Weaknesses Of Hertz Swot

Decent Essays
Strengths, Weaknesses, Opportunities, and Threats

Strengths
• Strong market position and brand awareness
• Extensive geographical reach
• Balanced customer and business mix

Weaknesses
• Substantial indebtedness
• Downsizing of rental car fleet could increase
• Tax liabilities

Opportunities
• Growth through strategic acquisitions
• Growing equipment rental business in the US and Canada

Threats
• Intense competition
• Decline in the value of the non-program cars and program cars
• Significant increases in fuel prices

SWOT Analysis

Strengths

Hertz is the one of the largest rental car brands and in overall reported revenues has captured the leading airport car rental brand market share in the US and in 120 European airports. It is also
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Its business customers account for approximately 43% of the total car rental revenues whereas the leisure customers accounted for approximately 58%. The international markets were reversed with 55% coming from business and 45% from leisure. These two segments each have different characteristics and demands. Therefore, properly managing the balance between them helps the company to perform consistently in an operational …show more content…
Large amounts of cash are used to pay interest that could reduce its ability to finance capital expenditures and acquisitions necessary for growth. High debt will also limit Hertz ability to quickly react to competitive pressures. Substantial portions of revenues must be used to service the debt. The extensive debt could have an adverse impact on its results of operations, cash flow, and competitiveness. (Marketline, 2013)

Downsizing of the car rental fleet (for Hertz, Dollar, and Thrify) and a reduction in net book value could result in a reduction of tax deferrals. Which may then require Hertz to make cash payments of US federal and state income tax liabilities. (Marketline, 2013)

Opportunities

Strategic acquisition is primarily responsible for its expanding global presence. For instance, the Hertz Equipment Rental acquisition of Pioneer Equipment Rental & Sales with a focus in Oklahoma, Southern Kansas, and Northern Texas. Similarly the acquisition of Cinelease creating new space in the Entertainment Services providing lighting and grip rentals to the television industry. Acquisitions are the primary growth of Hertz. (Marketline,

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