Zipcarallows a lot of freedom and flexibility to their customers to renteither by hour or day. The firm allows people who do not own cars toenjoy car services as much as they can. The company targeted denselypopulated regions with the strong public transportation system andhigh parking costs. Serving many customers increases theprofitability of the company. The fund drive was essential in helpingthe company meet the operational cost for expansion to othermetropolitans from Washington Dc, Boston, and New York(Martin, Graeme, and Sabina Siebert, 2016).The increase in the consumption of services offered by the companynecessitated the boost of the capital especially the cars to hireout. The Zipcar’s decision for fundraising within the uncertaineconomic climate was worth because the business operation is allabout risk taking.
Thecompany incurred huge losses during its third year of operation, andit was important to get other external sources of funds to ensure thesmooth running of the business activities without strain. The companyopted for a fundraising which helped in meeting the debts, businessexpansion and developing new services to meet the costumers’ needs.The main goals for the strategic planning and management in thecompany were promoting growth and expansion. The fund drive was acost-effective way of raising funds because interest paymentsinvolved(Traverso, 2012).
Thecompany offers services to three segments including people seekingcost savings, business and government employees and students fromuniversities. The impacts of the fundraiser include continuousexpansion and venture in the new markets. For instance, the companyexpanded their fleet to cover about 50%. Market expansion requires aconstant funding therefore, raising the finances is a major drivefor expansion in the company because of the minimal free cashretained after acquiring equipment and property assets(Manning & Bodine, 2012).
Manning,H. & Bodine, K. (2012). Outsidein : the power of putting customers at the center of your business.Boston: Houghton Mifflin Harcourt.
Martin,Graeme, and Sabina Siebert. (2016). ManagingPeople and Organizations in Changing Contexts.London: Routledge Taylor & Francis Group.
Traverso,R. (2012). Sharing and social production as business opportunities:the Zipcar case study and analysis.