Avis Buys Zipcar – Smart Expansion of Business

zipcarWhat do you do when your business is being disintermediated? Buy into the disintermediation. Car sharing is an idea pioneered by Zipcar that could threaten the car rental market. Traditionally companies don’t know how to respond to these threats and often try to shut them down via legislation or other pressure tactics. But here Avis demonstrates the best ways to handle things by buying into the market. The free market is built on competition, so compete. I love this move by Avis to buy Zipcar and expand its business and potentially expand what it means to be a rental car company.

Uber is currently putting pressure on cab companies by setting up customers with rides provided by other regular people in their own cars. No central dispatch is needed as its all run via a mobile phone app. Its another example of technology and out of the box thinking disrupting an age old industry. Cab companies are fighting back trying to elected officials to slow down Uber but here is my question. Why doesn’t a cab company buy Uber and expand its business model or directly steal Uber’s idea and make it their own?

Here is an absolute truth. Technology is growing and expanding and if you have an older traditional business its likely to be disrupted sooner than later. Fighting against the disruption is like fighting against the tides of the sea. Better to be like Avis and go with it. Jump on that new wave and ride it. After all, you likely have seasoned talent, systems and experience the newcomers don’t have. You might just be able to beat them at their own game.

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