Question

1. In the 1990’s, Enterprise Rent-A-Car was a highly-profitable and fast-growing market leader concerned about protecting their place in the market. Based on your knowledge of the rental car market, would you conclude that Enterprise was operating in a Red Ocean or Blue Ocean competitive environment? Frame your answer in the context of at least three of the descriptors used in the Red Ocean / Blue Ocean model (and discussed in class).

Answer 1

Answer:

Enterprise Rent-A-Car was definitely operating in a Red Ocean enviroment.

Explanation:

This is because Red Ocean enviroments are characterized by stiff competition, market saturation, and innovation lagging, and the European market for Rental cars was already saturated in the 1990s.

This is why, despite being a market leader, the firm was anyway very worried about keeping its position, and spent a great deal of resources in doing so. In a Blue Ocean Strategy, the situation would be much more relaxed simply because the market would have far less competition (even none), and large tracts of the market would still be untapped.