Car-sharing has a medium internal rivalry, which implies that this business model has an emerging market in Belgium and it is steadily growing. The sector is moving from just selling cars to mobility providers, therefore investing in sharing technology is undoubtedly the next logic step in the automative industry. In this way, a growing number of players would make this market highly competitive in the nearest future. The biggest obstacle within this market is the people’s mindset towards materialism and consumerism and getting used to a new business model, therefore DriveNow takes a part in gradually shifting the attitudes by targeting early adopters and opinion leaders.
The supplier power is low at the moment, as the volume is not that big. However, as DriveNow moving forward toward the “growth” phase, subsequently, it will be in need of new suppliers.
There is a low of threat of new entrants, as market is already conquered by well-known big and small companies which have more or less the similar value proposition as DriveNow such as Zipcar, Partago, Bolides, Cambio, Poppy, Ubeeqo, Wibee, ZenCar and so forth. This sector also needs extensive investment ability. For example, DriveNow still needs 5 to 6 years on the market of Brussels to generate profit. However, it would change when the critical mass would be getting more used to such business model and after some time the shift to mobility as a service will inevitably force more and more traditional car manufacturers to compete on multiple fronts.
Moreover, the high level of substitution makes this market less attractive for new entrants. The substitutes for car-sharing are listed in the template above. Scooty is a vivid example for electric scooters, the owning and sharing bicycles firmly settled in the minds of Belgians. Regarding car-sharing options, Drivy is a great example of peer-to-peer car-sharing within Europe, Karzoo as the carpool service and CozyCar as sharing car and cost primarily with your neighbours. On top of all that, there are multimodality services, for example Taxistop, which include carpooling, car-sharing, home exchange, home-sitting and social transport for people with reduced mobility. Thus, the buying power is high because of the choices within the car-sharing segment and the high ability of substitution.
All in all, the timing of establishing DriveNow is perfect, as there is ability to differentiate thanks to the positioning as the premium segment, since there is no many traditional car manufacturers which implement the same model. This market has a great potential to grow and develop and DriveNow lays at the origin of this trend.
External analysis – Competitors
o Identify a direct and an indirect competitor of DriveNow and explain why you selected these two competitors.
In Belgium, ZipCar is the main direct competitor of DriveNow within the category of free-floating car-sharing. Both companies operate within Brussels so far, are easy to use, and have all-included rate (parking, fuel, insurance). The other big similarity is that both of these companies are rapidly developing and expanding. In this way, DriveNow joins forces with Cars2Go to have a greater market share and market proposition of ShareNow and ZipCar is being acquired by D’Ieteren Auto’s which will joint Poppy (shared cars and scoters) and ZipCar into one big brand under Poppy name.
As for indirect competitors, bike-sharing has a global rise, and in Belgium bikes play an important role for Belgian culture and mindset. Villo! and Blue-Bike are primarily two bike sharing system within Belgium, however Villo! has the similar local approach and idea behind as DriveNow: pick up, ride it, drop off. It as also free floating, which means that a person can drop off the bike at any Villo stations. In this way, both companies are targeting short motor short-distance trips.
o Briefly describe the Market Offering of these competitors.
Market offering of ZipCar differentiates from DriveNow primarily based on the price category, therefore brand image. ZipCar uses only non-electric Peugeot cars, while DriveNow uses BMW and convertible mini cars both electric and non-electric. In this way, the price per minute, daily price, registration fee and so on is a bit lower, for example DriveNow asks 0.33-0.36€/minute, while ZipCar asks 0.25€/minute.
Market offering of Villo! is available in Brussels, Namur and Antwerp. It also operates in many more countries, for example France, Spain or Ireland. It is a healthier, cheaper (32″,60€/year; 7″,65€/week; 1″,60€/day) and more ecological-friendly substitute for DriveNow.