Zipcar Case Study Analysis

[Case: Zipcar] Zipcar’s SWOT and financial analysis a) Strengths Firstly, Zipcar seized 80% of US market share, making it the strong player in the market. Secondly, as the company is able to acquire its competitors (Flexcar-US, Streetcar Ltd-UK), they can reduce the competitors as well as gain those market shares and customer bases from those 2 companies. Thirdly, Zipcar’s customer-friendly and disruptive business model is what makes it unique. They leverages accessibility, make it available close to where people live or work and need access to vehicle, which is one of the threat of car renting. The company also allows the members to use a car when required, which provides true flexibility. Supported by advanced technology (RFID System r), its vehicles are easy and readily available to use. Besides, the flat organizational structure makes it flexible and able to communicate efficiently and quickly to both employees and customers. Finally, the company has created brand recognition by calling its customers “Zipsters”. b) Weaknesses Zipcar has no prior experience in similar industry, but have fairly good experience in automotive industry. A fall in Zipcar’s gross and operating margins in the last reported quarter as compared with the prior-year period reflects high costs. The company ended the quarter having 8% more vehicles as compared to the year-ago period, while its fleet operation costs shot up by nearly 23%. The fleet operations, the company’s primary expenses consumed 71.2% of revenue in the first quarter of 2011. And the high costs make it unable to achieve the economies of scale. c) Opportunities Zipcar’s penetration in the international markets is not very high. Despite of the home market, there is only 1 presence in the Europe, which means there is more room to grow such as Spain. And because of the unfavorable economic situation in the European countries, people tend to get the idea of car sharing quite fast, which affects the growth in world’s car sharing