Uber Technologies Company: SWOT Analysis

Introduction

Modern technologies have led to the emergence of many companies that provide a wide range of services to different customers. Uber Technologies Incorporation (commonly known as Uber) is a corporation that provides car transportation and delivery services to customers in over 600 cities (Berger, Chen, & Frey, 2017). This essay begins by presenting a brief background of Uber. The paper gives a preliminary discussion of SWOT analysis and situation analysis as two useful analytical tools. The company’s SWOT analysis is then described in detail. The essay goes further to give a detailed discussion based on the aspects identified in the SWOT matrix. The paper concludes by exploring the company’s future prospects and aims.

Company Background

Uber Technologies Inc. is a multinational corporation that offers food delivery and car transportation services. It develops and markets apps that can be used by drivers to meet the needs of different clients. Food delivery apps are also developed and marketed by Uber. The organization is currently operating in 633 major cities across the world (Berger et al., 2017). The corporation is headquartered in San Francisco, California. The company was founded in the year 2009 by Garret Camp and Travis Kalanick. The company’s original name was UberCab. It was later changed to Uber in 2011. Uber has introduced UberX and UberPOOL within the past five years. The organization is currently focusing on autonomous vehicles in order to support the needs of more customers in the future.

Analytical Tools

Situation Analysis

This is a tool used by organizational leaders to examine the internal and external attributes affecting a given company. This procedure is then used to outline the company’s capabilities, potential clients, and competitiveness in the environment (Brazil & Kirk, 2016). Situation analysis is embraced by managers to design an effective business plan. The tool identifies potential areas that can be tapped to maximize performance.

SWOT Analysis

SWOT matrix is one of the widely used concepts in the world of business. The tool is considered to identify and understand the unique strengths and weaknesses in a given organization. These two constitute an organization’s internal environment (Berger et al., 2017). The tool goes further to outline the major threats and opportunities faced by a given company. These occur in the external environment. The tool is then used to make adequate decisions and business strategies.

Uber: SWOT Analysis

Strengths

Uber has a number of strengths than support its business model. To begin with, Uber has become a recognizable and admirable brand across the world. The company’s business model is characterized by a cashless system that is safe for both the driver and the customer. The company offers premium services at reduced prices in comparison with contemporary taxis (Brazil & Kirk, 2016).

The brand is associated with standardized services, verified cars, and competent drivers. These attributes attract many potential people. The organization’s operations are usually cheaper since there is no need for dispatchers. This model makes it easier for the company to minimize its operational expenses and deliver quality services (Brazil & Kirk, 2016). Experts indicate that the organization’s apps are user-friendly.

Weaknesses

Experts believe that Uber’s model is easy to replicate (Berger et al., 2017). This means that the level of competition will always be high. The strategy is very hard to predict since technology has been changing over the years. Studies have indicated that the company’s drivers have been raising numerous concerns. This is a clear indication that more drivers are unsatisfied with the company.

The apps designed and marketed by Uber have been characterized by privacy concerns. For instance, customers can be tracked and monitored by third-party users (Ulama, 2016). Statistics have revealed that Uber has not been making adequate profits.

Opportunities

According to the IBISWorld, consumer demand for similar services is expected to rise in the future (Ulama, 2016). More people have enough income that can be disposed. Special occasions, such as promotions, graduations, and weddings, will encourage more people to use these services. The profitability of the industry is expected to rise.

The global society has specific markets that are yet to be targeted, such as India. The elderly can also benefit from these services. More people will prefer Uber for errands and transportation of pets and children. Different suburban areas offer new opportunities to Uber (Berger et al., 2017). New technologies will ensure the corporation succeeds in the autonomous or driverless cars sector.

Threats

Different countries have presented new legislation to ban the company from the operation. Problems with different authorities have led to increased fines (Brazil & Kirk, 2016). This issue has given the company a negative image. Many drivers have presented their dissatisfaction with the employer in the recent past.

The competition will emerge within the company’s drivers. This means that prices might increase and eventually affect its performance (Berger et al., 2017). Different corporations, such as Toyota and Google, are also focusing on autonomous vehicles. This development is a major threat to Uber’s future objectives.

SWOT Analysis Matrix

Strengths
  • Recognizable brand
  • Cashless payment
  • Reduced prices/fares
  • Standardized services
  • User-friendly apps
  • Reduced operational costs
Weaknesses
  • Business model can be replicated
  • Model is unpredictable
  • Privacy issues and concerns
  • Strained company-drivers relationships
  • Focus on cities
Opportunities
  • Emerging markets such as India
  • Increasing demand for luxury services
  • Suburban areas across the world
  • Aging population
  • Technological changes
Threats
  • Competition from companies like Google
  • Legal issues and suits
  • Increased cases of scandals
  • Issues with authorities

Discussion

The company’s opportunities and strengths appear to outweigh its threats and weaknesses. The first reason why Uber will succeed is because of the nature of its business model. The model is admired by many customers across the world. Although it can be replicated, it is agreeable that the brand is attractive to more customers. More potential markets are being sensitized about the brand. This is a clear indication that the future will be brighter for the corporation (Berger et al., 2017). The second reason is that the company has become a pacesetter in the driverless cars segment. The success of this model and the provision of services in different suburbs will result in increased profits.

The third reason is that more people are currently in need of cashless transport systems. Despite the lawsuits, privacy concerns, and strained driver-company relationships, the chances are high that more people will be in need of Uber’s services. The aging population and children make the model more attractive to more people (Berger et al., 2017). These opportunities and strengths will definitely sustain the company’s future performance. This is possible because the industry is still in its infancy.

Conclusion

The completed SWOT analysis shows conclusively that Uber has managed to penetrate and succeed in an industry that has been dominated by contemporary taxis. This can be described as a disruptive technology capable of supporting the changing needs of more customers. From this understanding, it is clear that the corporation will be in a position to expand its operations and overcome the existing threats and weaknesses.

References

Berger, T., Chen, C., & Frey, C. (2017). Drivers of disruption? Estimating the Uber effect. Web.

Brazil, N., & Kirk, D. S. (2016). Uber and metropolitan traffic fatalities in the United States. American Journal of Epidemiology, 184(3), 192-198. Web.

Ulama, D. (2016). Limousine & town car services in the US. Los Angeles, CA: IBISWorld Incorporation.