Enterprise Rent-A-Car: Growth Strategies, Funding Sources & Exit

This report provides a comprehensive analysis of growth strategies for Enterprise Rent-A-Car, focusing on key considerations for evaluating growth opportunities, potential funding sources, business plan development, and exit options. It utilizes frameworks like Porter's Generic Strategies, PESTEL analysis, and the BCG Matrix to assess market positioning and competitive advantage. The Ansoff Matrix is employed to evaluate market and product development strategies. Funding options such as retained earnings, commercial bank loans, and financial institutions are explored, highlighting their benefits and drawbacks. The report also outlines the development of a business plan and the assessment of various exit strategies for the company. This analysis aims to provide a strategic roadmap for Enterprise Rent-A-Car to enhance its market position and achieve sustainable growth.

Planning for growth

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
Key considerations for evaluating growth opportunities............................................................3
Evaluate opportunity for growth.................................................................................................6
Potential sources of funding........................................................................................................7
Business plan...............................................................................................................................8
Assess exit options....................................................................................................................11
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Planning is the key of business growth and expansion which help company in improving
its current performance. Business planning ensure proper allocation of resources and attract new
source of funding to enhance financial position of the company. Business plan contribute
maximum scope for company success and aid in meeting desirable objects. It will help in
determining blueprint for business growth and profitability by discovering opportunities (market
share) and resources management. The chosen organisation for this report is Enterprise Rent-A-
Car which is established in 1957 and founded by Jack Taylor (Abdullahi, 2017). The company
becomes largest car rental organisation in North America and operating its international business
in Germany, United sates, Ireland, Canada and UK. The company is planning to provide
effective solutions to its customer service to gain more competitive advantage. The report
evaluate growth opportunities of company by the help of Ansoff matrix. The report assess
potential source of finance along with its benefits and drawbacks. It design business plan for
growth and expansion and assess exit options.
TASK 1
Key considerations for evaluating growth opportunities
Enterprise Rent-A-Car is the recognised international company which provides services
of rental cars. The organisation is planning for growth and expansion to enhancing its current
customers services and recognising its future capabilities. Enterprise Rent-A-Car should
implement Porters Generic strategies to evaluate its growth opportunities. This model ensure
competitive benefits and explore its market opportunity.
Cost leadership-The cost leadership strategy includes, acquiring competitive benefits by
reducing cost of its products and services. The goal of implement this strategy is to ensure
effective market leadership by managing value chain management (Alaaraj, 2018). The company
services and products are targeting middle class customers who are very price sensitive, So cost
leadership is the best strategy that satisfy needs of targeted customers. The respective company
focus on providing affordable products and create brand awareness to increase its sales revenue.
By implementation of this strategy company can make effective supply chain and reduce its cost
of production.

Differentiation strategy- The differentiation strategy generate competitive advantage by
developing unique products and services or adding new features in existing products. This will
help Enterprise Rent-A-Car in expanding its customer base because they offers creative product
features. The aim of company towards this strategy is to provide different range of products and
services from its competitors (Davidsson, 2017). This will develop interest of customers towards
unique products and services and build more loyal customers of respective company. By this
differentiation strategy company develop its unique selling proposition and develop pressure to
other alternatives brands because mass customers will prefer respective company products and
services. The company created its own logo as differentiation factor to build strong presence in
minds of customers.
Cost focus-In this strategy company utilise their resources and focus on niche targeted
segment. Enterprise Rent-A-Car can implement cost focus strategy by delivering cost effective
products to specific targeted segment. Through this strategy company will provide valuable
products at very affordable price to one specific segment. It will increase sales of company and
performance level because they are focusing only one particular segment and meet the
requirements of particular customers (Fanta, 2020). The company is focusing on middle class
segment because they can not afford to purchase new car or any transport services, so company
focus or aim to target middle class segment at very affordable price.
Differentiation focus- Enterprise Rent-A-Car implement this strategy by delivering
differentiation products to one particular segment. This will improve company performance as
they provide unique and creative products and services to one particular sector rather than entire
market. Respective company can add on unique features or innovative concept to differentiate its
brand name from its competitors. Company can provide discounting features and improve its
customer services quality which develop difference from other competitors. In this strategy
company is concentrate on one particular segment of middle class because requirement of
transportation services is needed by them. So there is great opportunity for company to deliver
unique products to attract one particular segment.
PESTEL
PESTEL model is the influencing technique which recognise company external
environment to reduce the impact of political, economic, social, technological, environmental
and legal.

Political- The international governments make changes in its policy making that impact
performance of Enterprise Rent-A-Car. The company is accountable to follows international
trade policy that provide ease in practising business activities of company. The democratic
institutions support and strengthen car rental business of company by the help of transparency
and stable political environment.
Economic-The inflation rate impact on the demand of car industry and fluctuate actual
price of the Enterprise Rent-A-Car products and services (Halt and et.al., 2017). The increase
price of car industry become advantage for company because most of the people will prefer to
purchase rental services of car.
Social-The attitude and preference of Enterprise Rent-A-Car targeted customers is
moving towards spending on comfort rather than savings. So company can take advantage of it
be providing valuable rental car services to deliver premium status to the target customers.
Technical-The company can take advantage of technology in business by providing 5G
infrastructure. This will provide 5G network connectivity to their customers and they can enjoy
premium services. By applying this technology company can increase their customer base and
sales revenue.
Environment-The company must adopted waste management to accomplish its
accountability towards environment. This will reduce cost of production and improve effective
chain of supply (Mahendra, 2019). By recycling policy company can enhance its services and
improve its performance level.
Legal-The services which is provided by Enterprise Rent-A-Car, refereed as riskier one
so they should regulate health and safety, consumer protection laws in business activities so that
they can deliver better services without harming anyone.
BCG Matrix
The BCG matrix helps in determine long strategic plan for company growth and
opportunity. Enterprise Rent-A-Car should apply this model because it will analyse its growth
and expansion ratio.
Star-The star products are considered as high growth and high share that means products
required lots of investment to maintain high share and growth to win competition. Enterprise
Rent-A-Car products like SUVs and Cars are capturing leading market position and crate income
in competitive environment.

Cash Cows- It create less income due to competitive pressure but have high share
because of high cost maintenance. Respective company products like minivans & vans have high
maintenance cost but generate low growth and high share.
Dogs-It is considered as low share and low growth in market and refers as biggest drain
for Enterprise Rent-A-Car (Masulis, 2020). The moving trucks & vans develop low growth and
low profit share due to less demand in competitive market of respective company.
Question mark- The products like Exotic cars have high market growth but due to less
awareness of this new category of respective company they capture low market share. This can
be turn into star category if Enterprise Rent-A-Car products successfully capture high market
share.
Evaluate opportunity for growth
The Ansoff matrix is effective marketing model which ascertain product and market
development strategy. This model help Enterprise Rent-A-Car to develop its market launch
strategies. It determine market and product growth strategies of Enterprise Rent-A-Car and helps
in decision making.
Market development- Enterprise Rent-A-Car's branches is located as per the
convenience of customers that help them to maintain competitive advantages. As per the
customer needs opened their branch near airport location (Michael, 2017). By implementation of
this strategy, company develop its market share and profitability and win its competitors. The
company focus to expand its operation and branches in several countries like USA, UK, Canada,
Ireland and Germany.
Product development-This strategy help Enterprise Rent-A-Car in enhancing its
services in market and develop profitable business. They develop their products by providing
innovative pick up services which help in meeting requirements of customers. The rental
programmes services are delivering specialised price to target potential customers. The company
adopted poly-centric activities in its operations which referred as company provided services at
specific market like Rent -A- Car is running at global level but WeCar and Flex-E- Rent operates
in UK and US.
Diversification- This strategy contribute wider scope for company profitability in
differentiate products and market share. It supply opportunities to explore exclusive ventures and
potential profits. It is the riskier strategy because Enterprise Rent-A-Car require high experience

and knowledge of current market. As company has experience of largest rental car services and
also have little knowledge of packaged goods industry. But company does not make any profits
due to poor sales and guarantee buy back preparation with retailers. From this company acquire
knowledge and experience that it can not guarantee success in each venture they operates.
Potential sources of funding
Source of finance: There are various sources of finance that provides fund for business
for establishment and run business operations. Each and every source has their own
characteristics, Rent-A-Car analyses all options and select available source of fund that
facilitates organisation to attain the objective of growth and development. Respective
organisation chose appropriate source of fund after analysing specific situation, cost, purpose and
associated risk (Moren, 2019). There are various short as well as long term requirements that are
analysed by the organisation than take decisions to chose appropriate source of funding. Some
source if finance and their benefits and drawbacks are mentioned below:
Retain earning: Retained earning is defined as the specific proportion of organisational
earning that is retained by the organisation for future use. It is also termed as the internal
financing or self-financing of profits (Narins, 2017). Rent-A-Car do not distribute whole
business earning to its shareholders as a dividend but it saved some proportion that can be
utilised in future situations.
Benefits:
 retained earning is the permanent internal source of funding that is available in
organisation for future use on which organisation do not pay any kind of interest,
dividend or any flotation cost.
 It facilitates organisation to deal with unexpected losses as well as it enhances market
price of equity share of Rent-A-Car organisation.
Drawbacks:
 Excessive retained earning enhance dissatisfaction is shareholders because they get lower
dividend on their shares.
 It is the uncertain source of fund that depends upon organisational profitability and the
earning of business fluctuates every time.
Lone from commercial banks: Commercial banks plays important role in providing funds to
business for different purpose and different time period. Banks provide finance to Rent-A-Car

organisation in various forms such as overdraft, term loan, discounting of bill and through latter
of credit. Banks charges interest on loans according to characteristic of business. Respective
organisation repaid loan amount either in lump sum or in instalments (Park, 2019). Banks
provide finance for both short and long period of time.
Benefits:
 Bank loan is the flexible source of finance that can be increased by the organisation
according to requirements as well as repaid in advance when excess fund is available in
business.
 All the information that is provided by the organisation are kept confidential and there is
no requirement of issuing prospectus and underwriting.
Drawbacks:
 There are range of legal requirements are fulfilled by the organisation to get finance from
banks that takes too much time as well.
 Before providing loan, bank investigates organisational current affairs and financial
positioning.
Financial institutes: There are number of financial institutes are established by the government
that provides finance to business to run properly and expand business in other areas. These
institutes offers owned and loan capital for short, medium as well as long term requirements of
Rent-A-Car organisation (Pan and et.al., 2020). These organisational provides financial
assistance and technical assistance to business for their smooth running. These source of finance
is considerable in situation when large amount is required for longer duration for expansion
purpose.
Benefit:
 Financial institutes provides long term finance to business, apart form finance these
organisations provides managerial and technical advices to business.
Drawback:
 There are too much formalities are fulfilled by the organisation to grant loan from
financial institutes which is time consuming and expensive.
Business plan
Company overview

Enterprise Rent-A-Car is recognised global brand that is established by Jack Taylor in
1957. They are operating business of rental cars at global level in Germany, UK, USA, Ireland,
Canada and looking for the opportunities in expanding its marker share and growth rate.
Vision & Mission
Enterprise Rent-A-Car vision wants to create bright future for employees and customers
as they believe to strengthening community, employees and customers by rewarding for its
contribution (Pistrui, 2019). The mission of the company is to deliver best services at global
level. It serve the community and customers by providing qualitative services and value.
Strategic objectives
 Enterprise Rent-A-Car aims to develop innovative services and serve best value to their
community.
 Company want to capture 40 % of market share and develop revenue unto 30 % from its
new products.
 Launching new products and services of premium exotic cars to attract new and existing
customer base.
Market analysis
Market trends-The current market trends of this car rental service provider company is
AI-augmented mobility, Innovation accelerators (Santisteban, 2017). The AI-augmented
mobility, support data analytics in order to enhance regulatory and improve dynamic policy
making. The innovation accelerators drive innovation of technology like 5G connectivity in
multimodal car rental services.
SWOT-
Strengths
 Enterprise Rent-A-Car is iconic brand
that has strong brand equity and
awareness.
 The respective company have diverse
products portfolio that easily manage
domestic and international market
segment.
Opportunities
 The respective company can take
advantage of customer disposal income
in lancing new products.
 They can adopt E-commerce and social
media business model to reduce the
advertisement cost in new market
segments and target mass active social

 Company have strong relationship with
suppliers which create strong supply
chain.
users.
Weakness
 Company has lack of employees
diversity that reduce potential success
of company.
 Project management is only internal
stakeholder rather than entire
stakeholders which create poor public
image.
Threats
 Enterprise Rent-A-Car have to keep on
close supervision on government
regulations that may create pressure of
protest regarding labour safety.
 Threats of new entrants will decrease
profits of company and they have to
maintain efficiency which increase
operating cost.
STP- The STP stands for segmentation targeting and positioning which help company to
create brand awareness of new products and services.
Segmentation- The Enterprise Rent-A-Car, aims towards national travellers that will segment
market share on the basis of geographic and behavioural (Silva, 2018). From geographic basis
they divide market share of US and established their brand in every region, climate and town.
From behavioural they segment the age group between 18-64.
Targeting-Company mainly target national and regional peoples who are located near by and all
male, female as well as children.
Positioning- Company position it self by developing technology of 5G connectivity and promote
marketing campaign on social media.
Marketing and sales strategy
The sales and marketing plan help Rent-A-Car in reaching its customers and converting
them into profitable customers. The company develop social media marketing campaign to reach
its target audience (Singh, 2017). Their marketing plan is to promote and create awareness of
new products and services through social media promotions (Instagram). The sales strategy
includes, promotional discounts offers for their regular customers so that they can increase
theory sales from the help of loyal customers.

Financial projection
Cash flow statement-It is the financial statement which summarize cash & cash equivalent and
provide detail information of cash inflows and outflows that help company in operating,
investing and financial activities.
Assess exit options
Business exit strategy for Rent-A-Car helps company to create substantial profits when
company plans to end their business activities (Singh and et.al., 2018). There are several
business exit options available for Enterprise Rent-A-Car with pros and cons.
Merger & Acquisition-While planning for exit strategy, Rent-A-Car can merge with large
company which deals in same car rental services. This is separate entities which joint together to
form new entity.
Pros:
 Company can sell products and services at higher price because buyer needs company
products.
 When company facing some issues in operating then merger can save stability of entity.
Cons:
 Lots of lay-off will occurs due to new management takes over.
 This is hard to consolidate company culture with another company.
Initial public offerings- This is one of the effective exit strategy by which company can sell out
its stock to the public and turn around its company status from private to publicly owned
(Warren, 2017). Initial public offerings provides opportunities to the company to obtain capital
through shares offerings.
Pros:
 Going publicly is considered as most effective and profitable exit strategies.
 This will enhance high valuation towards interest of ownership.
Cons:
 This is known as expensive and difficult exit strategies because it required certain
conditions (security exchange commission).
 The company which are operating small to medium business will unlikely to succeed
because people prefer to purchase stock of iconic brand.

Liquidate-When company does not find any suitable strategy for exit, then liquidation is
considered as best strategy. This strategy refers as selling the assets, paying debts and then close
the entire business venture. It is the strategy by which company can convert its property and
assets in terms of cash and cash equivalent.
Pros:
 It is the simplest strategy that can be completed by company on regular basis.
 It will enables company to acquire cash on immediate basis.
Cons:
 This type of strategy offers low return on investments during execution of the strategy
and lots of unemployment will create in closing of business activities.
CONCLUSION
From the above report, it has been concluded that respective company can generate lots
of opportunity of growth and expansion by proper assessment of Porter generic, PESTEL, BCG
Matrix. Cost leadership is the best strategy that can be adopted by respective company because it
will enhance company ability to provide best quality of products and services at affordable price
by cutting overhead expenses. Respective company can acquire loan from commercial banks
because interest charge are very affordable. The Liquidate exit plan is better option for exit
strategy as it will provide immediate cash after selling the assets, paying debts. The business
plan provide will appropriate direction to the company in launching new products and services.

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