Question

Consider how Porter’s Five Forces apply to Uber’s business/industry. (Porter’s Five Forces is at an industry level).  

Pick one force and describe how you believe it impacts Ubers’s profits, favorably or unfavorably.

What could Uber do to more favorably position itself for sustained economic profit over the next five years?

Answer 1

answer-

PORTER's FIVE FORCES MODEL FOR UBER BUSINESS-

PORTER's five forces analysis is the model which focuses on the intensity of the competitions for a business in the market & its attractiveness to the market in terms of profit.

as per uber which is ride sharing, cab facility provider, food delivery & other transport network company. it is one of the few company which provide transport facility of cars, bikes etc over the internet. so , in what ways porter's model apply to uber business. let's discuss it below-

FORCE-1 THREAT OF NEW COMPETITOR'S ENTRANCE IN THE MARKET-

AS the there are only few company which provide tranportation facility to its cutomer. so if any other company enters into the same market then the businee of the uber will be affected by thier ability. the following issues/risks can be arised with this force-

• a risk of being remain unique in terms of technology means uber has to do high investment in itself to distinguish itself from its new entrant.
• risk of losing market cause of its past operations means company not itself is ver clean in its operational level. in the past it has faced legal issues with government, charges & fines by the government which can be used as tool for its new entrant in the market.
• uber is a technology based company. any other company wants to enter into this market does not have to struggle cause they can copy the technology & work like uber in the market.

FORCE 2- THREATS OF ITS SUBSTITUE IN THE MARKET-

This is one of the forces which can impact the business of the uber unfavorly as uber's business is no more unique as there are so many transport service provider in the market like private taxi, train, metro etc. what makes uber different from its competitors is its fast delivery, easy availability & average pricing but if any of the service is changed then customer will switch to other subsitutes.like is uber does high rates or poor delievry then it can be replaced by its substitues.

FORCE 3- BARGAINING POWER OF SUPPLIER-

IN case of the uber, the suppliers are the drivers & thier own cars. because uber itself does not provide any car from thier side . drivers on uber has thier own cars. if car drivers bargain for thier profit like extra payments, advances so uber has to follow as it has no choices beacuse car drivers is the base on what company is running. os, thier power of bargaining affect the uber business. as per another supply is fuel to cars. as we know there is always fluctuations in the prices of oil & gas of any country. high price rate of the fuel also affect the business of the uber.

FORCE 4- HIGH BARGAINING POWER OF THE BUYER'S SIDE-

AS we know that customer is the king of any market. thier strength can affect the uber business as if uber charges high prices for its product & services then customer can force them to lower down thier prices or otherwise they would switch to other options.so this force also affect the uber business.

FORCE 5- DEGREE OF COMPETITIVE RIVALRY-

IT is the force which shows the intensity or degree of competition present in the uber business.like uber is not remain a sole ridesharing facility there are many more in the competition just like it- google cars which poses a great threat to the uber business.

above forces shows the threats & weakness of the uber businee which uber can turn them into opportunity & strengths.

* ONE FORCE WHICH CAN IMPACT UBER'S PROFIT UNFAVORABLY-

ACCORDING TO ME, the profit of the uber can be impacted by the force of degree of competitive rivalry beacuse technolgy used by uber is not easy to imitate or copy by other company. right now there are less provider in this market bu as the number of ridesharing company increases then the profit of the uber decrease because customers would have many substitutes to choose.

* POINTS FOR UBER TO BE ECONOMICAL SUSTAINED FOR NEXT FIVE YEARS-

• UBER can do swot analysis of the company & list down its strength-weakness & opportunities-threats every year to position itself in the market.
• UBER can do things which are its weakness like bargaining power of supplier then uber should focus on that waekness & turn it into strength.
• UBER can charge less prices than its competitors in the market.
• UBER can provide the best qulaity services to its customer.
• UBER can expand its product line to enter into new business area.
• UBER can skip low profit giving regions & stop to provide servies there & use those resources into some other profitable regions.

so, above points can do favorable impact on the uber's profit for next five years.these points are estimates as no one can tell the exact thing for next hour or day let alone the five years but uber can estimates by research.

*hope answer written in my language is enough for you to help in your study. good luck.