Zip Car

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1. 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 and 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 waiting 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, if 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...
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