Enterprise-Rent a Car

In my opinion it will be difficult for Avis and Hertz to replicate Enterprise's success in the local car rental market. The reason for this is that Enterprise's choice of activities has created a set of assets which support its competitive advantage.

It has an extensive nationwide network of 4000 neighborhood branches which makes it convenient for customer to reach it. By initially not focusing on the highly competitive airport rental market it was able to cater to an underserviced segment of the market thereby giving it a head start. Unlike Avis and Hertz, Enterprise setup branches at relatively inexpensive real estate and operated with a lean staff which kept its overheads low and secured its cost advantage.

The emphasis on delighting its customers is the guiding principle for Enterprise's operating strategy. It hired people with outgoing personalities and tracked their ability to provide customer delight both as individual and as team. This kept its employees highly motivated and focused on delighting customers since this metric was a key factor in the reward and career advancement system It further gave freedom to branch managers to waive charges, and give discounts in case of mistakes which minimized customer dissatisfaction. Its superior understanding of its customers' needs is demonstrated by its offering services such as free pick up and drop. Also by setting up a new branch once an existing branch reaches the threshold of 150 cars ensures that no branch is overworked and there are no compromises on customer experience.

Its strategic decision to partner with the two main gatekeepers of the segment- the insurance agencies and car dealerships allowed it to secure preferential referrals from them. It simplified the car reservation process for these companies to ensure a captive customer base. It also improved its value proposition for the insurance companies by providing them update on the status of car repair completion