This analysis builds on the work done for your individual written assignment last week in researching the Hofstede cultural dimension for three countries.

For your team report, discuss what would be the ideal Hofstede cultural dimensions that would fit your client. Specifically discuss each of the four dimensions and explain how from a marketing or market demand perspective, it would be ideal if the particular dimension was high or low. For example, a company that mostly appeals to people wishing to achieve status (such as an expensive watch) might sell best to a country with a high masculinity score.

Go through each dimension explaining the ideal cultural dimension. Then try and find a country with score that fits your ideal, and explain how this would impact your marketing activities in that country. The country you select that fits a specific indicator, will likely not be the same country for all four indicators since it would be rare that one country shares the ‘ideal’ score for all four. (Note: the selection of these countries for this assignment is not related to the final three countries you will select for your international marketing report – that will be done through a foreign market matrix in weeks 4 and 5.)

The team report should be 3 pages.

Microsoft word 1 page, APA Format, Scholarly reviewed citations. Please read below all attached files. The Indicator i have chosen is Masculine VS. Feminine on the Topic UBER.

SWOT Analysis: Uber

MBA 686

SWOT ANALYSIS: UBER

John Brooks, Sara Vong, Ade Adesida, & Tyler Frankenfield. ATSJ Marketing.

Benedictine University

STRENGTHS

The name Uber is synonymous with the ride service market. Uber has enjoyed and capitalized upon first to market advantages. Although Uber isn’t a market disrupter by the strictest definition, as some have ascribed to it, it has completely changed the ride service market, which has long been dominated by cab companies (Christensen, Raynor, & McDonald, 2015). Uber has distinct advantages over traditional cab companies, where in many cities; expensive tokens are required to operate (Salmon, 2011). The tokens also serve to limit the fleet of cabs available, which is not in the best interest of consumers. Consumers have noticed this, and as such have voted with their wallets. Uber drivers use their own vehicles, which makes for a large fleet. This means supply is not a limiting factor. Unlike cab companies, Uber does not have employees, rather it has independent contractors. This helps reduce overhead costs even more, which are already low. This allows Uber to pass along better pay to drivers, and better rates to consumers (Worstall, 2014). In addition to saving money, consumers benefit from the user friendly nature of being able to pull out a smart phone, and have a driver there to pick them up within minutes. Other conveniences include the ease of payment via the app, a rating system that allows users to select highly rated drivers, and customers can choose the level of service (SUV, taxi, black car, etc.….). Although there is much debate about exactly what Uber’s current value is, there is no debate about whether or not it is a successful and valuable company. This makes it an attractive company for many investors. In fact, earlier this year Uber raised $3.5 billion from the Saudi Sovereign Wealth Fund (Konrad, 2016). All signs point to Uber being primed for expansion into new markets.

WEAKNESSES

Uber’s business process and product are simple and easily replicated, and there is nothing Uber can do to stop competitors from eating into their market share (Chan, 2015).  Uber may have gained a first mover advantage in the ride sharing market, but with no barriers to entry, the market will become even more competitive.  Internationally, Uber has shown a weak knowledge of local markets.  As evidenced by the recent sale of Uber China to local rival Didi Chuxing, local strategies are required for local markets (Somerville, 2016).  Uber tried to use strategies that were successful in other markets and rushed entry into China and Indonesia without an understanding of the culture, business dynamics and consumers (Somerville, 2016).  Uber has already made significant investments in their technology and research and development, and have undergone a trial and error period that new startups will not have to endure because they can learn from Uber’s mistakes and costs to their reputation.  Being a first mover means that Uber may have to re-define their operating procedures and company policies in each new market they penetrate which can be costly and take time to correct once new features are required to remain competitive through saturation.  This significant investment also means that Uber may not be able to make fundamental changes that may be necessary to see any payoff in international markets that have vastly different customs and operating norms.

The relationship between Uber and their drivers lacks connection and there is little loyalty either way, especially because the drivers carry the burden of the increased car maintenance, fuel costs, increased insurance cost and inherent risk of accident.  The payout for the drivers may be too low compared to the risks, and Uber does not offer many incentives to keep drivers loyal to their brand versus a competitor.  Uber’s business model is based on the fact that drivers are independent contractors, not employees of the company, so they do not receive any benefits or incentives of a traditional employer.  As the employer/employee relationship become a bigger topic in the ridesharing industry, Uber will continue to receive class action lawsuits and political and governmental roadblocks as they try to operate with all of the control of an employer, without any of the tax, regulation or reciprocity to their drivers.  Similarly to employee loyalty, customer loyalty is also low and it is hard to build.  All else equal, Price is the only thing that drives the consumer in remaining with Uber or switching to a competitor.  If customers feel like they have more incentives or can get a better price from a different ride share competitor or even traditional taxi company, they will not exclusively use Uber.

OPPORTUNITIES

Uber realized that customers are unhappy with the old-fashioned taxi firms following unusually high costs and delays. This has been a great source of market opportunities, as evidenced by the firm’s expansion to nations, like Kenya and India, where cab services are highly rated and problematic. The company has also taken advantage of regions where there are no taxi services in operation. Uber service is specially made for that customer who needs affordable and convenient service, that lacks in most of its opponents (Bashir, Yousaf & Verma, 2016).

Uber is able to calculate its prices automatically and based on the prevailing economic circumstances. This is an opportunity that makes it survive tough economic times. Uber has been keen on programs that are aimed at reducing climate change and is always committed to embracing transportation mechanisms that cannot overcome weather challenges like planes. Uber has taken advantage of the existing international agreements in an effort to expand its market share (Zickuhr, 2016).

Uber is committed to continue inventing better ways of service delivery through adopting and linking with partners to meet and exceed customer expectations. Not only does the firm include used cars in its operations, but also airplanes to ensure that customer’s needs are met conveniently. Uber enjoys numerous opportunities from cheap electric cars, offering its services to the sick, taking pupils to school, and taking pets to the doctor. Other opportunities include the increasing disposable money and need for quality (Alley, 2016).

THREATS

Uber, like any successful company operating in a free market, has to deal with competition. Lyft is Uber’s largest and most direct competitor outside of cab companies. The effects Lyft has on Uber are multi-faceted. These include driving down profit margins, which not only effects Uber’s bottom line, but also that of its drivers. The latter can lead to unhappy drivers, which can lead to a drop in service from a reduced fleet. In fact, Lyft is more favorable for drivers in terms of commissions and tips. The Uber app doesn’t encourage tips, as Lyft does (Van Maldegiam, 2015).  Another major area of concern is regulation in markets. It’s no secret that Uber has caused a large decrease in revenue from taxi companies (Nelson, 2016). This will motivate existing taxi companies to lobby local governments to create regulations, and other barriers to market entry. In fact, Germany and France have already introduced fines and put regulation in place to ban and/or limit Uber from operating (Davies, 2016). Intuitively one may assume that consumer demand will trump such efforts, as it has in the United States. However, lobbyists and governments use many tactics, including scare tactics with regard to safety (Kerr, 2014). This is not to minimize the importance of safety. As the brand grows, new drivers come in as unknown variables. Any issues with safety can lead to bad press, which will undoubtedly be used against Uber. Changes in technology can lead to, another company coming with a new innovative idea to grab market share. For instance, self-driving cars are being explored by Google, and may be a threat in the future (Google, 2016). Lastly, overvaluation leading to overinvestment in a given area is a concern.

References

Alley, J. K. (2016). The Impact of Uber Technologies on the New York City Transportation Industry.

Bashir, M., Yousaf, A., & Verma, R. (2016). Disruptive Business Model Innovation: How a Tech Firm is Changing the Traditional Taxi Service Industry. Indian Journal of Marketing, 46(4), 49-59.

Chan, S. (2015). SWOT Analysis for Uber. Retrieved from https://prezi.com/vg9ka4hxa1s3/swot-analysis-for-uber/.

Christensen, C.M., Raynor M.E., & McDonald, R. (2015). What Is Disruptive Innovation? Harvard Business Review. Retrieved fromhttps://hbr.org/2015/12/what-is-disruptive-innovation.

Damodaran, A. (2014). Uber Isn’t Worth $17 Billion. FiveThirtyEight. Retrieved from http://fivethirtyeight.com/features/uber-isnt-worth-17-billion/.

Davies, R. (2016). Uber suffers legal setbacks in France and Germany. The Guardian. Retrieved fromhttps://www.theguardian.com/technology/2016/jun/09/uber-suffers-legal-setbacks-in-france-and-germany.

Google. (2016). Google Self-Driving Car Project. Google. Retrieved from https://www.google.com/selfdrivingcar/.

Kerr, D. (2014). How risky is your Uber ride? Maybe more than you think. cNet. Retrieved from http://www.cnet.com/news/how-risky-is-your-uber-ride-maybe-more-than-you-think/.

Konrad, A. (2016). Uber Raises $3.5 Billion From Saudi Sovereign Wealth Fund, Keeps $62.5 Billion Valuation. Forbes. Retrieved fromhttp://www.forbes.com/sites/alexkonrad/2016/06/01/uber-raises-3-5-billion-from-saudi-sovereign-fund-at-62-5-billion-valuation/#7abbaffa41d4.

Nelson, L.J. (2016). Uber and Lyft have devastated L.A.’s taxi industry, city records show. Los Angeles Times. Retrieved fromhttp://www.latimes.com/local/lanow/la-me-ln-uber-lyft-taxis-la-20160413-story.html.

Salmon, F. (2011). Why taxi medallions cost $1 million. Reuters. Retrieved from http://blogs.reuters.com/felix-salmon/2011/10/21/why-taxi-medallions-cost-1-million/.

Salmon, F. (2011). Why taxi medallions cost $1 million. Reuters. Retrieved from http://blogs.reuters.com/felix-salmon/2011/10/21/why-taxi-medallions-cost-1-million/.

Somerville, H. (2016). Uber’s rivals have a new road map. Business Insider. Retrieved from http://www.businessinsider.com/r-didis-dominance-of-uber-in-china-offers-roadmap-for-ride-hailing-rivals-2016-8.

Van Maldegiam, S. (2015. Uber vs Lyft Shootout. The Rideshare Guy. Retrieved from http://therideshareguy.com/uber-vs-lyft-shootout/.

Worstall, T. (2014). How Uber Increases Driver Profits While Being Cheaper Than Traditional Taxis. The Motley Fool. Retrieved fromhttp://www.fool.com/investing/general/2014/01/23/how-uber-increases-driver-profits-while-being-chea.aspx.

Zickuhr, K. M. (2016). When Uber comes to town: The impact of transportation network companies on metropolitan labor markets(Doctoral dissertation, GEORGETOWN UNIVERSITY).