Case Analysis Of ZipCar

Case Analysis Of ZipCar Zipcar was established in 1999 and it is a leading company in the car sharing industry in North America with a strong presence in the U.S., Canada and Europe (Goldman S., May 2008). The company has 200000 members in 50 markets and concentrates on businesses, residential areas and universities (Goldman S., May 2008). Their vision is â€Å"†Providing reliable and convenient access to on-demand transportation, complementing other means of mobility.†Ã¢â‚¬  (Goldman S., May 2008) The company car fleet consists of 5000 cars that include hybrid vehicles, SUVs and sedans (Goldman S., May 2008). Their business is concentrated on a small market where people need to rent a car on an hourly basis instead of daily basis. The customers can reserve a car online and use an RFID card called the zipcard to enter the reserved car by swiping the card on the reader near the driver’s windshield (Pearlson, K., Saunders, C. (2009)). Other than having a unique service Zipcar employs pow erful technology to support its business model (Pearlson, K., Saunders, C. (2009)). They have a patented wireless technology that is used to monitor car security, feul level, hourly usage and other features (Pearlson, K., Saunders, C. (2009)) . Zipcar has developed a unique business model and supported it with appropriate technology which makes it a unique business. Regarding the bargaining power of buyers, Zipcar service is considered unique and the market they are targeting is considered niche. Since it is hard to find a service like the one provided by Zipcar and the market is small the buyers bargaining power is low. The other substitute available is renting cars by day which is not convenient for some of the customers. Public transportation and car ownership is another alternative but it may be costly due to the rising fuel prices. In the other traditional car rental companies the customers have to wait for long to get their car. By using Zipcar they can find a nearby car witho ut waiting which is more convenient. In addition, Zipcar has an established brand name and a strong identity which makes the customers more attached to it. With a unique service and an established brand name Zipcar customers cannot be high on price sensitivity and their bargaining power is reduced. Concerning the bargaining power of suppliers, most of the suppliers for Zipcar are not concentrated. Insurers, gas providers and car agencies can be considered among the suppliers of Zipcar. All of these work in competitive markets. There are several insurers, car agencies and gas providers and Zipcar can chose among them which makes the bargaining power of suppliers low. However, Zipcar needs parking spaces and auto services which can be beneficial for the supplier. Parking spaces can be owned by a government authority or a business establishment. Zipcar may need to build and maintain relationships with these entities to get the parking spaces especially if the government or the establis hment owns a huge parking area. This way the supplier might have the upper hand since Zipcar needs those spaces near the customers. Also, the cars that Zipcar uses need services which makes the company limited to a very few suppliers to provide this service. Since cars are the basis for the business, Zipcar needs to choose one reliable supplier for the car service. Therefore, parking area owners and car service providers can be considered powerful suppliers.