Discussion: Patented Wireless Technology

Discussion: Patented Wireless Technology

All cars were outfi tted with patented wireless technology. Zipcar ’ s proprietary IT platform carries information fl ow bet- ween customers, vehicles, and the company. It is used to monitor car security, fulfi ll reservations, record hourly usage, and maintain mileage information. The platform also relays vital technical information such as battery voltage and fuel level. It even informs the central system if a customer forgot to turn off headlights, which can quickly drain battery power.

This business model provides unique advantages over traditional car rentals. Customers do not have to stand in line or fi ll out papers to rent a car. They know exactly which make and model they will be getting. Unlike most off‐airport rental agency locations, which are open only during business hours, Zipcar locations are open 24 hours. The company ’ s rates also include the cost of gas and insurance as well as reserved parking spots at some locations.

Additionally, the company uses social networking technologies to develop an online community of Zipcar members— Zipsters. It encourages Zipsters to talk about their Ziptrips (i.e., share their personal experiences with Zipcar ).

Thus, information technology is not only the key enabler of this business model but also a facilitator in creating a buzz and encouraging community development around the concept. Zipcar changed the rules of the rental car industry by

■ CASE STUDY 2‐2 Zipcar

But Groupon added to its business strategy with mobile capability and new services. In February 2012, it purchased Kima Labs , a mobile payment specialist, and Hyperpublic , a company that builds databases of local information. In May 2011, in a few cities, the company launched Groupon Now, a time‐based local application that gives customers instant deals at merchants nearby using location‐based software. CEO Andrew Mason told Wall Street analysts in February 2012 that he saw signifi cant growth potential, including working on new features that will help customers personalize offers and avoid deals they don ’ t want.

Discussion Questions

1. How does information technology help Groupon compete?

2. Do you agree or disagree with the statement that “Groupon has no sustainable competitive advantage?” Please explain your point of view.

3. How does Groupon add value to the companies whose offers are sold on the site?

4. What impact, if any, will Groupon Now have on Groupon ’ s competitive position? Explain.

5. What would you advise Groupon leaders to consider as their next application?

6. Analyze the business model of Groupon using Porter ’ s five forces model.

Sources: Adapted from http://mashable.com/2010/08/19/gap‐groupon/ (accessed February 21, 2012); http://www.forbes.com/sites/ petercohan/2011/06/06/memo‐to‐sec‐groupon‐has‐no‐competitive‐advantage‐stop‐its‐ipo/ (accessed February 21, 2012); http://blogs. wsj.com/venturecapital/2010/09/29/rice‐university‐study‐groupon‐renewal‐rate‐not‐so‐hot/ (accessed February 21, 2012); http://articles. chicagotribune.com/2011‐05‐18/business/ct‐biz‐0519‐groupon‐now‐20110518_1_groupon‐chief‐executive‐andrew‐mason‐fi rst‐phase (accessed February 21, 2012); http://www.reuters.com/article/2012/02/09/us‐groupon‐idUSTRE81727 B20120209 (accessed February 21, 2012).

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