The car rental is many billion US dollars in the economy. The US segment of industry is an average of 18.5 billion US dollars per year. Today there are about 1.9 million rental cars serving the US market. In addition, there are many rental companies along with industry leaders who break down total revenue, sometimes Dollar Thrifty, Budget and Vanguard. Unlike other bankruptcy service companies, the rental company is highly consolidated and places a natural potential for new cost advantages, as they face high input costs, with a lower likelihood of economies of scale. In addition, most of the profits are generated by several companies including Enterprise, Hertz and Avis. For fiscal year 2004, Enterprise established 7.4 billion in total revenue. Hertz came second with about 5.2 billion and Avis with 2.97 dollars in revenue.
The rental car industry is facing a different environment than it did five years ago. According to Business Travel News, vehicles are leased until they have accumulated 20,000 to 30,000 miles until they are used in the automotive industry, but traffic management was 12,000 to 15,000 miles five years ago. Due to the slow growth in industry and narrow profit margins, there is no imminent threat to backward integration within the industry. In fact, only by craftsmen is Hertz vertically integrated through Ford.
There are many factors that shape the competitive landscape automotive industry. Competition comes from two main sources through the chain. In the spectroscopy, competition is high not only because the market is appointed and well-guarded by Enterprise Enterprise, but its competitors operate at a cost-effective level, as well as lower market share, as Enterprise has established networks of dealers over 90 percent of leisure items. On the corporate side, however, competition is very strong at the airport, as this part is under tight control by Hertz. Because the industry has suffered a major economic downturn in recent years, it has increased the scope of competition within most of the companies that survived. Competitive is the rental company's war zone like most rental companies, including Enterprise, Hertz and Avis, among the major players involved in football battles.
Over the last five years, most companies have been working to increase their fleet sizes and increase profitability. Companies with the largest fleet in the US have added 75,000 cars in the fleet since 2002, helping to increase the number of facilities at 170 at the airports. Hertz, however, has added 25,000 vehicles and increased its international presence in 150 countries, compared to 140 in 2002. In addition, Avis has increased its fleet from 210,000 in 2002 to 220,000 in spite of recent economic adversity. In the years after the economic collapse, despite the fact that most companies in all industries were struggling, Enterprise's leaders had been steadily growing. For example, annual sales amounted to $ 6.3 in 2001, $ 6.5 in 2002, 6.9 US dollars in 2003, and 7.4 billion in 2004, which means that growth is 7.2 percent per year over the last four years. Since 2002, the industry has begun to recover its feet in the industry, with total sales increasing from 17.9 billion to 18.2 billion in 2003. According to industry analysts, better days have not yet reached the lease of the automotive industry. In the coming years, it is expected that the industry will experience a faster growth rate of 20.89 billion krónur per year after 2008, "equivalent to CAGR 2.7% [increase] in the period 2003-2008."
In recent years, the rental industry has made great progress to facilitate the distribution process. Today there are about 19,000 renting places that provide 1.9 million rental cars in the United States. Due to the growing number of car rental locations in the United States, strategic and tactical approaches are taken into account to ensure proper distribution in the industry. Distribution takes place within two connected parts. In the corporate market, the cars are distributed to airports and hotel environments. In the recreation area, cars are distributed to agencies located on most major roads and metropolitan areas.
In the past, car rental companies used to rely on intestines or intuitive guesses to make decisions about how many cars should have in a particular fleet or utilization level and the performance of standards for keeping certain cars in one fleet. With this methodology, it was very difficult to maintain a balance that would satisfy consumer demand and profitability. The distribution process is quite simple throughout the industry. For starters, managers need to determine the number of cars that have to be stocked every day. Because a very noticeable problem stems from the fact that there are too many or not enough cars, most car rental companies, including Hertz, Enterprise and Avis, use "pool", which is a group of independent rentals that share a fleet of vehicles. The pools are there, renting places efficiently since they reduce the risk of low inventory if not preventing a car rental.
Most companies through the chain earn on the basis of the type of rented vehicles. Rental cars are categorized in economy, contract, intermediate, premium and luxury. Among the five categories, the economy gives the most profit. For example, the economy is a part of itself responsible for 37.7 percent of the total market value in 2004. In addition, the deal amounted to 32.3 percent of total income. The rest of the other category covers over 30 percent for American items.
The overall return on rental cars has decreased in recent years. Over the past five years, the industry has been fighting like the rest of the journey. Indeed, between 2001 and 2003, the US market has suffered moderate decline in profits. In particular, revenues decreased from 19.4 billion in 2000 to 18.2 billion in 2001. Subsequently, total income growth increased further than 17.9 billion in 2002; The amount is at a minimum of 17.7 billion krónur, which is the total income for 1999. In 2003, the industry hardly experienced a sharp rise, which increased profit to 18.2 billion krónur. As a result of the economic downturn in recent years, some of the smaller players heavily dependent on air operations have done much of the strategy as a way of preparing their business to face an economic economic tournament that could surround the industry. By 2004, however, the economic situation of most companies has gradually improved through the industry, as most rental companies have yielded a much higher profit compared with the previous years. Enterprise, for example, achieved revenues of $ 7.4 billion; Hertz returned revenues of 5.2 billion US dollars and Avis by 2.9 billion in revenue in fiscal year 2004. According to analysts, the rental company is expected to experience steady growth of 2.6 percent in revenue over the next few years, which means an increase in profits.
Competitive Competition Among Merchants
There are many factors that drive competition in the car rental company. In recent years, extensive fleet sizes and increasing profitability have been the focus of most companies within the car rental. Companies, Hertz and Avis among leaders have grown both in sales and fleet sizes. In addition, competition is strengthening as companies are constantly trying to improve current conditions and offer more to consumers. Enterprise has almost doubled the size of the fleet from 1993 to approximately 600,000 cars today. Because the industry operates on such narrow profit margins, price competition is not a factor. However, most companies are active participants in creating value and offering a range of convenience from technical gadgets to even free leases to satisfy customers. Hertz, for example, integrates the Never-Lost GPS system into their cars. Enterprise, however, uses advanced yield management systems to manage its fleet.
Finally, Avis OnStar and Skynet use the system to serve consumers more stable and offers a free weekend rental if a customer leases a car for five consecutive days. In addition, the leasing company's consumer base has relatively low or no cost. However, leased premises are facing high fixed operating costs, including rental housing, insurance and maintenance. As a result, rental income is prone to pricing, as cars are only for recovery of operating expenses and meeting the requirements of their customers. Furthermore, because the industry has experienced slow growth in recent years due to economic stagnation that led to a sharp decline in both businesses and leisure activities, most companies, including industry leaders, are trying to relocate their businesses by reducing the airline's burden and restore his leg in a competitive competitive scene.
Potential entry of new competitors
Entering the car hire industry places new ways at a serious disadvantage. In recent years after the economic collapse of 2001, most major rental companies have begun to increase their market share in the sector's leisure industry as a means of ensuring stability and lowering the airline's burden and car rental. While this trend has achieved long-term success for existing companies, it has increased the competitive landscape for new visits. Due to the seriousness of the competition, current companies like Enterprise, Hertz and Avis carefully monitor their competitors to expect Sharpe retaliatory strikes against new companies. Another barrier to entry is created because of the saturation of the industry.
Enterprise has, for example, taken the first advantage at its expense with 6000 facilities by measuring the recreation area, setting not only high restrictions on the most common distribution channels, but also high standards for new businesses for new businesses. Today, Enterprise has a rental area within 15 miles from 90 percent of Americans. Because of the network of salesmen, Enterprise has established itself throughout the nation, it has become a constant, more contraction and, last but not least, the airline company compared to its competitors. Hertz, on the other hand, utilizes a full range of 7200 stores to secure its market position. Basically, the emergence of most industry leaders in the leisure market is not just competition, but it also varies with the complexity of entering the car rental.
Threat of Substitute
There are many substitutes available for the automotive industry. From a technical point of view, rent a car to avoid meeting being less attractive options in contrast to video recording, virtual groups and collaboration software that companies can instantly set up meeting with their employees anywhere in the world at cheaper costs. In addition, other benefits include receiving a suitable enough passenger seat based on quality and changing costs, but it may not be as attractive as a taxi for the day or more. While public transport is the most cost-effective option, it's more expensive in terms of the process and time it takes to reach somebody's destination. Finally, because flying offers comfort, speed and performance, it's a very seductive substitute; However, it is an unattractive option in terms of prices compared to renting a car. In the industry, car hire has more protection against suburban companies, as many companies have set up a itinerary that determines variables when car rents or by interchange is the best option.
According to Tracy Esch, director of marketing operations, the company rents its cars for a 200-mile journey before taking into account the choice. Basically, the threat of deputy is quite low in the car rental company, as the impact of substitute products does not pose a significant threat to profitability through the industry.
Birgirafli is small in the car rental company. Due to the availability of alternates and competitors, suppliers have no major influence on the terms and conditions of delivery of the cars. Because taxis are usually bought in bulk, the rental company has a significant impact on the terms of sale as they have the ability to play one supplier against others to lower the selling price. Another factor that reduces supplier capacity is the lack of exchange rates. Thus, buyers are not affected by purchases from one supplier to another, and most importantly, the change in products from different inventories is strictly prominent and does not affect the renting of consumers.
Purchasing power of buyers
Although the leisure industry has little or no power, the industry has a significant impact on the car rental. An interesting policy that is currently under way through the industry is to force a car rental company to adapt to the needs of corporate travelers. This trend significantly reduces the inventory or leasing companies & # 39; power and enhances a common buyer, as the business area is extremely price-sensitive, well-informed about the price changes of the industry, the acquisition in larger quantities and they use the internet to force lower prices. Travel agencies, however, have less impact on lease terms. Because vacationers are usually less price sensitive, buy in less quantities or buy less, they have weak stock options.
Today, a rental car faces a different environment than it did five years ago. Competitive figure, the revolution of five forces around the car rental industry exports some strong economic pressure that has significantly reduced the competitiveness of the industry. As a result of the economic downturn in recent years, many companies went under the nominal value of the budget and the Vanguard Group because the business opportunities indicated that the competitive environment was unstable. Today, very few companies, including Enterprise, Hertz and Avis, come above average revenue compared to other industries. It is realistic that the car rental is not a very attractive industry because of competition, entry barriers and competitive pressure from exchange companies.
Strategic Group Mapping
As a medium-focused industry, there is a clear hierarchy in the car rental company. From an economic point of view, there are differences between various issues, including revenue, fleet size and the market that each company holds on the market. For example, Enterprise is the industry with fleet size of approximately 600,000 cars along with market size and level of profitability. Hertz is in second place with a large number of market share and fleet volume. In addition, Avis is ranked third on the map. Avis is one of the companies that aims to recover their income before the economic downturn. For example, in 2000, Avis generated revenues of 4.23 billion. In the coming years after 2000, Avis's revenues have been significantly lower than in 2000. As a means of reducing uncertainty, most companies are gradually reducing the maximum dependence on airline operations and establishing a leisure market. This development may not be in favor of Hertz as the business policy is complex with the airports.
Key Performance Factors
There are many key issues that are successful in car rental. Capacity utilization is one of the factors that determine the success of the industry. Because rental companies experience loss of income when there are either too few or too many cars that are in their barges, it's important to manage the fleets efficiently. This performance factor is a big strength for the industry as it decreases if it does not completely eliminate potentially lacking car rental. Efficient distribution is another factor that keeps the industry profitable. Despite the positive relationship between fleet sizes and profitability, companies are constantly increasing their fleet sizes because of the competitive environment that surrounds the industry. In addition, comfort is one of the most important features that consumers choose a rental company. That is, car rental consumers are ceasing to rent cars from companies that have comfortable rentals and drop off locations. Another key feature that is common among competing companies is to integrate technology into their business processes. With technology, for example, creating car rental companies leads to meeting consumer demand by making the car very comfortable by improving the comfort of online rental with other options. Furthermore, companies have integrated navigation systems along with road construction to offer customers thought when renting cars.
There are many factors that affect the attraction of the car rental industry. Because the industry is moderately focused, it impairs new market participants. Thus, the minimum strength is a natural barrier to entering the industry as it allows the company to expect a lot of recovery from new companies. Due to the risks associated with the intake of the industry among other factors, it is not a very attractive industry in the market. From a competitive position, the leisure market is 90 percent planned because the company is actively seeking to control these sectors of the market. On the other hand, the airports are heavily guarded by Hertz. It is realistic to say that entry into the industry offers low profitability based on the costs and risks involved. For most consumers, the key choices are choosing one company over a different price and convenience. Because of this reason, the rental company is very caring about setting its growth and, consequently, even forcing heavy industry manufacturers in order to offer more to consumers less than to remain competitive. Hertz, for example, offers wireless internet to its customers just to add more convenience to their itineraries. Avis, on the other hand, offers a free weekend subscription if a customer returns a car for five consecutive days. Based on the impact of the five forces, the car rental is not a very attractive industry for potential new market participants.
The rental car industry is in a recovery state. While it may seem like the industry is performing well, it is gradually recovering from its actual economic situation over the past five years. As a way of ensuring profitability, including looking for market share and stability, most companies around the chain have a common goal that focuses on the reduction of airline load and transportation to leisure. This Motion Recommendation has caused great competition among industry competitors when trying to defend their market share. From a futuristic point of view, the better days of car industry have not yet come. As profitability increases, I believe that most industry leaders, including Enterprise, Hertz and Avis, will be bound by the economic and competitive barriers to their strategic policy groups, and newcomers will have a better chance of filtering and achieving success in the car rental.
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Source by Rodrigue Monestime