Case Study Description of Uber: Kalanick's Tumultuous Era
In June 2017, transportation company Uber Technologies Inc. (Uber), which operated in 70 countries and had net revenue in the fourth quarter of 2016 of US$1.7 billion, fired its chief executive officer, Travis Kalanick. By the time of Kalanick's departure, negative publicity had contributed to a decline in market share, and a number of other high-level executives had left the company. What options could the company identify for the future that would address existing issues, including those surrounding its culture, practices, financing, and consumer confidence? Robert Eames is affiliated with Westminster College, Missouri.
Swot Analysis of "Uber: Kalanick's Tumultuous Era" written by Robert Eames includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kalanick's Uber facing as an external strategic factors. Some of the topics covered in Uber: Kalanick's Tumultuous Era case study are - Strategic Management Strategies, Organizational culture and Organizational Development.
Some of the macro environment factors that can be used to understand the Uber: Kalanick's Tumultuous Era casestudy better are - – there is increasing trade war between United States & China, technology disruption, increasing commodity prices, there is backlash against globalization, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, wage bills are increasing,
increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Uber: Kalanick's Tumultuous Era
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Uber: Kalanick's Tumultuous Era case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kalanick's Uber, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kalanick's Uber 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: Kalanick's Tumultuous Era can be done for the following purposes –
1. Strategic planning using facts provided in Uber: Kalanick's Tumultuous Era case study
2. Improving business portfolio management of Kalanick's Uber
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kalanick's Uber
Strengths Uber: Kalanick's Tumultuous Era | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kalanick's Uber in Uber: Kalanick's Tumultuous Era Harvard Business Review case study are -
Successful track record of launching new products
– Kalanick's Uber has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kalanick's Uber has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to lead change in Organizational Development field
– Kalanick's Uber is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Kalanick's Uber in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Kalanick's Uber is one of the leading recruiters in the industry. Managers in the Uber: Kalanick's Tumultuous Era are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Kalanick's Uber is one of the most innovative firm in sector. Manager in Uber: Kalanick's Tumultuous Era Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Kalanick's Uber is present in almost all the verticals within the industry. This has provided firm in Uber: Kalanick's Tumultuous Era case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Highly skilled collaborators
– Kalanick's Uber 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: Kalanick's Tumultuous Era HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Kalanick's Uber is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Kalanick's Uber is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Uber: Kalanick's Tumultuous Era Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Kalanick's Uber is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Uber: Kalanick's Tumultuous Era 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.
Analytics focus
– Kalanick's Uber 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 Robert Eames 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.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Kalanick's Uber digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kalanick's Uber has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Organizational Resilience of Kalanick's Uber
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Kalanick's Uber does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Uber: Kalanick's Tumultuous Era | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Uber: Kalanick's Tumultuous Era are -
Workers concerns about automation
– As automation is fast increasing in the segment, Kalanick's Uber needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High operating costs
– Compare to the competitors, firm in the HBR case study Uber: Kalanick's Tumultuous Era 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 Kalanick's Uber 's lucrative customers.
Need for greater diversity
– Kalanick's Uber 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 Kalanick's Uber, firm in the HBR case study Uber: Kalanick's Tumultuous Era needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Kalanick's Uber has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kalanick's Uber is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Uber: Kalanick's Tumultuous Era can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Uber: Kalanick's Tumultuous Era, is just above the industry average. Kalanick's Uber 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Uber: Kalanick's Tumultuous Era, it seems that the employees of Kalanick's Uber don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Capital Spending Reduction
– Even during the low interest decade, Kalanick's Uber 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Robert Eames suggests that, Kalanick's Uber is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Slow to strategic competitive environment developments
– As Uber: Kalanick's Tumultuous Era HBR case study mentions - Kalanick's Uber takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities Uber: Kalanick's Tumultuous Era | 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: Kalanick's Tumultuous Era are -
Manufacturing automation
– Kalanick's Uber can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kalanick's Uber 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: Kalanick's Tumultuous Era, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Kalanick's Uber in the consumer business. Now Kalanick's Uber can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kalanick's Uber 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.
Leveraging digital technologies
– Kalanick's Uber 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Kalanick's Uber to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Better consumer reach
– The expansion of the 5G network will help Kalanick's Uber to increase its market reach. Kalanick's Uber 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kalanick's Uber can use these opportunities to build new business models that can help the communities that Kalanick's Uber operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kalanick's Uber can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kalanick's Uber in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Kalanick's Uber has opened avenues for new revenue streams for the organization in the industry. This can help Kalanick's Uber to build a more holistic ecosystem as suggested in the Uber: Kalanick's Tumultuous Era case study. Kalanick's Uber can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Kalanick's Uber 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.
Using analytics as competitive advantage
– Kalanick's Uber has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Uber: Kalanick's Tumultuous Era - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kalanick's Uber to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Uber: Kalanick's Tumultuous Era External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Uber: Kalanick's Tumultuous Era are -
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kalanick's Uber can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kalanick's Uber 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: Kalanick's Tumultuous Era .
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.
Regulatory challenges
– Kalanick's Uber 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 Organizational Development industry regulations.
Environmental challenges
– Kalanick's Uber needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Kalanick's Uber can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Consumer confidence and its impact on Kalanick's Uber 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.
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.
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: Kalanick's Tumultuous Era, Kalanick's Uber may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Kalanick's Uber needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Kalanick's Uber in the Organizational Development sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Kalanick's Uber 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.
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 Kalanick's Uber.
Shortening product life cycle
– it is one of the major threat that Kalanick's Uber is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Uber: Kalanick's Tumultuous Era 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: Kalanick's Tumultuous Era 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: Kalanick's Tumultuous Era 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: Kalanick's Tumultuous Era 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: Kalanick's Tumultuous Era 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 Kalanick's Uber needs to make to build a sustainable competitive advantage.