Zipcar case study - Essay Example

Zipcar Case Study Porters’ Five Forces Model A. Bargaining power of suppliers There are numerous traditional car rentals in the market. However, these suppliers are not efficient and some charge high prices. Only Zipcar stands out as the most accessible, affordable, and efficient rental agency.B. Barriers for new entrants in the marketZipcar has a unique business strategy (Pearlson and Saunders 75). The strategy allowed customers to reserve cars online, access car parking, return the car, and pay for services rendered without any delays.

The strategy also included a patented wireless technology that enhanced communication between Zipcar and its customers (Pearlson and Saunders 75). New entrants required a lot of capital and skills to match this strategy hence barring them from entering the market. Zipcar charge cheap prices for long distances as compared to other rental companies. New entrants will find it hard to charge such prices.C. Threat of substitutesThere are many substitutes in the market for car rental services. Indeed, buyers can easily choose to switch to other rental services if Zipcar fails to meet their needs.

Buyers can use personal cars, family cars, public transport, or taxis.D. Bargaining power of buyersBuyers have medium bargaining power where they have a chance to switch to other rental services if Zipcar does not meet their needs. The market has many buyers but only few have the capacity to influence market forces. However, the increasing number of online buyers can influence market prices in the future.E. RivalryMany car rental companies in the market compete with one another in terms of prices.

The companies provide the same services. There is no service or price differentiation in the market.The synergy between the business strategy for zipcar and information technology is very important (Pearlson and Saunders 75). Zipcar uses information and technology to enhance growth by helping the company to offer improved and efficient services.The network effects that are part of the strategy for zipcar are zipsters. They are social networking technologies used to develop an online community (Pearlson and Saunders 75).

The zipsters add value to the company by encouraging community development and creating good relations between Zipcar and the customers.As the CEO of zipcar, I realize that the services offered and the price of the services threatens my competitive advantage. To sustain a competitive advantage, I would offer flexibility services, maintain cars, and charge affordable prices.Works CitedPearlson, Keri E, and Carol S. Saunders. Managing and using information systems. A strategic approach. 4th Edition.

New Jersey: John Wiley & Sons, Inc., 2012. Print..