current Key Performance Indicators (KPI)
Question 1
Even though the Olympics’ current Key Performance Indicators (KPI) are fundamentally healthy, the recent developments in the industry would logically persuade the company to react to the changes and protect its market niche. Failure to act by changing its program has the potential of ceding more ground to the onslaught emanating from the competitors, especially Enterprise. As Andy rightly puts it, it needs to act immediately. Though it has been adopting the plan to follow Hertz’s #1 Club Plan as dynamic leaders in the business travelers, it needs to ensure that the car rental segment that appears to be the future in the industry attracts attention and corresponding investments. Competition and the change in the industrial dynamics, including the entry of new innovative plans by competitors, appear to be the most significant impediment to its future.
Question 2
Joining the Olympic Medalist program was free for all as nay member was allowed to participate at no cost. For the members (customers), the benefits included the earning of an award of one free day whenever they accumulated 16 credits implying that the process was simple enough to make the points. Further, the customers benefit in that they can remain with the credits earned for that particular program for one year since the day that they make the credits. Lastly, the customers could also redeem the credits earned for other programs such as Arline frequent flyer programs and rental car upgrade programs. Depending on how they accumulated the points, members were also able to move from bronze to silver and finally gold membership, all of which came with increased benefits. Hence, aside from the customers, the management, employees, and airport operators were assured of customer loyalty, which often translates to increased revenues and reduction of costs when it comes to advertising.
The program faced several weaknesses, including the fact that one had to undertake as many credits as 16 to earn a free rental day. It was also note so popular and known to the consumers compared to other programs. When it was first conceptualized, the entity intended to run it as a cost center, implying that it would earn costs without necessarily generating revenues.
Question 3
The unique thing about the strategy adopted by Enterprise is the fact that it resonates with the consumers in the car rentals market segment. Olympic ought to make its approach resonate with the consumers. Based on the discussion, it is quite clear that the company has done little to market its bonus system since its advertisement budget is dwarfed by the one that Enterprise has in promoting its strategy. Given the fact that Olympic ranks fourth below Enterprise, Avis, and Hertz, the most appropriate way to respond is to catch up. It should eliminate items such as the blackout dates and should consider the approach that the dollar spend equals to the points earned.
While it is accurate that the redemption rates for free days for Olympic as a vacation destination exceeds other locations, the loyal medalist customers would easily be persuaded to join the dollar spend, and that would ensure that the segment generates more revenues and regains market share. It should increase the $20 million allocated towards the advertisement to what Enterprise offers at $40 million since ads and investments in the industry are synonymous with the returns generated. The potential impact of removing the blackout dates includes the disappointment and further loss of the members, especially those that are ascribed to the loyal medalist plan. However, costs would gradually be covered by the revenues generated from the other segments that appear more promising and fruitful, as demonstrated by Enterprise.