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Zipcar Case Study

In: Computers and Technology

Submitted By jlfickey
Words 3671
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Question #2
Porter’s Five Forces Model – Zipcar, Inc.
Threat of New Entrant ZIpcar’s IT infrastructure would be hard to replicate.
They have a strong competitive advantage with their patented wireless technologies and proprietary information systems that create entrance barriers for new competition.
Bargaining Power of Buyers Zipcar provides a membership based business strategy and a fully automated reservation system. GPS location services, membership accounts, and reservation modifications can all be accessed with a member’s mobile device.
Customers will find it difficult to get the same level of service form another competitor.
The creation of user friendly IT systems has simplified Zipcar’s car rental experience.
Zipcar has managed to limit the bargaining power of buyers by decreasing the likelihood of customers switching.
Bargaining Power of Suppliers Zipcar’s has experienced a steady growth, expanding its services into new locations.
Taking advantage of incentives for sustainability have helped Zipcar limit the bargaining power of it suppliers.
Automation of services create less dependence people, places and services that are synonymous with the traditional suppliers of the car rental industry.
By dealing directly with car manufactures they can limit their bargaining power of the supplier. Entering into purchasing agreements can help to negotiate the selling cost of the car.
Industry Competitors Industry competitors of Zipcar would be the traditional car rental companies. These companies are constrained by lengthy paperwork processes and subject to typical business hours of operation.
Traditional vehicle rental companies do not offer hourly rentals.
Zipcar has established a niche in the market through systems automation that creates efficiency by aligning its business strategy with an effective use of information technologies.
Zipcar has designated parking spaces at various locations within cities that they operate.
Zipcar rentals can be made 24/7.
Zipcar’s low priced rental rates include the cost of gas and insurance.
Threat of Substitute Products The development of the ZIpcars IT systems will make the threat of substitutes very unlikely.
Traditional rental services cannot offer the same services for the same price.
Other modes of public transportation may be available but the convenience that comes with personal transportation cannot be matched.
Zipcar provides an on demand service that allows the user to utilize the full benefit of a personal vehicle without the cost of ownership.
Question #3
The synergy between Zipcar’s business strategy and the use of IT.
The mission and vision behind the Zipcar is to provide a car sharing service that gives the customer on-demand mobility while leaving a small footprint on the environment . With a Zipcar membership a customer can bypass the hassles of the typical car rentals procedures of filling out paperwork every time that they need to use a car. Members are only charged for the time that they use a vehicle, unlike traditional rental agencies that typically require a minimum daily rental. All Zipcar locations and services remain open and operational 24 hours a day. Members can login to update and review their accounts at any time. Their website is user friendly, informational, and concise.
The synergy between Zipcars business strategy and it effective use of IT has enabled the company with successful growth. Allowing them to directly compete with traditional car rental companies by fully automating the car rental experience for their members. In order to track and monitor vehicles remotely Zipcar utilizes a patented wireless technology coupled with their proprietary IT platform. Information is able to flow seamlessly between customers, vehicles, and the company. It provides customers with the ability to make reservations, record hourly usage, and maintain mileage information. For the company it provides technical information on the vehicles that include fuel and battery levels .
With these IT systems in place it is easy to gather additional consumer data that may prove to be valuable. Data that could be further analyzed to determine customer behaviors and make educated business decisions. For example, based on rental history informations they could determine which types of cars are in most demand for specific locations. This information would assist in purchasing decisions when it comes time to acquire new vehicles into their fleet.
Social networking technologies are used to share user experiences, gather customer feedback, and act as a facilitator to encourage community development of the organization. The company has been able to promote positive feedback for its green initiatives, community involvement, and its innovative use of technology.
On the back end of the company employees utilize different types IT services to interact with one another, promote business development, and facilitate the needs of the customers. Zipcar’s services focus on larger metropolitan areas to provide easily accessible and affordable transportation alternatives. Zipcar has multiple car rental locations in four different countries between North America and Europe.
By bringing the new Web 2.0 mind-set of focusing on automation, customer empowerment, transparency, and community they have changed the rules of the rental car industry. Allowing individuals and businesses to have access to the benefits of car ownership without the costly expense of buying a car.

Question #4
The 2014 IT trends and policies that have been adopted by Zipcar and their importance to the company.
Mobile Apps and Applications
Mobile apps and applications provide the users with different methods to access a company and its information. A user access may include the ability to manage personal accounts, make purchases, or schedule an appointment.
Zipcar has mobile apps available that can be downloaded for iPhone and Android devices. Theses apps allow customers to find vehicles with an interactive map. Locations of vehicles are displayed via a GPS tracking systems located within the vehicle. When a car become available a location pin will be displayed on the map. The mobile application will also allow a user to make reservations, modify a reservation, report damage, and even lock and unlock a vehicle.
The app’s reservation options displays the various cars that are available for rent and calculates the expected cost for the rental. This mobile app enhances the customer experience through time saving convince and ease of use.
The Internet of Everything
The internet of everything refers to how electronic devices are becoming more integrated into internet to promote a seamless interactions with the user. Zipcar’s patented wireless technologies and proprietary IT structure allows for this to happen. Each car is outfitted with technologies that allow for remote interaction. Security, car vitals, and vehicle usage can all be monitored and controlled through the internet. For example, as a theft deterrent a vehicle and be shut off remotely if unauthorized usage if detected.
RFID technologies allow customers to lock and unlock a vehicle by simply placing their membership card over a sensor that is located on the windshield. The membership card is the approximately the same size and a credit card. The card is imbedded with an RFID tag. When the card is placed over the sensor it communicates wirelessly with the companies IT systems to automatically start monitoring the vehicle at the start of a rental. This process is fully automated and the communication happens within a few seconds.
Zipcar’s IT systems and device interactions appear to be ubiquitous. As a member travels to different locations or regions where Zipcar’s services are located. The information systems and device interactions appear to all function the same. This provides the customer with the same familiarity and comfort level they have come to know.

Hyrbid Cloud, IT as Service Broker, and Cloud Computing/Architecture
The hybrid cloud utilizes a combination of internal and external IT services. Internally, a company’s private cloud is used to provide its users with access to the company’s information through its own data centers. The company has the responsibility for running and managing IT resources in-house which can be costly. Externally, public cloud services can be offered with the ability to pass the cost to the third party cloud provider.
The hybrid cloud can provide greater flexibility and scalability of IT services within a company. New applications can be used without the need for a company to install new hardware or software. The services can be easily scaled up or down, limiting them according to their requirements.
With the many different services that can be provided via the cloud, it makes it easier for a company to utilize or even try new technologies at a fraction of the cost. Understanding which third party IT service that best suits their needs can be somewhat of a challenge. A cloud service broker (CSB) can be used to handle the aggregation, integration, and customization of the different services that are available.
ZIpcar has developed proprietary IT systems and patented wireless technologies. The information about the inner workings of their IT operations are not readily available. According to their privacy policy, they do maintain servers that hold customer information which are located within the European Union and the United States of America. The utilization of a hybrid cloud to service different IT functions could not be determined. It does offers services for its customers that can be compared to a hybrid cloud at the user level.
The Zipcar mobile app is essentially a hybrid cloud based service for its users. The app is downloaded the personal device and provides access to the services of the company. For example, the GPS locators in each vehicle and TomTom map services provide the user the location of the vehicle. The customer reaps the benefits of these services without having to purchase the GPS equipment or the map software. Zipcar can be thought of as a CSB for the user. Providing different cloud based services that are accessed via their internet ready devices.

Software Defined Anything
As information technologies continue to advance, the need to be able to manage and control hardware is an ongoing requirement. Software-defined anything (SDx) is a term that is used to describe the new trend of allowing software to fill the role of managing and controlling multi-piece hardware systems. SDx essentially provides the connections that are needed to the different hardware devices within an IT system.
Zipcar utilizes a wide range of technologies that allow its members to experience a new way to rent a vehicle. The ability to rent 24/7 through a fully automated system gives their members more control and freedom. GPS systems, RFID sensors, and patented wireless technologies are connected together so that vehicles can be rented and managed through Zipcar’s proprietary IT systems.
A member’s mobile device coupled with Zipcars mobile app provides members connectivity directly to the vehicle. Being able to view a vehicles location, its rental availability, and the cost of the vehicle rental can all be seen and managed through the mobile app.
IT systems allow the company to monitor security, fulfill reservations, record hourly usage, and maintain mileage information. It also relays vital technical information such as battery voltage and fuel level. It can even inform the central system if the customer forgot to turn the headlights off can quickly drain the battery . Zipcar’s amount of hardware connectivity is a good example of the SDx trend. The software systems that are in place manage and control the multiple devices that must interact for a transaction to take place. Zipcar’s success relies on their software’s ability to effectively manage its hardware.

Outsourcing
With outsourcing a company hires a third party to provide services or perform certain business functions within their organization. Services and functions that can be provided at a cheaper cost to the company.
Zipcar provides its customers with vehicle rental services that are fully automated. This is accomplish with a combination of different technologies. Users are given the necessary tools that make it possible to find and rent a car. The map feature that is utilized with the GPS location is currently outsourced through TomTom’s map service.
Zipcar currently outsources its call center to a third party affiliate. The call center technologies that are used provides the company with effective call management features. An automatic call distributor (ACD) and interactive voice response (IVR) systems are obvious technologies that are in use at the current call center. When you first call into Zipcar you are greeted by the IVR system. This system provides a series of recorded messages that allows the user to navigate through it with the phone’s keypad. The second technology is the ACD which automatically routes the call to the appropriate person that is trained to handle the user’s specific request .
The advantages of outsourcing the telecommunication features is to allow for the call center to absorb the cost of the maintaining the equipment, technologies, and staffing. Leverage Social Media
Social media sites such as Facebook, YouTube, Twitter, Google, and LinkedIn allow users to connect to each other via the internet. From these sites people and businesses can interact within a web based community. Allowing them to share pictures, videos, and personal experiences within that community.
Social media sites are accessed through an internet webpage or on mobile devices via a site specific app. The app will allow the user to directly connect and interact with the social media platform. These sites can be used as marketing tool to relay company information and promotions directly to the consumer. Social media interactions are often done in real time so a company’s constant input is needed to help keep followers engaged.
Access to these sites are free and many offer upgraded features at an additional cost. With instant access to a large pool of users, a social media presence is often an appealing marketing strategy for a businesses. When leveraging social media as part of a business strategy it is important to stay focused on the site’s interactions and its changing content. Maintaining information so that it is accurate and relevant is often a fulltime job.
Zipcar utilizes various social media sites to interact with its followers. These sites have allowed members to share their Zipcar experiences, access promotions, and take part in contest. Zipcar has been able to effectively leverage their social media presence to create brand awareness, gain market share, and create new base of loyal followers that refer themselves as Zipsters.
Collaboration Technologies
Collaboration and teamwork create an environment that allows the collective knowledge, resources, and skills of each team member to flourish. Effective collaboration technologies allow for unified interaction between users. Groups of people can work together, share ideas, and provide access to digital documents and files in real time.
Zipcar currently has offices are located in multiple locations across the US, Europe, and Canada. Employees must have the capability to connect and collaborate to complete projects and accomplish the company goals. Technologies that enable communication and network connectivity enable the cooperation that is needed to get the job done.
Social media sites such as Facebook, Twitter, and LinkedIn is another example of a type of collaboration technology. Users can post information, share advice, and receive feedback. Companies may utilize these technologies to promote products, services, and collaborate directly with consumers.
Zipcar has been able to develop a strong social media presence within the market. By connection directly with the users of these sites they are able to gain new customers, maintain existing relationships, and gather valuable feedback from consumers. For example, Facebook followers are given the opportunity to come up with new Zipcar vehicle names. These names are used as an identifier that are unique to each vehicle.
Securing the Enterprise
Securing the enterprise should be an approach that focuses on both the internal and external factors that can cause risk to an organization. A business’s IT network can become vulnerable if not properly secured. Vulnerabilities can lead to unwanted exposure of personally identifiable information.
Network and systems security tools that are commonly used to provide safeguards against unwanted access. These can include things like firewalls, access passwords, network filters, and encryption technologies. Policies and procedures should be developed to help create awareness on how to secure sensitive information. Developing a privacy policy can help to ensure that a customer’s personal information is properly managed and secure. Training programs help to create awareness among the employees of the different types of security risks. This also can make sure that they understand the countermeasures that are available to help mitigate these risks.
Zipcar has a detailed privacy policy that explains how information is collected used. It states where personal information is stored, shared, and how it is transmitted. They have been awarded the TRUSTe’s Privacy Seal signifying that this privacy policy and practices have been reviewed by TRUSTe for compliance with TRUSTe's program requirements including transparency, accountability and choice regarding the collection and use of your personal information.
For Zipcar security measures are in place and they appear to be function properly. The success of the company is membership driven. Maintaining existing members and trying to secure new accounts. With each member personal information must be gathered and securely stored on their system. Personally identifiable information is highly guarded. Information like driving records and financial records are secured using safeguards such SSL encryption to help prevent unauthorized access to this information.
Though Zipcar does not guarantee that their systems are 100% resistant to cyber-attacks, they make a good faith effort to protect personal information through the policies and procedures that they have in place.

Question #5
Additional 2014 IT trends that have not been adopted by Zipcar and their possible significance as it relates to the company.
Smart Machines
The smart machine era will be the most disruptive in the history of IT. New systems that begin to fulfill some of the earliest visions for what information technologies might accomplish — doing what we thought only people could do and machines could not —are now finally emerging.
Zipcar current IT business strategy does not appear to incorporate the use of smart machines. With new advancements of vehicle technologies cars will eventually be able to drive themselves. Ford has recently unveiled a self-driving Fusion Hybrid. Ford has been working with MIT and Stanford University to develop this technology.
Zipcar should be thinking about possibly integrating this technology when it becomes available. Once the technology is perfected and is available to the consumer it will more than likely be offered as a vehicle option upgrade. Zipcar’s current business strategy uses a variety of technologies that has provided them with a strong competitive advantage. This technology would fall in line with their current strategies that incorporate IT systems into the car rental service.
Other technologies that could remember and interact with each individual may also become available. For example, customizing the car settings automatically to a members profile and being able to learn new preferences as the customer interacts with the vehicle.
Big Data, Business Intelligence (BI) and Analytics
Data by itself is raw and unrefined. Big data is often used to define massive collections of data sets When data is processed it becomes information and from this information you can receive intelligence. The purpose of analytics is to process the collected data to arrive at the optimal decision.
Data that is collected is either going to fall into one of two categories. It will either be structured or unstructured data. The volume of unstructured data is growing much faster rate than the structured data. It is predicted that unstructured data will account for 90% of all data in the next decade. Being able to process and make sense of this data is where the challenge lies. Big data analytics utilizes different business intelligence technologies to help gain a richer, deeper, and more accurate insight into customers, partners, and businesses. The goal is to use these technologies to help gain a completive advantage within an industry.
It does not appear that Zipcar has adopted the technology trend that utilizes big data, business intelligence (BI) and analytics. In order adopt this trend changes to their IT systems, strategies, and processes may need to take place. The potential benefits from the adoption could be used to further separate themselves from their competition. Allowing for greater insight into the industry, which could lead to better processes and approaches that are outside of their current business model.

Question #6
Zipcar’s possible IT structure and the deployment as it relates to their scope and the potential for geographic expansion.
It would make sense for Zipcar IT structure to be organized in a top down type structure with a CIO at the top. Possibly split into different departmental areas that would be led by different department managers. Under each of the manager would be different level associates (e.g. tier I, II, and III). This provides a structured approach for the completion of IT related projects.
The company’s IT infrastructure will probably be a combination of decentralized and centralized architecture. Decentralized in a sense that the computing power that is needed to run the business will be spread out among different devices. Zipcar has multiple office locations each of which need the ability to have devices such as PCs and laptops, smart phones and tablets. As information is processed and collected at each location it is transferred to their company servers. These server locations are probably going to be regionally located. For example, currently there may be a servers located in the US and located in Europe. These servers would be able to run the websites that provide customer interactions, maintain customer records and vehicle systems.
Having these servers located in different regions would allow for redundancy that can help to minimize the any disruption in the system. The Zipcar service is available 24/7, so it is critical that the systems stay online. Systems may need to maintain different types of information (e.g. DMV records and insurance info) that may vary from location to location.
There may be a centralized Data warehouse that communicates with the regionally located systems. Providing IT managers and software engineers the ability to centrally manage the systems and back up the information into a secure location. As the company expands into different countries the need to increase regional systems can be done as needed.

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...The competitive advantage model is sustainable for Zipcar, because the company has created a model that is complex and difficult for other companies to emulate. Rental car companies such as Avis, Budget and Enterprise would be unable to switch to Zipcar’s model due to their old existing traditional infrastructure. Zipcar’s model provides multiple benefits to the customers, such as pay per hour, paperless renting process etc. Zipcar also has good business strategy. For example, Zipcar is targeting college students as their new customer base, a population that car rental companies have largely ignored because of liability concerns. Zipcar’s idea is to gain early adopters who will continue using the service when they graduate which I think is good mixture of information technology and innovative business technique. Groupon on the other hand, is a company which sells internet coupons for events, services and popular events. In my perspective, Groupon’s model is not sustainable and can be easily copied by new companies. In addition to that, Groupon’s business model does not add value to retailers. For example, large number of retailers found Groupon deals unprofitable as one of the local business owner lost $8,000 on their Groupon promotion when too many coupons were issued. (P.G. 71 Groupon Case study ). Further, there are no barriers for entry to stop competitors. As hundreds of competitors have already entered into the market, as a result Groupon had to hire thousands of...

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Zipcar Marketing Plan

...short notice. * A degree of freedom, “low-car” diet. * Car-sharing alternative to a cab service, renting or owning a car. Actual Product * Zipcars are available in 67 cities/metros in the United States, Canada, and the United Kingdom. * Members are given a “Zipcard”, an access card containing a wireless chip that will open the vehicle they have reserved only at the time they have reserved it and the keys stay in the car at all times. * Reservations include driver’s insurance, gas card for the car, reimbursements for fuel obtained at gas stations that do not accept the included gas card, and up to $15 in reimbursements for typical car maintenance items like car washes and window wiper fluid refills. (Zipcar) Augmented Product * Website offers easy account access to pay memberships fees, add money to Zipcard and change driving plan. * Zipcar has teamed up with universities and colleges to offer the convenience of car ownership without having a car on campus. Product Life Cycle * Zipcar, European car-sharing, occupies the Growth Stage of the Product Life Cycle. In 2000, Zipcar was founded by Cambridge, Massachusetts residents. In October 2007, Zipcar merged with rival Flexcar and in April 2010 Zipcar bought London-based car-sharing firm Streetcar in its latest bid to expand across Europe. By 2009 Zipcar became the world’s largest car-sharing service in 49 U.S. cities, Vancouver, Toronto and London and continues to expand with gaining more members,......

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Zip Car

...Myra Hart, Senior Lecturer Mich ael J. Roberts, and Research Associate Julia D. Stevens prepare d this case. This case draws upon portions of an earlier case, “Zipcar,” HB S No. 802-085 (Boston: Harvard Bu siness School Publishing, 2002), written by Professor Myra Hart and Research Associat e Wendy Carter. HBS cases are developed so lely as the basis for cl ass discussion. Cas es are not intended to serve as endorsements, sources of primary data , or illustrations of effective or ineffective management. Copyright © 2003 President and Fellows of Harvard College. To orde r copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, us ed in a spreadsheet, or transmitted in any form or by any means—electronic, mechani cal, photocopying, recording, or otherwise—without the permission of Harvard Business School. MYRA HART MICHAEL J. ROBERTS JULIA D. STEVENS Zipcar: Refining the Business Model It was October 14, 2000, and Robin Chase was leaving yet another meeting with potential providers of capital for her fledgling venture, Zipcar. Chase was CEO and cofounder of the company, which she and Antje Danielson had starte d some 10 months before. The idea behind Zipcar—a sophisticated form of car sharing—was simple, yet potentially revolutionary. Chase and Danielson......

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...MAY 9, 2005 MYRA HART MICHAEL J. ROBERTS JULIA D. STEVENS Zipcar: Refining the Business Model It was October 14, 2000, and Robin Chase was leaving yet another meeting with potential providers of capital for her fledgling venture, Zipcar. Chase was CEO and cofounder of the company, which she and Antje Danielson had started some 10 months before. The idea behind Zipcar—a sophisticated form of car sharing—was simple, yet potentially revolutionary. Chase and Danielson had conducted some initial research during late 1999, and by the end of that year, the two had developed a business plan. They had incorporated in January 2000 and raised their first $50,000 from one angel investor. By June of 2000, the two entrepreneurs had leased 12 cars and were ready to open for business in Boston. By October, the fledgling company had 19 vehicles, nearly 250 members, and the founders had raised—and spent—an additional $325,000 to fund the early stages of operations. Yet, even with this demonstration of viability, Chase and Danielson had not succeeded in raising the equity capital they needed to really grow Zipcar. Beginning in early 2000, Chase had made a series of presentations to potential investors in which she sought $1 million in capital to prove the business model in Boston and, eventually, to set the stage for expanding the business to other U.S. cities. Potential investors seemed intrigued and enthusiastic about the Zipcar idea. While Chase hoped to close on this first round of......

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