Case Analysis for International Strategic Management Class

1. ZIPCAR CASE ANALYSIS

2. Robin Chase and
Antje Danielson
establish Zipcar in
Cambridge,
Massachusetts
2000 2003 2007 2010 2011 Today
Zipcar hired Scott
Griffith as CEO
Zipcar acquired one
of its main
competitors, Flexcar
Zipcar purchased
Streetcar Limited
(UK), opening the
door to European
region
Joined the
“Establishment”
and become a
public company

3. 1) Car Sharing
2) Fast Fleet

4. Scott Griffith: Chairman of the Board and CEO
• Griffith joined Zipcar in 2003
• focus on “getting thing right”
• turned his business acumen to Boston,
Washington DC, and New York city
• His leadership is credited with defining a new
category of transportation.
Steve Case: Board of Directors, Chair of
Nominating and Governance Committee
• One of the nation’s greatest entrepreneurs
• Case’s accomplishments and entrepreneurial
style are an obvious fit for Zipcar
Work experience: senior-level positions at Boeing, Information America, and The Parthenon Group
Work experience: AOL - world largest internet company

5. Ed Goldfinger- Chief Financial Officer
• technical savvy, financial education, and leadership skills
• Zipcar’s decision to replace former CFO Shuan Starbuck
with Goldfinger as a move to focus on strategic growth
initiatives.
Work experience: CPA in Connecticut, CFO of Spotfire, CFO at KPMG, CFO at PepsiCo, CEO at Empirix,
and CFO at Sapient
Mark Norman- President and Chief Operating Officer
• joined Zipcar in 2007
• Ability to streamline the complex business model and
operations while maintaining a focus on member
experience.
Work experience: CEO of Flexcar and Chairman,
President and CEO of DaimlerChrysler-Canada

6. STEEP ANALYSIS

7. Change in way of life
•The cost and availability of parking
space: 207 open-air lots were lost
from 1999 to 2008
High and difficult to
anticipate fluctuations in
the cost of parking
Lifestyle
Partners with lifestyle
brands : innovative
marketing
Car sharing has grown in
popularity
Competitors

8. 63% of surveyed college
applicants agreed that, “a
college’s commitment to the
environment could affect their
decision to attend”
• Zipcar substantial decreases in
CO2 emissions
• University supplies marketing,
parking, and financial guarantees
• Car companies have
successfully embedded into the
psyche of American consumers
“freedom”
• Car companies producing
smaller, lighter, safer and
better gas mileage
Zipcar brand is about more than
cars, it is about fun and freedom
and improving urban life
It is capital and resource
intensive and requires constant
modification and improvement
to meet customer demand.
Zipcar keeps its organizational
structure fairly flat

9. Technological advancement
Radio frequency
identification
FastFleet
Social media Marketing: Facebook,
Twitter

10. Natural disasters in
Japan
Customers are going
green
Higher cost : supply shortages,
manufacturing delays
Zipcar distinguishes itself as an
original, green idea and
sustainability
Many businesses leverage their
alignment with sustainable
companies like Zipcar to appeal to
their own customers

11. Recession
• transit operators being
forced to cut some routes
• average price of a new car
in the US approaching
$30,000
• any economic distress
impacting suppliers of car
components to manufactures
• Oil prices have more than
doubled since its bottom in
March 2009
seek alternative
forms of
transportation
Many businesses
changing status quo
the same costs that
plague consumers
plague Zipcar

12. Political volatility in the US
in regard to production,
dependence on foreign oil,
and natural resources
usage
Renter age restrictions
mandated by insurance
companies
Opportunities for Zipcar
High cost for Zipcar

14.  Customer-centric vision (Level of responsiveness, Z3D Knowledge
Center)
Technologies that focus on customer satisfaction (RFID)
Innovative collaborations e.g. Starbuck
Greater Flexibility
First mover
Word-of-Mouth marketing
Gain largest market share in North America
ROE increase from 0.99 in 2009 to 2.66 in 2010

15. Low ability to pay debt
Inability of achieving EOS
Difficult to compete in European
 Low ability to generate sale from asset
Low ability to generate profit of Zipcar
Low ability to pay interest

16. Car ownership decrease by 3.5 % because of increasing in gasoline
price
College students have been prevented by car rental agencies.
College’s commitment to environment.
Green thinking trend
Social media
Global car sharing

17. Decline in economic and business prospects of car manufactures.
Natural disasters in Japan.
Teenager drivers have a crash rate 4 times higher than older
drivers.
Retail companies offer car sharing.

18. • High fixed cost
• Lack of differentiation
• Economies of scale exist
for all potential entrants
• Distribution is easy
• Highly concentrated
industry (74% of market
share for Zipcar)
• High exit barriers
• Various number of
competitors
• High industry growth
Threat of new entrants
Competitive Rivalry
• Low switching costs
• High availability of
substitutes such as
public transportation,
car ownership, taxis ,
etc.
Threat of substitutes

19. • Numerous parking facilities
• Limited contact with
insurance company
• Third-party support services
such as data storage and
payment processing, which
could cause holdups
• Low switching costs
• High availability of
substitutes
Bargaining power of suppliers
Bargaining power of buyers

20. IMMEDIATE IMPENDING INVISIBLE
• Rental car agencies
• Car ownership

24. Challenges
Lack of parking facilities • Keeping affordable and
convenient parking for its vehicles
• Utilize both publicity and
privately owned real estate
Investment • Sell solution instead of product to fit
the lifestyle of Zipster

25. How did Zipcar handle the tasks and uncertainties?
The method to introduce and promote
the existing services/ products to the
market by focusing on the need of the
CRM at the present as well as
technology
Marketing Street teams to market block by block
Technology innovation

27. Radio frequency identification to lock and unlock the cars to
monitor such information as miles driven, battery voltage, and
fuel level
24/7 customer service (Zipcard)

28. 72.2% of market share as measure in members
74% of market share in North America

29. Word-of-mouth marketing
Advertising by using posting
ads to mass transit stations
Social medias

30. Strong Brand Awareness
Have good online reviews