Zipcar: Refining the Business Model

The company has been functioning well in terms of generating profit and demand so far. However, there will be a 20% increase in demand for the next month of operations as predicted by management, and the production and supply management's problems may come as a problem they can no longer afford.

with their return on investment, employees are paid and treated fairly, and customers are satisfied with the

It has everything a consumer leaving in a busy area of a metropolitan area can ask for. Convenience, cheap, and accessibility. This is everything that a customer living with out a vehicle in an area that a car is needed periodically can ask for.Weaknesses: To start up a business like this as Chase realized you need a lot of capital. Finding the money and investors that believe in your company is going to be the hardest thing to do. To lease new cars or not have enough cars for the demand of new customers can also be a hindrance in the growth of this company. Other areas of concern that need to be addressed are the costs and insurance and liability exposure that renting a car to somebody can have. With multiple of even a few wrecks or fatalities can easily close the doors to a company like Zipcar that is just getting started. Opportunities: The Zipcar company is a company that can be very easily started once the right infrastructure is in place and can even be pitched to investors as a franchise store. That can be duplicated in other areas of the country. There is not current niche for the type of people that Chase is targeting and is untapped market place with the proper marketing plan.Threats: Rental car companies can also offer rental of cars on an hourly basis. They can pick up customers as well. This is not advertised but can be done. Most importantly if Boston or New York, or Chicago have a very efficient Public

This will benefit the company as customers are more likely to come back to a shop where they believe they have had excellent service and so a positive impression has been built of your business to that customer, this may have even further reaching benefits to trade if the customer then recommends your business to others based on the positive impression.

a) Apply the coefficient-of-variation decision criterion to these alternatives to find out which is preferred by the angel investor, assuming that he/she is risk-averse.

* The company would drop present dealers in their markets and not add new dealers.

My recomendation is to invest in this company. The market is growing and the industry is new. With reasanable prices, people will love to travel and visit different places. The managment have the experiances to do day by day operation and they hire the best salesmen and give them the opportunity and time to manage thier trips. Also, the company are very conservative with thier projection plan. A new company started running back to back charters and made a profit of 500,000 during the first year. The risk is that there is no assets for the comapny in case if the business didn’t work and they want to sell it. Also, it is a one man show by Steven with his experiances and knowledge. Moreover, other companies can steal the salesmen by better offers. To reduce these risks, they need to give some ownership to most of the salesmen and to make sure

Breakdown: While you hope your car is dependable, there’s always the possibility that it could break down at some point,

Option one was chosen over options two and three because, I believed it will produce the best results. The company image will be maintained more with this choice. Consumer confidence I believe will be higher. I believe stock prices will be more stable and may increase once investors realized

Finding ways to shorten routes and delivery times between stores would also been a benefit for the company. When I would attempt to fix

Upon receiving first round financing of $1.3 million, Zipcar is, as CEO Robin Chase describes, “poised for action”. The measures that the company intends to take moving forward will likely determine its future viability as the dominant player in the relatively untapped market of car sharing in North America. Currently, Chase is testing the concept in the single market of Boston, and has ambitious goals to break into other markets along the East and Mid-coast by the end of next year. Having received preliminary positive customer responses, Zipcar has potential to establish a secure market foothold and revenue traction; however, the start-up company is not without problems, namely the short lead time on their competitive edge, the

In consequent, they have limit cash to pay for daily operating costs that get higher every day and they would finally have to go out of the business. Second, there is challenge of finding convenient parking lots for its vehicles especially in densely populated cities such as New York and London. A start-up business may find it difficult to anticipate cost of parking. Moreover, there are different preferences of car in different markets. It is hard for a start-up company to meet every need of the consumers. Finally, the limitation of technology makes it hard for a start-up company to catch up with the big players in the market. It’s probably because of the limited capital and inability to access to such innovation. With advanced technology, the big players can easily operate their businesses and provides much convenience more than a start-up company, which results in a great distance between them to catch up with. Such first mover as Zipcar can avoid uncertainties by creating barrier to entry, avoid lockingin to inappropriate models, and have minimal upfront costs. They focused positioning of the Zipcar brand and clear communication of its value proposition. Moreover, they emphasize on the high quality service and consistent performance. Although Zipcar is not the first car share venture in the U.S., the company had

Since 2006, when the TOMS Shoes was founded, their ‘one for one’ business model has been widely embraced or criticized by different companies and the consumers. While, Blake Mycoskie, the founder of TOMS Company, was on trip to Argentina in 2006, he witnessed the extreme poverty and poor health conditions. After countersigning children walking barefoot, it dramatically heightened Blake’s awareness. Consequently, after witnessing those events, Mycoskie came up with a simple and innovating plan to create a for-profit business with a philanthropic component. Consequently, Blake created TOMS company with a unique principal and business model referred to ‘One for One’. TOMS ‘One for One’ is a unique business model, where for every pair of shoes purchased TOMS donates a pair of shoes to children in need in developing or underdeveloped countries. The company’s name ‘TOMS’ generated from the word ‘TOMORROW’, which was the original concept of the company, ‘shoes for tomorrow’.

a. I recommend that we invest $500,000 and let JV run independentlyas it was. Reason being is because 1. It is a minimul investment of only $500,000 vs. an investment of $8.5 million to create a gold standard of manufacturing facility and have the clients order volume not meet projections. In other words “why fix what’s not broken”.

This will help the company to deliver product and services that satisfy customers, hence increasing profitability.