Zipcar

Porter’s Five Forces of Competitive Position for Zipcar
Porter’s five forces analysis is supposed to provide a very simple perspective for assessing and analyzing the competitive strength and position of a company, in this case Zipcar namely. The analysis can be outlined as follows.
The competitive rivalry force for Zipcar is moderate to strong. The major competition is faced from other rental agencies that provide similar services. Nevertheless, the company has a competitive advantage over its competitors due to the flexibility of the service it provides to its customers. Other competitors for Zipcar include transportation services providers such as taxi cabs and public transportation. Nevertheless, the advantage of Zipcar over this competitor segment lies within availability virtually in any location in a dense area as well as relative cheapness of the service if a travel to long distance is required, which would add to the customer cost if a taxi, for example, was chosen.
Supplier power in the competitive position for Zipcar is evaluated to be as moderate. The company provides the car rental services with its own cars, which provides for no delays in car availability from third parties. Furthermore, the company supports strong connections with petrol stations as well as technical services that guarantee in time fuel supply as well as car repairs when needed.
Buyer power in the competitive position of Zipcar is strong. Buyers may easily choose between other car rental services. Thus, whenever potential buyer feels that his/her needs won’t be satisfy, he/she can easily switch to competitors.
Power of new market entrants is evaluated to be strong due to attractiveness of the potential returns to new market players. Zipcar Company showed substantial growth of its business from $13.7 million in revenues in 2005 to the revenue of $105.9 million in 2008. Thus, attracted with such high return new entrants are predicted to appear.
The power of substitutes is also strong due to a trend of many individuals and families to buy cars of their own, which exclude the need to rent a car for travel purposes. Furthermore, substitutes available from public transport services may be preferred for short distance travels.
2. All the cars were outfitted with patented wireless technology. Their propriety IT platform carried information flow between customers, vehicles, and the company. It was used to monitor car security. Fillfill reservation, record hourly usage and maintain mileage information. It also relayed vital technical reservations such as battery voltage and fuel level.
The use of wireless technology is an example of synergy between the company’s strategy and information technology.
4. As a CEO of Zipcar, I fully understand that in order to create a successful service the company needs to make a convenient, reliable and secure as a privately owned car. This objective can be accomplished by leveraging Internet and wireless technology. The measure has been taken with the confidence that a new service could be “the next big thing” about the company. The research would enable Zipcar members to reserve a car 24 hours a day. The service works for about seven days a week, and is traditionally organized via the Internet or automated phone system.
4. Zipcar CEO also understood that the greatest challenge of the company is to overcome a growing completion. “The main problem is that this technology does not exist. It means that people have to build everything from the in-vehicle technology to the reservation system.” (Zipcar - The Computerworld Honors Program) A particular attention was paid to organizing leveraging wireless network. When organizing this network “Zipcar innovators made a vital decision – to use a complex machine which carefully designed for one individual driver- and made it work just as well for many drivers. A primary objective of Zipcar’s CEO was to make cars maximally accessible to the drivers.” (Zipcar - The Computerworld Honors Program).

References:
Zipcar. Case Study.