While Uber has been growing quickly in some parts of the world, it has struggled in China. The popular ride sharing service has spent billions of dollars trying to gain more of the market in that huge country. But it only ever managed to gain about 20 percent, at most.
Uber’s main competition in China is a company called Didi Chuxing. And that competition got even heavier recently when Didi Chuxing partnered with Lyft and received a major investment from Apple.
So instead of revving up its own efforts even more, Uber decided to take a different sort of approach — partnering with Didi Chuxing as well. (Uber’s decided to merge its China operations with Didi Chuxing but will still own a healthy chunk of the new company.)
The Value of a Market Opportunity Analysis
It might seem like Uber is sort of giving up the fight. But there comes a time for a lot of businesses when you have to decide whether the outcome you’re looking for is actually going to be worth the resources you’re putting into getting there. For example, you might be looking to expand into a new territory, but once you get started you find that the market is pretty saturated. In that case, you might not find it worth it to continue your efforts, or you may need to look for a more creative solution.
That’s basically what Uber did. Their market opportunity analysis weighed the odds of achieving its desired outcome with the resources it was putting into getting there. And it found a creative way to still keep its share of the market without having to continually pour resources into fighting the competition
Uber Photo via Shutterstock
Aira Bongco
Have you heard of Grab? It is also a competitor of Uber. But I guess Uber wins in the fact that it is metered at a lower rate.