29 Jun MKT 351 – Enterprise Rent A Car Focuses
Question
CASE 28 Enterprise RentACar Focuses on Its People
Enterprise RentACar, with annual sales of more than $13 billion, is the largest and most
profitable carrental business in North America. The company runs more than 6000 locations that fall within 15 miles of 90 percent of the U.S. population. Enterprise also operates in Canada, Germany, Ireland, and the United Kingdom.
When Jack Taylor started Enterprise in 1957, he adopted a unique strategy. Most car
rental firms targeted business and leisure travel customers who arrived at an airport and needed to rent a car for local transportation. Taylor decided to target a different segment—drivers whose own cars were being repaired or who were driving on vacation, hauling home improvement materials, or in need of an extra vehicle for an outoftown guest, or who, for some other reason, simply needed an extra car for a few days.
Traditional car rental companies must charge relatively high daily rates because their locations in or near airports are expensive. In addition, their business customers are price
insensitive because their companies pay for the rental expenses. While the airport locations are convenient for business customers, these locations are inconvenient for people seeking a replacement car while their car is in the shop. Although Enterprise has airport locations, it also maintains rental offices in downtown and suburban areas, near where its target market lives and works. The firm provides local pickup and delivery service in most areas.
Enterprise also rewards entrepreneurship at a local level. The company fosters a sense of ownership among its employees. For example, its management training program starts by defining a clear career path for each management trainee. Then it teaches employees how to build their own business. Their compensation is tied directly to the financial results of the local operation. Employees from the rental branch offices often advance to the highest levels of operating management.
Page 589 The firm hires college graduates—8000 each year from 1000 campuses—for its management trainee positions because it believes a college degree demonstrates intelligence and motivation. Rather than recruiting students with the highest GPA, it focuses on hiring people who were athletes or officers of social organizations, such as fraternities, sororities, and clubs, because they typically have the good interpersonal skills needed to deal effectively with Enterprise’s varied customers.
Jack Taylor’s growth strategy is based on providing highquality, personalized service so that customers will return to Enterprise when they need to rent a car again. One of his often
quoted sayings summarizes his philosophy: “If you take care of your customers and employees, the bottom line will take care of itself.” But because operating managers initially were compensated on the basis of sales growth, not customer satisfaction, service quality declined.
The first step Enterprise took to improve customer service was to develop a customer satisfaction
measure, called the Enterprise Service Quality Index. The questionnaire that customers complete
to assess ESQI was developed on the basis of input from operating managers, which in turn gave
those managers a sense of ownership of the measurement tool. As ESQI gained legitimacy, Enterprise made a bigger deal of it. It posted the scores for each location prominently in its monthly operating reports—right next to the net profit numbers that determined managers’ pay. The operating managers were able to track how they were doing and how all their peers were doing because all of the locations were ranked.
Feedback is also provided to service providers. If a customer mentions in the questionnaire that “I really liked Jill behind the counter; she just was terrific,” that comment gets sent the very next morning to the local branch so that Jill knows that she did a great job and that a customer said something nice about her. Likewise, if somebody said that a car was dirty, the next day the local manager knows it and can determine why it happened. To increase motivation among managers and improve service at their locations, Enterprise also announced that managers could be promoted only if their customer satisfaction scores were above the company average. Then it demonstrated that it would abide by this policy by failing to promote some star performers who had achieved good growth and profit numbers but
had belowaverage satisfaction scores.
To provide a high level of service, new employees generally work long, grueling hours for
what many see as relatively low pay. Before they are put in a branch and learn how to rent a car, Enterprise tells new hires about what the company means, what is important to customers, and what it deems important in terms of being a good team member. The company operates like a confederation of small businesses. New employees, like all Enterprise managers, are expected to
jump in and help wash or vacuum cars when the location gets backed up. But all this hard work can pay off. The firm does not hire outsiders for other than entrylevel jobs. At Enterprise, every position is filled by promoting someone already inside the company. Thus, Enterprise employees know that if they work hard and do their best, they may very well succeed in moving up the corporate ladder and earning a significant income. DISCUSSION QUESTIONS What are the pros and cons of Enterprise’s human resource management strategy?
2.
Would you want to work for Enterprise? Why or why not?
3.
How does its human resource strategy complement the quality of customer service
delivered by its representatives
1.
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.