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What is Strategic management - Concept, Application, SWOT Analysis

3740 Downloads1 I Published: 20 Mar ,2019

STRATEGIC MAANGEMENT IN UBER

Strategic management is defined as procedure which includes planning, analysis and monitoring of procedures running in the industry. Objectives for business including short term and long term are formulated for providing directions to the manpower (Ward and Peppard, 2016). Under this policies, frameworks and action plans are formulated for accomplishing overall targets for business. Present report is based on UBER which is a leading taxi service provider firm of the nation. The report describes about four competitive strategies used by enterprise for achieving their desired targets. In addition to this various strategic issues faced while formulating action plans for business has been mentioned.

SUMMARY SWOT

UBER - Strategic Management

(Source – UBER, 2016)

STRENGTHS UBER is a known for its high tech taxi services which renders quality experiences for its business clients. Operations of business are located in more than 200 cities of 54 nations. Company has large fleet of vehicles and vary little competition is faced by it from rival transportation service providers.

WEAKNESSES :- business model of the enterprise is less effective and unpredictable due to which it becomes difficult for achieving required targets. Company hires drivers on a temporary basis due to which it becomes difficult to train employees in productive manner.

OPPORTUNITY :- UBER has opportunity for expanding the business of the company in diverse nations of world. Asian countries like India, China and Pakistan offers huge consumer base and high profitability and revenues can be achieved by firm by expanding the business in these nations. Advancement in technology and increasing number of internet users offer advantages to targets consumers that are using smartphones (Flammer, 2013.).

THREATS :- Many new players are entering into taxi business and due to it threats are getting created for UBER. New taxi regulations formed by country also imposes a challenge for the enterprise to successfully execute their operations.

Four competitive business strategies

SWOT Analysis

(Source- Kapferer, 2012)

Business level strategies :-Under business level strategies management formulates action plans by involving data and information gathered from external business environment. Effective business level strategies developed in effective manner supports in gaining competitive advantage and sustainable development of business (Cartwright and Cooper, 2012). It is vital that knowledge and information should be assembled from sources that are authentic and reliable. Management of UBER can take significant initiatives for developing business level strategies in effective manner. At initial level it is determined that who are potential consumers of business to whom services will be offered. Requirements of targeted consumers are also identified by doing proper research and survey. It supports in designing strategies that will assist in accomplishing desired goals of business. The main strategies that UBER can use are as described :-

  1. Cost leadership strategies :- Under this actions plans are made for offering transportation services at lower price as compared to competitor firms (Fitzsimmons and Fitzsimmons, 2013) . It will aid in rendering taxi services to all income group consumers at reasonable price. There is need to make reductions in overall investment cost so that consumers will be offered taxi services at lower price rates in market. It will help in gaining big market share by involving large number of consumers in business. It is required that unnecessary cost for business should be reduced so that total expenses of business can be reduced.
  2. Differentiation strategy :- UBER is a leading service provider firm which offers high tech taxi services to business clients. New attributes and features can be added in the existing services of the company for offering better taxi experiences for clients. Consumers can be attracted by offering better and differentiated taxi services and it will support in enhancing consumer base of the company. Rapid and new innovation needs to be done in existing model of business so that high customer services can be offered at premium price to the consumers (David and David, 2016).
  3. Focused business level strategies – In this method specific consumers are targeted for selling taxi services offered by UBER. More concentration is given on a particular geographical market area and impelling advertising and promotional strategies are set for attracting consumers.

Strategy Levels

(Sources- Ashby, Leat and Hudson-Smith, 2012 )

Corporate level strategies :-These strategies are formed at top level of management and decisions taken at this level influences the whole organizational structure. Proper initiatives are taken by management for making improvements in financial performances and managing manpower of the organization in systematic manner. It is critical that management of UBER should involve staff members in the decision making process so that appropriate decisions can be taken for business. Plans that are made under corporate level strategies renders directions and instructions for the staff members of the business overall operational activities of the business gets affected by it (David, and David, 2016). Decisions are taken for making Allocation of resources in optimum manner so that desired functions of UBER can be executed in successful manner. In addition to this decisions for managing manpower of the organization are also taken at this level and task allocation to the employees is also done (Ashby, Leat and Hudson-Smith, 2012). Judgements for diversifying existing services and making modifications in current business procedures are needed to be taken under the corporate level strategies formed by management of UBER.

Identification of at least three significant strategic issues the organization faces

UBER company deals in taxi services and operated its business across 54 nations. There are many business issues that are faced by the organization which hampers performance of the enterprise. It is vital to take significant steps for resolving the issues that are faced be corporation (Kapferer, 2012). It will support in ensuring growth and profitability of the business in successful manner. There are many strategic issues that are faced by management of the UBER and they are as described-

    • Assessing needs of consumer - it is assertive for identifying needs of the clients in a consumer oriented business. It will support in rendering effective taxi services as per the needs and requirements of clients. Preferences of consumers changes from time to time and due to that need arises for making changes in existing services provided by business (Seuring, 2013). Moreover it is a complex and challenging task for exactly knowing needs of buyers and data and information collecting procedure is also tough and complicated and hence it is challenging task for identifying requirements and needs of clients of business. When strategies are formed it is required that action plans should focuses on satisfying needs of consumers.
    • Identifying potential target market :- operations of UBER have been spread in large consumer market across 54 countries . It is a complicated task for doing segmentation of market and assessing potential consumer base of business (Cartwright and Cooper, 2012). Positioning and targeting strategies of corporation are formed by identifying potential consumer base for the business. Other than this segmentation needs to be done on the basis of sex, age, and income level of consumers.
    • Allocation of resources :- while strategy formulation process there is need to make plans for allocating resources of the organization. Financial funds of the enterprise needs to be divided on different operational activities of business. Other than this human resource also needs to be given specific tasks and responsibility (Berman and Evans, 2013). It is a complex task and sometimes difficulties are faced for making allocation of different resources of the organization in successful mode. In addition to this there is need for doing research and survey for collecting external and internal data and information

Recommendations for making effective strategies.

UBER company can make use of effective strategies for managing staff members of the organization. Action plans can be formulated at two different levels that includes corporate and business level strategy.

Management should take initiatives for developing a culture where people are passionate for learning (Kapferer, 2012).

New attributes and features can be added in the existing taxi services so that clients should be provided with better taxi experiences. Use of advanced technology can be taken and new innovations can be made in GPS tracking systems, smart phone map. Regular feedbacks can be taken from clients who avail taxi services of UBER for making improvements in existing business model.

Strategy for ride sharing services is a unique concept and it supports in rendering reasonable prices taxi services to customers (Hill, Jones, and Schilling, 2014). New features can be added in this concept and attractive advertising and promotional strategies can be formed for informing consumer about this initiative of UBER.

Assistance from external survey agency can be taken for assembling necessary data and knowledge which is required for formulating strategies for business.

CONCLUSION

Summing up the present report it has been concluded that strategic management is complex process and organized approach is required for making strategies for business. UBER company can adopt cost leadership strategy for rendering superior quality taxi facilities at reasonable price to the consumers. In addition to this differentiation strategy can be used for making improvements in existing attributes and features in taxi services of the enterprise.

REFERENCES

Books and Journals

      • Ashby, A., Leat, M. and Hudson-Smith, M., 2012. Making connections: a review of supply chain management and sustainability literature. Supply Chain Management: An International Journal. 17(5). pp.497-516.
      • Berman, B.R. and Evans, J.R., 2013. Retail management: a strategic approach. Pearson Higher Ed.
      • Cartwright, S. and Cooper, C.L., 2012. Managing Mergers Acquisitions and Strategic Alliances. Routledge.
      • David, F. and David, F. R., 2016. Strategic Management: A Competitive Advantage Approach, Concepts and Cases.
      • Fitzsimmons, J. and Fitzsimmons, M., 2013. Service management: Operations, strategy, information technology. McGraw-Hill Higher Education.
      • Flammer, C., 2013. Corporate social responsibility and shareholder reaction: The environmental awareness of investors. Academy of Management Journal. 56(3). pp.758-781.
      • Hill, C. W., Jones, G. R. and Schilling, M. A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.
      • Kapferer, J. N., 2012. The new strategic brand management: Advanced insights and strategic thinking. Kogan page publishers.
      • Seuring, S., 2013. A review of modeling approaches for sustainable supply chain management. Decision support systems. 54(4). pp.1513-1520.
      • Ward, J. and Peppard, J., 2016. The Strategic Management of Information Systems: Building a Digital Strategy. John Wiley & Sons.

Online

    • UBER. 2016. [Online]. Available through: < https://www.uber.com/en-IN/>. [Accessed on 20th November 2016].
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