ZIPCAR CASE ANALYSIS

HISTORY

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

ZIPCAR’s PRODUCTS1) Car Sharing

2) Fast Fleet

KEY EXECUTIVEScott 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

KEY EXECUTIVEEd 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

STEEP ANALYSIS

SOCIO-CULTURAL

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

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

TECHNOLOGICAL

Technological advancement

Radio frequency identification

FastFleet

Social media Marketing: Facebook, Twitter

ENVIRONMENTNatural 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

ECONOMICSRecession• 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

POLITICAL

Political volatility in the US in regard to production,

dependence on foreign oil, and natural resources

usage

Renter age restrictions mandated by insurance

companiesOpportunities for Zipcar

High cost for Zipcar

SWOT ANALYSIS

STRENGTHS Customer-centric vision (Level of responsiveness, Z3D Knowledge

Center)Technologies that focus on customer satisfaction (RFID) Innovative collaborations e.g. StarbuckGreater Flexibility First moverWord-of-Mouth marketingGain largest market share in North AmericaROE increase from 0.99 in 2009 to 2.66 in 2010

WEAKNESSES Low ability to pay debt Inability of achieving EOSDifficult to compete in European Low ability to generate sale from asset Low ability to generate profit of Zipcar Low ability to pay interest

OPPORTUNITIESCar ownership decrease by 3.5 % because of increasing in gasoline

priceCollege students have been prevented by car rental agencies.College’s commitment to environment.Green thinking trend Social mediaGlobal car sharing

THREATSDecline 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.

FIVE FORCES

• 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

FIVE FORCES

• 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

UNATTRACTIVE!

COMPETITORSIMMEDIATE IMPENDING INVISIBLE

• Rental car agencies• Car ownership

COMPETITORS

COMPETITORS

COMPETITORS

FIRST MOVER CHALLENGES

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

FIRST MOVER CHALLENGES

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

KEY SUCCESS FACTORSAND RECOMMENDATIONS

TECHNOLOGIESRadio 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)

RecommendationsQR CODE Free sticker to promote

MARKET SHARE

RecommendationsGeographic expansion e.g. in AsiaCreate alliances

72.2% of market share as measure in members

74% of market share in North America

ADVERTISING

Word-of-mouth marketing

Advertising by using posting ads to mass transit stations

RecommendationsUse Public relationsCSR Activities

Social medias

BRAND AWARENESS

Strong Brand AwarenessHave good online reviews

RecommendationsCreate event Brand ambassador