Uber and the Sharing Economy: Global Market Expansion and Reception SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Uber and the Sharing Economy: Global Market Expansion and Reception
Alexander Cooper is gearing up to lead an expansion strategy for the scrappy and super successful car sharing service, Uber. While the company has not been without its controversy, it is making headway in far off places like India. It is looking to scale its model in India, China, and the rest of Southeast Asia, but is increasingly running into regulatory hurdles. Cooper is forced to think hard about what Uber's expansion strategy should be and how it will impact the company's operations. Uber currently markets itself based on word of mouth, but in markets like China where two companies dominate 99% of market share, this may be unrealistic. What path should this sharing economy company take?
Swot Analysis of "Uber and the Sharing Economy: Global Market Expansion and Reception" written by Andrew Hoffman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Uber Cooper facing as an external strategic factors. Some of the topics covered in Uber and the Sharing Economy: Global Market Expansion and Reception case study are - Strategic Management Strategies, Economy, Emerging markets, Globalization, Internet, IT and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Uber and the Sharing Economy: Global Market Expansion and Reception casestudy better are - – challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, increasing transportation and logistics costs, there is increasing trade war between United States & China,
wage bills are increasing, increasing energy prices, etc
Introduction to SWOT Analysis of Uber and the Sharing Economy: Global Market Expansion and Reception
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Uber and the Sharing Economy: Global Market Expansion and Reception case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Uber Cooper, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Uber Cooper operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Uber and the Sharing Economy: Global Market Expansion and Reception can be done for the following purposes –
1. Strategic planning using facts provided in Uber and the Sharing Economy: Global Market Expansion and Reception case study
2. Improving business portfolio management of Uber Cooper
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Uber Cooper
Strengths Uber and the Sharing Economy: Global Market Expansion and Reception | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Uber Cooper in Uber and the Sharing Economy: Global Market Expansion and Reception Harvard Business Review case study are -
High switching costs
– The high switching costs that Uber Cooper has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Operational resilience
– The operational resilience strategy in the Uber and the Sharing Economy: Global Market Expansion and Reception Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High brand equity
– Uber Cooper has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Uber Cooper to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Uber Cooper is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Uber Cooper has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Uber and the Sharing Economy: Global Market Expansion and Reception HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Uber Cooper has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Uber and the Sharing Economy: Global Market Expansion and Reception Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Analytics focus
– Uber Cooper is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Andrew Hoffman can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Sustainable margins compare to other players in Strategy & Execution industry
– Uber and the Sharing Economy: Global Market Expansion and Reception firm has clearly differentiated products in the market place. This has enabled Uber Cooper to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Uber Cooper to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Uber Cooper has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Uber and the Sharing Economy: Global Market Expansion and Reception - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Uber Cooper is one of the most innovative firm in sector. Manager in Uber and the Sharing Economy: Global Market Expansion and Reception Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Uber Cooper are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Organizational Resilience of Uber Cooper
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Uber Cooper does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Uber and the Sharing Economy: Global Market Expansion and Reception | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Uber and the Sharing Economy: Global Market Expansion and Reception are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Uber and the Sharing Economy: Global Market Expansion and Reception HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Uber Cooper has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Uber Cooper is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Uber Cooper needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Uber Cooper to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Uber Cooper has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Low market penetration in new markets
– Outside its home market of Uber Cooper, firm in the HBR case study Uber and the Sharing Economy: Global Market Expansion and Reception needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Uber and the Sharing Economy: Global Market Expansion and Reception has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Uber Cooper 's lucrative customers.
Products dominated business model
– Even though Uber Cooper has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Uber and the Sharing Economy: Global Market Expansion and Reception should strive to include more intangible value offerings along with its core products and services.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Uber Cooper supply chain. Even after few cautionary changes mentioned in the HBR case study - Uber and the Sharing Economy: Global Market Expansion and Reception, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Uber Cooper vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Uber and the Sharing Economy: Global Market Expansion and Reception, is just above the industry average. Uber Cooper needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Interest costs
– Compare to the competition, Uber Cooper has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Capital Spending Reduction
– Even during the low interest decade, Uber Cooper has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow decision making process
– As mentioned earlier in the report, Uber Cooper has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Uber Cooper even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Opportunities Uber and the Sharing Economy: Global Market Expansion and Reception | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Uber and the Sharing Economy: Global Market Expansion and Reception are -
Learning at scale
– Online learning technologies has now opened space for Uber Cooper to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Loyalty marketing
– Uber Cooper has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Uber Cooper in the consumer business. Now Uber Cooper can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Uber Cooper to increase its market reach. Uber Cooper will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Building a culture of innovation
– managers at Uber Cooper can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Developing new processes and practices
– Uber Cooper can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Uber Cooper can use these opportunities to build new business models that can help the communities that Uber Cooper operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Uber Cooper can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Uber and the Sharing Economy: Global Market Expansion and Reception, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Uber Cooper can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Uber Cooper in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Uber Cooper can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Uber Cooper can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Uber and the Sharing Economy: Global Market Expansion and Reception suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Low interest rates
– Even though inflation is raising its head in most developed economies, Uber Cooper can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Threats Uber and the Sharing Economy: Global Market Expansion and Reception External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Uber and the Sharing Economy: Global Market Expansion and Reception are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Uber and the Sharing Economy: Global Market Expansion and Reception, Uber Cooper may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Stagnating economy with rate increase
– Uber Cooper can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Technology acceleration in Forth Industrial Revolution
– Uber Cooper has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Uber Cooper needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Uber Cooper in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Shortening product life cycle
– it is one of the major threat that Uber Cooper is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Uber Cooper.
Regulatory challenges
– Uber Cooper needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Increasing wage structure of Uber Cooper
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Uber Cooper.
High dependence on third party suppliers
– Uber Cooper high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Consumer confidence and its impact on Uber Cooper demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Uber Cooper can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Uber and the Sharing Economy: Global Market Expansion and Reception .
Weighted SWOT Analysis of Uber and the Sharing Economy: Global Market Expansion and Reception Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Uber and the Sharing Economy: Global Market Expansion and Reception needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Uber and the Sharing Economy: Global Market Expansion and Reception is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Uber and the Sharing Economy: Global Market Expansion and Reception is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Uber and the Sharing Economy: Global Market Expansion and Reception is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Uber Cooper needs to make to build a sustainable competitive advantage.