Assignment:
Easy Rider Car Rental is a single-location operation in Smalltown, USA. A new marketing manager has been hired to analyze business and propose areas for further marketing focus and growth potential. The manager identified the following six business units:
| Gross revenues per year |
$2M |
|
| Leisure car rentals |
$900,000 |
45% |
| Corporate car rentals |
$540,000 |
27% |
| Refueling/Fuel packages |
$100,000 |
5% |
| Insurance add-ons |
$300,000 |
15% |
| Misc. accessories (baby seats, GPS, etc.) |
$160,000 |
8% |
Here are some facts the manager has to consider:
- A new Intel plant has been built and will open within the next six months
- Insurance and miscellaneous income has very little related expense
- Very little profit is derived from refueling. This is viewed as a customer service.
- Based on the information the manager has collected, place each of the five business units on a BCG matrix with growth potential (low to high) and revenues generated (high to low) as the two axes.
- Explain your placement choices.
- What to do think the marketing manager should do with this analysis?
Provide complete and step by step solution for the question and show calculations and use formulas.