Case Analysis on

Presented by,
Group 6
Niraj Ghimire
Amit Pathak
Subigya Regmi
Prajwal S Shrestha

Zipcar
Car usage via a membership organization.
Founded in 2000 by Antje Danielson and Robin
Chase
Provides reliable and convenient access to ondemand transportation.
Hassle free service
No fuel cost
No mantainence cost
No Insurance cost

About the Entrepreneurs

Robin Chase
Major in English, French and philosophy at
Welleseley College.
MBA from MITs Sloan School of
Management

Antje Danielson
Worked for University Committee on the
Environment at Harvard University
Phd from the Freie University, Berlin

Danielsons idea to start the venture

Chase believed the idea.

Insight behind Zipcar

Already implement in few countries of Europe.
Best suited for Urban Location with the dense
base of potential users.
Expensive parking
Limited need to drive
High percentage of population using public
transport

Case Facts
Several variations of the Zipcar business model
along with their financial plan.
Include a very early version and a version
developed just prior to the launch of the business,
Includes the data from the first few months of
operations.
Underlies the business model for the venture and
to discover how these assumptions are holding up
as the business is actually rolled out.

Issues
Is the business practicable in terms of market demand,
opportunities and other environmental factors?
What were the flaws in the business model of Zipcar due to
which it couldnt get an interest of Investors in the early
phase?
Was the pricing strategy one of the reason to position Zipcar
different from other competitors and to cover its COGS at the
early phase of the business?
How important was the technology building in Zipcars
business model?
Was the variable cost and overhead cost a hindrance in the
growth of Zipcar?

Analysis 1
Gap in the market.
lack of satisfaction among every consumer

Huge prospect in terms of market size.

66 million population in 20 metropolitan cities
20 million population using public vehicles

strong demand for the niche product in US.

The primary prominence as the opportunity was
the convenience and the cost saving.

Analysis 2
The idea of car sharing business model was
relatively new in US.
Lack of experience of both entrepreneurs.
Unjustified financial plan and unclear numbers in
financial statement.
Huge loss in the first year.
The business model has not incorporated all the
costs involved in the business as the revenue of the
company increases.

Continued..
No breakeven point mentioned in the proposed
business model.
lacked to incorporate the staff increment to
meet the growth in business.
Annual fee of membership is too high to hurdle.
Cost related to parking has been ignored.

Analysis 3
The critical component of business growth of
Zipcar.
Higher annual subscription fees.
Change in pricing model after the failure.
Revise its targeted revenue and cost looking
into its actual figures and fails to covers it
COGS.

Analysis 4
Important factor for the proper operation of the
Zipcar.
The business was based mostly on web and hence
targeted such customers.
Online reservation system.
Black box to which information about the user
would be transferred.
present the right card to the right car at the
prescribed time

Analysis 5
Variable cost and overhead costs higher than
their expectation in the business plan.
Lease cost at $4800/vehicle
Parking cost at $750/vehicle
Fuel bill 10% higher than expected

The overhead costs higher than expected at

$44000 per month.

Conclusion

Recommendation
Its original pricing model should consider in the
financial plan.
It needs to consider further its marketing
expenses to increase its membership which
further increases its all overhead costs.
focus highly on research and development.
. Maintaining superior technology can give them a
competitive edge over their rivals.

Keep
Calm
&
Drive Safe