Enterprise Rent-a-Car Essay

SWOT With attempt, the guest ever give birth bys first. This is a major strength that the partnership has capitalized on in lay out to say itself from the competition. Their Well pick you up slogan is the indigenous centre of the caller-outs client service aspect. After the guests, the focus is on employees. Good customer service comes from exactly the beaver employees and first step postulates all(a) of their employees to be happy with their jobs. By offering a sense of ownership and incentives to advance deep down the railway autory gild, initiative employees are often truly satisfied with their positions. initiative is the swelledst rail car letting smart set with the largest fleet and the closely lease locations. Because of this, they are easily accessible all over the country. Their main securities industry focus is the chthonianstructure/ city grocery store section and they are the attention attracter in this separate with the most comme rcialise share. In order to stay on top, opening has kept up with technology and has organise many long-term alliances with insurance bestridents and car repair shops to produce referrals.Shifting to the weaknesses of the beau monde settles try falling short in a couple of areas. first step does non cast off the largest commercialize share in the entire car contract industry. The company has established itself in the home/city merchandise and has not entered the largest plane section of the industry airdrome lettings. As a result, they have low sensation in the industry. approximately red-hot(prenominal)wise drawback is the lack of a frequent customer program. Most major car lease companies have these recite-buyer clubs as they attract extract calling and create to a greater extent customer awareness. Within the company, endeavor is in any case having problems recruiting groovy employees. Because awareness of the company is low and the realise of workin g for a car rental company isnt that glamorous, college graduates often flatten employment opportunities with opening.The biggest foreseeable luck for the company to take advant mature of is the aerodrome market segment. This is the largest market segment of the car rental industry and its been left full by attempt. Next would be the at a lower place 25 yr. old segment. Rental car companies often leave out assertable customers in this segment by either not renting to them or adding large paysto the normal rental rates. Enterprise on the other hand, does rent to the under 25 segment and charges a small fee or no fee at all.The unoccupied rental market is some other segment that Enterprise tail assembly turn out into. This market is largely made up of people that want to rent more(prenominal) expensive cars (SUVs and convertibles) for the weekend. another(prenominal) hazard for the company is to expand its system of alliances with business organisationes and schools/uni versities. more incentives domiciliate be offered to this segment in hopes of opening up more business opportunities.Enterprise get out have to arrest out for threats in the industry to conserve its competitive position. One of the threats is the prospect for other car rental companies to enter the home/city segment, which is the strong waiting of Enterprise. In order to be competitive in the future, Enterprise essential keep up with expert advancements such as Internet applications.Alternatives on that point are trine broad selections that Enterprise fecal matter involve to implement if they want to meet their profit and growth expectations for the future. Enterprise could do nothing, target the vastly untapped 25 and young market, or range into other segments of the general rent-a-car market. These three alternatives could be used alone or in combination.One natural withdrawion for Enterprise is to do nothing.The next option for Enterprise is to target the vastl y untapped 25 and younger market. This market is an exceptional opportunity for Enterprise because they are one of the solo car rental companies that rents to drivers under the age of 25. To target this group takes commitment and creativity. offshoot and foremost Enterprise needs to come up with more creative ads targeting this segment. some other angle for Enterprise would be to get its name onto college campuses across the country. They could do this by giving presentations at various Universities or having a creative study skirmish for college students. Finally to fully r individually and keep the under 25 market, Enterprise must keep up with technology. This segment is the most computer savvy of all age groups and to fully target this market Enterprise must bethe industry leader in technological innovations.The Final option for Enterprise is to bleed into other segments of the overall rent-a-car market. Enterprise dominates the switching rental segment of overall rent-a-c ar market. The shift rental segment sole(prenominal) accounts for 27 percent of the total market. Therefore, there is a huge market consisting of the business and leisure/ arbitrary markets that enterprise has currently not entered.Criteria In implementing these alternatives there must be a way to measure the fulfill to see if they are working. The advertize we jut out is more of topical anaesthetic anesthetic nature than national. We turn over that the National publicizing turn tail should suave be done, alone a local one should be done also to compliment the National lawsuit. The local take to the woodss should be in the form of unexampledspaper ads and radio ads. The local branching should oversee and select the media. Then the tax revenue cave ind from the ad should be four durations the comprise to make the ad. Once this 4to1 ratio is not met, its time to change the ad or find another media. The Enterprise company coating is such that each individual br anch is responsible for its sales and service. To stay in the parameters of this culture each branch should be responsible for its own advert also.In measuring the college presentations and the creative contests, Enterprise should monitor the number of resumes that they receive. If the presentations and/or contests do not generate a sizable measurement of resumes, thence the programs must be reevaluated. contemptible into the other segments of the overall rent-a-car market batch be measured by profits. Once an drome branch becomes profitable, then Enterprise should start flavor at other airports for expansion. In the leisure/discretionary market, track how many weekend rentals and opulence rentals that are world used by each branch.Evaluation of Alternatives 1. Marketing to the 25 yr. and younger segment Our first alternative is to develop a marketing campaign to the 25-year and younger market segment. Targeting this segment go forth benefit Enterprise by exploitation a s ignificant growth in summationd awareness not single locally, butalso nationally. Increased awareness for the local/city segment leave alone greatly help their all immediate prosperous market niche. The recruitment of tall quality employees and building superior marque awareness forget enable Enterprise to stand above its competitors.Targeting the 25-year and younger segment, Enterprise forget develop a younger clientele and entrust have a wider range of employees to select from. This can be accomplished by setting up presentations at respected universities around the fall in States and promoting incentive contests with recompenses. Other benefits will embarrass join ond profit potency and beingness a step ahead of its competitors with technology. scientific advancements in the Internet and World wide-cut Web could add convenience for customers with the mankind of an on-line reservation system.On the other side of the spectrum, some risks could be associated with t he targeting 25 and younger segment. These risks will be associated with bigger be in advertising, marketing, and recruitment. Time and might will also be contributed since a long-term commitment is required. Also, consumers might irresolution the security of on-line reservations.2. Moving into invigorated market segments Our second alternative is to move into and gain a share of brisk market segments. These new markets are the airport segment and the leisure/discretionary segment. The airport segment is the largest in the rental car market, due to the immense amounts of business corporations renting out cars for their representatives. Enterprise can intelligibly take control of this market segment and more profits and revenues can be attained. With sharing or controlling this market segment, awareness will expand among these business starters and discounts and incentives can be introduced to incorporate repeat business. For the leisure/discretionary segment, Enterprise can i ntroduce more luxury vehicles that will appeal to the distinctive traveler. The benefits of moving into the new markets are deal outable.Some negative issues can affect Enterprise by moving into new market segments. One is that it is real expensive. There could be numerous cost resulted by missed figured opportunities or mistakes rendered by managers atthese airport locations. Secondly, it is very waste trying to penetrate an all realise saturated market, such as the airport segment. Spending money, time, and energy into a new market segment where Enterprise does not have a firm hold can be financially high-priced and damaging to Enterprises image.Recommendation Our urge onation, as the posterior One Consulting firm, to Enterprise Rent-A-Car, begins with a remit penetration of the business segment (airport rentals) of the car rental market. By entering this segment of the market, Enterprise can penetrate a market in which it formally had no presence in. Also, with the bus iness segment being the largest segment of the car rental industry, there is huge profit potential. We would propose commencement the segment penetration with only the bigger airports to limit the cost and risks associated with entering this new segment. Within two years enterprise should evaluate their progress in this segment.If it proves to be profitable, Enterprise should continue to expand into small airports across the country, and have a national presence, in the deemd 150 airports within louver years. This will be necessary to exercise the present growth rate of 25% for the company since the home-city market is only evolution at approximately 10 to 15% per year. However, to remain consistent with the companies decentralized operations, we step that the business segment of the industry should be run and managed as a wholly separate region, no matter where it is located. This will prevent the loss of focus on Enterprises primary market segment, the replacement market , with particular speech pattern on neighborhood locations.The second part of our testimonial for Enterprise Rent-A-Car involves increasing advertising targeted towards the under 25-year-old market. Allowing time for budgeting and the creative process, the advertising campaign should be implemented immediately. This can prove to be very priceless because some other firms will not rent a vehicle to anyone under the age of 25. Similarly, a great opportunity to develop brand loyalty lies in this segment. By getting a abide on the other car rental companies in the mind of the consumer, Enterprise can put itself at a strategic advantage. Enterprise has already begun to do this somewhat, with a lower charge than other companies, for the under 25 years old rentals. However, werecommend using a national advertising campaign to not only increase the awareness of renting to younger customers, but also to increase awareness of the company as a whole.This in turn, will help ease the difficu lty of astute other segments. Furthermore, a localized campaign, managed by each region, should be implemented to increase awareness, catering to local trends and needs, once again, memory consistent with the companies decentralized operations format. include in this local advertisement campaign, an emphasis should be placed on the company itself and its job opportunities, highlighting to the younger audition the promotion from within process and profit-sharing opportunities.Another aspect of the local advertising campaign should focus on employee recruitment. We recommend some type of contest involving a capital reward to generate interest in becoming employed by the company. For example, we call forth implementing a contest rewarding the best creative taped interview or resume with a $10,000 cash reward and an employed position. This contest will generate interest and provide Enterprise with a database of potential employees. Ultimately it will draw out the pool from which E nterprise is able to choose its employees from. This is very important for the future of the company.Lastly, we recommend that Enterprise continue to keep up with, or ahead of, technology. This continues the emphasis on the younger audience and top-notch employees. Advanced tracking systems, such as the one Enterprise currently utilizes, and convenience are learn factors in the future success of the company. Advancements in the area of the Internet and computers is crucial to the sustain growth of this company, especially in the travel segment of the market.Enterprise must consider the financial aspect of the recommendation by Base One Consulting. If approximately 15 airports location were opened and used to judge the profitability of this segment, and an estimated 125 cars at each location (based on Exhibit 1), with the cost averaging about $20,000 per vehicle, Enterprise would be feel at an initial investment of about $37.5 million. However, the companys revenue is estimated a t about $2.61 billion per year from the replacement market. The profit potential can only be estimated since airport rates very widely. Since the overall car rentalmarket generates an estimated $14.62 billion per year, and the business rentals account for about 40 percent of that figure, there is potential to penetrate an over $5.5 billion sawhorse market (Figures from Exhibit 2).In comparison, the costs to implement an aggressive advertising campaign, some(prenominal) nationally and locally, must be estimated from historic advertising figures (Exhibit 2). Since Enterprise spent an estimated $22 million in advertising furthest year, and a more aggressive campaign will be implemented, we can estimate an advertising budget of about $55 million. This should cover all of the national and local advertisements. Although the advertising budget will more than double, it would only account for about 2.1% of the companys budget. This is less than the industry average out of 2.8% of reven ue. Overall, by implementing the recommended strategy, Enterprise would be looking at expenditures of about $92 million. Although this is or so 40% of the companys revenue for one year, many of the funds will come from long-term loans and other sources. Also, the revenues that will be realized by implementing the recommendation must be considered.