Download as docx, pdf, or txt
Download as docx, pdf, or txt
You are on page 1of 2

Analysis: Should Uber engage in competition with rivals in Global markets (China , India, or

south Asia ) or should Uber leave these markets and focus only on the U.S. markets?
• Should Uber leave these markets
Given data available in resent sources, this issue is now academic. Uber has already left
these some of these markets. But, it really should not; therefore, Khosrowshahi, is not giving
up as the company regroups and charges ahead again. Considering the extremely fierce
competition the company faces in Southeast Asia, China, Russia and India (for example)
Uber stockholders are better served if the company exits these and other markets where it is
taking-up billions of dollars in losses a battle of resistance against well-entrenched local
competitors who understand the local landscapes better (Sawhney, 2018). In India for
example, Ola’s market share increased from 53% in July 2017 to 56.2% in December, while
during the same period, Uber’s share slipped from 42% to 39.6% (Sawhney, 2018). A very
similar pattern is observed in the other markets mentioned above. It follows then, that it would
be more profitable for Uber to accept potentially valuable stakes in its local rivals and letting
them win in their respective markets (entering partnerships and adopting global strategic
alliances into its global expansion strategy).
ZZZZZZZZZZZZZZZZZZZZZZZZZZZ
With Khosrowshahi at the helm Uber’s global expansion strategy is leaning towards
collaboration and partnership. These global strategic alliances (GSA) have pros and cons.
Considering pros or advantages, Delaney (2018) states that cost of a GSA is usually shared
equitably among the corporations involved and is generally the least expensive way for all
concerned to form a partnership. Highlighting the flexibility of GSA’s as an
advantage, Delaney indicates that depending onions resources resources, a company can
structure an equity or non-equity partnership where, in the first you can hold a minority,
majority, or equal stake while in the second, the host country partner has a greater stake in
the deal, and thus holds a majority interest.
• Pros and cons of Uber’s choice
Among pros or advantages of establishing a GSA, the following apply to Uber:
• Get instant market access, or at least speed your entry into a new market
• Exploit new opportunities to strengthen your position in a market where you already have a
foothold
• Share fixed costs and resources
• Broaden its business and political contact base
• Gain greater knowledge of international customs and culture

The following cons or disadvantages of establishing a GSA, apply to Uber:


• Weaker management involvement or less equity stake
• Fear of market insulation due to local partner's presence
• Loss of control over important issues such as product quality, operating costs, employees,
etc.

Final Recommendations
Given the thorough case analysis, the following final recommendations are made:
1. In markets where it definitely can not compete, but can still gain profits, Uber must either
make a strategic retreat or establish strategic partnerships and collaborations.
2. Uber must strive to establish trustworthy, genuine, collaborative agreements with local,
regional, and global governments.
3. Engage in negotiation of regulations with governments rather than avoiding them
altogether in violation of their laws.
4. Rather than recurring to awe and shock, and disruptive marketing tactics, Uber must focus
in good will marketing practices.

You might also like