Enterprise Rent-a-car - Case Study Example

Case Analysis for Enterprise Rent-a-car Introduction The car rental industry in America started in the year1916 following the initiation of commercial air services after World War II. The Enterprise’s founder Jack aimed at setting offices at local rental markets rather than setting up offices at airports (Busse and Swinkels 1). The company aimed at ensuring transport convenience to their customers when their personal cars were under repair after maybe involving in an accident. The 1969 court decision was more advantageous to this enterprise since it required all insurance companies to start reimbursing for car rentals during the time when an insured owner’s vehicle was under repair following an accident. By the end of 2010, the enterprise had grown bigger, and became the largest private car rental enterprises with 6,000 rental locations and 850,000 rental cars in service. Since 1994, the enterprise has been the leading car rental company and by the year 2010, it accounted for almost half of the auto rental market with its competitor being Hertz (Busse and Swinkels 2). In order to maximize its profits and ensure quality services to its customers, the Human Resource department decided to employ more employees, most of them being university graduates than any other car rental company (Burns 90). This enables the enterprise to compete other companies since these graduate employees were goal oriented, had good problem solving skills, had good communication and leadership skills, had good customer and sales service skills, they were flexible, and ensured a well-built work ethnic. However, in order to sustain its employees, the company offered an opportunity to develop well-paying careers, if they showed the efforts of working hard and willing to learn new skills. The new trainees earned approximately $35,000 per annum including overtime allowances. However, the Human resource management ensured that the hardworking employees received promotions to better positions and this made the company to appear in the BusinessWeek top fifty places to launch your career consistently (Burns 90). Secondly, all the branches of enterprise rent-a-car typically started their operations at 7:30 a.m. to 6:00p.m. This enables the enterprise to serve a large number of customers since the allocated working hours were the working hours for the customers. The company could, for instance, fetch customers to their work location and back home in the evening (Busse and Swinkels 3). The Human Resource staffed offices with the adequate number of employees to manage the allocated fleet of cars. These offices were under careful management, and if a branch increased its fleet to 150 cars and above, the enterprise would divide this sales territory by establishing a new office (Besanko 377). In order to attract and maximize the number of customers, all employees, including the trainees, were supposed to attain the set targets of developing and establishing relationships with companies and people around their territory in order to drive the business or refer their customers. Branch managers, however, operated their offices as revenue and profit centres and given the authority of determining the size of the fleet, open new branches, sell old cars, and set rental prices (the lowest within the industry). Unlike its competitors such as Hertz, the enterprise was not involved in national advertising (Besanko 378). It instead used the “We’ll Pick You Up” as an advertisement image, which enabled it to attract more customers hence maximizing its profit. Thirdly, the corporate culture in the enterprise, according to its core founder was the key to its success, although it was not a good fit for all employees. In the year 2002, the enterprise formalized some statements of the founding values. (1) The brand is among the valuable thing the company owns. (2) Employees should have honest and integrity. (3) Customer service is the company’s way of life (4) Enterprise is a friendly and funny place ruled by teamwork. (5) Employees should work hard, (6) Success comes when we pay attention to customers and our fellow employees. (7) The enterprise doors all always opened (Busse and Swinkels 5). Andy emphasized on the importance of ensuring good customer services among the other values. This is because clients want someone who shows interest to them and a friendly environment. All employees within the company were to be honest and managers trained on how to identify and do away with de-motivating factors such as poor management in the enterprise (Luther 120). Moreover, the American rental market in the year 2010 comprised of two segments: airport market and local market. Although enterprise broadly invested in the local market, customers’ request prompted the company to open airport location in the year 1995 (Busse and Swinkels 7). The main competitors of the enterprise in 2010 were, Hertz, which was the leading airport rental brand and Avis. The senior management of enterprise was aware that the future belonged to the Rental Company, which could offer a broad array of rental services. By 2007, enterprise opened two hundred airport offices more than its competitors did and this was evident that Avis and Hertz were unable to replicate enterprise’s success. Although enterprise used extra ten minutes at check-in, it emerged the number one airport rental brand for seven years consecutively in the U.S and J.D, Satisfaction study. Additionally, enterprise dominated its operations in the local market by opening 6,000 branches (Busse and Swinkels 7). Unlike its competitor Hertz, enterprise ensured that it covered all the fifty states of America. The company also sets prices, which were slightly lower than those of its competitors were and enabled it to sustain its customers despite the growth of the new car rental companies. Unlike discretionary rental services offered by enterprise competitors, it established most of its offices near repairs and dealers shops since many people could have their cars involved in the accident or has troubles and could find themselves in repair or dealer shops without cars to get home or pick their kids from school (DiJulius 143). Stationing its offices near such places enabled the company to serve a large number of customers, hence maximizing its profit. Most insurance companies preferred enterprise since it had full-time employees at its headquarters to facilitate full-time booking. In the year 1990, enterprise decided to conduct a research on customers’ satisfaction, and on what the company’s local customers valued from their cars. The results of this research revealed three things that local customers cared: helpfulness and altitude, transaction speed, and car cleanliness. Enterprise puts into consideration these three factors enabling it to attract more customers compared to its competitors (Pasiuk 56). Additionally, in order to support and facilitate its growth, enterprise ensured a significant technology investment. The company had more than 1,400 IT personnel to develop all-important systems to come up with quality services to its clients such as E-cars (Computer Assisted Rental System) to support its operations and reservations (Busse and Swinkels 11). Like any other rental company, Enterprise invested a lot of its vehicle fleet to ensure that it had enough cars cater for the needs of all customers. This enabled the company to serve a large number of customers, hence maximizing its revenues and sustaining more customers. Conclusion In just a period of fifty years, Enterprise has grown from an accident business with the leading car rental company in the US. Although the Enterprise is the leading rental company in the US, it should also focus on globalizing its operations by investing in all continents. The Enterprise management should also ensure that the employees adhere to the cultural values, ensure quality customer services, use quality vehicles, and set reasonable rental charges. This will highly enable the Enterprise challenge its competitors and popularity of competitive factors such as Zip car and other sharing services will not affect its future profitability. Work cited Top of Form Bottom of Form Besanko, David. Economics of Strategy. Hoboken, NJ: John Wiley & Sons, 2010. Print. Burns, Stan. Exceeding Expectations: The Enterprise Rent-a-Car Story. Lyme, CT: Greenwich Pub. Group, 2007. Print. Busse, Meghan and Swinkels, Jeroen. Enterprise Rent-A-Car. New York, NY: Kellogg, 2012.print. DiJulius, John R. Secret Service: Hidden Systems That Deliver Unforgettable Customer Service. New York: AMACOM, 2005. Print. Luther, William M. The Marketing Plan: How to Prepare and Implement It. New York: AMACOM, 2004. Internet resource. Pasiuk, Laurie. Vault Guide to the Top Transportation Industry Employers. New York, NY: Vault, 2006. Internet resource. Read More