AVIS EUROPE GLOBAL ENVIROMENT
Outline the key economic characteristics of the travel and leisure sector and CRITICALLY ANALSE THEIR IMPORTANCE TO AVIS EUROPE CAR RENTAL.
Analysis should include the following
· Key cost and demand characteristics, market structure
· Competitive behaviour of the business sector as well as the macroeconomic environment in particular developments regarding economic growth, interest and exchange rates
· How changes to the company’s business environment are likely to impact on its behaviour in the medium term
Outline
· Development of the sector: these may include brief recent history and growth/decline .factors influencing growth. Has it been steady or erratic?
· Some general economic characteristics
ü What are the characteristics of the sectors output, does it sell mainly to final consumers or to other firms?.
ü In what way is the travel and leisure sector operating in the global market place?
ü How many are employed, and what are the key characteristics of the labour force
ü Is it easy to get into, or hefty capital expenditure necessary
Key cost and demand characteristics
· What can be said about the general cost characteristics of the sector? Are there extensive economies of scale?. If so in what parts and what are the nature and source of these economies?
· What are the limitations to these economies/Are they exhausted fairly quickly relative to the size of the market? Can small firms survive in the sector, perhaps in niche markets
· Do transaction costs tend to be high or low?
· What implication does the presence of economies have for market dominance? Can the optimum scale be achieved with only a very small percentage of the market ?.what are the implications for global operations?
· How much customer loyalty is there in the sector? Do customers tend to stay with a given firm or do they switch around? Is advertising /brand loyalty important? Example avis brand loyalty and advert WE TRY HARDER
· How far do businesses perceive their demand as global in nature ? WHY
Business behaviour
· Does the achievement of economies of scale imply markert power? If so might this cause prices to be higher than they might otherwise be?. Is there any evidence of firm colluding over prices
· Do firms have to make substantial investment in physical capital, R&D, and advertising to compete?does this makes it difficult for new entrants to come in
· Do firms operate on international basis
· How does the markert structure or contestability of the markert influence firm behaviour?
Macroeconomic influences
ü How does the world economic growth or business cycle, interest rates or international trade agreements or disputes affect the sector.
Global influences and likely development over the medium term
How can global forces influence the sectors development over the medium term . Are the global pace and pattern of technological change and innovation likely to alter and if so in what direction. is global demand likely to grow or decline?. What are the main markets likely to develop? Will international competition become less or intense? How will these developments influence the way the sector is structured and the behaviour of firms in the sector,e.g in terms of pricing, advertising and marketing, product and process development, merger and acquisition policies.
Conclusion
v What is distinctive about the sector in terms of costs and demand?. What are the main global influences that the sector faces and how will these affect its development
Note: the outline is my thinking and framework I expect to have from you .other ideas can come from you to make the write up more robust than the above outline.
1,200 words maximum
Sources academic databases like
References on both assignment can be taken from companies finacial statements and annual reports .
Maximum words 1,200
Credit:ivythesis.typepad.com
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