Macro And Micro Analysis Of SiXT car rental

Executive Summary

The study was conducted on SiXT car rental company in the. The basic idea of the study was to analyze the internal and external market audit. The study was to know the current situation of the company and how is it running, and what are main factor that drove this company to success.

PESTLE and TOWS were used to find the major strength, weakness, and other aspects of business.

 Macro Analysis of SiXT:

PESTLE analysis for Car Rental

 PESTLE analysis is a tools used by marketers in order to analyze the micro and macro environmental factor that make an impact on an organization. PESTLE stands for Political Economic Social Technology Legal and Environment.

Political

     Political factors includes laws, regulations, security, others that impact the car rental industry. Political trouble will directly affect the business linked with tourism. Tourist mostly do not bring their vehicle along with them so they mostly rely on renting/hire a car to take them around. Changes in tax, law, others play a major role in determining the profit generated by the organization. They should meet the employment and vehicle standards to operate. The foreign policies will also be critical for deciding the success rate for car rental industry.

Economic

   Economic factors play an important role in determining profitability of an organization as interest rate, inflation rate, economic growth rate, growth in disposable income, others play a key determining factor in car rental business. In car rental business decline in economy means decline of luxury and leisure time, is linked directly with vehicle renting. It will have a hard time meeting the competitive prices during an economic downturn. Resulting in sales volume and decreasing fee generation. It may even be highly effected as fuel prices, exchange rates, environment regulation, others all have a negative impact.

Social

 Social factor includes education, impression of work, population sex distribution career, imported goods and service, lifestyle and others. People who drive nice cars are thought to be wealthy among people and is thought to have higher living standard, income, others. So people most of them try to drive better cars as the hiring luxurious cars has increased over the years

Technology

Technology refers to research & development, technology, communication infrastructure, access to newest technology, Internet infrastructure and penetration. Customers these days are demanding broader and faster way to access information. Technological advancement could an edge to the industry, as it allows information to be viewed from the world.

Legal

 Legal factor includes trust laws, copyright, patents, consumer protection, employment law, data protection, others affecting the car rental industry. Car rental companies will be under copyright laws by the car dealers which may force them use most the cars under a same brand and give less priority to cars of other brands. They must also ensure the cars safety before they rent the car protect the customer information.

Environment

Environmental factors refers to the physical and geographic conditions affecting to use the vehicles. It involves infrastructures such as driving roads, desert, road and etc. People going to places where there are very harsh road will need jeeps having 4 wheel drive whereas people travelling on highway will need fast and fuel efficient cars.

Micro Analysis of SiXT

Suppliers

 Suppliers refers to the organization which gives the product to an organization they mostly known as wholesalers. They sell their in bulk with a very low profit margin. Car rental companies buy cars in a huge amount in order to meet their demand. There could be a serious issue if the suppliers aren’t able to supply cars to the car rental companies in time.

Customers

   Customers are known as the final consumer of commodity. It is not necessary for the customer to be a consumer, they might have purchased it from someone else to consume. Car rental services majority of the customer are tourists, people with having car repairs done, etc.

Competitors

 Competitors refers to the rival group which they are trying to overtake one another. Competition is very common in people where they are providing / selling service which are similar to each other. As for sixt being a car rental company

TOWS

 TOWS is tool used by marketers similar to SWOT the only difference between them is that threats opportunities weakness are analyzed before strength.

TOWS Strategic Alternatives Matrix

	External Opportunities (O) 1.Collaboration with Agencies 2.Huge recall of vehicles 3.	External Threats (T) 1.Political Instability 2.Tax Changes 3.Change in Rules 4.
Internal Strengths (S) 1.Good Service 2.Competative Price 3.24/7 Available 4.	SO Strategies that use strengths to maximize opportunities.	ST Strategies that use strengths to minimize threats.
Internal Weaknesses (W) 1.Huge Debts 2.Lack of Organization 3. 4.	WO Strategies that minimize weaknesses by taking advantage of opportunities.	WT Strategies that minimize weaknesses and avoid threats.

SO (Strength Opportunities) - Sixt car rental has been in the market for a long time. They are well known car rental companies throughout the world. The customers has been well satisfied and reasonably prices in comparison to other rental companies. They can increase their share in the market as the rental industry is expected to boom in the coming years.

ST (Strength Threats)- They been in the rental industry for a long time , also having a high number of loyal customers. It can start a campaign to be known as reliable car rental company. As it has set a number of branches all over the world, having branches all over the world encourages customer to trust more.

WO(Weakness Opportunities)- Car rental companies has been under a huge debt as the cars that they buy are mostly bought under finance companies. If anything goes wrong in the marketing area the debt will be huge burden for the company. As the car rental industries is expected to boom, it can start an adverting campaign to attract more customers.

WT(Weakness Threats)-  Threats are usually a huge problem for every company as it could lead to closure of any company. Car rental companies are usually prone to closure due to huge debts for buying cars with finances. They must be quick enough to replace the old cars before depreciation goes down to a point where it might be difficult to sell the cars.

Threats

 The companies has a huge amount of capital as they buy vehicle in bulk mostly are purchased through financing companies. The expense that is huge is the vehicles depreciation combined all will be quite a huge expense. It will have to replace the old cars with new ones at a right time. If economic recession takes place soon then it might be hard for them to run properly as the interest rate may skyrocket depending on the economic situation.

Opportunities

 It could collaborate with a car manufacturer and use the only brand which could help enhance company get better car at lower price rates and even perhaps with better finances at lower rates. It can help associate the local and international travel agencies to encourage the travelers to use their cars, giving them to increase their transaction, profitability, publicity and etc.

Weakness

 The market is very competitive on the current state. There are a number of competitors such as avis, europcar, hertz, others have made it difficult to make profits good enough. Manufacturing of strong cars, as most of them rent a car when their cars break down or is given for servicing, repairs. Political instability which may contribute for lesser tourist visits.

Strength

 Sixt is over a century year old is highly recognized Brand around the globe in car rental business. It has branches in the country giving people a reliable access from anywhere and has nationwide expansion. It connected with respected travel companies like Expedia, Travelocity, Orbitz, others including other offline travel agencies.

Critical Success Factor

   Sixt has had a very good management from the day of opening, the employees has been extensive training program from the site or one –to one training centers. The training programs is also accessible for the employees through the internet. Maintained a very strong base line with loyal customers from around the globe. Sixt has provided very innovative series for car reservation and rental transaction at affordable prices. The call centers are available 24/7 making the company reliable at any time of the day. It has partnered with 90 of the popular airlines so that the loyalty program can reach even wider places. The interactive website makes booking possible for under 30 sec making it faster easier for the customers.

Reference:

References

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Ekomi.co.uk, (2014). Sixt rent a car customer reviews - Rating: 3.7 from 6605 customer reviews and experiences for sixt.com. [online] Available at: https://www.ekomi.co.uk/review-sixt-rent-a-car-llc.html [Accessed 3 Aug. 2014].

Small Business - Chron.com, (2014). Difference Between SWOT & TOWS Analysis. [online] Available at: http://smallbusiness.chron.com/difference-between-swot-tows-analysis-23169.html [Accessed 3 Aug. 2014].

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