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Case Study: Zip Car- Redefining the Business Model

Business Idea
The idea behind the Zip car is to serve as a sophisticated form of car sharing. The idea was first originated in Swit zerland in 1987 from two cooperatives to provide both convenience and cost savings to the users. And the two founders of Zip car then start up their business in January 2000 and raised their first $50,000 from one of the angel investors. Before they incorporated, they had done sufficient number of market research, from which it was came to know that there is demand for such service and the suppliers were only limited. So if they succeeded in capturing that market niche, then there is no doubt for their success and growth. Though there are some of loopholes in the business model.

Business Model
Human Resources:
Chase and Danielson are two founders of this company, the idea first generated after Danielsons returned from a trip to Germany. The concept of car sharing seemed to be catching across Europe. Danielson holds a PhD in geochemist who supervised

undergraduate energy policy research at Harvard. She worked for the University Committee on the Environment at Harvard University, directing interdisciplinary research on energy consumption and greenhouse gases. And she would continue working at Harvard, s pending evenings and weekends on the new venture. On the other hand, Chase majored in English, French and philosophy and later had an MBA in applied economics and finance. And she had committed her full time to this new venture. The past work experience, qualification in both the cases is not fully compatible with the concept, technology of the new venture.

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Case Study: Zip Car- Redefining the Business Model

Marketing:
The marketing plan relied on minimization of cost. So they focussed mainly in marketing through word of mouth, through companys website, fr ee media coverage and so on. The logo signified track of the road in the form of Z and the green colour signified the

environment friendly. The more effort was given in developing the simple and user friendly website, so that most of the members booked their reservation mainly through website rather than telephone or others.

Technology:
The reservations were based through online. All other i nformation regarding reservation, time and place, starter, billing etc. were done through server wirelessly. In the start up, the problem arose due to such vague technology and the imperfection.

Competitors:
Zipcar need to compete with other players in ma rket. Canada, Commun Auto, which was launched in Quebec City in 1994 and in Montreal in 1995. U.S. competition consisted of two west coast companies: Portland -based Car-Sharing Inc., founded in 1998 and a Seattle based Flexcar, launched in January 2000. Re ntal car agencies, such as Hertz or Avis, might enter the market if they saw it as a substantial new business opportunity. Volkswagen had already conducted its own studies of the market potential. It could participate as a supplier or could consider enteri ng the market directly. To tackle these competitors as a new entrant having zero knowledge in the same field, limited budget (in marketing, for growth) was quite difficult.

Finance:

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