Enterprise Rent a Car
External macro environment is usually of great importance for the business operations and marketing decisions of large American companies including the Enterprise Rent-a-Car. The macro environment factors cannot be controlled, but they often significantly influence the organization’s development (Hiriyappa, 2015, p.31). Some of the macro environment factors that have the largest impact on the present and future Enterprise Rent-a-Car’s business operations are economic, socio-cultural, environmental and technological factors. The company should carefully analyze these factors in order to build up the profitable and sustainable future.
The economic factors are the most important factors for the Enterprise Rent-a-Car. The company depends on the stable American economy and if there are economic problems in the country it means that fewer people will be able to rent a car. Moreover, if the fuel prices change, the company will have to either increase or reduce supply of the car rental services in order to satisfy the demand. Some of the economic indicators that might be important for the Enterprise Rent-a-Car include the following: levels of unemployment and inflation, fuel prices, economic growth, financial performance of the auto industry, economic strengths and weaknesses in the existing markets, purchasing power of the people, etc. If investments and income are rising, it means that the business prospects are bright and further investments will not be very risky (Hiriyappa, 2015, p.36).
The socio-cultural and demographic factors are as significant as the economic factors. The American society constantly changes and it is important for the Enterprise Rent-a-Car to follow all the trends and adjust the existing products or introduce the new products if the situation in the market requires that. For instance, nowadays the women are much more involved in the contemporary business than before. Therefore, the customer-oriented companies such as the Enterprise Rent-a-Car should think about how to satisfy the needs of the women when they design their marketing strategies or new services. What is more, the information about the spatial dispersal, employment pattern, etc. may help the Enterprise Rent-a-Car improve the work of its branches in the local markets.
In terms of the environmental factors, nowadays the issue of the climate change has been influencing the politics and the economy. More and more investment resources are directed into the energy efficient and environment friendly technologies and mobility schemes. The Enterprise Rent-a-Car will need to react to the climate change too. One of the services that the company has already offered to the customers is the WeCar which is a car sharing programme that allows the customers to rent a car at an affordable rate. In addition, the company will have to invest more resources into the hybrid and fuel-efficient vehicles. The environmental factors may also include some of the natural factors such as topographical factors and location aspects. Such information may help to introduce the changes in the marketing mix (Hiriyappa, 2015, p.42).
Finally, the technological environment poses serious challenges for the Enterprise Rent-A-Car. Use of the eco-friendly technologies will be needed in order to correspond to the laws and regulations that are targeted at preservation of the natural environment. The information communication technologies are already used by the companies in order to attract the new customers, extend the product/service range, reduce the operational costs and stay competitive in all business segments. The Enterprise Rent-a-Car works with the people that are educated and up with the times. Not applying the technologies would result in worsened quality of the services and inability to satisfy the customers’ needs. Therefore the company should apply the new technologies and be as innovative as possible taking into account how much attention is being paid to the IT nowadays. Moreover, there is the pressure from the new companies that are contributing to the creation of the disruptive economies. For instance, Uber is a new company that contributes to the increased mobility in the USA.
Enterprise Rent-a-Car was founded in 1957 by Jack Taylor and now is headquartered in Clayton, Missouri. Enterprise Rent-a-Car is one of the largest private companies in the USA and its success may be attributed to the business model that the owners have been applying and the policies and practices that have helped to build a very large company that operates as “a small business” despite a very large number of the branches. The company constantly expands internally and externally by “offering existing and new products within existing and/or new markets” (Case Study, n.d.).
Basically in order to reach the business objectives the company has been using all options in the Ansoff Matrix: market penetration, market development, product development and diversification. In terms of the market penetration, Enterprise Rent-a-Car uses the existing services in the existing markets. Usually the market penetration is achieved by means of the active promotion and distribution that help to sell more services to the established customers and find the new customers in the markets where Enterprise Rent-a-Car is present.
In the case study, market development, product development and diversification were described in order to show how the company Enterprise Rent-a-Car emerged into one of the most successful private companies in the USA. Firstly, the market development was targeted at expanding the operations across the USA and some other countries in Northern America and Europe. It was of great importance to provide the high quality services in order to gain a competitive advantage over the other competitors. The customers have always been in the center of attention in each branch of the Enterprise Rent-a-Car. In addition, all branches are located close to the customers, for example in the airports.
Secondly, the company had to develop and provide the new services to the customers in the existing markets. Some examples of the new services include “Pick-up” and “Flex-E-Rent” services. What is more, the service range was extended by means of active cooperation with the corporate clients. The new services were gradually introduced in order to avoid excessive business rinks. One of the strengths of the company is the decentralized management of the business operations. Each branch is encouraged to be proactive at the local level and offer the services that will match the preferences of the customers. At same time, the Enterprise Rent-a-Case is a private company that requires all branches to apply similar policies and therefore coordination and subordination are significant for successful work of the company and its branches.
Finally, diversification has helped the company to offer absolutely different products and enter the new market sectors. Diversification is usually very risky, because the company does not have any experience in the new area and requires a lot of investment in order to achieve the business objectives. Since the 1960s the Enterprise Rent-a-Car has tried to diversify its business activities several times and not always the initiatives were successful. The most successful diversification project was the establishment of the Car Sales division in 1962. The new business of the Enterprise Rent-a-Car grew into one of the largest sellers of used cars in the USA (Case Study, n.d.).
References
Singh, V. (May 2014). International Business Environment & Foreign Exchange Economics.
New Age International. Retrieved from
http://www.newagepublishers.com/samplechapter/001610.pdf
Enterprise Rent-a-Car Case Study. (n.d.) The Times 100 Business Case Studies. Print.
