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Kellogg

School of Management

Business Strategy

Prof. Jeroen Swinkels




Discussion Questions for Enterprise Rent-A-Car


Synopsis

Although they are a privately held company, there is every indication that Enterprise Rent-A-Car
has not just outperformed other car rental firms over the last many yearsEnterprise has thrived in
an otherwise low-profit industry. Our case discussion will examine the particular assets that
Enterprise has assembled that enable them to carry out a distinctive set of activities in order to
generate competitive advantage. In the discussion, we will pay attention to the various aspects of
Enterprises strategy that illustrate trade-offsthat is, the extent to which the firm, over time, has
given things up in order to better or more profitably do what it does.


Assignment

Analysis
1. All car rental companies provide customers with the temporary use of a car. How do
Enterprises original target customers in the local or home-city marketand their needs
differ from the target customers of their major competitors such as Hertz and Avis? How does
Enterprise match (or not) the needs of their local market customers?

2. What choices of assets and activities has Enterprise made in order to provide car rentals with
the attributes you described in Question 1? In other words, what makes their particular car
rental product possible and profitable? Pay particular attention to trade-offs.

3. Enterprises HR strategy contributes significantly to the firms success and consistent
profitability. Why are people so important to Enterprise? What are the strengths and
weaknesses of this HR strategy? Are you troubled by Enterprises high employee turnover rate,
given their substantial upfront investment in employee recruiting and training?

4. The case mentions that both Avis and Hertz have begun to enter the local (home-city) car
rental market. Do you think they will be able to replicate Enterprises success in this market?
Why or why not? (In answering this question, you should think about the feedback from
activities to assets. In other words, think about how the Enterprises choice of activities may
have helped them create assets that they might not otherwise have had.)

Synthesis
5. What do we learn from the Enterprise case?


Extension
How do you think growth in the popularity of Zipcar and other car-sharing services will affect
(positively or negatively) Enterprises future profitability? What, if anything, should Enterprise do
in anticipation of continued growth in residential car-sharing?

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