Page 1: Introduction
As an organisation develops a strategy, it is not making short-term decisions. Instead, it is creating a pathway that leads to a long term goal. Strategic managers have to make many decisions. For example, they have to differentiate their activities from their competitors. This means making their products and services distinctive and different from those of rivals, creating a unique selling point (USP) that, in turn, strengthens its brand. They also have to consider the scope of their activities. For example, should they simply operate in one market or should they enter a range of different markets? If they do enter different markets, how should they enter them?
This case study illustrates how Enterprise Rent-A-Car has expanded its operations beyond its core business of car hire. The case study uses Ansoff’s matrix to illustrate how it has developed its strategies to improve and grow the business, creating new products and extending its services into new markets.
Founded in 1957
More than 55 years ago, in 1957, Enterprise was founded by Jack Taylor, an entrepreneur, in Missouri, USA. Starting with just seven cars he invested his money and ideas into Executive Leasing, which later became Enterprise. Since then the company has become the largest car rental company in North America, and arguably the world, with annual revenues of $14.1 billion and 68,000 employees in 2011. Enterprise Rent-A-Car is an internationally recognised brand, operating within the United States, Canada, the UK, Ireland and Germany. It currently has more than 7,000 rental offices in five countries.
However, as the company has developed it has maintained the approach and feel of a smaller business. In fact, Enterprise is still a privately-owned business, with three generations of the Taylor family involved in managing the organisation. Even though Enterprise is a big company, it is run like a small business. Its branches are decentralised. This means that local managers have the freedom to make decisions based on the needs of each location.
Enterprise’s ability to keep the customer at the centre of everything it does depends on the skills and commitment of its employees. The main focus for Enterprise is to find new ways to provide real solutions for people and businesses with transportation problems. A focus on customer service is the driving force behind the business. For example, customers benefit from a local pick-up service to take them to the branch to collect their car. It is this level of customer service that makes Enterprise different from its competitors.