Zipcar Case

It is a very interesting case in my opinion. It talks about an innovative rental car company which is totally different from the traditional rental car companies that widely exist in today's market. Zipcar is utilizing the help of web 2.0 technology and is much more advanced than the traditional rental car companies and the use of technology provides them the competitive edge over others. This is new business model and has its advantages and disadvantages over the traditional rental car companies.

1. Analyze the business model of Zipcar using Porter's five forces model.

The model with which Zipcar came up with is quite unique and is difficult for competitors to copy because Zipcar is taking heavy use of technology. Whereas the traditional car rental companies have a different type of infrastructure and setup and so they cannot mimic Zipcar's strategy overnight. In the case of Zipcar there is no or very little overhead and other car rental companies have a lot of overhead. There are advantages and disadvantages with Zipcar over the traditional car rental companies. Customers would need to weigh the conveninece they get with the Zipcar like the ability to rent a car for few hours from a location of their choice (like downtown) and no lines and no time is wasted that way. Since Zipcar doesn't depend on proprietary goods, they need not to look at supplier power as an issue.

2. Discuss the synergy between the business strategy of Zipcar and information technology.

I see a complete syngery and synchronization between Zipcar and information technology. IT is a crucial part of Zipcar's success and their technology. Zipcar is bringing the convenience which is the primary goal of the company and it is being achieved with the help of IT in the case of Zipcar. Every step in the process like booking a rental, all the agreements, payments, pickup and drop off etc, everything is done with the help of IT.

3. What network effects are part of the strategy of Zipcar? How do they add value?

Zipcar uses social networking as the medium of communication with the customers and so are the customers among themselves. I believe that customers are more open when they express opinions in those websites than they would be when talking to a person. So, open, honest feedback and reviews will be given by the customers and Zipcar would get helped by that for sure.

4. As the CEO of Zipcar, where is your most thretaening competition? What would you do to sustain a competitive advantage?

Zipcar's tough competiton comes from the traditional car rental companies as they are available in almost all towns and cities. Zipcar needs to continue to get feedback from customers and try to improve the service by the use of the technology. Zipcar can look into expand their service to more