Executive Summary
I am going to look at the company Uber. Being one of the most recent startups that has gone worldwide and is valued at over 70 billion dollars it is one of the greatest project in the world. It therefore a good project to be studies and analyzed to get an insight into how a a project should be done. I will look at I from various pints of view, the company review, the analysis of the industry at large, the competition, the challenges , the marketing plan and the management team behind it. I will also study the financial plans it had.
Introduction
Uber as a company started in 2009 implemented first in San Francisco as UberCab. Over the year they have been on and endeavor to expand all over the world to reach as many cities as possible all over the world. This is a very ambitious project and its success is very important since it sets a president and a lee way for other companies and industries to expand setting an example for other to follow. The company looks forwards to providing convenient and affordable transport for people through out the world. The company has created employment to millions of people all over the world both directly and indirectly. It now has a fleet of more than 7 million cars
Company overview
Uber is a taxi hailing service, where a customer can on the touch of a button on the phone can order a taxi that will come directly to your position based the GPS data. The way it works is such that the company allows drivers to bring their fleet of vehicles for inspection by the company and on approval, the driver is given access to the Uber database where he can be requested to transport clients. The customer normally pays the driver at the end of every journey. That is basically how the company works. The revenue of the company is a commission on each ride the driver takes the client on. This may look like a small amount but once you imagine that there are more than a million rides that Uber takes a day, the profit if very big. As part of the fleet, Uber has different categories of vehicles from the smallest car which would be the cheapest to the high end vehicles which is the Uber select. Clients can be paired with a vehicle of their choice convenient to the wallet. The service has also take into account the change in demand in different times of the day with a surge pricing technology where prises rise with demand and lower in off peak hours. Uber started back in 2009 by the founders Travis Kalanick and Garrett Camp. Started as Uber can it took San-Francisco by storm in 2010 and gradually expanding, raising capital of 22.2 billion dollars it famous all over the world.
Industry Analysis
Uber was the first player I the industry and by far the largest company. Taxi companies have been in the industry for generation but Uber and other have incorporated technology in a way that has brought the traditional taxi cabs a run for their money. The main player in the Taxi hailing services are Uber with a market share of 74 percent followed by Lyft taking 22 percent of the market share. The rest is shared by the smaller companies. The fraction share of the industry in good because in any industry competition ensures that the consumer is protected and gets the best service possible. The drivers that work with the app are happy with the service they can now work 24 hours a day knowing the app will assign the customers from their wide customer base
Customer Analysis
In terms of customers , the company has done a a lot of marketing and has over the years gained a large customer base. The customers are pulled towards the service because of the competitive prices that are very affordable and most of all the convenience of the app. The customer is able to order a car from the comfort of his living room and is informed the moment the car arrives. This service has solved a problem that many people had for a long time. Getting cab was hard waving at taxis in the middle of the road is dangerous. The mobility is also uncandid, normal taxis would only be available in high traffic areas, this app allows the user to request a ride from anywhere. The customers vary from young people looking fro cheap transportation to executive business people who want a quality form of transportation that is available on the fly. The extra features like the ability to schedule a taxi pick up at a certain time has also been a good feature for the customers.
Competitive Analysis
Since the uber app became popular there have been many other applications that have come into the industry and try and disrupt it. The uber dominance has however always proven to be strong. The competition is however getting tighter by the day. Depending on cities, there are different competitors but non has been able to reach the stretch of uber. Currently, uber has established itself in more than 633 cities around the world. The numbers are staggering and shows the level of commitment of Uber as a company. Because of the competitive nature of the industry, the company keeps on advertising and this advertising costs has had an effect on the overall profits of the company. Normal Taxi`s have been heavily affected by the Uber take over, in every city around the world, the ordinary taxi cars have resorted to joining uber at the end of the day since customers often opt for the app other than the traditional methods.
Marketing Plan
Uber has employed so many marketing strategies to ensure they have outwitted and outdone the competition. There is the most obvious strategy, the referral code system where one user will send a friend a special code that once used will offer him a free ride of a certain value. The way the company works with a market segmentations strategy dividing depending on demography and geography, this has helped the company price accordingly. Another technique applied is the differentiation targeting strategy that is used so as t share of wallet customer where they upsell the existing competitors. They simply compare uber prices to the current pricing in the market and lower their rates to the most economical but profitable rates possible. Positions has been used in such a way that they have benefit based pricing. They attracts various demographics since the travel cost is huge, positions on a economy basis will have an effect on the mind-set of customers. To gain popularity the company has used local celebrities in different cities to popularize the app. Branding the company in a way that seems more appealing.
Operations Plan
The company being multinational and that big it need a well managed operations plan. The structure of governance has its CEO at the helm making decisions about the company at the headquarters in san Francisco California reporting only to the board of directors. In each city around the worlds the company has a head of operations officer who is in charge of the smooth running of activities at that level. They however have set of standards that as a company must be maintained to ensure quality of services. Being a web based company most of the operations that take place can be tracked using a computer and all the ride taken by each driver is easily calculated. This way the company keeps paying their driver monthly based on the number of trips they have taken.
Management Team
The management structure has the board of directors at the helm and the CEO just below them. The CEO is assisted in operations by 5 other directors who head different departments. Under them are the different departments in the company which includes the legal team who ensure that all laws are observed and the operations department among others. There are many other directors who world bellow him to ensure smooth running of operations Such aa big company would need
Financial Plan
In terms of finances the company had used a very elaborate mechanism. They raised funds not all at once, but in a series of 8 stages all the company expanded. The fist series was in 2011 where after the San Francisco success raised 11 million. The then raised another 37 million in series B in 11 after success in New York city. They went ahead and get another 258 million in 2013 and 600m in 2014 both raising the capital as it had sunk ins roots down and its potential was now being unleashed. In 2015 they raised a total 4.9 billions and 2 billion in 2017. By December 2017 they had raised a total on 22.2 billion dollars in funding. The financial funding coincided with expansions plans and that’s how they have manages to expand to such heights.
References
Mahajan, J. (2010). Business organisation and management. Mumbai [India]: Himalaya Pub. House.
Sen, M. (2008). Business Management. New Delhi: Global Media Publications.
Tzur, A. (2017). Uber Über regulation? Regulatory change following the emergence of new technologies in the taxi market. Regulation & Governance. http://dx.doi.org/10.1111/rego.12170
