Uber case analysis

1. Case Analysis: Uber in
Australian Taxi Industry
MMBA 8017 Strategic Marketing, Term 2, 2020
Report Title: Case Analysis - Individual Report
Company: Uber Australia
Contributor: Amit Sati
Student Id: 45692386

2. Table of Contents
1. 4Cs Analysis of UBER in Australian RideShare Industry 3
2. SWOT Analysis of UBER in Australian RideShare Industry for Strategic Direction 5
3. Available Marketing Strategies for UBER to Drive Growth 6
4. Marketing Strategy recommendation for UBER 8
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3. 1. 4Cs Analysis of UBER in Australian RideShare
Industry
1.1. Context
A. Socio-Economic Trends: Acceptability of Share Economy is growing in
Australian Market along with usage of cashless payment methods. Aging population and
increasing cultural diversity demand unique ways to improve the product attractiveness.
B. Technology Trends: Increasing penetration of smart phones in the market
presents opportunity to develop existing market by targeting non-users in the rideshare
industry.
1.2. Customers
Customers in the rideshare industry could be categorized in to four new segments
based on the interest, behavior and needs.
A. Party Goers Segment: Their primary objective is after party safe travel to avoid
late nigh driving. Needs of this segment – anywhere pickup (wide availability), payment
convenience, reliability & safety, premium experience
B. Office Goer Segment: Their primary objectives are business travel, last mile
connectivity etc. Needs of this segment – cab status (real time tracking of arriving cab),
reliability, value, experience
C. Occasional User Segment: Needs of this segment – reliability, availability,
experience, value for money. They use uber as backup or in emergency.
D. Oblivious Segment: These are non-users, with no or little brand awareness.
Needs & challenges – Brand awareness, safety, price sensitive, payment mode,
technology challenges. Reluctant to change existing mode of transport.
1.3. Company
● Uber is Market Leader in Australian rideshare Industry
● Pioneered the ride share industry through user friendly platform, convenience in
payment (cash less options), transparency, improved user experience
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4. ● Focus on Process improvement to differentiate from traditional taxi industry
● Surge Pricing made it unique against traditional taxi
● Positioning - “Premium (Emotional Modifier) Daily (Descriptive Modifier) commute
(Brand Function)”
● Targeting effectively to party Goers & Office Goers
1.4. Competition
Increasing competition from within the rideshare industry and traditional taxi industry are
causing threat to market leadership position of Uber.
● Digitisation in traditional Taxi industry, aggressive advertising, collaborations with
other industries such as travel agencies
● New Entrants in rideshare industry – OLA, DIDI, Shebah
● Market share dropped from 90% to 55% in one and half year since 2018, after
OLA & DIDI entered the rideshare industry
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5. 2. SWOT Analysis of UBER in Australian
RideShare Industry for Strategic Direction
Strengths
- Market Leadership, brand
awareness
- Technology & market
learning curve compared to
new entrants
Weakness
- No long-term customer
commitment
- Higher per kilometer price
to customers compared to
alternates
Opportunities
- Increasing acceptability of
Sharing Economy
- Increasing penetration of
smart phone & credit / debit
card
- Aging Population
A. Utilising technology
experience to innovate and
maximise sharing economy
acceptability
B. Using brand awareness
and technology to solve
challenges of aging
population
C. Using Sharing economy
acceptability to position
better than public transport
and targeting aging
population
D. Using card payments for
longer commitment by
providing extra benefit for
prepaid / e-wallet feature
Threats
- Increasing Competition
(Co-Driver)
- Negative Press Coverage
globally
- Increase in users with
English as Second
Language
E. Using brand awareness
to improve brand image
F. Using technology to
reduce language barrier &
gain edge for competition
G. launch loyalty programs
to reduce impact of
competition
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6. 3. Available Marketing Strategies for UBER to Drive
Growth
Three marketing strategies are available to Uber in growth market in Australian
rideshare industry using ANSOFF Matrix (below):
3.1. Confrontation Strategy
A. Customer Loyalty Programs: Confrontation strategy could be implemented by
UBER by launching Customer Loyalty programs using Gamification method for
discounts, multiplatform rewards and premium offerings.
B. Multilingual Interface: Adding new Features such as Multilingual Interface or
language translation in the Uber APP could significantly improve the adaptability
amongst growing population with English as second language.
3.2. Market Development
A. Focused Advertisements: To grow the segments further by converting non-users
into users, UBER market development strategy could include focusing advertising
spends on perceptual objective of building trust and value for money, specially targeting
aging population.
B: New Payment Options: More Payment Options targeting for aging population who
is apprehensive about storing card details on Apps. Options such as, Prepaid credits,
e-wallet, give or lend money amongst friends or Family could gain popularity within non
users segment.
3.3. Flanker Strategy
A. Bike Peer-to-Peer Renting Platform: To counter increasing low cost substitutes and
competitive offerings, UBER could launch a “Bike Peer-to-peer renting Service.” This
could be effective to price sensitive target segments and complement the existing “Cab
Ride Share” product.
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7. B. Public Transport Consulting Services: Diversification method to offer the
expertise of technology in transport could be offered to local transport authorities.
Using Artificial Intelligence and Machine learning technologies, a new Route
Management offering such as, no fixed time-table bus services to increase efficiency.
ANSOFF Matrix (Utilising SWOT strategic options mentioned in brackets)
Products
Existing New
Mar
kets
Exist
ing
Market Penetration
- Loyalty Programs/ discounts /
Gamification (confrontation) (G) (A)
- Advertisement spends with
perceptual objective of building trust
(market development) (B) (E) (C)
Product Development
- Product Improvement to
accommodate multi-language
features (Confrontation) (F)
- Launch Bike Peer-to-peer renting
services to target non-users seeking
value for money (Flanker strategy)
(A)
New
Market Development
- More Payment Options (Prepaid / e
wallet, give / lend money amongst
friends / Family) (market
development) target non-users (D)
(A)
Diversification
- Route Management Services to
Public Transport Agencies (example
– Artificial Intelligence based, no fixed
time-table bus services to increase
efficiency) (A)
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8. 4. Marketing Strategy recommendation for UBER
Out of the 3 marketing strategies available, UBER should adopt the Market
Development strategy as part of Growth Strategy (strategy 3.2).
4.1 Strengths:
A. High Profitability: Market development strategy presents higher profitability by
gaining higher market share in the un-targeted segments.
B. Low Competitive Retaliation: Market development strategy also has lower chances
of competitive retaliation, which provides more time to earn profits from these segments.
C. Reduces Dependency on Existing Segments: By exploring new segments, the
dependency on existing customers reduces. This balances risk in the business.
4.2 Limitations:
A. Low Revenue Growth: Revenue growth will be slower compared to other strategies
as it would take time to increase brand awareness and gain customer confidence.
B. High Advertisement Spends: Market development strategy also requires increase
in advertisement spends to increase the perceptual targeting effectiveness and success
of the strategy.
C. Reduces Learning Time for Competitors: One of the disadvantages of being first
mover in growth market is providing better learning to followers. Competitors will be
easily able to copy the offerings and attack the position in the segment.
Strengths & Weakness comparison of 3 strategies available:
Strategy Strengths Limitations
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9. Confrontation
Strategy
- This strategy provides fast
growth in revenue for UBER
from existing customers.
- This helps is maintaining
existing Market Share within
the ride share segments.
- This strategy increases the
dependency on existing
market.
- This also leads to escalation
in industry rivalry and lower
profits.
Market Development
- This strategy leads to higher
profitability for UBER in the
industry.
- This also reduces chances of
aggressive retaliation by
competitors in the industry.
- This strategy provides low
revenue growth for UBER
compared to other two
strategies.
- This needs increase in
advertising spends to increase
the effectiveness of perceptual
objectives.
Flanker Strategy
- This strategy provides fast
growth in revenue for UBER
from new customer segments.
- This provides opportunity to
gain early mover advantage in
a new product category, and
leads to increase in
profitability.
- This strategy requires higher
capital investment to launch
new products and services.
- This strategy possesses high
financial risk as compared to
other two strategies.
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