Olympic Rent A Car US Customer Loyalty Battles Case Solution

1. What should Walkins do? What factors help explain the performance of Olympic Rent-A-Car U.S.? What market forces may impede it in the future?

Walkins and other stakeholders of the company discussed the prospective of Olympics’ and how it can steal market share from the leading competitors' Hertz and Enterprise. Walkins should change the medalist reward program to stay competitive in the market. As indicated by the market analyses and the points brought by Andy, the manager of customer relations, the customers of Olympic do not necessarily belong to the low-income group. Consumers from affluent households are most likely to travel and rent the service for business and leisure. With the penetration of the internet, resulting in online meetings and teleconferencing the number of business trips might decrease and the main consumer base might belong to leisure travellers in the future who mostly belong to affluent households. This group of consumers is most likely to be Olympic medalist members. They look for services and programs that have more to offer and in order to make sure this group perceives the loyalty program as a better offer than the competitors Walkins should change the loyalty program. 

The revenue growth stated in the income statement indicates that the Olympics is performing better than the other players in the Car rental industry. However, the operating profit margins are very thin and do not give room for taking any risks. The debt and depreciation were at par with the industry average however they did indicate that the company requires heavy capital investment to stay in the market in the future. However, some market forces can impede the performance of the Olympics in the future and therefore requires the managers to take the right decision. The demand for rental cars service might decrease with businesses being conducting online through the use of the latest technology. The improving socio-economic conditions might shift the demand for better service than better value making Olympics’ strategy incompetent.

2. Assuming Olympic responds to Enterprise, how should it do so? What is the potential impact of emphasizing dollars spent versus days of rental? What is the potential impact of removing blackout dates?

The loyalty program members contributed 21% to the revenue of 2012 making them the most important customers for the company.