MNB3701
MAY/JUNE PORTFOLIO 2025
UNIQUE NO.
DUE DATE: 2 JUNE 2025
, MNB3701 May/June 2025 Portfolio
Question 1: Formal and Informal Institutions in China (15 marks)
Formal institutions:
1. Regulations on ride-sharing – In July 2016, China implemented national rules
requiring driver background checks, local registration, and restrictions on pricing,
which disrupted Uber’s subsidy-based model.
2. Government actions – Uber faced legal challenges like police crackdowns,
office raids in Guangzhou and Chengdu, and seizure of equipment, indicating
regulatory hostility.
Informal institutions:
1. Payment culture – Most Chinese consumers preferred using Alipay over credit
cards. Uber had to adapt its system to integrate Alipay for success.
2. Trust in local drivers – Chinese riders generally trusted regulated taxi drivers
over private car owners, making Uber less appealing compared to DiDi, which
partnered with taxi services.
Question 2: National Competitive Advantage Theory (10 marks)
Applying Porter’s Diamond:
1. Factor conditions – High population density, vehicle restrictions, and limited cab
licenses increased the demand for ride-sharing.
2. Demand conditions – Pollution and congestion led urban consumers to seek
better transport solutions.
MAY/JUNE PORTFOLIO 2025
UNIQUE NO.
DUE DATE: 2 JUNE 2025
, MNB3701 May/June 2025 Portfolio
Question 1: Formal and Informal Institutions in China (15 marks)
Formal institutions:
1. Regulations on ride-sharing – In July 2016, China implemented national rules
requiring driver background checks, local registration, and restrictions on pricing,
which disrupted Uber’s subsidy-based model.
2. Government actions – Uber faced legal challenges like police crackdowns,
office raids in Guangzhou and Chengdu, and seizure of equipment, indicating
regulatory hostility.
Informal institutions:
1. Payment culture – Most Chinese consumers preferred using Alipay over credit
cards. Uber had to adapt its system to integrate Alipay for success.
2. Trust in local drivers – Chinese riders generally trusted regulated taxi drivers
over private car owners, making Uber less appealing compared to DiDi, which
partnered with taxi services.
Question 2: National Competitive Advantage Theory (10 marks)
Applying Porter’s Diamond:
1. Factor conditions – High population density, vehicle restrictions, and limited cab
licenses increased the demand for ride-sharing.
2. Demand conditions – Pollution and congestion led urban consumers to seek
better transport solutions.
