Page 1: Introduction
One of the most important decisions a business has to make is where to locate. The location of the business can have a significant effect on how it performs. Businesses will aim to operate from locations that provide the maximum competitive advantage. These decisions need to be reviewed regularly.
By selecting the best location, a business could get more customers, improve its efficiency and generate greater profits. For example, choosing an out-of-town shopping park instead of a high street may allow a retail business to have greater shop space, better overheads and attract more customers because parking is easier.
Multinational businesses need to make many decisions about the location of their operations. At an international level, they might need to choose which countries or territories to operate within to maximise opportunities. Within each country, they would need to locate the head office. At a more local level, they may need to choose whether to locate within or around major cities.
Enterprise Rent-A-Car is an internationally recognised brand, operating within the United States, Canada, the UK, Ireland and Germany. It is the UK's largest car rental company. As the company has developed, it has sought to retain the personal feel of a smaller business.
The company encourages its branch managers to take responsibility for local operations. This approach helps to create a dynamic service driven by the individual branches. This means that each branch is free to focus on the needs of its local customers, while delivering Enterprise’s values and high standards of customer service.
Competitive market place
Car rental is an extremely competitive market. There are many car rental companies operating in the UK. Enterprise aims to outperform its competitors through a focus on customer service. Service is a core element of Enterprise’s ethos and as such, employees seek to provide the highest standards of customer care. This is the driving force and key differentiator of the business.
As part of this strategy, Enterprise attempts to locate its branches as close as possible to its customers. It has an extensive branch network. Within the UK, the company operates from 350 locations. Most people (over 75% of the country’s population) live within five miles of an Enterprise branch.
This case study focuses on how Enterprise Rent-A-Car decides where to locate its new or relocated branches.