Case Study of Zipcar

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1. Analyze the business model of Zipcar using Porter’s five forces model. Threat of new entrants: Profitable markets that yield high returns will attract new firms. This results in many new entrants, which eventually will decrease profitability for all firms in the industry. Under the guidance of Griffith, Zipcar's operating income rose to $one hundred million, which means this is a profitable, and the members are also increased. This will increase the new entrants, who may be compress the cost, thus reduce car rental prices. Bargaining power of customers (buyers): There are many car rental companies available, such as HERTZ, AVIS, so consumers make their choice depend on which company can give a discount and which is the cheapest one. This will influence zipcar’s profit. The consumer may ask more service, such as a more clean or new car, this will increase zipcar’s cost. Bargaining power of suppliers: Many buyers of automotive suppliers, so that each individual buyer is unlikely to become an important customer for party. Zipcar is also no exception. So suppliers will not provide a lower price. Intensity of competitive rivalry: Competitors offer almost the same product or service, such as henz, AVIS ,users switching costs are low; a strategic action, if successful, their income is considerable. It is proved that Zipcar model is very successful. So many similar car rental companies will appear. 2. Discuss the synergy between the business strategy of Zipcar and information technology. Customer can use the RFID-enabled Zipcard to use the car easily, and check all rental records and print receipts from the online reservation system. Zipcar also created and installed a GPS-enabled wireless device in each car, which allowed members to find and reserve a nearest vehicle using a cell phone. And each car has patented wireless technology, which make customers to use

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