Strengths And Weaknesses Of Avis Budget Group

1926 Words 8 Pages
III.) Avis Budget Group has many strengths within their company. One of these strengths includes Avis’ ability to meet the needs of a wide variety of consumers. Avis’ Budget Group has many sub companies, which allows Avis to meet the needs of many consumers. Under Avis Budget Group is Avis Car Rental, Budget Truck, Zipcar, Apex, and Maggiore. Avis Car Rental is able to meet the needs of customers in need of a rental vehicle for leisure or commercial purposes. Budget Truck is responsible for being able to meet the needs of consumers in need of trucks, such as moving vehicles. Zipcar is a company that is used for consumers that are in need of transportation by the car sharing ability. This company is able to flourish due to the 900,000 …show more content…
One of these weaknesses is seen in comparison of the fourth quarter, 2014 to quarters one through three of 2015. Avis Budget Group seems to be on a decline financially in many areas. In quarter 4, the receivables turnover was 14.17, which means the company was collecting its receivables 14 times in a quarter which is extremely fast. The ratio is now down to 3 times per quarter. Another ratio which has changed drastically was the day sales outstanding which is a calculation on how long it takes, in days, it takes to collect cash from credit sales. It has gone from, in Quarter 4, 2014, 6.35, to 24.62, in quarter 3, 2015. Another weakness of Avis Budget Group is the ability to keep up with today’s technology. With advances in technology every day, new models of cars are being released every year. If Avis does not have the assets on hand to purchase these new models, they could ultimately lose money to competitors. If a consumer is in need of the newest model with the highest technology, and Avis can not supply the vehicle, the consumer will be forced to take their business elsewhere to another company such as Hertz, or Enterprise. Avis Budget Group’s debt net ratio is also very poor. Avis has a debt net ratio in the last quarter of 30.50 (“Avis Budget Group Reports Record Third Quarter 2015 Results, 2015). What this ratio means is prospective lenders would be cautious to lend to Avis Budget …show more content…
Avis Budget Group has $16,969,000,000 in total assets, which shows Avis is one of the most dominant companies in their industry. Enterprise is the next closest competitor and they have $569,000,000 less total assets compared to Avis (Business Insight: Essentials, 2015). Avis Budget Group is also the second oldest rental car company, founded in 1946, behind Hertz. This shows that Avis Budget Group is a reliable company because it has been around and expanded for 70 years. Avis Budget Group is still expanding and on November 16th, 2015 announced that they have acquired a licensee in Poland. They have now added 50 locations throughout Gdansk, Krakow, and Warsaw (“Avis Budget Group Acquires Its Avis Licensee in Poland”, 2015). This has now enhanced Avis’ presence in Europe. The cost of the purchase was $25 million but the new locations are expected to add an extra $20 million of annual revenue. Lastly, Avis is recognized worldwide as one of the top companies in the passenger car industry. They have earned multiple honors in customer loyalty, the leading car rental company, top in overall performance, the top managed company, and more in the world’s honor, North America, United States, Canada, Latin America/Caribbean, Australia, Asia, and the EMEA (Europe, Middle Eastern, and Asia) (“Avis Budget Group”, 2015). Lastly, the rental car industry correlates

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