Business Strategy-Car Rental Industry

589 Words3 Pages
Article Summary Hertz Global Holdings, a large rental car company, has reached an agreement to acquire Dollar Thrifty Automotive Group. After pursuing the acquisition for several years, the company is preparing to enter into a deal that will facilitate the purchase of Dollar Thrifty Automotive Group which is one there competitors in the rental car industry. Despite anti-trust concerns and rejections to previous offers the firm made to Dollar Thrifty, the company has overcome these obstacles and reached an agreement. Hertz Global Holdings is now set to acquire Dollar Thrifty for the sum of $2.3 billion dollars. The acquisition of Dollar Thrifty represents a strategic action for Hertz because of the position it will give them in the industry in which they compete. The completion of the deal will essentially give the firm control of approximately 25% of the rental car market by putting them in control of three of the nine major rental car brands. The deal will also make the firm the second-largest car rental firm in the nation. By integrating some of their resources and capabilities, Hertz is attempting to enhance their market power, exercise their core competencies, and create value by embarking on this horizontal acquisition. Hertz Global Holdings’ management views the acquisition as the best strategic option for both companies. The firm believes that the deal grants them the ability to be more competitive in the global market with a larger range of rental options. There is also an expectation that Dollar Thrifty’s strong international presence will give the firm a competitive advantage not only in the United States, but in Europe and other markets as well. The firm expects to cut its costs by scaling operations to focus on more retail outlets which will allow them to compete with other major players in the industry as well as provide the resources that are

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