Uber's Case Assignment

Example for Uber Case

Leading & Lagging Indicators – Performance of different segments

Leading part

Since Uber has invested in different segments, the operation of which should be under oversight, then Uber should decide whether it should make adaption to segment structure. For example, after huge investment and multiple strategies have been implemented to the food delivery segment, the performance of UberEat could not have significantly increased, then Uber needs to cut investment and reconsider how to improve performance of the whole company.

The monthly order growth, as the leading indicator, could provide reasonable observation results and monitoring opinion on whether the segment is still at growth stage, and whether the investment gets sufficient return. The number of orders not only implies potential revenue and profit, it also reflects current active users and demand of existing customers, which indicates future improvement on performance. Higher growth rate shows better performance and more competitive standpoint of companies in different industries. It also brings more revenue, which is one of the indicators of market share. The connector will be a positive index factor since the leading indicator is positively related to lagging indicators - market share of segments.

Lagging part

The market share, as the lagging indicator, in different industries would be the last and strongest signal to urge strategy turning point. Significant dropping of market share indicates potential market failure of Uber. Also, constant market share without growth implies the stagnation of development and gradual erosion of Uber’s satisfactory performance. Uber needs to set the several ranges of market share targets for different segments, once they drop out from certain value, immediate decision-making process or actions should be implemented. For example, after the negative growth of order happens continuously for a few months, the market share of Uber riding drops to 10%, then Uber needs to consider redundancy and cost cutting in this segment.

Assumption

Assumption includes: The source of the number of orders is reliable and credible, and it could remove unrelated or minor factors in this relationship, for example, cancelled or fake orders. The number of competitors, technology advance level and other market characteristics will not change significantly, otherwise, totally different market features make logic relationship and target ranges/red flags of lagging indicators meaningless.