Enterprise Hbs Case
All car rental companies provide customers with the temporary use of a car. How do Enterprise’s original target customers in the local or “home-city” market—and their needs—differ from the target customers of their major competitors such as Hertz and Avis? How does Enterprise match (or not) the needs of their local market customers?
The local market consists of (i.) discretionary and (ii.) repair/insurance replacement rentals. Both categories place a premium on price (relatively lower), location, and customer service. Additional value added services such as pick-up and drop-off enhance the benefit the local audience receives. The airport market customer base consists of (i.) business and (ii.) leisure rentals. These renters, particularly the business travelers, place a premium on speed of check-out/check-in, vehicle availability, and brand. Additional value added services such as in-car GPS enhance the benefit these customers receive.
Enterprise’s unique combination of assets/activities allows the company to meet the needs of its target customers in ways other rental car companies (e.g. Avis and Hertz) cannot. Enterprise’s large network of suburban locations allows for low prices and convenience/proximity to its customers; the company also provides top-notch customer service by carefully hiring and training its employees.
What choices of assets and activities has Enterprise made in order to provide car rentals with the attributes you described in Question 1? In other words, what makes their particular car rental “product” possible and profitable? Pay particular attention to trade-offs.
Large network of franchises outside airport: Neighborhood (vs. airport) locations cost less and allow Enterprise to provide a significant price advantage and proximity to its target customers. The major trade-offs entail foregoing a significant portion of the airport rental car market (~$10B).
Customer-focused HR culture: Enterprise hires college graduates with people skills
The local market consists of (i.) discretionary and (ii.) repair/insurance replacement rentals. Both categories place a premium on price (relatively lower), location, and customer service. Additional value added services such as pick-up and drop-off enhance the benefit the local audience receives. The airport market customer base consists of (i.) business and (ii.) leisure rentals. These renters, particularly the business travelers, place a premium on speed of check-out/check-in, vehicle availability, and brand. Additional value added services such as in-car GPS enhance the benefit these customers receive.
Enterprise’s unique combination of assets/activities allows the company to meet the needs of its target customers in ways other rental car companies (e.g. Avis and Hertz) cannot. Enterprise’s large network of suburban locations allows for low prices and convenience/proximity to its customers; the company also provides top-notch customer service by carefully hiring and training its employees.
What choices of assets and activities has Enterprise made in order to provide car rentals with the attributes you described in Question 1? In other words, what makes their particular car rental “product” possible and profitable? Pay particular attention to trade-offs.
Large network of franchises outside airport: Neighborhood (vs. airport) locations cost less and allow Enterprise to provide a significant price advantage and proximity to its target customers. The major trade-offs entail foregoing a significant portion of the airport rental car market (~$10B).
Customer-focused HR culture: Enterprise hires college graduates with people skills