Strengths And Weaknesses Of Avis Budget Group

Decent Essays
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

Related Documents

  • Decent Essays

    Their rapid growth is a remarkable one as well, showing they are a valued customer in the market. As shown in Document E Toyota posted an extraordinary amount of money around 611.7 billion yen. Their growth is visible by the great growth it has achieved. Equally as important as their growth Toyota is considerably the most known car brand to this day. On the graph on Document D Toyota is third in market sales and is making around 150,000 in sales as of November 2015.…

    • 729 Words
    • 3 Pages
    Decent Essays
  • Decent Essays

    Automotive Outlook report, (the percentage of leased vehicles among retail purchases has risen from 13 percent in 2009 to 26 percent in 2014, and the percentage of 72 month loans has grown from 22 percent to 32 percent during the same period). (Figure 1-3). The increase in interest rates would undoubtedly have a negative impact on automotive industry. How that comes? The consumers’ ability to purchase new vehicles or leasing luxury vehicles’ models will decline.…

    • 1102 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    Nick Connor, Managing Director of Volvo Car UK, commented on the sales performance by saying: “2015 was a perfect year for Volvo. With the highest sales here in the UK for twenty years and the highest sales worldwide ever, Volvo is a brand that is going places. And with other technologically advanced, luxurious and distinctive models on the horizon, we’re sure that these record-breaking figures will continue into 2016 and beyond.” That’s why many people choose to use Volvo cars enjoying their performance and good…

    • 1407 Words
    • 6 Pages
    Decent Essays
  • Decent Essays

    They provide various types of cars ranging from the van, APV, minibuses, sedans, to other luxury cars. To give satisfaction to the customers, units of vehicles that they have are very well maintained, cleaned, and equipped with a guaranteed insurance coverage. The scope provided is also very diverse. They serve car rental services for individuals, families, and companies. Dollar rental car is able to cover and reach the entire state of the United States and countries in Europe both for close and very far distances.…

    • 1002 Words
    • 5 Pages
    Decent Essays
  • Decent Essays

    Being the first company to introduce a feature can be the biggest tool a marketer can have over the competition. Take the VW Golf, (2) a car that has been on the market since 1974. It has gone through 7 generation changes since then. It has revolutionised its style and design as the competitors followed the need to come with a new style or design was key to keeping their place as one of the best-selling cars in the world. For 2016, VW now offers 9 styles of the Golf from a basic model to a van version.…

    • 942 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    To fulfil the demands of the consumer these four components must be understood and met (Business Case Studies, 2015). According to King (2015) classic car rental is cheaper and most popular in the United States. It would therefore be in the interest of the business to establish the company in United States. Merged with an already established business, it would gain more public recognition in an already diverse and large market (King, 2015). Online care hire booking has a seen a great amount of success and growth over the years among tourists particularly (King, 2015).…

    • 1147 Words
    • 5 Pages
    Decent Essays
  • Decent Essays

    Renting a car is a great way to get around an area if you don't want to have to rely on public transport. Some people might think about car rentals if they are on vacation or if they are in a different city or state for business. Having a car at your disposal means that you can be much more independent which can make your time away from home a lot more relaxed. Car rentals are very popular today which means that rental agencies are all looking for ways to get your custom. To do this they are offering highly competitive prices and all good agencies will have a wide choice of cars.…

    • 1009 Words
    • 5 Pages
    Decent Essays
  • Decent Essays

    Tesla has done most of sales online, but does quite a bit in stores too. If you ask me Tesla is a greats stock here are some reasons why. It has the best technology and strongest brand by far, in the auto market’s largest growth sector.The value of Tesla’s stock increased past Ford and General Motors to become the most valuable car company in the United States. The amount of Tesla's yearly car production rate is about to explode from 100,000 cars today to 500,000 cars in 2018 because of the company’s lower-priced Model 3. Even better, this doesn't even take into account Tesla's newest energy storage…

    • 1713 Words
    • 7 Pages
    Decent Essays
  • Decent Essays

    PEV sales in US The table shows that more than half (58%) of the total sales occurred in 2013. The sales are increasing with the progressive years. In the first half of year 2014, PEVs accounted for 3.5% of all vehicles sold. Despite a better a better debut in US market compared to Hybrid Electric Vehicles (HEVs), PEVs still need a long while to truly disrupt the conventional car market. This could be seen from the percentage shares.…

    • 3535 Words
    • 15 Pages
    Decent Essays
  • Decent Essays

    Q1- Discuss if Volkswagen commands competitive advantage, if any, from its operations stratergy. Volkswagen is one of the biggest automobile manufacturers in the world and has the target to be the biggest automobile company in the world by 2018. The operating profit of Volkswagen was recorded to be 12.8 billion euros in 2011 (currently 10.2 billion euros) and a total revenue of 275 billion euros, which is the highest in automobile sector. One of the main reasons for such a high level of productivity is Volkswagen labour force. Volkswagen has a total employee base of 592,500 people globally which is higher than its competitors such as Fiat-Chrysler (197,000), Ford (164,000) and General Motors (213,000) combined.…

    • 1049 Words
    • 5 Pages
    Decent Essays