Avis Europe Plc is a leading car rental company in Europe, Africa, the Middle East and Asia. The company offers its services through two globally recognised brands, namely Avis and Budget in more than 3,800 locations. The company serves over seven million customers across the network with an average fleet of 100,000 vehicles. It is headquartered in Bracknell, Berkshire and employs approximately 5,967 people (Data monitor, 2009). Due to the commercial ties with Avis Budget Group, as well as with the Wizard rental and reservation system, long term agreements allows Avis to utilize both names, brands and operating systems through master licensing agreements until 2036. The Budget named business is present in 3 continents and serves their customers through 1,000 rental locations in 65 countries. The Avis brand operates within a network of 2,800 locations in 109 countries through wholly-owned subsidiaries in 13 countries and franchisees in 96 countries (Avis Europe Plc, 2009, p. 10). Avis Europe plc serves individual, corporate and insurance/ replacement customers.
The five mayor markets France, Italy, Germany and the United Kingdom generate approximately 86% of the company’s revenue (Avis Europe Plc, 2010 [Online]).
Table of Contents
1 Introduction
1.1 Company profile Avis Europe plc
1.2 Stakeholders and its importance
1.3 Legal Form
1.3.1 Limited Liability
1.3.2 Lifting the veil of incorporation
1.3.3 Corporate governance
2 Analysis of the financial strengths and weaknesses and proposing strategy
2.1 Horizontal analysis
2.2 Calculation and interpretation of four key ratios
2.2.1 Profitability – Roce
2.2.2 Efficiency – Asset turnover
2.2.3 Liquidity – Current ratio
2.2.4 Structure – gearing
2.3 Cash flow
2.4 Avis financial strengths and weaknesses
2.4.1 Comparison to Sixt Ag
2.4.2 Swot Analysis
3 New financial strategy
3.1 Current strategic focus
3.2 Avis new strategy
3.2.1 Ansoff Matrix approach
3.2.2The Balance scorecard as a strategic management system
Objective and Research Focus
This report aims to analyze and evaluate the financial position of Avis Europe Plc amidst the challenging economic environment of 2009, while proposing a future financial strategy to ensure sustainable growth and shareholder satisfaction.
- Financial performance analysis using horizontal methods and key ratios.
- Evaluation of stakeholder influence and the legal framework of the company.
- Comparative analysis of financial strengths against industry competitor Sixt AG.
- Strategic development through the Ansoff Matrix and Balanced Scorecard implementation.
Excerpt from the Book
2.4.1Comparison to Sixt AG
The European car rental market is characterised by three large multinational firms, consisting of Avis, Europcar and Hertz, compromising about 60% of the overall market. Avis Europe plc had the second highest market revenue in Europe in 2008 and the second highest market share in 2009. The author has chosen the German car rental company Sixt AG as it is Avis biggest competitor in Germany with a reported market share of 21.1% and a 9% on a European level (Avis Europe plc, 2009, p.11).
Summary of Chapters
1 Introduction: Provides an overview of Avis Europe Plc, its corporate structure, key stakeholders, and the legal implications of its public limited company status.
2 Analysis of the financial strengths and weaknesses and proposing strategy: Examines the company's financial performance in 2009 through horizontal analysis, key ratios, and a comparative study with Sixt AG to identify strengths and weaknesses.
3 New financial strategy: Outlines a future strategic roadmap for Avis, utilizing the Ansoff Matrix and a Balanced Scorecard to align operational goals with financial targets.
Keywords
Avis Europe, Financial Analysis, Corporate Strategy, Profitability, Liquidity, Gearing, SWOT Analysis, Ansoff Matrix, Balanced Scorecard, Stakeholder Management, Market Share, Car Rental Industry, Cost Reduction, Shareholders, Debt Management
Frequently Asked Questions
What is the primary objective of this report?
The report seeks to analyze Avis Europe Plc's financial status during the 2009 economic downturn and propose a strategic framework to improve its future performance and shareholder value.
Which specific areas of financial performance are examined?
The study evaluates profitability (ROCE), efficiency (asset turnover), liquidity (current ratio), and financial structure (gearing).
What is the core research methodology?
The research employs horizontal financial analysis, key ratio interpretation, and strategic management tools like SWOT, the Ansoff Matrix, and the Balanced Scorecard.
Who is the target audience for this document?
The report is primarily directed towards investors and shareholders to assess the company's ability to generate cash and its future growth potential.
How does the author evaluate Avis's market position?
The author performs a comparative analysis against Sixt AG, Avis's main competitor in the German market, to benchmark market share and operational efficiency.
What does the Balanced Scorecard section cover?
It provides a strategic framework that aligns the company's financial, customer, internal, and learning/growth perspectives with its long-term objectives.
Why is the "Limited Liability" status important for Avis?
It protects individual shareholders by separating the company's legal personality from its members, limiting the liability of investors to their original investment.
How does the author suggest Avis should address falling profit margins?
The researcher recommends focusing on structural cost reductions rather than raising prices, to remain competitive and maintain the current customer base.
- Quote paper
- Sarah Bertram (Author), 2010, Business Deconstruced Assignment 2010, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/179066
