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In today’s competitive world shorter product life cycles, customers rapid demands and quickly changing business environment is putting lot of pressures on manufacturers for quicker response and shorter cycle times. Now the manufacturers put pressures on their suppliers. One way to ensure quick turnaround is by holding inventory, but inventory costs can easily become prohibitive. A wiser approach is to make your production agile, able to adapt to changing customer demands. This can only be done by JUST IN TIME (JIT) philosophy.

Taiichi Ohno, a former shop manager and eventually vice president of Toyota Motor Company, is the individual credited most for the with the development of just-in-time. It is a term used to describe the Toyota production system, is widely recognized today as the one of the most efficient manufacturing system in the world. In simple words we can explain JIT only required necessary units be provided in necessary quantities at necessary times. Producing one unit extra is as bad is being one unit short. Completing one day early is as bad as finishing one day late. Items are supplied “just-in-time”. Ohno describes the development of JIT as

*By actually trying, various problems become known. As much problems become gradually clear, they taught me the direction of the next move. I think that we can only understand how all of these pieces fit together in hindsight.

The concept is very simple, if you produce only what you need when you need it, then there is no room of error. JIT has truly changed the face of manufacturing and transformed the global economy. JIT is both a philosophy and collection of management methods and techniques used to eliminate waste (particularly inventory). In JIT workers are multifunctional and are required to perform different tasks. Machines are also multifunction and are arranged in small U-shaped work cells that enable parts to processed in a continuous flow through the cell. Workers produce pars one at a time within cells and transport those parts between cells in small lots. Environment is kept clean and free of waste so that any unusual occurrence are visible. Schedules are prepared only for the final assembly line, in which several different models are assembled at the same line. Requirements for the component parts and subassemblies are then pulled through the system. The “PULL” element of JIT will not work unless production is uniform and lot sizes are low. Pull system is also used to order material from suppliers (fewer in numbers usually). They make be requested to make multiple deliveries of the same item in the same day, so the manufacturing system must be flexible.

Just-in-time inventory is viewed as the waste of resources and considered as obstacle in improvement. As there is little buffer inventory between the workstations, so the quality must be high and efforts are made to prevent machine breakdowns. When all these things are taken into consideration, system produces high-quality goods, quickly and at low cost. This system is also being able to respond to changes in customer demands. These elements of JIT can also be applied to the almost any operation, including service operations.*K.Suzuki, The Manufacturing Challenge(New York: Free Press, 1985), p250

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Source by Ali Abbas

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2011 Toyota Sequoia

For one of the most reliable manufacturer names in the industry, style and class, and a great safety packed SUV, the 2011 Toyota Sequoia is a great choice for all consumers looking for a top of the line SUV today. Although it is a little on the pricier end, with the base model coming in at $ 40,030, it is well worth it if you want a quality and powerful SUV. It features a massive interior space with roomy seating, even in the third row seats, an extremely quiet and smooth ride on the highway, offers quick acceleration, and offers a high towing capacity.

The SR5 base model offers a powerful 4.6 liter, V8 engine, with an automatic transmission. Although not the best in gas mileage, getting 14 miles per gallon in the city and 20 miles per gallon on the highway, it is still comparable with other SUVs as far as gas mileage. It features Bluetooth wireless technologies, a 4 wheel drive, iPod input connections, satellite radio, side and curtain airbags, a navigation system, stability and Traction control, and fold-down third row seats. So, although it is at a high price range, the features on the inside are luxurious features, and the safety features are at the top of the industry standards.

There are several prices for the 2011 Toyota Sequoia starting with the base, and going all the way up to the Platinum FFV model, with a price tag of $ 60,405. This model offers a much more powerful engine at 5.7 liters, V8 flex-fuel engine, with an automatic transmission. It also adds in a DVD player, leather interior seats, additional cargo space, all-season tires, touch-screen navigation system, heated and adjustable front seats, automatic transmission, and all the interior class you can imagine. So if you want luxury, class, style, and most importantly optimal safety for you and your family, the Platinum FFV may come at a cost, but you will not be sorry about the purchase. Not only that, it offers a great re-sale value on the market as well.

With a more powerful 310 horsepower engine than its previous 2010 model, additional safety features added in, the ability to reach 60 miles per hour in 6.7 seconds, which is comparable to a sedan style car, the 2011 Toyota Sequoia will not disappoint consumers; either in style, interior luxury and the roomiest interior seating, style, the safest and smoothest ride available, and the ever trusted Toyota named backing up its performance features. So, when considering your next new SUV purchase, the 2011 Toyota Sequoia should be a great contender for any consumer searching for a new SUV, especially if you want luxury features, for much less than most luxury SUVs (Lexus, BMW, or Mercedes) today; and still, you get the luxury features those vehicles offer.

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Source by Todd Rip

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Supply Chain Management (SCM) as defined by Tom McGuffog is “Maximising added value and reducing total cost across the entire trading process through focusing on speed and certainty of response to the market.” Due to globalization and ICT, SCM has become a tool for companies to compete effectively either at a local level or at a global scale. SCM has become a necessity especially for manufacturing industry when it comes to deliver products at a competitive cost and at a higher quality than their competitors. Here are some of the reason SCM has become important to today’s manufacturing industry:-

Competitive Edge through Core Competencies

Today’s business climate has rapidly changed and has become more competitive as ever in nature. Businesses now not only need to operate at a lower cost to compete, it must also develop its own core competencies to distinguish itself from competitors and stand out in the market. In creating the competitive edge, companies need to divert its resources to focus on what they do best and outsource the process and task that is not important to the overall objective of the company. SCM has allowed company to rethink their entire operation and restructure it so that they can focus on its core competencies and outsource processes that are not within the core competencies of the company. Due to the current competitive market, it is the only way for a company to survive. The strategy on applying SCM will not only impact their market positioning but also strategic decision on choosing the right partners, resources and manpower. By focusing on core competencies also will allow the company to create niches and specialization of core areas. As stated in the Blue Ocean Strategy outlined by Chan Kim, in order to create a niche for competitive advantage, companies must look at the big picture of the whole process, and figuring out which process can be reduce, eliminate, raise and create.

As an example stated by Chan Kim, the Japanese automotive industries capitalise on its resources to build small and efficient cars. The Japanese automotive industries gain competitive edge by utilising their supply chain to maximise their core competencies and position itself in a niche market. The strategy works and now Toyota Motor Corporation, a Japanese company, is considered to be the number one auto car maker in the world beating Ford and General Motors of the United States.

Value Advantage

SCM has allowed business nowadays to not just have productivity advantage alone but also on value advantage. As Martin Christopher in his book, Logistics and Supply Chain Management: Strategies for Reducing Cost and Improving Service’ states, ‘Productivity advantage gives a lower cost profile and the value advantage gives the product or offering a differential ‘plus’ over competitive offerings.’ Through maximizing added value and also reduce the cost in the same time, more innovation can be added to the product and process. Mass manufacturing offers productivity advantage but through effective supply chain management, mass customization can be achieved. With mass customization, customers are given the value advantage through flexible manufacturing and customized adaptation. Product life cycles also can be improved through effective use of SCM. Value advantage also changes the norm of traditional offerings that is ‘one-size-fits-all.’ Through SCM, the more accepted offerings by the industry to the consumers would be a variety of products catered to different market segments and customers preferences.

As an example, the Toyota Production System practiced in Toyota, evaluates its supply chain and determines what is value added activities and what is not value added activities. Non added value activities are considered to be ‘Muda’ or waste and therefore must be eliminated. Such non added value activities are overproduction, waiting, unnecessary transport, over processing, excess inventory, unnecessary movement, defects and unused employee creativity. The steps taken to eliminate waste are through Kaizen, Kanban, Just-in-time and also push-pull production to meet actual customer’s demands. The Toyota Production System revolutionise the Supply Chain Management towards becoming a leaner supply chain system that is more agile and flexible towards meeting the end users demands.

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Source by Razamith Sovereign

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Todays sophisticated European engines produce higher horsepower densities per cubic inch and subject the engines oil to severe operational conditions. Throw in all the emissions control equipment on these cars and the oils used must demonstrate exceptional anti-wear performance and meet the strict formulation requirements needed to meet the most current European motor oil specifications.

Those specifications at this writing are VW 504/00/507.00, VW, 502, 505 and 505.01, BMW LL-04, Porsche C-30, ACEA C-3, ACEA A3-B3/B4, Mercedes Benz 229.31 and 229.51 etc. Since most European car makers specify oil change intervals that are considerable longer than those of U.S car makers, oils meeting these specifications need to demonstrate excellent high temperature/high shear performance (HT/HS) to maintain viscosity and provide adequate engine protection.

In addition, turbocharged direct injection (TDI) engines are common in European vehicles. Motor oils used in these applications must be very thermally stable to handle the high operating temperatures and resist deposit formation while providing adequate turbocharger cooling. Thermally stable oils help keep oil passages clean and promote fluid circulation so turbocharger bearings stay cool and lubricated

Because of the sophisticated and extremely efficient pollution control equipment used on European vehicles, almost all European car makers require oil used in these applications to be formulated with lower amounts of sulphated ash, phosphorous and sulfur. (SAPS) SAPS is a commonly used anti-wear additive in motor oils.

The problem is that oils with excessive sulphated ash, phosphorus and sulfur (SAPS) can harm modern exhaust treatment devices. Diesel particulate filters (DPF’s), for example, require low-SAPS motor oil to help prevent filter plugging. This is why using motor oil that does not meet the correct specification can cause engine problems and that annoying check engine light to come on!

Because SAPS additives provide a high degree of wear protection, its reduction has caused some motor oil formulators considerable difficulty in producing a engine oil that both provides outstanding protection and meets the car makers requirements for use with their engine advanced pollution control equipment. The most ideal motor oil for European engine is high grade synthetic oils engineered for the above specifications. Synthetic oils have very low pour points protecting the engine from oil starvation and providing immediate oil pressure when the outside temperature is low while its thermal stability withstands high-temperature/high-RPM breakdown to resist deposit formations that starve TDI systems of lubrication.

This is why some of the biggest names in European cars such as Mercedes and Porsche are factory filled with synthetic oil and many require the use of synthetic oil to maintain the cars warrantee.

Amsoil Inc. introduced the first American Petroleum institute rated motor oil in 1972. Today Amsoil is considered the world leader in high grade synthetic lubrication and offers synthetic motor oils specifically engineered for the most demanding European car applications.

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Source by Larry Crider

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What is the Dealer mark up on a used RV?

The typical dealer mark up on a used RV is 30 to 45% above wholesale RV invoice price. With extremes at 10 to 60%. The Manufacture’s suggested retail price is generally 30-40%, but most RV dealers are free to sell the RV for a price that they can get the most for it. High volume RV dealers typically sell more RVs at lower margins. Smaller volume rv dealers may sell less but expect more profit on each unit.

What is the wholesale invoice price amount? This is the price that the dealer paid for the motor home. Most dealers will not let you see this price up front. A few will. Even though they have list prices of 30 to 50% above RV wholesale invoice, most dealers like to make at least a 30% margin on their inventory. You should always be able to talk them to at least 30% over wholesale invoice. If I can buy a car for $500 over the wholesale invoice, can’t I do the same think with a motorhome? To stay in business a dealership would have to sell for a minimum of 10-20%. RVs are much more expensive then cars and require more overhead.

Are their any other advantages to being a high volume dealer? Yes being a high volume dealer also allows you to get manufacturers rebates from $50 to 15% cash back from the manufacture. This depends on how aggressively the manufacturer is working to promote products or increase market share.

What amount should I offer the RV dealer and how do you calculate this amount? If you know the rv wholesale pricing or invoice amount (the amount the dealer paid) for the motorhome, in a competitive market just add 15 to 20% to the wholesale amount to make your offer. If you don’t know the wholesale amount, here is a good way to estimate it: 1) Divide the SRP(suggested retail price) by 1.4. (This Assumes the average a 40% mark up) ex. List price 140,000/1.4 is equal to 100,000 wholesale invoice price. 2) Add a 30% mark up to the invoice price to bring it to $130,000 this an offer that a dealer will almost never refuse. 3) If you are a bargain shopper or feel that the dealer is in a pinch or in a competitive market offer of invoice plus a 20% mark up =$120,000 4) Probably the best deal you will find on the current years model is a 10% mark up for $110,000 above the wholesale RV invoice. Most dealers won’t accept this though.

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Source by Spencer Arnold

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Lots of people turn to cars under $1000 bucks looking save a buck or two. Here is a quick guide on how to make some cash (that you can use to buy more rusty boxes on wheels of course)

Plain and simple part cars out.

Step 1. Buy a car. This is pretty much the most crucial step. If you are actually doing this to make money and not just salvaging that blown up buick sitting in your driveway than you need to find a car that people want to buy parts for. eBay is pretty much your friend here and my suggested avenue for selling most parts. In the past I have watched people make money from a variety of cars (my roommate used to finance his workshop with parted out cars) One in particular was a 1994 Honda Accord. Thats right you don’t need to buy a 1939 Alfa Romeo (although that would be sweet) or anything super rare to get good money for parts.

Often times finding a car that is pretty common can be a good thing but be sure to check eBay for the prices certain parts are going for before hand and let that be your guide in making your purchase. Now when it comes to buying the car usually the ones that don’t run will be your best deals and you may even get a freebie if your lucky. (few people want dead cars in their driveway) Obviously the less you pay the more you profit.

Step 2. Tear it apart. The key here is research and time management. Everybody wants to pull the engine and trans etc., but often times it may not even be worth it. Check out eBay or where ever you plan on selling and ask yourself is what these parts are selling for worth my time? Would I actually want to crate and ship this? Is anybody actually bidding on this crap? All good questions that need answers. Honestly it tends to be the nickel and dime parts that can really make you some money. Shifters, speedometers, sensors, mirrors, sun-visors, etc. these parts take seconds to remove and if they are in good shape people are often willing to pay a pretty penny for them, because the only other option for parts like these tends to be the dealers who charge an arm and a leg.

Step 3. Sell The Parts. Once you have determined what you want to sell and pulled the stuff off its time to start selling. I like eBay but swap meets, forums, and other sources may work better for you. If you have done your research you know where to find the people who see value in the parts you have pulled.

Step 4. Scrap the rest. Always factor in that you can prolly get $100-$300 bucks for the rest of the pile at the scrap yard. Usually you will want to haul it there yourself and will probably need to pull the tires and gas tank. I would even consider it a good rule of thumb to try and not pay more for the car than you can scrap it for. This helps you avoid any kind of loss.

And there you have it. Four easy steps to make some quick money and make your neighbors hate you.

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Source by Brian Ostrowiak

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Market Overview

The car rental industry is a multi-billion dollar sector of the US economy. The US segment of the industry averages about $18.5 billion in revenue a year. Today, there are approximately 1.9 million rental vehicles that service the US segment of the market. In addition, there are many rental agencies besides the industry leaders that subdivide the total revenue, namely Dollar Thrifty, Budget and Vanguard. Unlike other mature service industries, the rental car industry is highly consolidated which naturally puts potential new comers at a cost-disadvantage since they face high input costs with reduced possibility of economies of scale. Moreover, most of the profit is generated by a few firms including Enterprise, Hertz and Avis. For the fiscal year of 2004, Enterprise generated $7.4 billion in total revenue. Hertz came in second position with about $5.2 billion and Avis with $2.97 in revenue.

Level of Integration

The rental car industry faces a completely different environment than it did five years ago. According to Business Travel News, vehicles are being rented until they have accumulated 20,000 to 30,000 miles until they are relegated to the used car industry whereas the turn-around mileage was 12,000 to 15,000 miles five years ago. Because of slow industry growth and narrow profit margin, there is no imminent threat to backward integration within the industry. In fact, among the industry players only Hertz is vertically integrated through Ford.

Scope of Competition

There are many factors that shape the competitive landscape of the car rental industry. Competition comes from two main sources throughout the chain. On the vacation consumer’s end of the spectrum, competition is fierce not only because the market is saturated and well guarded by industry leader Enterprise, but competitors operate at a cost disadvantage along with smaller market shares since Enterprise has established a network of dealers over 90 percent the leisure segment. On the corporate segment, on the other hand, competition is very strong at the airports since that segment is under tight supervision by Hertz. Because the industry underwent a massive economic downfall in recent years, it has upgraded the scale of competition within most of the companies that survived. Competitively speaking, the rental car industry is a war-zone as most rental agencies including Enterprise, Hertz and Avis among the major players engage in a battle of the fittest.

Growth

Over the past five years, most firms have been working towards enhancing their fleet sizes and increasing the level of profitability. Enterprise currently the company with the largest fleet in the US has added 75,000 vehicles to its fleet since 2002 which help increase its number of facilities to 170 at the airports. Hertz, on the other hand, has added 25,000 vehicles and broadened its international presence in 150 counties as opposed to 140 in 2002. In addition, Avis has increased its fleet from 210,000 in 2002 to 220,000 despite recent economic adversities. Over the years following the economic downturn, although most companies throughout the industry were struggling, Enterprise among the industry leaders had been growing steadily. For example, annual sales reached $6.3 in 2001, $6.5 in 2002, $6.9 in 2003 and $7.4 billion in 2004 which translated into a growth rate of 7.2 percent a year for the past four years. Since 2002, the industry has started to regain its footing in the sector as overall sales grew from $17.9 billion to $18.2 billion in 2003. According to industry analysts, the better days of the rental car industry have yet to come. Over the course of the next several years, the industry is expected to experience accelerated growth valued at $20.89 billion each year following 2008 “which equates to a CAGR of 2.7 % [increase] in the 2003-2008 period.”

Distribution

Over the past few years the rental car industry has made a great deal of progress to facilitate it distribution processes. Today, there are approximately 19,000 rental locations yielding about 1.9 million rental cars in the US. Because of the increasingly abundant number of car rental locations in the US, strategic and tactical approaches are taken into account in order to insure proper distribution throughout the industry. Distribution takes place within two interrelated segments. On the corporate market, the cars are distributed to airports and hotel surroundings. On the leisure segment, on the other hand, cars are distributed to agency owned facilities that are conveniently located within most major roads and metropolitan areas.

In the past, managers of rental car companies used to rely on gut-feelings or intuitive guesses to make decisions about how many cars to have in a particular fleet or the utilization level and performance standards of keeping certain cars in one fleet. With that methodology, it was very difficult to maintain a level of balance that would satisfy consumer demand and the desired level of profitability. The distribution process is fairly simple throughout the industry. To begin with, managers must determine the number of cars that must be on inventory on a daily basis. Because a very noticeable problem arises when too many or not enough cars are available, most car rental companies including Hertz, Enterprise and Avis, use a “pool” which is a group of independent rental facilities that share a fleet of vehicles. Basically, with the pools in place, rental locations operate more efficiently since they reduce the risk of low inventory if not eliminate rental car shortages.

Market Segmentation

Most companies throughout the chain make a profit based of the type of cars that are rented. The rental cars are categorized into economy, compact, intermediate, premium and luxury. Among the five categories, the economy sector yields the most profit. For instance, the economy segment by itself is responsible for 37.7 percent of the total market revenue in 2004. In addition, the compact segment accounted for 32.3 percent of overall revenue. The rest of the other categories covers the remaining 30 percent for the US segment.

Historical Levels of Profitability

The overall profitability of the car rental industry has been shrinking in recent years. Over the past five years, the industry has been struggling just like the rest of the travel industry. In fact, between the years 2001 and 2003 the US market has experienced a moderate reduction in the level of profitability. Specifically, revenue fell from $19.4 billion in 2000 to $18.2 billion in 2001. Subsequently, the overall industry revenue eroded further to $17.9 billion in 2002; an amount that is minimally higher than $17.7 billion which is the overall revenue for the year 1999. In 2003, the industry experienced a barely noticeable increase which brought profit to $18.2 billion. As a result of the economic downturn in recent years, some of the smaller players that were highly dependent on the airline industry have done a great deal of strategy realignments as a way of preparing their companies to cope with eventual economic adversities that may surround the industry. For the year 2004, on the other hand, the economic situation of most firms have gradually improved throughout the industry since most rental agencies have returned far greater profits relative to the anterior years. For instance, Enterprise realized revenues of $7.4 billion; Hertz returned revenues of $5.2 billion and Avis with $2.9 billion in revenue for the fiscal year of 2004. According to industry analysts, the rental car industry is expected to experience steady growth of 2.6 percent in revenue over the next several years which translates into an increase in profit.

Competitive Rivalry Among Sellers

There are many factors that drive competition within the car rental industry. Over the past few years, broadening fleet sizes and increasing profitability has been the focus of most companies within the car rental industry. Enterprise, Hertz and Avis among the leaders have been growing both in sales and fleet sizes. In addition, competition intensifies as firms are constantly trying to improve their current conditions and offer more to consumers. Enterprise has nearly doubled its fleet size since 1993 to approximately 600,000 cars today. Because the industry operates on such narrow profit margins, price competition is not a factor; however, most companies are actively involved in creating values and providing a range of amenities from technological gadgets to even free rental to satisfy customers. Hertz, for example, integrates its Never-Lost GPS system within its cars. Enterprise, on the other hand, uses sophisticated yield management software to manage its fleets.

Finally, Avis uses its OnStar and Skynet system to better serve the consumer base and offers free weekend rental if a customer rents a car for five consecutive days Moreover, the consumer base of the rental car industry has relatively low to no switching cost. Conversely, rental agencies face high fixed operating costs including property rental, insurance and maintenance. Consequently, rental agencies are sensitively pricing there rental cars just to recover operating costs and adequately meet their customers demands. Furthermore, because the industry experienced slow growth in recent years due to economic stagnation that resulted in a massive decline in both corporate travel and the leisure sector, most companies including the industry leaders are aggressively trying to reposition their firms by gradually lessening the dependency level on the airline industry and regaining their footing in the leisure competitive arena.

The Potential Entry of new Competitors

Entering the car rental industry puts new comers at a serious disadvantage. Over the past few years following the economic downturn of 2001, most major rental companies have started increasing their market shares in the vacation sector of the industry as a way of insuring stability and lowering the level of dependency between the airline and the car rental industry. While this trend has engendered long term success for the existing firms, it has heightened the competitive landscape for new comers. Because of the severity of competition, existing firms such as Enterprise, Hertz and Avis carefully monitor their competitive radars to anticipate Sharpe retaliatory strikes against new entrants. Another barrier to entry is created because of the saturation level of the industry.

For example, Enterprise has taken the first mover advantage with its 6000 facilities by saturating the leisure segment thereby placing not only high restrictions on the most common distribution channels, but also high resource requirements for new firms. Today, Enterprise has a rental location within 15 miles of 90 percent of the US population. Because of the network of dealers Enterprise has established around the nation, it has become relatively stable, more recession proof and most importantly, less reliant on the airline industry compared to its competitors. Hertz, on the other hand, is utilizing the full spectrum of its 7200 stores to secure its position in the marketplace. Basically, the emergence of most of the industry leaders into the leisure market not only drives rivalry, but also it varies directly with the level of complexity of entering the car rental industry.

The Threat of Substitute

There are many substitutes available for the car rental industry. From a technological standpoint, renting a car to go the distance for a meeting is a less attractive alternative as opposed to video conferencing, virtual teams and collaboration software with which a company can immediately setup a meeting with its employees from anywhere around the world at a cheaper cost. In addition, there are other alternatives including taking a cab which is a satisfactory substitute relative to quality and switching cost, but it may not be as attractively priced as a rental car for the course of a day or more. While public transportation is the most cost efficient of the alternatives, it is more costly in terms of the process and time it takes to reach one’s destination. Finally, because flying offers convenience, speed and performance, it is a very enticing substitute; however, it is an unattractive alternative in terms of price relative to renting a car. On the business segment, car rental agencies have more protection against substitutes since many companies have implemented travel policies that establish the parameters of when renting a car or using a substitute is the best course of action.

According to Tracy Esch, an Advantage director of marketing operations, her company rents cars up to a 200-mile trip before considering an alternative. Basically, the threat of substitute is reasonably low in the car rental industry since the effects the substitute products have do not pose a significant threat of profit erosion throughout the industry.

The Bargaining Power of Suppliers

Supplier power is low in the car rental industry. Because of the availability of substitutes and the level of competition, suppliers do not have a great deal of influence in the terms and conditions of supplying the rental cars. Because the rental cars are usually purchased in bulk, rental car agents have significant influence over the terms of the sale since they possess the ability to play one supplier against another to lower the sales price. Another factor that reduces supplier power is the absence of switching cost. That is, buyers are not affected from purchasing from one supplier over another and most importantly, changing to different supplier’s products is barely noticeable and does not affect consumer’s rental choices.

The Bargaining Power of Buyers

While the leisure sector has little or no power, the business segment possesses a significant amount of influence in the car rental industry. An interesting trend that is currently underway throughout the industry is forcing car rental companies to adapt to the needs of corporate travelers. This trend significantly reduces supplier power or the rental firms’ power and increases corporate buyer power since the business segment is excruciatingly price sensitive, well informed about the industry’s price structure, purchase in larger quantities and they use the internet to force lower prices. Vacation buyers, on the other hand, have less influence over the rental terms. Because vacationers are usually less price sensitive, purchase in lesser amounts or purchase more infrequently, they have weak bargaining power.

Five Forces

Today the car rental industry is facing a completely different environment than it did five years ago. Competitively speaking, the revolution of the five forces around the car rental industry exerts some strong economic pressure that has significantly tarnished the competitive attractiveness of the industry. As a result of the economic downturn in recent years, many companies went under namely Budget and the Vanguard Group because their business infrastructure succumbed to the untenability of the competitive environment. Today, very few firms including Enterprise, Hertz and Avis return a slightly above-average revenue compared to the rest of the industry. Realistically speaking, the car rental sector is not a very attractive industry because of the level of competition, the barriers to entry and the competitive pressure from the substitute firms.

Strategic Group Mapping

As a moderately concentrated sector, there is a clear hierarchy in the car rental industry. From an economic standpoint, disparities exist from a number of dimensions including revenue, fleet size and the market size each firm holds in the market place. For instance, Enterprise dominates the industry with a fleet size of approximately 600,000 vehicles along with its market size and its level of profitability. Hertz comes in second position with its number of market shares and fleet volume. In addition, Avis ranks third on the map. Avis is among one of the companies that is having issues recovering its revenue margins from prior to the economic downturn. For instance, in 2000 Avis returned revenues of approximately $4.23 billion. Over the course of the next several years following 2000, the revenue of Avis has been significantly lower than that of 2000. As a way of reducing uncertainty most companies are gradually lessening the level of dependency on the airline industry and emerging the leisure market. This trend may not be in the best interest of Hertz since its business strategy is intricately linked to the airports.

Key Success Factors

There are many key success factors that drive profitability throughout the car rental industry. Capacity utilization is one of the factors that determines success in the industry. Because rental firms experience loss of revenue when there are either too few or too many cars sitting in their lots, it is of paramount importance to efficiently manage the fleets. This success factor represents a big strength for the industry since it lowers if not completely eliminates the possibly of running short on rental cars. Efficient distribution is another factor that keeps the industry profitable. Despite the positive relationship between fleet sizes and the level of profitability, firms are constantly growing their fleet sizes because of the competitive forces that surround the industry. In addition, convenience is one of the crucial attributes by which consumers select rental firms. That is, car rental consumers are more prone to renting cars from firms that have convenient rental and drop off locations. Another key success factor that is common among competing firms is the integration of technology in their business processes. Through technology, for instance, the car rental companies create ways to meet consumer demand by making renting a car a very agreeable ordeal by adding the convenience of online rental among other alternatives. Furthermore, firms have integrated navigation systems along with roadside assistance to offer customers the piece of mind when renting cars.

Industry Attractiveness

There are many factors that impact the attractiveness of the car rental industry. Because the industry is moderately concentrated, it puts new market entrants at a disadvantage. That is, its low concentration represents a natural barrier to entering the industry as it allows existing firm to anticipate sharp retaliations against new entrants. Because of the risks associated with entering the industry among other factors, it is not a very attractive sector of the marketplace. From a competitive standpoint, the leisure market is 90 percent saturated because of the active efforts of Enterprise to dominate this sector of the market. On the other hand, the airport terminals are heavily guarded by Hertz. Realistically speaking, entry in the industry offers low profitability relative to the costs and risks associated. For most consumers, the main determining factors of choosing one company over another are price and convenience. Because of this reason, rental firms are very circumspect about setting their rates and that generally force even the industry major players in the position of offering more to the consumers for less just to remain competitive. Hertz, for example, offers wireless internet to its customers just to add more convenience to their travel plans. Avis on the other hand, offers free weekend specials if a customer rents a car for five consecutive weekdays. Based on the impact of the five forces, the car rental sector is not a very attractive industry to potential new market entrants.

Conclusion

The rental car industry is in a state of recovery. Although it may seem like the industry is performing well financially, it is nonetheless gradually regaining its footing relative to its actual economic position within the last five years. As a way of insuring profitability, besides seeking market shares and stability, most companies throughout the chain have a common goal that deals with lowering the level of dependency on the airline industry and moving toward the leisure segment. This state of motion has engendered some fierce competition among industry competitors as they attempt to defend their market shares. From a futuristic perspective, the better days of the car rental industry have yet to come. As the level of profitability increases, I believe that most of the industry leaders including Enterprise, Hertz and Avis will be bounded by the economic and competitive barriers of mobility of their strategic groups and new comers will have a better chance of infiltrating and realizing success in the car rental industry.

Sources

“Passenger Car Rental.” Encyclopedia of Global Industries. Dec. 2004. Gale group. 02 Feb 2005. http://galenet.galegroup.com.ucfproxy.fcla.edu/servlet/BCRC.

“Car & Truck Rental.” Hoover’s AB&D Company. Jan. 2005 . Hoovers. 04 Feb 2005. http://premium.hoovers.com.ucfproxy.fcla.edu/subscribe/ind/factsheet.xhtm. “

Rental car foes war on each other’s turf.” The Associate Press. Fall 2004. The Enquirer. 08 March 2005. http://www.enquirer.com/editions/2004/10/11/biz_rentalcars111.html.

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Source by Rodrigue Monestime

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All vehicles in the US are required to be registered, by law, before being driven through public spaces. This needs to be renewed on a yearly basis and those who break the law are subject to a fine and possibly imprisonment.

The registering of a vehicle basically means that in return for paying a fee you are now free to drive the automobile on public roads. It is provided only if you have insurance for the vehicle and is based on several factors including the year, make and model of the car.

The actual process of obtaining registration may differ in each state. However, the most common documents that will have to be produced at the time of registration are the title to the car, proof of insurance and a bill of sale. Many states will refuse to register a automobile without these being supplied by the current owner of the automobile.

When you purchase an automobile, you become legally responsible for the payment of any monies owed on the vehicle, as well as associated fees and charges. This is why anyone selling a car privately is suggested to consumers to record the transaction with an auto bill of sale form. This will provide proof that the vehicle has been transferred to a new owner and that the new owner is now responsible for any of the above fees and charges.

Although the process of registering your vehicle may seem expensive and troublesome, it is however a necessary part of car ownership and will protect you against various types of fraud associated with your automobile.

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Source by T Potter

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Out of 194 independent states of the world, only 52 countries follow a system of RHD vehicles. The system proposes to drive on the left hand side of the road for which the vehicles required are RHD or in other words right hand steering mounted vehicles. There are no specific reasons attached to it but this is how the system has actually differentiated the two class of people preference. The major drawback being faced by vehicle buyers is that the biggest producer of vehicle i.e. Japan, only produces Right Hand Drive vehicles.

It is quite common these days that things which are shorter in supply are highly demanded. Likewise, land cruisers from Japan are one of the highly demanded vehicles all over the world. It is not that people want to drive a right handed land cruiser but the preference is given to a Japanese brand. Besides right hand drive Toyota there is a huge demand of other right hand drive vehicles all over the world, which is intact since ages only because of the reliability of the Japanese Brand. On the other hand, many countries only permit left hand drive vehicles on the road and have strict laws and policies for RHD vehicles. These countries include USA, Canada, UAE, South American states and many others. Therefore, in order to satisfy the impulsive demand of right hand drive Toyotas and other right hand drive Japanese vehicles, technology is now allowing a Japanese vehicle admirer to get the vehicles changed into a LHD.

The conversion of a RHD vehicle into a left hand driven vehicle offers plentiful benefits keeping other things constant. First of all, the vehicles get into that particular country’s traffic law compliance and secondly the driver does not have to get worried with the changed driver seat. Make a note that before going ahead with the steering mount transplantation many risks and a lot of money has to be brought into consideration. This not only satisfies the excessive demand for vehicles but it also promotes imports of that particular country. Buying an originally left handed vehicle may be expensive as that vehicle has to be imported from North America, Korea or Singapore whereas people seeking quality Japanese vehicles, can quench their hunt by converting a second hand or any other make into a left hand drive vehicles within less than a few days.

Many countries have banned the imports on Japanese vehicles i.e. vehicles. The reasons being common above all the restriction and ban policies is that the RHD vehicles are not made environment friendly and they are expected to cause more damage to the surroundings. Especially Canada has real strict policies on not only driving a but also importing one. Therefore the steering turning process has made it a lot easier for the government as well as for the natives of such countries.

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Source by George W Thomas