SWOT Analysis
Supports achieving goals of organization |
Detriment to achieving goals of organization |
|
Attributes internal to organization |
STRENGTH · What advantages does your organization have? · What do you do better than anyone else? · What unique or lowest-cost resources can you draw upon that others can’t? · What do people in your market see as your strengths? · What factors mean that you “get the sale”? · What is your organization’s unique value proposition? |
WEAKNESS · What could you improve? · What should you avoid? · What are people in your market likely to see as weaknesses? · What factors lose you sales? |
Attributes external to organization |
OPPORTUNITY · From PEST + Specific env. · Also consider any actions by your competitors |
THREAT · From PEST + Specific env. · Also consider any actions by your competitors |
STRENGTH |
WEAKNESS |
|
OPPORTUNITY |
Pursue opportunities that are good fit to firm strengths |
Overcome weaknesses to pursue opportunities |
THREAT |
Use strengths to reduce vulnerability to threats |
Prevent weaknesses from making firm susceptible to threats |
Rationale |
Strategy Examples (non-exhaustive) |
Take advantage of strengths and opportunities |
· Develop the market · Innovate |
Take advantage of strengths and move away from threats |
· Acquire businesses with synergistic potential – joint ventures, strategic alliances |
Eliminate weaknesses to take advantage of opportunities |
· Restructuring |
Protect yourself or Exit the market |
· Divest yourself of components of firm · Liquidate |
1. What business is Uber in, what is its generic strategy? What do you think Uber’s long term goal is?
2. 1)What are Proters 5 Forces.
? Competitive rivalry – compeititve rivalry among competing sellers?
? Supplier power – are suppliers limited? Why?
? Buyer power – do the customers hava a say in the company?
? Threat of substitution – substitute products?
? Threat of new entry – who are they?
2)How do you determine the companies’ five competitive strategies.(Broad Low Cost, Broad
Differentiated, Focus Low cost, Focused Differentiation, Best solution).
3. Use SWOT Analysis to analyze the case. (Strengths, Weaknesses, Opportunities, and Threats)
4. What’s going on with the case? (Is there a problem? What next? Are they doing good?)
5. Suggestion/advise/recommendation for the case.
Answer each question in no less than 200 words and please make sure all the answers are based on the
case. Do not use the other outside resources.
Porter’s 5 Forces &
5 Generic Strategies
Assessing Industries and Competitive Environments
5 Forces Analysis Objectives
Evaluates An Industry’s Likelihood to Allow Participants to Make Money
Estimates the Economic Power of A Group of Companies Relative to:
Customers
Suppliers
New Entrants
Substitute Products
Competitive Rivalry among Competing Sellers
Rivalry Among Competing Sellers
Industries with Fierce Competition tend to drive down overall profits
Occurs when the only way to grow is to take market share from others because demand is growing slowly or declining
When there is little differentiation in products and services
Competitors are numerous and driven by market share, not profits
Excess Capacity forces drive to gain share at other’s expense
Threat of New Entrants
The likelihood of New Entrants is less if there are:
Barriers to entry to a Market, including economies of scale in production, sales, research, branding and complex regulations.
Patents, trademarks, longstanding customer relationships, best locations, long & expensive learning curve all block new entrants
Structural barriers such as high capital/equipment costs, or relationship barriers such as limited distribution or available customers due to culture, trade policies or longstanding relationships
Supplier Bargaining Power
Suppliers selling commodities that are widely available have less bargaining power than suppliers who are the sole source of a product or who provide highly regarded brand name products
Suppliers providing products for which there are no attractive substitutes have more power
Suppliers who have low rivalry/price competition have more power
Buyers’ Power
Buyer’s power is stronger when supply exceeds demand
Products are standardized or undifferentiated
Switching costs are low
Buyers are few and large
Purchases can be postponed
Competition among sellers is intense
Substitute Products
Industry is less attractive if consumers can substitute a different product
Internet and Cable News are substitutes for Newspapers
Online retail is a substitute to shopping malls
Laser Surgery is a substitute for glasses and contacts
Substitutes must be readily available and attractively priced with low switching costs—AirBnB vs Marriott; Uber/Lyft vs Medallion Cabs
5 Forces Changeable–Coke
Porter in 1980’s says Soda Pop Industry Printing Money
Addictive blend of Sugar, Caffeine whose sweetness is tempered by carbonation
Growing market for soft drinks in US and Worldwide
Few Alternatives—No Sna
Uber
Uber, a company providing peer-to-peer shared car rides through a smartphone app, went public at a valuation of $82 billion in May of 2019, raising $8.1 billion at $45 per share.1 Prior to this, Uber had announced that it expected to reach a market value of $120 billion at its initial public offering (IPO), which created a frenzy in Silicon Valley and on Wall Street, as Uber would become the biggest American company to initially list on an American stock exchange—larger even than Facebook, which went public in 2012 at an impressive $104 billion valuation.2 However, Uber was not able to capitalize on the $120 billion promise and never reached a market cap greater than $82 billion that year. Uber would not exceed its IPO market cap until November of 2020 during a historic run up of the stock market.3
Dara Khosrowshahi, who had become CEO in 2017, had already faced numerous challenges as he moved the company toward its IPO. Challenges included charges that the culture was rife with sexism, that drivers were involved in hundreds of sexual assaults and other crimes on passengers, and that the company still had not turned a profit. Hired to “clean up the mess” left by former CEO Travis Kalanick, Mr. Khosrowshahi had quietly listened to employees and steadied the ship.4 Yet, while negative headlines finally began to subside, operating losses continued to expand unabated. That problem was made worse in March 2020 as the global coronavirus pandemic cut demand for rides. Serendipitously, as demand for rides fell, a silver lining emerged in the form of rapidly expanding demand for Uber Eats, the food delivery service owned by the company.
The stark ability of one growth business in the portfolio to make up for some of the downturn in another business proved crucial during the pandemic. But Mr. Khosrowshahi also knew that the core business of ridesharing continued to face numerous challenges of regulation, lawsuits, competition, and operating losses. This presented an ongoing need to either find a profitability fix for the core business or to find new businesses that could potentially supersede or replace ridesharing. Beyond food delivery in Uber Eats, another obvious place to look was to autonomous vehicles, which were seen to have the potential to replace drivers with a fleet of robotaxis. Uber had been investing heavily in this area, and yet success in a future vision of autonomous vehicle-based transportation was anything but assured. Other competitors were also investing heavily in the space and no company had yet reached the goal of 100 percent autonomy with its vehicles.
As Uber emerged from the worst effects of the pandemic, Mr. Khosrowshahi faced a number of challenges. Could he make the rideshare business profitable and if so, how? Should he continue investing in autonomous vehicles and if so, where? Should he launch new businesses? And crucially, how could he configure and coordinate Ub
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