Unit 42 - Planning for Growth: Enterprise Rent-A-Car Business Plan

This report provides a comprehensive analysis of growth planning for Enterprise Rent-A-Car, examining key considerations like Porter's generic strategies, PESTEL analysis, and the Boston Consulting Group matrix. It explores growth opportunities, funding sources (including retained earnings and tra...Read More

Planning for growth

Table of Contents
Introduction .........................................................................................................................................3
P1 Evaluating growth opportunities by analyzing the key considerations...........................................3
P2 Ansoff growth matrix......................................................................................................................6
M1 Discussion of the growth options to have the understanding of competitive advantage. ....6
P3 Sources of funding with its benefits and drawbacks.......................................................................7
M2 Evaluation of potential source of funding ...........................................................................8
P4 Designing a business plan for growth.............................................................................................8
M3 Developing an detailed business plan for growth and securing investment, setting out
strategic objectives, strategies and appropriate frameworks for achieving objectives. .............9
P5 Assess exit or succession options for a small business explaining the benefits and drawbacks
of each option............................................................................................................................10
M4 Evaluate exit or succession options for a small business comparing and contrasting the
options and making valid recommendations.............................................................................12
CONCLUSION..................................................................................................................................12
References .........................................................................................................................................13

Introduction
The planning for growth is the companies strategy activity where it helps in tracking the
progress of the business and enables for planning to employers. It helps in providing the opportunity
to the organisation where the resources are allocated in the efficient way to adopt the changes. It
involves the strategies and tactics in the growth plan. Through the growth plan it helps in knowing
the current state of business which helps in setting the targets, goals of the business. For the
economy growth the strategic planning is essential aspect as business vision is prepared for the
future and leads to achievement of business growth (Afzalan, N and et.al., 2018). The goals from
medium term to long term is planned in the strategic plan of the organisation and the ways are
described for achieving them. The chosen organisation is Enterprise Rent-A-Car is which is
founded in 1957 by the Jack Taylor in Missouri, USA. In the assignment the discussion is done on
key considerations of the business like porter's generic, Ansoff matrix, and PESTEL to examine
growth opportunities. Further, it also discusses the sources of funding and business plan is prepared
which also elaborates the exist or succession planning for the small business.
P1 Evaluating growth opportunities by analyzing the key considerations
The small organization needs to expand their business in the international market due to the
emergence of the technologies as they gain several opportunities so that they can have the
competitive advantage and grab the attention of customers. Various models is used by the Enterprise
Rent-A-Car for the business expansion and to enhance the market growth of the business.
Competitive advantage- The competition in the marketplace assists the organization to
conduct the business in innovative manner for the growth. It developed various tools and assets by
focusing on local rentals in the large number. It has more than 6000 rental locations which also
offers the solutions top the customers and families. The customer needs and requirements is
identified by the Enterprise Rent-A-Car. To have the competitive advantage the focuses is put on the
resources, capabilities and competencies by the application of various models (Ahani, S and et.al.,
2020).
Porter’s generic strategy
This model was developed in 1980 where the right strategy is chosen to gain the competitive
advantage. It focuses on the strategies of cost leadership, differentiation and focus.
 Cost leadership strategy- To gain the competitive advantage the costs is lowered which is
used in various consumer market. The market share is expanded by the Enterprise Rent-A-
Car which targets the middle class as they place high importance to pricing factor. To gain

the high brand awareness and sales growth it focuses on affordable and easily accessible of
the produce. In the expansion of customer base, brand recognition the benefit is provided
through this strategy (Alvarez, A and et.al., 2017).
 Differentiation strategy-For the attainment of the growth objectives the Enterprise Rent-A-
Car uses this strategy by focusing on unique products to have the expansion in the customer
base. It also makes the use of brand logo to create the brand image in the minds of
consumers. The innovation is used by the Enterprise Rent-A-Car to differentiate the services
from others.
 Focus strategy- To have the target segments the organizations are encouraged to focus on
resources by adopting this strategy the best value is offered and in terms of low cost by the
Enterprise Rent-A-Car. In the possible low price the need of niche market segment is served.
To satisfy the consumer expectations the Enterprise Rent-A-Car focuses on the product
attributes to make the modification in product (Amr, A.A., 2020).
PESTEL Analysis
The Enterprise Rent-A-Car identifies the external forces of environment which is used in
management tool and strategic planning to gain the support in decision making by leveraging the
core capabilities and competencies.
 Political factor- The Enterprise Rent-A-Car success and failure is determined by the
commercial restrictions and political stability. There are various factors which influence the
company such as taxation policy, change in policies, government system, trade restrictions
etc. the company expenses are increased due to the increase in the taxation. There is a
government support to the Enterprise Rent-A-Car (Armaghani, S and et.al., 2020).
 Economic factor- The growth of the Enterprise Rent-A-Car is affected with the several
factors such as labor market conditions, inflation, saving and interest rate. The purchasing
power of the consumer is change with the inflation as it impacts on the cost of raw material
and inputs. The Enterprise Rent-A-Car has affect on profitability with the companient of
GDP. There is high disposable income as the company has high sales with the high GDP.
The economies of scale is necessary to maintain to remove the economic instability (Bekun,
F.V and et.al., 2019).
 Social factor- The factors which affects the Enterprise Rent-A-Car are consumer spending
pattern, power structure, demographic trends through which an effective message can be
designed. The Enterprise Rent-A-Car makes the consumer aware regarding the products
and services as there is a access of highly talented skilled employees with the higher

education of social trend. The social pattern are related to consumer behavior directly which
have the affect on work trend and buyer structure is influenced.
 Technological factor- The technological advancement has the importance on technological
factors for the decision making of the Enterprise Rent-A-Car. Through the innovation the
changes occurs in the organization. Through the expansion of the internet and online
business the Enterprise Rent-A-Car can communicate with the consumer directly. The
innovation in the technological creates the competitive edge for the company (Calvo, N and
et.al., 2018).
 Environmental factor- The Enterprise Rent-A-Car deals with the environmental law to
become the environmental friendly. The resource allocation choices are incorporated to
maintain the standards. The business efficiency is influenced by the changes in weather and
climatic conditions. The green business practice is adopted by the Enterprise Rent-A-Car.
 Legal factor- The legal aspects influence the Enterprise Rent-A-Car. In the labor laws it is
a guidelines where minimum conditions set regarding the minimum working age. The
company follows various laws for the regulation to ensure the safety. The consumer data is
protected of Enterprise Rent-A-Car by studying data protection regulation. The company
valuable ideas and patents are protected by designing intellectual property rights 9Cleberg,
C., 2019).
Boston consultancy group matrix
This is a planing tool for the organization that is use for having the growth opportunity
which comprise the four element. It is observed on the level of high or low growth level and market
share. The Enterprise Rent-A-Car uses this matrix for having analysis of growth status and
opportunities.
 Dog- In the market, the company is growing slowly because of its low market growth rate
and small market share. There is no need for investment in the Enterprise Rent-A-Car, as
only little cash is generated.
 Question mark- In such cases, the market growth of the product is high and low market
share that requires careful thought as the losses arise and a lot of money is consumed by
Enterprise Rent-A-Car. The strategic choice of product development and market penetration
is taken into account (Dadashpoor and et.al., 2018).
 Star- In the cash generator and cash user category, it includes the high market share and
high market growth. In the Enterprise Rent-A-Car, the positive cash flow arises, which
requires the strategic choice of vertical and horizontal integration.

 Cash Cows- The low market growth rate and high market share will determine what is
considered a profitable brand. The Cash Cow will receive the Enterprise Rent-A-Car, which
will be invested in stars to support future growth (Deng and et.al., 2017).
P2 Ansoff growth matrix
In the growth of the business decision it is the strategic tool used for the guidance. It defines
a strategic planning technique for the future purpose operations. This model is used by the
Enterprise Rent-A-Car for the business operations expansion.
 Market penetration- The businesses uses who wants to have growth in the market for the
existing product. The Enterprise Rent-A-Car reaches to more customer by increasing the
production capacity which leads to more efficiency and effectiveness. The company
penetrates with the existing market product and market which increases the marketing
investment.
 Market development- In the new market the existing product is introduced for the growth
of the Enterprise Rent-A-Car. The investment is required in the research and development so
that new markets and consumer segment is identified by understanding the different cultures
trends. The brand awareness is increased which has high sales and growth in the new market
(Dicke, T.S., 2017).
 Product development- The new product is expanded in the existing market for the growth
of the company by making necessary modifications and improvement in the product for the
offering to new consumers. The consumer demand is known by making investment in the
activity of research and development of the Enterprise Rent-A-Car.
 Diversification- For the growth and development of Enterprise Rent-A-Car it is engaged in
new product and new market to remain competitive in the innovative manner. In the vertical
diversification the new product is introduced in the exiting product line. In the horizontal
diversification there is a launch of new product development and economic environment is
shared similarly (Epifanova, T.V and et.al., 2017).
M1 Discussion of the growth options to have the understanding of competitive advantage.
To have the expansion of the business activities various marketing strategies are needed to
be developed and requires the analysis of macro factors. by adopting the ansoff matrix the company
productivity will improve and there will be the expansion in the market share and in new product.

P3 Sources of funding with its benefits and drawbacks
The various sources of funds are procured for the startup and to run the business. The
finance is the life blood of business where the money is required to carry out the activities. To
achieve he long term actions plan the funds are prearranged for the organization which too helps in
improving the productivity and efficiency. The Enterprise Rent-A-Car requires the different sources
for the growth are-
Retained earnings- The company maintains the portion of net earning which is generally
not distributed to the shareholders in the form of dividend and it is kept for the intention of future
known as retained earnings. It is a source of internal financing of the organization. To fulfill the
additional requirement in the future this source is used by Enterprise Rent-A-Car to have the
revenue (Fernando, Y and et.al., 2019).
Benefits- For the organization it is a permanent source of funds which offers the flexibility and
operational freedom. The capacity to absorb the unexpected losses is enhanced and do not includes
the explicit cost in the form of interest, dividend or flotation cost.
Drawbacks- The business profits are fluctuating which is an uncertain source of finance. The
shareholders can have the dissatisfaction as lower dividend is received by them due to excessive
ploughing back of undistributed profits. The firm do not recognize the associated opportunity cost
which leads to sub-optimal use of funds.
Trade credit- In such source the payment is not made immediate to the trader from whom
the purchase of goods and services is made. In the buyers accounts the records is appeared as
sundry creditors. It is source of short term financing used by the Enterprise Rent-A-Car and granted
to those who have the financial standing and goodwill.
Benefits- This source of funds is convenient and continuous as credit can be avail by knowing the
credit worthiness of the customer to the seller. The sales of the Enterprise Rent-A-Car is promoted
and helps in increasing the inventory level. To provide the funds any charge on the assets is not
created.
Drawbacks- The firm can have the risk of over trading if the trade credit facility is easily available
and have flexibility. The limited amount of funds is generated whi9ch is also costly in raising
money as compare to other source (Freitas Junior, J.C.D.S and et.al.,2017).
Public deposits- From the public funds are raised directly where the rate of interest is high.
The organization and depositor is benefited with this deposits. The public deposits is invited by the
company for the period of up to three years. It takes care of both the short and medium term
financial needs of the Enterprise Rent-A-Car.

Benefits- The process of obtaining the deposit is simple and do not involve the restrictive
conditions. The cost is lower than the cost of borrowings from the banks. The company power is not
diluted because the depositor do not have the voting rights.
Drawbacks- The new companies faces the difficulties in raising the funds from public deposits.
When the company requires the funds it is not recognized by the public which is the unreliable
source of finance. The required size of the public deposits is large then collection becomes difficult.
M2 Evaluation of potential source of funding
The company has numerous sources of funds to expand the business. The Enterprise Rent-
A-Car can take the use of retained earning to keep some money as the reserve for the future
requirements. It can also use the public deposits for raising the funds for the additional purchase of
cars to provide the facilities of car rental to consumers according to their comfortably.
P4 Designing a business plan for growth
The business plan is the formal document which defines the company vision and strategies
that is required to achieve he future long term goals.
Executive summary- In the assignment the growth opportunities is discussed by the application of
various models on the company. The Enterprise Rent-A-Car is an American rental car agency which
is founded in 1947. It has more than 9000 home city locations and 419 airport locations. It focuses
on local rental car market and to consumers who requires the replacement. Various sources of
funding is elaborated for the future business expansion.
Business description- The mission of the Enterprise Rent-A-Car is to provide best transportation
service in the worldwide and to provide the safe working to employees. The vision is to reward the
handwork with opportunity by taking care of employees who believes in strengthening the
community. The objective of the Enterprise Rent-A-Car to have the growth in sales by increasing
the market share. To create the loyal customers by enhancing the brand strength. To manage the cost
effectively so as profitability can be increased (Friedmann, J., 2020).
The product and service of the Enterprise Rent-A-Car is to provide the rented car by
focusing on the home city. The long-term commercial vehicle is provided along which this it also
offers the customers local and airport rentals, exotic car hire, car sharing etc.
Market analysis- The Enterprise Rent-A-Car of market trend includes the increasing demand for
the online car rental services. In the market analysis it takes the STP where the segmentation of the
market is done according to the booking type, vehicle type, application type and the final consumer.
The targeting is done to every age group in the wide geographic area according to the requirements

of the customers. The positioning is done of the Enterprise Rent-A-Car according to the service
quality and varieties is offered so that there can be brand recognition in the consumers minds.
The SWOT analysis of the Enterprise Rent-A-Car defines the strategic planning for the
future growth in the market. The strength is of brand recognition, customer services and services are
provided at the location of airport and large area. The weakness can be having outdated websites
and difficult to navigate if requires the international expansion. The opportunity for the Enterprise
Rent-A-Car can be expansion in car share to have long return on investment, more rentals and
enhancement of profitability. The threat is increase in fuel prices and fluctuations, decline of future
and repeat customers.
Marketing and sales strategy- The Enterprise Rent-A-Car will make the use of various
promotional techniques to promote the product it will take the marketing tactic of marketing mix of
product, price, place and promotion. The company will evaluates the source of funds for the
expansion and growth by taking retained earnings, trade credit. The pricing will be set in
accordance to customers for their affordability. The Enterprise Rent-A-Car will make sales strategy
to differentiate from the competitors by developing value propositions (Jawaid, M.F., Pipralia, S.
and Kumar, A., 2018).
Financial plan- The company prepares the projected cash flow statement, income statement to get
know the company financial position. For the expansion the budget is prepared by recording all the
expenditures and incomes so that funds can be utilized efficiently.
Company structure and management team- The Enterprise Rent-A-Car uses the flat structure as
it has the decentralized power with the great scope of specialization. The decision making is done
rapidly with the clear understanding. The structure has the flexibility to adopt the changes. The team
is managed by more than 10000 employees and the management layers are few.
Monitoring and controlling- To know the company progress the sales will be compared to the
previous sales so that profitability can be known and the market shares can be increased. The plan
are modified by taking the action plan such as bench marking to compare the actual performance
with the projected plan.
M3 Developing an detailed business plan for growth and securing investment, setting out
strategic objectives, strategies and appropriate frameworks for achieving objectives.
The Enterprise Rent-A-Car adopts the several steps to prepare the business plan so that
resources can be utilized efficiently. The business plan of the company helps in providing the

understanding of the company objectives in detail. In the business plan the market is analyzed and
financial projection is taken. It also evaluates the sources of funds for the future requirements. The
company also considers the internal and external factors and growth strategy for the expansion
internationally.
P5 Assess exit or succession options for a small business explaining the benefits and drawbacks of
each option
It has been found necessary for organisation to make exit plan or getting succession ideas by
doing the complete study of current market condition. For the purpose of making effective decision
related to the growth of business, these ideas helps a lot. Enterprise Rent-A-Car is planning to
expand their business functions in a new market. So it is necessary for them to develop exit plan
and succession options which state that the organisation can effortlessly contract with all the
possibilities that can distress the operations of the organisation.
Exit Plan: It can be considered as strategy which is used in exiting a privately held company.
Analysing the financial, repercussion for leaving an organisation and legal and tax options are
include in the exit plan. This plan is made in the hope of maximization of value of business and
minimizing the tax burdens at the time of exit. It is necessary to do effective exit planning otherwise
it will directly effect the success of organisation. It include several aspects, some of them are given
below: Selling firm in open market: It has been found that purchasing a business which is already
established is a good option for any entrepreneurs because starting a new business is a risky
task. It should be the responsibility of owner to make attractive the business so that buyers
take interest.
Pros Cons
Good financial condition of business attract the
buyers to buy the business.
It may be a time consuming process to find any
interested buyer of business in the open
market.
 Close and sell Assets as soon as possible: Another option is that the owner can sell the
assets in the market. It is the last option which is available for the business owner as they
can make money only by selling all the assets in the case of losing the business relations. It
is necessary for the owner to work with liquidation expert before selling the assets so that
they can follow a right procedures of liquidation.
Pros Cons

It can be consider as the instant closing process
as it is totally depend on the selling of assets.
Under this process, the organisation have to
pay their debt first to their creditors.
Transfer of business to family members: This practice of making a dominant business profitable
means the transfer of all rights and powers; Company's responsibilities, assets, and liabilities to
members of the household whose aim is to conduct accessible fictional business, as well as all
individuals related to it.
Pros Cons
The salesperson of the undertaking power
control it even after ward the sale, until the
corporate deliberation is remunerated in wide-
ranging (Scuotto, V and et.al., 2019).
Ever-changing a firm to an unqualified family
associate force basis the corporate to look
agonizes & yield unwanted consequences.
Succession Plan
Basically, succession planning relies on business development and new relevance, and it can
be beneficial to identify the newest executives to replace the predominant business staff when they
leave administration. Succession planning enables experts to be passed on from one person to
another. Enterprise Rent-A-Car can create a policy for this facility that professionally anticipates all
upcoming functions and monitors the vagueness of slightly inconvenient situations. This strategy
includes a number of factors which are detailed below:
Mergers and Acquisitions: This feature is extremely helpful in assisting the Sectors' succession
plan. Mergers are a valued technique of combining one branch with another so that the parties can
collectively achieve extensive and collected work to achieve the company's goals that dissolve the
company's advantage for extremely cost-effective benefits. Acquisition also includes detailed
procedures that small businesses can use to sell themselves to large companies (Villarón-Peramato,
O and et.al., 2018).
Benefits Drawbacks

The main advantage of this technique is to
increase precise skills and competencies and
to eradicate impending dangers and
uncertainties.
Upsurges the occasion of replication in
marketable operations, chief insufficiency
(Waluszewski, A and et.al., 2017).
With regard to exit and succession arrangements, the granting of analyzes, the succession
arrangement will be the most suitable optimum for the Enterprise Rent-A-Car, as it could also
propose a variety of remuneration so that the profession can efficiently reserve its future goals.
M4 Evaluate exit or succession options for a small business, compare and
compare options, and make valid recommendations.
Stranded in the current discussion, with all these product ranges, succession planning is
unhurriedly the ideal ideal for the Enterprise Rent-A-Car is about to achieve the profitable
completion of the original fortune & also wants to introduce new products, so succession planning
is that better optimal. help review exact introductions so that the company can effectively remove
them. Succession planning is well organized to be the better choice for companies to take advantage
of mergers and acquisitions to fuel their commercial performance (Zhang, Q. and Wang, Y., 2018).
CONCLUSION
From the above report, it is concluded that the planning plays a most important role in the
growth of a business organisation. It is necessary for business organisation to analyse all the factors
which are related to the business. It is necessary to set goals and objectives first and then make and
develop the strategies which are helpful in achieving the goals. Growth matrix can be considered as
the determinant which help the organisation in understanding the market condition. With the help of
planning, an organisation can prepare themselves so that they can follow the significant process in
order to achieve the goals and objectives of organisation. Arranging the funds is a huge challenge
for any small business organisation. In order to analysing the success of business organisation,
business plan is useful. In any case, the business organisation is not getting success as the
management is not able to perform all the tasks in an effective manner, leaving the market by
paying all debts is the best way solution and take an exit from the market.

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