Applied Corporate Strategy – Uber Acquires Postmates (Term Paper Sample)

Applied Corporate Strategy – Uber Acquires Postmates Student Name Public University COURSE####: Course Title Instructor Name Due Date Table of Contents TOC \o "1-3" \h \z \u 1Introduction PAGEREF _Toc69851592 \h 2 1.1Uber’s Background PAGEREF _Toc69851593 \h 2 2External Analysis PAGEREF _Toc69851594 \h 3 2.1PESTLE Analysis PAGEREF _Toc69851595 \h 3 2.1.1Political Factors PAGEREF _Toc69851596 \h 3 2.1.2Economic Factors PAGEREF _Toc69851597 \h 4 2.1.3Social Factors PAGEREF _Toc69851598 \h 5 2.1.4Technological Factors PAGEREF _Toc69851599 \h 6 2.1.5Legal Factors PAGEREF _Toc69851600 \h 6 2.1.6Environmental Factors PAGEREF _Toc69851601 \h 7 2.2Porter’s Five Forces PAGEREF _Toc69851602 \h 7 2.2.1Buyer Power (High) PAGEREF _Toc69851603 \h 7 2.2.2Supplier power (Low) PAGEREF _Toc69851604 \h 8 2.2.3Threat of Substitute Product (Low) PAGEREF _Toc69851605 \h 8 2.2.4Rivalry among Existing Firms (High) PAGEREF _Toc69851606 \h 8 2.2.5Threat of New Entry (Low) PAGEREF _Toc69851607 \h 9 3Internal Analysis PAGEREF _Toc69851608 \h 10 3.1Tangible Resources PAGEREF _Toc69851609 \h 10 3.1.1Physical Resources PAGEREF _Toc69851610 \h 10 3.2Human Resources PAGEREF _Toc69851611 \h 11 3.3Intangible Resources PAGEREF _Toc69851612 \h 11 3.3.1Mobile Application PAGEREF _Toc69851613 \h 11 3.3.2Uber Brand PAGEREF _Toc69851614 \h 11 3.4Value Chain Analysis PAGEREF _Toc69851615 \h 11 3.5 PAGEREF _Toc69851616 \h 12 3.6VRIO Framework PAGEREF _Toc69851617 \h 13 4Evaluation PAGEREF _Toc69851618 \h 15 4.1Sustainability PAGEREF _Toc69851619 \h 15 4.2Acceptability PAGEREF _Toc69851620 \h 16 4.3Stakeholder Mapping PAGEREF _Toc69851621 \h 18 4.4Feasibility PAGEREF _Toc69851622 \h 18 5References PAGEREF _Toc69851623 \h 20 6Appendices PAGEREF _Toc69851624 \h 24 Introduction This report puts light on Uber’s corporate strategy. The organization aims to grow the Eats division in the US food delivery industry by buying Postmates for 265 billion dollars. It presents the external analysis of the organization by examining the macro-environment using the PESTLE framework and assesses the industry attractiveness using Porter’s five forces model. The internal analysis is evaluated using VRIO and Value Chain frameworks. Lastly, the SAF framework is applied to investigate the viability of Postmates acquisition. Uber’s Background 29432251276350Uber is an American company initially established as a transportation organization in 2009. It launched a subsidiary, Uber Eats, a foodstuff delivery service, in August 2014, enabling consumers to peruse menus, order, pay, and track the foodstuff deliveries from the engaged restaurants and hotels using the web browser, android IOS platforms (Uber Eats, 2021). The primary delivery courier means are Motorbikes and vehicles. Although the organization is based in San Francisco, it serves more than 45 countries worldwide and supports 600,000 restaurants. Uber Eats is the leading food delivery service globally, controlling 29 percent market share and 66 million users. Its revenue in 2020 was 4.8 billion dollars, a 152 percent increase compared to 2019 (Curry, 2020). Uber uses the differentiation strategy by establishing synergetic efforts between Eats and Rides segments (Dawson, 2019). External Analysis PESTLE Analysis Political Factors The food delivery industry has kindled political debates across the globe, with many nations concerned about the regulatory basis of the sharing economy. The emerging industry has disrupted the traditional restaurant business where customers had to visit hotels and restaurants to get foodstuffs physically. This has led to a controversy that has changed politics in numerous arenas. Not only are authorities in the domestic market US concerned about whether they should enact new laws but also countries across the globe are equally anxious (Conger, 2020). The food delivery industry faces additional scrutiny by many nations globally, posing challenges to companies in the sector. For instance, the US Food and Drug Administration has mapped the risks involved in the industry. However, coordination with local state regulators lacks (Hoelzer, 2020). The endeavor by governments worldwide to enact a comprehensive regulatory framework for every component of the food delivery industry will make the sector among the most securely regulated (CNN, 2020). These political complexities in the industry threaten the industry by reducing the profitability of the food delivery business, with most people in the US viewing business regulation as excessive. (See appendix 1). Economic Factors 22479001724025The food delivery industry is based on a shared economy where intellectual and physical resources are used. Organizations in this industry hire drivers to deliver foodstuff in a different location which is considerably cheaper than hiring courier services. Many countries deem this business model unfair competition to the courier services, leading to banning or restricting their services. This presents a threat to the industry. As the global population gets more affluent, the disposable income for upper, middle, and lower classes proportionately. When people have money, their expenditure on luxuries with individuals cooking less and investing in food delivery often. The market share of the food delivery industry is expected to reach 154.34 billion in 2023 at a compound annual growth rate of 11.51 percent (Markets, 2020). The global food delivery services industry is also expected to grow by a compound annual growth rate of 12 percent (Figure 2). This creates a tremendous opportunity in the food delivery industry. The increasing laborers’ earnings occasion the growth in disposable incomes. The cost of engaging employees is rising across all sectors. This is attributed to the increasing state anticipations for minimum wages and the rising demand for workers (Veen et al., 2020). Therefore, as labor costs increase, less margins and less profits experienced threaten the food delivery industry. Social Factors The easy availability of the platforms for requisition for food delivery plays a significant role in the industry's growth. It is easy to peruse food menus, order, and choose delivery times using mobile applications. No communication is needed other than several presses on the smartphone. As customers enjoy the services, they post about these services on social media platforms such as Twitter and Facebook (Prajapati et al., 2020). This increases their popularity and creates an opportunity in the food delivery industry. 2914650127635Health consciousness has grown significantly in recent years. For instance, eating healthier was the top resolution for people in the US in 2019 (see figure 3) (Statista, 2019). As individuals understand the relationship between the foods they consume and their health, the exploitation of available means of getting healthier food rises. The option of perusing menus and ordering the food one requires to present an opportunity in the food delivery industry. Technological Factors 2076450162560The application of technology plays a pivotal role in the growth of the food delivery industry since they are based on online platforms. It enables customers to access menus and order foodstuff through an application. The estimated cost of purchase and delivery of the chosen food is displayed on the platform depending on weather, location, traffic, and cost of food. Organizations can make payments through online platforms (Brar et al., 2021). Customers in the US made more than 70 percent of food delivery service payments online in 2018 (Grand View Research, 2019). This sector faces difficulties when the platforms go down. Therefore, technological advancement that assures the applications' reliability provides an opportunity in the food delivery industry. There is advancement towards automation both in the automobile and food industry. North America is predicted to own 29 percent of autonomous cars by 2035 (Statista, 2020). Several restaurants across the globe use robots in the preparation of foods. For instance, Hen na Hotel in Japan is nearly run entirely by robots (Associated Press, 2017). Therefore, as these significant services augment the food delivery industry reduce human labor, profitability increases, and human error decreases, creating an opportunity in the sector. Legal Factors The controversy surrounding the food delivery industry presents numerous legal challenges to organizations in the sector. Several countries have threatened to impose bans against food delivery companies due to their shared economy concept, infringing on the copyright, food safety, labor, and usage laws. For instance, the international court of justice banned Uber Eats in Portugal (All-in-global, 2019). The Califonia state-affected Consumer Act in 2020 will also affect the food delivery organizations since it limits their access to customer information (The Guardian, 2019). Thus, the legal factors threaten the growth of the industry. Environmental Factors The food delivery industry involves the use of automobiles. Transportation is the most significant contributor of greenhouse gases in the United States (the United States Environmental Protection Agency, 2019). Green-oriented customers are increasingly reluctant to purchase products from organizations that do not embrace sustainability. The food delivery industry should embrace the use of eco-friendly delivery means to avoid losing market share. Nonetheless, environmental concerns create sustainable opportunities for companies in the food delivery industry. The PESTEL analysis of the food delivery industry presents a mix of opportunities, threats, and uncertainties. Essentially, customers’ propensity to consume is increasing, advancement in technology decreasing labor, government regulations becoming tighter, customers’ choice of diet becoming increasingly specific. All these factors present com...