Zipcar Essay Example | Topics and Well Written Essays - 750 words

Zipcar - Essay Example It can be apparently said that in the US car rental market, as per 2011 statistical records, revenue touched a record high with the process of generation of over $1000, per unit for the entire US market, thereby bringing into focus the various levels of efficiencies that has been achieved by the players in the particular market (Arn.com 2012). However, it can be said that the entire market for this business is highly vulnerable to various factors of macro and micro economic nature (IbisWorld.com 2012). Item 2. The young car rental company Zipcar has increasingly focused its forward approach on various strategies with regards to capitalizing on the various prospects that are associated with the growth of the company as well as its sustenance in the car rental market in the presence of big competitors and tremendous competition and market pressure in the long term. For the purpose of attaining significant growth and business edge, Zipcar focused on effective segmentation and targeting. By the focusing on the opportunity of targeting college crowd for its rental services, it developed a unique market to serve and thereby developing an edge over the others. It can be said that while this certainly provided an edge at the beginning, but it may not be sustainable in the long term as competitors may increasingly target the same market. Also, from the damage point of view, the cost of maintaining the resources while catering to the target market is also significantly high. The financial analysis a lso supports the fact of high operating expenses for the company. The evaluation of the financial performance over the 3 year period shows that thought the company had an increase in revenue yet the cost related to fleet operations also went up. It also revealed that the operating expenses also increased over the period. So, it can be said that servicing the college student are coming out as a little expensive over the years. Talking in terms of the company’s long term prospects, it can be said that the company is yet to get established in a secured manner. The reason behind that is because though the company has achieved a significant growth in revenue yet its operational expenses are also increasing. Despite the high growth rate, it is not very effective for a new company to have high operating costs as the chances of maintaining profits will gets reduced with the company’s attainment of capacity as well as market saturation by other car rental companies. Apart from this, it also has to be taken in to account that the company’s main competitive edge of servicing the college students can be targeted by well established rival companies, thereby reducing the company’s standalone advantages. The company should focus on increasing the efficiency in terms of economies of scale by reducing cost of operations for the purpose of securing itself over the long term. Item 3. It can be said t