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Medium Market Entry

Upper Goes South

#Technology #Tech #Transportation
ProHub Comment

This market entry case requires candidates to synthesize qualitative market analysis (Exhibit #1) with financial modeling (Exhibit #2) to recommend the optimal country for expansion. The case tests both strategic thinking (country selection criteria) and quantitative analysis (P&L projections with FX conversions), emphasizing the importance of asking clarifying questions about exchange rates and tax treatment.

Estimated Time 15 minutes
Difficulty Medium
Source Duke
50 / 100
Upper, a US-based transportation network company with $10bn in annual sales offering services that include peer-to-peer ridesharing, ride service hailing, and a bicycle-sharing system, is thinking about their possible growth opportunities. After leading the local market for 5 years, they are looking to expand in Latin America. Upper has engaged our firm to help them evaluate the different options and to choose which would be the best country to penetrate initially.

Clarifying Information

  1. Company information/Industry: Upper operates in the ride hailing industry. Upper has only had operations in the US, and at the moment they are only evaluating Latin America (no other geographies) given that they are technologically superior to any incumbent. The industry is characterized for low number of competitors yet fierce competition among existing firms, given that the service is almost seen as a commodity.
  2. Business model: for ridesharing/hailing, Upper charges the rider a fee determined at the time of order, and then pays the drivers a fraction of the fee (similar to Uber or Lyft ridesharing). For the bicycle system, customers must scan a QR code that is on the bicycle, ride, and then “end” the ride by pressing a button on the app. The rider will then be charged a fee based on the time of usage and the distance covered.
  3. Goal: The best country would be the one that offers the largest profit over the next 3Y and, due to the complexity of the different countries, Upper would like to begin by penetrating ONLY one country.
  4. For their penetration in Latin America, they are looking to initially offer only ridesharing/hailing, and not bicycle-sharing. Assume there are no budget constraints at this time.