Case Solution for Zoomcar Constrained by Supply Issues by Seema Gupta
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Get Zoomcar Constrained by Supply Issues Case Study Solution Analysis Answers by Seema Gupta, Menaka Rao | Case ID for this case is W24838. This is a Plagiarism free Case Solution.
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Greg Moran, the chief executive officer of Zoomcar, an Indian car-rental company, had recognized that the
costs of vehicle ownership were high for many individuals who needed vehicles only sporadically. At the
point when Zoomcar began its services, there was no self-drive online option in the market, and Zoomcar
provided a platform for consumers to rent self-drive vehicles. While the rental model became popular, the
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company faced hindrances in supply due to poor access to capital markets, funding problems due to an
asset-heavy balance sheet, and unfavourable government policies that restricted rentals based on colour-
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coded licence plates.
Zoomcar had tweaked its business model twice to circumvent the issue of supply and believed that it had
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The Case Solution Starts From page 5
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ASSIGNMENT QUESTIONS
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1. What business model changes has Zoomcar made over time? Was the company eventually able to make
a product−market fit that reconciled with the business objectives?
2. Why did Zoomcar keep pivoting? Were these changes required? Could the company instead have just
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revised each business model?
3. Do you see a channel conflict in Zoomcar’s evolving business plans? Evaluate the pros and cons of the
original equipment manufacturer (OEM) model.
4. If you were Greg Moran, what would you do? Why?
The Case Solution Starts From page 5
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ANALYSIS
1. What business model changes has Zoomcar made over time? Was the company eventually able
to make a product−market fit that reconciled with the business objectives?
Here, it is pertinent to ask: Considering that Zoomcar’s main business is car rentals, what should its business
model be?
The objective the company should try to achieve would be twofold:
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• Derive a steady flow of cars on the Zoomcar platform to drive revenue growth profitably
• Run an asset-light business to improve the company’s valuation
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Keeping these objectives in mind, the company started with car rentals for weekend getaways, which then
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morphed into a subscription model and then into an OEM subscription model. At each turn, it made losses
and hence made further switches. According to Moran, “We are at this juncture where we have to make a
decision on whether to continue with the subscription model or become technology partners with OEMs.
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We are exploring this option aggressively to help solve the supply problem strategically.”
There are two basic alternatives available to Zoomcar, with minor variations:
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• An OEM model, wherein Zoomcar does not invest in vehicles but provides services and subscriptions
• A subscription model, wherein Zoomcar builds vehicle inventory by purchasing cars and inviting
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subscriptions
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The Case Solution Starts From page 5
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EXHIBIT -3: ZOOMCAR—CURRENT RATIO, FY 2017–FY 2020
(in ₹ millions) FY 2017 FY 2018 FY 2019 FY 2020
Current Assets
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Cash and Cash Equivalents 117.5 1,226.6 265.6 346.5
Short-Term Loans and Advances 146.4 444.8 377.0 311.7
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Other Current Assets 254.0 98.9 274.9 265.6
Total Current Assets 517.9 1,770.3 917.5 923.8
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Current Liabilities
Employee-Related Provisions 9.7 29.4 13.3 21.8
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Trade Payables 98.4 131.1 247.5 482.9
Other Current Liabilities 94.9 85.8 221.6 489.9
Total Current Liabilities 203.0 246.3 482.4 994.6
Current Ratio 2.55 7.19 1.90 0.93
The Case Solution Starts From page 5
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