Analyze and discuss the strategic implications as related to management information systems (MIS) that you derived from this case. In the Zipcar case study, there was no particular strategic implication related to management of information system that could be derived from because IT was perfectly used to maximize Zipcar’s business advantage that brought advantages to both customers and the company’s bottom-line profits. By smartly use of technology, Zipcar was able to provide convenient and reliable access to on-demand transportation, making mobility as top priority.
With the use of Internet and the technological infrastructure, Zipcar was able to build, operate, sustain, and scale a viable service to its customers. Since technology may fail sometimes, so obviously there was no recovery plan mentioned throughout the case. How did the company profiled in this case leverage information technology (IT) to its strategic advantage (or disadvantage)? Strategic Advantages
Zipcar has leveraged IT to its strategic advantage by making every car transaction count and convenient for customers over the Internet. Customer applied for a Zipcard that allow them to conduct online business with the company. Such online activities as reservation for a car in a few hours in their local city for a pickup at certain time and location, and unlock their car once the car was picked up within walking distance (Pearlson & Saunders, 2010). With RFID-enabled Zipcard, all transactions are done online from billing, rental pricing, rental records retrieval, printing receipts, and credit card payment.
Customers also know which car they will choose, what color and size of the car they refer, when and where it becomes available within their vicinity. The car was also equipped with GPS-enabled wireless device that allowed customers to reserve and find a nearest vehicle using their own cell and smart phones (pg. 75). With patented wireless technology, information about the car and customers are instantly transmitted back and forth to the company, and this will tremendously help Zipcar to protect its physical assets as they know where, when, how and who dares to steal or break into their cars.
Zipcar also has the ability to monitor car security, fulfill reservations, maintain mileage information, and record hourly usage through its wireless technology. In addition, with the transmittal of important technical information such as the fuel level and the battery voltage back to the company, Zipcar can take preventive measures to alert or bring awareness to their customers, especially if the battery power were drained because the customers forgot to turn off headlights. Zipcar even went further once they launched a new social networking site called Zipters to form an online community of Zipcar members.
By maximizing the strength and popularity of the social networking technologies to their strategic advantage, Zipcar brings customers’ experience about their product and brand name to a higher and different level by encouraging them to share their own experiences about their trips called Ziptrips. Through these cheap and almost available technologies, Zipcar was able to make their brand known, understand the needs of customers quickly so they can market the right products to their name or image is extremely important and it is not always easy to create such a strong and reputable brand name that can quickly capture the customers’ interests and loyalty to the product.
Through social media, Zipcar made their brand known to younger generations. Brand image, communication, and technology play key role in Zipcar’s overall business strategy. Zipcar has used and invested heavily in technology because they know this is essential to their business’ success and profits. Zipcar also changed the traditional car rental industry’s rule by incorporating/adopting the new Web 2.0 mind-set to focus on customer empowerment, transparency, automation, and community.
With Zipcar, customers now have full freedom to choose what car they want, where and when they want to pick up the car as everything was included in the price so they do not have to worry about insurance, gas or fill out paper works at certain business hours. Strategic Disadvantages
While factors contributing to IT strategic advantages were easily captured in the case study, the disadvantage aspects were hard to find. Obviously, Zipcar did not have a backup plan in place just in case the system was down. As during these shut-down moments, Zipcar would not be able to track the customers’ activities online and clearly know the current physical state and location of the vehicle. Technologies are beneficial to humans once they work well only and there was no way to ensure its 100% operational availability without a proper backup plan in place.
Zipcar should think of ways to restore the system backup, how to protect their customers and vehicles during these shut-downs, who would come to the customers’ rescue as well as other logistic things such as charges, gas, etc… Zipcar should know that technology would never work to their advantages at all times. The enemies of growth are easy and comfort. Therefore, Zipcar should not fall asleep and enjoy their current success without seriously taking into considerations of a new backup or restoration plan.
This strategic advantage could become Zipcar’s advantage once their engineers work out a system that allow the automatic backup or fail back plans kicking in once the system was down to save the vehicle’s operations, or at least it could send out an immediate alert to both the customers and company’s headquarters once the dangers or failures were detected. Contested challenges would provide Zipcar opportunities to develop new functionalities, rise up, and eventually become a dominant in the car rental industry (Shaheen & Cohen, 2013). Highlight any particular lessons learned that would be valuable for an MIS manager.
By footing their shoes in customers’ and understanding well the customers’ struggles and frustration when standing in long line, Zipcar was able to create a superb vehicle and online services to serve their customers well. Zipcar knew very well how to leverage accessibility and make it convenience for their customers from anywhere and at any time, and this has created a real threat to their business counterparts in the traditional car rental industry. Supported by RFID technology, Zipcar’s vehicles became readily available to customers, and this gave customers flexibility.
Automatic online reservation system has saved Zipcar tremendously on costs for both their operational and human resources expenses. With Zipters community, Zipcar has achieved their brand recognition. With everything automated, Zipcar was able to reduce stress for customers while improving their bottom-line profits. Zipcar has made their customers realize that owning a car on their own are too expensive compared to using Zipcar’s vehicle where costs for gas mileage, tax, insurance and maintenance were included (Kohda & Masuda, 2013).
This was the reason why customers’ membership on Zipters community has grown at unexpected rate of over 200,000 (pg. 75). These paying members kept increasing due to Zipcar’s ability to maintain service and technological leadership. Undisruptive business model has made Zipcar a market leader. In customers ‘view and experiences, Zipcar has done many great things for them than just merely meet their aggressive demands on mobility, accessibility and availability.
Zipcar was able to build its strong image as a pioneered and market leader by having the technologies to back them up through a lot of highly technical initiatives and practical solutions. They have successfully used technology as their business foundation, and only in this sense, Zipcar could strive and be successful in many more years to come. Conclusion
Zipcar has created a successful business model where IT was the main reason for the company’s success and existence. Through IT-enabled capabilities, Zipcar was able to pay their complete focus and attentions on customers, and always found innovative ways to improve customers’ experiences about their products and services. It was true that Zipcar was more about creating a village of loyal customers where the sense of togetherness and community was the key, and less on transactions or operating costs (Kennedy, 2003).
With customer-focus model, Zipcar quickly became the only player in the car rental industry where everything was automated, and from there they expanded their business internationally. Zipcar has given their customers a new meaningful concept of how a modern living or life style would be like when everything was conducted online.
Kennedy, R. (2003, October 10). Taking the co-op out for a spin: New car rental idea depends on
courtesy of strangers. New York Times. Retrieved from http://www.umuc.edu/library Kohda, Y., & Masuda, K. (2013). How do sharing service providers create value? Knowledge Science Journal, 8, 32. Japan Advanced Institute of Science and Technology. Pearlson, K.E., & Saunders, C. S. (2010). Managing and using information systems: A strategic approach (4th ed.). Hoboken, NJ: Wiley. Shaheen, S., & Cohen, A. (2013). Innovative mobility carsharing outlook. The Transportation Sustainability Research Journal, 2(34), 3-5. University of California, Berkeley- Project.
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