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CRIN6009 | Innovation Strategy used by Uber Inc

You have been contracted by Uber to write a report on its innovative operations and will proceed to make recommendations ensuring that the company continues to take an innovative approach to business.

Your report must critically examine the innovative strategy that Uber has adopted by:

  • Explaining different types of innovative strategies using the innovation strategy matrix to inform your discussion
  • Critically reflecting on industry examples that have not been innovative in their approach to business.
  • Critically evaluating Uber's choice of innovative strategy. Your evaluation should be informed by a STEEPLE and SWOT analysis of the business.
  • Critically analysing the complexities of implementing creativity and innovation into an existing business culture and business structure.
  • Making recommendations to ensure the continued success of Uber based upon the findings of your report.

Answer:

Introduction

The purpose of this report is to provide a brief introduction of the innovation operations initiated by the company Uber Inc. The report talks about the innovation strategy used by the company with an aim to introduce innovation in the activities of the business. It also explains different types of innovation strategies for the business along with the innovation strategy matrix. Further, the report examines the example of different industries that have not used innovation in their business activities with the explanation of the UBER’s choice innovation strategy with various frameworks. The latter part of the report provides recommendations for the continued success of the company.

Innovation is the basic requirement of the business process that help companies to function its activities properly and become competitive in the target market. The company UBER Inc. is successfully using the innovation strategies in their business to gain success in the target market. Innovation is one of the best ways with the help of which an organization can initiate reputable identification of their image in the target market (Goetsch, and Davis 2014). Innovation also increases the satisfaction level of the customers that subsequently increase the satisfaction level of the company as well. Further, the use of innovation strategy by the company UBER Inc. is discussed below:

Innovation Strategy Matrix

Albert Einstein stated the quote that, if he had 20 days to solve a particular problem, then he would spend 19 days in defining it. Definition of the problem is very similar for the identification of the result in the same way innovation is a problem because it remains undefined for the organizations. The fact should be noted that there are different types of innovations present in the environment that requires different approaches for its application as well. Deficiency of the proper application of correct innovation is the problem due to which companies fail in implementing innovation at the workplace (Rothaermel 2015). The innovation matrix tool successfully illustrates the different types of innovation strategies that a business initiate with an aim to implement innovation in their business. The matrix explains different types of innovation strategies that a business can use in their business. The below mentioned are four innovation strategies that can be used by the company UBER Inc. in order to adopt innovation operations in their business (Browning 2016).

Source: (Satell, 2016)

Further, it should be noted that innovation is a diverse activity that introduces brainstorming ideas to the company with the help of which they can increase its success in the competitive market. Further, four different types of innovation strategies mentioned in the innovation matrix are discussed below:

  • Breakthrough Innovation: Thomas Kuhm stated this innovation as ‘revolutionary science' as this process includes a shift in the p

    aradigm. Under the case of breakthrough innovation, the problem is clearly defined by the organization, however, the paths of innovation for the organization is unknown or not clear. The breakthrough innovation is the type of innovation that takes a bold move for the organization (Biemans 2018). It should be noted that this type of innovation is the actual change for the betterment that an organization can initiate in their business as it involves taking revolutionary technology in their process. Breakthrough innovation changes the products and services offered by the company in such a way that the company leapfrogs the position in the target market. Companies like UBER require this type of innovative strategies to meet their targets in the external market (Appendices 2). Under this type of strategy, the business introduces innovative strategies in the process that other competitors will take years to welcome (Chenhall, and Moers 2015).    
  • Sustaining Innovation: sustaining innovation refers to the process of innovation under which the organization aims to improve the innovation strategy of the business with an aim to aid and assist the next generation in their business process. This type of innovation helps the business to attain sustainable competitive advantage in the target market. Under this type of innovation, the organization goes on developing the current product by developing generations until the products reach the end of its life cycle (Daft 2015). Large-scale organizations are good in providing sustaining innovation because the resources, process of business and cultures are set up in such a way that enables sustainability of the position of the company in the target market. Typical sustainable innovation includes feature additions; cost reduction, product line expansion etc. It can be said that this type of innovation strategy is just opposite to the breakthrough innovation strategy because under this type of strategy the business process aims to create limited innovation that can increase the sustainability activities of the company whereas breakthrough  innovation is the process of creating innovation that is new and big for competitors to perform (Ding, Guo, and Guo 2018).
  • Basic Research: Basic research refers to the type of innovation under which the management performs the research function and because of that research, they find out the best possible outcome to act upon. The main idea behind this type of innovation is how things work with the use of such innovation at the workplace (Cedergren, Norstrom, and Wall 2017). The aspect of basic research innovation is not even regarded as the innovation in some field but it takes a major role in initiating innovative activities at the workplace. Basic research provides huge dividend at the workplace in long run approach as it already researches the upcoming innovations in the field and presents them in front of the board due to which an organization initiates innovative strategies at workplace (Goffin, and Mitchell 2016).
  • Disruptive Innovation: The concept of disruptive innovation was introduced by Clayton Christensen in his book The Innovator’s Dilemma. Under this type of approach, the leader of the organization initiates new approaches along with the products and services of the company. The process of disruption need not be hi-tech and efficient innovation, instead, a disruptive innovation is the type of innovation that simplifies the user experience and increases the productivity of the organization. The three most important qualities of the process of disruptive innovation are that the business establishes new products and services in the target market; another one is that the business begins their activities as a substandard product that cannot be seen as a threat for the market leaders (Edelman 2015). And lastly, adopters are the non-consumers who were unable to access such products and services earlier due to cost or accessibility. An innovation strategy becomes disruptive when the adoption of the strategy is widespread and it improves the quality. The major aim of this strategy to start from the very beginning by not disturbing the large market shareholders in the market but slowly placing the image in such a way that these companies also get threatened with the activities of the organization. This type of strategy was adopted by Toyota to replace GM, and by Airbnb as well (Kompalla, Geldmacher, Just, and Lange 2017).

Importance of Innovation

In the current business environment has become one of the major aspects that helps them to succeed in the target market. Innovation is no more an option for companies instead it is the sole choice available for companies to grow. Further, it should be noted that businesses in the traditional brick and mortar economy are getting exposed to the digital age and the prognosis of the event is not great. Digitalization brings a path for future growth, with the help of innovation even the old-fashioned business can breathe and survive in the market (Harding, Kandlikar, and Gulati, 2016). Technology is just one aspect of the business; it is more like a tool that is used by the business process to innovate. Innovation is the best way to solve the problems faced by the companies along with competition. In the current era, it has been evaluated that the organizations using the innovative services in their business grows and sustain a dignified position in the market as well. However, the company that does not adopt the aspect innovation somehow fail to survive in the tough and competitive market just like the company Hailo and Ingogo (Wanetick 2015).

Talking about the company Hailo, it should be noted that the organization was formed in the year 2011 by three entrepreneurs and three taxi drivers. In the initial days the company was running well in the target market, even it was expanding at a great speed. Hailo captures the streets of London along with Japan, Ireland, Spain, Canada, and the US. So, overall the company was working properly the market but with its entrance into the market of US, the company failed to innovate (Berkowski 2014). In the US the company attempted the same strategy that they used in another market however, the company failed to acknowledge that US taxi management market is diversified in nature. In response to which the organization raised a heavy amount from the market in the form of venture capital and failed to build a strong relationship with the taxi drivers of US. Thus, it should be noted that as the company failed to innovate their business process in the expanding market due to which they failed and got merged with some other organization (Pisano 2015).

Further, talking about the company Ingogo, it should be noted that the company has fixed fare services that reduce the interest of the taxi drivers from the organization. In order to avoid confusion, the company adopted this method that initiated rigidity in the activities of the organization. Also, the organization is based in a small part of Australia and does not aim to expand its services as well. Resulting to which, the company failed to perform well and grow appropriately in the target market. So, these are the two examples of the company that failed due to not adopting innovation in their process (Urbinati, et. al., 2018).

UBER's innovative strategy

UBER Inc. is already known as an organization that is famous for its innovating actions in the target market. The company has already set high standard so no need to use innovative technology for their business that is next generation innovation for other organization. UBER Inc. should make use of the breakthrough innovation strategy in order to innovate the business and maintain sustainability in the target market (Christensen, Raynor, and McDonald 2015). With the help of breakthrough innovation business strategy, the company can easily expand their scope of business in the diversified market and grow. The basic requirement of the innovative strategy implemented at the workplace is t either grow and expand or sustain the activities of the business. Therefore, the breakthrough innovation strategy will successfully fulfill the growth and expansion requirements of UBER. Further, the below-mentioned STEEPLE analysis successfully evaluates the choice of innovation strategy of the business:

Social: UBER Inc. is a privately owned organization that was originated in the year 2009; the company serves its services in the worldwide market and has more than 12000 employees working with them. So, it can be said that the socio-cultural environment of the company is diverse. The customers of the company also enjoy its easy accessible platform. The company is also available on social media website and provides opinion towards certain things as well. So, it can be said the social environment of the company is healthy and adaptable to change as well (Goffin, and Mitchell 2016).

Technological: Most of the work of the organization is initiated by the use of technology in their business. So, technology plays the biggest role in helping the organization to build the strong customer base and enhancing services as well. The customers also make appointment through application and websites and the company intimates the driver through app only. So, it should be noted that the technology plays a major significance in helping the company to grow and expand. The employees feel all time ready to adopt new technology and satisfy the customers as well (Wieland, Hartmann, and Vargo 2017).

Economic: Industry in that UBER operates its business is sharing economy that means that the economy is based on sharing the intellectual and physical resources worldwide. Since the industry is new and best in the market to it provides an advantage to the organization to grow and effectively earn revenue as well. Apart from it, there is a great scope of innovation in the company to address the market as well (Grant 2016).

Environmental: The environmental factors that are related to the services provided by the UBER Inc. have a negative impact on the society resulting to which the activities of the company are regarded as a questionable aspect in the market. The activities of the company increase the traffic congestion and fuel usage as well. Before the initiation of the activities of UBER, people used the taxi services but not that much; introduction of UBER has increased the rate of people, using taxi services to travel that subsequently increases the pollution level as well. Resulting to which, it should be noted that sustainability of the environment has become a concern for the government of countries worldwide (Schneider 2017).

Political: Talking about the political factors, it should be noted that the company has faced many political controversies from its initial developmental stage until now. The company faced most of the problems due to unclear governmental regulations, so the company focuses on adopting the strategies that help them to attain the innovation in their business by complying with all the necessary requirements as well. With the help of type of innovation, the company can successfully introduce new ideas in their business without attracting a penalty for the management (Fleischmann, Daniel, and Welters 2017).

Legal: It should be noted that just like the political factor; the company has not performed well in this factor of the STEEPLE analysis as well. The organization faces difficulty in managing the legal requirement of the employees and the organization. The company needs to introduce new policies in such a way that increase the satisfaction level of the employees and earn the attention of the customers as well.

Ethical: The Company is not in a good position in terms of ethical analysis as well. However, UBER successfully comply with their corporate social responsibilities. The organization also aims to satisfy the employees (drivers) of the company but somehow they fail to implement that in the activities as well. It is the requirement of the company to innovate the business functions in such a way that it meets the business requirements and satisfy the ethical obligation of the company present in the environment (Parker, and Van Alstyne 2017).

Apart from STEEPLE, the SWOT analysis of the company also helps in understanding the need of the organization to make use of the innovation strategy to grow. As SWOT is internal as well as external analysis, so it provides the viewpoint of both the aspects present in the market.  

(Source: https://www.kantarfutures.com/the-uber-all-economy-a-challenge-to-traditional-business-models/)

Strength: There are numerous strengths of the company in the target market; however, the most important strength that helps UBER to win the customers is the adaptive nature of the brand (Appendices 3). The management of the company lays emphasis on the customer satisfaction aspect in response to which they initiate activities that help them to sustain the business in the target market. The company also makes use of innovation to repeatedly grow and increase the brand portfolio of the company (Sarooghi, Libaers, and Burkemper 2015).

Weakness: The biggest weakness of the company is its controversial issues present in the environment. UBER is stuck with such controversies that somehow devalue the name of the company in the market. Further, the dependency of the organization on the resource is also weakness of the company.

Opportunities: Increase in disposable income of the employees along with increasing internet penetration provides an opportunity to the company to grow and capture the extensible market share in the target market. Internet penetration gives an opportunity to the market to grow and adopt innovative technologies in the market as well (Yoshida, Sendjaya, Hirst, and Cooper, 2014).

Threats: unclear government regulations and the drivers’ dissatisfaction are the two major threats for the company that can reduce or restrain their growth in the target market.

Apart from the above-mentioned two frameworks, it should be noted that the industry analysis of the company UBER also states that the company has a moderate level of risk in the society. It acts as an advantage for the company to easily make use of the innovation and creativity strategies and business model to earn success in the target market (Appendices 1).  

Complexities of Innovation

Innovation is not the cup of tea for every organization to implement successfully. It takes a lot of hard work from the part of employees and the dedication of the management to conduct the innovation in an organization. Every business should understand their scope of business to implement the adequate type of innovation strategies using the resources in a way to earn reputation in the target market. Further, the complexities that UBER might face while implementing innovation in their business culture are discussed below:

  • Resistance by employees: Innovation means change and the process of change is directly connected to the process of resistance of employee. As discussed above that innovation is not easy for the all the organizations and the employees to handle, instead, it takes lots of effort to successfully implement innovation strategies at the workplace. The employees of the company UBER are already using hi-tech technology and efficient resources to initiate the activities of business and further introduction of innovative strategies will make them feel burdened with work. Resulting to which they will resist performing this task that will increase the complexities for the business (Wang, and Miao, 2015).
  • Lack of availability of resources: The process of innovation and implementation of such innovative strategies in the business requires the availability of resources in the organization. The management of the company needs to procure and obtain the resources in such a way that they help the employees to use innovative strategies in the growth of the business. So, if these resources cost high or they are difficult to procure then the organization will face barriers to the implementation of innovative strategies in the business.  
  • Adopting of innovation while complying with legal requirements: From the above discussion of the STEEPLE analysis of the company, it has been evaluated that the company faces difficulty in complying with the legal rules and regulation formed in the market. With the introduction of new and innovative strategies in the business, UBER might face more difficulty in making use of such innovation while complying with all the rules formed by the government as well (Perry-Smith, and Mannucci 2017).  
  • Inadequate Leadership: Lastly, it should be noted that innovation demands leadership in the organization. The employees of the company will certainly resist making use of innovative strategies in the business if they are not introduced properly to them. So, the inefficient leader will make it more difficult for the organization to reduce the resistance level of the employees and understand the need for innovation effectively. Complexities in the process will certainly be eliminated if the employees understand the viewpoint of the leader and initiate the activities effectively (Dawson, and Andriopoulos 2014).

Recommendations

  • The threats identified in the above-mentioned stanzas can be converted into opportunities by utilizing the aspect of innovation in the business. The company faces the threat of unclear governmental legislation and the increasing level of dissatisfaction among the employees in the company. With the use of breakthrough innovation strategy, the company should talented human resource in the organization that takes care of the interest of all the people (stakeholders) of the company. These employees of the company should be employed by the management only to monitor the activities of the employees and govern them as well. In this way, the organization would adequately develop leadership skills in the employees and comply with the rules and regulation as well. The qualified human resource employed should be millennial so that they can understand the issues of the employees and help them to co-operate with them as well.
  • Further, the weakness of the company UBER is that the organization is the controversies that attract them and devalue their name in the target market. So, the organization with the help of its efficient employees should attempt to change the business structure and culture of the company. With such change, the company will definitely initiate innovative changes in the business that will ultimately protect them from attracting such controversies with the name of the organization. Resulting in which, the media will then highlight the name of the company only in good and innovative work performed by them. So, in this way, the company will turn its weakness into the opportunity by maintaining a qualified brand portfolio in the market. Innovation will improve the functions of the business and help the management to eliminate the conflicts present in the environment.

Conclusion

Thus in the limelight of the above-mentioned events, it should be noted that creativity and innovation are the two most important aspects that help a business to grow and increase its revenue in the target market. The above-mentioned report successfully attempts to explain the importance and need for innovation strategy in an organization like UBER Inc. The report explained that the company should make use of the breakthrough innovation strategy to succeed in the target market. Further, the report also explained the SWOT and STEEPLE analysis on behalf of the company and complexities that the company might face in adopting such technologies in the target market. The report successfully fulfills the requirements of the assessment.

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