Business Models and Planning - Essay Example

Business Models and Planning Question It is a business idea that entails organized sharing of cars. It is different from renting cars in that ownership is shared, and one is not restricted to how long they should use the car so long as they meet the costs of mileage and other periodic costs. In brief, it is just analogous to owning a car in a more convenient and financially flexible way. The idea originated in Switzerland (Hart et al., 2005).Question #2 According to the early research that Chase conducted, the idea was still little recognized (had not taken shape) in Western Europe. Only 0.01% of drivers had embraced and paid for the shared-car ownership.

Of course, this meant that the market was viable. With about 99.99% of the market untapped, there was a great business opportunity for Chase and partner. More drivers would soon need the services so that business idea was highly viable, and there would be great returns (Hart et al., 2005).Question #3 The main competitors were Swiss Mobility CarSharing-it had 1400 cars at the moment-and Stadtauto. The latter had only 300 cars. The former had a membership of 30,000 people, and operated in some 700 locations and was mostly concentrated in expanding in Switzerland.

Drive Stadtauto had about 7,500 members and did operate in 110 locations. Other competitors were only potential in that they had not already set shop. They included CommunAuto, Car-Sharing Inc. and FlexCar. To differentiate it, Chase and partner focused on cost effectiveness and convenience when other companies focused more on environmental impact. They priced their services relatively cheaper and had diverse products when other competitors concentrated on just one or two products (Hart et al., 2005). Question #4 Chase and partner used a catchy name-Zipcar.

The name communicated their intention so that customers readily related to their services and the core rationale behind their idea; which was basically to share ownership of cars at individual convenience. They employed low-budget advertising techniques. For instance, they got 40% of their customers through word of mouth and referrals where already registered members referred others. Public relations also came in handy for them since they got 25% of their customers through this tactic. They also employed guerrilla grassroots efforts of marketing.

Members advertised the services even without knowing they did through well-crafted logos that conveyed environment conservation (Hart et al., 2005). Chase ensured that communication was passed through the websites. She emphasized on quality, convenience, low costs and the need to keep the environment “green". In my view, the marketing messages were effective in that Zipcar was able to break even after a short time and became a market leader. Question #5 The revised financial plan had added costs.

The changes were prompted by economic realities on the ground. Lease costs were on the increase; higher than had first been anticipated. When the company became bigger, it was only necessary that the costs be adjusted so that they creditors did not think the company was a financial risk. The expenses were huge and so revising the budget would ensure that the company got reasonable returns. The company needed more money to meet other logistics that were unforeseeable. Statistics of car ownership proved that the increase would insignificantly influence the business (Hart et al., 2005).ReferenceHart, M.

, Roberts, M. J., & Stevens, J. D. (2005). Zipcar: refining the business model. Harvard Business School Pub..