ZIPCAR

QUALITATIVE ANALYSIS
ZipCar is an American Company that provides car sharing services or shared vehicles to its
members through a previous reservation billed by hour of use or by a day rate.
The company was founded in the year 2000 in Cambridge, Massachusetts. Today it has
approximately 700.000 users and 9000 vehicles. It operates in United States, Canada and in
some countries in Europe.
ZipCar principal services are:
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Drive cars by the hour or day. Gas & insurance included.

In neighborhoods, cities and airports across the globe.
Save hundreds over car ownership.
Choose from sedans, hybrids, vans and more.
Membership starts as low as $6/month.

The use of this service is very simple. First of all you need to be member or user by
purchasing the membership which can be paid monthly or yearly. After that the customer
receives a card in which he or she specify the time that wants to have the car and where will
they use it. Then, with the card they unlock the vehicle and can enjoy it for the time settled
until leaving it in the place agreed so that a new user can enjoy the experience.
With the benefits of environment protection and avoiding high parking and fixed costs of
car ownership, the deal attracts customers with limited driving requirements. When
compared with the alternatives of owning a car ($6.9k/year) and the available car rental
services ($1.9k-2.4k/year), the offer from ZipCar ($1k-1.5k/year) makes sense and appeals
those specific users, who require less than 6,000 miles driving per year. The idea has
proved itself in the already established European markets and seems lucrative in the
untapped market of Boston with potential for nationwide growth, in US.

The SWOT analysis of the business shows important ads, basically by the macroeconomic
environment, that today generates big opportunities.

The business presents big opportunities due to the growing density of the urban
areas and therefore new sustainability mechanisms that present. ZipCar offers
renting a shared vehicle in the zone that suits most the user, generating a more
efficient and less expensive business model. Also creates new opportunities like
growing technological waves, apps use, mobile networks, ecological tendencies,

new mobility regulations and potential users (Schools, Universities).

Threats to the industry, increase in the fuel price and some security issues.
Strengths, being an innovative company, with green benefits, that uses technological
mechanisms in its operations, with an efficient, easy to use and economic Web
platform, useful for this segment of customers and with a much differentiated

service.
Weaknesses, few planning in costs, big technological dependency, insufficient and
expensive parking lots, expensive vehicles.

The KEY FACTORS that the Company have are:

-Technological.
-Fixed Assets (Vehicles)
-Parking lots.
-Maintenance personnel
The analysis of the industry shows the following result: The business is located in the
industry of Car sharing
Competitors:
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Traditional car rental agencies Hertz, Avis, Budget, Dollar.

Car Manufacturers.

Porter 5 Forces
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Bargaining power of customers: Low. There is no customer concentration, the

service is differentiated and does not suit all kind of people.

Bargaining power of suppliers: Low. Suppliers are easily replaceable, there are a

lot of vehicles that suit the business demand.

Threat of new entrants: Low. Low entrant barriers, it is a market in which many
companies can operate, however the permanence in it depends on the product and
service offered. Also every day new mobility services are presented with more

benefits to the environment.

Thereat of substitute product or services: High. Customers have the facility of
choosing between different substitute products or services like: Public transport,

renting or buying cars or motorcycles.

Intensity of competitive rivalry: High. There are a lot of players in the market,
however costs are higher and the product offered is not as differentiated.