Global Industry Matrix Analysis – Car Rental MarketGIM Location [ppt]

Porter’s Six Forces Competitive Model Buyers’ barainin po!er "e#ine our buyers$ %uto insurance companies& body s'ops and end customers( )nd

customers include bot' retail customers and corporate customers( %uto insurance

companies and body s'ops are also our customers because insurance companies need t'e

insured’s cars replaced in case o# accidents( Customers mi't also !ant to use a car !'ent'eir cars are bein repaired in t'e body s'ops( *More detailed de#inition s'ould be #ound

in customer analysis(+

In car rental mar,et& buyers 'ave reat barainin po!er(

[-'e c'art !ill be converted into pararap's]

%uto.insurance

/ Body S'ops

)nd customers

 

 buyer concentration to #irm concentration ratio Lo! 01%

 barainin leverae 2i' 2i'

 buyer volume Bi *'i' ro!t'+ 3ery bi

 buyer s!itc'in costs relative to #irm s!itc'in

costs

3ery 'i' 01%

 buyer in#ormation availability 3ery 2i' 4elatively 2i'

ability to bac,!ard interate Lo! 01%

availability o# existin substitute products 01% 2i'

 buyer price sensitivity 2i' 2i'

 price o# total purc'ase 5 5

Suppliers’ Barainin Po!er 

"e#ine our suppliers$ -'e dealers'ips

[-'e c'art !ill be converted into pararap's]

"ealers'ips

supplier s!itc'in costs relative to #irm

s!itc'in costs

 01%

deree o# di##erentiation o# inputs 2i'

 presence o# substitute inputs Fe!

supplier concentration to #irm concentration ratio 2i'

t'reat o# #or!ard interation by suppliers relative

to t'e t'reat o# bac,!ard interation by #irms

3ery 2i'

cost o# inputs relative to sellin price o# t'e

 product

Lo!

-'reats o# 0e! )ntrants

 

"e#ine our most li,ely ne! entrants$ travel aencies& lon distance public transportation&

and dealers'ips( Public transportation suc' as airlines& train companies may be ne!

entrants because t'ey are t'e primary transportation met'ods #or travelers( -'ey can provide instant car rental services to travelers ri't upon t'eir arrival( -ravel aencies

mi't also start car rental services because t'ey 'ave a stron net!or, !it' 'otels&

restaurants& and in#ormation o# attractions& etc(& and t'ey mi't !ant to taret t'e roadtrip customers too buy providin direct car rentals( "ealers'ips 'ave establis'ed assets

*cars+& and t'ey are also li,ely to enter car rental mar,et& as addition to t'e direct sales o#

cars to customers(

[-'e c'art !ill be converted into pararap's]

"ealers'ips Public-ransportation

-ravel%encies

t'e existence o# barriers to entry Lo! Medium Medium

economies o# product di##erences5

 brand e6uity Lo! 7es 7es

s!itc'in costs Lo! 2i' 2i'

capital re6uirements Lo! 2i' 2i'

access to distribution [customers] Lo! 2i' 2i'

absolute cost advantaes 0o 0o 0o

learni

 

n curve advantaes [past data5] Lo! 2i' Medium

expected retaliation 7es 7es 7es

overnment policies 89 89 89  

-'reats o# Substitutes

"e#ine our substitutes$ di##erent transportation alternatives( Instead o# rentin a car&customers mi't c'oose to buy a car& use s'ort.distance public transportation and en:oy

coac'es or vans o# travel aencies(

[-'e c'art !ill be converted into pararap's]

"ealers'ips Public

-ransportation

-ravel

%encies

 buyer propensity to substitute Lo! Lo! Lo!

relative price per#ormance o#

substitutes

Medium 2i' Lo!

 buyer s!itc'in costs Lo! 2i' 2i'

 perceived level o# productdi##erentiation

2i' Lo! Lo!

Intensity o# competitive rivalry

number o# competitors Great

rate o# industry ro!t' 2i'

intermittent industry overcapacity Fe!

exit barriers 2i'

 

diversity o# competitors 2i'

in#ormational complexity and asymmetry Lo!

 brand e6uity 2i'

#ixed cost allocation per value added 2i'

level o# advertisin expense 2i'

Complementary product analysis

Complementary products$ Gasoline& insurance companies and body s'ops(

Industry )volutionCar rental mar,et is an emerin mar,et(

[Mar,et 8vervie!]

;it' t'e < #orces& t'ey 'ave evolved. Lon.run C'anes in Gro!t'

. C'anes in Buyer Sements Served

. Buyer=s Learnin

. 4eduction o# >ncertainty

. "i##usion o# Proprietary 9no!lede

. %ccumulation o# )xperience

. )xpansion *or Contraction+ in Scale

. C'anes in Input and Currency Costs

. Product Innovation

. Mar,etin Innovation

. Process Innovation

. Structual C'ane in %d:acent Industries

. Government Policy C'ane

. )ntries and )xits

-'e moves in accordance to t'e six #orces8ur competitors 'ave made accordin strateies to cope !it' t'e six #orces( )nterprise’sdealers'ip stratey& 2ert?’s taret on airports1'otels& Budet #rom travel aencies5 %s !e

ro!& !e !ill provide our customers !it' superior experience and build stron brand

imae& and !e !ill also expand our service into related industries& suc' as tourism&

corporate and etc(

Competitive Position and Strategic GroupsCompetitive PositionGroup C( 0ic'e mar,et$ reional [Bay %rea] !it' #ocus on bot' retail mar,et and

insurance1body s'ops( [Someone s'ould tal, about t'e rationale o# suc' decision(] 8urcomparative advantae !ill be reatly improved customer convenience in terms o#

 prompt car provision( In @A to A years& !'en modern tec'noloies are vastly accepted in

consumer mar,et& ro!in needs #or diitali?in car rental service are also expected(

Customers !ill be able to access Internet any!'ere and anytime& our user.#riendly e. business model !ill provide a means to satis#y customer’s needs #or car rental !it'in t'e

s'ortest time and minimi?ed 'uman errors( ;e currently aim to build suc' tec'noloical

leaders'ip and also accumulate experience and s,ills& #or t'e #uture expansion to t'enational car rental companies(

 

Strateic Group Mappin [need more analysis]@ dimensions$ operation scales and tec'noloical applications( [I need a term t'at sounds

 better]

8ur ma:or rivals are #rom Group %& !'ere t'e larest car rental companies are( -'ere area #e! companies !it'in Group C in Bay %rea& suc' as ipLoc,( 2o!ever& t'e

competition #rom Group B can be inored5

2o! 'as Group % evolved5

Strateic Group %nalysisMobility barrier analysis

. -'e barrier is 'ue !'en reional #irms !ant to o nationally( Because t'at

decision mi't lead to a tremendous increase in cost associated !it' settin up

o##ices& 'irin employees& buildin ne! net!or,s !it' local body s'ops andinsurance companies& advertisement and enlarin database(

. -'e barrier #rom semi.e.business to #ully adapted e.business model is relatively

smaller( For t'e lare car rental companies& it is really easy to establis' customer

database& eliminate t'e paper !or, especially !'en t'ey already 'ave an onlinereservation system& 'o!ever adaptin t'at system nation!ide re6uires 'ue

e##orts in education #or t'e employees and 'i' costs due to complete system

update( 8t'er possible di##iculty mi't be t'e reduced interaction bet!een t'ecompany itsel# and t'e customers and additional ris, perceived by customers(

. -'e barrier #or outsiders to enter car rental companies is relatively also very bi(

-'e start up costs can be 'ue and t'e experiences or understandin o# car rentalmar,et is also crucial(

Competitive Moves and Retaliation Likeliood Analysis;e believe an outbrea, o# !ar#are is unli,ely& because t'e cost o# retaliation out!ei's

t'e bene#it( For lare national companies suc' as )nterprise&

. -'eir o##ices are loosely connected& eac' pursin t'eir o!n pro#its& so it is very'ard #or )nterprise to react as a uni#ied orani?ation(

. -'ey !ill 'ave to react nationally& !'ic' means t'at a small price cut !ill result

in lare loss( It is not cost.e##ective because reions outside Bay %rea !ill also be bene#ited(

. -'e price cut in car rental is 'ard to notice( Car rental mar,et is a 'i'ly

diversi#ied mar,et and t'e rental varies larely amon di##erent models(

But !e !ould expect t'e lare companies !ould also adopt our e.business stratey and

 puttin more e##orts in providin better and more prompt service and tec'noloical

innovations( 2o!ever& it !ill be a ris,y investment and t'eir accordin actions are notexpected to be ta,en very soon(