Summary Summary of problem
Uber was formed in 2009 and after its historical success; it planned to expand into other countries like China, India Pakistan etc. The current challenge for Uber is the competitors in China and different regulations in these countries. Uber is facing challenges from two of its main competitors in the China. It hardly got rides of 1 million on a daily basis in China. Uber sales are slow in these countries. Now, the company is planning to think about the expansion strategy and its effect on the operations of the country. The important question here is to recommend that whether it should expand into other countries or only focus on the United States.
Suggestions
It is suggested that Uber should acquire another Chinese
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They also discussed with Lyft the ways to compete with the Uber. Uber is also facing an issue of illegal rides in the market of China. This problem is due to the insufficient information of the market by the Uber. Uber is only providing 1 million rides in one day as compared to the Didi Kaudi gaining 7 million rides in the single day. There is the huge difference between per day rides of these both companies. Same problems of expansion exist in the market of India. Uber is facing regulatory issues in the Indian market. Ola is another big competitor for Uber in the Indian market. These are the problems in Asian countries, facing by the Uber, one of leading company of Francisco. Uber needs to expand in international markets but is facing these issues and worried about its expansion results. Differences in the culture of these countries are also problematic for Uber for getting profits.
Solution of problems
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Uber should improve its services as compared to its competitors. It should target customers by providing them low-cost ride and convenience. India is the unstable political market. One of benefit with the Uber is that it is targeting the middle class. The middle-class population is high in India. Uber can resolve a problem of regulations by acquiring Indian company. Knowing your market is very important in this regard. These expansion strategies would improve its operations and profitability in Asian countries. It should try to recover from its mistakes. Acquisition of other U.S companies in the United States would help it to increase its market share in China. It may acquire Indian companies for taking help regarding regulations and laws prevailing in the country. Indian car booking companies can provide it better knowledge about how to target people and provide legal services. Uber has the advantage of the strong market in the Europe and the United States. Strong presence in developed countries is also important for this company. Uber should concentrate on its strong base. It can use it as the advantage to target other people in developing countries. It should also understand its competitive advantage over other
Economic because customers may choose what transportation service, if any, to use. Legal power because customers have a right to file a lawsuit against Uber if they so choose. • Taxi companies, other ride sharing companies (Lyft) have political and legal power because they may lobby government for fair competition like supporting the App-On Gap law. Legal power because they can sue companies that compete unfairly. • California App-Based Drivers Association, American Insurance Association, the public, attorneys for consumers, the Government, and internet based companies all have political power because they can network or work together in groups to lobby, present arguments for and publically support proposed legislation like the App-On Gap law.
Breaking into new markets helps the company grow and brings in new customers, which leads to higher profit margins.
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Sakarya, S., Eckman, M. & Hyllegard, K. H. (2007). Market Selection for International Expansion - Assessing Opportunities in Emerging Markets. International Marketing Review, 24(2), 208-238.
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