A business plan proposed by: Donna Maher, Avi

Kletzel & Romy Ribitzky Sofaer iMBA, Spring 2012

T e l A v i v U n i v e r s i t y , R e c a n a t i S c h o o l o f B u s i n e s s

Car2Go: Driving into the B2B Market

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Table of Contents

Chapter 1: Executive Summary………………………………….3

Chapter 2: Opportunity, Market need & Size..…………………..5

Chapter 3: Vision and Core Concept …………………….……...7

Chapter 4: Value Proposition & Business Model …………….....8

Chapter 5: Context- Industry & Timing ………………………....9

Chapter 6: Strategy & Competitive Advantage………………....11

Chapter 7: Operational Plan …………………………………...13

Chapter 8: Sales & Marketing Plan …………………………….15

Chapter 9: Financial Plan (with assumptions) ………………….18

Chapter 10: Organization………………………………………..20

Chapter 11: Team & Management………………………………21

Chapter 12: Required Resources………………………………...22

Chapter 13: Legal & Shareholders………………..……………..24

Chapter 14: Evaluation of Uncertainty & Risks ………………..26

Chapter 15: Potential Exit, ROI & Key Learnings ……………..29

Chapter 16: Corporate Social Responsibility …………………..33

Chapter 17: Conclusions, Recommendations and Summary ......35

Chapter 18: Appendixes ……...………………………………..36

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Chapter 1: Executive Summary

Car2Go, originally founded by Jonathan (Yoni) Gadish and 3 of his friends, is a company

experiencing growing pains. An entrepreneurial firm that won great buzz when it launched in 2008,

the company is struggling to maintain market share, reach profitability, increase revenues and grow

its customer base. While Car2Go initially had the first-mover advantage in bringing the concept of

car-sharing to Israel from Europe and the United States, where it was a cutting edge concept in social

responsibility, rental car companies, leasing companies and even car manufacturers are realizing the

financial benefits of this concept and are jumping into the market.

Rather than sit idly by and let others take a piece of its business, Car2Go realizes the need to change

and adapt to the encroaching threat. To that end, we’ve analyzed the feasibility of expanding the

Car2Go model into the business market, extending the company’s value proposition of offering

convenient, sleek vehicles on demand and by the hour, to some of Israel’s quality, hip, and luxury

firms.

Identifying barriers to entry, key cost and revenue drivers, we believe that Car2Go is looking at an

opportunity to grow its business, but risks abound. From acquisition costs—vehicles, human

resources and clients—to marketing and promotional costs to general industry and economic

condition risks, we’ve laid the groundwork for the considerations the Car2Go team must answer

before jumping into developing a new market segment.

Calculating the costs against the proposals currently on the table, we see that Car2Go is able to

finance the pilot program without having to raise additional capital--be it via seeking more venture

capital/private equity funding, issuing debt or having to plan an initial public offering. This finding is

encouraging as the capital structure of the company can stay intact.

Taking all the factors into account, we do believe that building upon its impressive board of tried and

proven entrepreneurs and industry professionals along with embarking upon a targeted and

conservative pilot program that allows Car2Go an opportunity to test the market at the lowest

possible cost and risk to the company. Our initial analysis finds that while there is interest in the

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market for Car2Go’s services, the company still has a long way to go in terms of educating HR

professionals and operational directors on its product offering, its technological savvy and why it

truly is a choice that makes financial sense among so many others.

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Chapter 2: Opportunity, Market need & size

Car2Go subscribers choose car sharing as an alternative to owning a car, as it eliminates costs related

to financing, insurance, taxation and registration—or as a secondary solution in the transportation

infrastructure. The marginal cost per kilometer of car sharing is significantly lower, at 30% less, than

the high fixed costs involved in owning a car. Car2Go customers can save up to 15,000–20,000 NIS

a year by choosing car-sharing options. This is a substantial saving especially since the average car

owner only uses his/her vehicle for only an hour per day.

Car renting at Car2Go is done by the hour, which proves a great incentive for users to drive as little

as possible, decreasing the amount of cars on the road and eliminating pollution. Additionally,

Car2Go customers avoid the struggle of searching for parking spaces as C2G has designated parking

slots designated to the car sharing users.

Currently, Car2Go is the only major car sharing company in Israel but car sharing has proven

successful in other parts of the world. For example, Zipcar, a large international car sharing company

based in the USA, has successfully penetrated the market with its innovative solution.

Zipcar has been so well received that it went public in April of 2011.

In terms of market size, we first looked at the 3.5 million drivers that are registered in Israel by 20091

according to government officials. From those, 1,876,000 own a private vehicle. 75% of the number

of drivers are in Car2Go’s target market of 25-54 year olds, bringing our estimate of the total

available market potential to 2,625,000 drivers. We considered current owners as being potentially

interested in a second car for marginal use, so they could still become customers of Car2Go.2 Non car

owners can certainly use Car2Go as an alternative to car owning. According to market research

carried out on behalf of Car2Go, the Israeli market could reach 70,000-105,000 members, although

the company's business plan is based on 26,000 members during the first five years3.

1 http://www.nrg.co.il/online/16/ART2/125/172.html

2 http://www.ynet.co.il/articles/0,7340,L-3911336,00.html

3 http://www.jpost.com/LandedPages/PrintArticle.aspx?id=137775

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These figures show the alarming need for Car2Go to expand its business model. The company cannot

possibly survive on attracting 5%-10% share of the 472,500 customers in the available market that

we calculated (which is a better-case scenario than Gadish expects). While Gadish projects a 30%

growth rate4, we project a 20% growth rate considering the new entries and the price wars within the

industry. A typical 300 shekel day rental has gone down to 58 shekel as per the offers of new entrant

“Quickie”, from Avis5.

4 http://www.jpost.com/LandedPages/PrintArticle.aspx?id=137775

5 http://www.haaretz.com/business/taking-us-for-a-ride-1.418985

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Chapter 3: Vision and Core Concept

Car2Go Israel is a car-sharing company that offers subscription packages to individuals or families

living in the center of Israel who can appreciate the advantages of not owning their own car. Car2Go

subscribers choose car sharing as an alternative to owning a car, as it eliminates costs related to

financing, insurance, and registration—or as a secondary solution in the transportation infrastructure.

The marginal cost per kilometer of car sharing is significantly lower, at 30% less6, than the high fixed

costs involved in owning a car. Decreasing the amount of cars on the road eliminates pollution and is

a great way to add value to all stakeholders where Car2Go operates.

The company would have you imagine having the convenience of accessing a car whenever you need

it, right around the corner, yet instead of paying for maintenance and gas, you only pay per ride. Use

it for a few hours, or for the whole day. With Car2Go, you only get charged for the time you’re using

the car, saving your business—and your employees—meaningful cash. Let’s not forget that when

you pay per ride, you’re more conscious of why you’re making the trip in the first place--which

makes more people stop to consider the environment. With Car2Go, every one of the cars serves up

to 30 people, which means that we take 15 cars off the road. That leads to less pollution, less traffic,

and more parking spaces.

The context of this company came about metropolitan realities (in the case of Zipcar, in the city of

Boston, MA, USA) that enlarged the pain of concentrated populations in small areas, constantly

challenging for parking space. Citizens were obviously affected by the continuously increasing gas

prices and the multiple taxation that goes into car ownership. If that wasn’t enough, the constant

maintenance costs only strengthen the customer’s pain for drivers in the Boston area. The

opportunity that Zipcar has identified involves a niche market that is more conscious about their

trips. Zipcar identified marginal use for their cars as a way to share the multiple costs that it carries.

This model was successfully recreated in the Tel Aviv area and that is how Car2Go’s concept came

to be.

6 Green Facts, Car2Go

http://www.car2go.co.il/index.php?option=com_content&view=article&id=50&Itemid=56&lang=he

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Chapter 4: Value Proposition & Business Model

Value Proposition: Offer a convenient, cost-effective alternative to taxis, public transportation and

car ownership for consumer and business purposes. Since car-sharing is currently not taxed, Car2Go

saves business and their employees approximately 40% in taxable expenditures on benefits.

Companies that can use Car2Go during the overnight hours can save 50% off the published prices.

Business model: Car2Go is a subscription-based business that charges an initial membership fee

followed by an annual fee and a per-use fee. As part of its corporate plan Car2Go can offer a three-

pronged solution:

● A branded, specialized fleet, complete with ops manager, for the exclusive use of the

business in question. This fleet can range from 1 vehicle to multiple cars, depending on the

needs of the business

● A non-branded, non-specialized fleet. Rather, Car2Go makes available its entire fleet of cars

to the business, ensuring that at any given time, an appropriate model car is ready for the

company’s use. This vehicle has Car2Go branding and comes out of a Car2Go location or

parking spot

● Car2Go licenses its proprietary car-sharing technology (C2G Logic) to the business. This

way, the company buying the license continues to use the its own cars but implements a car-

sharing model using Car2Go’s software

Costs for Car2Go include:

● Fixed costs:

○ Leases on 200+ cars

○ Customer service representatives/overhead

○ Office in Tel Aviv

○ Parking

○ Internet access

○ SG&A

● Variable costs:

○ Gas

○ Customer acquisition

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Chapter 5: Context-Industry and timing

Competitors of Car2Go include other car sharing companies, carpooling companies, car rental

companies, and public transportation. Carpooling companies include Carpool Israel Rideshare,

Erideshare.com, and Carpoolworld. Competing rental companies include Eldan, Avis, Enterprise,

Shlomo Sixt, Budget as well as a smattering of boutique firms. Public transportation in Israel

includes different bus companies and the public train. Additionally, Tel-o-fun, a bike rental company

with 125 stations all throughout Tel Aviv, is also a competitor of Car2Go.

Industry

The market for car sharing has grown by tenfold compared to the 20th century. First started in

Europe, the car sharing concept can now be found in over 600 cities worldwide, 18 countries and on

four different continents7. The graph below shows the growth in number of car-sharing members

from 1988 to 2006. It is evident that car sharing is only becoming more and more popular and that

7 http://www.carsharing.net/library/UCD-ITS-RR-06-22.pdf

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the timing for Car2Go is on point.

Car sharing is seen as a young and innovative solution to not owning a car.

History of Car sharing

The first car-sharing company can be traced back to 1948 in Zurich, Switzerland and was attractive

to those who could not afford cars. While, more car-sharing companies began to emerge in the 1970s

and 1980s in France and Amsterdam, most were unsuccessful.

Car-sharing made a comeback in the 1990s with a successful company in Germany and throughout

Europe. In 1990, Carshare Portland, was the first official car sharing company launched in the U.S. in

Portland, Oregon. Today, Zipcar, founded in Boston in 2000, is currently the leading car-sharing

company in the U.S., and has hit such popularity that it went public in April of 2011.

Taxation Loophole

Car-sharing can not only save users a significant amount of money, but can also eliminate taxes that

must be paid by the company since they do not own the cars and since government tax agencies have

not yet figured out how to charge citizens who share their vehicles. Economist Keren Harel-Harari

found that 98.76% of car owners pay a car ownership tax of 83%8. Even employees in Israel who

receive leased vehicles as part of their compensation package can pay up to 700 NIS–1400 NIS per

month out of their own pockets, creating a double-taxation conundrum, as both the employer and the

employee are taxed on the lease benefit.

However, with Car2Go’s services (and with those of a car-sharing competitor’s), customers can

avoid this tax in addition to all the other lower-cost benefits of not owning a car. Additionally,

Car2Go’s customers also know that they’re part of a larger ecological solution to two big problems:

pollution in the form of CO2 emissions and traffic congestion. Since car-sharing lowers the number

of cars on the road, pollution is reduced. And as there are fewer cars on the road, traffic congestion is

alleviated.

8 http://www.jims-israel.org/pdf/EnglishCars.pdf

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Chapter 6: Strategy & Competitive Advantage

Car2Go should continue to build upon its strong brand name and first-mover advantage. While

newcomers to the market and recognized rental properties are exploring the hourly business option,

Car2Go maintains its competitive edge by holding on to its entrepreneurial spirit, being nimble and

able to quickly pivot—and adapt to customer needs in a way that a larger, more established company

can’t afford itself.

Another key element of its competitive advantage is its patented technology. Car2Go has proprietary

car-opening technology but it didn’t stop there. The company’s tech division—C2G Logic—

continues to develop and implement technologies that maximize and make it easier for companies to

manage and leverage fleet operations. Companies that choose to forego Car2Go’s vehicle solutions,

or companies that operate outside of Israel, can purchase a license to Car2Go’s fleet operations

technology and within a short period of time can be up and running, managing their own group of

cars as if they were a mini version of Car2Go.

Yet despite these two key advantages, Car2Go’s size is a source of competitive disadvantage.

Mainly, its fleet offering, while a great selection for the B2C market, is somewhat lacking when it

comes to the B2B market. Most of our respondents indicated that in order for their executives—even

junior staffers—to use Car2Go’s services in official capacities (i.e., during business hours, for

meetings, customer shuttles, etc.) they would require a certain caliber of vehicle. In order for Car2Go

to be able to cater to the middle- and high-end businesses, which are the most desirable in terms of

ROI (please see finance section below), the company must boost its fleet to include luxury sedans

befitting executives who work in sectors such as finance, media, pharmaceuticals, retail and the like.

Suggested makes include, but are not limited to: Audi, Alfa Romeo, Mini Cooper, Mercedes, and

Lexus.

Finally, according to research by the Guardian Professional Network, among other competitive

disadvantages that a company can procure is failure to have a culture of sustainability9.

Environmental and social performance management from companies according to Guardian’s

9 http://www.guardian.co.uk/sustainable-business/sustainability-key-corporate-success?newsfeed=true

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research proves to create more value for a company’s shareholders by shaping more committed

employees and in turn a more loyal base of clients. It is crucial that Car2Go take this factor into

account and incorporate it into the company mentality.

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Chapter 7: Operational Plan

It’s clear that there’s a need in the market for another solution in the transportation matrix—and

Car2Go may just be the answer to many small and mid-sized businesses’ pain. However, the

company must adapt its offering essentially to each firm. While we see that all companies agree on

the fact that executives must have nice cars to use when going on client calls, since we’re targeting

this offering as a benefit for junior or rising executives, we may be able to negotiate pricing on taking

a mid-range sedan. However, if the vehicle is going to be used as part of the daily drive to see clients,

it may have to be upgraded—which ups the cost and may lower the savings over other transportation

options.

So what’s a company to do? With Tamir Fishman we worked out an implementation roadmap that

begins with a coupon to adoption method.

● An initial introductory tryout in the form of a Groupon-like offer for a test period to all

employees. If there’s enough interest, TF would embark on a pilot testing program with

Car2Go. The target audience would be:

○ Employees who don’t currently have leased cars

○ New employees

○ Junior executives who the company may feel that it wants to compensate in a new

way

○ All of this points toward Car2Go developing a new market penetration model

● Pending the results of a pilot, TF would implement Car2Go as part of its roster of

perks/offerings in the 2013 benefits package

It’s critical to have open channels of communication and feedback throughout the process in order to

keep improving the model. Each customer has different needs and hence, we should expect the same

for each different business that Car2Go approaches. By gathering feedback along each part of the

roadmap, Car2Go can reach customized coupon to adoption models for each company or segmented

groups and hence meet their needs.

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This model is easily implementable in other companies and helps Car2Go hedge its risk as it attempts

to break into the B2B market. Rather than having to buy a new fleet of luxury cars, customize them

to clients and then find itself with extra vehicles that are unnecessary should these clients decide not

to proceed, using a pilot to adoption program helps increase Car2Go’s revenues without dramatically

increasing the company’s costs and helps it analyze whether this sector is a profitable one to compete

in.

Therefore, we conclude that: Since Car2Go offers another option to car renting/leasing/purchasing or

public transportation, it has positioned itself as an offering for a niche customer—not a product for

the mass market. This differentiation is key to future marketing and targeting efforts.

Pilot launch should be completed by Q1 2013, while the assessment and feedback should be expected

from March through April 2013. Marketing, sales, and distribution channels can then be cultivated in

order to build upon a successful pilot and move into phase one of implementing a full-time

fleet/joint-venture/partnership with Car2Go.

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Chapter 8: Sales & Marketing Plan

Marketing for Car2Go’s B2C segment was primarily viral. “We began with an online advertisement

with a small budget of about $2000, the rest was flyers to create the PR buzz. Within one year we

had 75 articles in the press giving us great media exposure10,” Gadish told INSEAD’s Center for

Entrepreneurship. “One of Jonathan’s partners Noam Margalit, owned some popular pubs, bars and

cafes in the nightlife area of Tel Aviv. He distributed the flyers and even mentioned CAR2GO on

some of the menus. Word spread rapidly and by 2009 Car2Go employed 12 people with three full

time partners and one part time. There were 3,000 members with a fleet of 50 cars, growing 30%

each month11.”

Since we know that while some elements of B2B marketing mimic B2C marketing but need to be

tailored to the “what’s-in-it for my company” question, we’ve identified the following three

challenges Car2Go faces in its appeal to the business market:

1. It has to educate companies on its value proposition and how it fits into the already complex

transportation matrix that businesses already use and feel comfortable with. As marketers we

know that setting out to change people’s mindsets is both a time-consuming and costly

proposition. Car2Go must convince executives, especially human resources and ops

managers, who have the power to adopt this new idea into the company that a car-sharing

plan not only fits into their budget, but also works to their advantage. Identifying the

appropriate company executive that has the power to make this decision for the company is

another obstacle Car2Go faces, however it can be achieved

2. Car2Go is operating under a business and marketing model that has worked well both in

Europe and the United States. However, bringing a tailor-made solution to Israel doesn’t

guarantee success. Therefore, Car2Go must adapt its model to fit the needs of the Israeli

corporate customer. We have identified in our research that the focus should be operational

as opposed to compensational, unless a new market can be developed, composed of

10

http://www.insead.edu/facultyresearch/centres/entrepreneurship/topent/Alumni-Gadish_J.cfm 11

IBID

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employees that could begin getting a shared car when they were previously not getting any

(for example certain kinds of salespeople or junior level executives).

3. In its B2C marketing, Car2Go has relied solely on lead generation and word-of-mouth via

targeted marketing campaigns and buzz generated by positive PR. However, to succeed in the

B2B world, Car2Go must be more proactive in its approach toward lead generation.

In order for Car2Go to overcome these challenges, we first identified a working knowledge of the

company and typical customers, then we set out into the field to perform a market study in 4-5 small,

medium and large companies in order to find out the following:

● Current benefits packages, operational business needs and how Car2Go can add value

● We’ve identified that in most companies, there’s an opportunity to enter the company as a

pilot rather than immediately be offered as part of the benefits package. This is actually a

win-win entry strategy for both Car2Go and its corporate partner as both companies can

assess the working relationship and whether teaming up would be beneficial.

● Entry models include coupon-to-adoption which entail Car2Go to propose an exclusive,

limited-time savings for the company’s employees. Should that generate enough interest, a

pilot program would be instated. A successful pilot program would lead to negotiations about

full implementation within the company as part of a benefits/operations package

● Get feedback and build tailored package

● Create sales pitch built upon customer needs, company offerings, Ishikawa findings and

detailed feedback

We recommend Car2Go to utilize our findings in order to standardize a marketing and sales strategy

for the B2B market, called “Coupon to adoption.” This program can be advertised and sold directly

to businesses through viral and media current channels. Car2Go can also choose to focus B2B efforts

to a specific sales team within their organization that could specialize in tailoring the specific coupon

to adoption program to each company, based on the same idea of trying out first by giving a coupon

with a certain benefit to the employee that would try the service. Examples of coupons could include:

additional working benefits, medical, groceries, services, etc.

Additionally a group of young and hip interns could visit industrial areas during lunch time in order

to generate buzz again around the services of Car2GO for a low cost (just their transportation to the

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sites) in order to regenerate the initial buzz that accompanied the company at its launch. Examples of

sites could include Ramat Hachayal, Herzliya Pituach, Raanana industrial Park, Matam area in Haifa,

etc.

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Chapter 9: Financial Plan (with assumptions)

The following discussion and analysis of financial condition and results of operations should

be read in conjunction with Car2Go’s consolidated financial statements in order to understand the

financial status of the company:

Overview

Car2Go got financing from two key and influential sources. In 2009, Gadish began talks with

Pointer, a public safety products and services firm dealing in the auto and insurance industry. A 6

million NIS investment in exchange for a 51% stake in the company came along with smart money—

the supply chain contacts that Car2Go needed in order to expand. An investment by Tamir Fishman,

one of Israel’s leading venture capital and private equity firms—with more than $3.2 billion under

management—ensured that Car2Go had more room for growth.

Fleet Operations

Fleet operations consist principally of costs associated with operating the vehicles such as lease

expense, depreciation, parking, fuel, insurance, gain or loss on disposal of vehicles, accidents, repairs

and maintenance as well as employee-related costs. Fuel costs fluctuate as gas prices increase or

decrease. Fleet operation costs are expected to increase as Car2Go grows the number of vehicles in

its fleet to service a growing business clientele. However, as Car2Go learns how to better utilize its

systems and becomes more efficient, these costs should reduce and stabilize. As the company grows

it should also be able to negotiate better terms for its leases, building upon its brand recognition and

economies of scale.

Member Services and Fulfillment

Member services and fulfillment costs as well as human resources expenditures and credit card

processing fees make up the second bulk of expenses for Car2Go. These costs are expected to rise as

the company expands and adds more clients, which means more transactions and more customer

support. Since we recommend bringing on an experienced B2B marketing chief and operations

director, we may see a demand for additional overhead in member services headcount as well.

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Research and Development

Car2Go’s technology is one of its key competitive advantages. As such, it must be protected and

continuously updated. Expenses in this sector include human capital, labor costs, coding, testing, and

legal fees for patents. R&D efforts so far have been focused on improving both the front-end and

back-end interfaces, as well as marketing and selling the operational aspects of the technology

mainly to overseas clients. Currently R&D expenses account for approximately 2.5%-5% of

revenues, a figure that’s in-line with industry standards.

Selling, General and Administrative

Car2Go has been able to keep its operation lean and mean, staying true to its entrepreneurial roots,

but it is now time to loosen the reins and grow. As with most companies, SG&A expenses are made

up of labor-related expenses for sales and marketing, administrative, human resources, IT, online

search and advertising, PR and other promotional expenses, professional fees (i.e. legal, accounting,

finance personnel), insurance and other corporate expenses.

In order to compete in the B2B space, we expect these costs to rise for Car2Go, especially in the

marketing and human resources arenas as we recommend that the company embark upon a more

aggressive marketing campaign to encourage a successful pilot program as well as the hiring of an

experienced B2B marketing chief and an operations manager to support the marketing chief’s

initiatives.

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Chapter 10: Organization

Car2Go’s business plan was created in 2007 by Gadish as part of a business venture competition

project when he was enrolled at INSEAD as an MBA candidate. The company officially launched on

September 1, 2008 with a fleet of 8 vehicles in the center of Tel Aviv.

Today Car2Go has expanded to several other large cities within Israel and has grown its fleet to over

200 vehicles. Car2Go provides convenience to its customers as there is a Car2Go parking spot every

200m-300m within the cities that Car2Go operates.

Car2Go currently follows a functional organizational structure in which departments report to CEO

and cofounder, Gadish (please see chapter 11 for more information about the organizational team).

While the current organizational team of the company is solid, Car2Go must expand its team to

include specialists that will care for the needs of the B2B customer. More specifically, we

recommend that Car2Go hire at least one marketing head and one operations manager who will focus

on expanding Car2Go’s B2B clientele. Additionally, it is important that Car2Go hire one or two B2B

customer service reps who will report to the B2B marketing and ops chiefs. By having a separate

management team for each customer segment, Car2Go’s organizational structure will shift to a

product organizational structure. This is crucial as our research has proven that the B2B customer

segment has different needs than Car2Go’s current customers. Please see chart below for a

recommended outlined product organizational structure.

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Chapter 11: Team & Management

Car2Go is helmed and backed by a proven team of entrepreneurs and board of advisors. In addition,

Tamir Fishman, one of Israel’s leading private equity firms, invested in the company via its parent

company Pointer and subsidiary Shagrir.

The management team includes:

Jonathan Gadish, CEO & Business development. INSEAD MBA; B.Sc in Industrial

engineering from TAU; Naval officer; Project manager with Tefen, operations management

consulting (5 years); Business development in Suncar - car rental.

Gerrard Gadish – Operations, founded Suncar, car rental and leasing company, in 1983.

Currently the owner and CEO of Suncar with 3 branched and close to 1,000 cars.

Noam Margalit, Sales & Operations, B.Sc Industrial Engineer from TAU; serial

entrepreneur, owns several businesses in the night life arena of Tel Aviv, including some of

the most trendy bars and Cafes. Education from Massachusetts Institute of Technology - MIT

and Shenkar College of Engineering and Design.

Benjamin Ninio, Marketing & Customer Service B.A. Business Management from IDC &

Wharton; Customer service and sales manager in tourism industry; Programs coordinator at

Jewish Agency, Research coordinator, John Hopkins University.

Board of advisors:

David Brook – Cofounder and senior manager with Flexcar, 2nd biggest car-sharing

organization in the USA (now part of Zipcar)

Nathan Strauss – Parking solution consultant

Gal Bardea - Brand manager at P&G

Cobi Barnea - M&A & strategic alliance consultant

Yonatan Factor – Branding expert

Conrad Wagner – Car-sharing consultant (Mobility)

Michael Aidane – IT architect, serial entrepreneur

Johnny Sabag – Former advisor to Shaul Mofaz, deputy Prime Minister and Minister of

Transport

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Chapter 12: Required Resources

Where we saw the most room for improvement was within Car2Go’s board and network, an

untapped resource. A meeting with Tamir Fishman, an investor in Car2Go’s parent company,

revealed a potential fit for both sides and yet neither had previously considered exploring the

synergy. We recommend that as Car2Go considers right partners for its pilot program it first look

within its board of advisors and their networks to see what natural partnerships may already exist that

are right at its fingertips. With a little probing Car2Go may have its pilot right within its board, and

there’s nothing like a group of interested parties to make an initiative work.

In order to make inroads into the B2B market, Car2Go will have to make a substantial investment to

grow its luxury fleet. The company is already in the process of acquiring several Alfa Mito vehicles

in order to answer rising demand for more upscale models, but we’ve calculated that to carry out a

pilot which will run across 5 companies—2 small, 2 mid-sized and 1 enterprise—Car2Go will need

to lease or purchase a total of 10 better or luxury-level cars (Lexus, Audi, Mercedes sedans) at a cost

of $350 per month (1,400 NIS)-$1,000 per month (4,000 NIS)12 respectively.

Additionally, we recommend that the company bring in both a head of marketing to lead the B2B

effort in terms of outreach, planning and client relations, as well as a head of operations for B2B.

While the B2B Marketing Director must have experience in this segment, and will therefore

command a higher salary—20,000 NIS-25,000 NIS per month given 3-5 years of experience13

according to AllJobs. For a marketing manager with some business development experience, that

salary is in the range of 18,000 NIS-21,000 NIS per month.

Technology is not going to add costs since it’s already been developed and is actually a revenue

driver to Car2Go. The car-door-opening technology, as well as the operational fleet management and

reporting technology that is patented is continuously developed by Ben Ninio and his team. In order

for Car2Go to operate in the B2B realm however, no immediate advances in the technology need to

12

Audi lease info obtained from Audi of Boston, Christopher Wall, dealer. 13

Salary table link: http://www.alljobs.co.il/SalarySurvey.aspx

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be made. In fact, some companies prefer to just license the technology aspect of Car2Go’s offering,

using employees’ existing cars and essentially mimicking the Car2Go fleet experience.

For companies who want to take advantage of Car2Go’s car-sharing offering but want a more

exclusive look and feel, Car2Go can offer a tailor-made exclusive fleet furnished with branded

vehicles. The costs of branding a car to a specific company vary depending on the model that the

company selects. Fitting the car with the company’s decal adds only marginal costs and may actually

help save Car2Go marketing costs as satisfied customers continue to spread the message that Car2Go

is a reliable and right transportation solution—a move that is consistent with Car2Go’s method of

marketing and evangelizing.

As Car2Go’s customer base grows it will likely need to acquire more parking spaces. While it will

not need to pay for parking near or at offices (as it can pass on those negotiations to the companies it

partners with so they can leverage their relationships with landlords—at least at the pilot phase),

Car2Go should increase its available parking spaces by 25% around the most popular locations

around the areas it services, as those are the most likely locales that clients will choose to have

meetings, etc.

Car2Go will pay for these costs by building them into the pilot proposals, rather than having to take

out a bank loan, issue debt, or appeal for private equity funding. For example, the price plan for

Tamir Fishman (see section 18, Appendices, below), which includes an Alfa Mito for 4,600 NIS per

month, a Honda Insight Hybrid for 4,000 NIS per month and a Nissan Acko for 3,300 NIS per

month, in addition to the monthly usage fee and initiation fees, cover the costs of acquiring the Alfa

Mito and taking the other two vehicles out of Car2Go’s daily rotation for other clients.

24

Chapter 13: Legal & Shareholders

Contract and Charter:

Each Car2Go member must read and sign the subscription agreement which describes the

responsibilities of the subscriber. More specifically, the agreement covers the following topics:

general information, appendices, prioritization of appendices, substance of contractual relations,

period of agreement and consideration for the services and mode of payment. The subscribers’

payment details are also documented in this form. After signing the agreement, subscribers are given

an electronic key card that allows entrance into Car2Go vehicles they choose to rent.

In addition to the subscription agreement, all Car2Go users are presented with a charter form that

further describes the nature of the relationship between Car2Go and the subscriber. Topics discussed

in the charter are as follows: threshold considerations for receiving the services, terms of use and

maintenance of the cars, duties and responsibilities, collateral, payments, damages, fines, business

subscribers, supply of the subscriber’s cards, privacy of subscribers details and intellectual property.

Municipality

Car2Go has received permission from several major cities throughout Israel to designate parking

spots just for Car2Go members. Cities have an incentive to work with Car2Go since it works towards

decreasing air pollution.

Intellectual Property

Car2Go currently has a patented car door technology that allows subscribers to access the vehicle

they register to use. The company has also made this technology available to businesses via

licensing.

Shareholders

Car2Go is a private company and therefore share information is not publicly available. However,

we’ve discovered that in the initial round of investing, family and friends helped to bootstrap the

company from concept to the seed stage. Gadish, who started the company with 3 friends, ended up

25

having to switch partners mid-stream, adding his dad and 2 others in order to keep Car2Go going14.

The new partners split equity in the ventures and by 2009 the company had grown to 3 full-time

partners, one part-time partner and 12 employees.

To fuel further growth, Gadish and co. spoke to several private equity and VC firms and tried to

engineer different types of deals (following a second round of FFF financing). In the end, they settled

on debt financing of 6 million NIS from Pointer in exchange for 51% of the company. Additional

cash arrived later from Tamir Fishman in the form on an investment in Shagrir/Pointer, Car2Go’s

parent company via a Tamir Fishman fund.

But the company is still in the red and looking for ways to turn a profit. While Gadish had originally

hoped to navigate Car2Go to a quick exit, the financial crisis of 2008 quickly derailed those hopes.

And with its U.S. twin Zipcar also suffering dire financial losses on the scale of millions of dollars,

investors are shy to drive more money into the sector.

14

http://www.insead.edu/facultyresearch/centres/entrepreneurship/topent/Alumni-Gadish_J.cfm

26

Chapter 14: Evaluation of Uncertainty & Risks

Car2Go has reached a point of market saturation with its B2C product offering and must therefore

explore other revenue streams, especially as it struggles to reach profitability.

The first risk is doing nothing and keeping the status quo. By keeping to its current business model,

Car2Go risks not growing its business, indeed shrinking its operations, as it loses customers to

competitors (at a typical rate of attrition of 5% annually). And with new entrants flooding the market,

Avis’ Quickie service is just the latest example15, Car2Go needs to figure out an effective solution--

fast. Established companies and nimble entrepreneurial firms have pushed pricing wars that have

seen rates slashed from a high of around 200 NIS/day to a low of 58 NIS/day. At these margins it’s

difficult to eke out a profit on consumers alone, especially if volume isn’t maximized. Therefore, it’s

time to explore whether expanding into the commercial, or business, market.

In exploring the feasibility of a B2B option, we spoke to current and former Car2Go customers as

well as 13 companies of various sizes in Israel. Our findings include:

● Car2Go makes sense as a secondary car solution; meaning, they will not replace their

primary, daily car, but will consider not buying a second car for a spouse or significant other

and instead use Car2Go for hourly drives/projects

● Car2Go does not make sense for a company that has many executives who all travel from

home to office and office to home at the same time since they will all need the cars at the

same time

● Having to return the car to the same pick-up location is a deal-breaker in 89% of the cases. If

Car2Go found a way to economically pick-up cars from one-way trips, or have a way to

centrally command and control the fleet, that would be ideal and bring in thousands more in

revenues

● Startups and mid-sized companies could be a great target as they’re more willing to take risks

on new initiatives. Entering larger corporations would mean going after mid-managers who

are not already beneficiaries of car leases and would therefore not have to give up a benefit—

rather, they would feel that they’re gaining a benefit

15

http://www.haaretz.com/business/taking-us-for-a-ride-1.418985

27

● Executives will not be willing to give up their cars

● Executives demand luxury cars, which Car2Go does not provide in abundance

● Offering Car2Go as part of a series of secondary benefits to mid-level managers who don’t

already get car leases is an excellent way to pilot the program and test whether it would gain

corporate acceptance at no risk to the host company

● Young professionals would be more willing to try this out

● Car2Go must increase its hybrid or electric car vehicle options in order to be seen as a truly

green solution

Understanding the customer objections and needs, Car2Go must realize that expanding its fleet

before validating that there’s a market need is a big risk. Just because corporate leaders say they

would consider Car2Go as an option doesn’t necessarily mean that they would sign on the dotted line

once Car2Go comes up with a B2B product offering.

Since the average car lease costs approximately 1,000-3,000 NIS per month16, Car2Go needs to

embark upon a year-long pilot program in order to make the costs worth its while. Additionally, a

branded-option, meaning that the company uses a Car2Go vehicle with its own branding on it—

effectively taking this vehicle out of operations for other companies—makes the proposition even

more expensive since the costs are not being shared among multiple customers.

In order to hedge against this risk, protect Car2Go’s financial interests and maintain good working

relationships with potential customers, we recommend that Car2Go embark on coupon-to-adoption

models with small- and midsized companies and pursue full-time contracts with large companies.

The coupon-to-adoption model outlined above allows both Car2Go and its clients to safely, and

economically, explore the option of offering Car2Go as part of its transportation infrastructure.

Predicting the state of the economy and customer demand for Car2Go’s product is always a

challenge. However, the benefit of reaching out to the B2B market is that businesses will continue to

have meetings and woo customers, no matter how poor the economy gets—indeed, the worse the

situation is, the more executives need to meet with potential customers face-to-face. And while

international travel is often among the first expenses to be cut during economic distress, short, in-city

trips—where in-person meetings can have a big impact—are typically favored.

16

http://www.ianglo-auto-association.com/lease.html

28

However, Car2Go must watch its rate of expansion. Growing too quickly and implementing too

many pilots can weigh heavily on its finances and put undue financial pressure on its operations.

Additionally, in order to appeal to attractive companies, Car2Go must be careful about who it

chooses to align its brand with. Selecting the right fit for a pilot is key to successful implementation.

Therefore, we recommend that Car2Go undertake no more than 5 pilots within the 2013 FY under a

strict vetting process, preferably two with small companies (one with an established small business,

one with a startup), two with mid-sized businesses, and one with a large business. By embarking

upon these studies with a broad range but a small exposure, Car2Go limits its risk but maximizes its

learning potential about acceptance and market reaction to a B2B offering.

Additional risk factors include, but are not limited to:

● Potential changes in insurance laws that would make it cost-prohibitive for Car2Go to

continue covering insurance premiums

● Changes in tax laws that would make it no longer attractive for consumers and businesses to

choose car-sharing over car leasing or car ownership

● Changes in labor laws that would increase the costs of hiring and retaining employees

● Safety concerns and/or recalls with any of the vehicles offered by Car2Go would

significantly detract from the company’s bottom-line and erode customer trust

● The ability to secure parking at popular locales where the company operates—and hopes to

grow—is essential to the success of the business

● Any Internet outages, downtimes, interferences would severely undermine Car2Go’s

credibility and may curtail any companies doing business with Car2Go if the system is not

reliable and available at any and all times that it is needed

29

Chapter 15: Potential Exit, ROI & Key Learnings

The goal for this project is to increase Car2Go’s revenue stream by finding new markets in the B2B

sector. There is no need at this time to go public by filing for an IPO. There is a need to find new

investments in order to cover the costs of additional fleets or sales/marketing.

Car2Go must decide if it can provide the investment capital itself or tap new sources. The investment

will be returned in the form of increased revenues by added business volumes. The idea is to

establish a new clientele in the B2B sector.

In order to help Car2Go break into the B2B market, increase its market share and gain wider

visibility overall, we initially interviewed 5 current Car2Go customers and a handful of former

drivers in order to get anecdotal data about their experiences. All are either currently employed by

companies who allot lease cars to their top employees, or have enjoyed this benefit within the past

year. Their comments were as follows:

● Car2Go makes sense as a secondary car solution; meaning, they will not replace their

primary, daily car, but will consider not buying a second car for a spouse or significant other

and instead use C2G for hourly drives/projects

● Car2Go does not make sense for a company that has many executives who all travel from

home to office and office to home at the same time since they will all need the cars at the

same time

● Having to return the car to the same pick-up location is a deal-breaker in 89% of the cases. If

Car2Go found a way to economically pick-up cars from one-way trips, or have a way to

centrally command and control the fleet, that would be ideal and bring in thousands more in

revenues

● Startups and mid-sized companies could be a great target as they’re more willing to take risks

on new initiatives. Entering larger corporations would mean going after mid-managers who

are not already beneficiaries of car leases and would therefore not have to give up a benefit—

rather, they would feel that they’re gaining a benefit

Building upon these findings, we targeted the following 13 Israeli firms as a testing ground for a

Car2Go pitch: Dor Alon, Mega, AM: PM, Tamir Fishman, HOT, Netvision, Matomy, Pfizer, Teva,

30

Beitili, ISEF, Shekulu Tov and Techloft. From our preliminary research we wanted to focus on the

small- to mid-sized companies to test feasibility of pilot programs because it’s typically easier to

launch new initiatives with smaller firms which tend to be more entrepreneurial, and mid-sized

companies may be more likely to need the cost-savings while not be locked into a relationship with a

big car service provider as they’re seen as “small fish” to the Hertzes and Avises of the world.

In speaking with corporate representatives, we found the following:

● Executives will not be willing to give up their cars

● Executives demand luxury cars, which Car2Go does not provide in abundance

● Offering Car2Go as part of a series of secondary benefits to mid-level managers who don’t

already get car leases is an excellent way to pilot the program and test whether it would gain

corporate acceptance at no risk to the host company

● Young professionals would be more willing to try this out

● Car2Go must increase its hybrid or electric car vehicle options in order to be seen as a truly

green solution

Further, some company-specific findings include more detailed insights. For example, in Dor Alon’s

AM:PM we found a unique aligning of the brand with Car2Go.

Since both Car2Go and AM:PM operate in highly urban areas, targeting a young clientele,

and want to maximize the overnight hours for deliveries and merchandizing, Car2Go’s 50%

off overnight solution may be an excellent selling point

We discovered that the 24/7 convenience store chain uses only 3-4 light trucks (which

Car2Go owns) and makes spot deliveries on-demand, making it the ideal client for Car2Go

From Beitili, we learned of the costs some companies incur while using a hybrid offering for their

employees—offering car leases for their executives and subsidizing subordinates’ bus passes. At

Beitili, the points of interest were:

Saving between 700-1,400 NIS in taxes for their employees, who pay anywhere from 2,000-

3,000 NIS monthly for a leased vehicle.

Saving the company 300 NIS per employee, per month—or 90,000 NIS monthly (the

company employs 300), 1,080,000 NIS annually—for those who qualify for bus passes

31

Techloft took us on a journey through the startup space. We targeted the incubator since we know

that startups are low on cash and wanted to bring an element of CSR to the project—pitch the C2G

option at a discounted price to the incubator so that entrepreneurs can use the vehicles to get to

meetings, get the funding they need, and then use Car2Go for their other transportation needs. While

Techloft was interested in our proposal, the incubator is, itself, in its preliminary stages and not yet

ready to hear a pitch, but promised to stay in touch once it reaches the second stage of its

development and raises enough money for a fund where some of the discretionary money can be

diverted to transportation costs.

Our meetings with Tamir Fishman were perhaps the most illuminating. Here we confirmed our base

assumptions (mentioned in the key findings above)—which we then went on to verify with every

company we spoke with—and also learned of a suggested pilot program (see section 5).

While Car2Go gave us the option of pitching both its patented technology and its services, all

companies were interested in the service arm of the business. As the HR lead from TF put it, “you

can’t ask an executive at a top firm to always be ready to lend his car to someone who needs it.”

While she saw the benefits of car-sharing, even down to the Shekels and agorot of the tax savings,

she said her group of executives would not be willing to pool their cars into a fleet.

The major pain she identified with current car lease provider Hertz were:

● Customer service leaves a lot to be desired. Any time there’s an issue, customers have to wait

a long time for a response. Money isn’t managed well, etc. This is unacceptable for TF,

which serves top-notch execs

● There’s a sense of being over-charged for minor issues, i.e. a scratch costs hundreds or

thousands of NIS to fix. Any minimal problem costs a lot of money to repair and the issue of

pricing fairness comes up a lot

Besides giving us this valuable feedback, this specialized company also shed light on what clients are

looking for once they sign on the dotted line:

● Customer service must be top notch. Car leasing companies have a bad reputation of

charging for every little scratch and this is an area where Car2Go can differentiate itself

32

● Have designated representatives handling top clients’ needs. When a high-end corporate

customer calls, Car2Go has to be able to drop everything and address their concerns, no

matter what

● Make sure that available inventory matches demand

33

Chapter 16: Corporate Social Responsibility

The question of CSR is an important one and in the case of a startup—and emerging company—the

issue revolves around when do we implement CSR initiatives? According to Milton Friedman, the

first obligation of a business is to make a profit for its shareholders17, anything else amounts to a

form of taxation. However, since we live in a society, there’s an expectation that companies give

back once they hit a certain threshold of profitability.

Car2Go has maintained that its approach to corporate social responsibility is in its green proposition.

The company claims that every one of its vehicles serves 30 drivers and has the effect of taking 15

cars off the road18. The company further maintains that renting a car by the hour means that

consumers are more likely to consider the purpose of their trip and think twice before embarking

upon it. This means that 70% fewer rides happen on cars that are shared.

Yet despite all these promises of a greener tomorrow and a smaller carbon footprint, potential

corporate partners are reticent to endorse Car2Go with the green stamp of approval as the company’s

fleet of hybrid and electric vehicles currently accounts for only 3% of its total offering.

This will immediately boost the company’s credibility to those seeking a green alternative. After all,

according to Max B. E. Clarkson, Corporate Social Performance can be evaluated more effectively

based on the corporation’s relationships with its stakeholders, as opposed to using any models or

methodologies19. By listening to its green constituency, Car2Go shows that it is ready to be an active

participant in the battle to save the planet and fight to end our dependence on fuel.

To that end, the company has to do more in order to fulfill its role as a good corporate social citizen.

In order to boost our business, we suggest taking a note from Michael Porter and implement a shared

value CSR initiative that aligns with Car2Go’s core values20.

17

Friedman, The Social Responsibility of Business Is to Increase its Profits 18

http://www.car2go.co.il/giv/index.php?option=com_content&view=article&id=50&Itemid=56&lang=en

19

Clarkson, A Stakeholder framework for analyzing and evaluating Corporate Social Performance 20

Porter and Kramer, Creating Shared Value, 2011

34

With “Road to Work” we recommend:

Car2Go team up with strategic partners to sponsor driving lessons for people in

underprivileged neighborhoods regardless of ethnicity or religion

The primary purpose of this initiative is to teach people a vocation that leads them to find

driving-related jobs. Car2Go’s strategic partners will be key in helping with employment and

placement options

Secondary benefit of this initiative will be better road safety, better relationships between

Car2Go and strategic partners, better brand awareness for Car2Go—and the creation of a new

customer base for Car2Go as these newly employed people become customers

By embarking upon a CSR program that aligns with Car2Go’s core values, the company will be able

to grow its appeal to consumers by showing that it values the environment it operates in, that it cares

about those less fortunate, that it understands how it can have an impact on the economy by training

people for jobs and helping find positions for them, and by serving as a consumer good option once it

places its graduates in well-paying positions, enabling them to become contributing members of

tomorrow’s economic society.

35

Chapter 17: Conclusions, Recommendations and Summary

There’s a clear need in the market for Car2Go’s services. We believe that if the company chooses to

implement our coupon-to-adoption method it can test the arena at minimal risk. Currently the B2B

market doesn’t see car-sharing as a solution it can use as part of its infrastructure framework. That’s

a bias that Car2Go will have to overcome—one client at a time. A successful implementation with a

key partner, such as Tamir Fishman, AM:PM or Beitili would go a long way toward validation by

other companies and would increase demand for Car2Go’s service.

Building this demand around rising young professionals is the most organic path to growth. They’re

already open to the idea of car-sharing and have fewer demands than executives who have been

driving their own luxury vehicles for years. Younger professionals are also more welcoming to pilot

programs, coupons, and experiments.

Additionally, implementing a CSR initiative would generate fresh buzz and press that would renew

interest in the company for all the right reasons. Right now, the B2B market doesn’t see Car2Go as a

viable green solution. While customers recognize that a limited percentage of the fleet runs on hybrid

cars, the complaint we heard most often is that it’s not enough. In order to be seen as a serious player

in the green space, Car2Go must immediately increase its ownership of hybrid and electric vehicles.

Finally, making it in the B2B world takes more initiative than it does in the B2C world. While so far,

Car2Go has been able to rely on its cool factor when it came to generating leads, businesses expect to

be pitched and courted. In order to maximize the pitch directions and market segmentation we’ve

provided, we highly recommend that Car2Go target 10 companies per year to go after, actively

pursue them, use our questionnaire if necessary, and tailor an offer. If they succeed in closing a few

deals per quarter, we feel like they could be self-sufficient in their road to growth. Otherwise, they

would need additional sources of private investment.

There’s no question that Car2Go needs to embark upon a new market or a new product in order to

grow its revenues and appeal to new customers. We believe that by tapping into the B2B market,

Car2Go will discover that it has a ready and willing new driver base happy to contribute to its bottom

line.

36

Chapter 18: Appendixes (including supporting docs and resumes)

Our Prezi presentation:

http://prezi.com/m0bxq0tgdkrr/car2go/

Additional source for Business Plan formatting: David Zilichovsky’s “Elements of a

Business Plan”

Our questionnaire:

1. What solution do you have now?

2. What do you like about it?

3. Who do you currently offer a car solution to in your company?

4. What differentiation do you have, if any, between different users?

5. What is your ideal transportation solution?

6. Do you use the vehicle benefit to recruit and retain employees?

7. Do you keep a log or a management system of fleet and different users’ consumption and

mileage?

8. How costly is your current car lease/taxi/bus plan?

9. Go over the C2G Plan

10. How would you tailor it differently to fit your needs?

37

Takeaways from Car2Go’s Sales Calls:

● Moving is an unexplored potential business area

○ problem: those consumers don’t become regular C2G customers and they’re usually

interested in a one-time solution to a unique problem

● Overnight businesses can save 50% of the hourly/KM price by reserving after 23:00. This

could be good for:

○ bakeries

○ retailers who receive goods overnight to restock their floor

○ newspapers

○ Any other industries

● Customer objections tend to be over price. Car2Go overcomes that by asking for a

comparison benchmark

● This is all about getting to know the customer and all info/data is customer-generated. This is

not a PUSH

○ All calls are generated by leads, not cold calls

○ Questions include: where in Israel are you based, what is the nature of your trip, how

often will you need a car? Based on the answers, Car2Go tries to come up with the

right parameters to fit the customer needs. There’s no desire to oversell because that

way the user is unsatisfied and leaves the service

○ Emphasis on the fact that this will NOT replace a rental car, a train ticket, or a plane

ticket. This is just ANOTHER tool in an arsenal of tools that can be a viable solution

on a needs basis

○ From the lead-generation tool that is proprietary to Car2Go, 25% of people become

members, 35% become drivers. In-person inquiries show a conversion rate of 95%

38

Contact information for Companies we spoke with:

Tamir Fishman

Sivan Shapira- Operations & Welfare Manager. Tel: 03-6849340. Cel: 054-6530400. Email:

sivans@tamfish.com

Dor Alon/AM:PM/Mega

Nissim Shavit- Environmental Section Manager, Projects Manager, Dor Alon. Tel:

046321206. Mobile: 0545438011.

Email: nissim.shavit@doralon.co.il

Betili

Renana Medina- HR Manager*. Tel: 03-9536428. Cel: 052-2309024. Email:

renana@betili.com

*This contact has only agreed to participate in the project as an educational sample and

has not agreed to discuss further business with C2G.

Shekulu Tov

Arik- CEO. Cel: 050-2090378. Email: arik@s-tov.org.il

Netvision/Celcom

Sharon Shuri- HR Manager, 013 Netvision. Cel: 052-3133934. Email:

sharons@013netvision.co.il

HOT

Avishay Damari- HOT HR. Tel: 077-7077057. Cel: 054-7077057. Email:

Avishay.Damari@hot.net.il

Matomy

Shir Ross- Account Manager, Publisher Key Accounts, Matomy Xtend Media. Tel: 077-

3606145/ Cel: 054-7945920

Email: shir.r@matomy.com

39

ISEF

Shai Zamir. Cel: 052-5841177

Email: shaizamir5@gmail.com

Techloft

Gilad Tuffias- Founder. Tel: 050-5475540

Email: gilad@techloft.co.il

Pfizer

Inbal Goren. Tel: 09-9700500

Email: Inbal.Goren@Pfizer.com

Teva

Natalie Kamil- Israel Compensation & Benefits. Tel: 03-9148958. Cell: 054-8885073

Email: gilad@techloft.co.il

40

41

Our SWOT Analysis:

STRENGTHS

Recognized brand, perceived as young hip

and sexy

Patented door opening technology

Methods of marketing that include a personal

and business approach

Diverse vehicle offering in fleet

Location in key big cities that allows

functionality success

Specialized parking spaces

First mover advantage, establishing car

sharing business in Israel

Strategic financial back up through the support of the Tamir Fishman group

WEAKNESSES

Not yet operationally profitable

Business model forces drivers into

two-way trips

Company is stuck in a startup

mentality despite being in a more

mature phase

Not enough luxury vehicles

Not enough hybrid/electric cars,

while appealing to green conscious

market

Lack of customer segmentation Corporate strategy is unfocused.

OPPORTUNITIES

Reliance on lead generation sales system

prevents proactive pitching

Market not educated enough about benefits

of car sharing

Capitalizing on tax benefits of car sharing vs.

car ownership/leasing

Tel Aviv’s government hasn’t defined which

vendor they will utilize for citywide for

municipality car project.

Lack of penetration into B2B markets

THREATS

Competitors forming strategic

partnerships (i.e. Better Place and

Eldan)

Customer perception as an

expensive service

Major corporations favoring a car

leasing culture in Israel

Growing number of alternatives

Growing reach of public

transportation

42

Our Ansoff model

Ansoff

Model

Current Products New Products

Current

Markets

Market Penetration

C2G is already implementing

marketing efforts

Market is relatively saturated

with competitors. Where’s the

benefit in further saturating it?

Only new place to enter into is new markets (see bullets below)

Product Development

Market demand indicates that

current markets would benefit

from new offerings in luxury

market and commercial market

New features such as pick-up here,

drop-off there, would increase business.

New

Markets

Market Development

No need for investment in new

products

Partnership with strategic

partners means higher visibility

at lower risk

Potential customers may be more

willing to sign on if their

companies implicitly endorse the service

Diversification

Highest risk

Niche demand for luxury vehicles

within new market but no proof

that it will lead to fast profits

High upfront costs