Enterprise Rent-A-Car - Assignment Example

Enterprise Rent-A-Car The Enterprise car rental business has been very successful since its earliest days because the management acknowledged the importance of both the employees and the customers. Customer’s satisfaction was the goal of the company. To satisfy the customers, the Enterprise undertook distinct practices that favoured the customers and the overall business. First, the business was reliable in that it had established branches in the most convenient parts of the country that includes close to repair shops making it easy to acquire a means of transportation while the customer’s own car was being repaired (Exhibit 1). With time, the Enterprise devised other strategies that were more attractive to the customer than the competitors’ and that included the door-to-door and drop-off services. This was important in developing as well as improving relationships with the customers and taking reliability to another level. The service involved picking the customers from their homes and dropping them off and increased the company’s market share after establishment of the “We’ll Pick You Up” campaign. The company’s pre-established culture was also customer oriented through a founding value that viewed customer service as Enterprise’s way of life. Second, Enterprise had invested in training their employees to be customer oriented. When hiring employees, the company sought for employees with customer-specific characteristics that include customer service skills, flexibility, and good communication skills. Third, the company ensured that their customer experience was convenient mostly with respect to the cars and the reception that the customers received when they visited the company. The customer experience maintained three major aspects that they fulfilled in the best way possible that incorporated the cleanliness of the cars, the transaction speed, and the attitude as well as the helpfulness of the employees. Lastly, the company encouraged the customers to give feedback on the quality of the services they received. The company wanted to improve repeat purchase through feedback. For instance, the customers were asked if they were completely satisfied or just satisfied. Although the vast majority stated that they were completely satisfied, the company sought to resolve issues with the customers that were not completely satisfied by asking them whether they would accept a call from the branch manager. The Enterprise acquired several assets to enable itself in providing the best services. First, the company did not target the best and the brightest students in college when hiring its employees. The company chose to recruit from what they referred to as the second half that makes the upper half possible. Since the bright students are the usual targets of the corporate recruiters, Enterprise decided to pick those that are ready to build a well-paying career for themselves. Second, the company shifted its attention from acquiring the best computer systems to realizing the best customer experience through honesty and integrity. Here, the company emphasized that one can live through any mistake but cannot survive a lie. This implied that their record keeping capabilities would not be of much importance if the customer service is not perfect. This made it possible for the company to offer the most competitive customer experience as compared to the competitors. As is the case with most businesses, the human resource strategy adopted by the company had its own strengths and weaknesses. Motivation is one of the best strengths that were realized through the adopted strategy. This was realized through the company’s rewarding system and recognition of good performance. The rewarding system was founded on performance based compensation that at times contributed most of the employees’ payment. Here, bonuses made up almost 80% of the total compensation. However, this depended on how a specific branch is performing. Recognition was done through communication of the names of the best performing employees to an entire region. Promotion could also take place according to both the branch and the individual’s performance in addition to experience. Additionally, a pre-determined promotion program was followed by all individuals indicating that the company did not favour any individual even the CEO who inherited the company from his father. The company filled most of its managerial posts through promotion. Employees become motivated if an organization refrains from favouring or unfairness of any kind. The human resource strategy managed to foster competitive environments among the organization itself. The company’s staff competed among themselves since the best performing branch received the most privileges with regard to promotions and compensations. This is one of the best outcomes in the adopted human resource strategy since it prompted the managers to come up with innovative ways to beat the other branch. One of the innovations that came from this form of competition is the door-to-door pickup and drop-off service. In the end, the overall organization developed and made vast profits. With respect to the disadvantages, the method that led to promotion and recognition was at times a let-down to good performing individuals. This is because the company tied the eligibility for corporate recognition and promotion to the performance of the team or the entire branch. This means that although an individual may be performing well, the only chance they had of being promoted was if the branch they work in was performing well in its entirety. Although this fostered teamwork, it still functioned as a disadvantage. The atmosphere of intense competition was at times viewed as exploitation by some managers who stated that the atmosphere is horrible due to pressure to perform well and competition. With respect to the main competitors, Avis and Hertz, it would not be possible to replicate Enterprise’s success by both competitors although they would improve their success if they adopted similar practices as those embraced by Enterprise. Since Enterprise has established its presence even in the airport rental sector, it becomes more difficult for the competitors to replicate its success. This is because Enterprise’s success is immense especially with regard to branches. At one time, Enterprise had 6,000 branches while Avis, which is the second best, managed 1,930 (Exhibit 2). This proves that being able to replicate the company’s success is overly difficult. The increasing popularity of Zipcar will not affect Enterprise’s future profitability for several reasons. First, there are many players in the same business that will provide intense competition for Zipcar. Second, Enterprise has already established its presence in the car rental market making it very difficult for other businesses to outperform or even affect its profitability. Third, Enterprise has also established itself in the car-sharing business in the form of virtual cars. This implies that Enterprise has a share in the sharing business, which when coupled with its performance and market share in the rental business could mean intense competition for other players. Exhibit 1 Enterprise main activities Exhibit 2 Facts and facts about Enterprise Branches Approximately 6,000 in 50 states Revenue More than 12 billion by 2010 Human Resources More than 68,000 all over U.S Fleet Approximately 850,000 cars throughout U.S Exhibit A Car rental market Enterprise Avis Hertz Zipcar Owned 13% of airport rental business by 2007. Fleet of 850,000 6,000 branches Risk cars made up 53% of total fleet. Carried out intense advertising. Was second in airport car rental after Hertz. No.1 car airport rental brand in U.S by 2010. Revenue of 1.1 billion by 2010 Second after Enterprise. 500,000 members 8,000 vehicles Revenue of $186 million in 2010. Read More