ENTERPRISE RENT A CAR Harvard Case Solution & Analysis

ENTERPRISE RENT A CAR Case Solution 

COMPANY BACKGROUND:

The Enterprise Rent a Car Company is a service provider organization that initially started operating in the industry of its home country in the United States. The company was founded by Jack Taylor in St.Louis in the late 1950s and the initial operations of the organization were handled by a human resource of roughly 10 persons that were hired by the organization. Due to the impressive leadership and management of the directing authority of the company, the business has thrived and enjoyed success along with its growth ever since the business was founded by the founding father of the company.

The impressive expansion of the business can be analyzed by the fact that in just a few decades the business has progressed from possessing just a dozen vehicles to more than 10,000 vehicles roughly. The business presently maintains roughly above 500,000 vehicles and hundreds of offices spread around U.S., Europe and Canada.

ANALYSIS:

The analysis of the strategic structure, policies and business culture of the organization will include an analysis of the industry and the adopted business culture and structure of the management of the organization. This will assist in realizing the environment of the company and the management policies of the organization in order to determine the competitive advantage or the challenges and risks to the business that it might be facing from the industry rivals or the environment of the markets where the company operates.

PORTER FIVE FORCES:

Bargaining power of buyers:

The bargaining power of the buyers in the rent a car industry is quite high as it is a service providing industry and the companies often compete on the services they provide to the customers in the markets. The bargaining and influencing power of the customers in such industries is quite high as they are at the center of power and the organizations thrive to please and attract customers. Same is the case of the U.S. rent a car industry where the customers have an enormous bargaining power due to the presence of multiple organizations and services in the market.

Due to the nature of the business as a service provider in the market it is therefore necessary for the company to adopt as per the influence of the customer and compete on the basis of services they provide to the customers along with the prices they charge for it.

 Bargaining power of supplier:

The main suppliers to the companies in the industry are the car manufacturers and dealers and their bargaining power against the Rent a Car companies is quite low. The car manufacturing industry of the country is quite segregated due to the attractiveness of the market and no significant barriers in entrance for the foreign car manufacturers to penetrate and operate in the market.

 This has enabled for many foreign car manufacturing companies to enter and operate in the markets of the country and the competition in the industry is extremely high. There is intense competition among the rival car manufacturing organization to secure agreements and contracts for supplying of car and the rent car organizations are in a much better and dominant position to influence agreements and contracts with them.

Threat of substitutes:

Although there are several other means of travelling available to the customers in the market that are more economical that the rent a car service industry however; the convenience and comfort that the rent a car gives to the customers is irreplaceable. The improved living standards of the developed regions of the world that include the Europe, U.S. and Latin America allows the customers to look for convenience and comfort rather than looking for the economic options for travelling..................

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