Emil Der-GrigorianGary Lee

Ricky LongVincent Chan

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+

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.

Primary & Secondary Goals

Primary Goals– Responsibility to Customer Service – Responsibility to Employees– Sustain Long-Term Profitability

Secondary Goals– Local Market– Global Expansion– Airports

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

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)

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

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

Secondary Goals (continued)

– Economies of Scale– Price Wars

Solutions– Concentrate on domestic

Solution (continued)

ERAC

Airport Expansion

Airport Expansion– Competitive Advantage

• Customer Service• Price Leader ( ie. Downfall of People Express)

Experience curve

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.

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

Solutions (continued)

Lower prices set with low utilization Higher prices set with higher utilization

– ie. AA Super Saver Program

Summary

Continue local market niche. No Global expansion. Change of business strategy in the airport

market.