Zipcar Case Analysis It Strategy

Questions One: Analysis of Zipcar’s business model using Porter’s five forces model
Threat of New Entrants
In my own observation, Zipcar is a perfect description of an almost hundred percent automated business. They have fully utilized all IT resources available to them, and have succeeded in eliminating the need for human interaction at the same time staying in full control of the business.
They have succeeded in outfitting all their cars with patented wireless technology, which I would classify as a strong point for competitive advantage, and at the same time mitigating the threat of new entrants.
Bargaining Power of Buyers
Just as stated in the case, Zipcar was the perfect answer for customers who wanted to rent a car for few hours in their home city. That just goes to say that zipcar had a target niche market and fully utilized technology in their business modeling. Contrary to the traditional methods of car renting where customers had to stay on long queues to rent a car at a higher cost with possible friction from human interaction and without the guarantee of getting a car of choice, Zipcar’s business model addresses all these problems by fully utilizing technology from the reservation stage all through to the return stage at a minimal cost to the customer. The convenience of the car renting process to Zipcar’s customers makes it very likely that they get repeat patronage, giving them a sustainable advantage.
Bargaining Power of Suppliers
Since Zipcar fully utilized sustainable technologies in their operations, thereby having minimal requirement for human resource, they reduced their dependence on suppliers of labour, inadvertently reducing the bargaining power of suppliers of labour. Unlike traditional rental companies that were fully dependent on human resource for staff needs with the risk of their operations being held to ransom by strike actions et al, Zipcar’s utilization of technology eliminates that threat and at a reduced cost.
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