One of the first points that we make in the core class is that operations must be linked to strategy. How a firm chooses to carry out its quotidian obligations needs to be aligned with what it is trying to do in the marketplace. If that alignment is missing, it is going to be very hard for the firm to meets its obligations to customers. Or, it is going to be very easy for a competitor to come in to take its lunch money.
Comparing Zipcar with take your pick of standard rental car companies is a nice way of illustrating this point. Zipcar and, say, Avis are in the same business: They rent cars. However, Zipcar is set up for replacing car ownership in densely populated areas while Avis is set up for accommodating travelers far from home who need to get to a meeting. Zipcar is not set up to handle people getting off an airplane and Avis is not set up to help yuppies get out to the Target in the burbs. It’s not that Zipcar or Avis wouldn’t want to make those sales, it’s that their operational choices make it somewhere between difficult and impossible to fulfill those customer needs. (For more, see here.)
Great example. Works well in class. But what does it say about Avis’ proposed acquisition of Zipcar? (more…)