Is Zipcar A High Potential Venture

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Recommended: Analysing the market and the customer

Based on Criteria’s of Evaluating Venture Opportunities there are several key indicators that shows that Zipcar is indeed a high potential venture. Below are the criteria in brief

1.0 Industry & Market

Market: The revolutionary concept certainly provides an alternative to public transport. Furthermore the car sharing concept is really useful for the public in a overcrowded city with limited parking & expensive parking fees. This is clearly not an untouched segment because there are other 2 competitors operating.

• Customer: The target customers are educated and internet savvy urban dwelling people.

• User Benefits: Non car owners will have the service at their disposal when ever they require thru reserving it on the web.

• Value added: All billings are done online and is hassle free. Users have access to utilization data. System is fully automated with wireless data sending and receiving.

• Product life: Product will be long life as annual market growth is expected to be 30%.

1.1 Market Structure

As I mentioned earlier, the market is not completely untapped, but the other competitors are concentrating in the metropolitan area. The whole US market is still available to be ventured into.

1.2 Market Size

The potential market size is huge, as forecasted, in 14 metropolitan cities it would be $200 million.

1.3 Growth Rate

The annual growth rate is expected to be 30 %.

1.4 Market Capacity

It’s at its fullest capacity, as only Portland & Seattle have similar services.

1.4 Market share attainable (Year 5)

It is capable of capturing 13.8% of the market share. It is not a market leader, but with continuous development & effort has the potential to be a market leader.

1.5 Cost Structure

ZipCar is a low cost provider. Ma...

... middle of paper ...

...nal Criteria

6.1 Goals and fit

The founders have potential success with moderate risk. The founders are also very passionate with their idea.

6.2 Upside / downside issues

ZipCar founders have invested their own money into the venture and have been seen taking salary cuts.

6.3 Desirability

The founders thrive under pressure working hard to locate funding for ZipCar.

7.0 Strategic Differentiation

7.1 Degree of fit

The venture has a revolutionary service concept that serves the purpose and customer needs.

7.2 Team

The founders have good fundamental in finance and management background.

7.3 Service management

7.4 Timing

7.5 Technology

7.6 Flexibility

7.7 Opportunity orientation

7.8 Pricing

7.9 Distribution channels

7.10 Room for error

Conclusion

Based on the criteria discussed above, ZipCar is a high potential venture with good returns.

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