PowerPoint Presentation

ZIPCAR CASE ANALYSIS

HISTORY

Robin Chase and Antje Danielson establish Zipcar in Cambridge, Massachusetts Zipcar hired Scott Griffith as CEO Zipcar acquired one of its main competitors, Flexcar Zipcar purchased Streetcar Limited (UK), opening the door to European regionJoined the Establishment and become a public company

ZIPCARs PRODUCTS

Car Sharing

2) Fast Fleet

KEY EXECUTIVE

Scott Griffith: Chairman of the Board and CEOGriffith joined Zipcar in 2003focus on getting thing right turned his business acumen to Boston, Washington DC, and New York cityHis leadership is credited with defining a new category of transportation.

Steve Case: Board of Directors, Chair of Nominating and Governance Committee One of the nations greatest entrepreneurs Cases 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 EXECUTIVE

Ed Goldfinger- Chief Financial Officertechnical savvy, financial education, and leadership skills Zipcars 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 SapientMark 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 lifeThe cost and availability of parking space: 207 open-air lots were lost from 1999 to 2008High and difficult to anticipate fluctuations in the cost of parkingLifestylePartners with lifestyle brands : innovative marketingCar sharing has grown in popularityCompetitors

63% of surveyed college applicants agreed that, a colleges commitment to the environment could affect their decision to attend Zipcar substantial decreases in CO2 emissions University supplies marketing, parking, and financial guaranteesCar companies have successfully embedded into the psyche of American consumers freedomCar companies producing smaller, lighter, safer and better gas mileageZipcar 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 advancementRadio frequency identification FastFleetSocial media Marketing: Facebook, Twitter

ENVIRONMENT

Natural disasters in Japan Customers are going greenHigher cost : supply shortages, manufacturing delaysZipcar 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

ECONOMICS

Recession 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 quothe 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 ZipcarHigh 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 FlexibilityFirst moverWord-of-Mouth marketingGain largest market share in North AmericaROE increase from 0.99 in 2009 to 2.66 in 2010

20092010LiquidityCurrent Ratio 0.93780.9191EfficiencyTotal asset turnover1.460.75ProfitabilityReturn on Asset0.0520.057Return on Equity0.0992.66Return on Sale1.04571.04Net Profit Margin0.0360.076RiskDebt Ratio0.460.55Time Interest Earn 1.91.73

WEAKNESSES

Low ability to pay debtInability of achieving EOSDifficult to compete in European Low ability to generate sale from assetLow ability to generate profit of Zipcar Low ability to pay interest

20092010LiquidityCurrent Ratio 0.93780.9191EfficiencyTotal asset turnover1.460.75ProfitabilityReturn on Asset0.0520.057Return on Equity0.0992.66Return on Sale1.04571.04Net Profit Margin0.0360.076RiskDebt Ratio0.460.55Time Interest Earn 1.91.73

OPPORTUNITIES

Car ownership decrease by 3.5 % because of increasing in gasoline priceCollege students have been prevented by car rental agencies.Colleges commitment to environment.Green thinking trendSocial mediaGlobal car sharing

Source: Frost & Sullivan

THREATS

Decline 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 costLack of differentiationEconomies of scale exist for all potential entrantsDistribution is easy

Highly concentrated industry (74% of market share for Zipcar)High exit barriersVarious number of competitorsHigh industry growth

Threat of new entrantsCompetitive RivalryLow switching costsHigh availability of substitutes such as public transportation, car ownership, taxis , etc.

Threat of substitutes

FIVE FORCES

Numerous parking facilitiesLimited contact with insurance companyThird-party support services such as data storage and payment processing, which could cause holdups

Low switching costsHigh availability of substitutes Bargaining power of suppliersBargaining power of buyers

UNATTRACTIVE!

COMPETITORS

IMMEDIATE

IMPENDINGINVISIBLE Rental car agencies Car ownership

COMPETITORS

COMPETITORS

COMPETITORS

FIRST MOVER CHALLENGES

ChallengesLack of parking facilitiesKeeping affordable and convenient parking for its vehiclesUtilize both publicity and privately owned real estateInvestmentSell 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 technologyMarketingStreet teams to market block by blockTechnology innovation

KEY SUCCESS FACTORSAND RECOMMENDATIONS

TECHNOLOGIES

Radio 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 CODEFree 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 marketingAdvertising by using posting ads to mass transit stations

RecommendationsUse Public relationsCSR ActivitiesSocial medias

BRAND AWARENESS

Strong Brand AwarenessHave good online reviews

RecommendationsCreate event Brand ambassador