Penske Porters Five Forces

Founded in 1969 by Roger Penske Joint venture between Penske Corporation, Penske Automotive Group and General Electric Over 700 locations in North America 20,000 associates We maintain more than 200,000 heavy, medium, and light-duty vehicles

Core Values Employee longevity – a result of our training, recognition & rewards Culture of measurement and accountability Growth-oriented practices and Innovative thinking Constant focus on quality and safety Clean and organized operations

Strength in Transportation Transportation, Automotive, Performance, & Private Equity

Transportation Industry The U.S. transportation network serves more than 300 million people and 7.5 million business establishments across 3.8 million square miles of land. Moving raw materials and finished goods between production and consumption centers, this freight network is a vital component of commerce in the United States (U.S. DOT 2010)

Market Structure Oligopoly market * National * Regional * Local

Porters Five Forces

Competition What do truck rental customers think about. Price? Customer Service? Roadside assistance

Bargaining Power of Customers * Can’t pass on costs to customers * Customer expectations * Compete on price * Price Elasticity * Kinked demand curve * Utilization

Threat of Substitutes * Common Carriers Benefits Costs * Regional vs. Long Distance * Opportunity Costs

Bargaining Power of Suppliers Bargaining power is in the hands of the Suppliers Suppliers have many customers You can focus on core business initiatives and gain insight to manage your fleet needs GMC, Ford, Freightliner and International Trucks. Large companies with many customers and large operations. Business is not dependent on Penske. Benefits Many substitutes Threats of New Entrants High start-up cost Low Margins No diversification of product lines Penske services: * Multiple product lines * Absorption of loss across product lines * Brand recognition * Experience curve