emil der-grigorian gary lee ricky long vincent chan
TRANSCRIPT
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Emil Der-GrigorianGary Lee
Ricky LongVincent Chan
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History
History Founded in 1957 by Jack Taylor Based out of a dealership in St.Louis, MO Targeted Insurance adjustors and shop
mechanics Started out with 17 cars in its fleet. It now
has 600,000+
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Mission Statement Our mission is to fulfill the automobile rental, leasing, car sale, and
related needs of our customers, and, in doing so, exceed their expectations for service, quality, and value. We will strive to earn our customers' long-term loyalty by working to deliver more than promised; being honest and fair; and 'going the extra mile' to provide exceptional personalized service that creates a pleasing business experience. We must motivate our employees to provide exceptional service to our customers by supporting their development, providing opportunities for personal growth, and amply compensating them for their successes and achievements. We believe it is critical to our success to promote managers from within who will serve as examples of success for others to follow. Although our goal is to be the best and not necessarily the biggest or the most profitable, our success at satisfying customers and motivating employees will bring growth and long-term profitability.
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Primary & Secondary Goals
Primary Goals– Responsibility to Customer Service – Responsibility to Employees– Sustain Long-Term Profitability
Secondary Goals– Local Market– Global Expansion– Airports
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Primary Goals
Promoting From Within– Four Aspects of Promotion:
• ESQI Score
• Branch Growth– Fleet Size
• Branch Profitability– IPC [Income per car = (# days/mo)(overall avg rate)
(current utility %)(time and miles)]
• Number of promotable management candidates
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Secondary Goals
Local Expansion– $15B overall local rental market
• ERAC = 37% of market ($5.6B)
– In 90% of the U.S., an ERAC is 15 minutes away (4,200 locations in the U.S.)
– Specific Segments• Insurance adjustors• Automobile mechanics (ie.Trex company)
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ARMS(Automatic Reservation Management System)
The ARMS system is a Web-Based application that enables insurance companies, ERAC Branches, and auto-body shops to manage the entire rental cycle.
Communication tree between Insurance adjustors, ERAC and body shops in real time.– Increases response time
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Secondary Goals (continued)
Global Expansion– 40 years too late (second-mover disadvantage)
• Hertz opened branch in France in 1952
• Enterprise opened in Canada in 1993
– Hertz: 7,000 branches worldwide
Enterprise: 4,800 branches worldwide
Budget: 2,290 branches worldwide– No Cost Leadership Strategy
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Secondary Goals (continued)
– Economies of Scale– Price Wars
Solutions– Concentrate on domestic
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Solution (continued)
ERAC
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Airport Expansion
Airport Expansion– Competitive Advantage
• Customer Service• Price Leader ( ie. Downfall of People Express)
Experience curve
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Airport Expansion (cont.)
Disadvantage in the Airport Market• $9B overall Airport rental market
• ERAC = 3% of market ($300M) vs. Hertz = 30% of market ($2.7B)
Price Cutting– Competitors can undercut ERAC rates and
withstand a short-term profit decrease.
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Solutions
Implement ARMS in the airport market– Combine airfare and car rental reservation into
one system.• Direct billing can be set-up through major airlines
such as Southwest, AA, United Airline, etc.
• Technology– Combines cost leadership and differentiation
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Solutions (continued)
Lower prices set with low utilization Higher prices set with higher utilization
– ie. AA Super Saver Program
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Summary
Continue local market niche. No Global expansion. Change of business strategy in the airport
market.