Marketing: Macro-Environment - Economic, Socio-Cultural & Technological Assessment Answers

Macro-Environmental: Economic

The economic factors are the factors that are not in the control of a company and they get affected by the change in government policies regarding tax, per capita income, purchasing power of the customers, etc are the some of the economic forces. The economic factors generally relate to the changes like interest rates, cost and prices of goods, rate of inflation and exchange rates (Blanchard, 2011).All these forces need close monitoring of the business practices. These forces can impact the profits of the company to a very great extent.

The most significant factors that have affected Uber in Australia are rise in the prices of fuel, licence price and tax policies of government. The average licence price in Australian states is around $350,000 (ATIA, 2014).The vehicles of Uber run on fuel and when the prices of fuel increase then the company may have to compromise its profit margins. The same happened with Uber when it tried to increase the fare of taxi due to increase in the LPG price and it sales went down exactly when Uber came with UberX in the year 2014 (PocketBook, 2015). So the company again took the decision to offer the same old price and keep fewer margins for profit. Secondly when there is recession then the purchasing powers of customers go down and in that case the customers prefer to find cheaper option than that of Uber to travel from one place to another (Ali & Talwar, 2013).

Macro-Environmental: Socio-cultural

The socio-cultural factors are the factors within the societies and cultures that have potential to affect the feelings, thoughts and behaviours of the customers. These forces have a great role to play in affecting the attitude of customers (Barret & Weinstein, 2014). In this way socio-cultural factors have an impact over buying behaviour of the customers. Uber also gets affected because of these factors.

The factors such as carpools, shared culture and car sharing are something that has affected the buying behaviour of customers in Australia. Over the past few years it has been observed that the people in the Australian society started carpools to go to their workplaces and colleges (BTS, 2013).Due to this the number of bookings of taxis per month has rapidly decreased (Boyle, 2016).This decrease has adversely affected the revenue of Uber. People get connected with their peers, superiors and subordinated at workplace to pool the car for coming and going back from office. Another socio-culture factor in Australia that has decreased cab booking is shared culture. What people do is that they share their cab if they want to go to a nearby place. In that case the booking that could have been made by two different customers is only made by one customer and then they both share the fare. This sharing culture has decreased cab booking by 32 % (Pavlou & Stewart, 2015).These changes in Australia society are proving to be fatal for Uber. This sharing culture is also promoted due to the fact that people in the society have adopted green culture and they are very conscious towards saving fuel and energy. A research suggested that if this trend will continue to grow then there are chances that booking of Uber will go down by 40-50 % in next three to four years.

Macro-Environmental: Technological

Technological factors relate to the use of technology in performing a function. The globalisation has pushed technological interventions and this has positively affected the business operations of a company. The technological forces include latest machinery, equipments, etc. These changes are required to be adopted by a business to make its operations successful. Similarly, when there is new technology available in the market the old becomes obsolete (Bertoncelj, 2009). Uber also have to adopt new technology to remain competitive and perform better.

Uber has latest mobile trackers in all its cabs and this has created a huge impact over customers. The latest mobile trackers and real time updates of the customer and traveller has helped Uber to gain trust of customers and use it again. This is how technology has a positive impact over Uber. Then there is another technological intervention that has proved to be very beneficial to Uber and this is mobile applications. In Australia the trend of mobile application has increased and Uber also launched its mobile application so that people can order their cab conveniently at any time from any place (Hall, 2014).It also enabled people to track their cabs real time and make sure that they are secured. These advancements in the technology and adaptability of Australian population with respect to the technology were indeed the most significant aspect of technology to Uber.