Dr.

Sean Jasso

MGMT 449

04/01/18

CASE 10: Uber: Feeling the Heat from Competitors and Regulators Worldwide

Issue/Problem Identification

Uber, originally known as “UberCab,” was started by Travis Kalanick and Garrett Camp in San

Francisco, California, in 2009. Its target audience was young, educated, tech-savvy urbanites, more likely

to rent than own their own homes, who generally got around via public transportation, biking, or walking.

The company grew rapidly and by 2015 it was providing carpooling services in 300 major cities in fifty-

eight countries around the world.

As Uber moved forward into new territories, however, it got entangled in many regulatory and

legal hassles. The company had to figure out how to sustain its lead in the heavily regulated,

controversial, competitive, and ever-changing taxi industry. Moreover, despite a landslide market share

Uber was operating at a loss. How to lower costs and become profitable was another challenge for this

young and aggressive company.

There are few major overriding issues concerning Uber in this case. Number one threat to this

company is the competition and threats of new entrant nationally and internationally. The high bargaining

power of the customers and threat of substitute services makes this industry “red sea” filled with sharks

that needs continues strategic planning and improvement to stay competitive and relevant.

Lyft has the exact same core business model and application technology as Uber. The intense

price war between Uber and Lyft in highly populated cities in the US is a major issue. Also, introduction

of new startups such as Fasten and Grab and international competition, such as Ola and Didi has put more

pressure on the company to reconsider some of its strategies.

Some sub-issues concerning the company would be governmental regulations, social

responsibility of the company. Local strikes against Uber on salary, employee rights, and data privacy,
sexism has been an ongoing issue, required capital to resolve. Constraint of smartphones, affordable

vehicles, and gasoline and government nationalization depend on countries operated in are all risks for

Uber.

Despite significant investment to establish a relationship with governmental authorities, Uber is

still prone to operational interference from groups mentioned above. For example, in Germany the taxi

drivers union was able to block Uber’s entrance with the help of German government citing unfair

competition. Similarly, the state of California has filed a lawsuit for criminal investigations alongside

nationwide class action lawsuit. Entering in markets such as Denmark and Netherlands is difficult because

of pervasive use of the bicycle for commute.

Stakeholder Analysis and Management Evaluation

In summary, the stakeholders of the firm include all those parties involved in the survival or

progress of the firm. Similarly, it also includes all those affected by the organization’s performance,

activities and policies among others. These include, drivers, government and regulatory agencies,

clients/passengers, directors/company executives and employees,

The main objective of the firm’s management team and directors is to make transportation “as

reliable as running water” everywhere, for everyone. To accomplish such objective, Uber offer service to

everyone, including luxury and affordable options with low prices, fast, and efficient while trying new

services with transaction convenience—mobile payment globally, merging intangible code and

technology with the tangible world where customers live in

CEO Travis mentioned in an interview four Phases of Uber Objectives. First objective is to create

the world’s biggest taxi networks, connecting riders with safe, reliable, and convenient transportation

providers at a variety of price-points in cities around the world. Second to create the world’s biggest P2P

logistics platform, allowing anyone to either request or provide physical delivery of a myriad of goods

and services. Third is to shift from 100 percent human-driven logistics to 100 percent machine-driven

logistics and the last phase for the company would be world domination.

Recommendations and Implementation

 It is recommended for the company to expand into untapped markets .More product variety i.e in

markets where cars are not prevalent use bike or scooter for Uber services and name it Uber tuk-tuk, Uber

bike, Uber scooter. Also it is recommended for the firm to try to grow organically, not through

acquisition and continue to tune strategy.

Also to sustain competitive advantage it is recommended to promote business through low price to

gain more market share compare to Lyft.

Currently for Uber growing internationally in to untapped markets could be the best strategy. By

rapidly grow product offerings globally like UberX, UberXL, UberBlack, UberSUV, UberPOOL,

UberTaxi, UberSelect, Uber for Business, and UberRUSH (UberEATS) to offer service for virtually

every social and demographic group in the world, Uber can differentiate its business from its competitors.

Some implementation consideration would be to focus on organizational structure by restructuring

the company into different units based on service/technology. A program should be initiated in order to

capture new technology/acquisition opportunities for the company and the product managers of current

services should be head of these programs since these areas are very specific.

For evaluation and control, Uber should use its current information system to provide feedback for

new implementation activities since Uber apparently is famous for having accessible analytics system to

track any operation data and performance results should be reviewed on daily basis.

CASE 10: Amazon.com, Inc: Retailing Giant to High Tech Player?

Issue/Problem Identification

In this case, there are various facts concerning the case. Founded by Jeff Bezos, online

giant Amazon.com was incorporated in the state of Washington in July, 1994, and sold its first book in

July, 1995. Amazon quickly grew from an online bookstore to the world's largest online retailer, greatly

expanding its product and service offerings through a series of acquisitions, alliances, partnerships and

exclusivity agreements. By 2010, 43% of Amazon net sales were from media, including books, music,

DVDs/video products, magazine subscriptions, digital downloads, and video games. More than half of all

Amazon sales came from computers, mobile devices including the Kindle, Kindle Fire, and Kindle

Touch, and other electronics, as well as general merchandise from home and garden supplies to groceries,

apparel, jewelry, health and beauty products, sports and outdoor equipment, tools, and auto and industrial

supplies. Amazon faced several other challenges including those from state governments that wanted it to

collect sales taxes so that it did not adversely compete against local businesses. Amazon was at a

crossroads with regard to its push into technology vs. its general merchandise.

In this case study, there are several issues that affect the survival of Amazon in the long term. The

first one is the competition. Amazon has a number of typical concerns, including "intense competition"

and rapid expansion "straining" management and other resources as well as dangers associated with doing

business all around the world. Those are pretty typical risks for a company of Amazon's size and reach.

Some of the sub-issues in the presenting case that would need some attention would be shipping

costs and data loss and security breaches. Amazon has so far done a remarkable job in optimizing its

shipping operation. That's a key to the company's success as its ability to control shipping costs remains

key to its success given that tens of millions paid for free two-day shipping. Perhaps the biggest risk

facing Amazon is hackers. No company can completely guarantee that its security won't be breached.

That's a large concern at a company that could have its store knocked offline or the hundreds of millions

of credit cards it holds information on compromised. Amazon laid out its concerns in its annual report.

Stakeholder Analysis and Management Evaluation

Jeff Bezos is the Chairman of the Board and CEO of Amazon and owns 19.4% of the

Company. Amazons corporate governance analysis consists of three board committees of which two are

standard: the audit committee and the governance committee. The third committee, the Leadership

Development and Compensation Committee, is uncommon.

 In general, the e-commerce organization experiences pressure from a variety of stakeholders and

their interests. Nonetheless, Amazon’s corporate social responsibility programs are designed to address

and satisfy the interests of mostly 3 groups, customers, employees, and community.

Amazon’s corporate social responsibility strategy gives the highest priority to customers as the

most important stakeholder group. The company considers customers as the primary determinant of its e-

commerce business success, especially because these stakeholders significantly affect revenues. Such

prioritization agrees with Amazon’s mission statement and vision statement, which highlight the

centrality of customers in the business and its development. The interests of these stakeholders are fair

pricing, convenience of service, and online security in transacting with the company. Amazon satisfies all

of these interests through emphasis on service and technology.

Amazon.com Inc. values employees as significant determinants of organizational performance and

corporate social responsibility policies and programs. This stakeholder group is interested in competitive

compensation and career development. Employees are important because they support competitive

advantage based on Amazon’s organizational culture. The company’s human resources facilitate the

development of new ideas to increase business efficiency. Amazon satisfies the interests of these

stakeholders through leadership development and an appropriate compensation policy based on the

organization’s high growth potential.

Amazon maintains a corporate social responsibility program for communities. These stakeholders

are significant because they influence consumer perception on the company’s goods and services. The

interests of communities include development support, such as through education, healthcare and

environmental conservation. The company addresses these interests mainly through its primary

community support arm, Amazon Smile.

The top management of Amazon made a strategic plan to fix many issues which help the company

maintains the leading position in the home e-commerce business. Amazon should take action keep its

name on top of the market place as number one largest trusted retailer to curb new entrant out of business.

Also they should focus on getting back the customer both in the US and abroad. Lastly, Amazon should
invest more money on new technology. By offering new user interface and technologies, the can create a

solid platform in their operation for the stress free packaging and same day delivery.

Recommendations and Implementation

Current strategies fit for the company's strategic direction in the short term however Alternative

strategies are recommended for long term growth and continued success. Amazon should continue to

work on websites improvements, customization based on geography and recommendations based on

analysis of the customer purchases. In addition to organic growth, acquisitions could add to the existing

distribution channel and product divergence. Amazon should build upon it's core competencies to grow

organically and increase the market share. Also, Amazon should take into consideration types of

expansion that will allow keeping Amazon competitive and unique from its competitors. This included

improving existing cloud computing technology infrastructure could be leveraged better by its application

across different devices. Existing data mining on customer's needs and shopping habits should be

expanded and taken advantage of as this information may even be valuable to Amazon's and many of it's

partners.

Amazon's business strategy should continue to support it's e-commerce business. At a functional

level, there needs to be more investments in technology infrastructure and marketing. Technology

Infrastructure will continue to give Amazon a distinctive competitive advantage and marketing will allow

Amazon to become highly recognizable globally.

The number one implementation consideration that would help Amazon sustains growth and

profitability would be to continue e-commerce success which relies heavily on Amazon's IT

infrastructure. To accomplish this task company needs to invest heavily in technology infrastructure to

support "Frustration Fee Packaging" program that would help identify appropriate packaging for each

item. Continuously improve Amazon websites and identify problems and develop solutions to enhance

customer experience continue to analyze and apply web traffic data and Investments in Web Services and

Hardware. The implementation of these strategies should be implemented and monitored by leaders and

directors from top-down in the company and should be communicated effectively for best efficiency.