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BUSN2039 International Business Management

tag 0 Download 0 Pages / 0 Words tag 21-06-2022
  • Course Code: BUSN2039
  • University: Flinders University
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  • Country: Australia

Answers:

Question 1

Metropolitan markets through the municipal authority enact policies guiding the operations of the taxi business. Uber operates on a different formula that makes it evade some of the regulations thereby creating an imbalance in passing the law. Consequently, the intervention by leaders to have them share similar laws with the traditional taxis cuts down on their profits. Policies such as monthly parking fees, commercial insurance requirements, and licensing fees consequently diminish their profits.

Besides, airport policies limit the business for Uber while promoting those of the traditional taxis which pay taxes on their parking spaces. Since Uber lacks one destination parking, the system defines their existence as they do not regularly contribute to the management.   

Moreover, the firm suffers from several lawsuits from the lack of adherence to the American Disability Act which the company fails to follow in their considerations. Further, the presence of insurance policy act that requires taxi companies to insure passengers as in the traditional taxis is absent in Uber thus cutting on its profits in any case such concerns are raised.

Question 2

Customers have problems with some of the drivers who display low quality of service. The firm conducts a background test on the drivers but fails to certify their level of quality service to clients. However, the firm addresses the concern by allowing customers through the app to rate a driver and comment on the experience of a ride. Consequently, the review enables the firm to disqualify and punish non-competitive drivers while making necessary compensation to clients.

At the same time, some drivers lack the knowledge of particular areas and might end up taking the longest route which increases the prices of transport. Consequently, the client suffers from the lack of knowledge leaving dissatisfaction among them. Uber addresses the concern by introducing a city knowledge test in its recruitment procedures and provides a map to ensure individuals remain conversant with areas of operation (Rothaermel 2015).  

Besides, the act of adjusting prices without notifying the driver leads to much confrontation between the two where the driver lacks explanation to give to the client. The firm handles the concern currently by offering an explanation to clients on the purpose of price increase such as long traffic jams and the use of an alternative route thus satisfying the concerns of the clients.

Question 3

New York City had a competitive market with a likely number of customers. There was little threat to entry situation as the cost of entry remained high given the rules by the city authority giving the already existing firms an upper hand. There was a little buyer bargaining power which made them depend on the existing taxis. The clients around the city were willing to spend even higher prices as long as the service satisfied their need for excellent service given the busy nature of the city (Rothaermel 2015).

The willingness of individuals picking taxis parked along the street allowed business to thrive with the middle and upper class willing to pay for the services. The supply power was moderate allowing the existing firms to set their prices according to demands and seasons as the cost of switching from one provider to the other remained high due to consolidated prices. Besides, there was a low competitive rivalry situation where the companies operating could agree to set prices and abide by them. The absence of tech-taxis gave the conventional taxis the ability to charge prices according to the stature of their clients and the seasons as per their regulating body (Jonas 2015). Consequently, the market was profitable for the individuals who enjoyed the ability to inflate prices of offering transport across the city.   

Question 4

Uber is destined to grow based on the key strengths it has to pertain the low costs of operations. Drivers do not spend money as in the previous case where it has no destined parking points due to the mobile platform. Besides, the firm accepts not only cash but also cashless payment which remains clear to clients before boarding a vehicle where they have a chance to select highly rated drivers. Moreover, the firm counts on its strong brand name recognized in over 300 cities and their excellent service in utmost maintained vehicles which allow clients select their preferred stations or music to listen while on transit (Jonas 2015).

 Notably, the firm has the potential of an unlimited number of the fleet as it continuously recruits depending on the demand ratio which increases its presence around cities. The strength reduces the probability of supplier power as there cannot be a substitute to the individual driver. Lastly, the firm keeps its costs at all times low by hiring drivers who work either on part-time or full-time basis depending on their preference. Lack of full employment limits the guarantee of employee’s benefits from the firm.      

Question 5

Uber is faced with some legal suits in several countries on the lack of compliance expressed in its service. The numerous scandals and fraud from the drivers continue to de-popularize the business and gives its competitors an upper hand. Besides, drivers aren’t happy with the low-profit realization as the firm increases in capacity and profit. Moreover, the lack of patent rights places the business open to imitation where other firms entering the market try to imitate the provisions leading to stiff competition (Cannon and Summers 2014). The firm has problems with the local government in several cities of operation leading to a poor relation which might strain business.

However, the company strives to sort out its challenges by introducing patent rights on its technology to lock out other competitors from imitation (Westerman, Bonnet and McAfee 2014). Besides, the firm tries to comply with local legislations to reduce the bad image portrayed and enhance its service towards excellence by increasing its adherence and address of customer concern. The firm plans to develop a competitive remuneration plan to increase its loyalty within their drivers. The approach to compliance to regulations and fighting off the competitors through innovative legal approaches places the firm’s future success.

Reference List

Cannon, S. and Summers, L.H., 2014. How Uber and the sharing economy can win over regulators. Harvard business review, 13, pp.1-4.

Jonas, A 2015, 'Share and Share Dislike: the Rise of Uber and Airbnb and how New York City should Play Nice', Journal Of Law And Policy, 24, p. 205, LexisNexis Academic: Law Reviews.

Rothaermel, F.T., 2015. Strategic Management. New York, NY: McGraw-Hill.

Westerman, G., Bonnet, D. and McAfee, A., 2014. Leading digital: Turning Technology into Business Transformation. Harvard Business Press.

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