make this
type of new production mechanism their full time job is essentially reduce the number
of unemployment in the city, that is one of the most important social issues around the
world (Robert, SF), so with this point of view Uber is making a contribution to the
aggregate of the countries where they are located.
Strategic Markets
Uber try to segment its market to identify homogeneous consumer groups to carry out
an analysis of the descriptive and behavioral characteristics of consumers, in the case
of uber, contexts such as population sizes, annual income and age ranges are
analyzed.
Where uber has managed to segment through these various factors, to achieve a more
precise location of its market, the geographical densities of the cities where you want
to operate the application are initially analyzed, selecting those with the largest
population and geographic extension in Latin America in the main cities or capitals of
the countries. Where through databases it is possible to carry out projections of
demand at the urban level by selecting the centers of greatest demand, to adjust their
rates and do the study of consumers who are in these areas. (Moreno, SF)
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According to the information provided by uber, consumers in these populations range
between 18 and 40 years, according to the feedback provided by uber it is initially
located since the age of 18, because it is the legal age to work and is considered
people with income from this age, It was also possible to segment within these age
ranges, generate 3 different characterizations made by income levels, where you have
people A of high income people B of middle income and people C of income over the
range of the minimum wage of the country of analysis. (Delgado, Ratto y Rodriguez,
2018)
This segmentation was initially carried out, through the registration of data on the
platform, where by means of credit and debit cards, it is possible to identify by GPS
and residence data the sectors where the percentiles with higher quotas and
disbursements are located on cards. Managing to identify the type of user and services
to which they access, for example, 3 services have been created for the city of Bogotá
that respond to the characterization of the strategic markets that have been defined,
for example Uber black, A Premium service for the areas with higher incomes and
behavioral factors such as security, where most users prefer trips alone in vehicles
that also reflect the social behavior of preferences to high-end vehicles or social status.
While 50% of the remaining population has been found they are willing to travel in the
company of other people or standard services for the value of the fare, such as uber
pool services, for consumer percentiles C and pool and x services, for consumer
sectors B and c.
In this way, uber has managed to locate and establish strategic markets in the main
cities of Latin America.
Key Factors
Focus:
→ Pool: UberPool allows passengers to share a trip for a cheaper price, which means
that more people will use the Uber app more frequently. In places where UberPool
is available, there are more trips and passengers, and this reduces the downtime
of Driver Partners. (Uber, SF1)
So its focus is greater passengers at lower cost, both for passengers and for the
drivers themselves
→ Uber x: It is the service of the most used application because it is a trip at low cost
but privately in a particular low-end vehicle. So its focus is to provide comfort at
low costs, generating greater income for drivers and also for the company.
→ Uber black: This is an original and exclusive travel service of the application, which
provides a service in luxury cars, at higher costs but with greater professionalism
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in their drivers. Also its focus is on people with higher incomes, willing to pay for
this type of comfort, it is assured that it is ideal for business people. (Uber, SF3)
Worth
- Pool: Its value is to provide a transport service available to all, low or high
income, as the lowest cost service of the platform. Additionally, it is the service with
the highest profits because in a single trip up to 4 trips can be made that can exceed
the gain value of the other services.
- Uber x: Its value is found in maintaining a price below the other private
public transports that are in the market, maintaining the standards that safety and
comfort that only uber has been able to offer.
- Uber black: Its value is to provide comfort at a higher price, giving more
professionalism to its users, which in some general way allows greater value added
to the platform.
Resolve
- Each of the services solves the need to transport at a fair, safe and easy
price.
- Each offers a set price according to its comfort and flexibility, so it fits
perfectly with the needs of each passenger, allowing millions of people to reach all
over the world.
Reach
- Uber is a platform that has had a scope at the government level, it has been
able to perform very well in each of the countries where it has been established
because it studies its market and appropriates the needs of the population. (Uber
products,2018)
- BARRANQUILLA AND CARTAGENA: In these cities you can only find uber
x and uber black, due to the number of tourists
- CÚCUTA AND BUCARAMANGA: In this city you will only find uberx, because
it is characterized by its educational institutions and its industry.
- CALI AND MEDELLIN: Because it is one of the main cities of the country, it
has uberx and uber black
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- BOGOTA: being the capital of the country, where its population is most
housed and its cultural and economic diversity, it is where more is found
diversification of products such as uberX, uberPOOL, UberBLACK, UberVAN and
UberÁngel.
Diary
- Uber is solidified daily reaching its users mainly studying their specific needs,
innovating more and more in safety regimes, so that both drivers and passengers
remain in constant use and expand their supply and demand.
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Trasnacional
structures
1 3 5
Highly Distributed:
A. Uber is a company divided into several regions, so its score of 5 because it has
a headquarters in each of the regions in which it is located, is how it meets the
main needs of each specific society.
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- Must be model 2006 onwards
- It must have 4 doors
- Excellent aesthetic and mechanical conditions.
- Have yellow plates
Uber would not fall into the hollow of the pasion because there are no cultural
barriers between its partners, because each foreign subsidiary has its own leader
that is responsible for meeting the needs of the same company where the subsidiary
is located.
The value proposition changes with respect to where the product is being handled,
an expensive example of this is when uber arrived in Latin America, where there was
not the same range of cars with which it was being offered in the rest of the world, so
he had to lower the range allowed to give income to older workers and provide
greater offer to users
The product line gap
Uber, like many multinationals, adjusts its services according to local needs, so its
products can go up or down in quality with respect to the needs and reach of the
local population
Recognizing cultural changes
Before arriving at a new place it is necessary to study its composition very well to
know if there are benefits with the arrival of the company, and that has been able to
take uber very well, because it knows what corners of the world to arrive and with
what specific service, it is clear that there is no perfect or permanent organizational
design is a company that is reinventing itself on a daily basis in innovation and
security issues, both in the first and third world
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Finally, Uber has a different T structure, it is necessary that if there is a relationship
between the different countries where the App works, because people who travel
and feel satisfaction with the service want to have the same experience outside their
country, then people They can use the App in different countries is an advantage,
but the changes and modifications that are made for a specific country should not
affect the operation of the service in another. However, it is known that the services
and markets in which Uber works in each country vary, so it is the representation of
the company in each country that decides what services are enabled in each country
or in each city.
The reduction of waste from operations: One of the growth factors of the
company is to reduce costs and increase its opportunities, for example, uber does it
through electronic invoices and digital registrations drastically reducing its
environmental footprint under the use of digital media, such as advertising where
marketing is largely done through digital ads on mobile devices. (Revista
empresarial, 2017)
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The lack of incentives depends on the results of the sustainability initiatives: In
cities such as Medellín, conferences have been organized as a foundation, planting
a tree, for cars that circulate the day without a car, so that people decide to share
their trips and discourage the use of the private car and support with these races to
plant trees in the city of Medellín, given that the great use of private vehicles has led
to an increase in parking lots in the city of Medellín and a large reduction in parks
and green areas .
There are also tax incentives, where there are lower tax costs for green vehicles,
compared to traditional fossil fuel where these tax benefits benefit the driving
partners.
Although not all uber services are friendly to the environment, their service with the
greatest benefit is the uber pool for most countries and in some countries like Spain,
green services have been implemented where their fleet is 100% electric, while at In
the future the company has invested more than $ 10 million in green initiatives,
where several of these resources are directly to non-profit foundations and in the
future it is investing in a fleet of electric motorcycles and charging stations in the city
of Sacramento in order to to decongest the cities of traditional transport with green
services that help people to move to their destinations in a more environmentally
friendly way.
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Loyalty of users and partners Uber.
Competition UBER
Uber currently has a large part of the market worldwide, positioning itself as one of the
apps, with the largest users and profits. Therefore, an increase in rival apps such as
Lyft (USA), Cabify (Latin America and Central America) Didi, (Euopa), Beat (Latin
America) has also increased.
Mirror technique
In several countries, for example, the United States disputes the market, UBER and
Lyft, where they compete under the mirror technique, offering marketing, advertising
and similar services and promotions in the American market dispute. Similar situations
occur in other markets around the world with other platforms.
Rewards
In the United States, Lyft created loyalty programs, with which Uber has currently
launched a series of pilot plans in its main cities with its Rewards program, which
consists of offering benefits to users for the number of services acquired, in their
different modalities differing greater benefits for the services of black and x, its services
with greater gains, these benefits include refunds of money, free trips or coupons or
discounts for food services with several chain meals affiliated with the platform.
Better grades
They have also created loyalty for frequent clients, where clients with daily tours are
exempt from dynamic rates and Premium allocation of high-qualified drivers, with
platinum programs for businesspersons and executive employees who frequent the
service on a daily basis.
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Capture new markets. (Regional strategy)
The second loyalty technique is to capture new users with similar characteristics in
areas or regions with similar conditions, we talk about special services and incentives
for drivers to apply to these areas or regions with a different range of services, for
example include Premium or black services in intermediate cities or in areas of the city
with low traffic of vehicles for the purpose of offering in new areas or regions and
looking for new users assuming the Uber cost for the purpose of temporary expansion
goals, that is, these campaigns work within 3 to 6 months while the region shows
results.
Cost loss markets and increase advertising (High cost markets strategy)
In order to cover some of its costs, Uber negotiates commercial agreements with
different industries such as textiles, food and sale of digital products. Through
commercial guidelines within their platforms and gifts for new customers or
reactivation of sporadic customers, these strategies are carried out through
agreements with large brands that sponsor multiple benefits for users in exchange for
viewing new products or new brands, who wish to access the public or users of the
Uber platform in this way it is difficult to cover some market segments that generate
sporadic user losses and logistics costs.
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Brand agreements - Corner Store
Uber has worked in partnerships in multiple occasions with several companies, for
example rent sector, providing the service of delivery of purchases made by the Corner
Store platforms in which, people who pay with their visa card linked to their Uber
account, receive free trips for purchases on rental items.
Cake.af
It is a free service to take users to the restaurant free, if a table is available, through
making a reservation you will receive a service that will take you free to the restaurant,
which seeks to strengthen agreements with a large number of restaurants.
CONCLUSIONS
Uber strategy analysis: Two main characteristic of the Uber strategy are security and
price, this is because are related with the necessities that the Colombian market have,
in the structure of the business that Uber has in the country they take very serious the
point of view that the user has of the service.
Uber markets: Uber as the most important firm of transport at this days, have different
kind of market not only because they exist in different kinds of regions in the country,
but the different services that they offer, the different prices between that services, the
focus of some markets that Uber have related to the importance that the market have
in their profitability are aspects that we had to analyze and could be a good research
to find some new type of organization in the society.
With the last idea, two question have to be answer, the first one is the which are the
critical factors that Uber have, and this is related with the environmental, law,
technology and other aspects, that in all the cases we could see radical changes in
the type of think that Uber have compared to the classical type of enterprises; the
second one is the competitors that they had since the beginning and the new ones
that are appearing along the existence of Uber, and that is a very important item that
show the newest behavior of the market.
REFERENCES
Baranco Daniel, (2018). Uber saca a pasear por Madrid sus vehículos eléctricos
de lujo. Clicacoches.com – Disponible en web
Delgado Josimar, Ratto Christian, Rodríguez Eddy, (2018). Plan estratégico 2017-
2020 para uber. Universidad del Pacifico. Disponible en web
Mankiw, N. (1998). Principios de economía. Madrid: McGraw-Hill.
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Moreno Romero, Gianella, (SF). Uber: Estudio de mercado. Monografias.com.
Disponible en web
Revista empresarial, (2017). Factura electrónica contribuye con el medio
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famoso del mundo – Nueva Movilidad. Disponible en web
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vehicular/
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https://www.uber.com/es-CO/drive/bogota/vehicle-requirements/
Uber, (SF5). Requisitos para conducir con la aplicación de Uber – Disponible en
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5fe0-4383-b34c-4a2480efd71e
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