Essays24.com - Term Papers and Free Essays
Search

Business Analysis of Apple

Essay by   •  June 22, 2016  •  Case Study  •  6,217 Words (25 Pages)  •  686 Views

Essay Preview: Business Analysis of Apple

Report this essay
Page 1 of 25

Executive Summary

Avis Budget Group is a worldwide recognized, well-established and leading brand name in car rental industry providing exquisite rental car services through its division Avis and Budget. Avis is a major player in the rental industry; both through its Avis and Budget brands, which have more than 10,000 rental locations in approximately 175 countries around the world, and through its Zipcar brand, which is the world's leading car sharing network, with more than 775,000 members. 

The overall operation of the company relies solely on these two basic segments or Strategic Business Units. Strategies involved in creating market share and profitability for this company are the division of work activities into units as:

• Avis primarily deals in providing rental vehicle services to two segments that include the commercial segment and the leisure segments of the entire travel industry, which is their target market.

• The other big unit Budget is a chief rental car provider fighting its way through the most value conscious segments of the travel industry in U.S, Canada, Caribbean and different parts across the world. Budget is also operating in the U.S as the leader of truck rental providers.

Multiple causes have resulted in Avis’s competitor problem, such as high fleet costs, limited suppliers, low priced rivals, and locations. These issues can be summarized in the following problem statement: Avis Budget has a strong operational network. Strong operational network enables the company to gain access to key markets as well as to enhance the quality of its services. However, intense competition in the vehicle rental industry may lead to reduced rental volumes and downward pricing pressure, which could have an adverse impact on Avis Budget's results of operations.

Avis has a number of paths they can take to fix their competition problem. Since Avis operates in a unique market, it is crucial to find solutions that will help the firm with their issues. A number of solutions will be presented throughout this paper. Using the decision matrix tool it will help us find the right solution for Avis.

Position

Avis Budget Group, Inc. is operated by two brands, Avis and Budget. To the rental car suppliers, Avis is one of the leading premium commercial and legal segments as Budget is the price-conscious segment. Avis is known for a number of leading statistics in the global vehicle rental industry as Avis Rental Care has locations in not only in the United States, but Canada, Latin America, Australia and New Zealand. With their slogan, “We Try Harder”, Avis is able to push their slogan to become more as a promise to each individual customer. They promise to try harder than their competitors to achieve their customer’s wants and needs to ultimately make their travel more enjoyable than any other competitor would offer (Avis Budget Group BSC Company information). The company primarily operates in the US. It is headquartered in Parsippany, New Jersey and employed about 28,000 people as of December 31, 2012. In addition Avis Budget and its subsidiaries and licensees provide a complete range of vehicle rental services in approximately 10,000 rental locations in approximately 175 countries around the world. Avis Budget Group has approximately 29,000 employees and revenues of over $7 billion. (Avis Budget Group BSC Company information)

The first quarter of Avis Budget Group, Inc. ended on March 31, 2013, with improved yearly earnings compared to the pervious years. For the quarter, the Avis reported revenue of $1.7 billion, a 4% increase compared with the prior-year first quarter. (Avis Budget Group, Inc. Form 10-K) Excluding certain items, such as adjusted EBITDA declined 22% to $93 million from $119 million for the same period a year ago. The company reported net income of $9 million, excluding certain items, and a GAAP net loss of $46 million due to debt-extinguishment expenses, transaction-related charges and restructuring costs. Loss before income taxes was $57 million against $26 million for the same period a year ago. Adjusted EBITDA (non-GAAP) was $83 million against $112 million for the same period a year ago. Income before income taxes was $5 million against $19 million for the same period a year ago. Net cash provided by operating activities was $300 million. Free cash flow was $50 million. Capital expenditures were $21 million.

Comparing Avis to its competitors we can see firm’s strengths and weakness. Since the firm operates all over the world, not just in the US we have to analyze companies in the same regions offering the same services. With that being said, Avis Budget Group major competitors are EAN holdings, LLC, Hertz Global Holdings, Inc, and Europcar Groupe.

EAN Holdings, LLC, which does business as Enterprise-Rent-A-Car, is a leading US car rental company. It maintains a fleet of about 714,000 vehicles from more than 7,000 locations -- some 6,000 in the US and another 900 in Canada, Germany, Ireland, and the UK. Unlike rivals Hertz and Avis, which operate primarily from airports, Enterprise focuses on customers whose own cars are in the shop or need a rental for vacations or other occasions. (EAN Holdings, LLC, Inc. Form 10-K)

Hertz Global Holdings, Inc. is a holding company. The firm owns airport general use car rental brand. Its Dollar and Thrifty brands have approximately 1,410 corporate and franchisee locations in 83 countries. Its business operates in two segments: rental and leasing of cars, crossovers and light trucks (car rental), and rental of industrial, construction and material handling equipment (equipment rental). In its equipment rental business segment, it rents equipment through approximately 340 branches in the United States, Canada, France, Spain, Italy, China and Saudi Arabia, as well as through its international licensees. (Hertz Global Holdings, Inc. Form 10-K)

Europcar Groupe is one of Europe's largest car rental companies, Europcar has more than 5,000 locations in airports, near train stations, and other places in Europe, Africa, the Middle East, Latin America, and Asia-Pacific. It also has a presence in North America through a strategic alliance with Enterprise Rent-A-Car; the alliance boasts a network of about 13,000 locations. (Europcar Groupe)

All three of these companies are major threats to Avis; the following charts below are stock prices of Avis Budget Group and its competitors from 2009 to present day.

(Avis Budget's, Consolidated Statements of Cash Flows. Form 10-K, 2013)

...

...

Download as:   txt (39.9 Kb)   pdf (291.2 Kb)   docx (24.8 Kb)  
Continue for 24 more pages »
Only available on Essays24.com
Citation Generator

(2016, 06). Business Analysis of Apple. Essays24.com. Retrieved 06, 2016, from https://www.essays24.com/essay/Business-Analysis-of-Apple/69428.html

"Business Analysis of Apple" Essays24.com. 06 2016. 2016. 06 2016 <https://www.essays24.com/essay/Business-Analysis-of-Apple/69428.html>.

"Business Analysis of Apple." Essays24.com. Essays24.com, 06 2016. Web. 06 2016. <https://www.essays24.com/essay/Business-Analysis-of-Apple/69428.html>.

"Business Analysis of Apple." Essays24.com. 06, 2016. Accessed 06, 2016. https://www.essays24.com/essay/Business-Analysis-of-Apple/69428.html.