The main way that Enterprise differs from its rivals is that it does not have offices in the airport. It instead strategically chooses its locations in a way that 90% of the American population lives within 15 minutes of its offices. The Enterprise management is keenly aware that Americans would welcome a local option for renting cars when their own vehicles were being repaired or when they are going for a vacation and don’t want to use their cars. The management understands that keeping the local population happy is vital to the company’s success. The biggest tradeoff that it makes in this case is losing those customers who are coming from out of state and need a rental car for a vacationing or business purposes. It therefore loses on an opportunity to attract fresh clients from overseas. Having a location at the airport also helps in building awareness of rental car company’s services and by using its premises it’s helps in projecting a strong visual brand. Enterprise, while choosing not to open an airport location, opens inexpensive rental offices everywhere else in the city (as close as possible to its customers) thereby reducing overhead significantly. It then establishes relationships with the auto dealerships. It rents cars for a little as $16 a day and keeps it cars on the road for six months longer than Hertz and Avis do, further reducing its operational costs. Enterprise goes to great lengths in identifying its customers need and delivers exceptionally high standard of customer service for its home-city market.A focus oncustomer service is the driving force behind its business. For example, customers benefit from a local pick-up service to take them to the branch to collect their car. It is this level of customer service that makes Enterprise different from its competitors. Enterprise became a household name in a relatively short period of time – in the face of formidable competitors such as Avis and Hertz. The other car rental agencies focused on the lucrative airport market, leaving Enterprise alone in serving people in their own cities. By establishing partnerships with auto dealerships, Enterprise ensures that no other firm can compete with them. Enterprise’s costs are so low that no other firm can find it profitable to moveEnterprise’s territory/locations. Enterprise’s unwavering focus on customer service has largely contributed to its reputation and therefore has a loyal customer base. Simply by delivering the cars to those in need, enterprise ensures that should other firm enter the market, a ruinous and cutthroat price competition would ensue. For above reason’s I think that Enterprise does have a sustainable competitive advantage. Kodak’s competitive advantage is largely due to the razor-blade strategy that it pursues. It sold user friendly cameras and films for low costs which allowed it to have a dominant market share.
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- Spring '17
- Digital single-lens reflex camera, Enterprise Case Study