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Swot Analysis Oh Abg

Essay by   •  May 18, 2011  •  Case Study  •  842 Words (4 Pages)  •  2,786 Views

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Strengths

ABG is operating two of the most recognized brands in the world in the car rental business. The Avis brand has been in the minds of customers and travelers since the 1940s with presence in every major airport not only in the U.S. but also around the globe.

ABG enjoys the benefits of two brands with two different niche markets, where Avis is targeting the corporate business customers and budget is targeting the price conscious leisure customer. On the other hand, both brands are sharing the same fleet, maintenance facility, systems, technology and administration which will lower the cost considerably.

Travel Daily News announced Avis brand a leading car rental company in customer loyalty by brand using key customer loyalty index (Traveldailynews.com, 2011). In this study, Travel Daily News examined customer's relationships with 528 brands in 79 categories. Avis achieved high marks in each brand loyalty segment including convenience, customer service, brand reputation, reliability, safety and pricing.

ABG enjoys a credit rating of AAA that was issued by DBRS (DBRS.com, 2010). This high credit score will facilitate ABG ability to finance its fleet purchases in order to cover seasonal demands during peak months, especially the summer vacation season and around major holidays.

One final strength of ABG is its adaption to a unique franchise agreement with successful entrepreneurs to operate many of ABG off-airport locations. This approach is helping to enhance ABG image and to generate exceptional revenues since more operating costs will be handled by the franchisees. On the other hand, franchisees will develop repeat customer base by establishing strong relationships within the local market benefiting from ABG brand names.

Weaknesses

Auto Rental news rank ABG as the third car rental company in the U.S. with 2100 locations and around 270,000 cars in its fleet lagging behind rivals Enterprise and Hertz. ABG fleet size and limited number of locations continue to put pressure on its operations and ability to expand customer base especially during peak season which usually leads to more reservation failures because of insufficient fleet and absence of locations mainly in the suburban areas.

One of the factors that determine a car rental company's success is its ability to maximize the sale price of retired cars in its fleet. ABG lacks direct sales outlet to sell cars to puplic customers while depending solely on selling its retired fleet in car auctions. This fact limits ABG ability to generate maximum sale value for its fleet.

ABG marketing mix depends heavily on mass media and national promotions with limited number of marketing individuals contacting small business accounts, car dealers and body shops which leaves the field open for rivals such as Enterprise and Hertz to dominate

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