Porters Five Forces Applied To Zipcar Essay Example

companies providing substitute services, and this competition revolves mostly around price rather than differentiation. 6 Business Model Unlike car-sharing companies that already existed on the U.S. West Coast, Zipcar has represented itself as an environmentally friendly company. This image is emphasised by Zipcar’s green logo, which conveys simplicity and cleanliness.

Such advertising techniques have generated a lot of publicity for Zipcar, enabling the company to build brand recognition and attract customers without incurring huge marketing costs. Services are convenient because reserved cars are parked within short walking distance from user locations and public transport stations. In addition, reservations can be made online or over the phone at any time. Zipcar has invested heavily in developing a patented technology platform that can be used only by the company.Each driver is given a unique Zipcar card that can unlock the car door at the specific time for which the subscriber has booked. The driver need only be concerned with unlocking the car and driving.

While the car is in use, usage data is transferred (real-time) wirelessly to Zipcar’s head office. Data is 8 recorded and stored to ensure correct billing. The data collection and billing processes are timely, accurate and hassle-free, contributing to the ease and efficiency of Zipcar’s business operations.Furthermore, the reduction in manual recording (and therefore the use of paper) has reinforced Zipcar’s green image. Zipcar would be able to attract more subscribers and earn more revenue. Provided that the company’s incident record regulations remain in place, most 18 year old drivers would be responsible and reliable. If there is doubt, younger drivers could be required to pay larger security deposits. Zipcar could offer a more diverse

selection of vehicle types and sizes including cars, vans, mini-vans and bikes.Larger vehicles could attract bigger travelling groups, while bikes would appeal to those without a driver’s licence or those who enjoy fresh air and exercise while being able to travel faster than on foot.

Zipcar should maintain vehicle supply agreements with manufacturers such as Volkswagen, even if prices are higher than hoped. The dissolution of such agreements could result in vehicle suppliers entering the market directly. They could utilise existing resources to compete against Zipcar. It would be better for Zipcar to work with, rather than compete against, these manufacturers.More money could be spent on advertising in order to really raise awareness of the company and the services that it provides. The target customer base could be broadened, with advertising aimed at older as well as younger people.

This is a good way to ensure the integrity, responsibility and reliability of subscribers, and thereby protect the vehicles from damage and the company from litigation. Advantages of driving a Zipcar Affordable Subscribers can rent a Zipcar at the hourly rate of $5. 5 and up to $44 per day, depending on where they live and the type of car they choose. Convenient Subscribers have access to different vehicle styles and models, can reserve cars online or over the phone, and can pick up cars from convenient locations (usually within walking distance).

Environmentally friendly Car-sharing helps to relieve daily traffic congestion and parking problems. With fewer cars on the road, the amount of pollution in the air is reduced. 12 Conclusion To conclude, Zipcar is an innovative business with the potential to become the leading service provider in an

industry that is growing rapidly. Much of Zipcar’s success and has resulted from the emphasis placed on the three predominant features of its business model – low cost, convenience and eco-friendliness.One of Zipcar’s greatest assets is its patented technology.

The technology is vital to the efficiency of operations and business processes, and deters potential new entrants to the U. S. car-sharing industry. Further capital investment is needed in order for Zipcar to refine its business model and processes, and to secure resources required for expansion. Such financing would significantly help Zipcar to realise its long-term potential as a highly profitable company that provides a highly valued service throughout the United States.