Uber: Changing The Way The World Moves SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Uber: Changing The Way The World Moves
In 2015, Uber is building what may be the largest point-to-point transportation network of its kind; it is literally changing the way the world moves. But unlike traditional transportation logistics companies like FedEx, Uber has an incredibly lightweight infrastructure: It owns no vehicles, employs no drivers, and pays no vehicle maintenance costs. Instead, its network relies on peer-to-peer coordination between drivers and passengers, enabled by sophisticated software and a clever reputation system. But despite its remarkable early success, Uber is an extremely polarizing company. Its business model is highly disruptive, and while disruptive innovation can be a good thing, it is also true that disruptive companies tend to break things. This is certainly true for Uber, and is one of the key tensions in the case: Uber's innovative business model is outpacing many of the laws regulating its industry, and while it is going to take the regulatory system some time to catch up, Uber doesn't appear to be willing to wait.
Swot Analysis of "Uber: Changing The Way The World Moves" written by Youngme Moon includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Uber Disruptive facing as an external strategic factors. Some of the topics covered in Uber: Changing The Way The World Moves case study are - Strategic Management Strategies, Disruptive innovation, Operations management, Pricing, Strategy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Uber: Changing The Way The World Moves casestudy better are - – there is increasing trade war between United States & China, supply chains are disrupted by pandemic , increasing commodity prices, increasing government debt because of Covid-19 spendings, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing transportation and logistics costs, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Uber: Changing The Way The World Moves
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Uber: Changing The Way The World Moves case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Uber Disruptive, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Uber Disruptive 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: Changing The Way The World Moves can be done for the following purposes –
1. Strategic planning using facts provided in Uber: Changing The Way The World Moves case study
2. Improving business portfolio management of Uber Disruptive
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Uber Disruptive
Strengths Uber: Changing The Way The World Moves | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Uber Disruptive in Uber: Changing The Way The World Moves Harvard Business Review case study are -
High brand equity
– Uber Disruptive has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Uber Disruptive to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Uber Disruptive is one of the most innovative firm in sector. Manager in Uber: Changing The Way The World Moves Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Uber Disruptive has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Uber: Changing The Way The World Moves 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.
Ability to lead change in Leadership & Managing People field
– Uber Disruptive 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 Uber Disruptive in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Uber Disruptive is present in almost all the verticals within the industry. This has provided firm in Uber: Changing The Way The World Moves 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.
Strong track record of project management
– Uber Disruptive is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Uber Disruptive in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Uber Disruptive 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: Changing The Way The World Moves 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.
Ability to recruit top talent
– Uber Disruptive is one of the leading recruiters in the industry. Managers in the Uber: Changing The Way The World Moves are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Leadership & Managing People industry
– Uber: Changing The Way The World Moves firm has clearly differentiated products in the market place. This has enabled Uber Disruptive to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Uber Disruptive to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Uber Disruptive 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: Changing The Way The World Moves HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Uber: Changing The Way The World Moves | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Uber: Changing The Way The World Moves are -
High operating costs
– Compare to the competitors, firm in the HBR case study Uber: Changing The Way The World Moves 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 Disruptive 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Uber Disruptive is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Uber Disruptive needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Uber Disruptive to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Youngme Moon suggests that, Uber Disruptive 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.
Low market penetration in new markets
– Outside its home market of Uber Disruptive, firm in the HBR case study Uber: Changing The Way The World Moves needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Uber Disruptive products
– To increase the profitability and margins on the products, Uber Disruptive needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Uber: Changing The Way The World Moves, is just above the industry average. Uber Disruptive 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.
Slow to strategic competitive environment developments
– As Uber: Changing The Way The World Moves HBR case study mentions - Uber Disruptive 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Uber Disruptive is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Uber: Changing The Way The World Moves can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Uber Disruptive 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.
Skills based hiring
– The stress on hiring functional specialists at Uber Disruptive has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Uber: Changing The Way The World Moves, it seems that the employees of Uber Disruptive 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: Changing The Way The World Moves | 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: Changing The Way The World Moves are -
Building a culture of innovation
– managers at Uber Disruptive 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 Leadership & Managing People segment.
Using analytics as competitive advantage
– Uber Disruptive 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: Changing The Way The World Moves - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Uber Disruptive to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Uber Disruptive 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 Uber Disruptive to increase its market reach. Uber Disruptive 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.
Learning at scale
– Online learning technologies has now opened space for Uber Disruptive 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Uber Disruptive 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Uber Disruptive in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Uber Disruptive can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Uber Disruptive 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.
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 Disruptive can use these opportunities to build new business models that can help the communities that Uber Disruptive operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Creating value in data economy
– The success of analytics program of Uber Disruptive has opened avenues for new revenue streams for the organization in the industry. This can help Uber Disruptive to build a more holistic ecosystem as suggested in the Uber: Changing The Way The World Moves case study. Uber Disruptive can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Uber Disruptive can develop new processes and procedures in Leadership & Managing People 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.
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 Disruptive in the consumer business. Now Uber Disruptive can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Uber: Changing The Way The World Moves External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Uber: Changing The Way The World Moves are -
High dependence on third party suppliers
– Uber Disruptive 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.
Stagnating economy with rate increase
– Uber Disruptive 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.
Environmental challenges
– Uber Disruptive 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. Uber Disruptive can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Increasing wage structure of Uber Disruptive
– 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 Disruptive.
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.
Technology acceleration in Forth Industrial Revolution
– Uber Disruptive has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Uber Disruptive needs to keep up with the evolution of technology in the Leadership & Managing People 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Uber Disruptive 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: Changing The Way The World Moves .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Uber Disruptive 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: Changing The Way The World Moves, Uber Disruptive may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Uber Disruptive in the Leadership & Managing People industry. The Leadership & Managing People 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.
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 Uber Disruptive in the Leadership & Managing People sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Uber Disruptive is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Uber: Changing The Way The World Moves 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: Changing The Way The World Moves 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: Changing The Way The World Moves 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: Changing The Way The World Moves 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: Changing The Way The World Moves 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 Disruptive needs to make to build a sustainable competitive advantage.
