Zip car Harvard Case Solution & Analysis

Zip car Case Solution

Qualitative Criteria

In this corporate world, investment is something which can be done before analyzing the market.It is imperative to forecast the future before investing in any particular company. Globalization and market diversity have created a lot of challenges for the company to survive in the sustainable market. Few criteria can be used to assess Zipcar funding opportunity.

Performance of the company

Market strength

Swot analysis

Operations

Performance of company:

Car sharing is becoming a growing industry lately with increased price of gasoline and other commodities, owning a car has becomemore of aluxury due to which people prefer to travel in public transports. In this rental industry, Zipcar has created public value among the other competitors.

Zipcar provides high-class service with well-equipped vehicles in low rates from other rental services. The members can drive on their own on some occasions without any extra charges.On the other hand, drivers are hired who are trained to drive at an average speed and to ensure that the passengers reach on time. The drivers are highly recommended that they use different routes so as to ensure that the passenger reach the desired destination on time. Various modes of payments are subscribed for the convenience of customers whereas,online booking system has been introduced with vast availability of vehicles in all areas of the U.S.  Therefore, the company is performing well which is a good sign for the management as it could support the future plans of the company.

Market strength:

The company can fulfill the short-term transportation needs for the existing customers.It is believed that the company is satisfying the need of its customers, which has helped to create a strong customer base.The U.S market is vast and untouched;in 1999, around 66 Million Americans lived in top 20 metropolitan areas of which around 20 million Americans used the public transport.Therefore,continuous increase in the customers has also increased the market share as the company is fulfilling the basic needs of transportation of its consumers. (Zipcar, 2014)

Zipcar received a significant response from educated college students and web-connected individuals who frequently required transportation.However, 15,000 customers were targeted from which 10,000 were those who could be reached before the deadline. According to the people in the U.S., Zipcar chargesless than other services, which again increases the market presence of the company.

SWOT Analysis:

Strengths:

Zipcar's main strength is its business model, which makes it unique from its competitors. The company provides its customers the accessibility by being available where people live or work; members have various optionsto use the company's cars whenever required. Moreover, Zipcar shows growth with respect to its services and operations. The financial performance of the company also improved from past five years as the membership increased by 25% to 673,000 members as compared to last year. Furthermore, membership retention ratio also improved significantly. In addition to this, the company increased its annual membership fee from $50 to $60, which reflects a strong demand for Zipcar's offerings.

Weaknesses:

The number of the members of the company is based on the annual usage i.e. longer weekends trips, traveling for work/school, and etc.

The company faces the greatest challenge of creating a high level of initial cost aside from dealing with customers’ complaints regarding the unavailability of the car.

Opportunities:

The company has to adopt the market expansion strategy to advertise itself globally which is still an untargeted segment and there is a significant potential in that segment. The target market of Zipcar is almost the whole population, therefore it is also an opportunity to introduce any new product in the market because of having a strong brand name. Moreover, the increasing fuel cost can be beneficial for the company instead of buying own cars, as people will prefer to travel through Zipcar. In addition to this, the company can leverage itself by expanding its market leadership with vehicle manufacturers to secure better deals of procurement i.e. partnership with Ford for its students drive campaigns.................

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