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Harvard Case - Green globalization: GreenMobility's push to internationalize electric car sharing

"Green globalization: GreenMobility's push to internationalize electric car sharing" Harvard business case study is written by Adam K. Frost, Shuang L. Frost, Lukas Hvidkjaer, Kristoffer Kellberg Frank. It deals with the challenges in the field of Entrepreneurship. The case study is 18 page(s) long and it was first published on : Dec 21, 2023

At Fern Fort University, we recommend that GreenMobility pursue a strategic internationalization strategy focused on replicating its successful Danish model in carefully selected European cities, leveraging its existing strengths in technology, operations, and sustainability. This approach should prioritize market selection based on factors like government support for electric mobility, existing public transportation infrastructure, and urban density. GreenMobility should also consider strategic partnerships with local players to accelerate market entry and build local expertise.

2. Background

GreenMobility is a Danish electric car-sharing company founded in 2010. The company has achieved significant success in its home market, establishing itself as a leader in the Danish electric car-sharing sector. Driven by a strong commitment to environmental sustainability and a desire to expand its reach, GreenMobility is now seeking to internationalize its business.

The case study focuses on the company?s decision-making process as it considers various options for international expansion. GreenMobility faces several challenges, including:

  • Competition: The electric car-sharing market is becoming increasingly competitive, with established players like Zipcar and car2go operating globally.
  • Market complexity: Each city presents unique challenges related to infrastructure, regulations, and consumer preferences.
  • Financing: Expanding into new markets requires significant capital investment.

3. Analysis of the Case Study

To analyze GreenMobility?s situation, we can utilize the Porter?s Five Forces framework:

  • Threat of New Entrants: High - The electric car-sharing market is relatively easy to enter, with low barriers to entry.
  • Bargaining Power of Buyers: Moderate - Consumers have several options for transportation, but GreenMobility?s focus on sustainability and user experience can create a competitive advantage.
  • Bargaining Power of Suppliers: Moderate - GreenMobility relies on suppliers for vehicles and charging infrastructure, but the market for these products is relatively competitive.
  • Threat of Substitute Products: High - Public transportation, ride-hailing services, and personal car ownership are all potential substitutes for electric car-sharing.
  • Competitive Rivalry: High - The market is already crowded with established players and new entrants, leading to intense competition.

Key Strengths of GreenMobility:

  • Strong Brand: GreenMobility has established a strong brand in Denmark, known for its commitment to sustainability and user-friendliness.
  • Technology and Operations: The company has developed a robust technology platform and efficient operational processes, which can be replicated in new markets.
  • Sustainability Focus: GreenMobility?s commitment to environmental sustainability aligns with growing global concerns about climate change, creating a potential competitive advantage.

Key Challenges:

  • Funding: International expansion requires significant capital investment, which may be challenging to secure.
  • Market Entry Strategies: GreenMobility needs to develop effective market entry strategies to overcome competition and adapt to local conditions.
  • Local Partnerships: Building partnerships with local stakeholders is crucial for navigating regulations, securing permits, and building local expertise.

4. Recommendations

1. Strategic Market Selection:

  • Focus on European Cities: GreenMobility should prioritize expansion into European cities with strong government support for electric mobility, well-developed public transportation infrastructure, and high urban density.
  • Market Research and Due Diligence: Thorough market research should be conducted to identify potential target cities, assess market size, competitive landscape, and regulatory environment.
  • Pilot Projects: GreenMobility should consider launching pilot projects in select cities to test its business model and gather valuable data before committing to full-scale expansion.

2. Strategic Partnerships:

  • Local Players: GreenMobility should seek partnerships with local companies, including car dealerships, charging infrastructure providers, and ride-sharing platforms.
  • Government Agencies: Engaging with local government agencies is essential for securing permits, navigating regulations, and accessing incentives.
  • Joint Ventures: GreenMobility could consider forming joint ventures with local partners to share risks and leverage local expertise.

3. Funding Strategy:

  • Venture Capital: GreenMobility should explore opportunities for venture capital funding to support its international expansion.
  • Debt Financing: The company could consider debt financing from banks or other financial institutions.
  • Crowdfunding: Leveraging crowdfunding platforms could be a viable option to engage with environmentally conscious investors and raise funds.

4. Operational Efficiency:

  • Replicating the Danish Model: GreenMobility should leverage its existing technology platform and operational processes to ensure efficient operations in new markets.
  • Local Adaptability: The company should be prepared to adapt its business model to local conditions, including pricing, vehicle selection, and marketing strategies.
  • Data Analytics: GreenMobility should utilize data analytics to optimize operations, track performance, and identify areas for improvement.

5. Marketing and Branding:

  • Local Adaptation: GreenMobility should adapt its marketing message and branding to resonate with local audiences.
  • Partnerships: Collaborating with local businesses and influencers can help reach target customers and build brand awareness.
  • Social Media: Leveraging social media platforms is crucial for engaging with potential customers and promoting GreenMobility?s sustainable values.

5. Basis of Recommendations

These recommendations are based on the following considerations:

  • Core Competencies: GreenMobility?s core competencies in technology, operations, and sustainability can be leveraged for international expansion.
  • External Customers: The recommendations are designed to attract environmentally conscious customers who value convenience and sustainability.
  • Competitors: The recommendations aim to differentiate GreenMobility from its competitors by focusing on strategic partnerships, market selection, and a strong brand identity.
  • Attractiveness: The recommendations are expected to generate positive returns on investment through increased market share and revenue growth.

6. Conclusion

GreenMobility has a strong foundation for international expansion, driven by its commitment to sustainability, its innovative technology platform, and its proven operational model. By carefully selecting target markets, forming strategic partnerships, and adapting its business model to local conditions, GreenMobility can successfully expand its reach and become a leading player in the global electric car-sharing market.

7. Discussion

Alternative Options:

  • Acquisition: GreenMobility could consider acquiring existing car-sharing companies in target markets, but this approach carries significant financial risks and integration challenges.
  • Franchising: Franchising could be a less capital-intensive option, but it requires careful selection of franchisees and ongoing management oversight.

Risks and Key Assumptions:

  • Market Acceptance: The success of GreenMobility?s expansion depends on the willingness of consumers to adopt electric car-sharing.
  • Competition: Intense competition from established players and new entrants could hinder GreenMobility?s growth.
  • Regulatory Environment: Changes in government regulations could impact the profitability of electric car-sharing.

8. Next Steps

Timeline:

  • Year 1: Conduct thorough market research, identify target cities, and develop a detailed business plan for international expansion.
  • Year 2: Secure funding, establish partnerships, and launch pilot projects in selected cities.
  • Year 3: Scale up operations in successful pilot markets, expand to new cities, and continue to refine the business model.

Key Milestones:

  • Secure Funding: Secure sufficient capital to support international expansion.
  • Establish Partnerships: Form strategic partnerships with local players to facilitate market entry.
  • Launch Pilot Projects: Successfully launch pilot projects in target cities to test the business model.
  • Scale Up Operations: Expand operations in successful markets and achieve sustainable growth.

By focusing on strategic market selection, partnerships, and operational efficiency, GreenMobility can achieve significant success in its international expansion journey while contributing to the global shift towards sustainable transportation.

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Case Description

On a fine winter morning in January 2021, in an office in downtown Copenhagen, Henrik Isaksen, the founder of GreenMobility, pondered the future of his company and his role in it. GreenMobility, a pioneer in electric vehicle (EV) car sharing, had established itself as an industry leader in Denmark and had taken the first steps towards globalizing its business. The company was operating in seven cities in four countries. Moreover, it had recently been listed on Nasdaq Copenhagen's Main Market and had plans to unroll operations in major European markets. However, Isaksen found himself at a crossroads. Despite some early success, the path to globalization had been fraught with challenges. GreenMobility did not have a proven business model. It had struggled with leadership challenges, with five different CEOs in as many years. The global pandemic, which started in 2019, had placed unprecedented strain on the entire transportation industry. GreenMobility needed a new strategy, not only to weather this turbulent period but also to continue expanding into new markets and establish itself as the global leader in the EV car-sharing segment. What approach to internationalization would best enable GreenMobility to achieve its ambition? Was Isaksen the person best suited to lead the company through the next stage of internationalization?

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