Uber's Exit from China: A Raw Deal?

Uber's Exit from China: A Raw Deal?
Case Code: BSTR504
Case Length: 11 Pages
Period: 2013-2016
Pub Date: 2016
Teaching Note: Available
Price: Rs.400
Organization: Uber
Industry: Chinese Taxi Market
Countries: China
Themes: --
Turnaround of Indian Railways: A Tough Road Ahead?
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

Uber, a US-based car hailing mobile app company which had a firm foothold in 41 countries all around the world, entered the Chinese market in 2013 intending to grab a share of the huge Chinese market and expand globally. But the Chinese market was not easy and Uber faced stiff competition from local players, Alibaba-backed Kuaidi and Tencent-backed Didi. Uber localized itself in the Chinese market and catered to the tastes of the Chinese customers. It fought its Chinese rivals on their core strengths of low costs by offering customers better discounts on fares and giving subsidies to drivers in order to build a market share. It worked in a tough regulatory environment which saw local companies differently from their foreign counterparts. After having fought fiercely and invested billions of dollars in developing market share and building infrastructure, Uber stunned analysts in August 2016 by merging with its rival Didi, which had earlier acquired Kuaidi.....

Issues

The case is structured to achieve the following teaching objectives:

  • Understand and apply the competitive strategies used by market leaders
  • Understand the ways a company can localize its business operations in China and apply the same in going global in emerging economies
  • Analyze the competitive situation, extent of rivalry and the forces that are acting to drive the competition (using Porter’s five force model to map the level of competition)
  • Evaluate the market opportunities and assess customer value to build market share

Contents

Keywords

Travis Kalanick, Didi Dache, Kuaidi Dache, Didi- Kuaidi, UberBLACK, Alipay, WeChat, People’s Uber, Tencent,Google Maps, Baidu, App-based ride hailing service, Subsidy Race, Regulatory Jolt, Ride Hailing Service Regulations, Market Share

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