PESTLE Analysis of Uber, Microsoft, and Google
In this report we will discuss about the three technological companies such as Uber, Microsoft and Google. The objective of this report is to focus on the styles of the leadership and strategies of human resource management. Microsoft gave people a reason to love the technology and always learn something new about it. Microsoft has steadily helped people to work, live, play and connects through significant technology. Uber has provided a platform where riders connect with drivers through an application on mobile. Uber has been the discoverer in the sharing economy and it also offers various service levels and supported people in terms of conveyance (Matherne & Toole, 2017). Google is the world’s most powerful, far and wide search engine which provides significant results immediately. The main mission of Google is to arrange the world’s information and make it globally approachable and useful (Baldonado, 2015).
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PESTLE |
UBER |
MICROSOFT |
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POLITICAL |
Uber has been facing some obstacles all over the world for not having appropriate laws and regulations. Lawmakers have asked the company about insurance policy and licence of the drivers. |
Microsoft increased its performance through political stability of markets that leads to opportunities. Government helped the company in increasing sales through government clients. |
Government supports businesses when the market is stable, then these businesses advertise on Google and this is advantage for Google. |
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ECONOMICAL |
Uber works in the industry of sharing economy. This has created employment on large scale and also they had reduced the charges of taxi and this cutting of prices generated competition. |
Customer’s purchasing power increases with the growth of economy. So, this helps the company in generating profit and revenue. |
Microsoft is affected by economic factors such as inflation rates, tax regulations, interest rates and exchange rates. |
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SOCIAL |
Uber is user friendly and provided efficiency and convenience in public’s routine. Uber gives better and quicker ride experience than other taxies (Europarl, 2015). |
Microsoft has faced big challenge because people have switched to big screens smart phones. Microsoft is helpful for growing software business and computer hardware. |
Google might face threat due to rise in social media usage as Facebook also provides the advertising services. |
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TECHNOLOGICAL |
Uber increases smart phone users as to avail the services it is mandatory to download the app on smart phone. Uber is helpful in saving time technically as people can book the nearest cab that arrive the pickup location within minutes. |
Microsoft has the opportunity of innovation for mobile devices as the demand of mobile technology has been raised. People prefer handy technological devices. |
Google has the opportunity in technology as improvement of market is more connected to online and believes in technology and this would leads to high advertisement profits. |
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LEGAL |
Uber must follow laws such as the technical usage laws, copyright laws, labour and employee safety laws. |
Microsoft should be concerned for patent law such as computer software piracy. |
Google can utilise the opportunity of legal regulations through improving their privacy for individual users. |
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ENVIRONMENTAL |
Uber is providing eco-friendly service such as Uber pool (Frue, 2017). |
Microsoft has been creating carbon neutral products. The company has also invested in renewable energy (Gupta, 2013). |
The environmental factors affect the technical users in terms of safety. Google should make sure that users are protected from hackers and other scams (Thomas, 2007). |
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Five Forces Framework |
Uber |
Microsoft |
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Threat of new entrants |
Uber is operating the business with the concept that people, who want to work with Uber as their drivers then they are welcomed with their own cars and get their vehicle registered and work at variable hours for Uber. Hence, any new company who want to establish similar business as competition then the obstacles and costs at initial level are low. Uber has high threats of new entrants (Ogutu, 2015). |
Threat of new entrants to Microsoft is not considerable because of its high financial investment and technological knowledge. |
Many competitors can enter the market as the cost of business is average, but it could be very challenging to defeat goodwill of Google. |
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Threat of substitutes |
A substitute is a common fear that is faced in competitive business environments. In the industry of transportation, there are many competitors that can quickly replace Uber in the market. The possibility of threat considered due to service quality can be from traditional transportation industry such as taxis, public transportation and private cars etc., they are comparatively lower in cost due to their efficiency and quality. Hence similar services can threaten the existence of Uber. |
Threat of substitute is low because Microsoft includes operating systems, software applications and cloud based computing services. |
The cost of advertising can cause a threat of substitute. |
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Supplier bargaining power |
Uber does not own any of the vehicles in its name. Company’s business platform is dependent on drivers owning vehicles. Uber is providing their drivers along with cars for services, this leads to rule the suppliers over Uber and suppliers have high bargaining power in case of Uber. The company should take care of suppliers because if anything bad happens then it will affect goodwill of the company. |
Microsoft handles the bargaining power of suppliers by providing productive supply chain to suppliers (Njambi et al., 2016). |
Supplier bargaining power is low because the competition of Google is very low. |
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Buyer bargaining power |
As the market is growing, the alternatives and other competitors are increasing and they bring more choice to the customer and switching cost which are comparatively lower. The Uber application software is free and requires only downloading and free registration, customers can easily switch on the opponents of Uber. |
Bargaining power of buyer is of a moderate level because the existing customers would not switch easily on another as this would result in lack of efficiency while adapting new product. |
Individual buyers can impact the Google very less. Hence, the bargaining power of buyer is less. |
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Degree of rivalry |
Uber needs to advance its innovation strategies as there are many competitors. To survive Uber should lower the costs with better quality of services (Omsa et al., 2017). |
The competitive rivalry is high for Microsoft. Although, Microsoft is the discoverer of many technologies in computers but now the same products are made by other companies with the same features. |
Degree of rivalry is moderate as Google has many competitors in search engine, still obtain majority of internet services (Tehrani & Rahmani, 2014). |
Dara Khosrowshahi is the CEO at Uber. He made strategies such as building trust of people towards the company, to build trust the company needs to strengthen their capability to get their customers convinced. The company has to make them influenced that they are in it for their benefits. Uber has not constraint itself to particular division of cars. They provide variety of cars for different choices of various people. Uber adapted surge pricing technology; in this strategy when the demand increases the price also decreases and prices also depends on the number of drivers availability and the number of people who request for the rides (Humphereys & Einstein, 2004). Uber implemented the strategy based on weather; if the weather is unusual then the company increases the price because the demand increases more as compared to normal weather. The company commenced a procedure of improving new values and made new standards to avoid the miss happenings and to improve the image of the company. The management of team is very mandatory to achieve the goals efficiently. When various people are working together then they should be managed very effectively and efficiently as diverse team is not comfortable in performing as the equivalent team. The company can achieve the goals through building trust and managing the team to perform productively (Mims, 2017).
In the companies like Google, the culture is very different when it comes to its employees and their work style. Google feels proud that it follows distributed leadership style. Go getter style which is individual oriented is the type of leadership style Google believed in (Manimala & Wasdani, 2013). When Sundar Pichai, the CEO of Google entered into the organization, he had maintained his respectful approach and dedication to proceeding development and training. He was aware of the new innovations that needed to exist in the organization. He always believed in the great talent. New talent can be very helpful in the growth of the company. He not only became a transformational leader for his existing employees but also provided his knowledge to the new entrants. Their important strategy is to recruit calibre and talented people and for this they give personal attention and involvement in hiring candidates. The company wants the right people to get opportunity to achieve their own life goals and also wants people who fit best for the company. Google always believed in not forgetting its roots. Sundar Pichai always said that he is a person who will always belong to the roots he comes from, no matter how far he goes or how successful he will be. He gave his employees a good chance to succeed in t he organisation by listening to their ideas and giving importance to their innovations (Marketing, 2017).
Five Forces Framework
If the qualities of the ex CEO Steve’s leadership style is combined, it was more into intense and the aggressive competition. This type of aggressive competition might demolish the new innovations and the creativity that is shown by the people. When Satya Nadella came, he introduced himself as the person who believes to be normal with his employees and focus more on learning and creativity (Kell & Ovide, 2014). He collaboratively got involved with the teams to create something new and innovative. His belief was not to be aggressive with his employees. Steve used more of a directive style but Nadella believed to be more supportive towards the people. When Satya became the in charge, the whole company felt refreshed. He came from a technical background and started implementing the transformational leadership style and did major changes in the values, norms, structure and strategies. The cultural change that he did in the organization was known to be as “Soul the unique core”. He in the initial phase of his joining understood that he needed to make the culture of Microsoft more agile and flexible to initiate with the new innovations. Change is the only thing that is constant, that is what he believed in. Such changes could only be done by a transformational leader (Salem, 2018).
Conclusion
It has been concluded from the above report that Pestle analysis is very mandatory for any company. Pestle analysis is a tool that is used by marketers to monitor and examine the macro environmental factors that have an impact on an organisation. The pestle analysis is important in macro environment because it is necessary to recognize the vital features which affect the organisation’s costs of production. Pestle analysis is a framework that helps to know the position and potential of the business and also helps to know when and how to expand the business. It has been also concluded that leadership strategies play an important role in an organisation. Strategic leadership helps the organisation in providing the vision and orientation for the development and prosperity of an organisation. The strategic leaders support to encourage the interest and strength of the people working in their organisation. They support the employee of the organisation to learn how to transform the motive into operation. We have also concluded that the organisations directed by the strategic leaders are successful in achieving their goals productively. Strategic leaders make a important difference in the performance of an organisation as they have the capability to enhance the performance of an organisation with the help of their leadership strategies. They have the calibre to influence a group towards the way of procurement of goals.
References
Baldonado, A.M., 2015. Workplace Fun: Learning from Google, Southwest Airlines, and Facebook. International Journal of Research in Business Studies and Management, 2(12).
Europarl, 2015. SOCIAL, ECONOMIC AND LEGAL CONSEQUENCES OF UBER AND SIMILAR TRANSPORTATION NETWORK COMPANIES. [Online] Available at: https://www.europarl.europa.eu/RegData/etudes/BRIE/2015/563398/IPOL_BRI(2015)563398_EN.pdf [Accessed 12 April 2018].
Frue, K., 2017. PESTLE Analysis of Uber. [Online] Available at: https://pestleanalysis.com/pestle-analysis-uber/ [Accessed 12 April 2018].
Gupta, A., 2013. Environment & PEST Analysis: An Approach to External Business Environment. International Journal of Modern Social Sciences, 2(1).
Humphereys, J.H. & Einstein, W.O., 2004. Leadership and Temperament Congruence: Extending the Expectancy Model of Work Motivation. Journal of Leadership and Organizations Studies, 10(4), pp.58-79.
Kell, J. & Ovide, S., 2014. Microsoft Names Satya Nadella as CEO. [Online] Available at: https://people.stern.nyu.edu/adamodar/pdfiles/cfovhds/weeklypuzzles/MicrosoftNewCEO/NewCEO.pdf [Accessed 12 April 2018].
Manimala, M.J. & Wasdani, K.P., 2013. Distributed leadership at Google: Lessons from the billion-dollar brand. [Online] Available at: https://iveybusinessjournal.com/publication/distributed-leadership-at-google-lessons-from-the-billion-dollar-brand/ [Accessed 12 April 2018].
Marketing, T., 2017. 4 Leadership Lessons from Sundar Pichai, CEO of Google. [Online] Available at: https://thinkmarketingmagazine.com/4-leadership-lessons-google-ceo-sundar-pichai/ [Accessed 12 April 2018].
Matherne, B. & Toole, J.O., 2017. Uber: Aggressive management for growth. The Case Journal, 13(4).
Mims, C., 2017. Uber’s Biggest Problem: It’s business Model. [Online] Available at: https://www.carloratti.com/wp-content/uploads/2017/07/20170621_Wall-Street-Journal.pdf [Accessed 12 April 2018].
Njambi, E., Lewa, P. & Katuse, P., 2016. Relationship between Threat of Substitutes and Competitive Advantage of Large Multinationals. The International Journal Of Business & Management, 4(7).
Ogutu, F.M.M., 2015. Porter’s five competitive forces framework and other factors that influence the choice of response strategies adopted by public universities in Kenya. International Journal of Educational Management, 29(3).
Omsa, S., Abdullah, I.H. & Jamali, H., 2017. Five Competitive Forces Model and the Implementation of orter’s Generic Strategies to Gain Firm Performances. Science Journal of Business and Management, 5(1), pp.9-16.
Salem, A., 2018. Microsoft and the transformational leadership style of Satya Nadella! [Online] [Accessed 12 April 2018].
Tehrani, M.B. & Rahmani, F., 2014. Evaluation Strategy Michael Porter’s five forces model of the competitive environment on the dairy industry. American Journal of Engineering Research, 3(5), pp.80-85.
Thomas, H., 2007. An analysis of the environment and competitive dynamics of management education. Journal of Management Development, 26(1), pp.9-21.
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