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 - – competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, increasing commodity prices, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs,
increasing energy prices, there is increasing trade war between United States & China, 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 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.
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.
Learning organization
- Colorado 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 Colorado Uber is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Uber in Colorado: Seeking Regulatory Certainty Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Colorado Uber digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Colorado 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.
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.
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.
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.
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.
Superior customer experience
– The customer experience strategy of Colorado Uber in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Operational resilience
– The operational resilience strategy in the Uber in Colorado: Seeking Regulatory Certainty 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.
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 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Uber in Colorado: Seeking Regulatory Certainty, is just above the industry average. Colorado 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.
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.
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.
Products dominated business model
– Even though Colorado Uber 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 in Colorado: Seeking Regulatory Certainty should strive to include more intangible value offerings along with its core products and services.
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.
Need for greater diversity
– Colorado 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.
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.
Low market penetration in new markets
– Outside its home market of Colorado Uber, firm in the HBR case study Uber in Colorado: Seeking Regulatory Certainty needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Colorado 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.
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.
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 -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Colorado 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 in Colorado: Seeking Regulatory Certainty, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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. Colorado Uber can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Colorado 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 Global Business segment, and it will provide faster access to the consumers.
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.
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.
Using analytics as competitive advantage
– Colorado 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 in Colorado: Seeking Regulatory Certainty - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Colorado Uber to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Colorado Uber 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 Global Business segment.
Loyalty marketing
– Colorado Uber 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Colorado Uber can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 -
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.
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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Colorado Uber with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 in Colorado: Seeking Regulatory Certainty, Colorado 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 Global Business .
Technology acceleration in Forth Industrial Revolution
– Colorado Uber has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Colorado Uber needs to keep up with the evolution of technology in the Global Business 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.
Shortening product life cycle
– it is one of the major threat that Colorado Uber is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Colorado 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 in Colorado: Seeking Regulatory Certainty .
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.
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.
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.
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.
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.