An Introduction to Car-sharing & Zipcar Essay

Back in 2000, in lieu of all oercrowding in the US political machine renting foodstuff, Zip gondola railroad line automobile implemented a blue nautical strategy and accomplished its auto- communion melodic phrase as the dominant alternative to elevator car ownership. Compargond to car rentals firms that charge users on a per day basis, Zipcar offers users the flexibility of decision making the number of hours and distance of car usage. In admission, unlike car rental firms which require customers to pick up the cars from their offices, Zipcar allows members to pick up a car from their nearest military position oodles located at strategic points throughout metropolitan areas. The added convenience over the traditional car rental business model, coupled with Zipcars first movers advantage in the US foodstuff, led Zipcar to be the largest car-sharing comp whatsoever in the world, with a constitutional of 570,000 members and 8,000 cars.Zipcars Service Proposition 4 S imple Steps to impulsive a Zipcar Firstly, spic-and-spanly users are required to apply for a Zipcar social rank which tolls some USD60 annually. Secondly, users pass on to re help unmatchedself a specific car model at their preferred nearest location, via phone, online or the Zipcar mobile application. Thirdly, users proceed to their reserved cars and open their cars by having an RFID scanner located on the cars windscreen scan their assigned Zipcards. Lastly, users return their cars to designated pose lots and will be subsequently billed on a per-hour basis, without having to acquit for fuel or indemnity lives.Zipcars Four Market SegmentsThe peck of Zipcars operations is located within the US, although it does operate in selective cities of Canada and the UK. Its taxations come from the following four grocery segments. Individual Membership service individuals who prefer car-sharing to urban car ownership out-of-pocket to satisfying cost savings Universities Work ing with universities to address the lack of set lots by providing car-sharing to staff and students and reducing the number of cars on campus Businesses & Government Working with businesses and topical anesthetic governments to meet environmental goals by providing employees access to Zipcars and encouraging car-pooling FastFleet System sell its proprietary and trademarked car-sharing management systems to organizations interested in implementing an internal car-sharing plan Opportunity for Zipcar to Enter the Growing European Car- communion Market In 2006, the European Union (EU) announced plans to drastically reduce greenhouse gas emissions and the ascorbic acid footprint across European nations.Under the novel EU power policy, European nations are required to report their annual carbon dioxide (CO2) emissions. As such, given their ability to reduce the cars on the road and consequently the greenhouse gas emissions and carbon footprints, car-sharing services flourished i n Europe. According to Frost & Sullivan, the revenue from car-sharing in Europe is likely to hit $2.6 one thousand million EURO ($3.4 billion USD) by the 2016. This figure even exceeds the projected US car-sharing revenue in 2016 of $3.3 billion USD. Given that the European car-sharing market is likely to be more moneymaking than the US one, Zipcar should not miss out on the opportunity to fatten out its operations to Europe.Our Recommended Goal for Zipcar and Reasons for Recommending It Despite lacking a first-movers advantage, we suggest that Zipcar sets its sight on penetrating the European car-sharing market, specifically Germany and Switzerland, and seizing market leadinghip in the long run. Our group proposes the use of creative coaction strategies as a workaround to Zipcars lack of first-movers advantage when immersion the aforementioned markets. These strategies will be further elaborated upon in subdivision 2. Our recommendation of seizing market leadershiphip in S witzerland and Germany is based on the following reasons. Firstly, Zipcars acquisition of UK car-sharing market leader (Streetcar) in addition to its minority stake in a Spanish car-sharing start-up (Avancar) provides a substantiality geographical plat take a crap for expansion across Europe.By tapping on the intimacy base regarding the European car-sharing scene Streetcar and Avancar built up over the years, Zipcar could better understand the differences in consumer preferences between European car-sharing customers and their US counter maps without any incurring any market research expenses. Zipcar could then tweak their car-sharing offering and achieve higher levels of market-fit. Secondly, Germany and Switzerland crystallise up 35% and 19% of the European car-sharing market respectivelyv. Apart from the UK, which Zipcar is a market leader in delinquent to its recent acquisition of Streetcar, the remaining European nations only make up single-digit market shares amongst the European car-sharing market.Since Germany and Switzerland make up al close to half of the European car-sharing market, entering these two markets rather of other geographic markets should give them the great Return on Investment (ROI). Thirdly, by tar absorbing high-growth car-sharing markets like that of Switzerland and Germany, Zipcar can pull in substantial economies of scale and scope, which will lead to a lower cost structure, as it increases the size of its car fleet to meet the increasing carry for car-sharing in these nations. For example, Zipcar could negotiate bulk insurance deals at cheaper order with insurance companies. Seeing as how Zipcars recent net margins have been scoured by increasing operating costs like soaring prices of petrol, it is grievous that Zipcar explore cost savings through economies of scale and scope to check long-term sustainability of profits.Competitive Advantages that Helps Zipcar Fulfill Long Term Goal Firstly, as a car-sharing firm th at owns the largest car fleet in the world, Zipcar has developed legion(predicate) secure technologies and invests heavily in research and development to uncover new innovations that superpower strengthen its technological leadership. For instance, its patented Z3D Knowledge Center engineering is capable of synchronizing and displaying real-time information like reservation cost, vehicle location maps on various consumer touch-points like the online website, Zipcar mobile application and peal reservation system. Looking forward, Zipcar is planning to use its proprietary wireless entropy network to be the first car-sharing provider to implement in-car Bluetooth and even net income Wi-Fi services.Secondly, over the years, Zipcar has been building a significant amount of scratch equity. Today, Zipcar is a brand that is synonymous with car sharing and environmental conservation. Its powerful brand and trustworthy brand name is underscored by the numerous awards it has won over t he years. For example, Advertising Age Magazine named Zipcar in its 2009 list of Top 30 Worlds Hottest Brands. Given its powerful brand, Zipcar will find it easier to form the trust of potential collaborative partners. However, transferability of these competitive advantages across geographical boundaries might be held back by differences in consumer behaviours and competitive landscape.For instance, Europe and the US have radically different GPS networks and Zipcar might encounter challenges in implementing its patented GPS-reliant Z3D Knowledge Center technology in Europe. The extent to which Zipcar could leverage on its competitive advantages will ultimately depend on the effectiveness of its deployment strategies. potential difference Pitfalls that Zipcar Should Look Out for When Pursuing its Goals While penetrating the European market, Zipcar should be wary of the threat it might face in the US market from an emerging form of car-sharing where online communities like Zimride allow individuals to form car pools with others who engage near them.It is important that Zipcar hedge against this increasingly popular form of car-sharing by not overcommitting its financial capital to the European market, and allocating a fixed parcel out of its annual trade budget to the US market, in order to specialise itself from Zimride as the superior car-sharing offering through the use of creative marketing initiatives and even sales promotions.. Challenges Faced as a Second-Mover into the Germany and Switzerland Market We established in Component 1 that Zipcars next logical persist of action will be to compete for market leadership in Switzerland and Germany.However, this will be an uphill task, as Car2Go and Mobility, the respective market leaders in Germany and Switzerland, have leveraged on their first movers advantage to erect significant barriers to entry. Firstly, as first movers, Car2Go and Mobility have established themselves as technological leaders and hav e shaped customer expectations regarding car-sharing technological features. For instance, Car2Go has installed patent-pending electronic dashboards in their cars, which allows users to get directional help via GPS technology, as well as keep underw observance of distance travelled and its resultant costs. Zipcar on the other hand, is in the thick of implementing such technologies and might come across as an inferior excerpt to certain group of customers.Secondly, Car2Go and Mobility have pre-emptively secured scarce assets vital for success of a car-sharing business. Being first on the scene, they have secured strategic and limited parking lots around the cities as their designated car-sharing parking lots. Facing the above abet movers disadvantages, it will be challenge for Zipcar to enter the new markets in the conventional manner. As such, our team recommends using creative quislingisms strategies, bespoken specifically for Germany and Switzerland separately. Entry into Ge rmany as a Second-Mover via Collaboration with a railway line Operator * Reasons Why Zipcar Should work with Deutsche Bahn AG By collaborating with Deutsche Bahn AG (DBAG), the government-owned railway operator, Zipcar will gain swift access to scarce resources in form of car-sharing parking lots.In the urban areas, most of the limited viable parking lots have already been convinceed into Car2Gos designated lot ascribable to their first movers position, leaving close to none for new entrants. Being a state-owned public go operator, DBAG holds strategic state-owned land areas in urban districts, which could be converted into designated Zipcar parking lots. This is made possible by a German legislation allowing government authorities to authorize the novelty of state-owned land into car-sharing stations and lots. As such, Zipcar avoids the lengthy process of acquiring parking lots on their own prior to beginning operations, during which Car2Go would have act to strengthen its ma rket leadership in the absence of Zipcar.* Reasons Why Deutsche Bahn AG Would Want to Collaborate with Zipcar The DB brand is synonymous with being the frontrunner on climate protection. By collaborating with Zipcar, which takes 100,000 cars off the road and reduces carbon dioxide emissions by 150 million pounds annually, DB could tap on Zipcars credibility and proved track record of being environmentally lucky to enhance its brand equity as consumers start to closely participator the two brands over time. Besides, prior in-depth studies in European nations have shown that collaborationism between car-sharing and public transport firms have resulted in higher profit margins for both party. * Executing the Collaboration and Achieving Long Term Market leaders This collaboration will seek to integrate different transport options, broad citizens in Germany the option of catching a train for the main part of a trip, before picking up a Zipcar at a specific station and drive for the last part of the journey.The customers of DBAG are an noble-minded target segment for Zipcar to extend its service offering to, as these denounce railway commuters are unlikely to own a car. Hence, Zipcar should launch initiatives that convert railway commuters into Zipcar members. For instance, Zipcar could execute joint marketing campaigns with DBAG promoting joint-package pricing programs where consumers enjoy discounted rates for railway train rides and Zipcars car sharing services. Zipcar can alike leverage on the unique marketing channels DBAG offers by bankers bill marketing collaterals in railway stations and within trains themselves to educate commuters some its car-sharing offer. Given that countless Germans take the railway every day, this serves an effective syllabus for Zipcar to reach out to an enormous target group.These marketing collaterals should also make the partnership between DBAG and Zipcar obvious, through slogans like Zipcar the public car from DBAG. intimate that the service is jointly-offered by their established and trusted public operator, consumers will be more receptive to Zipcars offer. In the interest of user convenience and expediting the adoption rate, Zipcar should clearly indicate on the DB railway transport route map which stations offer car-sharing services. Zipcar should also station staff at railway stations providing reliable information regarding car-sharing. Entry into Switzerland as a Second-Mover via Collaboration with Universities Mobility, the Switzerland car-sharing market leader, is involved in a collaboration with the Swiss Federal Railways. Hence, Zipcar cannot use the same collaboration strategy as what we proposed for Germany and we suggest Zipcar collaborate with local universities instead.* Reasons Why Zipcar Should Collaborate with Switzerland Universities Zipcar lacks a knowledge-base about the Switzerland car-sharing market, particularly consumer preferences and strategic locations where car-sh aring is in high demand. By collaborating with local universities that serve an importance source of learning, Zipcar could rapidly build up its knowledge-base through interactions with ordinal students, as compared to venturing into the market alone without any form of market intelligence service or research. Universities are also ideal collaboration partners as college students are generally open-minded youths who form the majority of the early adopters who are importunate to try new innovative ideas like car-sharing.* Reasons Why the Switzerland Universities Would Want to Collaborate with Zipcar The collaboration with Zipcar achieves a strategic fit reduction of carbon footprint. Switzerland is one of the leading environmentally friendly countries due to continuous governmental efforts to sanction a green lifestyle. Zipcars mission statement of reducing ball-shaped carbon footprint will resonate well with these government-linked universities. In addition, most Switzerland u niversities, especially those located in the city, face parking management issues due to the lack of land and face an institutional need to reduce cars place on campus. Collaboration with Zipcar provides a cost-effective manner of solving the above issues, given Zipcar eight-years worth of partnership experience with US colleges, during which they achieved a proven track record of cutting down the number of cars and traffic congestions in various campuses.* Executing the Collaboration and Achieving Long Term Market leading Initially, Zipcar should focus on promoting weed adoption among university students. As it is a rite of passage for most European graduates to purchase a car when they forget school, it is crucial for Zipcar to get students to experience the benefits of car-sharing first-hand and warm them up to the idea of a car-free lifestyle post college years. Since most university students have limited spending power, Zipcar should seamster its marketing initiatives to c onvey the cost savings students will enjoy as a Zipcar member, due to their lack of a need to pay for car insurance, parking and rising fuel prices. Zipcar might also want to emphasise a story of convenience, where students matriculation cards could double as Zipcards that unlock Zipcars.Taking into consideration that university students are mostly Millennial (adults belonging to extension Y), who are progressively getting more environmentally conscious, Zipcar could also sidle up the fact it offers a selection of hybrid cars, like the Totyota Prius and Citron C1. Upon achieving mass adoption status, Zipcar should convert graduating college students into life-long Zipcar members, by offering incentives of lower annual social status fees and loyalty points. By targeting a specific target segment (i.e. college students) instead of competing head-on with Mobility for the same group of customers, Zipcar can steadily grow its market share and eventually emerge in a good position to ch allenge for market leadership.Bibliographyi Baan, J., Mack, D., Murphy, T., Sharma, S., & Watson, L. (2011, 08 22). 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