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An Acquisition Drives Growth
Defining a winning portfolio strategy for Enterprise
Situation: In 2007, Enterprise completed the largest acquisition ever in the car rental business by buying National and Alamo. As Hertz had Thrifty and Avis had Budget, Enterprise now had brands to sharply position across end use. It seemed quite logical that National be the “business” brand, Alamo the “vacation” brand, and Enterprise the “everyday” brand. Research was requested to measure the North American drivers of purchase (both consumer and business) and the clarity of offer across all major brands.
Insight: Sklar Wilton conducted a comprehensive North American market study. The drivers of purchase for both consumer and business were identified. The perception of all major brands was also captured. While the research confirmed many ingoing hypotheses, a massive but risky opportunity emerged. The opportunity was the power of the market leading Enterprise brand. Customer ratings were passionate and there was every indication they would pay more for the Enterprise experience. The current pricing had Enterprise at entry level with Alamo priced higher. The research recommendation was to implement a “price swap” with confidence in the equity of Enterprise and the value orientation of the Alamo customer.
Impact: After a field test the swap was executed system wide. After one month Alamo volume was up 50%(!) and Enterprise was up 11%. The annualized impact was estimated at 3-4 share points in a market where each point is worth $100M.
Sklar Wilton was in on the beginnings of this opportunity…with analysis and support.
– John F. MacDonald, VP Analytics, Loyalty & Insights