Case Study Description of Uber in Colorado: Seeking Regulatory Certainty
This case study details the issues and challenges that faced ride-sharing company Uber following its arrival in the state of Colorado as a new alternative to traditional taxi and limousine services. It is written from the perspective of Will McCollum, general manager of Uber Denver, a recent MBA graduate who is given responsibility for all aspects of Uber's initial Colorado launch and ongoing operations. The case provides a unique example of the oft-seen process by which new entrant companies use technology and new business models to challenge incumbent firms and traditional industries. The highly regulated and very stable nature of local transportation markets and rapid speed of Uber's rise to prominence makes Uber's experience particularly noteworthy. Uber faces public legal battles with the Colorado Public Utilities Commission and other transportation companies within the area. After some early success in opposing regulatory restrictions, the decision facing McCollum and Uber is whether to continue to fight regulation in Colorado or instead proactively work with state politicians to develop a set of ongoing rules under which the industry will be required to operate. The case can be used to introduce or illustrate Porter's Five Forces, industry disruption and disruptive innovation, stakeholder analysis, the legislative and regulatory process, and corporate political strategy.
Authors :: Paul Seaborn, Peter Scott, William Miller
Swot Analysis of "Uber in Colorado: Seeking Regulatory Certainty" written by Paul Seaborn, Peter Scott, William Miller includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Colorado Uber facing as an external strategic factors. Some of the topics covered in Uber in Colorado: Seeking Regulatory Certainty case study are - Strategic Management Strategies, Disruptive innovation, IT, Mobile, Policy and Global Business.
Some of the macro environment factors that can be used to understand the Uber in Colorado: Seeking Regulatory Certainty casestudy better are - – geopolitical disruptions, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation,
increasing energy prices, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Uber in Colorado: Seeking Regulatory Certainty
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Uber in Colorado: Seeking Regulatory Certainty case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Colorado Uber, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Colorado 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 in Colorado: Seeking Regulatory Certainty can be done for the following purposes –
1. Strategic planning using facts provided in Uber in Colorado: Seeking Regulatory Certainty case study
2. Improving business portfolio management of Colorado Uber
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Colorado Uber
Strengths Uber in Colorado: Seeking Regulatory Certainty | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Colorado Uber in Uber in Colorado: Seeking Regulatory Certainty Harvard Business Review case study are -
Ability to recruit top talent
– Colorado Uber is one of the leading recruiters in the industry. Managers in the Uber in Colorado: Seeking Regulatory Certainty are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Global Business field
– Colorado 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 Colorado Uber in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Colorado Uber is present in almost all the verticals within the industry. This has provided firm in Uber in Colorado: Seeking Regulatory Certainty 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.
Organizational Resilience of Colorado Uber
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Colorado Uber does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Colorado Uber in the sector have low bargaining power. Uber in Colorado: Seeking Regulatory Certainty has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Colorado Uber to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Colorado Uber has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Colorado Uber to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Colorado Uber is one of the most innovative firm in sector. Manager in Uber in Colorado: Seeking Regulatory Certainty Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Global Business industry
– Uber in Colorado: Seeking Regulatory Certainty firm has clearly differentiated products in the market place. This has enabled Colorado Uber to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Colorado Uber to invest into research and development (R&D) and innovation.
Training and development
– Colorado Uber has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Uber in Colorado: Seeking Regulatory Certainty 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.
Highly skilled collaborators
– Colorado 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 in Colorado: Seeking Regulatory Certainty HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Colorado Uber 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.
Successful track record of launching new products
– Colorado Uber has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Colorado 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.
Weaknesses Uber in Colorado: Seeking Regulatory Certainty | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Uber in Colorado: Seeking Regulatory Certainty are -
High bargaining power of channel partners
– Because of the regulatory requirements, Paul Seaborn, Peter Scott, William Miller suggests that, Colorado 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.
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 Colorado Uber supply chain. Even after few cautionary changes mentioned in the HBR case study - Uber in Colorado: Seeking Regulatory Certainty, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Colorado Uber vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Uber in Colorado: Seeking Regulatory Certainty, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High cash cycle compare to competitors
Colorado 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Uber in Colorado: Seeking Regulatory Certainty 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 Colorado Uber has relatively successful track record of launching new products.
Lack of clear differentiation of Colorado Uber products
– To increase the profitability and margins on the products, Colorado Uber needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Colorado 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 in Colorado: Seeking Regulatory Certainty 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 Colorado Uber 's lucrative customers.
Interest costs
– Compare to the competition, Colorado Uber 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.
Aligning sales with marketing
– It come across in the case study Uber in Colorado: Seeking Regulatory Certainty that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Uber in Colorado: Seeking Regulatory Certainty can leverage the sales team experience to cultivate customer relationships as Colorado Uber is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Uber in Colorado: Seeking Regulatory Certainty, it seems that the employees of Colorado 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.
Opportunities Uber in Colorado: Seeking Regulatory Certainty | 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 in Colorado: Seeking Regulatory Certainty are -
Better consumer reach
– The expansion of the 5G network will help Colorado Uber to increase its market reach. Colorado 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Colorado Uber to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Colorado Uber to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Colorado Uber can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Colorado Uber is facing challenges because of the dominance of functional experts in the organization. Uber in Colorado: Seeking Regulatory Certainty case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Colorado Uber can develop new processes and procedures in Global Business 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Colorado 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Colorado Uber can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Colorado 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.
Creating value in data economy
– The success of analytics program of Colorado Uber has opened avenues for new revenue streams for the organization in the industry. This can help Colorado Uber to build a more holistic ecosystem as suggested in the Uber in Colorado: Seeking Regulatory Certainty case study. Colorado Uber can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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, Colorado Uber can use these opportunities to build new business models that can help the communities that Colorado Uber operates in. Secondly it can use opportunities from government spending in Global Business sector.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Colorado Uber can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Colorado Uber can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Learning at scale
– Online learning technologies has now opened space for Colorado 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.
Leveraging digital technologies
– Colorado 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.
Threats Uber in Colorado: Seeking Regulatory Certainty External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Uber in Colorado: Seeking Regulatory Certainty are -
Consumer confidence and its impact on Colorado 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.
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 Colorado Uber in the Global Business sector and impact the bottomline of the organization.
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.
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 Colorado Uber.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Colorado Uber will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Colorado Uber business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Colorado Uber
– 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 Colorado Uber.
Regulatory challenges
– Colorado 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 Global Business industry regulations.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Colorado Uber can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Colorado Uber 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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Colorado Uber in the Global Business industry. The Global Business 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.
Stagnating economy with rate increase
– Colorado 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.
Weighted SWOT Analysis of Uber in Colorado: Seeking Regulatory Certainty 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 in Colorado: Seeking Regulatory Certainty 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 in Colorado: Seeking Regulatory Certainty 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 in Colorado: Seeking Regulatory Certainty 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 in Colorado: Seeking Regulatory Certainty 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 Colorado Uber needs to make to build a sustainable competitive advantage.