Market Selection and Foreign Entry-Mode
Zipcar is a highly successful new company specializing in a brand new model for automobile rental services, which allows their customers long-term and flexible access to shared vehicles on a daily or hourly basis. Zipcar’s innovative model allows those who sign up for their membership services to share cars with other members on a flexible basis, creating a cost effective alternative to car ownership. Since its founding in 2000, it has grown to become a major player in the U.S. automobile rental market and has expanded internationally to Canada, the U.K., Spain, and Austria and offers rental services to almost one million customers.
Before writing your paper, make sure to carefully review the concepts of target markets and market selection from de Kluyver (2012) as well as the discussion of advantages and disadvantages of different foreign entry mode decisions in Carpenter and Dunung (2012) and Rajagopal (2009). Once you have finished reviewing the basic concepts of this module, read the following two articles and do some of your own additional research on Zipcar:
Zipcar expands in Sacramento becoming 26th major metro market: Based on strong demand, Zipcar increases number of vehicles, will open office (Nov. 6, 2013) PR Newswire [Proquest]
Esswein, P. M. (July, 2011). Zipcar: Robin Chase. Kiplinger’s Personal Finance, 65, 1 [Proquest]
Zipcar, Inc.; Zipcar acquires leading car sharing service in Austria. CarSharing.at. (July 25, 2012). Mergers & Acquisitions Week, 196. [Proquest]
Now suppose you have been hired by Zipcar to come up with an international strategic plan. Write a four to five page strategic plan for Zipcar that addresses the following issues:
- What country or countries should Zipcar enter next beyond the five countries they already operate in? Explain your reasoning for this selection based on criteria from the background materials including de Kluyver (2012).
- What mode of entry should Zipcar use to enter this country or countries that you chose? For example, should they use a joint venture, franchising, a greenfield strategy, etc.? Refer to the concepts from Carpenter and Dunung (2012) and Rajagopal (2009) in your answer.
Assignment Expectations
- Answer the assignment questions directly.
- Stay focused on the precise assignment questions; don’t go off on tangents or devote a lot of space to summarizing background materials.
- Make sure to use reliable and credible sources as your references. Articles published in established newspapers or business journals/magazines are preferred. If you find articles on the Internet, make sure they are from a credible source.
- Reference your sources of information with both a bibliography and in-text citations. See the Student Guide to Writing a High-Quality Academic Paper, including pages 13 and 14 on in-text citations. Another resource is the “Writing Style Guide,” which is found under “My Resources” in the TLC Portal.
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