Business and Management Context

Question: Discuss about the Business and Management Context. Answer: The world today is filled with companies, which compete with one another in order to stay ahead of the race of being at the top or at the first of the race. Top companies of the world participate and undertake many strategies that maximize their profit and give them maximum amount of revenue. The performance and the outcome of companies are affected due to various internal as well as external factors. These factors often contribute to the success and sometimes the failure of the companies to achieve maximum profit and revenue. The companies are often affected by these factors which affect the outcome and the performance of that particular company. The essay discusses the organizational structure of Uber as a company. It also discusses the environmental forces that affect the company, the risks that confront the firm, the organization and business practices and organizational functions of diverse firms. Uber is an American transportation network company. It operates in around 570 cities over the world. The CEO of the company is Travis Kalanick. The company specializes in the taxi service that is provided to the consumers. The company has become one of the leading taxi rental services of the world having its presence in over 570 cities. The company has an efficient organizational set up that has contributed to the company being one of the leading taxi or car rental companies of the world. The organizational structure of any company is important as a detailed analysis of the same helps to analyze the layout and the find out the loopholes and the drawbacks that often affect the performance of the company. The organizational structure of the company is important to consider in order to monitor and analyze the efficacy of the operations of the company. The company is a technology startup that helps the consumers or the customers to avail and also share rides to reach a new destination fr om another. The organizational structure of the company is important to analyze the internal organizational breakdown which can help in the analysis of the operations of the company. The organizational structure of Uber is somewhat like this The environmental forces generally affect the performance of a company. Uber is a transportation company that is one of the leading companies of the world. The company is rapidly growing with its operations being spread out to different cities of the world (Feeney, 2015). The rapid expansion of its business operations shows the popularity of the organization. The identification and analysis of the Porters 5 forces for the company helps to analyze the environmental factors of a company. The five forces help to decide and analyse the factors that affect the performance and the outcome of a company. The Porters 5 forces mainly comprises of five components. They are: the threat of new entrants, industry rivals, bargaining power of buyers, bargaining power of suppliers and the threat of substitutes. Threat of new entrants: Uber is a startup that faces a lot of competition from many new market entrants. The company has many already existing as well as new competitors in the market. The main competitors of Uber in a worldwide basis are Ola cabs, Lyft, Curb and Didi Chuxing. The company lacks the protection from new firms that come up with a ride-sharing format. These new firms charge lesser fare for covering the same distance (Gabel, 2016). Ola is a transportation company that is app-based that is based in India. The company has about over 40,000 cars in the country and provides services to about 22 cities in India. In China, Didi Chuxing is a transportation company that is formed by the merger of two largest transportation firms, Kuaidi Dache. It has about 99 per cent of the market share. A sound funding by giants like Apple Inc, Alibaba and Tencet Holdings backs the company. The company is purchasing the rights of Uber, which means that Uber is losing out almost $2 billion. Companies like Ola, Grab, Ly ft and Didi Chuxing are collaborating with each other to beat the competition and trying to overtake the business of Uber (Bashir, Yousaf Verma, 2016). The company, while setting up the business, parted with a lot of capital, while on the other hand, the other startups depended upon a lesser amount of capital to start their business. Bargaining power of suppliers: The company relies greatly on the vehicles of the owners who drive the car. The business model of the company relies on drivers and the partners who own rides. Uber uses an outsourcing strategy for the assets to persons and its labor that meet the terms and conditions for the use of their web application. It is often difficult to find a substitute for particular drivers. The owners of the vehicles have the freedom to choose over Uber and other companies that are the rivals of Uber. Therefore, it can be observed that the suppliers have and enjoy a greater power (Thursby Berbari, 2016). Bargaining power of the buyers: The customers have at their disposal, many options from which they can choose. Customers can choose from a variety of companies like Ola, Lyft or other ride sharing transportation options. The switching to other options also is very cheap compared to Uber. The system of ride sharing makes it cheaper for consumers to avail the app-based transportation facility. Threat of substitutes: For Uber, taxi services are the closest substitutes including the ride-sharing option. The abundance of availability of other options makes it difficult for Uber to undertake the operations smoothly. The public transportation like bus and taxi also act as a threat of substitute for the company. Competitive rivalry: Uber has many competitors in the market that pose a threat for the company. One of the major competitors of Uber is Lyft. Lyft has an almost similar operations and business models. The competition between the two firms is very intense (Rogers, 2015). The competitors compete for the suppliers as well as the market share. Uber is a market leader but the differentiation strategies of other firms restrict the potential of Uber as a company. Uber is confronted by many risks that exist in the market. Few of the risks are: The low profit margin of the drivers makes them unhappy and dissatisfied with the company. This makes them lock to the other competitive rivals of Uber. This can dispirit the new drivers from choosing Uber (Barro, 2014). Due to some legal rules and regulations that are imposed in various countries like Germany, makes it difficult for Uber to operate. The rules and regulations imposed by the government acts as a hindrance to the growth and development of the company in those countries. The risk of bad reputation due to many fraudulent and dishonest activities of the drivers remains one of the biggest risk for Uber. These types of activities damage the reputation of the company and the brand image of the company. With the advent of technology, there are many important innovations, which are making the need for transportation services obsolete. Self-driving cars from Google and the Segway often offer easier and more comfortable alternative to hiring the facility of transportation activities (Gabel, 2016). One of the main risks that Uber faces is the over-evaluation of a particular location which can lead to over investment in that location. This can lead to the company facing and incurring losses and thus losing out greatly of profitability and revenue generation. Uber Technologies Inc. is a company that has its operations spread out to over 570 cities across the globe ("Sign up to drive with Uber", 2017). It is a transportation company that offers rides to the consumers at a pre decided rate for a specific route. The customers can book the ride with the help of apps which can be accessed through a smartphone. The company operates in about 58 countries ("Sign up to drive with Uber", 2017). The drivers of Uber own their own vehicle or car. The company has a heavy investment in the research and development of the mobile app. The company requires the drivers as well as the consumers to possess a smartphone. The company enjoys a higher opportunity for growth and development in the future. The company, in most cities, offer upfront pricing which means that the average amount of fare that the rider has to pay is shown to the rider before taking the price (Henten Windekilde, 2016). The average earning per hour is $19.04 for the drivers of Uber ("Sig n up to drive with Uber", 2017). The practice of surcharge pricing that is prevalent in Uber is one of the main highlights of the company. It capitalizes on the willingness of the customers to pay more which is directly related to a high demand. Uber relies greatly on the operations and logistics managers of the firm, who are responsible for optimizing and growing the supply side of the market (Gloss, McGregor Brown, 2016). They help in highlighting the potential driver and potential partners. The firm has a culture of experimentation that leads to various projects. There are two divisions of Uber, namely, UberEATS and Otto. References: Barro, J. (2014). Under pressure from Uber, taxi medallion prices are plummeting.The New York Times. 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. Feeney, M. (2015). PolicyAnalysis. Gabel, D. (2016). Uber and the Persistence of Market Power.Journal of Economic Issues,50(2), 527-534. Gabel, D. (2016). Uber and the Persistence of Market Power.Journal of Economic Issues,50(2), 527-534. Glss, M., McGregor, M., Brown, B. (2016, May). Designing for labour: uber and the on-demand mobile workforce. InProceedings of the 2016 CHI Conference on Human Factors in Computing Systems(pp. 1632-1643). ACM. Henten, A. H., Windekilde, I. M. (2016). Transaction costs and the sharing economy.info,18(1), 1-15. Rogers, B. (2015). The social costs of Uber.U. Chi. L. Rev. Dialogue,82, 85. Sign up to drive with Uber. 2017. Uber. Retrieved 3 April 2017, from https://www.uber.com/signup/drive/lp/?city_name=nationalutm_source=AdWords_Brandutm_campaign=search-google-brand_1_-99_us-nationaltier1_d_txt_acq_cpc_en-us_uber%20usa_kwd-110756283842_171080509904_28781131960_e_c_track-jan21generalupdate_restructurecid=333818080adg_id=28781131960fi_id=match=enet=gdev=cdev_m=cre=171080509904kwid=kwd-110756283842kw=uber%20usaplacement=tar=gclid=CPvC75rxiNMCFdUSaAod2qQCjAgclsrc=aw.dsdclid=CKOosp3xiNMCFVKJaAod_EgBRw Thursby, M. C., Berbari, M. (2016). Identifying and Evaluating Market Opportunities. InTechnological Innovation: Generating Economic Results(pp. 33-58). Emerald Group Publishing Limited