CHAPTER CASE STUDY: IONAL CAR RENTAL’S DEATH EXPERIENCE NATIONAL NEAR-DEATU go for a revenue-based turnaround as op- We decided to go for a reu BENCE RAMAEKERS, TURNAROUND SPECIALIST based to a cost-cutting turnaround. -LAWRENCE RAMAEKERS. AND INTERIM PRESIDENT, NATIONAL CAR RENTAL SYSTEM, INC. ONE LAST CHANCE IN MOST Cases, Revenue Management is viewed as a means to generate additional reve- nues, but in some cases it can actually save a company from extinction. National Car Rental System is a case in point. By 1992, National had been losing money for at least a decade. That was fine when
CHAPTER CASE STUDY: IONAL CAR RENTAL’S DEATH EXPERIENCE NATIONAL NEAR-DEATU go for a revenue-based turnaround as op- We decided to go for a reu BENCE RAMAEKERS, TURNAROUND SPECIALIST based to a cost-cutting turnaround. -LAWRENCE RAMAEKERS. AND INTERIM PRESIDENT, NATIONAL CAR RENTAL SYSTEM, INC. ONE LAST CHANCE IN MOST Cases, Revenue Management is viewed as a means to generate additional reve- nues, but in some cases it can actually save a company from extinction. National Car Rental System is a case in point. By 1992, National had been losing money for at least a decade. That was fine when depreciation and tax write-offs were fi- nancial benefits for the owners or when National absorbed overproduction from its then parent, automaker General Mo- bors. But the situation changed dramatically whnounced a mind-boggling $3.4 yearthe biggest corporate lo changed dramatically when GM an- und-boggling $3.4 billion loss for its 1991 fiscal Best corporate loss in history. It was clear that control Logtion command 192 REVENUE MANAGEMENT National Car Rental’s Near-Death Experience es that GM Gobie Natal Nasjonal Cams M’s board There were to olished in a highly competitive and volatile did not yield revenue growth easily. Further, hile under extreme pressure from an owner the money-losing business units were a luxury th longer afford. In December 1992, the future of the Natie System unit was on the agenda at GM’s Twelve thousand jobs were on the line. The tions: liquidate National Car or take a gigan charge and give National one last chance to be and then be sold at a price high enough for GM some of its investment. Given the urgency of GM tion, it was a tough decision. Liquidation would billion hit on its balance sheet. Restructuring to give another chance meant that GM would have ping $744 million charge, and there was no guarante was accomplish place that did not was done while anded immediate results. Bigantico gigantic resto hance to become proble b for GM to of GM’s own would mean G COMPANY IN A CHANGING INDUSTRY CHANGING COMPANY would have to take a whnarphosisrivaline the National would survive. In the end, GM decided to give National one more com to live. Just two years later, the decision paid off brillid By early 1995, National had effected a $3 billion swin value and was experiencing an annual growth rate of about 20%. It had gone from being a liability to being an attractive asset for acquisition. According to those directing this tu around, Revenue Management was the single most importa factor. Previously, National had been the fifth largest aipat rental car company in the United States. Using RM, National achieved new power in the marketplace and was now i fourth place and rapidly closing in on the next largest con 1980s, the U.S. car rental business went through a met- sis rivaling those caused by airline and telecommuni- deregulation. Before 1986, owners of car rental firms them for large depreciation and investment tax write- s Profitability was not their first concern, and rental car companies typically did not make money from renting cars. They made money from manufacturers’ rebates on cars they purchased, selling cars after depreciating them rapidly and convincing renters to buy expensive “options” such as colli- in insurance. The depreciation write-offs evaporated be cause of U.S. tax code changes in the mid-1980s. Major automakers bought car rental companies to keep production lines going by supplying rental car fleets when overseas com- petition cut into U.S. retail sales. But shortly thereafter, new- car sales began to improve, and the automakers needed cars coming off the production line for retail sales, so they changed s and jacked up the prices for the rental car fleets. Once again, the basic economics of the car rental ic economics of the car rental industry anged because of circumstances beyond their contro In chapter 6, The Revenue Management Revolution, from your standpoint, share and discuss your most important take-a-way from this chapter (Be specific and brief, and relate it to any of the previous concepts/Tactics you have learned from any previous chapter. Further and much more specifically, Marriott found success through making sure they shielded (meaning they wouldnt necessarily open peak nights early for reservations) peak hotel nights during the week? Why is this such an important and solid strategy?
Why Work with Us
Top Quality and Well-Researched Papers
We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.
Professional and Experienced Academic Writers
We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.
Free Unlimited Revisions
If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.
Prompt Delivery and 100% Money-Back-Guarantee
All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.
Original & Confidential
We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.
24/7 Customer Support
Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.
No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.
Admission Essays & Business Writing Help
An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.
Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.
If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.