Uber Competitive Advantage and Emerging Market

Question: Discuss about the Uber Competitive Advantage and Emerging Market. Answer: Introduction: Uber started as a business idea from experience that the owner went through by missing a Taxi because it was raining and can be attributed to the concept of blue oceans. The product sought to provide an online to offline business that provides request rides. There is a lot of success that has been attributed to the rise of Uber and its ability to enter major markets like China. Kim Mauborgne (2005 P. 3) argue that competition is the hart of a business corporate strategy and the ability to develop competitive advantage. The strategy canvas developed by a firm forms a diagnostic and action framework that can give competitive advantage(Kim Mauborgne 2005, P. 4). The companys major advantage is connecting drivers to passengers through a lightweight user-friendly application. Uber itself does not offer transportation but rather uses private car owners. The ability to utilise smart phones to link the nearest driver to passengers gives a just in time delivery system that satisfies the cus tomer (Yip Li 2016, P. pp. 12). The use of a network orchestrator model is the key reason behind the success of Uber. The achievements of Uber in the US led it to spread to other countries like China. To enter the Chinese market, Uber had to develop a competitive advantage that would make people prefer it from other providers like Didi Taxi. Porter (1985, P. 25) argues that organizations obtain competitive advantage through acquiring attributes that make them outperform their competitors. Hook (2016, pp. 6-9) suggests that China has experienced a increasing number of Taxi services that could be tapped for business as shown in Appendix A and B. Uber started by offering a localized service through people Uber through pooling cars to maximum of four people which made the price less than that of a Taxi with a cost of CNY 1.5($0.2) per km and CNY 0.25(US$0.04) per minute. However, the strategy used by Uber in China was market penetration rather than profits making Uber lose over US$1 billion a year at the beginning,(Kuangzhen 2016, P. 4). However,, due to better prices and services, the customer base was growing in China within a very short time. At the beginning, Uber offered lower pr ices and luring drivers with subsidies that made them prefer working for it. After hitting the Chinese market, Uber started offering different Taxi services In gaining competitive advantage, management has to anticipate the future and mould it by balancing between the short term and long term goals of the organisation. In China Uber was facing intense competition from Didi which had history working in China. The service providers had partnerships and high funding that enabled creating of different services in the market (Tamberino 2017, pp. 9). However, partnership with local internet providers007A Baidu Inc that offered mapping and the use of millions of Baidu online users and ensuring accuracy of Google maps to meet customer locations. Baidu further gave competitive advantage by offering partnership with local car rental companies that were its customers. This enabled Uber to utilise the growing internet user population as shown in. Despite the challenges experienced in China, Uber has international success that can be attributed to a strategic management system linking the driver, passenger and Uber-Company to a system of performance that satisfies increased number of Taxi users around the world. However, the Chinese market offered great competition with Didi dominating most Taxi services in the country and having great partnerships that gave a challenge to Uber (Damodaran, 2014, P. 3). Despite that Uber managed to penetrate the Chinese market and give competition to the incumbent Didi. However,, Didi offers the biggest challenge to Uber and still dominates the market share up to today. Works Cited Damodaran, A., 2014. A Disruptive Cab Ride to Riches: The Uber Payoff. Forbes, 10 June. Hook, L., 2016. Ubers battle for China. FT Weekend Magazine, June. Kim, W. C. Mauborgne, R., 2005. Blue ocean strategy: From theory to Practice.. California Management Review, 47(3). Kuangzhen, W., 2016. Uber vs. Didi:The Race for Chinas Ride-hailing Market, s.l.: INSEAD, The Business School for the World. Porter, M., 1985. Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press. Tamberino, R., 2017. Uber: A Winning Strategy. [Online] Available at: https://rctom.hbs.org/submission/uber-a-winning-strategy/ YIP, A. LI, C., 2016. Uber China:Riding With Chinese Characteristics, s.l.: Centennial Colege.