Uber Technologies Inc is commonly known as UBER, is one of the famous America based multinational ride hailing company. The company offers the services like peer-to-peer ride sharing, ride haling, micro-mobility, and food delivery system with scooters and bikes. The company is headquartered in San Francisco. The company is operating in more than 785 metropolitan areas across the globe. The company is successfully operation in apps and websites (Uber, 2020).
The VRIO analysis of Uber greatly looks in the internal resources of the company to assess the sustained competitive advantage. This analysis mentions about the resources and the competitive advantage on every stage and component. It also analyzed the sustained competitive advantage, temporary competitive advantage, disadvantages and competitive parity. Here is the detailed VRIO analysis of Uber.
Value
The first component of the VRIO analysis is Value which determines how expensive are the resources and how frequently one can get it in the market? Uber greatly believes in creating value for the company as it offers the great convenience to drivers and riders. Uber has created its app with detailed routes, easy bookings, and navigation system for the consumers.
It also offers the automated payment system and estimated payment calculations. The company works hard to mitigate the disputes and risks on the local street and roads knowledge among drivers and riders. Uber also kept its prices low as compared to its competitors like Careem (Su Ng, 2016).
Rarity
This component of VRIO analysis deals with how rare or limited is the company resource is? In spite of the fact that Uber is facing high threats from the new entrants, many drivers prefer working with Uber because of the flexibility in timings without any fines. As compared to the traditional taxi system, where driver has to work for 13 hours, without any lease agreement and car rental facility.
Uber also provide the facility to its drivers to work both as Uber and taxi driver in order to utilize most of the time by picking more jobs. Uber also provide proper training and check all the security conditions before employing any driver (Sarker, 2018).
Imitability
This component determines the imitability of the company. Uber has invested much in the development of the business which is difficult and costly to imitate. The company has acquired these resources over a long period of time. Hence, competitors need huge capitalization to compete on the same level. Uber is highly dependent on its app unlike the traditional terms which deals in price wars and investment in promotion.
Uber requires huge investment and marketing and promotional techniques to relish on low level of competition. The company is successfully managing the application and works hard to fix all the bugs if occurs any (Su Ng, 2016).
Organization
This component deals with how well the company is organized and manages its resources efficiently to gain more competitive advantages. The main competitive advantage is the operational efficiency in the low regulatory expenditures. The company charges low fares which makes incumbents to start lobbying heavily.
However, company is successfully managing the application and its resources efficiently to gain the intended market share and growth. The network, GPS system, and other services offered by the company are highly managed and well organized (Edwards, 2018).
Conclusion
Uber is one of the successful companies in the industry managing its resources efficiently and gaining the competitive advantage through that. The company is successfully making its space in the industry and retaining its market share in the industry. Uber is competing in the industry to great extent and really focused on promotional techniques.
Uber is successfully working with the changing pattern of the society and provide ease to the consumers. The company is contributing positively with every component of VRIO analysis in the industry.
| V | R | I | O | ||
| Navigation system | ✓ | ✓ | ✓ | Competitive Parity | |
| Bargaining power | ✓ | ✓ | ✓ | Competitive Parity | |
| Application | ✓ | ✓ | ✓ | ✓ | Sustainable advantage |
| Brand Equity | ✓ | ✓ | ✓ | ✓ | Sustainable competitive advantage |
| Marketing | ✓ | ✓ | ✓ | ✓ | Sustainable advantage |
| Service quality | ✓ | ✓ | ✓ | ✓ | Sustainable advantage |
| Marketing and promotional techniques | ✓ | ✓ | ✓ | ✓ | Sustainable advantage |
| Talented HR | ✓ | ✓ | ✓ | ✓ | Competitive parity |
References
- Edward, H. 2018. VRIO Analysis of Uber. [Online], Available at: https://www.case48.com/vrio-analysis/13692-Uber, [Accessed on: 10th March, 2020].
- Sarker, P. 2018. Application of the Strategic Management Theories in Uber Bangladesh. [Online], Available at: https://www.slideshare.net/PanthoSarker/application-of-the-strategic-management-theories-in-uber-bangladesh-95498418, [Accessed on: 10th March, 2020].
- Su Ng, 2016. Uber Technologies Inc. as a Disruptive Innovation. [Online], Available at: https://www.academia.edu/31782167/Uber_Technologies_Inc._as_a_Disruptive_Innovation, [Accessed on: 10th March, 2020].
Uber, 2020. About us. [Online], Available at: https://www.uber.com/bh/en/about/. [Accessed on: 10th March, 2020].