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. Zipcar usage comes automatically insured, and fuel cards are accessible in the glove compartment of available vehicles that are shared by the hour or day. Through the use of increasing cell phone technology, a user may simply click on a smart phone to rent, locate, and unlock a vehicle.
Effective and unique marketing campaigns have successfully wooed users to the firm and aided in the building of a culture among Zipcar users. From guessing games to controlled destruction using a sledgehammer, the events are used to make social statements and build brand awareness while “… marketing to the specific character of each neighborhood.” (Keegan, 2009) Consumers report a feeling of camaraderie amongst each other at social events which also enhances customer appeal.
A company’s weaknesses are demonstrated through deficiencies in a firm’s or customer’s ability to adapt to new technologies. Many consumers are excited about the...