Question

Assignment Questions:​​​​ (5 Marks)

From Saudi or Middle East market, select an example of partnership between two companies (acquisition, collusion, joint venture, value-chain partnership, mutual service consortium, licensing arrangement…) and answer the following questions:

1) Briefly present the two companies, members of partnership (Industry, location, size, competitors, activities…). (Max 400 words)- (1Mark)

2) What is the kind of this partnership and what are its main reasons? (1Mark)

3) What are the issues brought up by the companies during partnership? (1Mark)

4) Evaluate the competitive advantage of the partner- companies. (1Mark)

5) What is the method used by the partner-companies to manage the organizational culture? underline the pros and cons of this method.(1 Mark)

Notes:

Answer 1

The example that would be considered here is the acquisition of Uber and Careem.

1. Uber – Uber Technologies, Inc. is an American company with its presence across the globe. There are about 110 users worldwide. It offers services like peer-to-peer ridesharing, food delivery services, etc. The company is headquartered in San Francisco. It has operations in more than 785 metropolitan areas. Uber can be accessed via the company website and its mobile app. It has 67% market share in the ride sharing service. The company founders are Garrett Camp and Travis Kalanick. Its direct competitors are Ola Cabs and Lyft.

                Careem- Careem is also like Uber as it has transportation network across the globe in 14 countries such as Middle East and South Asia. It is based in Dubai and its founder is Mudassir Sheika. Uber has acquired Careem.

2. The kind of partnership between Uber and Careem is acquisition. Uber has acquired Careem. The reasons are because of its failures in China and South-East Asian Countries. It was becoming unprofitable in the South-East Asian country. To combat this financial crisis and to gain the market share in the Middle East country, Uber took this strategy to acquire Careem.
3. During the partnership Careem insisted to operate as a separate entity in its own brand name. However, the partnership was successful through this strategy.
4. The competitive advantage is that the market share of both the companies would be increased. It is a large organization operating under the name of Careem. It is now a monopoly market in the Middle East in the taxi hailing industry. They have the power over the consumer market.
5. There are lot of problems due to these extreme cultural differences between the Western and the Middle East Country. The management needs to handle this culture shock effectively. The best method is to first make the managers understand the two different cultures. There should be cultural diversity as the primary value and culture of the organization. Promotions and rewards should be equally distributed. Finally, the company should be an equal opportunity employer.