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Our strategy was not to follow the price war, but to achieve

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by

Enrique de la Garza

on 30 October 2013

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Transcript of Our strategy was not to follow the price war, but to achieve

And finally...
"The Secret"™
Universal Car Rental
Price Simulation

Avoid price war
Consider outside factors
Difference in markets
Identify composition in every market
(Price - sensitivity)
Weekday/Weekend market
behaviour
Follow differentiated strategies for weekend and weekdays per location
Focus
Higher consideration for high margins rather than capacity utilization.
Strategy
Never change a winning team
Input Implementation:
Abdul
Click Logistics:
Vici
Foreseeing the future
and implementing the
right price.

Month 1
Hypothesis:
Weekday
- business customers: lower elasticity
Weekend
- leisure customers: higher elasticity
Months 2-12
Main goal: Maximize profits
Round 1
Market situation
Weekends:
Low capacity utilization, we could lower prices to capture demand
Weekdays:
Unattended demand, which means room to increase prices
Round 1 Learnings
1. Market leaders - Competition followed our pricing

2. Weekdays: Higher prices – higher profits

3. Weekends: Inelastic demand, lower prices – lower profits

4. Differentiated strategy for weekends and weekdays


Don‘t necessarily change overall strategy if profits decline
Deciding
Main decision criteria:
1. Demand forecast
2. Capacity utilization
3. Competitor´s price
Round 2
1. Competitor's price
2. External factors
Universal Demand
Behaviour
Margins
Capacity
vs.
Are you
considering
me?
We're going to
crush them
Leisure &
business
Mostly business
Full transcript