A Strategic Analysis of Zipcar

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Report to the Management:A Strategic Analysis of Zipcar|
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Student ID Number: 0898244, 0889876 |
11/30/2011|

Table of Contents
1.0) Abstract………………………………………………………………………...2 2.0) Introduction…………………………………………………………………….3 3.0) PESTEL Analysis…………………………………..……………..…………...4 4.0) Five Forces………...……………………………..…………….…..…………..6 5.0) Three Generic Strategies.……………………………..……………..…………8 6.0) Strategy Direction……………………………………………………...……..10 7.0) Value Chain Analysis…………………………………..……………………..11 8.0) SWOT Analysis…...….…………………………..……………………...…....13 9.0) Conclusion…………..………………………………………………………...15 10.0) Recommendations….…………………………………………………………15 11.0) Implementation Issues………………………………………………………...16 12.0) References…………………………………………………………………….17

1.0) Abstract
In this report we are going to reflect upon the business strategy of an American car sharing company called Zipcar. Business strategy determines the long term success of a company, the way they try to distinguish themselves in the market and how they achieve a competitive advantage. Zipcar is an innovator in the field of car sharing, but they still face fierce competition from car rental agencies and car ownership. This report looks to analyze their strategy in order to help them improve it. In examining Zipcar’s business strategy analytical tools such as PESTEL, SWOT and value chain analysis will be taken into account. This management report illustrates the company’s strongest and weakest areas that determine their potential growth and development. Recommendations will be made along with implementation issues which are important factors that will be discussed in this report in relation to the company’s business strategy. The company’s position as a competitor in the market will also be looked at, as well as how Zipcar attempts to present itself in it. Another important question to answer is what kind of challenges the company faces when trying to determine itself as a competitor. The report also describes Zipcar’s main external and internal influences and what effect they have on the company’s business strategy.

2.0) Introduction
The intention of this report is to conduct a strategic analysis of an American company called Zipcar, which is a car sharing company. For an annual fee, customers, known as ‘Zipsters’, have the option to rent a car whenever and for however long they need one. Their fleet of vehicles is parked through different locations in major cities throughout the United States, Canada and the UK (Zipcar). Members are issued a membership card which works to unlock the cars and as a gas and insurance card (Zipcar). You never need to enter an office, refill the tank before you return the car, or worry about returning the car on time, which distinguishes them from traditional rental car companies. Zipcar presents an intriguing challenge for a strategic analysis. Their mission statement is “to enable simple and responsible living” (Zipcar); however their corporate strategy is not clearly defined on their website. This is one reason they are interesting to analyze strategically; without a given corporate strategy, there is a lot of freedom in designing new strategies and recommendations. Another reason to analyze this company is that although they do quite well distinguishing themselves from competitors, they still control quite a small portion of the market when compared to large competitors such as Hertz or Enterprise (auto rental news). The large number of well-established competitors is one of Zipcar’s largest strategic challenges. Competitors are copying Zipcar’s concept of car-sharing as opposed to car rental, which steals market share from Zipcar (brand channel). However, they do have the advantage of being in the business of car-sharing for much longer than their competitors, which means they don’t have the same implementation issues as competitors. Another large strategic challenge,...
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