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Amanda Fuller

on 3 April 2013

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Transcript of Zipcar

By: Amanda Fuller
Travis Jones
Kristine Mullins
Michael Wheat What is Zipcar? Products/Services Offered Where did the idea "Zipcar" come from? 2000 - Company founded
* Robin Chase & Antje Danielson Business Strategy Integrated Cost Leadership/ Differentiation Core Values 2003 - Board voted Scott Griffith to remove Chase 2007 - Acquired Flexcar 2010 - Globalized; acquired Streetcar Limited 2011 - Went public 2013 - Avis acquired Zip Car Cost leadership:
- lowest cost:
A penny saved, a community revived.
Zipcar members save more than $500 (vs. car ownership). What would you do with an extra $500 a month? Many Zipsters put it back into their communities by buying local and sustainable products.

-acceptable features:
gas, insurance, 180 mileage Differentiation:
- Go green
Less and less driving.
After joining Zipcar, 90% of our members drove 5,500 miles or less per year. That adds up to more than 32 million gallons of crude oil left in the ground—or 219 gallons saved per Zipster.
- Innovated Idea
eliminates person to person
phone apps
- Fleet management software
Z3D Knowledge Center- hosts data
reduce costs, increase performance
take all control on technology "The car for people who don't want one" Industry Analysis Bargaining Power of Buyers- Customers have the ability to switch to less expensive or more readily available transportation options. (ex:biking, etc.)

Bargaining Power of Suppliers- Suppliers such as Ford own stakes in rival companies (Hertz), and therefore can exert pricing power over Zipcar. This can be combated by switching suppliers. Industry Analysis Threat of Substitutes- Substitutes for carsharing include car ownership, public transportation, taxis, biking/walking, and car rental. Because of Zipcar’s focus on urban and university areas, these substitutes will always be present.

Rivalry Among Competing Firms- Rivalry is high among competing firms. Enterprise and Hertz already have the resources and capabilities to compete with Zipcar and impede their potential for profit.

Threat of New Entrants- Low barriers to entry and car sharing industry is still in early stages of growth. Competitors Enterprise and Hertz have already started car sharing operations of their own. External Environment Analysis External Environment Analysis 1. Car sharing Internal Analysis Resources: SWOT Analysis Recommendations Primary Capital Stakeholders Block shareholders
Benchmark Capital
Greylock Partners Concentrated ownership allows for stronger more effective governance mechanisms, leading to a greater probability of maximization of shareholder wealth Competitive Analysis Competitive Analysis Vehicle fleet
Customer loyalty- "Zipsters"
Brand recognition
First mover advantage
Restricts location to urban environments Capabilities: Vehicle distribution
Word-of-mouth advertising
Development of innovative technologies Core Competencies: Global- Energy-conservative living is even bigger in Europe. Zipcar has already purchased rivals in Europe and Spain. Zipcar has the opportunity to expand to the cost conscious, environmentally aware European customer.

Demographic- Over 80% of North America’s carsharing membership is comprised of people who live in the urban environment

Physical- Zipcar focuses their services on major metropolitan areas and select universities, where parking and drop-off locations are readily available Economic- The current state of the United States economy is rather dismal. Companies and customers alike are having to alter their spending patterns in order to retain their financial security. As the prices of outside commodities such as gas continue to rise, Zipcar will have to pass these costs onto customers.

Sociocultural- Customers are becoming more eco-friendly. Around every corner is another company striving to meet the expectations placed on them by the environmentally-conscious consumer.

Technological- Car manufacturers are focusing their efforts on making newer, cheaper, energy-efficient vehicles. Future Objectives:
Enterprise & Hertz-
Gain larger portion of market
Find ways to differentiate themselves from competitors in the industry Current Strategy:
Specializing in local opportunities
Targeting college campuses, businesses, and government agencies
Operate using a majority of hybrid vehicles
Focused on expansion into emerging international markets along with community markets
Co-locating with hotels, body shops, and other vehicle repair facilities
Utilizes the Toyota Prius as its flagship car sharing fleet car Assumptions:
Enterprise & Hertz-
Car sharing will continue to increase in popularity Capabilities:
Large size enables them to place offices within 15 miles of 90% of the American population

Able to utilize its existing locations and brand recognition as they enter into the car sharing market
Capable of matching many of Zipcar amenities Summary Global and domestic expansion Retain college users
after graduation Increase growth
on college campuses Acquisition by a
competitor (Avis) 1. Obsess about the member experience build trust and confidence among our member community by delivering leading convenience, dependability and service excellence 2. Be the best we can be support personal growth, impact, and excellence 3. Deliver results create enduring value through growth 4. Keep it simple win through simplicity and continuous innovation 5. Have an impact change the world through urban and environmental transformation Overview
Business strategy
Industry analysis
External analysis
Internal analysis
Competitive analysis
Recommendations A major weakness that Zipcar faces is the inability of the consumer to return the car at multiple points. By developing the ability to return the Zipcar at multiple locations, Zipcar's product would be more readily available to a wider selection of customers. Zipcard (RFID technology)
FastFleet software Zipcar, being a relatively new company, lacks the necessary capital to fully develop the car sharing industry. By acquisition or merger with a rival such as Hertz, Enterprise, or Avis, the potential car sharing market could be fully realized. What is Zipcar By continued fostering of the "Zipster" culture, and highlighting the increasing cost of car ownership, Zipcar could retain college user long after graduation, leading to long term sustainable growth. Amanda - cost-effective transportation solutions that are good for the planet and easy on the wallet
- become a "Zipster"
- join, reserve, unlock, drive
- customers; Universities, Individuals, Business and government organizations Amanda Michael Travis Travis Kristine Kristine 2. Fast Fleet STRONG FORCES - VRIN - fleet management software
- tracking capabilities Zipcar presently is limited by its geographic size. Mainly focused in the Northeast portion of the United States, a few areas in Canada and in Europe. The potential car sharing market in Asia and Asia Minor are yet to be tapped into. MODERATE FORCES The majority of Zipcars market is college students on select campuses in the United States. Due to the reliance on this target market, Zipcar must expand into new campuses in order to achieve sustainable growth. Zipcar Founded in 2000, Zipcar entered into the unknown market of "car sharing". Zipcar brought a fresh, new and innovative spin to the car rental market. Zipcar is the "Netflix" of the car rental industry. With the purchase of an annual membership, a car is available whenever one finds themselves in need. However, with the creation of a new market comes high uncertainty.

Issues such as:
The high initial outlay of capital
Uncertain long term consumer demand
The difficulty of finding investors
Long term supplier concerns

Yet, Zipcar has countered most of all of these challenges with:
The creation of a "Zipster" culture
The hiring of experienced managers
Defining an urban market. One Way Trips Business Strategy Integrated Cost Leadership/Differentiated QUESTIONS? Main Competitors
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