...“Does IT Matter?” Assignment ZipCar 1. Zipcar/Porter’s five forces analysis Threat of New Entrant Zipcar’s use of a simple IT solution to find, reserve and use a car sharing service creates a slight barrier for new entrants. However, there is a constant threat to Zipcar in new car sharing companies and established car rental agencies adjusting their corporate strategy in order to enter the hourly rental industry. The barriers to entry are the high costs of inventory and creating an IT solution that is at least equal to Zipcar’s. Although these are barriers, they are barriers that can be mitigated by companies and therefore enter the car sharing industry. Bargaining Power of Buyers Due to the market being overloaded with customers and potential customers, buyers don’t pose much of a threat to Zipcar. Customers will demand low cost solutions but don’t have much ability to directly affect the pricing model by Zipcar or other rental agencies. If pricing were to become too much for the customer, the bigger threat is from substitutes. So as a whole, customers have limited bargaining power in the car rental business. Bargaining Power of Suppliers Suppliers have very little bargaining power with car sharing companies such as Zipcar. The market is saturated with many options for vehicles that Zipcar can choose which company they want to field their fleet of vehicles with. Companies such as Zipcar possess more power over their suppliers as they can enter into strategic...
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...Zipcar is an innovative rental car service company –their innovation must exploit hourly car-renter-needs with unique some IT activities such as RFID, GPS, Apps, and Wireless technology. Zipcar’s strategy with its unique IT activities, including Zipstars or Ziptrips that are social networking technologies, must create more customer values and its creation should be sustainable Zipcar's growth. Also, details are following answers of Discussion Questions; 1. Threat of new entrants –are hard to replicate those unique IT activities because they already have been obtained repositories about personal experiences. Bargaining power of buyers –are reduced because of including the cost of gas, insurance, and reserved parking spots. Bargaining power of suppliers –are mainly structured leased cars, fuel, insurance, maintenance, and parking that are reduced their volume customer or wealth of customer’s information. Threat of substitute products –could not easily follow their activities because of, continuously, improving their services level with customer needs such Zipsters. Industrial competitors –Zipcar has clearly difference between their original hourly rental car service and traditional daily rental car service. 2. Their business strategy, hourly rental car service, has been sustained sophisticating IT, for instance, RFID key system probably decrease a waste of time when standing in line or filling out papers to rent a car –hourly renters must emphasize those time naturally...
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...Marketing Principles Todd Jones 05/25/2015 Miller-Motte College Online Program 2 Company Case 1) Evaluate Zipcar based on benefit-oriented positioning. Zipcar has taken a unique approach to their benefit orientation with customers. The background behind Zipcar is that the company offers rental cars to everyday people. These rental cars accommodate the customers by eliminating the costs of car payments and paying for gas. Ultimately, Zipcar eliminates much travel time and strives to streamline transportation in highly dense areas such as New York, Boston, San Francisco, Los Angeles, etc. The unique positioning behind Zipcar is that it is completely loyal to its customers. It fills a niche market of people who want to save money, and protect the environment. Zipcar offers lines of vehicles that function towards lessoning fuel and carbon emissions. The company strives to make their vehicles easily accessible and custom for each consumer. 2) Describe the beliefs and values associated with Zipcar’s brand image. The benefits and values fall in line with the companies benefit oriented positioning. Zipcar’s brand image focuses on efficiency and economy. As displayed by their marketing strategies of “we love earth” and the subliminal messaging of their green logo to follow, it is apparent how important these beliefs and values are to the company. Zipcar makes things convenient for consumers by offering low and affordable prices, allowing consumers to “save 67 percent...
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...short notice. * A degree of freedom, “low-car” diet. * Car-sharing alternative to a cab service, renting or owning a car. Actual Product * Zipcars are available in 67 cities/metros in the United States, Canada, and the United Kingdom. * Members are given a “Zipcard”, an access card containing a wireless chip that will open the vehicle they have reserved only at the time they have reserved it and the keys stay in the car at all times. * Reservations include driver’s insurance, gas card for the car, reimbursements for fuel obtained at gas stations that do not accept the included gas card, and up to $15 in reimbursements for typical car maintenance items like car washes and window wiper fluid refills. (Zipcar) Augmented Product * Website offers easy account access to pay memberships fees, add money to Zipcard and change driving plan. * Zipcar has teamed up with universities and colleges to offer the convenience of car ownership without having a car on campus. Product Life Cycle * Zipcar, European car-sharing, occupies the Growth Stage of the Product Life Cycle. In 2000, Zipcar was founded by Cambridge, Massachusetts residents. In October 2007, Zipcar merged with rival Flexcar and in April 2010 Zipcar bought London-based car-sharing firm Streetcar in its latest bid to expand across Europe. By 2009 Zipcar became the world’s largest car-sharing service in 49 U.S. cities, Vancouver, Toronto and London and continues to expand with gaining more members, locations...
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...Zipcar Case The proposed venture in this case study has great potential in highly populated areas with a need for transportation. Since Zipcar provides the cars in areas close to the customer, this service would be easy to use. The drawback would be finding a way to make the benefit of utilizing Zipcar more compelling over other forms of transportation such as owning a car, using other car rental services, taxis, subways, or buses. The nice component of Zipcar is that it offers hourly services which can attract people who need a car only for a doctor’s appointment or grocery run. Zipcar has been able to progress its venture which is notable since funding and parking have been an issue. Most of the funding was used to start building the wireless technology to serve as the operating system. Unfortunately, the shortcoming in Zipcar’s progression could be because the “ Z-card” reader is not finished. With no asset and few angel investors, Zipcar can seem as a risky investment. Instead of rushing to start operating the business perhaps Chase could have gained investors by guaranteeing that she had a system that functioned. Despite the technological setback, Zipcar was able to obtain 3 cars and rely on members to keep a driving log to track usage. The advantage of Chase and Danielson starting Zipcar early is that since both lacked a degree of expertise, Zipcar would be able to grow by observing customer’s usage patterns and understanding the operational and financial parameters of...
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...company offers and to whom. In a given case, Chase and Danielson recognized possibilities in car-sharing business idea and ventured a deal. Zipcar emerged as a start-up company which offers car sharing service operating on a B2C basis. Zipcar offers on-demand vehicles and delivers mobile and timesaving service focusing on urban areas and its residents. Consequently, Zipcar business model in terms of its target market is segmented mostly according to geographic and psychographic factors (urban area people). As it follows, Zipcar mission statement flows out of its business model and aims to enable simple and responsible urban living. Business model most of the time integrates or is integrated within business strategy. Since Zipcar offers transportation service its business model/strategy in the first place is the car-sharing concept. Secondly, according to Ansoff’s Matrix framework, Zipcar business strategy is market development as long as the company offered existing product to a new geographic market. Chase and Danielson recognized the implicit need in a new market for already existing product/service on time and went for it. Zipcar was designed to offer car-sharing idea which evoked and brought that same hidden need onto the surface developing company’s potential market. Business model is closely tied to business’ objectives. Zipcar Company’s key objective for business growth and development appears to be a future where car-sharing members outnumber car owners in major...
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...Porter’s Five Forces Model – Zipcar, Inc. Threat of New Entrant ZIpcar’s IT infrastructure would be hard to replicate. They have a strong competitive advantage with their patented wireless technologies and proprietary information systems that create entrance barriers for new competition. Bargaining Power of Buyers Zipcar provides a membership based business strategy and a fully automated reservation system. GPS location services, membership accounts, and reservation modifications can all be accessed with a member’s mobile device. Customers will find it difficult to get the same level of service form another competitor. The creation of user friendly IT systems has simplified Zipcar’s car rental experience. Zipcar has managed to limit the bargaining power of buyers by decreasing the likelihood of customers switching. Bargaining Power of Suppliers Zipcar’s has experienced a steady growth, expanding its services into new locations. Taking advantage of incentives for sustainability have helped Zipcar limit the bargaining power of it suppliers. Automation of services create less dependence people, places and services that are synonymous with the traditional suppliers of the car rental industry. By dealing directly with car manufactures they can limit their bargaining power of the supplier. Entering into purchasing agreements can help to negotiate the selling cost of the car. Industry Competitors Industry competitors of Zipcar would be the traditional car...
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...Case Study: Zipcar Bryan Gibson IT496 June 24, 2013 Contents Case Description 3 Firm History & Products 3 What Do They Do Well? 4 Are Their Things They Do Poorly? 5 Porter’s Five Forces 6 POTENTIAL THREAT OF NEW ENTRANTS 6 BARGAINING POWER OF SUPPLIERS 6 BARGAINING POWER OF BUYERS 6 THREAT OF SUBSTITUES 6 INDUSTRY COMPETITORS 7 Sustainable Competitive Advantage 7 Case Questions 8 Discuss the synergy between the business strategy of Zipcar and information technology. 8 As the CEO of Zipcar, what would you do to sustain a competitive advantage? 8 Is Zipcar a Success or Failure? 9 Will Zipcar Survive? 9 Should Zipcar Alter Their Strategy? 10 References 11 Case Description Zipcar is a company that was co-founded by Antje Danielson and Robin Chase in January of 2000, and was based on a car-sharing system originally utilized in Germany and Switzerland. The concept was to allow car rentals by the hour, with arranged pick-up and drop-off times located in neighborhoods allowing customers to simply walk to the vehicle without the need to wait in line. Danielson and Chase were concerned about the environment and this was their solution to vehicle overcrowding. Additionally, they feel their service helps to alleviate the headaches associated with owning a car, and gives people the option of having a second car or a bigger car, if it suits their needs, without having to buy. Zipcar is backed by a proprietary IT platform which allowed...
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...Zipcar is a car sharing program based on Cambridge Massachusetts. It imposes an annual fee for its members depending upon the level of service and a fee per hour. These fees cover insurance and initial driving license checking fee. Consumers do not have to worry about insurance, down payment for car and monthly fee. Zipcar targets cities where it is difficult to find parking and people depend upon local transportation system. One of the main attractions of Zip car is customers can own car when they need without having to deal with monthly payment, insurance and parking problems. A brief overview of the key facts and issues related to management consumer behavior: Zipcar’s primary market is among urban dwelling people. People living in cities such as Boston primarily depend upon public transportation. Running errands and even work can be either within walking distance or within a reach of public transportation. Parking can be expensive and many time unavailable. Since these people use car occasionally, sharing car instead of owning one can be less expensive. Zipcar also focus its services to students who need car occasionally but do not want to own one. After paying certain fee, its members can have car with whenever they want for a small fee. Zipcar has locations around cities where it has fleet of cars. Its members can choose different kinds of cars. Members can pick up cars and return car on the designated spot using Zipcard. The same car will be used by other members too...
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...Zipcar Case & IT Doesn’t Matter Zipcar Case 1. Analyze the business model of Zipcar using Porter’s five forces model. a. Threat of new entrants: The threat of new entrants is something to be concerned about. The barriers to entry are no different now than when Zipcar first launched with the exception that technology has evolved. The major advantage Zipcar has is it is the first entrant and established in its current markets, but this is not the case in other markets/cities where Zipcar does not currently have a presence. The other advantage Zipcar has is the patent on its wireless technology, but a new competitor might be able to develop technology that could function just as well. In order to keep the threat of new entrants minimal, Zipcar would have expand into other cities and take advantage of its existing infrastructure. b. Supplier power: The biggest equipment costs I can guess for Zipcar would be car purchasing and maintenance and infrastructure cost/maintenance. For cars, there are a few big suppliers that also provide service. The models offered by the various companies that could fill the needs of Zipcar are largely similar. There are a few differences but all of the major car suppliers offer models that have similar fuel effiency, power plant (combustion engine, full electric, or hybrid), etc. While Zipcar might be able to dictate price, the company could shop around for the best price with small cost for switching. c. Threat of substitution:...
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...Identify the two or three drivers of Zipcar performance (deep indicators) around which strategies policies and practices can be designed or adjusted. One of the important drivers of Zipcar performance is the Marketing. Zipcar’s marketing plan relied on several low-budget tactics, they expect that 30% to 40% of their marketing impact would be driven by word of mouth, another 25% by free media generated by public relations and the rest by their own marketing efforts. The marketing shows a “urban hip” look. The logo and the first car were green; chase thought it was clearly distinguished from traditional rental cars. They use the logo in the web site, stationery, promotional materials and in the cars. Also they created stickers to put in other cars. The main idea of Chase was that they need to direct potential customers to the Zipcar web site due to this was the primary interface for information and the point of purchase for the majority of subscribers. This is the reason why they are willing to invest the time and the money necessary to get the web site right. The price strategy is another important driver for Zipcar performance and Chase thought pricing was a critical component of business development. There are several components that affect price like security deposit, initiation fee, annual fee, monthly fee, per mile fee and hourly or daily rates. The strategy for Chase was to cover the cost of good sold and then cover overhead at some target volume and utilization...
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...Management Consulting Group Executive Summary This report examines the competitive strategy and business operations of Zipcar, in addition to its position within the U.S. car-sharing industry. The report has been commissioned in order to aid venture capitalists in assessing potential risks and rewards associated with investment in Zipcar, and evaluating the strengths and weaknesses of Zipcar as a potential investment project. This report features: an assessment of the U.S. car-sharing industry, based on Porter’s five forces that shape industry competition an analysis of developments in Zipcar’s business model recommendations regarding the future development of Zipcar’s competitive strategy and business operations conclusions relating to the attractiveness of Zipcar as an investment project 1 Contents Executive Summary ................................................................................................... 1 Contents ..................................................................................................................... 2 Introduction ................................................................................................................ 3 Origins of Zipcar ......................................................................................................... 3 Porter’s five forces applied to Zipcar .......................................................................... 4 Business Model ................................
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...Organizational Paper OI/361 May 16, 2012 Organizational Paper In this paper it will discuss two different organizations, in which I will evaluate the impact of Innovation on organizations. This paper will also discuss the strategy, process, product, services and how it has affected the two organizations of choices. Tyler Perry foundation Strategy Tyler’s strategy was to get his audiences attention, and by him filming his own Francis (2010) episodes of Tyler Perry’s House of Payne his on studios, and offered it to the TV networks to show for nothing alerting his mailing list when it was due to be screened. Therefore, he is not just creative, but also smart. He was able to get his show on a network at no cost to him and, with his mailing. He promoted his own work though the mailing list. With his innovation, it has impact many people, and their home as well as Atlanta community with his amazing inspirational. Process His process is simply. He takes real life stores of families and others in mind while of course taking his own life stores as well. Doing this process, he gets creative. He is a good story teller. Tyler stated that he” uses voice his work to inspire, and up lift people that is the best gift to in the world. He also stated that he has many stories to tell in what he writes about in human experience he has years of stuff built up” (Tyler Perry, 2011). Keeping himself busy is part of his process he is all about keeping his audience happy. It is...
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...Zipcar 1. Company: Zipcar has great potential to meet needs of urban consumers. An analysis of the company’s strategy, its potential customer market, and its financing needs shows us that while Chase has been great at researching and identifying a potential multi-million dollar business, her ability to raise funds, manage operations, and grow the business at speeds required to keep the competition at bay is in question. Competition: There are no large competitors for Zipcar with only two other car sharing services in US in the west and one in Canada, though large car manufacturers such as Volkswagen could start to compete directly. With a low subscription price and better execution Zipcar should be able to keep ahead of its competition. 2. Zipcar relied on multiple revenue streams. Users paid for annual subscription, processing fees, tiered pricing for usage and interest income on security deposit which created a hybrid revenue model. Between December 1999 and May 2000, Chase realized that her assumption were too optimistic and began to remodel revenues accordingly. Revenues were now skewed towards usage rather than subscription which would call for better ongoing marketing strategy and put them into direct competition with established car rental companies. On the cost front, Chase had to incorporate new charges under parking and increased leasing cost per car, thereby increasing variable cost per car. In addition there were some surprises on fixed costs. The...
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...MAY 9, 2005 MYRA HART MICHAEL J. ROBERTS JULIA D. STEVENS Zipcar: Refining the Business Model It was October 14, 2000, and Robin Chase was leaving yet another meeting with potential providers of capital for her fledgling venture, Zipcar. Chase was CEO and cofounder of the company, which she and Antje Danielson had started some 10 months before. The idea behind Zipcar—a sophisticated form of car sharing—was simple, yet potentially revolutionary. Chase and Danielson had conducted some initial research during late 1999, and by the end of that year, the two had developed a business plan. They had incorporated in January 2000 and raised their first $50,000 from one angel investor. By June of 2000, the two entrepreneurs had leased 12 cars and were ready to open for business in Boston. By October, the fledgling company had 19 vehicles, nearly 250 members, and the founders had raised—and spent—an additional $325,000 to fund the early stages of operations. Yet, even with this demonstration of viability, Chase and Danielson had not succeeded in raising the equity capital they needed to really grow Zipcar. Beginning in early 2000, Chase had made a series of presentations to potential investors in which she sought $1 million in capital to prove the business model in Boston and, eventually, to set the stage for expanding the business to other U.S. cities. Potential investors seemed intrigued and enthusiastic about the Zipcar idea. While Chase hoped to close on this first round of financing...
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