CASE MEMO OLYMPIC RENT A CAR Essay

1364 Words Feb 1st, 2015 6 Pages
From : Elena Vignerte
To : Russel Lacey
MBA – MARKETING
Nov. 11 – 2014

CASE MEMO
Olympic Rent-A-Car US : Customer Loyalty Battles


CASE SUMMARY :

Olympic-rent-a-car is one of the US car renting company leader. The company was founded in 1976 by John Uelses, with a franchising model. The initial strategy of the company was to price lower than the main competitors. With a promotion, advertizing and franchizing strategy, the company reached to catch 7% of the market shares in 2012. By starting operating in the major airports, the company reached to extend by acquiring new smaller firms : in 2012 the company counted more than 460 rental locations across the USA and possessed a huge car fleet even if is still below the industry average.

To
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A first problem the company is facing is that even the growth rate is positive, the operating profit margin is still low. Also, the business requires heavy capital investment (important fleet) so that the company needs to stay profitable. Although, if the company eliminates it blackout days, changing it consumer strategy, Olympic would need a huge stock of cars too.

Although, the loyalty programs impact is not very relevant, even if reward members provides 21% of the revenues, only one out of ten travelers is an Olympic reward member. The company tends to position itself to catch price sensitive customers, but the loyalty reward doesn’t really affect them.

Another huge problem for Olympic rent-a-car is that company is in competition with main companies that control most of the market : 30% of market share for Hertz and 20% of the market shares are made by Entreprise. But in the last decade, there is a decreasing tendency of competitors numbers, that’s make an opportunity for the Olympic rent a car company

A first opportunity concerns the consumer target, 20% of the effective consumers of car renting are leisure consumers, however, they generate 80% of the revenues ; this evolution can be seen as a threat for the future of the company : it’s risky to…

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