A slowing down economy generally is followed by a slow down of necessary travel related services needed by travelers. As soon as this slowdown became apparent and unavoidable, these companies became proactive, thus keeping their losses at a minimum and their business healthy in the coming lean times. These good sound business decisions help make these companies emerge as leaders in the travel industry. These proactive steps placed them in front of the often devastating effects of bad economies and serve as an excellent model for other businesses to learn from for their own survival.
First, they decided to sell down their fleets, reducing them down to just the most in demand vehicles and those that they were sure they could rent. This put them in a better financial standing providing them with more capital but it also accomplished something else, it gave them leverage with the public allowing the demand on their vehicles to go up which in turn allowed them to charge more per rental. With fewer vehicles sitting idol they were able to increase their overall profit per vehicle and this helped improve their overall business.
The second successful step was to close all non or poor performing locations within the system and created a leaner better performing location to meet the increasing demands. This also put a higher demand on the available vehicles which equated to pricier rental rates. This also created more demands for healthier competitive prices withing the industry as a whole, which is very good for business and lessens the negative impacts of a slow down in the economy.
Finally, they made the decision to hang onto their reliable vehicles longer and this is helping them to decrease their overhead which was being spent on replacing vehicles and since a vehicle's life is truly more than 30,000 miles they have been able to maintain the same fleet of vehicles by servicing them well and hanging onto them longer. This has greatly reduced their overhead.
The results of these good sound forward thinking decisions are something to learn from. While those businesses that are riding out the uncertain waves of bad decisions are desperately slashing prices to stay afloat or have already sunk. These wise business decision makers would be excellent choices for national leadership. Unless the current leaders suddenly took an interest in some very creative ways to put the nation's financial interests back on track before it derails with total disaster.
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Posted under Cars
This post was written by Jason Hall on October 13, 2010
