2. Introduction &
Company Background
• Founded in 2000 by Robin Chase & Antje Danielson; raise $1.3 million from
14 investors
• Chase was forced out by the board in 2003, replaced by Scott Griffith
• Acquired its main competitor, Flexcar in 2007, and merged the operations
• Issue its highly anticipated IPO at $18 per share in April 2011
• Zipcar claims over 80% of the US car sharing market and half of all car
sharing members worldwide
3. Zipcar’s Key Executives
• Scott Griffith – Chairman of the Board and CEO
• Steve Case – Board of Directors, Chair of Nominating and
Governance Committee
• Ed Goldfinger – Chief Financial Officer
• Mark Norman – President and Chief Operating Officer
4. Products Offering
- Car Sharing
Marketed to individuals living in major metropolitan areas; college
students, staff and faculty at select universities; and organizations
including private businesses and government entities
- Fast Fleet
Fleet management software platform based on the one used by Zipcar
that is licensed on a monthly basis to both private and public organizations
that manage their own vehicle fleets
5. Business Model
How to be a Zipster?
Join:
apply -> pay annual membership -> approved and get a Zipcard
Reserve:
Make a reservation online or by phone
Unlock:
Lock and unlock reserved vehicles that parked in local lot with Zipcard
Drive:
Congrats, you’re a Zipster!
6. Competitors
Enterprise Rent-A-Car Company
• Founded in 1959, one of the largest in North America
• Managed over 700,000 vehicles and 135,000 corporate fleets
• Offer car sharing program called WeCar
Hertz Global Holdings, Inc.
• Start as a small fleet in 1918
• Managed over 550,000 vehicles at 6,500 locations in 140 countries
• Also entered the car sharing industry called Connect by Hertz, with
no annual membership fees, and low rates
7. SWOT
Strengths:
- First mover in the car sharing industry
- Accessible and user friendly interface for customers
- Interactive and hi-tech application and social media to engage
with their customer
- Strong partnership with college and university
Opportunities:
- Recent declines in car ownership due to rises cost of owning a
vehicle
- Widespread of smartphone and mobile-based applications
Weaknesses:
-Relatively young and small company compare to their
competitors
-High overhead and fleet operational cost (71,2% of its revenues in
2011)
- Too capital and resource intensive
Threats:
- Competitors start to enter the car sharing industry with their
large number of fleets
- High preference of using public transportation in the cities
- Fluctuation cost and increasing scarcity of parking lot
8. Challenges & Problems:
1. Describe the challenges faced by a start-up company in an undefined market. How did
Zipcar handle the tasks and uncertainties against its competitors? (include one type or
more attack strategy movement and explain)
2. Who are Zipcar’s primary stakeholders, and what are their particular interests? How does
having a set of large-block shareholders influence the decisions and actions of the firm?
3. How do the competitive forces in the industry affect Zipcar’s profit potential? What are
the biggest competitor threats facing the young company?
4. Identify the key success factors that are critical for Zipcar to realize sustainable growth in
the long term. What recommendations do you suggest to further the company’s success?
9. 1. Describe the Challenges Faced by a Start-up Company in an
Undefined Market. How did Zipcar Handle the Tasks and
Uncertainties Against its Competitors? (include One Type or More
Attack Strategy Movement and Explain)
-Don’t know the specific target
market and consumer
Because the uncertainty of the service
or product offered by the startup is
needed by the market or not.
- Gaining trust from stake holder and
supplier.
Because of the low brand awareness
consumer and supplier are tend to choose
well known product or services.
Zipcar handle the task and uncertainties
against their competitor by using attack
differentiated strategy, because Zipcar
attacking car rental and taxi industries both
at the same times.
And using attack bypass strategy with their
new approach to the customer using IT
system and unique service experience.
10. 2. Who are Zipcar’s Primary Stakeholders, and What are Their
Particular Interests? How does Having a Set of Large-block
Shareholders Influence the Decisions and Actions of the Firm?
Zipcar stakeholders are:
1. Suppliers
2. Customer
3. Internal zipcar’s company
4. Investors
Particular interest: Suppliers and for Zipcar internal, in
short term are wanting to see if the Zipcar can bring
profit and dependable for Zipcar suppliers, and in long
term their interest are wanting to Zipcar become
sustainable and growing because they’re offer unique
services to the customer, in customer perspective they’re
wanting low cost and easy transportation access.
Large-block shareholders influencing decisions and
actions because the shareholder are looking for the key
to a successful growth plan.
To instill confidence in investor, Zipcar must focus on
maintaining culture and innovative service, customer
satisfaction, and expanding to new market.
11. 3. How do the Competitive Forces in the Industry Affect
Zipcar’s Profit Potential?
Barrier to
Entry
High
Threat of
Substitute
High
Rivalry
Medium
Buyer Power
High
Supplier
Power
Low
12. 3. What are the Biggest Competitor Threats Facing the Young
Company?
The biggest competitor threat for Zipcar is when the
Enterprise Rent-A-Car Company entering the car sharing
market with their advantages such as the biggest fleet, strong
track records in car rental industry and value proposition eco-
friendly with their hybrid car.
13. 4. Identify the Key Success Factors that are Critical for Zipcar
to Realize Sustainable Growth in the Long Term
B. Partnership with university
Zipcar provide fleet vehicles, insurance and
membership administration while the university
typically supplies marketing, parking and some
financial guarantees. It’s the way that Zipcar can
receive revenue from students of college when
they want to go out of campus and another
reasons that many student have logical thought
about car ownership that they more prefer to rent
the car than owning a car because the expenses
as they owned the car.
1. Differentiation
They make a uniqueness business to offering in
their members, as mention below:
A. The system of ordering of car
Zipcar has a system registration online for Zipster to
become a member. Customer can make a reservation
by online after they receive Zipcar then they can use
that card to unlock the car which parked within walking
distance of the member.
C. Fleet Management (Fast Fleet)
This model is the way of Zipcar to provide a
service of management to manage vehicle of
company car. Zipcar can get licensing fee mothly
from they service to customer company such as
track usage, location, and maintenance schedules
of vehicles while reducing the human resources
normally needed to do so.
14. 4. Identify the Key Success Factors that are Critical for Zipcar
to Realize Sustainable Growth in the Long Term
2. Availability
Zipcar make a cooperation with car
supplier to supply their fleet. They
always provide with a specific car
based on customer ordering. Zipcar do
renewal of car every two or three
years to make their car is in good
condition.
3. Marketing
Zipcar has a slogan to build the brand
image is “low cost, word of mouth
marketing”. Its rely to bring in new
members based on a survey 28% of new
members who joined between March 2009
and 2010 that learned from existing Zipcar
members. In another way, Zipcar is using
local marketing such as posting ads on
buses, bus stops and subway station which
bring brain storm to customers as car
sharing service as more than just a mode
of transportation.
15. 4. What Recommendations do You Suggest to Further the
Company’s Success?
The Recommendations for Further Zipcars Business :
• Increasing fleet numbers
• Reducing cost by using hybrid car to reduce gasoline structure and partnership
with company insurance to gain lower premis
• Innovation on customer satisfaction such as:
- Customers Relationship Management
- Loyalty Program