Zipcar Case Study

Executive Summary:

With the information given by the article, the business model of Zipcar appears to be a successful and sustainable one. To make it fundable, however, there are still several things need to be done: recruiting a capable management team, focusing on the reduction of variable cost and the fuel expenses, developing the IT infrastructure that can fully support Zipcar’s operation, planning the next target cities for fast growth and generation of cash inflow, and developing a realistic schedule to the expansion of Zipcar.

Map out or describe the Zipcar ecosystem (suppliers, partners, competitors, customer segments, and other stakeholders impacted by their business model).?

• Municipal Governments
• Parking Facilitators (Parking Facility Owners)
• Car manufacturers (Leasing Companies)
• Gas Stations and Car Service Stations
• Car Insurance Providers
• Customers who rent the vehicles
• Venture Capitals/banks/Shareholders who finance the business
• Competitors ( Get-Around, Uber, Flight-Ccar, RelayRides, Rental Car companies, Taxi Cabs,)

Which stakeholders will view this new business model positively or negatively? Why? Given this, what is the overall likelihood of success of their business model?

All the players in the ecosystem of Zipcar with the exceptions of the competitors and possibly the car manufacturers would have a monetary and financial incentive to see the business model of Zipcar succeed and will look at Zipcar’s business model positively. According to the analyst, had it not been for the car sharing business the auto industry would have sold 500k more vehicles in the last decade.  The car manufacturers my see Zipcar as a customer who is leasing vehicles from them, but this transaction causes other potential losses for the auto industry. The competitors listed above will not have any incentive for Zipcar’s model to succeed and will look at Zipcar’s business strategy negatively.  However, the real winners of the Zipcar model are the customers who lease the vehicles. The Zipcar concept altered the way we use cars. Zipcar provided a convenient method for urban customers to “borrow” cars for short durations when mass transit or an additional car was needed. Zipcar didn’t market itself as a car rental company, but as a way of life for the urban population.

Zipcar would have a unique position in the market and provide a new, low-cost, convenient alternative to owning an automobile for drivers who logged less than 6,000 miles per year. Analysts estimate the potential market for car sharing to be close to $10 Billion dollar in the near future. Knowing the vested interest of the stake holders, customer need of car sharing and potential market of car sharing, we can foresee the viability and the success of Zipcar business model if the cost can be controlled and enough fund can be raised for future expansions.

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