Olympic Car Rental

Olympic Car Rental
Case Discussion
Group – 2
Ekadsha Sharma 18DM065
G Anirudh Raghav 18DM069
Madhav Raj Prakash 18DM108
Ankit Trivedi 18DM027
Bhavesh Agarwal 18DM047
Question 1
Analyse the car industry in the US, as presented in the

case
INDUSTRY OUTLOOK
12 $24Bn 50% $9.6Bn 2-3%

Car Rental players Matured Market Car rental market Business rentals at Entire industry
in the USA market size in the car share by revenue airport, 40% of growth rate
rental space owned by Enterprise entire industry
Car Rental
THE Industry: Analysis Continued
Car Dealers Suppliers
LEISURE Highly competitive environment
Insurance Providers
Maintenance & Servicing Medium 88% of market share controlled by
4 players
LOCAL
BUSINESS
AIRPORT
New Entrants Competition Substitutes

Low High High
Segments
Many Competitors Public transport

High Investment costs Shared / pooled vehicles
Low operating Costs Personal vehicles
Customers
High
Industry Analysis using
Porter’s 5 forces model
Question 2
Analyse the Olympic medalist reward program. What are

the issues facing Olympic?
Olympic Medalist Reward Program
• Olympic Medalist reward program was introduced in late 80”s after the release of National
Emerald’s Isle program and Hertz’s #1 Loyalty program
• Anyone could join he medliast program at no charge
• Members earned rewards by accumulating credits
• When a member earned 16 credits, he received an award of one free day
• Each day under the program equated to one credit, A rental day was 24 hrs starting at the time of
rental
• Finally, Credits could be redeemed for airline frequent flyer program and other rewards such as
rental car upgrades
The Medalist program had three tiers of membership
- Bronze: Member is credited as outlined above

- Silver : Moved to silver on renting 10 times or 16 rental days. Earns 15% bonus on credits and
are eligible upto 5 upgrades per year
- Gold: Moved to gold on renting 20 times or 30 rental days. Earns 25% bonus and is eligible for
10 upgrades per year
Issues facing Olympic
• Olympic charged the lowest among all the leading companies, hence the margins earnd
were very less
• Most of Olympics medallist members belong to other car rental loyalty programs
• Ambiguity over changing the reward program, since the company has always priced itself
low, they serve the customers who are value driven
• If not the loyalty program, should they look at improving the pick up and drop time?
• If Olympics moves towards the ‘Enterprise’ based loyalty program, would it result in an
increased market share or increased business or will it just lower the profitability
• If Olympics changes the medallist program, how much will it spend on advertising and
promotion
• And finally, the last and the most important challenge faced by the company is ‘How can
Olympic form a truly distinctive strategy so that it is unique from it’s competitors and cannot
be duplicated
Question 3
In your opinion what are the options for Olympic and

what should Olympic do ?
What must Olympic do:
• It’s is firstly important to note that main purpose of the medallist program is already defeated since most of it’s customers
use other ride sharing services as shown in Exhibit 5
• Olympics car rental must differentiate itself from it’s competitors in order to gain more market share and increase it’s
revenue
The following things are some suggestions that Olympics can implement :
1. Target business class renters and offer them Elite services:

• Enterprise has the lowest share of 20% market in the business travellers segment
• ‘Heavy Business Travellers’ pay $190 per trip and ‘Medium Business Travellers’ pay $57 per trip
• 20% of the Business travellers contribute to the 80% of the revenue of airport rentals
2. Move to a dollar based incentive program:
Tiers Members % Active Spend / Spending /

members rental day Member
Gold 210 37% 66 127
Silver 630 48% 98 188
Bronze 1460 58% 75 136
What must Olympic do:
2. Move to a dollar based incentive program:
• Silver members spend highest / day and spend highest / member
• So encourage and push more members to be a part of the silver tier
• Heavy business pay higher values / trip, moving to dollar based reward system will incentivize the customer to earn more
and additionally it will encourage him to spend more
3. Think of Acquisition and Related diversification :

• Olympic can network with some of the independent players to form a joint venture or through acquisition to increase the
customer base
• 58% of the business travellers book through online/ third party agencies as they are convenient and cost effective, So the
company can think of related diversification into online / third part agency.
• And finally, investing in smaller and independent companies with higher number of locations, will help Olympic to
increase its reach there by providing more convenience it’s customers
Question 4
What are the pros and cons of loyalty programs?

Pro’s and Con’s
Pro’s Cons
• Customer Retention • Market Saturation

• Relevant Customer • Past Customer Profitability
Data and Consumer Doesn’t Always Guarantee
Trends Future Profitability
• Higher Cart Value • Limitations of Loyalty Data
• Reducing Unprofitable • Balancing the Bottom Line
Customers • Difficulty in Pinpointing
• Better Customer Where Loyal Behavior
Actually Comes From
Communication
THANK YOU!

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Olympic Car Rental

Analyse the car industry in the US, as presented in the

12 $24Bn 50% $9.6Bn 2-3%

New Entrants Competition Substitutes

Many Competitors Public transport

Analyse the Olympic medalist reward program. What are

- Bronze: Member is credited as outlined above

In your opinion what are the options for Olympic and

1. Target business class renters and offer them Elite services:

2. Move to a dollar based incentive program:

Tiers Members % Active Spend / Spending /

3. Think of Acquisition and Related diversification :

What are the pros and cons of loyalty programs?

• Customer Retention • Market Saturation

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