Enterprise Rent a Car

Topics: Car rental companies, Car rental, ACRISS Car Classification Code Pages: 7 (1939 words) Published: September 16, 2008

Jack Taylor began his business of Enterprise Rent-A-Car in 1962 in St. Louis, Missouri. Following the successfully philosophy of, "Take care of your customers and employees first, and profits will follow", Enterprise grew steadily to become the nation’s largest rent-a-car company. What separated Enterprise from its other competitors such as Hertz, Avis, and Alamo was the fact that the company focused on two segments of the home-city market rather than appealing to the airport-rental market.

The first market was the replacement market that targeted towards local customers in the Enterprise neighbourhood locations who needed rental cars as replacements while their cars were being serviced. Enterprise employees would often visit the referral sources such as the insurance agents and auto mechanics with gifts, thereby establishing a personal relationship between the local Enterprise branch and the referral source. Creating this environment of good will encouraged agents and body shop workers to continue to recommend Enterprise over other companies. Additionally, Enterprise rental rates were lower then rates of comparable rental companies due to location of its branch offices. Contrary to the normal practice, Enterprise had locations in the city and suburban areas instead of locating close to the airport. Although this may at first seem counterproductive, having these locations actually aided Enterprise substantially. The cost of property near the airport was much higher then property in more localized city areas. Enterprise would pass the savings from property and rent onto the customer, and was therefore able to offer lower rates with comparable or greater service. Careful maintenance of the rental cars allowed Enterprise to keep its rental cars for longer then standard for airport rental companies. The low turnover rate of vehicles generated savings for Enterprise, which was then passed to the customer in the form of lower rates. By running efficient operations with an emphasis on the personal relationships between businesses, Enterprise was able to differentiate itself from a crowded market as well as capture a large customer base previously untapped by airport rental companies.

Another market that Enterprise was able to tap into was the “discretionary” or “leisure/vacation” sector. Many customers began renting cars for vacation purposes, whether it be a visiting relative or friend who required a vehicle, or a family who would rent a car for use instead of the family car. Local branches aided enormously in this area, making the process of renting a car a quick and convenient process.

Finally, an important aspect of Enterprise’s business was the local corporate market. They began to offer vehicles to businesses. Economically, renting a vehicle for occasional use made more sense then owning and maintaining the same vehicle for a business. In this way Enterprise was able to offer entire fleets to business at lower cost, resulting in a win-win situation for both parties. In the same way, collages and universities turned to Enterprise for rental of large vehicles for functions such as sports teams or trips.

By focusing on providing excellent customer service at low cost, Enterprise grew by its referral sources and word of mouth advertising. Enterprise became known for these qualities for business requiring rental car services.

However, Enterprise now faces the challenge to grow against the fierce competition without losing its focus and corporate culture. 2-0 SITUATIONAL ANALYSIS

The situation Enterprise faces is not uncommon in the business industry. None the less, it is important to understand the needs of the company and tailor a specific strategy towards it.

Currently, Enterprise has two main customer bases: the individual customer, and business/organizations. The individual customer can be categorized based on their particular need: rental during automobile repair or for...
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