Executive Summary Zipcar, a self-service car company with the largest active membership base of any car-sharing service in the United States, is facing a problem with the availability of the vehicle at appropriate time. This situation arises when the customer failed to return its car on time and the next customer is waiting at the parking spot with no car to drive despite following proper procedure in reserving a car online.I have determined that I must investigate and reach recommendation as to what business strategy should Zipcar adopt to operate efficiently in this situation. To reach a recommended course of action, I come up with four criteria : Vehicle availability; customer convenience; financial implications; and market growth. As the vehicle availability is the basic requirement of business such as Zipcar, I base my recommendation on this criterion by assigning double the weight to it as compare to the weights of other criteria.
After the analysis of the case and the information provided by you, I argued that Zipcar should not adopt the status quo and narrowed my alternatives to the following three strategies ·Introduce policies to influence customers behaviour to minimize delay in vehicle delivery ·Increase the vehicles in order to enhance vehicles to member ratio ·Create backup plan for effected customer by forming alliance with the local cab service provider and by leveraging technology After careful scrutiny and evaluation of the alternatives, I recommended that Zipcar should create a backup plan for effected customer by forming alliance with the local cab service provider an...
d by leveraging technology.By implementing this alternative, Zipcar will be able to cover up his key weakness in their operations and avoid any potential damages that could occur from dissatisfied customers. The chief benefit would be a proactive approach, which would guarantee the vehicle availability to all its customers by providing an alternative vehicle. 2. Issue of Concern Zipcar, a self-service car company with the largest active membership base of any car-sharing service in the United States, is facing a problem with the availability of the vehicle at appropriate time. This situation arises when the customer failed to return its car on time and the next customer is aiting at the parking spot with no car to drive despite following proper procedure in reserving a car online.
Since car sharing is among different clients, they are linked to each other’s actions in many ways. If a person books a vehicle, there is a possibility that he might face a situation not commensurate with his plans which makes him unable to return the vehicle on scheduled time. Under these circumstances, anyone who was booked in the same vehicle for next time slot, he will not be able to get the vehicle at the scheduled time, as had happened to Anita Karr in the case. Research findings of “The Human Behavior Institute” indicate that unexpected time delays will be experienced by over 80% of the customers at some point.
Hence there is ample possibility for majority of the customers of getting extremely dissatisfied and irritated after experiencing such delays in availability of vehicle as per the reservation made, i
the problem is not tackled seriously and attended immediately. 3. Recommendation Criteria In order to evaluate the effectiveness of the alternatives and to reach a final recommendation, following criteria is devised: 1. Vehicle availability : It is the basic requirement of the business such as Zipcar. This, being a critical success factor, is an important criterion to evaluate alternatives 2. Customer convenience : It is a prime motive of Zipcar and closely related to customer satisfaction.
Zipcar is making its utmost efforts to better the convenience of its registered members. Hence, customer convenience forms an important criterion to evaluate alternatives. 3.Financial implications : Zipcar is operating in a very competitive market which is very sensitive to the price. It would be hard for Zipcar to pass the financial burden to its customer.
Therefore, any increase in the current operating/fixed costs would have the negative impact on the profitability of the Zipcar. Therefore, alternatives will be evaluated to reach the final recommendation that should have minimum financial implication. 4. Market Growth : Zipcar is growing at very fast pace and would like to continue it in future. Any business strategy adopted by Zipcar at this stage would have long term impact on its growth.
Therefore, market growth become important criteria for basing any recommendation.Of all the criteria mentioned above I have determined that vehicle availability is the most important criterion because it is the basic requirement of Zipcar business. So I would base my recommendation on this criterion. 4.
Situational Analysis Zipcar’s target market is focused on the people living in dense urban residential areas, who do not own a car because of traffic congestions, high parking fees, insurance costs and maintenance costs, and are occasional drivers. Zipcar provides an alternative to car ownership. In these cities, many young professional choose public transportation for their journey to work over fighting the excessive traffic and paying high parking prices.Many university students rely on public transportation to get to school for the same reason of avoiding traffic but also because most university students cannot afford a car.
However the need for car certainly arises at some point. For the longest time the only choices were car rental and taxicabs. However, car rentals required rentals for a full day and taxicabs were convenient but had the drawback of not having the flexibility to stop, stay and go as you pleased. Ideally customers wanted a rental car for a few hours so that a young professional could run some errands or a university student can drive to an important job interview. It was this hybrid rental car idea by ZipCar that filled the customer demand for the need of securing a vehicle for a couple of hours without going through a hassling process.Zipcar is meeting the functional needs of it customer by providing rental cars on hourly basis at conveniently located places which can be reserved either on line or by calling the Zipcar centre, a year in advance or minutes before a car is needed, and the psychological needs by giving its customer a option to select vehicle from its wide vehicle fleet (small
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