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Milan Madusha Malshan Wanniarachchi

Entrepreneurship and Innovation

Word Count : 4250 words

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Table of Content
Task One 3

PESTEL Analysis 3
Porter's Five Forces Analysis 6
Value Chain Analysis - UBER 7
Competitor Analysis 10
Task Two 12

Initiative A 12
Initiative B 14
Task Three 18

Artificial Intelligence (AI) 18

Big data 19
References 21

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Task One
Q. You are required to select start-up and conduct a detailed analysis of the organization’s
current position in the market including competitor analysis, the need for innovation and
the business model (feasibility study) using appropriate analytical models and framework

A.

A young company founded expecting in making a new and exclusive service or a product to the
market, can be recognized as a start-up business. Startups are mainly engrained with innovation,
most of the time they focus in alleviating defects involved with products that are already in the
market and trying to improve the customer experience.

An American company mainly involved in mobility and transportation service industry; UBER
operates worldwide around 72 countries. A public company with around 29,000 employees,
UBER’s annual revenue as of 2021 is at USD 17.46 billion.

PESTEL Analysis
PESTEL Analysis
With many governments implementing laws which specifying standard
minimum wage for employees in order to prevent the issues faced by
Political
employees providing their services to the companies, UBER needs to focus
on paying their riders and drivers properly so that they would not tarnish their

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 brand name and losing commercial license given by these governments, by
not obeying these laws.
Due to not having proper legal permits for their cabs used as taxis, UBER
was charged many times by several governments.
An unclear regulation of UBER where in a case of an accident, the victim
does not have any clear idea of whom to blame, to the company or the driver.
Identified as a major cause of harming the taxi service, UBER has been
contacted by several political authorities requesting to cease their ridesharing
programme.
Due to the increasing living cost, people are more focusing in sharing rides
in order to manage their daily expenses.
UBER's revenue along with their profits have gone down by roughly 32%
Economic
due to the collapse in the economy caused by the Covid 19 pandemic.
UBER has gained popularity through their budget rides which the fairs are
more user friendly and convenient compared to the orthodox taxi services.
Since the elders dominating the larger portion of the population, and needing
more comfortable transporting services UBER has the upper hand in
increasing their revenue by targeting this potential consumer group.
Comparatively UBER's prices for their services are higher from bigger towns
to smaller towns.
Socio - cultural
Having successful social media marketing campaigns, UBER spreads more
awareness of their brand and services to a wider range of customers.
UBER has gained some what of domination in the market with their popular
and user-friendly mobile app, which most of the people complimented over
its convenience in using the app to book rides and using their other services.
With the world moving more into technology, even the automobile industry
has moved vastly into incorporating technology into their products, as a result
Technological many automobile giants are implementing self-driving vehicles, which the
UBER has a huge advantage in manipulating the market where they are
already into technology-based operations.

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 New age vehicles equipped with many more advanced technological features
including tracking systems, pop-up messages and easily connected to cloud-
based systems, UBER has the opportunity in developing their already
available systems and applications that can be easily equipped with these
inbuilt technological features in these advanced vehicles.
Due to the higher demand for UBER rides, they have increased the taxis
which can be resulted in many issues including carbon emission, fuel
Environmental consumption, environmental pollution, increased road traffic and etc.
As a solution UBER has also implemented a concept by the name 'Green
Uber" which they focus more on providing rides for electrical vehicles.
Many legal cases have been filed against UBER where they had to fight hard
in order to make sure and confirm that they treat their employees properly
and as permanent staff.
Legal
Also, UBER has been accused of not treating customer data properly where
they were taken to courts and been guided to safeguard the customer
information more importantly and secure this information.

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Porter's Five Forces Analysis
Porter's Five Forces Analysis
Due to the UBER's business model being replicable, anyone having an adequate
capital is capable in implementing a ride hailing service fulfilling the regulatory
Threat of requirements. This lessens the difficulty for the new entrants where they require
New enough finance to utilize for the backend operations as it is not quite hard to find
Entrants cabs and drivers. However, with UBER's wider grid of cab drivers and its brand
equity plays a huge role in preventing a new entrance easily to the market, which
the factor identified as a modest force disturbing UBER's competitiveness.
Substitute force has been identified moderate, due to the fact that the ongoing
trends of people feeling uncomfortable in using cabs because of the pandemic
Threat of expected to normalize eventually and bouncing back to the taxi services.
Substitute However, since many governments spending effectively in developing public
transportation, a threat is calculated where people might give priority to public
commutes in order save the additional costs of transportation.
With two main customer categories, one being quality focused and the other being
Bargaining
price focused, bargaining power of the customers are at a lower level in this
power of
industry. Through the data gathered from the customers, company pitches in with
consumers
ideal prices for each category through data analysis.
As a matter of fact, bargaining power of the suppliers, who are cab drivers in this
scenario are high where they are connected to the customers via the company's
platform. Drivers have demanded that the fee that they are getting needs to be
increased and also, they require that they should be treated as proper employees
Bargaining
with medical insurances, stable income and other proper benefits, where the
power of
UBER holds their ground firmly treating drivers as contract-based employees.
suppliers
However, due to the increasing demand of the driver’s community, many
governments and regulatory authorities have pressurized the company to provide
into the drivers' demands, which has made a huge impact on UBER's model of
business and its operations.
Competitiv With competitors like OLA, Lyft and Curb giving UBER a reasonable
e Rivalry competition with similar business model and operating systems, the force is not

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 something that the UBER should take lightly. However, with their new
implementations and conquering several other geographical regions UBER
decided not to back off from the fight.

A company’s basic actions consists of designing, production, advertising, marketing and

distribution, where the purpose of a value chain analysis is to evaluate and examine these basic
activities. The analysis mainly reflects margin and the value activities, where adding value to the
products is the purpose of value activities and margin represents the variance between the quality
and total fee in execution of above-mentioned value activities (Michael E. Porter,2004).

Value Chain Analysis - UBER

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Value Chain Analysis - UBER
Uber Inbound Logistics;
Acquiring, handling and storing the raw materials from the suppliers can be mainly
identified as the Inbound logistics, where in UBER's scenario, being a transportation
service provider UBER doesn't own any of the vehicle they provide transport
services with. All these vehicles are owned by the drivers who are working with
UBER as contractors instead of its employees. Both the drivers and the UBER's
customers requires a smartphone and internet to get the services provided by UBER,
where the company's inbound logistics are mainly based on internet operations and
office tools in order to run the business and the application properly.
Uber Operations;
Operations process of UBER is mainly consisting of maintaining and upgrading the
technology, machinery and the application where it's necessary.
Uber Outbound logistics;
Primary Activities

Where the outbound logistics are mainly consists of providing the final product to
the customer through its operation process including, production, storing, marketing
and distribution, UBER does not need many of the typical and physical features
where its operations and the final output mainly runs through internet.
Uber Marketing and Sales;
UBER mainly relies on social media and other digital platforms for their marketing
operations, where it has resulted quite positively for them using these platforms. As
per their sales, they also focused on providing new age payment methods including
credit card payments and etc where it is convenient for the customers utilize these
payment options rather than stick to the usual payment methods of physical cash
every time.
Uber Service;
Similar to almost every service provider, UBER is also concerned about providing
a quality service to its customers, therefore they have requested the users to provide
feedback on the services they get from UBER mainly regarding their rides and the
drivers. Through the app, customers can rate the drivers and the quality of the rides

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 where UBER use this information to evaluate and taking necessary actions in
improving their services to the market.
Human Resource Management;
Through proper human resource management, UBER possess the advantage of
proper selection, training and development of their people asset which can lead to
provide high level service to the customers.
Uber's firm infrastructure;
Through optimization of its firm structure, UBER can add more value to its entire
value chain.
Support Activities

Technology Development;
UBER being mainly involved with technology compared to typical transportation
service provider, it's much important for them develop the technology they use
necessarily in order to maintain their leading position in the market.
Procurement;
An effective procurement rule can add more value to a company where all the
involved parties obliging to a common and proper set of regulations where the
company can maintain its quality and doing the right thing. UBER being consists of
contracted drivers, representatives and employees require to have a proper
procurement rule to maintain its brand equity and providing quality service which
the customers expecting from them.

According to the above analysis UBER requires to identify and understand its activities and the
importance of them. Highlighting the activities where value can be added, UBER need to execute
proper action plan in gaining advantage and developing themselves.

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Competitor Analysis
Competitor Analysis
Company Product Range Channels Markets Key Highlights
Serving
Lyft (2012 Car, bike and Internet USA Revenue - USD 3.2 billion in
- USA) scooter rides 2021
and rentals
Metro Mobile Canada 5000 employees and drivers
transportation applications approx. 2 million
bookings
DiDi (2012 Car, bike and Internet South East Revenue - USD 27.3 billion in
- China) scooter rides Asia 2021
and rentals Mobile Asia UBER's biggest competitor
applications outside of USA with over 15
million drivers working with
their platform
OLA Car, bike and Internet India Revenue - USD 90 million in
(2010 - scooter rides 2021
India) and rentals
Food and Mobile New Zealand
grocery applications
delivery
car marketplace Australia 1.5 million driving partners
fleet UK
management
financial
services
inDriver Car, bike and Social Russian region Revenue - USD 1.25 billion in
(2013 - scooter rides Media 2021
USA and rentals Internet USA

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 Mobile Over 2000 employees
applications worldwide

A wide range of ideas and new business models are available for UBER to adopt in coming years
developing their brand equity and the business itself. One such idea is “Designated Driver
Services”. Through this the users are allowed to book specific drivers according to their
preferences and through early ride experiences. The service can be offered as pre booking in
advance of week earlier where the users can book a specific driver for a minimum of time period
of one week. The service can be offered with a premium price where users can choose to select
from normal rides or this preferred service.

Furthermore, UBER can include train booking and flight booking through their app where they
can provide the additional services of airport pick and drop as well as pick and drop at train stations
along with these bookings. This service can be much convenient for the users as there won’t be
any hassle or difficulty in finding a ride whenever they visit a place that is not much familiar with
them.

However, when adopting these new ideas, UBER should consider if the ideas are effective and
whether they are adoptable according to their current business model. When adopting the
Designated driver option, UBER need to focus on managing the rides among the drivers since if
mis managed some drivers might end up with lesser rides which can be resulted in lesser income
for them. This can lead to unfair treatment for employees and tarnish their brand name. So, they
need to conduct effective training programmes for the drivers in improving their personal skills
which the users prefer having rides with them and the company can manage these designated rides.
Regarding the UBER letting their app to book flight and train tickets, UBER need to be cautious
in sharing the user information and also regarding the government regulations placed on these
bookings and relevant services.

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Task Two
Q. Provide a critical evaluation of a business development growth opportunities for the
business venture which should be linked to innovation or the circular economy. The critical
evaluation of these options should include a business model canvas or startup lean canvas?

A.

The business model canvas can be explained as a context which utilized by strategic management
in order to create new models for the businesses along with in understanding the businesses which
are prevailing at the moment through operations planning (Osterwalder and Pigneur, 2010).
Presenting a clear depiction of structure, value planning, assets and clienteles of either a company
or a product, the business model canvas contributes the businesses to blend the processes of the
company through pointing out probable adjustments. New companies can gain huge benefits using
the business model canvas as it exposes the important areas which are unnoticed at times (Bocken,
Rana and Short, 2015).

Initiative A
As per the previous task, one of the best initiatives that UBER can implement is to add train and
flight booking option to their mobile app. Join forces with public transportation authorities, UBER
has the capability in providing this service to their clientele which will benefit them in a larger
scale. While allowing the customers to use the app for booking train and flight tickets, an additional
service of pick and drop can be added to the same when using this service.

Element How business conducted

Key Application consultants - Consultants who provide additional support in developing
partners the existing app for required purposes.
Government authorities - Responsible government officials and departments in
providing relevant access and permission to use their databases and operational platform
for the current initiative.
Train station and airport staff - Staff personnel providing assistance in any
requirement at their stations.
Key Application development - Development and testing process of the mobile application
Activities before launching it to the public.

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 Platform syncing - synchronization of the governmental platforms with UBER's
platform which allow the customers to use the application to book and get other
necessary information regarding their booking and etc.
Promotion - Online and offline promotional and advertising campaigns to make
awareness of the new initiative among the public.
Relationship management - maintaining effective connections with all the involved
parties including developers, consultants, government officials, train, metro and airport
staff personnel, drivers and end users.
Key Internal developing and IT teams - Communicating and executing relevant
resources requirements for the development and perform testing to make sure development are
accurate and operating.
Marketing team - Planning, conducting the campaigns to advertise the initiative and
make awareness to attract more clientele into the application.
Research team - Conducting effective researches in new trends and demands as well as
user feedback for future improvements of the process and application
Value User friendliness - Allowing the users to experience the new addition with minimal
proposition hassle and time waste compared to the previous processes.
Engagement - Encourage government authorities to promote the initiative to the public
through their channels
Convenience - Allowing the users to place bookings and drops and pickups through
single platform.
Customer End user reviews - Enabling customer reviews through mobile app and application
relationship stores where those reviews being responded and attended promptly.
Offers - enabling offers according to the usability of the customers for rides, in and out
of the new initiative.
Channels Offline:
Promotional Kiosks - Setting up promotional kiosks at airports, train and metro stations
as well as shopping malls and other locations where more crowd engagement exists and
promoting the new addition to the public.
SMS notifications - Sending promotional SMS describing the new addition with a link
to download the application who are not yet using it.
Online:

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 Social Media - Promotions via paid adverts through official social media pages of both
UBER and involved government departments.
Internet and Media - Paid advertisements including google adverts and TV
commercials to make the public aware of the new initiative.
Customer New users - People who are new to app mainly through new initiative adverts.
segments Existing users - Customer who already using the application and will benefit from the
new addition.
Cost Development cost - Expenses for new addition to the application and relevant
structure maintenance cost.
Research - Cost of acquiring the relevant information for the development and
consultancy cost.
Marketing - Expenses for both online and offline marketing campaigns.
Operations - Cost of initial documentational, agreements and access permission from
the government authorities, additional expenses for servers and infrastructure.
Revenue Booking commissions - Commissions received through bookings made via the app.
Streams Increased rides - Sales income through the increased rides through the pickup and drop
rides through the flight and train bookings.
Increased users - Increased sales from the new users introduced to the app via the new
initiative.

Looking at the business model canvas, the above initiative might take bit of a longer initial
processing time since getting the permissions, making agreements and synchronizing platforms
with the governmental authorities are bit lengthy processes. Further, operating the UBER’s
platform synchronized with governmental platforms require an additional attention safeguarding
the platform itself and customer information from various cyber-attacks and other relevant threats.
However, expanding the customer base and increased rides can be identified as the most important
benefits through this initiative as it directly affects the UBER’s revenue.

Initiative B
The next initiative that UBER can adopt is the “Designated Driver Service”. This service offers
the customers to select the driver which they feel comfortable riding with for a stipulated time
period. Since the preferences differs from one person to another, riding experience plays a huge
role in this.

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Element How business conducted
Key partners There will be no partners involved with this initiative as UBER can introduce this as
their very own exclusive service without any additional outsiders involved.
Key Activities Application development - Developing the application adding the service as an
exclusive and premier option including the relevant procedures.
Promotion - Promotional campaigns using online and offline platforms to make the
awareness about the premier service
Training and development - Providing training for the drivers to improve their
personal skills making sure they deliver top quality riding experience to the customers.
Relationship management - Maintaining effective communication through drivers, in
house operators, IT and development team regarding issues in respective areas and
providing solutions for them.
Key resources Internal developing and IT teams - Communicating and executing relevant
requirements for the development and perform testing to make sure development are
accurate and operating.
Marketing team - Planning, conducting the campaigns to advertise and make
awareness regarding the service.
Contracted drivers - Providing a pleasant and top-quality riding experience to the
customers.
HR and training team - Make sure to improve personal skills of the drivers through
effective training programmes which allow them to make a good impact for the
customers riding with them.
Value Convenience - Allowing the customers to have a hassle-free ride with a driver of their
proposition preference
User friendliness - Allocating an option for the customers to plan their ride for the
allowed time, which makes it easy for them to plan the rest of the things
Customer End user reviews - Enabling customer reviews through mobile app and application
relationship stores where those reviews being responded and attended promptly.
Customer service - Providing prompt solutions whenever an issue arise.
Channels Offline;
In app notifications - Notifying the customers through in app notification regarding
the premium service.
SMS notifications - Sending promotional SMS describing the new service.

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 Online;
Social Media - Promotions via paid adverts through official social media pages
Internet and Media - Paid advertisements including google adverts and TV
commercials to make the public aware of the new initiative.
Customer Existing customers - Customers who already using the application and will benefit
segments from the new addition.
Cost structure Development cost - Expenses for new addition to the application and relevant
maintenance cost.
Marketing - Expenses for both online and offline marketing campaigns.
Revenue The main revenue stream of this initiative can be collected by introducing this service
Streams as a value-added service where the customers are charged with an extra premium when
using this designated service. The premium can be varied by introducing package
structure where the users can extend the stipulated time of the service.

As per the business model canvas laid out for this initiative, since it does not need any outside
partners during any of the operations or other process, UBER has a huge advantage which directly
affect the cost structure for this segment. There will only be marketing, operational and
maintenance cost which are usual in any operation. However, since there will be no direct
expansion of UBER’s customer base happens through this, only revenue stream which attracts
income to the company would be the premium that the UBER will charge from their existing
customers using the service. As stated in the canvas, UBER can introduce a package structure
with the facility of extending the stipulated period where the customers are pre-booking the rides
with a designated driver, which can make the revenue flow through the initiative bit increased.
Moreover, UBER needs to make sure that the inter-personal skills of their contracted drivers are
at a high level, as through that only they will attract more customer using this service. Because if
the customers sticked only to a certain number of drivers, the company might have to face a huge
issue allocating rides for them according to the pre-bookings and make sure that all their drivers
are treated fairly with almost equal rides shared among them.

Comparatively, from the two initiatives, the best option to adopt at the moment for UBER would
be the new train and flight booking system allowed through their application. Though it takes bit
of a time to for the initial stage with the government sector and with a slightly extra amount

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compared to the cost structure of the Initiative B, in the long run initiative A would definitely
benefit UBER hugely. With direct expansion of their customer base and definite increment in rides
for the app due to drop and pickups added to their usual rides, UBER will have a positive hit on
their revenue.

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Task Three
Q. Discuss the use of TWO contemporary disruptive technologies (Blockchain, AI, IOT, Big
data etc.) that can be used to transform the startup and achieve a quantum leap in growth?

A.

The best two modern disruptive technologies to achieve a major growth for the UBER would be
AI and Big data technologies. Looking at the above-mentioned initiatives and the UBER’s current
business model, using these two technologies can make an effective and positive change to the
company.

Artificial Intelligence (AI)

AI or the Artificial Intelligence can be described as the recreation of human intellect developed by
mainly computer systems and machines. While the common reference for the AI is identified as
machine learning which only a one section of it, AI includes expert systems, natural language
processing, speech recognition and machine vision. While machine learning being the popular
segment of AI, it requires advance programming languages including Python, Java and etc. It also
requires unconventional hardware and other software in developing machine learning algorithms.
Focused on three main cognitive skills of learning, reasoning and self-correction, AI systems
mainly processed by feeding large quantity of characterised training data and making forecasts
through the patterns and connections identified through examining digested data into the systems.
During the learning phase, the programme concentrates on creating rules or technically called
algorithms through attained data by turning them into information that are processed and usable.
Reasoning process is where the AI programme selects the correct algorithm to reach the anticipated
result, while the programme will frequently perfect these algorithms during the self-correction
phase to make sure that the forecasts made by the programme are most precise and probable
outcomes. In this manner, a chatbot can learn to communicate similar to a life like person through
analysing data fed into the system of human conversations and chats. Similarly, an AI programme
that has been developed to recognize images is capable in learning recognise and define items in
an image through studying large number of specimens that has been digested into the system as
data.

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Using AI, which UBER already doing up to some extend at the moment in calculating driver arrival
times and ride duration, the company can use it to effectively identifying the ride patterns of their
customers such as travel frequency, ride distances, location preferences and etc to provide better
service through the application. Through the continuous data collected by the application in
regards to its customers, these data can be effectively fed into a proper AI programme in in order
to predict the customer behavioural patterns by analysing and processing these data efficiently. As
an example, most of the drivers who offered rides through the app chooses among rides according
to their likings of ride distance, payment methods and etc. Therefore, a customer who has been
identified through AI process as someone who mostly prefers frequent short distance rides can be
connected with a driver who has the same preference and vice versa. In the same way, customer
and the driver can be connected according to their preference of payment methods, as some prefer
cash payments and some does the payment through credit cards. This way a pleasant ride
experience can be provided to both the customer and the driver where UBER can increase their
brand equity through effective customer service and customer satisfaction.

Considering the initiatives suggested above, AI can be used to predict ticketing prices and offers
as well as plan UBER offers accordingly to attract customers more into the service for the initiative
A. Moreover, drivers can be kept informed regarding the flight delays, arrival and departure times
through the application itself during pick and drop rides offered through the service. Coming to
the initiative B, customers and the drivers can be connected more effectively for the designated
service by analysing both customer and driver information and feedback making effective
algorithms using AI and providing a top quality service through the application.

Big data
A greater, more compound data sets generated specially through new data bases can be described
as “Big data”, where these data sets being so large that the uncontemporary data processing
software are unable to manage or process them. However, these data sets are much useful in
addressing business issues which couldn’t being able to handle earlier. Also defined as “The three
Vs”; volume, velocity and variety, Volume stands for the tens of terabytes or hundreds of petabytes
of amorphous data with unknown value which has been collected through sources such as
clickstreams, web pages, data feeds, social media, mobile apps and other data collecting tools. The
frequency where the data is received and acted upon is called “Velocity”, where in current time

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period most of the internet aided smart products which functions in either real time or near-real
time require the same frequency of assessment and action of the data collected through these
products. Out of three Vs, variety stands for the different types of data available. Where traditional
data types are well organised and can be fitted precisely into respective databases, with big data
the organized structure and the neatness is not there to be found, which needs an extra processing
to originate denotation.

With the UBER incorporating AI into their operations, big data plays a huge role in getting the
best and most effective outcomes through AI programmes. Rather than using the traditional data,
UBER can include big data into their process along with AI and improve the outcome and forecast
made through AI programmes which will allow them process more smoothly and efficiently. As
an example, UBER can use big data collected through customer’s social media account in
predicting their travel plans and promote effective offers and services to them via app.

Using both AI and big data for initiative A, UBER can provide an efficient service through the app
to both customer and the drivers using the collected data and analysing and making more probable
predictions. In an instance where a driver waiting for a customer to be picked up at an airport
which the customer has requested the service while booking their alight tickets using the mobile
app, UBER can notify the driver regarding the customer’s travel plan and their arrival time and etc
using the data collected as big data which they will process through AI programmes that they have
incorporated with their operational processes. Similarly, UBER can use the big data collected from
customers, airline companies and travel agencies to analysing and process those data to match the
requirements, offers available and travel information of the involved parties which will benefits
all of them including UBER as well. These types of tactics can be used to increase UBER’s brand
equity which will definitely result in expanding their business and increasing their income.

Moreover, the same process and algorithm can be used to match the customers and drivers for the
designated driver service nominating most matching drivers to the customers according to their
preferences.

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