Zipcar: Refining the Business Model - Book Report/Review Example

Zipcar: Refining the Business Model Answer A) Car pooling is one of the most innovative services that have been provided to the individuals. Thinking in terms of the environmental aspect, it is one of best ways to reduce air pollution and also to conserve fast depleting resources. And for the customers it is both time and cost effective. Zipcar sensed the opportunity in the business and went ahead in that direction. Chase had a strong academic background and wanted to use it in the venture too.

Even there were only two existing competitors serving the same business. Therefore the opportunity was great and the business had every scope of getting bigger with time. Chase had a strong academic record to back her but there was lack of expertise in the particular field. Though it was a start up but the company made too many changes in a small amount of time, which prevented the business from being stable. Even fewer decisions taken by chase proved rather ineffective and cost consuming. Thus, the company needed more stability under the leadership of Chase.

Answer B) The business model adapted by Zipcar was of mixing innovation with the infrastructure. It was mostly catering to the service industry. The technical inputs through a proper processing got transformed to economic outputs. Marketing and financing were the major aspects in the business model adopted by Zipcar. There have been significant changes in the figures of the statements of business affairs in December 1999 and May 2000. From the figures, it can be seen that the profits increased tremendously between the two periods.

Being a start up it has to incur initial cost that gets sets off in the periods to come. Though the cost were increasing but the revenue were also considerably increasing. The increase of revenue in the later period was the effect of the low cost policy undertaken by Chase. Even with the increase of period, the business gained more popularity and people started availing the services. Thus, the company went in for ‘low cost more business formula’ which brought them greater gains in the second year.

Therefore the business situation in the year 2000 provided a bit of comfort to the company as the revenues were increasing considerably and even the expenses were well within control. Answer C) From the September 2000 figure, it could be analyzed that the variable costs of the firm were rising. Even the risks attached to the leasing were also on the run. Parking, fuel bills, overheads were also increasing. Even the costs incurred by the company for technological development were incurred in the time period.

The competition in the market was increasing too. Only soothing fact was that the marketing costs were in control. The policy that Chase should follow is that of cost reduction and also should develop certain schemes that would attract more members. Another policy that would be beneficial for the company is going in for corporate tie ups. It would help Zipcar in getting more number of members at reduced effort and cost. But the only way to success in the service industry is that of customer satisfaction.

Thus, to sustain in the market it will have to provide value added services to its customers at the minimal amount of cost. Bibliography Hart, Myra & Et. Al. Zipcar: Refining the Business Model Harvard Business School, 2005.