When people think of car rental firms, The names hertz and Avis usually come to mind. But in the last few years, enterprise rent a car has overtake both of these industry Giants, and today it stand as both the largest and the most profitable business in the car rental industry. In 2011, for instance, the firm had sales excess of $14 billion I'll fleet of over 1.2 million vehicles, and employed over 70,000 people.
Jack Taylor started enterprise in St. Louis in 1957.Taylor had a unique strategy in mind for enterprise, and that strategy played a key role in firm's initial success. Most car rental firms, like Hertz, Avis, base most of their location in or near airports, train stations, and other transportation hubs. These firms see their customers as a business travelers and people who fly for vacation and then need transportation at the end of their flight. But enterprise went after different customer. It sought to rent a car to individuals whose own cars are being repaired or who are taking driving vacation.The firm got its start by working with insurance companies. A standard feature in many automobile Insurance policies is the provision of a rental car when one's personal Car has been in an accident or has been stolen. Hertz and Avis charge relatively high daily rates because their customer needs the convenience of being near an airport and/or they are having their expense paid by their employer. These rates are often higher than insurance companies are willing to pay, so customers who use these firms end up paying part of the rental bill themselves. In addition, their locations are also often inconvenient for people seeking a replacement car while theirs is in the shop.
In recent years Enterprise has started to expand its market base by pursuing a two pronged growth strategy. First, the firm has started opening airport location to compete with Hertz and Avis, but their target is still the occasional renter rather than the frequent business traveler. Second, the firm also began to expand into international markets and today has rental offices in the United Kingdom, Ireland, France, Germany and other European countries.
Another key to enterprise's success has been its human resource strategy. While many employers seek to hire only top students, Enterprise target a certain kind of individual; it's preferred new employee is a college graduate from a middle to bottom half of the graduating class, and preferably one who was an athlete are who was otherwise actively involved in the campus are social activities. The rational for this unusual academic standard it's actually quite simple. Enterprise managers do not believe that especially high level of academic prowess are necessary to perform well in the car rental industry, but having a college degree nevertheless demonstrate a reasonable level of intelligence and motivation. Since interpersonal relation are important to its business, Enterprise wants people who are social director or high ranking officers of social organizations such as fraternities or sororities. Athletes are also desirable because of their competitiveness.Once hired, new employee at enterprise is often shocked at the performance expectations placed on them by the firm. They generally work long, grueling hours for relatively Low starting pay. And all enterprise managers are expected to jump in and help wash or vacuum cars when a rental agency gets backed up. all enterprise manager must also adhere to a stringent set of dress and grooming requirements. For instance, men must wear coordinated dress shirts and ties and can have a facial hair only when "medically necessary." And a woman must wear skirts no shorter than 2 inches above their knees or creased pants.
So what are the incentives for working at enterprise? For one thing, it's an unfortunate fact of life that college graduates with lower grades are often struggle to find work. This, a job at enterprise is better than no job at all. The firm also does not hire outsiders 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 higher of the corporate ladder add the growing and successful in firm. And higher level position has a salary more in line with the industry standard.
Case question:
1. Would Enterprise's approach to human resource management work in other industries? Why or why not? Be sure to give specific examples to substantiate your statements.
2. What risks does Enterprise face from its HR strategy?
3. Would you want to work for Enterprise? Why or why not?