Identify an MNE and discuss its overall international strategy (global, transnational, localization or international) and the structure that supports this strategy.
Uber and its Overall International Strategy
Uber has emerged as a successful example in business internationally, which has entered various countries transforming transportation patterns. The idea simply started with developing an app on a smart phone, which could be used for consumers to call a taxi or a cab. The company does not own these taxies but offers a platform for drivers and consumers for the ride. The company’s international strategy is aggressive as it has entered various countries to gain first-mover advantage. After the idea of Uber, many rivals in the ride – hailing market across the world have also emerged. Earlier, Uber was so confident to enter new markets and exploit a first – mover advantage, but the emergence of new rivals has made the company change its overall international strategy.
If the last two years of Uber are considered, it is noted that the company has retreated from many different economies first-mover to be large enough to ensure growth. The company’s new international strategy has emerged as a series of exists from different economies like China, Russia, and Southeast Asia. These exits have come as a reaction to fierce competition from rival ride-hailing firms in these countries. The company has managed to keep its stakes in its rival firms in these countries.
In one of recent research, it has shown that these moves are offering the company profits. Didi was a Chinese rival in which Uber took a 18.8 percent stake, which is now 15.4 percent because of Didi’s fundraising. Uber adopted the same strategy in Southeast Asia by having a 30 percent stake in local giant Grab, which has become 23 percent now because of Grab’s fundraising. In Russia, the company has entered into a joint venture with Russian rival Yandex. taxi. Uber’s share in the joint venture is 38 percent (Russell, 2019).
However, Uber remains in other parts of the world competing with rivals. Among these markets, Brazil has come out to be the most attractive market, while the EU is a very challenging market. The above international strategy of Uber says that it has adopted different global, transnational, localization, and internationalization strategies to expand into different markets (Manangi, 2017).
The main aim of the company seems to be protected from fierce competition from rivals so that its profit margins remain intact. Moreover, there are reports of falling profitability of Uber as its business model has some shortcomings. Despite these issues, the company has successfully been continuing its international strategy, which is due to its structure supporting this strategy (Sherman, 2019).
The structure that supports this Strategy
Uber has a first-mover advantage in the ride-hailing market, and its aggressive penetration into different markets internationally has made its name familiar across the globe. Its competition in markets like the EU, Brazil, and India, along with the US shows its solid posture because of the structure. The company is based on an idea which is selling, and it is shown from its successful IPO as well. The company has generated more than $90 billion from the IPO, which is the highest one since 2014 (Griswold, 2019).
Then, it entered Chinese, Russian, and Southeast markets, but exited after having stakes in rival companies. This move has been successful because of the sustainable and profitable structure of the company. These rivals have kept its stake because they consider its assets valuable enough to have its role in the market. Moreover, these stakes can offer future opportunities for the company as well if it considers entry into these markets as a new start.
References
Griswold, A. (2019). Uber’s stunning journey to a $90 billion IPO changed transportation forever.
Manangi, S. (2017). Uber’s global expansion strategy – “Think local to expand global” – will it work for startups?
Russell, J. (2019). Uber has already made billions from its exits in China, Russia and Southeast Asia.
Sherman, L. (2019). Can Uber Ever Be Profitable?
