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Avis Singapore

In: Business and Management

Submitted By parisella3
Words 1885
Pages 8
Threats
> Singapore has a excellent transport system, which is a much more cheaper service with the recent reduction of bus and train fares.
> The off peak car scheme gives Singaporeans more ability to own a car.

> There are low taxi fares in Singapore

> The private car rental scheme allows car owners to rent out their vehicles.

> Singapore is only a small country making it much more efficient to use public transport rather than renting a car to only use for short journeys.

>Petrol prices rise’s

Opportunities

>Owning a car in Singapore requires high maintenance costs, Certificate Of Entitlement, cars also rapidly depreciate.

> climate change and the impact to the environment cars have, provides a chance to introduce more eco-friendly cars ,with technology evolving and there being a larger and superior range of eco-friendly cars

Weaknesses
> There are high maintenance cost for the cars and they are required to purchase new cars regularly.

> The price to hire a car is much greater than public transport.

> There are many other Car Rental service’s who provide the same services that Avis does.

> Competitor Comfort Delgro has a larger fleet of cars, with over 1,400. Strengths
>Has a strong brand identity that is known throughout the world.
>Avis is said to have strong performance in pricing, order taking , billing and payment processing.

> fifth largest percentage of market in Singapore

>chauffer drivers and limousine services are available, this is a key area as Luxurious vehicle rental makes up the main market for the car rental businesses.

>Able to book online, lots of information and tips are provided on their website.

>Avis Singapore offers a wide range of car models, with a choice of sizes and styles to suit customers requirements Avis Singapore Case Study Analysis

Introduction -
This Swot analysis examines and identifies the strengths, weaknesses ,opportunities and threats that are associated with AVIS car rental, to give a broad view outlining the key factors that will impact on the organization's ability to achieve its purpose and vision.

Conclusion - Avis Singapore has many strengths, but there main competitors also possess some of their strengths, Avis Singapore are involved in a extremely competitive industry, were the environment has a lot more threats than opportunities and very small room for growth.

Future Growth
The future projected growth is looking like there is going to be a fall in demand for car rental hire because of all the non industry competitors such as public transport and taxi services being more preferred and efficient. Avis still may take more of the market if they make changes that will make them more competitive.

Increasing Market Share

Avis’s 4.4% share market being the 5th largest amount of market percentage of the industry, needs ways to improve its market share, To do this we need to assess the customer’s needs and what the customers want, Try to be unique from other competitors and creating a more powerful identity, They main keys to increasing market share are the price of the services, how the business promotes the company and attracts its customer base, the place where the service is issued and the service itself.

Avis needs to find out who their current customer base is and segment them into various groups based on their level and type of service they used.
Avis will then have an idea of what part of their service is not meeting the standards they have set, if certain cars aren’t being rented and used, Avis might have to think of slightly lowering the price to hire those cars in order to attract people to hire them and get full use of these assets.

An important thing Avis must do is form a bond with its customers to ensure they retain these customers and encourage them to use their service next time they need to rent a car. Avis can’t afford to lose any of their frequent uses to other competitors.

Avis also needs to determine the demographics and size of the market that is currently using and not using their service. This will show Avis what substantial audience’s they aren’t attracting and missing out on. They can then know who their consumers are and who they need to target and how they go about trying to target them.
Avis may want to conduct a consumer preference survey with potential new customers to help them with this task.

Avis could look at how 36% of Singapore’s population are foreigners and assuming that since they most likely won’t be staying long in Singapore there unlikely to purchase cars and will be looking to rent a car when travelling long distances, Avis can try to find away to attract these potential customers. Avis could also consider targeting tourists that have children by having more family cars, as they are the more keen on hiring a car as it is more convenient.

There main focus should still be on Business travellers as they make up the main market for the car rental industry, they can increase their market share in this area by the use of non-substitutable recourses such as having workers and drivers who have up-front contact with the customers have excellent communication skills that are pleasant , are able to hold a conversation with the customers and are able to provide assistance, having some workers who are able to speak several languages can also be great benefit, this will make the service a lot more enjoyable for the customer and will give the company a competitive advantage

Avis can try to set up a marketing campaign to try and promote themselves to the new potential customers, special promotions will help compliment the campaign.
They can advertise the company on a travel websites or airline websites which is a very safe option because it is not too expensive and you have a specific audience going on those websites.

Avis needs to try to be unique and do something that competitors don’t do, things such as doing a deal were if the consumer travels under a certain amount of kilometres they don’t have to pay for petrol, this will attract those who need to hire a car but aren’t travelling a far distance. Having a partnership with certain hotels , making it more convenient for tourists, they can book there hotel and the car rental is included in the package or they get a discount.
Avis has the opportunity to Introduce new eco-friendly range of cars, which may attract more people to use their service as they are being socially responsible. The cars are generally more cheaper to purchase and run giving a advantage over competitors.

These are just some things Avis can do to increase their market share and get ahead of their competitors.

External forces/ factors

There are many external forces or factors that might affect Singapore’s car rental market, these factors are those the industry have little or no control over that may affect the market and provide opportunities or have a negative effect . These factors comprise of Political, Economical, Sociocultural, Technological, Legal. Some of these factors/forces are as follow:

In the Graph below it displays the petrol prices for Caltex in Singapore over a 24 month period, the graph shows that petrol prices are increasing and if they continue to increase further this will effects the car rental industry, because car rental services require the customer to pay for the petrol consumption this will make it even more expensive for the customers, they have to pay a large sum for the higher of the car and for petrol which may repulse customers from using the service. It also has an effect on Car rental services who offer Chauffer drivers, in this case the company is the one paying for the petrol hence they will have to bump up the cost of the chauffer service.

Petrol watch, price history, 2011, viewed 11th April 2011 http://www.petrolwatch.com.sg/price-history/

A sociocultural force that might have an effect on the market is climate change, due to people now having more knowledge about climate change and the impact to the environment cars have, They will be looking for other options to travel.

With Singapore being the 3rd dense country in the world, being a very small country with only a 699.1 square kilometre land area and a very large population of over 5mllion people and growing. Traffic would be a major problem a result of this, there would be a large amount of congestion on the Singapore roads , which would be a hassle to travel around and would consume a lot more petrol and pollute the planet, it would also be much for faster to use public transport.

Certain Competitors in the car rental industry may also be a factor if they introduce something new that other companies don’t have will affect the market, A company may decide to lower their prices significantly which will make other companies lower their prices to stay competitive.

Car dealers may lower the price of their cars they are selling this may lead to people actually being able to afford buying their own car instead of renting a car.

“According to the World Bank “Doing Business 2010 Report,” Singapore economy is considered to be the easiest to do business in. in. In fact, Singapore has been awarded the most competitive country in Asia. Some favorable findings about Singapore stated in the report:
>Ranked No.1 for having the most open and liberal economy for international trade
>Ranked No.2 as the economy with the best investment potential
>Ranked #1 in Asia and #4 in the world for having low levels of corruption in the economy” Economy Watch 2011, world economy, Singapore economy, http://www.economywatch.com/world_economy/singapore viewed 6th April 2011.
Going by this reference Singapore being a country highly regarded for its Business sector, that it is the most open economy for international trade and has the second best investment potential. Which leads to more overseas investors and Business travelers coming over to Singapore for a short period of time and they are most likely going to use a car rental service this will give the industry a boost and give’s Avis a chance to gain more customers. Another impact this may have on the car rental industry will make it more competitive and will make companies target these Business travelers more.

Reference List

Henry W. L. Ho, 2010, Case Study 1 Avis car rental in Singapore: have they really tried harder, Marketing Cases In The Asia-Pacific Region. John Wiley & Sons Australia,10/2010.

Elliot, G, Rundle-Thiele, S, Waller, D, 2010 Marketing, John Wiley & Sons Australia, Ltd 42 McDougall Street, Milton Qld 4064

Avis 2011, Avis services, viewed 4th April, http://www.avis.com.sg/avis_services.php
Avis 2011, viewed 4th April , http://www.avis.com.sg

Comfort Delgro Car Rental, viewed 5th April 2011, http://www.cdgrentacar.com.sg/index.aspx

Economy Watch 2011, world economy, Singapore economy, http://www.economywatch.com/world_economy/singapore viewed 6th April 2011.

Petrol watch, price history, 2011, http://www.petrolwatch.com.sg/price-history/ viewed 11th April 2011

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