Ansoff’s Matrix – Enterprise Rent-A-Car
In 1957, Enterprise was founded by Jack Taylor, an
entrepreneur, in Missouri, USA. Starting with just seven cars he
invested his money and ideas into Executive Leasing, which later
became Enterprise. Since then the company has become the
largest car rental company in North America, and arguably the
world. One way of analysing the various strategies that an
organisation may use to grow the business is with Igor Ansoff’s
(1965) matrix. This considers the opportunities of offering existing
and new products within existing and/or new markets and the
levels of risk associated with each. This matrix suggests four
alternative marketing strategies:
a) Market penetration - involves selling more established products into existing markets, often by
increased promotion or price reductions or better routes to market, for example online.
b) Product development - involves
developing new products or services
and placing them into existing markets.
c) Market development - entails taking
existing products or services and
selling them in new markets.
d) Diversification - involves developing
new products and putting them into
new markets at the same time.
Diversification is considered the most risky strategy. This is because the business is expanding into
areas outside its core activities and experience as well as targeting a new audience. It also has to
bear the costs of new product development. Enterprise has focused most of its growth strategies on
market development, product development and diversification.
· Market development - Enterprise locates its branches as close as possible to its customers.
The convenience of this service gives Enterprise a competitive advantage. However, in
response to customer needs, Enterprise opened its first on-airport location in 1995. The demand
for this service was so great that by 2005 Enterprise had over 200 on-airport branches. This
meant that Enterprise kept ahead of its...