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Enterprise Rent-A-Car

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Enterprise Rent-A-Car

Case 1 /Operation Management 352

David Swanson


1. How has Enterprise Rent-A-Car (ERAC) defined its service differently than that of the typical national car rental company?

 Enterprise (ERAC), has thoroughly examined the market for rent-a-cars, and has exceeded in the areas of service, culture and growth with beginning in the examination of the service encounter triad (Fitzsimmons, Fitzsimmons, Pg.198, 2006). They have adapted a strategic encounter working with customers by focusing on their own personnel and hiring from a specific pool of prospects, college educated and athletic, emphasizing on social people or people that have been exposed to large crowds and have been in the role of directing in order to produce a positive attitude within the company and outside of it. This attitude sets an example to all of their employees as well as their customers. Eliminating the chance for any dominate encounter and training the proper personnel to handle unrealistic customer expectations and unexpected service failures (Fitzsimmons, Fitzsimmons, Pg.204, 2006), will encourage a professional manner, increase customer satisfaction and relive stress and frustration for the service provider (Fitzsimmons, Fitzsimmons, 2006).   Although with the rental business moving towards a more customer dominated encounter in the front office with the use of automated services, the blend of athletic employees still enhances competition in the front office and back, from customer service, car washing, detailing, delivery, and promotion within to management.

 Culture has played an important role in ERAC’s success also, from the beginning the founder Jack Taylor, philosophy was “You put the customer first because if they are satisfied, they’ll come back. Then come the employees. By making sure they are happy, well informed, and part of a team atmosphere, they will provide the best service possible. If you put the customer and the employee first, the bottom line will happen” (Fitzsimmons, Fitzsimmons, Pg.215, 2006). By distilling this philosophy in the business has guided its employees and increased overall customer satisfaction for ERAC. A set of values put forth by management creates organization among employees and creates identity. With proper training and a set of values in place empowering employees become much easier, and especially in the rental business of autos where frontline employees are a customer’s first contact regardless of walk-in or automated service. Having trained contact personnel that are motivated and informed creates customer satisfaction. With ERAC’s culture defined and service set forth by management has greatly contributed to its growth. If ERAC needs to target a specific customer for satisfaction isn’t really necessary but attainable, through costs and selection of autos. Basically by employees offering a strong service attitude overall has created customer satisfaction and in turn developed loyalty with repeat customers and helped ERAC gain market share against competitors in larger markets of the rental car industry. (443)

2. What features of its business concept allow ERAC to compete effectively with the existing national rental car companies?

  ERAC has a well defined strategic vision (Fitzsimmons, Fitzsimmons, Pg. 39, 2006) in place. Management has determined the target market, the service concept, operating strategy, and delivery system and if they support one another.                                                  ERAC, addresses the:

 Target market segments: ERAC operates along two primary lines of business, rental vehicles and corporate fleet management (Fitzsimmons, Fitzsimmons, 2006).The rental vehicles side allows them to capture the local market or hometown market as described by ERAC to be their main objective with continued growth and also capture some of the airport market from their competitors. The fleet management operation side of ERAC has expanded from just leasing to complete end to end leasing allowing customers to outsource their entire fleet.

Service concept: ERAC’s service concept is also personalized with delivery of an auto to the customer either at home or the repair shop. They offer rates that are considerably lower than their competitors and a wide selection of vehicles to meet their customer needs.

Operating strategy: ERAC makes use of their most advanced and most convenient office locator system connecting their 4000 offices via a 1-800 number making easy contact for customers and moving towards a more self service environment and supplemented  with ARMS, an automated rental management  system which provides an electronic interface that allows major clients, such as insurance companies, to manage bookings, billings, and payments in the most efficient manner possible (Fitzsimmons,Fitzsimmons,Pg. 217,2006). Also purchasing autos from a large number of makers and keeping them on the road longer to reduce costs.

Service delivery system: ERAC emphasis’s on social demand and people with interpersonal skills to create a positive attitude and trained in handling troubled situations. Customers are ERAC’s focus and their personnel from top management to front line employees are willing to help when necessary.

 ERAC makes use of the Open-system view of service operations (Fitzsimmons, Fitzsimmons, Pg.30, 2006) quite well. Service managers include the customer as a participant with an automated system, which facilitates marketing by educating the customer to play a role in the service process and leveling demand to match service capacity which includes having offices that are properly staffed and easily accessible for the customer.   The entire process properly executed from including the customer in the process, having properly trained staff and satisfied customers creates an edge for ERAC.  (416)

3. Use the service profit chain to explain the success of ERAC.

 The service profit chain proposes a relationship that links profitability, customer loyalty, and service value to employee satisfaction, capability, and productivity (Fitzsimmons, Fitzsimmons, Pg.209, 2006). ERAC does just that from their beginning with their founder Jack Taylor’s philosophy and has embedded it into the company’s culture for employees to recognize and guide their behavior. The service profit chain can be explained in 6 steps.



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