Case Assignment #1

1. Zipcar motivates its customers and partners by truly addressing their needs and wants from a company like theirs. For example, customers want something that will save them money. Zipcar’s solution to this is an affordable way to use a car that’s much cheaper than buying your own car. It cuts out the need to buy insurance, maintenance, gas, parking, and the general cost of the car. Cities want to cut down traffic and congestion. By using Zipcar, people tend to drive fewer miles and be more efficient when it comes to driving to and from somewhere.

For customer motivation, I would rate them a 3, because most people would prefer to have their own car. Zipcar is not for everyone, but it is extremely useful on vacation, business trips, or simply for convenience.

For city motivation, I would rate them a 3 because of how much congestion and traffic will decrease from Zipcar.

For businesses, I would rate them a 4 because I believe they would be interested to this as a substitute for rental cars during business trips or as a substitute for issuing work cars for employees. I think it would be not only convenient but cost efficient for the company.

For universities, I would rate them a 3, because most students prefer to walk to class or are used to campus buses and other forms of transportation. However, it would be appealing for the students who are unable to afford their own car or live on a campus where little driving is needed.

2. I believe that Zipcar has a good story to tell. It offers a cheaper alternative solution to traditional car ownership. This really benefits individuals who live in urban cities who don’t drive often. I find that Zipcar’s pitch would be easy to understand. Almost all, if not all, individuals 18 or older understand the concept of renting a car, so assumably, it would be easy to understand the concept of simply sharing a car. Once they understand what Zipcar is and what they’re about, this leads to understanding how car sharing could benefit the city, the business, or the university.

3. Core Strategy
Mission - Coming straight from zipcar.com, their mission is “to enable simple and responsible urban living” through the use of car-sharing.
Product/Market Scope - Car-Sharing service

Strategic Resources
Core Competency - Wireless technology that tracks the location of each car in real time to minimize the issue of double-booking
Assets - Vehicles, Employees, Zipcard Technology, Warehouses, Inventory, Equipment, Accounts receivables, etc

Partnership Network
Suppliers - Insurance agencies, gas providers, car agencies, government authority for parking spaces, parking area owners, car service providers, IT service for the web based reservations, etc.
Partners - Urban cities, businesses, universities, car agencies, FlexCar, Streetcar

Customer Interface
Target Customer - Individuals that live close to a Zipcar location who don’t need to drive everyday, students that do not have a car on campus or are looking for a cheap alternative to commuting to places, employees on business trips, and vacationers in an urban city.
Fulfillment, Support - Zipcar saves people money, decreases traffic and congestion, and reduces pollution.
Pricing - Membership starts at as low at $7/month. Saves individuals an average of about $500/month compare to people who own and operate their cars in the city.

Yes, I believe there are parts of the business model that are difficult to replicate. For example, as stated in the article, it shows that consumer behavior have changed from using Zipcar. People tend to drive less when using a car sharing service versus when thy own their own vehicle. They often drive routes that are more efficient to save time and money. I think that this type of behavior would be difficult for another company to copy.

4. Yes, I think Zipcar’s rapid growth could potentially affect its strengths in the future. With Zipcar already having 500,000 members and a limited number of cars, excess demand may occur. Some current strengths of the company right now is how quickly and easily reservations can be made. This could be a future problem with an over abundance of members.

Application Questions

1. One main problem is Zipcar’s flawed damages rule. Incidents have occurred where members return a car to its location in perfect condition then it’s damaged, most likely from another parking garage attendant. By Zipcar’s terms and agreements the member would be charged a hefty fine because of it, even though they had not caused it. This causes problems now and can in the long-term future.

Just like the previous question, another challenge Zipcar faces is rapid growth. Too much demand could affect the strengths of the company because of its limited supply of vehicles. When cars are booked and become unavailable, members will become frustrated in the company’s unreliability and use other forms of transportation. Losing the trust of their members could potentially be a big challenge for Zipcar.

2. City Car Share and Zipcar are obviously similar in which both are companies providing individuals with a car-sharing type service. There are similarities in their business models as well. Both companies are committed to improving the environment and the way of living by promoting an alternative to car ownership. Both of their goals are to reduce the traffic by taking cars off the street, the environmental impact of our cars, and the collective driving costs for its members. City Car Share and Zipcar both care about the affordability and convenience of its services for their customers.

Where there are major similarities, there are differences in the business model as well. For example, City Car Share is strictly a non-profit car sharing service in the Bay Area only. Every dollar that City Car Share makes goes right back to the community. Whereas Zipcar is widespread throughout the U.S., Europe, and potentially into Asia also. There is a difference in pricing too. City Car Share offers a unique mileage-based system where the hourly rates with mileage fee actually saves more money than a flat hourly rate.

Aside from being very alike in terms of services, I believe City Car Share is superior with their mission. Their mission is: “to make the Bay Area a more livable place,” and they have done just that. By being a non-profit, all of their proceeds goes straight back towards a better quality of life for their community. They are superior in the fact that they have set very big and very measurable goals in the future to make sure their profit will make a difference. These two examples really set apart City Car Share’s business model from Zipcar’s.