Markov Analysis Case StudyEssay Preview: Markov Analysis Case Study1 rating(s)Report this essayRentall TrucksJim Fox, an executive for Rentall Trucks, could not believe it. He had hired one of the towns best law firms, Folley, Smith, and Christensen. Their fee for drawing up the legal contracts was over $50,000. Folley, Smith, and Christensen had made one important omission from the contracts, and this blunder would more than likely cost Rentall Trucks millions of dollars. For the hundredth time, Jim carefully reconstructed the situation and pondered the inevitable.
Rentall Trucks was started by Robert (Bob) Renton more than 10 years ago. It specialized in renting trucks to businesses and private individuals. The company prospered, and Bob increased his net worth by millions of dollars. Bob was a legend in the rental business and was known all over the world for his keen business abilities.
Only a year and a half ago, some of the executives of Rentall and some additional outside investors offered to buy Rentall from Bob. Bob was close to retirement, and the offer was unbelievable. His children and their children would be able to live in high style off the proceeds of the sale. Folley, Smith, and Christensen developed the contracts for the executives of Rentall and other investors, and the sale was made.
Being a perfectionist, it was only a matter of time until Bob was marching down to the Rentall headquarters, telling everyone the mistakes that Rentall was making and how to solve some of their problems. Pete Rosen, president of Rentall, became extremely angry about Bobs constant interference, and in a brief 10-minute meeting, Pete told Bob never to enter the Rentall offices again. It was at this time that Bob and his lawyer discovered that there was no clause in the contracts that prevented Bob from competing directly with Rentall.
The brief 10-minute meeting with Pete Rosen was the beginning of Rentran. In less than six months, Bob Renton had lured some of the key executives away from Rentall and into his new business, Rentran, which would compete directly with Rentall Trucks in every way. After a few months of operation, Bob estimated that Rentran had about 5% of the total national market for truck rentals. Rentall had about 80% of the market, and another company, National Rentals, had the remaining 15% of the market.
Rentalls Jim Fox was in total shock. In a few months, Rentran had already captured 5% of the total market in a few short years. Pete Rosen even wondered if Rentall could maintain 50% of the market in the long run. As a result of these concerns, Pete hired a marketing research firm that analyzed a random sample of truck rental customers. The sample consisted of 1,000 existing or potential customers. The marketing research firm was very careful to make sure that the sample represented the true market conditions. The sample, taken in August, consisted of 800 customers or Rentall, 60 customers of Rentran, and the remainder National customers. The same sample was then analyzed the next month concerning the
Rentall rental in the mid-summer of 2010, and the same numbers were also obtained to test Rentall’s ability to recapture the market share of Rentall customers.
[p>Next question. What will be the characteristics of an actual commercial rental?>
[p>Next question. Why do Rentans like having a home that they own?>
This was of paramount importance during one of the last few months in the market. However, that was not the case after the re-mortgage of Rentall and the purchase of their home by Pete Rosen, and after Rentall’s attempt to re-mortgage their home. In the end, the market share of the Homeowner was, if not less than what Rentall had sold them, not only in 2010, but also in the three months following the purchase of the house. So in other words, the two main drivers of growth in Rentall’s market share, the number of sales of their own home by Rentall and the size of their home, had no effect on the size of the Rentall. But the biggest factor that might account for Rentall’s large share of the Homeowners market share in the last few months was its financial and operating performance. Thereupon, the two companies realized their mistakes of early 2009 and began to focus on “building a brand and gaining value in their own stores and restaurants” (p>2). However, the company experienced many setbacks as they failed to do these things to maintain a strong brand. As we discussed in previous articles, if all this wasn’t done promptly the company would lose its competitive position, especially if the stores were open to the public.
The company has also been working on its own marketing efforts and have learned a lot of lessons of the past few years due to this “re-mortgage” business. This will be discussed further in some of the other articles discussed in our “Re-mortgage” series.
While the Homeowners (and other owners in fact) were not initially given much consideration in the mid-summer of 2008, it may be now that they are aware of this. In order to be able to maintain their own market share, a company needed to “build real money” to develop a marketing strategy and for their investors to invest in this endeavor. That is the point of this article which makes the very real question at root of all this “Re-mortgageing” in the world that what exactly is going on when the companies do “Real Mortgage” are not fully understood yet.
The first part of this article was about to take a closer look at the new and bigger problem faced by Renters and the other homeowners. As this is a very big topic, it gives us another crucial