Innovation Strategy Assessment for the case of Uber 3
INNOVATIONSTRATEGY ASSESSMENT: THE CASE OF UBER
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Responseto Part 1
Uber’sbusiness model based on George and Bock’s three dimensions of abusiness model (resource, transactive and value structures) discussedin Section 3.1 of Block 3
Thechosen company for innovation strategy assessment is Uber. First,according to George and Bock (2008), a business model can be definedas the organization structure design with the enacting commercialopportunities. The author suggests that there are three dimensions ofa typical business model: resource structures, transactivestructure, and value structure. Evaluation of Uber based on Georgeand Bock (2008) model creates the allowance to infer various elementsof the organizations that are outright in accordingit’scompetitiveadvantage.
ResourceStructure: Asdefined by George and Bock (2008), a resource structure can beconceived as the static architectural elements of businessorganization, production technologies, and core resources that areharnessed to satisfy the customer needs. Uber is an internationaltransport network company whose resource structure entailsdeveloping, marketing, and operating Uber applications. The servicesallow customers to submit requests via smartphones, which are thenrelayed to the nearest taxi drivers to attend to the customers,providing their locations. The Uber services are offered 24/7 (KentarFutures, 2015).
Transactivestructure: Georgeand Bock (2008) define a transactive structure as the configurationof the organization on which the key core transactions with thestakeholders and partners are hinged. Uber’s transactive structurecan be conceived as the kind that is particularly oriented towardsdelivering the quality of services to the market and realizeexpansion. The company’s transactive stature is manifested by anarray of activities, including seeking internationalization,strategic business marketing operations, and the adoption of customerrelationship platforms. Since the Uber services platform isonline-based, the company strives to improve reliability in itsservices, as well as the security (Wee, 2016).
Valuestructure: Valuestructure can be described as a system comprising of expectations,rules and mechanisms, which function as the determinants of thecapture and value creation processes of a firm (George and Bock,2008). A look at Uber reveals certain unique elements of its valuestructure. One of the outstanding elements is its focus on theprofitability through growth and expansion. The organizationacknowledges that the ability to realize this goal is hinged on anumber of activities, including providing value for money andstriving to uphold corporate social responsibility. The value formoney aspect is assured by designing its products to meet theconsumer demands, while social responsibility practices includeengaging charity, producing quality practices, observing the rule oflaw, treating the employees well, being on the fore-front inprotecting the environment and being transparent and accountable(Kentar Futures, 2015).
Responseto Part 2
PartA: Assessing Uber’s innovation strategy based on Dodgson et al.(2008) classification of types of innovation strategy
Accordingto Dodgson et al. (2008), business innovation strategies can eitherbe broadly categorized as active, passive, proactive or reactive. Inclassifying Uber’s strategies, it is first imperative to define theclasses.
Asdocumented by Dodgson et al. (2008), business with active innovationstrategies are those that strive to defend their existing market andtechnological positions — they are typically quick to respond totechnological and market changes once project viability is proven,and exhibit incremental innovation and vibrant in-house appliedresearch and development.Companies pursuing passive strategies havethe tendency of stick back and waiting for the market demand to shiftbefore they can make adjustments. Therefore, passive companiesconceive the market as the only force that drivesinnovations.Businesses with proactive innovation strategies arehighly innovative, striving to be the discoverers, architects, andengineers of innovations. Typically, proactive companies exhibitstrong research orientation, seeking access of knowing from a widerange of sources and perceiving the competitive advantage asrisk-taking. Their innovation processes are radical and incremental.Lastly, a reactive organization strategy is essentiallytriggered bycertain trends in the market, which warrant companies to embracecertain forms of adjustments to keep abreast. Dodgson et al. (2008)note that reactive companies are followers, are operation oriented,embrace wait-and-see tactics, and are risk avoiders. They areparticularly known for copying certain proven innovation from theinnovators, and do so only after the innovations have been shown tobe effective.
Alook at the general attributes of these categories creates theallowance to infer that Uber would most likely be classified asproactive innovators. Its technology was discovered and implementedas the first of its own kind, taking the market by storm. Currently,the company does not have any other competitors from which to copyinnovations. The company is still dedicated to expanding and meetingthe consumer demands by investing in technologies. It is liaisingwith different high-tech companies to develop enhanced applicationsthat would enable it to be ahead of time. As a high-tech company, thecompany believes that they only way to remain on top of the marketand safeguard its competitive advantage is by seeking incrementalchange through technological research and development. To be able torealize the innovative capacity, Uber is also seekingto improveinformed human resource practices such as training and development,motivation and leadership, which it believes will bolster andcatalyze the innovations (Jagganernaut, 2015).
Conclusionsas to whether the proactive innovation strategy is appropriate tothe Uber’s operating environment or need to change
Itis indisputable that this kind of innovation strategy is appropriatefor Uber. The justifiability of this strategy rests on the notionthat for contemporary organizations, especially the high-techbusinesses, success within the marketplace is essentially a war oftechnologies. Therefore, the earlier they can be adopted, the earlierthey can create the allowance for a company to leverage an edgingcompetitive advantage (Grant,Hall Wailes & Wright, 2012 Kovacs & Paganelli, 2013).This view is plausible because, in one way, the Uber’s marketenvironment is characterized by competition threats, which resultfrom the existent competitors or new entrants. While the competitionis still less vibrant, it is necessary for Uber to differentiateitself as much as possible to avoid losing its large market share.
Inanother way, the market environment is characterized by a myriad ofuncertainties, including shrinking natural resources, growingregulation environment, and economic downturns. The ability of anyfirm to survive depends on the cost-effectiveness, resilience, andrisk management practices that a company is willing to adopt. It iswidely concurred that such aspects can be effectively assured byembracing vibrant innovative strategies (Kovacs& Paganelli, 2013).Indeed, according to Grant,Hall Wailes and Wright (2012),innovation and technologies are critical for firms operating in thecurrent market environment because they do not only enable a companyto differentiate itself from its key competitors, but also enhancesthe service delivery efficiency translating to reduced cost ofproduction and enhanced customer satisfaction. This point is alsosupported by Kovacsand Paganelli (2013) whonote that the best examples of successful firms, especially thoseoperating in the high-tech sectors, are those whose innovationsstrategies are proactive, citing the examples of Apple, Google andMicrosoft.
Reflectionon the use of Dodgson et al. (2008) typology as an analyticaltechnique
Inmy view, Dodgson et al. (2008) typology is perhaps the best frameworkfor conceptualizing the innovative strategy of firms. Its suitabilityrests on two points. The first point is that describes theorganization’s innovative orientation based relative vibrancy. Inlight of the call for firms to embrace vibrant innovative strategies,Dodgson et al. (2008) typology serves as an analytical tool for firmsto rate their position in a market marked by a war of technology andinnovativeness. There, a typical analytical technique creates theallowance to provide a recommendation on how a firm can improve itsstrategies to keep abreast with trending market developments. Forinstance, in the case of Uber, one would recommend that the companyis on the right track.
PartB:Outline of the main/key features of Uber’s current innovationstrategy
Ashas been noted, Uber’s innovation strategy is a vibrant kind. Basedon George and Bock (2008) model, Uber’s approach is a holistickind. On the other hand, based on Dodgson et al. (2008), itsinnovation strategy is a proactive one. On the overall, innovation isconsidered as a vital aspect of Uber success and is exemplified byvarious processes.
Typically,managers strive to ensure that innovation-related decisions and norms align with the performance goals of an organization. Notably,innovations are actively designed to not only yield results ofspecific isolated mechanisms such as steering committee and servicelevel agreements, among others, but also guide organizations towardsachieving their respective maingoals. The directions set by the boardof directors lay emphasis on five critical principles. The firstprinciple emphasizes the need of aligning individual needs anddepartmental goals and priorities with those of shareholders andconsumer needs. Therefore, innovations are designed to achievestrategic alignment of the information and related technologies withthe goal of enterprises. However, enterprises face challenges inachieving and maintaining alignment as both shareholders andenterpriseneedsare ever changing (Wee, 2016). These challenges arecurbed by utilizing the top-down management methodologies. Thiselement plays a crucial role in aligning the enterprise’sneeds withinnovative developments. Governing enterprises end-to-end is anotherprinciple. This principleensures that all functions and innovationprocesses within the organization, including service functions, andother assets, as well as resourcesare aligned with the innovations.Therefore, top management within the enterprise are required to takethe responsibility of accounting and effectively manage IT-relatedassets in their respective organizations (Growthhacken, 2015).
Applyinga single integrated framework is the third principle. This principlelays emphasis on using a single general integrated governanceapproach to producing the maximum value. Within this principle, thereis the integration and harmonization of the information technologyrelated risks framework guidance. The fourth principle is enabling aholistic approach principle. This principle puts the emphasis on theefficient and the effectiveness pertained to innovationimplementation. This principle takes into account a number ofinteracting components, which are considered as enablers because theyprovide support to management and governance through the interactionof enterprise activities. The interaction of activities within theenterprise is always independent. The last principle is theseparation of governance from management. This principle assists thekey innovators in delineating the roles between technologicalgovernance and management. This step includes evaluation of thecurrent and future needs of applications, and getting directlyinvolved in the preparation as well as the implementation of theplans and rules to ensure that innovationmeets enterprise’s goals.The directors also monitor conformance according to guidelines, aswell as performance against plans (Wired, 2014).
Uberis an international transport network company whose resourcestructure entails developing, marketing, and operating Uberapplications, which allow customers to reach taxi drivers that arenearest to them. The company’s transactive structure can beconceived as the kind that is particularly oriented towardsdelivering the quality of services to the market and realizeexpansion. Moroever, a look at Uber reveals certain unique elementsof its value structure. One of the outstanding elements is its focuson the profitability through growth and expansion. In essence, allthese developments create the allowance to infer that Uber’sinnovation strategy is market, as well as operation-focused.
Discussionon the extent the formation of this strategy is rooted in either aprescriptive (e.g. template based) or emergent approach to strategyformation
Uber’sstrategy information can be essentially seen as an emergent approachto strategy formation. The framework for developing innovations isnot set out and many tend to evolve with developmental trends intechnological capabilities. In contrast with the template-basedmethodology, this method is considereda flexible kind because itcreates the allowance for the organization to embrace different formsof technologies as a holistic approach. Organizational goals aresuccessfully achievedthrough the provision of proper rolesdescriptions and responsibilities. In addition, proper regulationsalso assure organizations a more complete and wide clear rangepertained to generic business and the roles of players and chartswithin the organizations. In addition, having regulations in placesolves the challenges related to innovation governance. Theinnovation-related challengesare curbed under the constitutesreferred to as cascade (top-down). This constitutes assist alignmententerprises in their respective information and related assets oftechnology. Governing enterprises end-to-end is another principle.The top management of the company is required to take theresponsibility of accounting and effectively managing informationtechnology and innovation-related assets in their respectivedepartments (Jagganernaut, 2015).
Thekey recommendations for improving Uber’s approach to innovationstrategy
Ashas been noted earlier, Uber’s proactive innovation strategy issuitable and outright at enabling it to safeguard its competitiveadvantage while striving to achieve incremental growth. Such anapproach has been justified on two bases. First is that successwithin the marketplace is essentially a war of technologies and thatthe earlier they can be adopted, the earlier they can create theallowance for a company to leverage an edging competitive advantage.Second is that the market environment is characterized by a myriad ofuncertainties, including shrinking natural resources, growingregulation environment, and economic downturns, and that the abilityof any firm to survive depends on the cost-effectiveness, resilience,and risk management practices that a firm is willing to adopt.Therefore, there is nothing much that can be recommended for Uber toimprove its innovative strategy because it seems to be on the righttrack. The management and leadership models that the company shouldembrace to be able to support the process are perhaps the only pointsthat may be suggested. On this note, it is recommended that Ubershould embrace informed leadership and management strategies thatcommunicate and reaffirm its commitment as a practice innovativefirm.
References
Dodgson,M., Gann, D., & Salter, A. 2008.TheManagement of Technological Innovation: Strategy and Practice.Completely rev. and updated. Oxford: Oxford University Press.
George,G., & Bock, A. J. 2008. InventingEntrepreneurs.Upper Saddle River, NJ: Pearson Prentice-Hall.
Grant,D Hall, R., Wailes, N. and Wright, C. 2012. "The false promisesof technological determinisms: the case of enterprises resourceplanning systems". NewTechnology, Work & Employments21 (1): 2–15.
Growthhacken.2015. Uber— What`s Fueling Uber`s Growth Engine?Retrieved from https://growthhackers.com/growth-studies/uber
Jagganernaut.2015. HowUber Works: Insights into Business & Revenue Model.Retrived fromhttp://nextjuggernaut.com/blog/how-uber-works-business-model-revenue-uber-insights/
KentarFutures. 2015. TheUber-all economy: A challenge to traditional business models.Retrieved fromhttp://thefuturescompany.com/the-uber-all-economy-a-challenge-to-traditional-business-models/
Kovacs,G. L., & Paganelli, P. 2013. "The planning and managementinfrastructures for large, complex, distributed projects – beyond ERPand SCM." Computersin Industry,51(2), 165-165
Wee,H. 2016. TheUber business model loses some of its sheen.Retrieved fromhttp://www.cnbc.com/2016/03/29/on-demand-business-model-looses-some-of-its-sheen-.html
Wired.2014. Uber’sBrilliant Strategy.Retrieved fromhttps://www.wired.com/2014/07/ubers-brilliant-strategy-to-make-itself-too-big-to-ban/
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