Managing Innovation: Applying Disruptive Innovation Theory to Zipcar

This report provides a comprehensive analysis of Zipcar, an American car-sharing company, focusing on its innovation management and application of the disruptive innovation theory. The report begins with an introduction to the importance of innovation in the business sector, particularly within the automobile industry, and outlines the report's objectives. It then delves into the disruptive innovation theory, explaining its core concepts and how it can be applied to businesses to achieve competitive advantages. The report highlights the theory's strengths and weaknesses and offers suggestions for Zipcar's application of the theory. A significant portion of the report is dedicated to the historical development of Zipcar, tracing its evolution from its founding to its current operations, including its business model and key strategies. The report concludes by exploring how the disruptive innovation theory can be applied to Zipcar's future development, offering insights into potential growth and innovation opportunities.

Managing Innovation Assessment

Table of Contents
INTRODUCTION......................................................................................................................3
Disruptive innovation theory..................................................................................................3
Application of the Disruptive Innovation Theory in the historical development context......6
Historical development of Zipcar...........................................................................................7
Application of the disruptive innovation theory for future development...............................8
Conclusion................................................................................................................................10
REFERENCES.........................................................................................................................11
Books & Journal:..................................................................................................................11

INTRODUCTION
In business sector, it is important to fulfil needs and demands of customers at all
aspects so that goals and objectives are achieved. The automobile industry has been changing
with period of time. Innovation and invention are two basic important part of business which
is needed to be understood and adopted property(Alexander, 2019). Due to changing needs of
customers it is becoming important for enterprises to focus on their innovative products and
services. Main purpose of this report is to understand the concept of managing innovation in
business market. Zip car, an American car sharing company headquartered in U.S. it is a
subsidiary of Avis Budget Group. This report comprises of theories, historical development
and future development. It is enabling them to make sure that they can gain maximum
satisfaction of their consumer and also aim to develop their presence in the market
successfully. With the help of this theory the organisation is opening a number of doors to
bring in creativity and also develop the organisation successfully.
Disruptive innovation theory
Business is a wider and broader term, which requires information, expertise and level
of knowledge at larger scale. It is important for business organization to increase their
stability in market for longer period of time by fulfilling all the requirements of targeted
customers. According to this theory it states that new business enter into markets and
different shoot dancers from others by being less expensive as well as providing more
products or services. In this competitive era, it is necessary for entrepreneur to gain relevant
information regarding specific market so that strategies are implemented in most efficient
manner (Brinkhoff, 2016).
Moreover, in relevance of selected enterprise it has been seen that they need to focus
on this disruptive innovation theory. It is duty of a manager to make assure that entity is able
to increase their sustainability period. By adopting of this theory it is beneficial for Zipcar to
competitive advantage in effective manner. This is because it helps in understanding market
situations through which products and services are distributed according to the changing
behaviour and attitude of customers.Main purpose of this theory is to increase and enhance
the sustainability period of business by introducing new products as well as services with in a
marketplace. In automobile industry innovation take place with blink of an eye and it is
essential for organisations to be active in market so that it easier to use resources efficiently

and with proper considerations. In relevance of this stated theory it has been examined that
focuses on four concepts which are further explained below-
Business environment is needed to be understood by organisations on the basis of which
they are able to make proper decisions at workplace. In this modern and flexible market,
entity needs to scan business environment so that factors impacting upon overall organisation
structure are determined. Also, targeting of an audience is done accordingly. Main purpose of
this theory is to increase and enhance the sustainability period of business by introducing new
products as well as services within a marketplace. In automobile industry innovation take
place with blink of an eye and it is essential for organisations to be active in market so that it
easier to use resources efficiently and with proper considerations.
 Furthermore, to target audience in effective manner it is crucial for enterprise to be
aware about products and services which can be used by customers effectively.
 It is also necessary for established business to focus on their core activities functions
and operations and ignoring the new entrants in market because they took time to get
themselves developed. Through this it will be easier for or entity to carry out their
business activities.
 Then entrance of a business need to be effective from competitors for example by
providing more additional offers and discounts to customers and increasing their
value added options.
 Another important concept of this theory is that market it is following changing trends
and it is essential for enterprises to deliver appropriate level of innovative products.
Strength
 Main strength this theory is that it assist in development of business product as well
as services & provides a deatil description to organisation to achieve goals and
objectives in proeper manner.
Weakness
 Drawback of this theory is that it is not applied at every situation because it is not
necessary that product will achieved success according to innovaion or aspects.
So, in relevance of this theory it has been seen that it is not necessary that it could be
applied in any situation because with frequent changes in market it is difficult to produce
innovative products on regular basis. Additional features and offers is being provided by

many enterprises to compete from their competitors by focusing on various factors such as
price, customer ratio etc.(Exposito, 2018).
There are few suggestions to Zipcar which are required to be focused when using this
theory and are mentioned below-
Not all innovation is disruption
In business, innovation is important on the basis of which it is easier for organisation
to achieve their goals. But it is necessary to examine that not every innovation is said to be a
distraction within a market. This is because disruptive innovation theory is being applied
only at time when entity focuses on a specific services or a product depending upon a
targeted audience needs.So, depending upon the market situation and individual demands
innovation is being carried out by organisations(Flavin, 2020).
Disruption can be low ended or new market:
In context of the above discussed theory, it has been analysed that it focuses on two
concepts in which the first one is the low end disruption. In this corporation enter into a
market with low goals and objectives to earn profit and lower scale. Then,comes situation in
which business enters into a specific market with motive of competing with rivals to achieve
higher competitive advantage and profit level.
Choose battle wisely
According to this theory, it also specifies that it is essential for new businesses or
enterprises to focus on customer needs because not everyone new entity is disruptive in
market. So, it is important for organisation to be active and have proper understanding of
how new business can influence targeted audience.So, it is necessary to compete with
prepared rivals depending on business size and market so that decision making is being
carried out accordingly.Without gaining relevant information, it is difficult to compete with
rivals and gain competitive benefits (Hameed, 2020).
Disruption innovation is process instead of product and services
It is necessary for enterprises to understand that disruption is a process which help in
entering into a market of new business. Moreover, with the help of disruptive innovation
theory in become easier for entity to access to customers effectively (Liu, 2020).
So, from the above explained paragraph it has been analysed that descriptive theory is
a complex procedure which is required to be carried out by popular scanning business

environment and conducting market research as well as analysis. It is necessary for manager
of Zip car to apply or adapt this theory in most appropriate manner.
Benefits of Disruptive innovation theory:
 Main benefit of this theory is that it is effective process which is used by enterprises
on basis of which they are able to access to new opportunities and achieve objectives
within a period of time(Si, 2020).
 Disruptive innovation theory is also beneficial because it help organisation to improve
their sustainability period for longer time interval.
 It also helps in understanding the needs and wants of customers. Through analysing
needs of target market it is easier for company to make effective decisions within a
business.
Limitations-
 Disadvantage of theory is that it is a time consuming procedure and need innovative
idea which is a difficult task for a new business or established one.
 Another limitation of disruptive innovation theory is that high level of skills, market
information and expertise is needed to apply this in enterprise to achieve positive
output.
Application of the Disruptive Innovation Theory in the historical development context
Company overview:
Zip car, a car share company headquartered in US. Enterprise has over 500 employees
and Avis budget group. It also has a wide range of competitors such as get around, car2go,
LLC, enterprise car share and many more. The company provides services such as self-
service on-demand cards on hour or day, etc (Wiegmann, 2019).They have more than 1
million members who ran taka for business and personal purposes.
Vision:
Main vision of a company is to improve the standard living of urban living society and
community.
Business Canvas Model:
Key Partners: Key Activities: Value Customer Customer

 Car
suppliers
 Local
Governme
nts
 Parking
locations
 Website
developers
 WOMM
 Operation
s
 Public
Relations
Proposition:
 Delivering
timely
efficient
car use
 Easy&
quick
access car
rental
Relationships:
 Zipsters
 Phone
Support
 Web
Segments:
 Business
investors
 Boston
Urbanities
Key Resources:
 Engineers
 Sales man
 Managem
ent
Channels:
 Supermar
kets and
hypermar
kets
 Social
media
Cost Structure:
 Parking
 Fixed costs (Corporate Level)
 Fleet operations
Historical development of Zipcar
ZIP Code was founded by and J Danielson and Robin chase based upon an already
existing German and Swiss company in the year 2000. In some months itself Zip car have
successfully hit the road around Boston. There were a number of developments brought in
Zip car as they have successfully opened their office in Washington DC and a new branch in
the New York city as well. Working on the same line by 2005 Zip car have successfully
secured a fund of $10 million from benchmark capital. After this they also opened an office
in San Francisco. The Toronto office of the organisation was started in year 2006. They then
worked with General Electric’s commercial and provided them with the lease of $20 million
line financing. Zip car has successfully provided availability of vehicles for its customers and

members who can now reserve a self-service through different phone applications, internet,
and telephone within just a time of 30 minutes. The members in the company are only reserve
wing the position and are entitled for 180 miles throughout a 24 hour period. They are then
charged some more amounts when they travel beyond 180 miles.
Zip car is now successfully providing access card to their customers and members
which has a wireless chip. Along with this wireless chip the members can open the vehicle
which has been reserved by them and it can only be opened while they have already reserve
the vehicle successfully. The reservation of the vehicle by the members is also including a
gas card for the car, insurance of the vehicle for the members and also reimbursement for the
fuel which they have obtained at the gas station while they are using the vehicle. Zip car has
further developed in a number of ways as they are now providing their consumers with
occasional driving plan as well as extra value plan. When another benefit which have been
developed in Zip car a long time is that the members who have used Zip car already can
successfully reserve a Zip car in any city where the organisation is working (Umar, 2018).
They are also provided and reimbursement of $15 for any kind of maintenance which is
provided by them to the car. This may include items such as washers for the car, window
wiper fluid refills and so on.
Along with this ZIP Code has also launched its own Zip car for business program in
the year 2004. Along with this the organisation is providing discounts for the consumers who
have chosen to drive from Monday to Friday. They have also signed businesses with a
number of different small, medium and large organisations who are renting Zip car in order to
save cost on travel of their employees. In addition to this ZIP Code has also partnered with
over more than 600 colleges as well as universities throughout North America. This is a great
way in which Zip car is including universities, organisations and also enhancing business
partners who can help them successfully.
Application of the disruptive innovation theory for future development
Disruptive innovation theory is a process which is helping organisation to go through
various stages in order to make sure that they are reaching towards their particular goals
successfully. It is also helping the business to make sure that they are making use of market
research and providing their consumers with various needs and requirements that have not
addressed by the organisations earlier (Türko, 2016). This will also provide organisation with
various unique selling points in order to make sure that they are successfully developing their

business in the industry and also bringing in new innovations for their future growth. Zipcar
is successfully using disruptive innovation theory in order to make sure that they are
providing their consumers with a number of different successful business ideas and services
that other companies do not provide.
When taking the current scenario into context it has been seen that it is necessary for
organisations to make sure that they are currently encouraging clean and sustainable
environment. It is the duty of every citizen as well as organisation to make sure that they are
fulfilling the requirement of a clean and green environment. There are a number of steps
which have been taken by Zip car in order to make sure that they are providing their
consumers with all the facilities keeping environment in mind. They have successfully
developed various ways to save environment from the pollutants that their vehicles are
releasing. All their vehicles are successfully checked for pollution test and the amount of
pollution they are releasing in the environment. It is necessary that all the vehicles which are
running under them are checked from time to time and the consumers and making proper use
of vehicle without over using it which can lead to excess pollutants in the environment.
Companies also successfully offering its consumer with a number of different membership
programmes which is enabling them to use the vehicle as per their convenience. Various
programmes providing maintenance cost to the consumers is helping the consumer to make
sure that they are managing the quality of vehicle and thecars available in zip car or
successfully maintained for the future consumers.It is a great way through which the
consumer base of the organisation is increasing rapidly. Along with this the organisation is
also using disruptive innovation theory significantly in order to make sure that no other
organisation is providing such services. The card which they have invented which will help
the consumers in unlocking car is of great help to them.
The fufure innovation pathway is important which is needed to be focuses and
adopted so that it is easy to access to access to business goals. Moreover, in relatono of Zip
Car they need to execute business activities with consideration of market situation so that it is
easy to access the business opportunities. It is duty of manager to make assure that future
innovation is being carried out in appropriate way.
Besides this another benefit to the consumer is that they can manage the fuel they are
using in the car while they take the services (Tierney, 2017). It is necessary that they are
using minimum fuel which will also help in saving the environment around. It is necessary
that all these ways are successfully used by organisations making sure that they are saving

cost of the consumers as well as providing them with better services. It is often seen that there
are a number of features which organisation is offering to the general public. All the new
services of the organisation are required to be mentioned in promotional tools as well. It is
necessary that all the potential consumers are communicated the information regarding
services and products so that they can make best use of it. There are a number of different
guidelines which are ethical and have to be followed by the organisation. Zip car is making
proper use of them in order to make sure that no employee of the organisation is undertaking
any unethical activity which may lead to demotivation for the consumers of the organisation.
It is also necessary that the brand value is maintained for which it is necessary for the
organisation to bring in various innovation from time to time. All these steps taken by Zip car
under disruptive innovation theory is a great way to make sure that they are developing their
unique selling point and also collecting huge customer base when compare to their
competitors.
Conclusion
With the help of the above report it can be clearly concluded that there are a number
of requirements for an organisation to make sure that they are continuously bringing in
innovation in the market. This innovation is enabling them to make sure that they can retain
their existing customers and provide them with new products and services. It is also a great
way for the organisation to gain attention of new consumers and increase their consumer
base. They can also enhance the competitive nature they serve in the market through bringing
in new innovation. Disruptive innovation theory is successfully used by organisation to bring
in something new in the market which has never been brought in industry. It is enabling them
to make sure that they can gain maximum satisfaction of their consumer and also aim to
develop their presence in the market successfully. With the help of this theory the
organisation is opening a number of doors to bring in creativity and also develop the
organisation successfully. This theory will successfully help the business to enter into new
markets. Along with this the growth and expansion option present for the organisation can be
successfully fulfilled with the help of this theory and organisation can grow enhancing their
profits as well as productivity successfully. In business sector, it is important to fulfil needs
and demands of customers at all aspects so that goals and objectives are achieved. The
automobile industry has been changing with period of time. Innovation and invention are two
basic important part of business which is needed to be understood and adopted property. Due

to changing needs of customers it is becoming important for enterprises to focus on their
innovative products and services
REFERENCES
Books & Journal:
Alexander, 2019.Managing Innovation: Understanding and Motivating Crowds (Vol. 32).
World Scientific.
Brinkhoff, 2016.Managing innovation in ‘localities of learning’in Berlin and
Seville.Understanding innovation in emerging economic spaces, pp.11-32.
Exposito, 2018. Innovation and business performance for Spanish SMEs: New evidence from
a multi-dimensional approach.International Small Business Journal,36(8), pp.911-
931.
Flavin, 2020. An international study of technology enhanced learning-related strategies from
the perspective of disruptive innovation.Interactive Technology and Smart Education.
Hameed, 2020.Relationships between external knowledge, internal innovation, firms’ open
innovation performance, service innovation and business performance in the Pakistani
hotel industry.International Journal of Hospitality Management,92, p.102745.
Liu, 2020.Perspectives on disruptive technology and innovation.International Journal of
Conflict Management.
Si, 2020. Disruptive innovation, business model and sharing economy: the bike-sharing cases
in China.Management Decision.
Tierney, 2017.Intelligent infrastructure: zip cars, invisible networks, and urban
transformation. University of Virginia Press.
Türko, 2016. Business plan vs business model canvas in entrepreneurship trainings, a
comparison of students' perceptions.Asian Social Science,12(10), pp.55-62.

Umar,2018. Business model canvas as a solution for competing strategy of small business in
Indonesia.International Journal of Entrepreneurship,22(1), pp.1-9.
Wiegmann,2019. Conclusions: Managing Innovation and Standards Within the Company and
Beyond. In Managing Innovation and Standards (pp. 139-167). Palgrave Pivot,
Cham.