Joseph Andrew Mangione – Student # 216022759 – firstname.lastname@example.org
Source: LA Eater (2016)
“On a snowy Paris evening in 2008, Travis Kalanick and Garrett Camp had trouble hailing a cab. So they came up with a simple idea—tap a button, get a ride” (Uber 2016).
Uber has transformed the the taxi industry and dominated the ride sharing network. But where to next?
With Lyft snapping at Uber’s heels and steeling market share through aggressive promotional techniques Uber has been forced to evaluate their position, and strategy, and develop product offerings to maintain their market lead.
When Uber and Lyft entered the ride sharing market they targeted customers looking for a more efficient and cost effective service as an alternative to taxis. In addition to the basic ride sharing service Uber developed extra options within the product range to suit a broader range of customer demands, including premium services like Uber Black and more cost effective services like UberPool. This strategy has helped distinguish them from the competition.
Uber has now gone one step further with the introduction of UberEats.
“With over a million registered drivers, the question has always been, “What else can they deliver while the fleet is not being optimized?”. The company has experimented with parcel pick-up and other services but food seems to have the most potential” (Neil Sturn, Jan 2016)
In an industry where price cutting and discount promotions is the main tactic to grab market share, Uber looked beyond it’s current products and market and developed UberEats – an online food delivery service that targets existing customers and potential new customers (utilising other online food delivery services). This product development and diversification strategy, which aligns with Ansoff Product-Market Growth Matrix, positions Uber well for further growth and strengthens Uber’s ability to turn a profit for investors.
If we take into consideration the “5c’s situation analysis” (Iaccabucci 2013, Pg. 224) for UberEATS Strategy we start to get a better idea of the potential for success.
Uber and Lyft have a similar customer base made up of both users and drivers.
The UberEats spinoff appeals to the same target audience as Uber rideshare (busy 25-35 year olds looking for quick efficient consumer products); Uber has therefore been able to market to it’s existing customers (early adopter and tech savvy individuals), with targeted advertising.
Uber has relied on the strength of the brand that has been built up under the ridesharing arm of the business. Uber has established itself as a fast, reliable service provider with a user friendly smartphone app, and has built strong customer loyalty. Uber had also acquired a large amount of funds which enables them to invest in new ventures.
Uber identified the opportunity to tap into their existing target market and leverage their existing driver resources and use the “enormous base of Uber drivers, who can be called upon to fill in gaps in their schedules to expand into other services” (Neil Sturn, Jan 2016). Uber has identified peaks and troughs in ridesharing services, and sought to utilise existing resources (drivers and vehicles) to offer weekday lunches and dinners to busy customers during the rideshare ‘troughs’.
As a society the desire for home delivery has grown. “Menulog.com.au surveyed more than 2000 Australians and discovered that eating out at restaurants is viewed as too much effort, with over half of us (51 per cent) preferring to order in than eat out because of the process required to leave the house” (Simone Mitchell, Jan 2016).
The introduction of Uber Ridesharing services has had a number of legal implications; Uber has worked through these (for example, defending class law suits, facing political opposition, particularly from dinosaur taxi companies) and paved the way for the company’s continued growth.
Technology as also played a big role with smartphones enabling both the easy access of drivers and customers to the platforms used by Uber and UberEATS.
Part of UberEATS strategy is calibrating with particular restaurants so that they are the sole delivery service provider. You can choose from an list of a select number of specific restaurant offerings only available via UberEATS.
While there are already a number of similar establish offerings such as PostMATES and GrubHub, the market is not as saturated as other markets (such as couriers) and Uber has positioned it’s spinoff well to penetrate the online food order and delivery market.
With this situational Analysis it seems UberEATS is a good fit for the company’s growth. Similar to the Uber rideshare platform, UberEats allows consumers to track their order and get a to-the-minute estimate of when their food is likely to arrive. This sets UberEats apart from it’s competitors and maintains it’s brand image of fast, reliable, affordable services which links to there very established Uber ride sharing service that has a strong established brand image.
While UberEats hasn’t quiet made it over the Pacific, if all goes well who knows what the future will hold.
So who’s hungry?!?
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