20100808

A niche market strategy that's hard to be emulated

Enterprise Rent-A-Car started with 17 cars in the early 1960's and today is a leading niche player  (largest fleet 350,000 and higher profits ) in the car rental market in the U.S. The company engages in 3 key market segments - cars rented for business and  cars rented for travel and recreation, as well as for emergency unanticipated rentals (due to accidents and theft)

Enterprise Rent-A-Car has developed and  serves its own niche (emergency unanticipated rentals). Having accepted the dominance of Hertz and Avis in  airports, concentrated on emergency rentals and became a niche leader.  The niche is very lucrative and serves approximately 75 % of market. 

But  what competitive advantages Enterprise Rent-A-Car created, that difficult to be emulated by competitors?
  • 3100 offices away from airports to avoid airport taxes
  • has its own booking system so do not pay commissions to travel agents or fees for use of other reservation system .
  • has a cost effective database of fleet management and maintenance that affords her substantial savings
  • has developed great skill in buying and selling cars; keeps a car for about 18        months , unlike its competitors approximately 6 months.
  • decentralized system of local branches, networked "with local garages, insurance offices and a friendly and fast service
  • advertises very little 
  • has an extremely high level of service and is renowned for special care of customers.

Enterprise Rent-A-Car hires executives strong entrepreneurial spirit, dedicated to friendly customer service. The company has its own tough management training program. 

Summing up, Enterprise Rent-A-Car has chosen to rent cars quite different from competitors, manage and monitor their large fleet, create local links, and provide friendly customer service.

The Verdict: Devotion to niche and specialization in service.
Good strategy and effective execution. 


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