Summit Global Education – Winter Brazil 2015
Group Project – International Business
Flaio !attos" Gabriela !oreira" #ac$ Sloms$% and Paula &ulio #anuar% 21" 2015 'io de #aneiro 1. Introduction
W(en I )irst (eard o) *ber" m% initial t(ou+(t ,as -Wo,. Finall% an alternatie to t(ose creep% %ello, ta/is. W(en ,e initial presented our ideas to t(e Brazilian students t(e% t(ou+(t uite t(e opposite" t(eir )aces and ,ords immediatel% jumped to sa)et% concerns re+ardin+ t(e serice. o,eer" as our introduction presentation ,ent on t(eir )aces seemed to li+(ten up and t(in$ about t(e potential t(e product (as in t(e area. &(e idea ,(en implementin+ a compan% or serice li$e t(at o) *ber (ere in Brazil ,ould be er% similar to (o, it be+an in t(e *nited States.
3 serice industr%" &a/is" as t(e% currentl% stand are (esitant to possibl% een aoidin+ desperatel% needed c(an+es and improements in t(eir industr%. o,eer" i) a serice industr% or an% industr% in +eneral ,aits around and pus(es o)) innoation t(e beaut% o) t(e )ree ,orld is t(e abilit% )or ot(ers to step in and do it )or t(em. #ust as *ber (as done in t(e ta/i industr% in 3merica" and no, as t(e% moe )or,ard and tr% to e/pand +loball%. Since t(eir inception in 2004 *ber (as absolutel% e/ploded )rom ,(at ,as a sericetec(nolo+% start up to a business t(at is no, aailable in oer 200 cities across t(e +lobe and (as been alued at 61 billion dollars. &(e% are t(e ne, leaders in transportation in cities and pus(in+ t(e limits on a peer to peer industr% li$e t(e serice t(e% o))er. 3)ter a bac$+round and driin+ c(ec$ an% indiidual ,antin+ to ,or$ )or *ber" can ,or$ )or *ber.
&(e mar$et objecties are simpl% to +ain control o) t(e trael o) in(abitants and traelers ali$e in Brazilian cities li$e 'io de #aneiro and Sao Paulo. Public transportation and ta/is are suc( a (i+(l% demanded serice" but aren7t t(e most e))icient" in bot( cost and time. Wit( t(e press o) a button on %our smartp(one a drier ,ill be to %ou ,it(in minutes ,it( %our destination in t(eir p(one immediatel% read% to +et +oin+. W(ile t(is is t(e case in a number o) cities across 3merica it is not t(e case in Brazil" but is ultimatel% t(e end +oal o) a compan% li$e *ber.
&(e most important attribute o) *ber is t(eir tar+et consumer. Simpl% because t(e% tar+et eer% consumer. 3n%one ,(o ta$es ta/is or public transportation ali$e can be a tar+et o) *ber. Wit( o)ten er% competitie prices )or t(e middle class consumer to more lu/urious options li$e *ber8" )or classier or more business )ormal trael" to een *berBoat options becomin+ aailable )or ,ater ta/is. &(e untapped and outdated industr% o) ta/is are no more. &(e )uture is *ber. &(e numbers don9t li$e. &(e% ,ere )ounded in 2004 and just : %ears later in 2015" t(e% (ae oer 1.5 billion dollars )rom enture capitalist inestments and (ad a mar$et ealuation o) 15 billion dollars. &(e ta/i industr% is a t(in+ o) t(e past" close t(e %ello, door o) t(e beat up sedan and open t(e door to t(e )uture ,it( *ber.
2. Market Analysis:
2.1. Classes A and B
*ber ,ill be launc(ed initiall% in t(e cities o) 'io de #aneiro" Sao Paulo and Belo orizonte" ,it( an initial )ocus in classes 3 and B.
&(e 3B classes in t(e ; cities<
&(rou+( t(e tables" ,e can see t(at t(e 3B classes correspond to 2=.1; > o) t(e population o) t(e cit% o) S?o Paulo" 2@.@5 > o) t(e population o) 'io de #aneiro and 24.:@ > o) t(e population o) Belo orizonte" representin+ a )aorable mar$et s(are )or positionin+ premium serices.
2.2. The profile of Class A and B in Brazil:
3lt(ou+( t(is is still a small +roup compared to t(e oer 200 million in(abitants o) t(e countr%" Brazil7s economic elite spreads )or a (u+e spectrum< it +oes )rom billionaires to a )amil% ,it( an income o) ="000 reais a mont(" t(e minimum to join t(e class B.
Een in t(e most restricted spectrum o) t(e class 3" t(at is" people ,it( a )amil% income o) at least 4"000 reais" t(e diersit% is (u+e. S?o Paulo" t(e lar+est cit% in t(e countr%" toda% (as t(e lar+est )leet o) (elicopters in t(e ,orld. It is t(e si/t( cit% in number o) billionaires and ,(ere most 'omanAe onti ,ines consumers.
3 stud% b% E/ame ma+azine" )ound t(at nearl% @0> o) people in t(e 3 and B classes in Brazil earn up to 1:"000 reais. W(at ,e ,ill li$el% see in t(e comin+ %ears is t(e combination o) t,o moements< more people bein+ cau+(t b% t(e middle class to t(e upper classes and enric(ment o) t(e people ,(o alread% are part o) t(e elite.
Cespite (i+( in)lation and lo, economic +ro,t( in Brazil in t(e last %ear" t(e serice sector bet,een classes 3 and B is still doin+ er% ,ell. &(e consumers o) t(ese classes )eel muc( less in)lation" (i+( interest rates and unemplo%ment. ompanies )rom di))erent industries" suc( as tourism" automobiles" beera+es" aiation and real estate" amon+ ot(ers" ,(o bet in classes 3 and B in recent %ears" no, reap t(e )ruits o) t(e strate+%. 3 stud% b% consultanc% Dielsen reeals t(at consumers in t(e top o) t(e p%ramid are responsible )or :0.4 > o) sales +ro,t( in supermar$ets. Participation o) class in t(is re+ard is ;;.@ >. 3ccordin+ to t(e anal%st Ilo de Souza" )rom Dielsen" a p(enomenon $no,n in t(e mar$et as trade up bene)its companies o))erin+ serices and +oods ,it( a Premium positionin+" suc( as *ber" In trade up " ,(en Brazilians e/perience a more sop(isticated serice" it does not return bac$ to t(e lass sop(isticated ones.
In addition" accordin+ to t(e FG Getulio ar+as FundationH" t(e classes 3 and B continue to +ro, si+ni)icantl% in Brazil<
2.3. Use of sartphones and apps in Brazil:
Brazil is t(e )ourt( countr% in t(e ,orld in number o) smartp(ones in 201; ,ere alread% =0 million smartp(one" be(ind onl% t(e *nited States" (ina and #apan. Bet,een 3pril and #une 2016 ,ere sold more t(an 100 smartp(ones per minute in Brazil. Smartp(one sales in Brazil durin+ t(e second uarter o) 2016 totaled 1; million (andsets sold" a 22> increase oer t(e same period o) 201;" a record number" accordin+ to a stud% b% International Cata orporation.
&(e )i+ures s(o, t(at een ,it( t(e instabilit% seen in ot(er tec(nolo+% se+ments and t(e lo, +ro,t( o) t(e Brazilian econom%" t(e cate+or% o) smartp(ones ,as not a))ected. &(ere are )our )actors t(at e/plain t(e time< increasin+ product port)olio combined ,it( t(e drop in prices b% manu)acturers" more inestment c(annels on top o) t(is cate+or% J mainl% t(e retailer" t(e e/emption ta/es )or smartp(ones b% t(e +oernment" and t(e main )actor is t(e user ,it( a +ro,in+ desire to be connected ,(ereer t(e% are. &(ese data are e/tremel% )aorable to t(e spread o) *ber in t(e countr%.
&(e increased use o) smartp(ones allo,s companies to ,or$ ,it( t(e deelopment o) tec(nolo+% to be+in to t(in$ o) tools and applications to )acilitate t(e dail% lies o) citizens" suc( as urban mobilit%. 3mon+ t(ese applications is *ber.
2.!. The Ta"i ser#ice in Brazil
&a/i serice in Brazil also presents )aorable data to *ber entr%. &(e perception o) passen+ers in Brazil is t(at t(e )leet in t(e countr% is ine))icient and cannot attend t(e demand. 3lso" anot(er )actor t(at displeases t(e Brazilians" especiall% in 'io de #aneiro" is t(e lac$ o) securit% t(at t(e serice proides.
S?o Paulo (as ;2":00 ta/is in its )leet. Wit( more t(an ten million in(abitants and 6;6"000 residents ,(o are in lasses 3 and B" ,(ic( most o)ten use t(e serice" t(e aera+e is 1; passen+ers per e(icle. &(ere are special ta/is" cooperaties" ,it( )i/ed point" lu/ur% and ordinar%. 3re 2;00 points on public roads" close to (otels and lar+e s(ops supermar$ets" s(oppin+ malls" sub,a% stations" bus terminals and airportsH. &(e lac$ o) ta/is" (o,eer" is )elt especiall% in t(e more remote areas o) t(e s(oppin+ centers in major eents. Wit( t(e cit% +ettin+ a +reater number o) trade s(o,s and concerts eer% %ear" (o,eer" t(e s(orta+e became also )elt in ot(er areas o) t(e cit%.
Sao Paulo is not t(e onl% Brazilian cit% to e/perience t(is problem. But een ,it( t(e approac( o) t(e Kl%mpics and t(e World up last %ear" t(e consensus amon+ t(e Brazilians cit% (all is not proide more concessions )or ta/is. 3s justi)ication" t(e municipal aut(orities claim t(at a)ter t(e eent period t(ere ,ill be no demand to justi)% t(e increase.
In Belo orizonte" t(e demand reac(es ;== people per car. &(e cit% (as a )leet o) more t(an )ie t(ousand ta/is and stopped to proide concessions in 1445. K) t(e 6;= permissions +ranted in t(e last and onl% notice" onl% 240 are enabled" since it is impossible to trans)er t(e license.
3.$conoic Analysis 3.1.Basic $conoic %ada & Brazil
GCP< 'L 6"60; trillion 201;H Per capita income< 'L 22.600 201;H Mabor Force< 105"= million !inimum ,a+e< =@@"00 reais
GCP Eolution< 2"=> 2002H 1"1> 200;H 5"=> 2006H ;"2> 2005H 6> 200:H :"1> 200=H 5"2> 200@H – 0";> 2004H ="5> 2010H 2"=> 2011H 0"4> 2012H. SEMI< 10"5> per %ear 2016H.
!. Copetiti#e Analysis
!.1 Analysis '()T !.1.1. 'tren*th
*ber is a +lobal brand and is een becomin+ er% popularized in arious areas
•
oer seas onenience J It (old ups to its promise o) )indin+ a ride in minutes. &(e s%stem
•
is er% conenient )or consumers to commute and (as +reat accessibilit% t(rou+( tools suc( as a mobile app t(at easil% lets %ou trac$ (o, )ar %our drier is. •
&(e pa%ment s%stem is trust,ort(% and eas% to transact ,it( little e))ort.
•
3pp to summon serice ersus (ain+ to (ail or be rejected b% cabs
•
Mu/ur% to ,ait )or *ber indoors ,it( estimated time countdo,nH ersus (ain+ to ,ait outside. Securit%
•
3ddin+ alue b% Cecreasin+ osts<
*ber (as increased e))icienc% in production" t(us lo,erin+ costs. I) it lo,ers costs" it can lo,er prices c(ar+ed" ma$in+ it more competitie and customers (appierH. •
*ber driers do not need to drie around loo$in+ )or customers to (ail it" ,(ic( saes )uel and time *ber N inbound s. ta/is N outboundH
•
*ber driers are not stuc$ driin+ )or @J12 (ours a da% t(e% can turn t(eir aailabilit% on or o)) at a ,(im
•
*ber does not (ae e(icular euipment to purc(ase" maintain" and depreciate as apital E/penditure" ma$in+ t(e compan% more a+ile
•
*ber (as )i/ed costs and emplo%s tec(nolo+% to ac(iee economies o) scale
•
*ber is able to pool ris$ because o) a)orementioned
3s a result o) reducin+ costs" *ber (as t(e lu/ur% o) reducin+ prices ,it(out (urtin+ its bottom line. !.1.2. (eakness •
Pricin+ isn9t t(e e/act price t(e% seem to matc( t(e compan% promotes because it c(an+es due to t(e time and %our location and destination area.
!.1.3. )pportunities •
reatin+ some sort o) credit or re,ard points s%stem
•
Partners(ips ,it( ot(er companies Spoti)%" Cileto" etc.H
•
Improin+ Product Ci))erentiation J *ber ,as uic$ to inte+rate *ber8 c(ipper t(en ta/isH and *berS* in ot(er cities" and most recentl%" it een inte+rated *berBoats and ,ater ta/is. &(at could be a +reat opportunit% in Brazil.
!.1.! Threats •
Kt(er ta/i driers or brands t(at (ae a similar serice.
•
Goernment re+ulations. J Kne issue t(at *ber is )acin+ is +oernment bureaucrac% and t(at is especiall% (i+( in Brazil N Goernment re+ulation is a +iant barrier in t(is situation.
•
Possibilit% o) retaliations b% competitors" suc( as protests b% ta/i driers.
•
Presence o) Substitutes + Cependin+ on conenience" lo,er cost" or consumer taste" ta$in+ t(e sub,a% or ,al$in+" as e/amples" to one9s destination are iable alternaties. Public transportation and ,al$in+ are not onl% ,elcomed on a nice da%" but t(e% also reduce pollution )or t(ose ,(o care about t(e enironment.
•
Eas% Imitabilit% J *ber9s app )eatures are eas% to imitate.
!.2. U,er versus Ta"i in Brazil
In Brazil" accordin+ to Federal Ma, Do. 12"6:@" t(e use o) a motor e(icle" o,n or t(ird parties" )or indiidual public transport paid passen+er is e/clusie o) ta/is. So t(e actiit% o) *ber ma% be consider ille+al b% t(e cit% (all o) 'io de #aneiro" Sao Paulo and Belo orizonte. *ber spo$esman Mane Oasselman" rein)orces t(at t(is is not a ta/i compan%" and onl% o))ers a plat)orm to connect driers and passen+ers" and states t(at passen+ers are unsatis)ied ,it( t(e standard ta/is.
In Brazil" t(e pro)essional D can be obtained b% an% drier t(at submit to t(e production process" but to be a ta/i drier %ou must (ae a license issued b% local +oernments. In S?o Paulo and 'io de #aneiro" licenses are no lon+er bein+ issued" because accordin+ to local +oernments" bot( cities (ae enou+( ta/is and t(e onl% ,a% to obtain a license is b% donation o) a (older o) t(e license.
&(ere)ore" some driers )ound in t(e *ber an outlet )or t(eir ,illin+ness to ,or$ be(ind t(e ,(eel. &(e drier just need a pro)essional D identi)ied b% a te/t in t(e document notes )ieldH and an aera+e car manu)actured )rom 2004.
E/perts point out t(at i) it re ac( ta le+al battle t(e cause is lost to t(e ta/i driers. &(e concession s%stem ,as )ormulated and based on alues and old la,s" a time ,(en t(e consumer (ad no bar+ainin+ po,er and so t(e state came as a mediator to t(e public. But ,it( social net,or$s and t(e possibilit% o) seeral competin+ plat)orms" consumers can e/perience and ealuate t(e serice" ,(ic( ,ill need to ,or$ (arder and improe ualit% and to sta% alie
&(ere are studies" suc( as t(e one o) Marr% Co,nes" o) Geor+eto,n *niersit%" ,(o anal%zed t(ese t%pes o) con)licts" +enerated b% ne, tec(nolo+ies and obsered t(at ne, tec(nolo+% al,a%s oerlap. W(en consumers discoer t(at t(e serice could be better" t(e% tend to pus( )or c(an+e. 3nd as in Brazil" t(e ta/i serice is er% ine))icient and passen+ers are er% un(app% *ber ,ill be able to establis( itsel) in t(e mar$et.
-. Marketin* lan -.1 roduct rofile
*ber is an application t(at o))ers a similar to t(e ta/i serice" but ,it( di))erentiated serice. &(e serice proided b% t(e application is considered lu/ur% mar$et" mainl% because t(e cars are lu/urious" (as +ood serice and t(e driers proides ,ater to customers" ma$in+ t(e race een more enjo%able. &(e compan% also o))ers a )aster serice" sa)el% and at a )i/ed price.
*ber )or business is t(e opportunit% )or t(e companies" because %our emplo%ees lin$ to a compan%Jproided pa%ment source and bill eac( ride directl% to %our account. &(e *ber in business (as seeral adanta+es" %ou can control %our route and anal%ze t(e costs" and %ou9ll be able to ma$e decisions about trael costs based on realJtime data.
-.1.1 ositionin* 'trate*y
&(e *ber is positioned as a sa)er transport compan%" ,it( an e/cellent serice and e/pensie lu/ur% " ma$in+ t(e most accessible cities .
-.1.2 Tar*et Market
&(e tar+et mar$et o) *ber are t(e classes 3 and B" in t(e re+ions 'io de #aneiro " Sao Paulo and Belo orizonte . 3 +ood opportunit% )or *ber is t(e rise o) t(e middle class and businesses located in t(ese re+ions.
-.1.3. Brand /alue
&(e brand alues o) *ber are securit%" reliabilit%" lu/ur% and transparenc%.
-.1.! roduct 'trate*y
&(e main di))erences bet,een &a/i direct competitor H and *ber are t(e sa)et% and lu/ur% t(at t(e uber o))ers . &(e di))erentiated serice" mainl% aimed at companies (ae competitie adanta+es li$e bein+ in seeral countries o) t(e ,orld and be able to access )rom %our mobile p(one .
-.1.- roduct Identity
*ber is a innoatie and alternatie ,a% to +et transportation" %ou can +et a ride and pa% a price c(eaper t(an common ta/i cabs. &(e direct competitors are t(e ta/i cabs companies. &o reac( sop(isticated people" t(e% use lu/ur% cars" and all t(e ima+es inolin+ t(e brand s(o,s com)ort" success and ,ealt(% people.
*ber lo+o re)lects securit% and sop(istication. -.2. ricin* 'trate*y
3nal%zin+ t(e operation o) *ber in t(e *S" ,e can see t(at t(e pricin+ strate+% currentl% used b% t(e compan% is t(e price s$immin+" in ,(ic( t(e compan% sets its prices (i+( to uic$l% recoer e/penditures )or product production and adertisin+. Graduall% prices
are bein+ reduced t(rou+( promotions and t(rou+( t(e creation o) a lo, cost serice called *ber8 t(at o))ers a serice in smaller cars ,it( a reduced price per trip.
3s a mar$et strate+%" *ber could operate in Brazil per)ormin+ t(e same ,a%. &(e comin+ o) t(e app to Brazil (appened last %ear and is alread% ,innin+ customers in major cities. 3s a ,a% to reac( t(e masses" t(e *ber8 could be implemented in Brazil in order to increase t(e number o) driers ,or$in+ ,it( t(em" ,(ic( in turn reduces rates and ensures reliabilit% durin+ pea$ times.
*ber is committed to be a lo,Jprice leader" so t(is strate+% besides attendin+ t(e demands also leads t(e app on t(e ri+(t pat( to ac(iee its +oals. &(e local operation7s objecties are to increase t(e basic app partners driers in t(e cities ,(ere t(e s%stem is alread% ,or$in+ to reduce call (andlin+ time" +ain ne, users and brin+ t(e serice to ot(er cities. &(e idea is" t(e more driers are associated ,it( *ber" t(e s(orter t(e ,aitin+ time )or t(e serice.
-.2.1. 0andlin* $"penses
&(e majorit% o) *ber )ares +o to t(e independent dries. *ber onl% receies 20> o) +ross )ares. !oreoer" pro)it )rom t(ese +ross rates is used to pa% t(e costs o) t(e serice. &(ese e/penses include pa%ment processin+" pa%ment )raud" re)unds" customer serice" dispute resolution" cellular (andsets and serice )ees )or t(e driers" and local re+ulator% e))orts.
-.3 Market access and distri,ution 'trate*y
It is important to anal%ze t(e mar$et access and t(e strate+% o) distribution. Met7s loo$ at points as relations ,it( +oernment" protectionism mar$et in t(e cities o) 'io de #aneiro and Sao Paulo" mainl% unions and re+ulations. &(e c(annels o) distribution and localization and ot(ers also are important in t(is process.
&(e main means o) acuirin+ our serice and t(rou+( apps" aailable )or Goo+le pla% and 3pple store" it is important to anal%ze t(at t(e eJcommerce in Brazil is +ro,in+ and t(is is an opportunit% to enter in t(e mar$et ,it( t(is app. &(e Cistribution c(annel is B2 business to consumerH" trade made bet,een t(e producer and t(e client t(rou+( t(e Internet" t(is c(annel (as man% adanta+es li$e Global access" Increased aailabilit% and ot(ers.
3t t(e be+innin+ ,e ,ill install our product in t(e cities o) 'io de #aneiro" Belo orizonte and Sao Paulo" It is important to anal%ze t(e Brazilian mar$et be)ore t(e e/pansion to ot(ers cities. &(e main mar$et protectionism points are t(e unions t(at ,or$ a+ainst t(e s%stem" because it is a c(eaper serice. &a/i driers 7 unions claim t(at t(e compan% ,as iolatin+ t(e national le+islation re+ulatin+ t(e pro)ession and prepare protests a+ainst t(e compan%" t(is is t(e bi++est problem o) apps. . -.!. rootion
*ber9s mar$etin+ tactics (ae al,a%s been uniue J )rom delierin+ ice cream" to barbecue in 3ustin. From Pedicabs" to +iin+ onesies to t(eir %oun+est riders.
&(e *ber mar$etin+ strate+% (as al,a%s been to tr% to $eep a stron+ relations(ip ,it( t(e customer b% adoptin+ a stron+ position in social media. &(is can be done ia Faceboo$" &,itter and een personalized emails to compan%9s emplo%ees ,(o o)ten use t(e ta/i serice in t(eir routines.
&(e di+ital mar$etin+ could also ,or$ ,it( t(e promotion o) sales t(rou+( t(e distribution o) directed promotional coupons )or speci)ic re+ions and dates. Social media also (elps in a ,a% t(at customers can ma$e t(e app )amous s(arin+ t(eir e/periences. *ber adds touc( points t(rou+(out t(e ride e/perience t(at increase iralit%.
W(en it comes to adertisin+" ads in restaurants" bars" buses and rest stops becomes essential )or t(e release o) t(e app. Since t(ese are places t(at possibl%" consumers ma% reuest t(e *ber serice.
In addition to t(e inestment in adertisin+ and di+ital mar$etin+" actiities o)) t(e internet also are er% important to build t(e relations(ip bet,een t(e app and t(e client. #ust as it (appened to promote t(e ne, diersi)ied priate rides" o))erin+ onJdemand ice cream to users" ordered and paid )or t(rou+( t(eir app" in Boston" (ica+o" De, or$ it%" San Francisco" Seattle" &oronto" and Was(in+ton C.
&(is position is ta$en because *ber proides a readil% aailable serice at a premium price. It is aimed at customer t(at realizes t(e alue o) time" and is ,illin+ to spend some e/tra mone% )or conenience.
'ources (ttps<,,,.uber.com (ttp<,,,.planalto.+o.brcciilQ0;Q3to2011J20162011MeiM126:@.(tm (ttp<businessco)ounder.tumblr.compost;65=20:;454lessonsJ)romJ ubersJmar$etin+Jstrate+% (ttp<e/ame.abril.com.brtecnolo+ianoticiasbrasilJeJoJuartoJpaisJdoJ mundoJemJnumeroJdeJsmartp(ones (ttp<+1.+lobo.comtecnolo+ianoticia201604endaJdeJsmartp(onesJ passamJdeJ1;Jmil(oesJnoJbrasilJnoJ2Jtrimestre.(tml (ttp<(ermanomota.com.br20120=2;classesJaJeJbJoJmercadoJueJmaisJ cresceJ2
(ttp<,,,1.)ol(a.uol.com.brmercado201610152:4:2JprodutosJparaJ empresasJsaoJnooJmercadoJdeJappsJdeJta/i.s(tml (ttp<,,,.adeta/.com.brinde/.p(pin)ormacoesJeJsericosestatisticas
