Zipcar is affected by its internal strengths and weaknesses with respect to competitors and is presented with opportunities and threats from its macro environment. By understanding these various factors, an organization may successfully thrive in the business environment at large. The following analysis of Keegan’s article “The Best New Idea in Business” provides a SWOT analysis of Zipcar, which illustrated the factors affecting the firm’s rapid growth.
The internal strengths of a firm refer to positive factors with respect to competitors within an industry. Zipcar possesses internal strengths in possessing superior customer response, simplicity of transactions, and the hosting of memorable marketing events. The derivation of individual strengths of Zipcar is based upon how this organization adds value to the marketplace better than its rivals.
Customer response is improved through measurable aspects such as the minimizing traffic congestion, lower carbon dioxide emissions, and reduced operating costs. A single usage of a shared vehicle, such as from Zipcar, “… takes up to 20 cars off the road as members sell their rides or decide not to buy new ones.” (Keegan, 2009) Budgetary savings and green initiatives are significant deciding factors for members. “(Drivers) who give up their cars and switch to Zipcar say they save an average of $600 per month… and surveys in Europe show CO2 emissions are being cut by up to 50% per user.” (Keegan, 2009)
Contrary to the traditional rental transaction, wherein customers stand in lines, pay multiple charges or fees, and fill out lengthy paperwork for usage by the day or week; The Company offers simpler transactions that differentiate their services and builds customer loyalty. Zip...
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...z is able to “… get volume discounts on cars, mobilize its huge fleet and customer-support call centers, invest heavily in each city, and absorb losses if it wants to start a price war.” (Keegan, 2009)
Provided the firm is able to successfully focus on its strengths of differentiation in adding value to the customer experience, and can successfully take advantage of opportunities in the global marketplace by focusing on a broader demographic of potential clients, Zipcar may be able to successfully traverse the potential threats from new competitors in the car sharing industry and overcome its weaknesses stemming from technology gaps and limited product offerings. With a history of dramatic levels of growth, Zipcar possesses the momentum to keep moving forward.
Works Cited
Keegan, P. (2009, September 14). The Best New Idea in Business. Fortune , 160 (5), p. 42.
It has also established a distinguishable name among its competitors with a reputation for leading customer service. However, even as an established venture, the company needs to maximize its profits in order to stay in business and expand into new territories beyond its conquered boundaries. A strategic analysis was carried out by our team to establish the company’s current situation. A SWOT analysis was performed to come up with three referenced, strategic alternatives. These alternatives are meant to act as strategic guidance to the company in order to enhance growth.
In this argument I will be focusing on Fox Car Rental, Inc. as the basis for a systematic analyses of the organization, as I identify the strength, weaknesses, opportunities, and threats to the existence of the organization and its operations. Also, I will be providing three pitfalls to strategic management. In order to facilitate my argument, the use of a strategic matrix analyses will be utilized.
Wolfe, Alan. "The Next Big Thing." NYTimes.com. The New York Times, 5 Mar. 2000. Web. 24 Feb. 2014.
The SWOT analysis: The study of the firm's Strengths, Weaknesses, Opportunities and Threats called SWOT analysis, a key step in flushing out known performance issues that are important to the growth of the organization addressed in the corporation strategic plan. The issues identified in the SWOT analysis help leadership to come up with a plan and strategy to achieve the overall mission of the company (Strategic Planning, n, d). Target Corporation is one of the largest public retailing company in the US having more than 1700 stores serving guests nationwide. Target group and its brand position are evaluated in the market using SWOT analysis.--
I chose to prepare a SWOT analysis on Wal-Mart. On July 2, 1962 Sam Walton opened the first Wal-Mart store in Rogers, Arkansas. Wal-Mart employs a detailed system of data technology that supports its local as well as international operations. Through this system, it is possible to supervise the achievement of its stores, on a real time basis. It also supports Wal-Mart’s economical procurement. Wal-Mart also uses the most up to date technologies available to maintain and manage its local and global logistics operations, by coordinating technology into its core operations. Wal-Mart is able to conquer the tough competition as well as accommodating its large market productively. Wal-Mart is the second largest retail company in the world. It is a billion dollar company with loyal customers and competitive prices that are lower than other competitors. The company receives a great discount from their supplier due to ordering products in bulk. Wal-Mart has an extensive customer
Porter’s five factors include: the intensity of rivalry among incumbents; the threat of new competitors; the threat of substitute products; the bargaining power of the buyers; and the bargaining power of the sellers (Parnell, 2014). The rivalry with competitors in the used vehicle marketplace exhibits a level of intensity based on the age and stage of this industry. In the US, the automotive industry has been in a mature phase of its life cycle for nearly 50 years (Gao, Kaas, Mohr, & Wee, 2016). As the leader in the industry, Manheim Auto Auction must maintain a keen awareness for potential changes in consumer behaviors or disruptive technologies that would be more difficult for us to quickly adapt to. The second factor, the threat of new challengers entering the industry, coincides with the first factor in understanding our competition. There are high barriers to enter the vehicle auction market and Manheim has set the industry standard for buying and selling used vehicles at live auctions and online. The infrastructure required to open a competing auction is quite significant, along with the necessary permits, licenses, and federal requirements there is limited ability for traditional competitors to enter the marketplace. Conversely, this also means that the industry has very high exit
When testing if a corporate strategy is leading the company to success, there are techniques that can be used to project data collected from the company. Long term attractiveness, competitive strength, and the nine cell industry attractiveness/business strength matrix are used to highlight strategic positions of each business in a diversified company. The industry attractiveness gages the prospects for long-term performance. Competitive strength measures how strong the units are positioned in a business in their industry. Lastly, the nine cell industry attractiveness/business strength matrix merges information on attractiveness and competitiveness to show where in the industry does a unit fit when it comes to long-term success. Walt Disney
Penttila, C. (2007, March) [Brain Storm] Big Ideas. Entrepreneur, p.62 Retrieved 6th March, 2014 from http://www.entrepreneur.com/magazine/entrepreneur/2007/march/174688.html
Hertz operates its car rental business through various brands in 145 different countries. Hertz was named, for the thirteenth time, by Travel + Leisure readers as the Best Car Rental Agency (Hertz Annual Report, 2013). Hertz is one of the top companies in the car rental industry by obtaining 18.6% of the market share (IBISWorld, 2014). In addition to the leading position that Hertz has built within its industry, the focus was to add more value offerings while recreating the experience in car rentals across the globe. Hertz employs both growth and competitive strategies to sustain competitiveness.
Strengths refer to what the company or product are better and/or particularly better than its competitors. It is a factor that happens internally and currently to the organisation, giving the company advantage in the market that it operates in.
They have over 11,555 worldwide rental car locations and are at the point where they can cover their short-term liabilities with cash flow from their operations. Hertz’s adjusted earnings per share increased 77.1% meaning that their market value has increased. Their revenues increased by 34%, while they had a cumulative cost savings of $3 billion (Hertz Annual Report, 2013). This demonstrates that Hertz has the financial resources and the access to markets that they need. Hertz has successfully integrated their ExpressRent kiosks in more than 48 markets and their eReturn option for Hertz Gold loyalty program members, in which they have the ability to choose the Hertz ‘Fuel Purchase Value Option’ that lets them automatically buy a full tank at the start of the rental, so they can turn in the car with the gas at any level and not have to worry about filling up on the way to the
A SWOT analysis is simple exercise that could be implemented on multiple subjects including an individual or a whole corporation. The SWOT analysis is an operational tool for managing change, defining strategic direction and setting realistic goals and objectives according to Simoneaux and Stroud (2011). Discovering new opportunities and manage and eliminate threats that are present in the company and the surrounding market. SWOT is a valuable technique that leads to a better understanding of the strengths, weaknesses, opportunities and treats both internally and externally. The strengths and weakness are to be considered internal factors and opportunities and threats to be e...
Ford competes with other automobile industries on many factors such as price, quality, reliability, appearance, available features, and fuel economy just to name a few. Such intense competition within the automobile industry tends to put downwards pressure on prices, making it harder for Ford to put a price on vehicles that are similar to other cars produced by competitors. The challenging price environment puts pressure on Ford to increase value to customers while trying to dramatically reduce costs to achieve the similar pricing of competitors. Ford must be able to reasonably price vehicles so that customers still feel as if they are getting the best car for their money. Competitive pricing is a threat to Ford because it must increasingly rely on customer perceived value to differentiate its car quality from its competitors. Ford must be able to justify its pricing in an industry where resembling cars have similar pricing and nearly identical features. Ford’s pricing objectives must somehow be achieved as other competitors are cutting costs and improving their vehicles. Negative pricing pressure threatens Ford’s ability to provide outstanding value to its customers for smaller or comparable pricing within the competitive automobile
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