Competitive Dynamics and Rivalry

Introduction & Company Background

• Founded in 2000 by Robin Chase & Antje Danielson; raise $1.3 million from14 investors

• Chase was forced out by the board in 2003, replaced by Scott Griffith

• Acquired its main competitor, Flexcar in 2007, and merged the operations

• Issue its highly anticipated IPO at $18 per share in April 2011

• Zipcar claims over 80% of the US car sharing market and half of all carsharing members worldwide

Zipcar’s Key Executives

• Scott Griffith – Chairman of the Board and CEO

• Steve Case – Board of Directors, Chair of Nominating andGovernance Committee

• Ed Goldfinger – Chief Financial Officer

• Mark Norman – President and Chief Operating Officer

Products Offering

- Car SharingMarketed to individuals living in major metropolitan areas; collegestudents, staff and faculty at select universities; and organizationsincluding private businesses and government entities

- Fast FleetFleet management software platform based on the one used by Zipcarthat is licensed on a monthly basis to both private and public organizationsthat manage their own vehicle fleets

Business Model

How to be a Zipster?

Join:apply -> pay annual membership -> approved and get a Zipcard

Reserve:Make a reservation online or by phone

Unlock:Lock and unlock reserved vehicles that parked in local lot with Zipcard

Drive:Congrats, you’re a Zipster!

Competitors

Enterprise Rent-A-Car Company

• Founded in 1959, one of the largest in North America• Managed over 700,000 vehicles and 135,000 corporate fleets• Offer car sharing program called WeCar

Hertz Global Holdings, Inc.

• Start as a small fleet in 1918• Managed over 550,000 vehicles at 6,500 locations in 140 countries• Also entered the car sharing industry called Connect by Hertz, withno annual membership fees, and low rates

SWOT

Strengths:

- First mover in the car sharing industry

- Accessible and user friendly interface for customers

- Interactive and hi-tech application and social media to engage with their customer

- Strong partnership with college and university

Opportunities:

- Recent declines in car ownership due to rises cost of owning a vehicle

- Widespread of smartphone and mobile-based applications

Weaknesses:

-Relatively young and small company compare to their competitors

-High overhead and fleet operational cost (71,2% of its revenues in 2011)

- Too capital and resource intensive

Threats:

- Competitors start to enter the car sharing industry with their large number of fleets

- High preference of using public transportation in the cities

- Fluctuation cost and increasing scarcity of parking lot

Challenges & Problems:

1. Describe the challenges faced by a start-up company in an undefined market. How did

Zipcar handle the tasks and uncertainties against its competitors? (include one type or

more attack strategy movement and explain)

2. Who are Zipcar’s primary stakeholders, and what are their particular interests? How does

having a set of large-block shareholders influence the decisions and actions of the firm?

3. How do the competitive forces in the industry affect Zipcar’s profit potential? What are

the biggest competitor threats facing the young company?

4. Identify the key success factors that are critical for Zipcar to realize sustainable growth in

the long term. What recommendations do you suggest to further the company’s success?

1. Describe the Challenges Faced by a Start-up Company in anUndefined Market. How did Zipcar Handle the Tasks andUncertainties Against its Competitors? (include One Type or MoreAttack Strategy Movement and Explain)

-Don’t know the specific targetmarket and consumer

Because the uncertainty of the serviceor product offered by the startup isneeded by the market or not.

- Gaining trust from stake holder andsupplier.

Because of the low brand awarenessconsumer and supplier are tend to choosewell known product or services.

Zipcar handle the task and uncertaintiesagainst their competitor by using attackdifferentiated strategy, because Zipcarattacking car rental and taxi industries bothat the same times.

And using attack bypass strategy with theirnew approach to the customer using ITsystem and unique service experience.

2. Who are Zipcar’s Primary Stakeholders, and What are TheirParticular Interests? How does Having a Set of Large-blockShareholders Influence the Decisions and Actions of the Firm?

Zipcar stakeholders are:

1. Suppliers

2. Customer

3. Internal zipcar’s company

4. Investors

Particular interest: Suppliers and for Zipcar internal, inshort term are wanting to see if the Zipcar can bringprofit and dependable for Zipcar suppliers, and in longterm their interest are wanting to Zipcar becomesustainable and growing because they’re offer uniqueservices to the customer, in customer perspective they’rewanting low cost and easy transportation access.

Large-block shareholders influencing decisions andactions because the shareholder are looking for the keyto a successful growth plan.

To instill confidence in investor, Zipcar must focus onmaintaining culture and innovative service, customersatisfaction, and expanding to new market.

3. How do the Competitive Forces in the Industry Affect Zipcar’s Profit Potential?

Barrier to EntryHigh

Threat of Substitute

High

RivalryMedium

Buyer PowerHigh

Supplier Power

Low

3. What are the Biggest Competitor Threats Facing the Young Company?

The biggest competitor threat for Zipcar is when theEnterprise Rent-A-Car Company entering the car sharingmarket with their advantages such as the biggest fleet, strongtrack records in car rental industry and value proposition eco-friendly with their hybrid car.

4. Identify the Key Success Factors that are Critical for Zipcarto Realize Sustainable Growth in the Long Term

B. Partnership with universityZipcar provide fleet vehicles, insurance andmembership administration while the universitytypically supplies marketing, parking and somefinancial guarantees. It’s the way that Zipcar canreceive revenue from students of college whenthey want to go out of campus and anotherreasons that many student have logical thoughtabout car ownership that they more prefer to rentthe car than owning a car because the expensesas they owned the car.

1. Differentiation

They make a uniqueness business to offering intheir members, as mention below:

A. The system of ordering of carZipcar has a system registration online for Zipster tobecome a member. Customer can make a reservationby online after they receive Zipcar then they can usethat card to unlock the car which parked within walkingdistance of the member.

C. Fleet Management (Fast Fleet)This model is the way of Zipcar to provide aservice of management to manage vehicle ofcompany car. Zipcar can get licensing fee mothlyfrom they service to customer company such astrack usage, location, and maintenance schedulesof vehicles while reducing the human resourcesnormally needed to do so.

4. Identify the Key Success Factors that are Critical for Zipcarto Realize Sustainable Growth in the Long Term

2. Availability

Zipcar make a cooperation with carsupplier to supply their fleet. Theyalways provide with a specific carbased on customer ordering. Zipcar dorenewal of car every two or threeyears to make their car is in goodcondition.

3. Marketing

Zipcar has a slogan to build the brandimage is “low cost, word of mouthmarketing”. Its rely to bring in newmembers based on a survey 28% of newmembers who joined between March 2009and 2010 that learned from existing Zipcarmembers. In another way, Zipcar is usinglocal marketing such as posting ads onbuses, bus stops and subway station whichbring brain storm to customers as carsharing service as more than just a modeof transportation.

4. What Recommendations do You Suggest to Further theCompany’s Success?

The Recommendations for Further Zipcars Business :

• Increasing fleet numbers

• Reducing cost by using hybrid car to reduce gasoline structure and partnership

with company insurance to gain lower premis

• Innovation on customer satisfaction such as:

- Customers Relationship Management

- Loyalty Program

Thank you…!!!