Zipcar Analysis Essay Example

from 6% to 3% in the first four months.

The text suggests that by converting certain fixed costs, such as high billing fees, to variable costs and implementing reduced pricing during weekday daytime hours, utilization and net income could increase. Customer acquisition costs have remained low through various marketing strategies. The September data indicates significant cash-based revenue. However, the diagnosis highlights that the ZipCar venture requires changes before it can be scaled and attract funding. The first concern is the management team: Chase, a stay-at-home mom, runs the venture from her home office, while her partner Danielson, who came up with the idea, seems less committed due to her existing career and pregnancy.

The experience with a new president has been unfavorable. To achieve an operational level for ZipCar, a capable and diverse team is essential. Moreover, the current business plan forecast does not accurately incorporate the September operations and fixed costs of 44K. Despite the low marketing expenses, Chase has not presented a strategy for consistently attracting new members or optimizing the network of ZipCars to maximize usage. Future plans and strategies, including target cities and staffing recommendations, must be clearly outlined.

Finally, the $300K in convertible loans presents an additional obstacle in terms of determining final equity. These loans represent approximately 25% of the required $1.3M cash injection, which introduces concerns about controllership for the venture capitalists.