Universal Rental Car Case Study

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Describe the pricing strategy you used during Scenario C of the Simulation Exercise. During scenario C, my strategy was focused on two main goals: 1. Increasing net profits and 2. Maximize capacity utilization consistently to 100% every month. Increase monthly net profits goal was achieve by strategically increase the rental price in cities with high demand and growing market share. Orlando was the city with highest growing demand by volume. Demand for rental cars grew from 1.51M to 2.55M during that fiscal year. I took advantage of this high demand to gradually increase the price for rentals from $41 to $69 during weekdays and from $34 to $60 during the weekends. By the end of the fiscal year, net profits in Orlando grew from 9.2M (initial fiscal year) to 21.1M in September. I…show more content…
That was the first issue to address during this simulation. It was fundament to increase utilization capacity on the weekends, once reached 100% utilization capacity, pricing strategy was key to maintain the balance. What did you think the competition was doing? Universal Rental Car (URC) competitors are increasing market share. They have taken 71.5% of the market vs. 28.5% UCR’s market share. However, the competitor’s monthly net profit was considerably less than URC’s monthly net profit; 24M vs. 36.1M. Clearly, the competitor strategy is based in offer lower prices to increase its market share. Therefore, increase its net profits by volume of sales. I based my assumptions in the facts that competitor’s prices are decreasing on the weekday in the three cities and it have remain steady on weekend in Tampa and Miami and slightly decrease in Orlando. Beside its lower price strategy, Universal’s competitor should be inventing in marketing campaigns to increase brand awareness such us airport advertising, e-advertising, and writing

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