Global strategic Planning - Assignment Example

Global strategic planning of Zipcar Introduction Zipcar was founded in the year 2000 and has been able to become one of the major players in the automobile rental segment in the United States market. The company offers membership based car rental services to the consumer market segment and has its headquarters in Boston. The members can hire a car and pay the bill either day basis or hour basis. The company was founded was Robin Chase and Antje Danielson, and has now grown as a major player and also operates in international markets of Spain, Canada, Austria and UK. The company provides rental services to about 1million customers and the members can even book the car for a day or even for a year. Expansion of Zipcar into other countries Zipcar offers the best of rental services to its members which have been the root cause behind the growth of the company. The company even has expanded its member base mainly because of the reference and positive word of mouth that are given by the members. The company operates into markets of US, UK, Canada, Austria, and Spain. However with the increased pace of competition in the market the markets where the company operates has become highly saturated with a large number of competitors. The expansion into other markets is a very strategic decision that is taken into account by a company when it faces some problems in the current market or when it identifies some great opportunities that are prevailing in other markets that could be beneficial for the company. The reason behind expansion of business operations in different market differ from company to company. Zipcar in such a scenario of globalized economy has been able to create its position in the US market as a major player in the car rental industry. The company offers a wide range of branded cars with advanced technology to its member base and has been able to offer a perfect solution to people by being an alternative to car ownership. The company has been able to acquire decent market share in the current five countries where it operates but there is a need that the company should not get bounded to just these few locations and analyze the probable market opportunities that are prevailing in some other countries. There are places where the concept of car rental services though is known but has not gain importance which can be an opportunity for the company. There are even locations having very few limited number of players in car rental services or countries that has huge demand from tourist for such car rental services which can prove to be a good opportunity for Zipcar to capture and increase its revenue margins. The major reason behind expansion of Zipcar’s business operations into other countries except from those it is already operating is to increase its market share and establish its brand image in other locations. The company can opt to enter in few more of European countries such as Switzerland, Greece, Germany, France and Italy. Apart from the European countries the company can even opt for entering into some of Asian countries such as UAE, Malaysia, Thailand, Singapore, and Sri Lanka. The European countries has the existing demand in the consumer market towards such car rental services and the company can generate high revenue margins if it plans to enter into the selected countries. Amongst the European countries the major countries that can be targeted by the company would be of Germany, Italy and France which have high tourist visits and there is a high demand in these markets towards such services. In Asia countries the company can attempt to enter in the markets of UAE and Singapore at the initial stage as per the consumer market demand and a stable economy condition so has to facilitate people towards opting for such car rental services. Expansion strategy to be used by Zipcar There are different forms of expansion strategy that can be undertaken by a company depending on what is the major objective of the company behind such an expansion. The expansion objectives of one company differs from another company as in case of some companies the major objective of expansion can be to adjust its products or services as per the local tastes and preferences so as to create a good impact on the consumer market in which ever region it operates. Another company may have an objective to gain economies of scale rather than adjusting its business operations to the local market. On basis of such objectives there are choices of three expansion strategies that are available to Zipcar that is global, transnational and multi-domestic. The best possible expansion strategy that can be incorporated by Zipcar in its business operations is transnational strategy. The transnational expansion strategy majorly forms a middle path for the company between global and multi-domestic strategy (Katsioloudes, 2012). The major reason behind such a strategy is the motive behind the expansion of Zipcar into the selected countries. The company majorly wants to gain a good percentage of market shares and also to generate high margins of revenue. The company in order to achieve such a goal needs to be aligned with the consumer preferences or rather the demand in whichever country it operates and also it needs to keep its services standard so that it can establish its brand image in such markets. The transnational strategy of Zipcar would enable the company to understand the demand of the market so as to place their services as per the local demand. The demand and preference of consumer market segment of European countries in relation to the Asian countries may not be similar towards car rental services so the company needs to achieve a balance between its need of economies of scale and the local preferences. Conclusion Zipcar should plan for expansion into other countries so that it can establish its brand image and also generate high revenue margins so as to sustain its business operations in the highly competitive market. The company needs to opt for transnational expansion strategy so that it align its business objectives with the needs and wants of local people in various new countries or rather completely new market segment where it plans to expand its business operations in the nearby future. Reference Katsioloudes, M. (2012). Global Strategic Planning. USA: Routledge. 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