Case Analysis: Olympic Rent A Car US: Customers Loyalty Battles Harvard Case Solution & Analysis

Case Analysis: Olympic Rent A Car US: Customers Loyalty Battles Case Solution

Case Analysis: Olympic Rent a Car US: Customers Loyalty Battles

Answer No 1

Current Situation

The current business model and strategy of the company is working well as the company has acquired 464 rental locations locally, which allows the company to compete successfully in the industry and to generate suitable profit. However, the company’s current revenue and margins are slightly below the industry average but the company does not have to worry about it. Olympic Rent A Car has almost 108,000 vehicles in its car fleet, which allows it to serve more customers in major locations all over the United States. Finally, the company purchases new cars and rents them for almost 15,000 to 30,000 miles (232 days per year almost) and afterwards, the company sells these cars to retail or wholesale market for almost 60% of the initial cost,which indicates that the company has a new fleet of cars and also adding new cars to its existing fleet.

Answer No 2

Value Proposition

The company’s current value proposition is “More for less” as the company is giving the best quality services while charging the lowest prices which are possible. The company positions itself as the most efficient company as per the consumer perspective because of its lower prices. However, customers also see this company as the low cost provider and willingly acquire its services asthe services of this industry are uniform and the only difference is the price. On the other hand, the company is primarily targeting the price conscious segment and positions itself as the industry cost leader. For further explanation and better understanding,appendix 1 has been made at the last of this paper.

Answer No 3

Strengths and weaknesses of the Loyalty Program

The customer loyalty program was a wonderful initiative by the company to encourage its customers to purchase or use more of the company’s services. However, the program had several strengths and weaknesses, which include increased rental customers royalty, increased profitability, and increased consumer reach and market visibility. Furthermore, there were some weaknesses which include undifferentiated services, customer switching, and program’s cost. Since this program enabled customers to use more services of the company and these customers were also more profitable for the company and due to this program, the company can attract more customers and increase its market reach and visibility. On the other hand, the program and services were not differentiated as all the industry members were conducting same sort of programs and were providing same services. In addition, the cost of the company was far too high as compared to the revenue which it was expected to increase...........................

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