Zipcar Case Study

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Zipcar is at risk of losing its market share due to the commoditization of technologies initially used by Zipcar and the entrance of big car rental names with large amounts of capital and brand recognition (GARP Investing). Despite Zipcar’s rapid expansion and leadership in the car sharing market it has only been profitable in the last few years (AutoRentalNews.com). If the market space becomes more competitive it could be difficult to maintain the slim profit margins it currently enjoys. To remain competitive, Zipcar needs to be able to differentiate with its competitors. The larger traditional rental companies have significant resources available affording them flexibility and agility. Zipcar should continue its focus on marketing the environmental impact saved through the use of Zipcar, especially in environmentally focused metropolitan areas. It should continue to leverage technology to maintain a low overhead in the cost structure and offer innovative features to its members. With a smaller vehicle fleet, Zipcar also need to emphasize on its ability to be within client neighborhoods and not centralized to ports of embarkation. Finally, Zipcar needs to leverage its early adoption of web2.0 capabilities to continue building the Zipster community and brand loyalty.

APPENDIX Figure 1: Porter’s Five Competitive Forces (Pearlson, Saunders, 2012)

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Figure 2: I nformation Technology Strategic Triangle

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Figure 3: RBV, Value Creation

Value Creation

Value Sustainability

Value Rarity

Imitation Substitution Transfer

IT ASSET

IT Infrastructure

Moderate Zipcar’s infrastructure is crucial to sustaining its competitive advantage. Its proprietary technology, FastFleet software, interactive and smart mobile apps, automated reservation and payment processes create value for the company. However, competitors use similar technology that they can purchase or develop.

Easy to imitate and transfer (besides technology that is still patent protected)

Moderate for substitution

Information Repository

High value and rarity because of its first mover advantage. Zipcar has collected information about members’ preferences, which is leveraged strategically; access to Avis advanced analytics tools; well integrated with Zipcar’s operations and staff

Difficult to imitate and transfer

Difficult to substitute because of the volume and nature of the data

IT CAPABILITY

IT Management Skills

High because they were acquired over time

Difficult to imitate, substitute, or transfer; resources leveraged well

Technical Skills

Low as Information system professionals could be hired relatively easily to perform technical work

Moderate to imitate, substitute, or transfer; there are some sustainability results because the skills are used to integrate across a range of systems

Social Media Presence

Moderate because of Zipcar`s loyal customers, brand recognition; word to mouth advertising; online interaction with customers; digital marketing; rivals can use same model

Easy to imitate and substitute Moderate to transfer

Innovative Technologies

High as Zipcar has developed an industry leading proprietary platform; investing in R&D

Difficult to imitate, substitute, or transfer

Relationship Skills

High value from partnerships with businesses, universities and car manufacturers Moderate rarity because other companies can also build relationships with organizations although time is required to develop the relationship

Moderate to imitate, substitute, or transfer; first mover advantage

Zipcar’s value proposition is significantly dependent on the role of technology. The company leverages its rare and valuable resources in order to establish a superior resource position and sustain its competitive advantage. Zipcar has spent years developing the technology that now represents an industry leading proprietary platform. Its IT infrastructure is supported by well­developed social media platform and strategic partnerships with car manufacturers and universities. Zipcar’s IT Management skills also serve as a tool for value creation and sustainability.

Reference

Pearlson, K.E. and Saunders, C.S. "Managing and Using Information Systems: A Strategic Approach", John Wiley and Sons, Inc., Fifth Edition p.73

Zipcar company website: h ttp://www.zipcar.com/ Garp Investing. (2012, June 27). Zipcar's Emerging Competitive Advantages. Retrieved March 13, 2016, from

http://www.nasdaq.com/article/zipcars­emerging­competitive­advantages­cm151454

Payless, Zipcar Drive Avis Budget's Revenue Increase. (2014, February 20). Retrieved March 14, 2016, from http://www.autorentalnews.com/channel/rental­operations/news/story/2014/02/avis­budget­group­s­revenue­up­fro m­q4­2012.aspx

Hamilton, M., Kass, A., Alter, Allan. “How collaboration technologies are improving process, workforce and business performance”, retrieved from https://www.accenture.com/us­en/insight­outlook­how­collaboration­technologies­are­improving­process­workforce ­business.aspx

Bughin, J., Chui, M., Manyika, J. (2013, May) “Ten IT­enabled business trend for the decade ahead”, retrieved from http://www.mckinsey.com/insights/high_tech_telecoms_internet/ten_it­enabled_business_trends_for_the_decade_ah ead

“Top 10 Strategic Technology Trends for 2016”, retrieved

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