Download Zipcar Strategy PDF

TitleZipcar Strategy
TagsBrand Economies Competition Car Rental
File Size439.7 KB
Total Pages9
Document Text Contents
Page 6

Adam C. Forni
UC Irvine FEMBA ‘13A

8 May 2012


Page 6 of 9

Daimler should be viewed as an opportunity to make amends, toward a more profitably industry.

Attend industry events to get a pulse on the market, and attempt tacit collusion in this burgeoning

marketplace – but always beware these power competitors.

5. Expand further into P2P Sharing. As seen in Exhibit 5, the leverage available with Peer to

Peer sharing is powerful. With 250M vehicles on US roads (or 140 times the total rental fleet),

the possibilities are vast. Apply the successful IT model to Wheelz, and monitor the subsidiary’s

success closely. Consider additional acquisitions, and keep a close eye on the other rising stars of

the industry.

6. Expand into other niches. Zipcar’s competitive advantages in IT and in branding can be

leveraged into related realms. Some of the hottest areas have to do with big logistical problems

that Zipcar is good at: for example, one-way sharing, ride sharing, and smart parking. Each of

these opportunities have similar leverage effects as P2P sharing. The company should put its IT

and branding to expansion into these areas: launch subsidiary brands or acquire as necessary.

7. Adapt to Insurance and Fuel constraints. Insurance is a major expense for Zipcar. Vertical

integration should be considered, as Zipcar expands its scale. Another option would be to offer a-

la-carte options for Zipsters – for example, they could use their own insurance if it meets Zipcar’s

legal criteria. The other big expense, fuel, is harder to negotiate since it’s a commodity.

However, Zipcar should consider joint marketing opportunities with strategy gas companies,

perhaps at a discount to Zipsters.



ZipCar Revenue

$0

$50

$100

$150

$200

$250

$300

2007 2008 2009 2010 2011

M
il

li
o

n
s

Revenue



Exhibit 1, Zipcar Revenues

Page 8

Adam C. Forni
UC Irvine FEMBA ‘13A

8 May 2012


Page 8 of 9

Step
Member

Acquisition


Customer
Reserves
Vehicle


Customer

Uses
Vehicle


Customer
Drops Off
Vehicle



Differentiator Branding
1
IT

2
IT

3



Insurance/

Fuel
4


Notes:
1. Brand Image is an advantage during member acquisition: grassroots marketing, word -of-mouth, and

wanting to be part of the cool “Zipster community” play a major role in retention.
2. IT plays a big role in any reservation system. But Zipcar was truly high tech: its Iphone and Android apps

were downloaded a half million times, and over half of reservations were performed on mobile phones.
3. Again during vehicle use, IT differentiated the company. Zipcar offered GPS standard, as well as in-trip

assistance on its Iphone app. Internally, the millions of annual microtransactions offered a rich cache of
data to mine, in order to optimize fleet deployment, pricing and product options.

4. During vehicle use, fuel and insurance are included. This is both a differentiator and a liability. See part
VI for recommendations.

Exhibit 4, Value Chain Map



Exhibit 5, Industry Positioning

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