In 1957, Jack Taylor founded the Enterprise Rent-A-Car in a basement Missouri Cadillac where he started with seven cars. Currently, the company operates more than 800,000 in approximately 7,000 locations. The core objective of Enterprise Rent-A-Car provides rental cars to their clients (Enterprise Holdings, 2019). As a private organization, the company is known as America’s #1-car rental company, with their success boosted by offering the best customer service in their industry and service line (Premkumar, et al., 2008).
External environment changes create the need for business managers to adjust to business operations. Some of the external factors that influence businesses include political, legal, social, geographic, financial, economic, markets, competitive situations, technological, and institutional. This will be explored using PESTEL
Armed conflicts in the countries that the business is located greatly affect its operation. The second political factor is time scale and resource allocation by the government. As a global company, the business experiences conflicting global regulations, which not only challenge its operations but also hard to manage. The last political factor is taxation policies where it has constantly enjoyed low taxes, which increase the profits and the amount spent by ERAC.
Some of the economic factors affecting ERAC include inflation rate, pressures to reduce consumer spending, exchange rate, Economic Performance of Enterprise Car, economic cycle, and increased liberalization of trade policy.
One of the factors is education level where the company employs qualified individuals in its businesses.
The supply chain model of IRAC has greatly been disrupted by technology as it results in increased information sharing channeling partners and results in high-profit sharing. The mobile technology has challenged ERAC in remaining at par with the technology, which has kept the company ahead of the competition. Need to restructure the supply chain model to lower the cost of production.
Recycling is one of an ongoing aspect and ERAC has to make plans to abide by these regulations. ERAC recognizes the employee as one of the important stakeholders (Enterprise Holdings, 2019) and has increased customer activism. Environmental agencies are regularly scrutinizing companies, which is an additional operational cost for the company. The priority of product innovation is greatly affected by the environmental norms where they design products concerning environmental norms.
ERAC is greatly influenced by business laws, as well as, environmental laws and guidance.
Internal analysis is significant during environmental scanning as a business identifies the influence of internal environment to its operations.
Strength can be termed as the capability, as well as, resources that an organization designs, develops, and sustains its competitive advantage in the market. One of the strengths of Enterprise Rent-A-Car is that it has a vast geographical presence. The company has an extensive dealer network and associated network, which is not only applicable in the delivery of services to clients, but it benefits the company in providing a competitive advantage in the organizational development industry. The HR department is the second strength for the company. One of the strategies that the HR in Enterprise Rent-A-Car applies is talent management. Developing the skills of the employees is integral to the success of organizational development industry.
The market leadership position is a strength, which has benefited the company in scaling new product successes. Although the majority of managers in the company struggle with innovation, the business applies consumer-driven innovation. The management aims to cater successfully for all their customers’ segments in their customer services including organizational culture, motivating people, marketing leadership development, growth strategy, and organizational structure segment. The company has attained this through its extensive product offerings, which is also beneficial in diversifying revenue streams. Another strength for ERAC is that it provides exhaustive product mix options to its clients through attaining the needs of their consumers in varying customer segments.
Weakness of ERAC
Helms and Nixon (2010) define weakness as the capabilities or resources that an organization does not have. A company may fall to weakness due to a strategic choice or lack of strategic planning. The first weakness for ERAC is its business model, which is easy to imitate from its competitors. There is a need to build a platform model, which integrates the end users, vendors, and suppliers. The investment of customer-oriented services is low and may give competitors a competitive advantage in the future. The third weakness is as a result of the impact of artificial energy and internet, which led to the alteration of the business model in organizational structure industry, organizational culture, motivating people, marketing, leadership development, growth strategy, growth strategy, as well as, reduced significance of the dealer network Enterprise Car. To counter this, ERAC must form an expensive robust supply chain network.
The financial statement of ERAC is at risk of pressures from operating margins and gross margins. Besides, the local monopolies and niche markets, which ERAC has been enjoying for years, are fast disappearing. The strategy employed by ERAC to customer network continues to fail. High competition in the industry has led to a reduction in the level of profits. However, the company can counter this by an assessment present value proposition of the varying items.
Opportunities provide a company with an area they can identify the potential for increased market share, profit, and growth (Gurel and Tat, 2017). The first opportunity for ERAC is a low inflation rate in the market, which exposes the clients to a low-interest rate, which in turn increases the rate of consumption of ERAC products. Increasing government regulations in the country are greatly inhibiting unorganized business to perform in the organizational structure industry, organizational culture, marketing, motivating people, leadership development, growth strategy, and customer service. In the digital era, the ERAC requires to embrace the online arena in its operations. They should have launches of new products at a low cost through dedicated social networks and third-party retail partners
Threats can be defined as the factors that are potentially dangerous to the model of the business, due to variation in changing consumer perceptions and macro-economic factors. One of the core challenges for ERAC is the high saturation in urban regions compared to the stagnations evident in the rural regions. In comparison to urban regions, the adoption rate of products in urban towns are higher than in rural regions. Distrust of institutions is the second threat, as well as, legal actions for Enterprise Car, which may negatively affect the growth of the company due to the inability to invest in other countries. Changes in political environments like the impact of Brexit to the EU, the U.S., and China trade war, and instability in the Middle East both at international and local market are potential threats for the company.
Enterprise Holdings, Inc. (2019). About Enterprise Rent-a-car. Retrieved from https://www.enterprise.com/en/about.html
Gürel, E., & Tat, M. (2017). SWOT ANALYSIS: A THEORETICAL REVIEW. Journal of International Social Research, 10(51).
Helms, M. M., & Nixon, J. (2010). Exploring SWOT analysis–where are we now? A review of academic research from the last decade. Journal of strategy and management, 3(3), 215-251.Premkumar, G., Richardson, V. J., & Zmud, R. W. (2008). Sustaining competitive advantage through a value net: The case of Enterprise Rent-A-Car. MIS Quarterly Executive, 3(4), 5.
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