Business Case Study -- Hertz Essay

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This approach has allowed Zipcar to place its vehicles strategically to maximize their availability to the very consumers who are most likely to utilize its services in every city in which it operates.

Initially, Hertz actually considered making an offer to purchase the entire Zipcar enterprise. Instead, it opted to develop its own version of the same service since there are no proprietary rights associated with merely adapting existing consumer transactions to the smart phone medium. To increase consumer awareness of its Hertz on Demand program, the company is currently preparing an aggressive advertising campaign in major cities such as New York that incorporate online and print newspapers ads, billboards, and even New York City subway platforms. In principle, the Hertz approach is to emphasize the affordability of per-hour rentals instead of traditional rentals by the day and the convenience of making reservations and changes via their cell phones and without customer service representatives involved in the process.

Personal Opinion on the Issues

I have mixed feelings about the competition. On one hand, it is obvious that Hertz has simply copied a business model invented by Zipcar. On the other hand, I understand that just transitioning existing business transactions to the smart phone medium is not subject to any ownership rights and that this is obviously the eventual direction of virtually all conceivable consumer transactions that used to require face-to-face interaction with salesmen or customer service associates.

Therefore, while I recognize Hertz's legal right to compete in this new market invented by Zipcar, I am simultaneously rooting for Zipcar to prevail in that competition.

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The main lesson that I have learned from this case study is that even extremely novel and profitable business ideas may not necessarily provide a long-term benefit. That is simply a function of the fact that, to the extent the ideas on which profits depend are unable to be protected from being copied by competitors, they may have only limited (i.e. short-term) potential value.

Conclusion

The current competition between Hertz and Zipcar is somewhat representative of the inevitable trends in contemporary business, particularly those that emphasize customer service interactions to negotiate services, especially in connection with business models whose provided services do not actually require any direct involvement of company personnel. That trend is already widely evident in transactions such as gasoline purchases employing smart card technology and will likely become standard retail procedures even in ordinary stores quite soon. From a wider perspective, the competition between Hertz and Zipcar also illustrates that new and prosperous business concepts that rely substantially or exclusively on new ideas that cannot be subjected to proprietary ownership may not necessarily continue to reap their initial profitability if those concepts are readily emulated by other companies, especially by competitors with the benefit of tremendous market share dominance within the same industry.

Reference

Clothier, M. "In the Race for the Carless, Can….....

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