Avis: Still Trying Harder!|Business Strategy|Case Study|Case Studies

Avis: Still Trying Harder!

            
 
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Case Details:

Case Code : BSTR048
Case Length : 15 Pages
Period : 1999 - 2003
Organization : Avis
Pub Date : 2003
Teaching Note :Not Available
Countries : USA
Industry : Car rental

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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Background Note

Avis was established as Avis Airlines Rent-a-Car System by Captain Warren E Avis (Warren), a former pilot and World War II veteran, in 1946, in Detroit, US. Warren, who traveled very frequently from one city to another, noticed that there was no efficient means of transport from airports to cities.

This inspired him to start a car rental company that catered to those people who wanted to rent their own vehicles as soon as they flew into a city. Although Hertz was already offering a transportation service, its branches were located in the city, not at airports. Founded with an investment of $ 85000, the company began operations with a fleet of just three cars at the Willow Run Airport in Detroit. The company was the world's first car rental operation located inside an airport. Within two years, the business was doing very well, and Warren opened a number of outlets in various business areas of the city and also one at Miami airport. Later it was decided to drop the word 'Airline' from the company's name. By 1953, Warren had launched franchise operations of Avis in Europe, Canada and Mexico.

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From the 1950s onwards, Avis changed hands many times as it was repeatedly sold and bought by a number of companies. In 1954, Warren sold the company to a Boston (Massachusetts) based financier and the owner of U-Drivit Corporation (a car rental company), Richard S. Robie (Robie), for $ 8 million.

Subsequently, Robie opened a number of outlets throughout the US and introduced the innovative concept of a nationwide one-way car rental system. In this system, customers could rent a car at one place and leave it at their destination instead of returning the vehicle to the shop. By the late 1950s, the company had opened 185 branches throughout the US and 10 branches in Canada. In addition, the company entered into alliances with other car rental companies in England, Ireland, France, Germany, Switzerland and Scotland. Avis was the first car rental company to introduce the concept of renting cars on a credit basis (late 1950's). By 1956, Avis' fleet had expanded to 1200 cars and the company had recorded a turnover of $ 4 million...

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