Case Analysis: Enterprise Rent-A-Car
Business analysis is one of the primary practices that facilitate any organization to the top position of the focal industry. The content of this paper, therefore, analyses the situation of the focal business (Enterprise Rent-A-Car) as one of the market-driven companies in the world. Enterprise Rent-A-Car began as automobile leasing firm in the year 1957 with Jack as the co-founder. To achieve the best analysis of the organization, the paper answers five key Value Creation Approach questions as below.
Macro environmental Factors
Macro-environmental factors influence the performance and operation of Enterprise Rent-A-Car as indirect and direct manner (Melville, 2010). In as much as there are very many forces that present threats and opportunities, the organization faces impact from two significant forces within the industry. The macro environmental forces faced by Enterprise includes; Demographics factors and technological factors.
The demographic environment is composed of people who in this case are customers. Enterprise offer category of services which cover across a wide range of demographics. The organization offers retail rental, fleet management, replacements, and business rental services to various groups of people. The company service is therefore consumed by a large number of consumers ranging from, personal drivers of all ages, business owners and airports. The customers vary from age aspect, professions as well as geographical locations (Melville, 2010). The diverse demographic therefore has a positive impact on the company as it creates a broader market.
Technological advancement is a very crucial factor in business. The increasing technological advancement impacts Enterprise operations both positively and negatively. Technological advancement results in changes in trends and social environment thus the need to advance. Taking, for instance, the majority of drivers (customers) desire for more fuel-efficient cars, free toxic gas emission cars, as well as vehicles that run on alternative sources such as solar and electricity thus, may opt for other firms. Enterprise in such case must, therefore, invest more capital to keep their customers. Even though technology posts thereat to the business, it also increases the organization's competitive advantage.
There are various push and pull factors within the industry that affects Enterprise Rent-A-Car operations. The immediate market factor that influences the firm’s activities is a stiffer completion from firms such as Avis Budget Group, Dollar Thrifty Automotive as well as Hertz Global Holdings (Shaheen, Cohen & Chung, 2014). Competition from these companies threats Enterprise Rent-A-Car progress the company must, therefore, use more capital to remain at the top. Another force influencing the demand is a collaboration between insurance companies and Enterprise Rent-A-Car. Insurance companies keep changing their policies which affect the company’s service charges.
Enterprise Rent-A-Car customer value creation
Customer value is the perception of the services offered by the organization. Enterprise Rent-A-Car developed a specific method of creating customer value known as “We’ll Pick You Up.” The organization provided a free ride to its customer’s and responded to customers’ needs thus high customer value (Weinstein, 2016). The strategy is useful to the company. However, the company should come up the most straightforward way the customers can reach their services. The company with modern technology should come up with an application that enables the customers to select the product they want. Free access just as the free ride will make customers feel valued thus high value and profitability. Moreover, the company should set a price for their customer that will make them feel that they are over serviced.
The customer perception based on the provided case can be gaged as superior satisfactory. The company since the creation works towards meeting the customer needs. The company developed and made every decision based on customer needs (Meyer & Schwager, 2017). However, in as much as the company customer perception is superior the organization should change when it comes to technological advancements. The current world is built on technology, customers need easy access to the company service, and this has reduced high customer perception and may affect the company in the future. Customers need an application for both Android, iPhone and Microsoft devices to maintain superior satisfaction and perception.
Enterprise Rent-A-Car performance according to industry revenue and market share is higher compared to other firms within the same industry such as Hertz. The company controls47% of the car renting market with a revenue of 9.5 billion dollars. The existing evidence shows that the organization performs well in comparison to the others. However, for Enterprise Rent-A-Car to remain at the top of the industry and increase the current market share and revenue, the company management should maximally exploit their competitive advantage as well as utilize the technology which other firms like Avis began utilizing (Berry et al. 2016).
According to the above analysis, Enterprise Rent-A-Car is doing well as a firm. However, the company management should fully exploit its competitive advantages and implement the use of current technology.
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