UBER BUSINESS MODEL MAP WITH PORTERS 5 FORCES MODEL

1. What is Uber...?

    Uber technologies, inc. That known as Uber. It is American company. It is online business. That offer many services in worldwide including Sri Lanka. Such as Vehicle hire and rent, Food delivery (Uber eats), Package and parcels delivery to their customer. As well as it is a one of the largest companies in this industry. They have over 110 million of monthly active user in worldwide.

2. What is their Business model...?

            On-demand business model

                    Because this Uber company fulfilled customers demand through delivering goods and providing services and Vehicles with, they receive request immediately. As well as this business model mainly run on using mobile and laptops through the internet. Because it is doing their business-like online business.

3. Map uber with porters five forced model using real example...?

Five forces model: Customers (Bargaining power of customers)
Suppliers (Bargaining power of suppliers)
New Vendors (Threat of new entrants)
Substitute vendors (Treat of substitutions)
Rivalry (Rivalry among existing competitors)

Customers

            In this case discuss about power of customer. Buyer power can lead to reduce prices or add highest value to cost by adding features, services, quantity to sell. As well as this uber company have strong ride hailing competition, different and alternative of transport vehicles and medium that cause to bargaining power of customers high at this stage. As well as when we compare with other companies in same industry, they have better pricing structure. moreover, they offer economy vehicles to their clients and vehicle sharing option to build high stable customer power.

If customer need to supplier or service provider details, this company available their information and provide to that customers. That cause to improve buyer protection. It helps to improve this bargaining power of clients. As well as they have highly spread service providers. Because many providers can provide many services in one time. So, they can respond quickly to client when they free from their received service finish. that cause to increase client power.

Suppliers

            In this topic about how uber suppliers and providers are powerful for make larger profit margin than the company that integrates the inputs of several supplier to sell to the end customer. Insight of uber company they have several suppliers and providers like drivers, deliver riders, and delivery boys. As well as insight the uber company they have not any unionization for their suppliers and providers. That directly cause to decrease the bargaining power of customers. As well as they have not enough payment for waiting times. So, they cannot discuss with the company. As well as company does not consider the suppliers and providers are under on their employee. That is reason for they have less bargaining power of customers. Moreover, when we consider about complete company, they have less bargaining power.

Insight uber they have not barriers to the entry new suppliers and providers. As well as register as new driver, new supplier, it is very easy than other companies. So, these services and drivers are effectively increase and effectively reduce bargaining power of them.

New Vendors

            When we map with new entrants with uber company, Uber likes to attract new entrants, that wish to get share of their success. New vendors/new entrants can add capacity, supply to the market which will reduce prices. But new entrants come with many challenges. New entrants can give to barriers to entry. Because anyone can program app, but they cannot promote it. So, uber has less treat of entrants. New entrants always try improving demand. It treats to existing company. This company have to spent billions of dollars to demand generation. Moreover, consider about economy of scale, uber has lower unit costs that help to scale up. that make very hard for new entrants.so that help to reduce treat of new entrants. for example, uber riders can join with uber eats team. So uber can scale up using less staff. As well as that will pertain with driverless cars. So uber company has less treat of new entrants.

Substitute vendors

            Substitute is not a same product from different vendors. Substitute fulfill same activity using different technology. As well as substitute may be coming from different industry or different from original one. There. are many factors that affects to the treat of substitute in uber. There are many substitutes for uber. Car renting and car sharing companies are treat to the uber. In the food delivery free delivery cash on delivery methods are treats to the uber. As well as some countries that they have more comfortable and better public transport services. These substitutes treat to uber. As well as now most of the peoples work from home.so there requirements are reduced. It treats to uber. So, there are many treats of substitute. So, think about this substitute is more important. this substitute is low due to the very different value proposition of the substitutes.

Rivalry

            Not all the industries and there are many factors that related companies are not equal. But that they are much more competitive than others. There are many factors that affect rivalry among existing competitors’ insight the uber. These Rivalry is stuff to the uber. Because uber haven’t any global competitor. but they have many strong players in various geographies. For example, Pick me in Sri Lanka. As well as uber that they reply for the rivalries through develop and provide many facilities. Such as uber itself is expanding into several areas like freight, food delivery, self-driving cars, and some others. Now uber successfully face this Rivalry among existing competitors and solve this rivalry.