Rent-A-Car Growth Strategy: Market Analysis, Funding, Succession Plan

This report explores growth strategies for Rent-A-Car, a UK-based car rental company established in 1957. It considers social, technological, environmental, competitive, economic, and market factors impacting growth. The Ansoff Matrix is applied to evaluate market penetration, product development, market development, and diversification strategies. Potential funding sources like bank loans, crowdfunding, and peer-to-peer lending are discussed, along with investment decision-making methods. The report also outlines essential elements of a business plan for scaling up the business, including market analysis, financial projections, and operational strategies. Finally, it examines succession options to ensure long-term stability and leadership continuity for Rent-A-Car.

PLANNING FOR GROWTH

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
P.1 Key consideration..................................................................................................................3
P.2 Opportunities and growth evaluation by Ansoff's Matrix.....................................................5
P.3 Potential Sources of Funding ................................................................................................7
P.4 Designing business plan for scaling up the business.............................................................9
P.5 Succession options...............................................................................................................13
CONCLUSION..............................................................................................................................15
REFERENCES................................................................................................................................1

INTRODUCTION
Growth and business are closely linked with each other. Every company perform its
function for the accomplishment of growth and success. Growth enables the company to make
exploration of business along with market. However, it requires that adequate planning need to
be made with a consideration towards various aspect including social, market, competitive and
various other aspect. Likewise, other option including funding and strategic growth option will
also need to be considered with the making of plan related with growth. Rent-A-Car is one of the
oldest company of UK that provide rental car services. It was established in 1957. It is an
international and recognized brand with enabling its services across the entire globe. This report
will discuss various consideration that will enable growth. Likewise, sources of funding along
with a business plan is also a part of this report. At the end succession strategies are also
included in this report.
MAIN BODY
P.1 Key consideration
There are various consideration with regard to Rent-A-Car that may have an impact over
the company and its growth. These considerations includes:
Social factors:
This is related with the customer taste and preference. This means with the changing taste
and preferences of the customers and their inclination towards the rental will act as an
opportunity for the Rent-A-Car. Since with the changing trends it is now common that the
customer usually prefers to make a car on rent rather than making purchasing. This means that
with the consideration over this aspect the company can move towards the growth (Cubric,
2020). Likewise, since with changing such taste of customers it would not be wrong to said that
Rent-A-Car will be able to make explorence in the market along with getting growth.
Technology:
This is also a major consideration towards the success aspect which is related with
technological advancement and up-gradation (Clohessy, Acton and Rogers, 2019). With the
changing technology and making its inculcation in the daily life would emerge as an opportunity
of growth with regard to Rent-A-Car but only if it will also adopt such changes. This means that

with the facility of digital technology and enabling facility of online booking the rental car will
lead to have a growth for the company. This is also having a direct impact towards the company
in terms of raising its share of profit and growth because with the adoption of technology, Rent-
A-Car would enable its services on a wider scale.
Environmental:
This is an important element and consideration towards the growth aspect for Rent-A-
Car. This is because with the raising pollution enabling vehicle at rental mode will lead to have
an impact in lowering the pollution (Dolphin, 2020). This would act in the direction of reduction
of more purchasing the car and make its negatively impact the environment. In addition of this
installation of such system that will lead to reduce the emission of carbon will again lead to have
a positive impact towards the company in the context of environment.
Competition:
This is also an important consideration which is related with extent of market competition
and needed to be focussed (Chauhan and Kalkis, 2021). This is because with a looking towards
the aspect of competition Rent-A-Car would make and frame its future strategies in such a
manner that along with meeting the need of the competition, it can further achieve growth too.
Economic:
This is also an important element with regard to growth opportunities. This is because
economic consideration include the economic environment containing economic policies and the
situation (BURKALTSEVA, and et.al., 2017). If the economic condition are good then it will
automatically enable the growth opportunities to Rent-A-Car by which it can frame its future
course of action and move towards the direction of growth.
Market situation:
This is also an important consideration with regard to analysis of growth opportunities.
This is because if the market situation is not good and favourable then it will lead to have an
adverse impact over the company and its business (Park, 2020). As every company make
perform its operation in the market. And if there would be no favourable situation then it will
lead to gave an adverse impact over the company and its growth too.
New product or services:
As per the need of the market and its analysis making up-gradation in the existing
services of the company will lead to enable it growth opportunity. This means keeping a focus

towards the products and services along with inculcating innovation in it would lead to have a
enabling of growth and success. This means that in order to achieve growth and explore the
market, Rent-A-Car need to be focussed towards its services and try to make innovation in it for
example renting car for outside the city in addition of local travel. Adoption of digitalization in
terms of making booking the car. This will lead to have a positive impact towards the company
in terms of its growth and success.
Thus, from the analysis of the above consideration it is clear that a focus towards these
aspects is very important with regard to Rent-A-Car. This is because with these considerations
Rent-A-Car will able to make grab of market opportunities. Likewise, these will act as base that
will lead to have a positive impact towards the enabling of success to company.
P.2 Opportunities and growth evaluation by Ansoff's Matrix
Ansoff matrix is an important model with regard to growth and opportunities. This model
will lead to have a major role with respect to growth of company, this is because with the
adoption of various strategies as per this model will lead to enable the company to make growth
along with exploration of its business.
The Ansoff's matrix model have four strategies for growth and the opportunity:
 Market penetration
 Product development
 Market development
 Diversification.

Source: What is the Ansoff Matrix?, 2021.
Market Penetration:
It means selling more existing product in the established market. This can be done by
promoting or price reduction of the services or the product (Loredana, 2017). For the market
penetration company can develop and increase their promotions. They can also decrease their
price to gain new customers. The company aims to increase the market share by the strategy of
market penetration. This strategy mainly deals with the customer's psychology of what they will
see the company will sell. By using this strategy it will help the company to expand their
consumers.
Product Development:
This type of strategy involves the development of new product or services to place them
into the market (Zanjani and et.al., 2020). Product development strategy would help the company
to develop the service in the market to ensure the profitable business. It is a medium risk
strategy. The growth of the company can be seen through the growth of the customers.
Market Development:
This means selling the new product into the new market (Alyamani, 2020). There are lot
of competitors for rental cars. To differentiate the company from the competitors, they should
improve their quality. For increasing the growth they must ensure that they start taking feedbacks
Illustration 1: Ansoff Matrix

from them and if feasible apply it within the firm as the customer satisfaction is the priority of
any company to sustain and to grow in the market.
Diversification:
This is also an important strategy as per ansoff matrix. Under this strategy new product
will be introduced in the new market. This is counted as an important but risky strategy because
it involve a high percentage of risk. As the market will be new and when new products will be
introduced by company in then new market then it involves a high percentage of risk because
there are chances that the company and its strategy will fail. And in case if there is an occurrence
of any failure then it will lead to have a severe negative impact on the company in terms of
affecting its profits and sales percentages.
From the above strategies it would not be wrong to said that in order to make growth and
explore the market, Rent-A-Car will need to comply and follow the strategy of market
development strategy under which it will make focus towards the aspect of making enabling its
existing services in the new market so it will lead to have capturing of new market and enable
growth and success to company. Moreover, this strategy assist the Rent-A-Car to make grabbing
of new customer with market and enable a rise in its profit and sales percentage. In addition of
this, with the adoption of this strategy Rent-A-Car would able to make raise the share of its
market and its enabled services.
P.3 Potential Sources of Funding
Investment decision making: Investment decision is a term of financial management. It
means capital budgeting (Ogunlusi and Obademi, 2019). Capital is referred to the assets. The
Rent-A-Car can use following methods for decision making: Payback Period method: Payback period means the time taken in recovering the
investment cost. The calculation of payback period helps the company like Rent-A-Car to
understand and determine about the different opportunities of investment. It is a crucial
consideration of the company to get a fast return in the shortest time.
 Net Present Value method: Net present value is the difference between the inflow and
outflow of present values of cash in a fixed period of time (Noch and Kusto, 2018). It
used buy the Rent-A-Car company to plan the investment and also to analyse the profit of
the company.

Source of Fund: The sources of fund used by the SME like Rent-A-Car can be
crowdfunding, bank loans, peer to peer lending and angel and venture funding.
 Bank Loans: Bank loans are the most common source of funding (Del Giovane, Nobili
and Signoretti, 2018). It is used by the Rent-A-Car company. Because it is a long term
financing source for the SMEs. The bank loans are fixed amount of money that is given
to the SMEs like Rent-A-Car. This needs to paid back within the specific time with some
specified interest. The paying back of money is paid through instalments. These
instalments can be monthly, quarterly, six monthly or yearly depending upon the contract
(Berrospide and Edge, 2019). Most commonly banks provide these loans on monthly
instalments.
◦ Advantages: It is a quick and easy approach for the SMEs.
◦ Disadvantages: It can be expensive for the SMEs as it has high rates of interests.
 Crowdfunding: Crowdfunding is used by the SMEs such as Rent-A-Car for collecting
raising the funds (Cornelius, 2020). Crowdfunding means large number of people are
giving the small amount of money to finance a business. This is an easy approach by
using crowdfunding websites on social media. It brings the entrepreneurs and the
investors together by expanding the pool of investors.
◦ Advantages: This method of Crowdfunding is most commonly used by the start up
companies. Also for the people who have the ability to access the larger groups.
◦ Disadvantages: It can damage the reputation of the firm. There are chances of not
reaching the funding goals because it totally depends on the investor's interests.
 Peer to Peer Lending: In peer to peer lending of money is a direct lending method. In this
method there is no any financial institute such banks as the intermediate (Dorfleitner,
Oswald, and Zhang, 2021). The direct lending between the individuals or the businesses
takes place. The SMEs like Rent-A-Car is using this method as their funding source. This
type of lending generally takes place on the online platforms where the borrowers match
with their potential lenders. This can be secured and unsecured personal loans. This type
of funding is considered to be the alternative source of financing by the Rent-A-Car.
◦ Advantages: This type of financing has higher returns. This is easy and approachable
ways of funding. Peer to peer lending has low rates of interests.

◦ Disadvantages: There is no legal protection or insurance for such type of financing.
The peer to peer lending is not available for all type of borrowers and lenders as a
source of funding.
 Angel finance: Angel investor is a business or an individual that provides the funds for
the start up businesses (Crick and Crick, 2018). With the exchange of money they
demand ownership. It can be on going or one time investment both to get through with
initial business stages. Rent-A-Car also includes these funding sources.
◦ Advantages: The angel investor would assume the risks prior to the situations.
◦ Disadvantages: The angel investors have more control on the start-up than the SMEs
owner.
 Venture Finance: These funding sources are those source that invests money into the
start-ups that are a high risks (Differences Between an Angel Investor and a Venture
Capitalist, 2021.). These start-ups have high risks of failure. After some period of time
the venture investment can fully buy the company if it has big shares in the venture.
◦ Advantages: The venture investors can make large investment in the company.
Disadvantages: The venture investors can remove the entrepreneur from the leading positions.
P.4 Designing business plan for scaling up the business
EXECUTIVE SUMMARY
'Rent-A-Car' is a car rental company based in Missouri, USA which rent auto-mobiles for short
periods of time and make revenue. These offerings company made for public ranging services
from 'few hours' to 'few weeks'. Established by Jack Taylor and became the largest enterprise in
North America with annual revenues of $14.1 billion and the company operates 68,000
employees in 2011. Rent-A-Car's budget plan is based on current and future trends of car renting
improving customer services based on online app. Company prioritizing sales and marketing
strategies through online expansions by introducing app which will provide convince to
customers such as online booking options. Company will raise its funds of working and equity
capital in primary market through securities like: shares, debentures, loans and deposits based on
its revenue and expenses.
BUSINESS OBJECTIVE

The main objective of Rent-A-Car is to increase market share with the help growing sales
which is the specific goals of the company. Company planning to enhance the strength of the
brand by 15% within two years (Casañ, Alier and Llorens, 2021). Achievements will be measure
on the scale of potential customer's by satisfying there demand. The main objective of the
business is to manage cost effectively which will increase profitability of the company in insured
time.
SWOT ANALYSIS Strengths- Rent-A-Car has strong and diverse portfolio with wide network coverage
operation. Company has been rewarded by 'World's Most Ethical Companies of 2020',
which is the competitive advantage of company that can lead to success with new
expansions. Weakness- Diversification of Rent-A-Car's services are most risky as it involves huge
investment other factors such as, high operating expenses despite seasonal demand for
services. Filing for bankruptcy protection can be another reason for bearing loss on
expansion plan. Opportunity- Rent-A-Car will increase its profitability by lowering the cost and will
become more competitive in the market (Hughes and Ferrett, 2020). As company can
develop and expand its business into existing market also sell them in new markets
by covering untapped group of customers.
 Threat- Companies holing the largest market share in the market are able to provide
lowest-price rental-car service in the market. Rent-A-Car also need to reduce its cost of
services by creating strong strategies to fight against fire competition in the market.
PESTLE ANALYSIS Political factor- Unstable government can cause uncertainty in the vehicle rental industry
which can lead high loss. Economic factor- Change in rental demand due reduce in value of the vehicle can lead to
new model prices which can be in favour of Rent-A-Car or can be another challenge in
company;s growth. Social factor- Lowering the age requirement for vehicle rent which is based on customer
can impact on the company's turnover can bring variation in huge amount. These days,

cultural and expectations are about health consciousness which the company is focusing
upon and taking initiatives. Technological factor- Advance ethnology can help company for launching the digital
dashboards for more convenient experience to the customers. Company can make
investment in advancing its management technology which will help to track activities in
the business. Legal factor- Rent-A-Car promising health and safety to its customers while providing it
service as well as to employee of the company. Theses safety measures ensuring welfare
in staff facilities at workplace under the act Health and safety at work act, 1974 (Künle
and Minke, 2020). Company also making ensure that all regulatory and law-determinants
of its market actions, positively affect the business.
 Environmental factor- Company will use fuel-effective sustainability ways in the
business plan of enhancing the business. Diversification of business services through
adopting sustainable ways with environmental friendly standards.
COMPETITIVE ANALYSIS
Rent-A-Car rising income level across the globe with the help of advance technology
which will efficient company services in the competitive market. Company will expand its
services with improving the buying capacity which will power bulk buy and lower the cost
(Viswanadham, 2018). Company is launching the app which will help it potential customers to
communicate with and giving tough competition in the market. Rent-A-Car will also use various
marketing strategies such as low-pricing with good quality services which will lead company
towards success.
MARKETING MIX Product- Rent-A-Car enhancing its market sale with the help various marketing strategies
like online expansions through introducing app. This app will provide convince to its
potential customers and attract new customers. Price- Company will focus on economy pricing strategics which are based upon market
demand and competitor's price. Pricing of car rental services are determined on the
economic patterns which are fluctuated.
 Place- Distribution of Rent-A-Car has taken a new dimension due to emergence
expansions of product and services on both offline outlets and online stores. Company

will update its physical locations of outlets as well as online features by adopting advance
technology (Wu and Zheng, 2021).
 Promotion- Rent-A-Car promoting and booking services with the help of app which is
the current requirements of the customers due to COVID-19, company creating brand
loyalty. Company is launching app as a tool of direct communication to its customers and
promoting the brand on online platforms such as Facebook, Instagram and Twitter.
STP APPROACHES
 Segmentation- Target market segmentation of Rent-A-Car will consist of
relatively young crowd which prefer good quality services and ready to pay
reasonable price for car rental services.
 Targeting- Company will target age group consist 30-39 because this group
prefers branding and service quality more than low price.
 Positioning- Rent-A-Car providing good car rental services at reasonable prices
which positioning the company .
BUDGET
Rent-A-Car scaling up its business by attracting investors and co-sponsors supporting
quality services in the market of car rental industry. Company attracting new customers by
enhancing these services with consideration of income and expenses includes in the business
plan. Rent-A-Car will raise its funds by attracting new capital investors in business plan.
Financial projections Year 1
Revenues from Bold Street Coffee 728910
Revenue from specialized coffee shops 450000
Net Revenues 1178910
Materials 380000
Labour 220000
Overhead costs 60640 -
Cost of goods sold 660640
Gross profit 44% 518270
Other Expenses: