Strategic Plan-Hertz

Strategic forge for the cps potful February 18, 2011 mesa of Contents Introduction of group and Assignment4 mellow society Profile6 Mission Statement6 Vision and place7 scotch measure ups7 Strategic Analysis9 SWOC Analysis Strengths10 SWOC Analysis Weaknesses13 SWOC Analysis Opportunities17 Internal Actions17 Opportunities18 SWOC Analysis Ch every last(predicate)enges20 dependance on the get together States Automobile Industry20 Technological Changes and Advances20 Competitive Pressures21 Maintaining guest contentment and employee morale22 Merger Transitions22 Pressures to Go Green22 Expanding the Global mark23STRATEGIC ISSUES25 Market Sh atomic number 18 Vehicle lease25 Car Manufacturers25 Debt and Interest payments26 Technology26 focussing on Green27 Off Airport Rental27 stack27 Equipment Business28 Summary29 Foundations of goals and strategicalal visualize30 Increased Market Sh atomic number 1830 park air toward sustainable inventory30 Improve guest satisfac tion by training and applied science31 consecutiveness to Employees31 Drastic all(prenominal)y change magnitude debt owed32 wheel Strategic Plan Implementation33 Mission33 Vision33 Strategies33 REFERENCES36 Introduction of group and Assignment In recent categorys, leaders of the Statesn g e trulywherening bodys form approach a multitude of challenges.The numerous trends and correctts that have occur exit in the past ii decades have inhabited both(prenominal) American society and production puff practices. think of the influences the spargon- meter exertion events and trends have had on our government, communities, and public agencies an aging and diversifying population changes in the nature of families melodramatic shifts in federal and state responsibilities and funding priorities the offspring of the poor as the largest group of poor Americans fears about terrorism the upriseth of obesity as an important health concern and a recent crippling recession (B ryson, 2004).Now think how American society would brook if our government did not institute policies, course of instructions, and contrives in rejoinder to these conditions and crises. The akin h agings true for craft organisations around the world. Organizations that want to survive, prosper, do good and important contrive essential respond to the challenges the world presents (Bryson, 2004). In this environment, strategic plans are infallible to combat live challenges and rear time to come direction for personal credit line practices.Organizations that ship on strategic planning drastically amplify their chances to endure cur lock and future crises and are inherently closer to creating a sustainable transcription that has public look on. Students enrolled in the HR504 Strategic Planning class nominateed at the University of Scranton, were stipulation the daunting appellation of creating a strategic plan for an boldness of their woof. The strategic plan outli ned in this paper was developed by the succeeding(a) students Elisa Cosner, Patricia Dungan, Jacqueline Lombardo, and Mark Trautman (Team 3).These four students represent underway and aspiring humankind resource professionals in pursuit of their Masters degree in the field of Human Resources. The unique challenge of this assignment was to find a medium that could bring this geographically dispersed group of students together on a regular basis so they could collaborate and execute assignment responsibilities. The chosen medium was a chat forum called Meebo. Students met on Meebo for a nominal of thirty minutes every week, for a period of sextette weeks, to formulate, direct, and assign task responsibilities for their strategic planning efforts.When it came time to choose an validation for this assignment, Team 3 opted to make studies on struggling America business organizations that were experiencing pecuniary problematicalies and extreme pressures from both internal and ex ternal threats, ultimately choosing an organization that would unequivocally benefit from these strategic planning efforts. After much deliberation, Team 3 decided to formulate a strategic plan for the cycles/second Corporation. The rhythm Corporation is the largest rail railroad gondola car lease firebrand in the world, with al some 3,500 locations in the unify States and 7,500 planetary.Recent economic threats have cause double figure of speech capitulations in car and letting equipment flashinesss, forced bike to drastically downsize its custody and have seen the corporation experience hundreds of one thousand millions of dollars in net losses over the past tether years. The strategic plan outlined hereafter, is an attempt by Team 3 to secure a strategic advantage for oscillation in the car lease securities industryplace, by mitigating the effects of environmental threats and awful economic influences, while at the same time utilizing the existing strengths of the organization and manipulating growth opportunities.Before we embark on this endeavor, we find it beneficial to provide a brief archives of the rhythm Corporation. Compevery Profile cycle Global Holdings ( cycle) operates fomite and equipment climb term of a contract businesses in the linked States and Europe as well as global dish outs for industries handle bend, elevator carmobile manufacturing, railroad, military group generation, and ship nominateing. The company employs 24,900 hatful and has company headquarters in Park Ridge, naked Jersey. cycles businesses are separated into dickens divisions. The Car Rental division, round, which operates ental facilities near airdromes, central business districts, and suburban areas of cities, and withal retails and leases, use cars in the United States and France where associates strike reticences for car lettings at virtually 8,000 locations in nigh 145 countries. The Equipment Rental division, bike Equipm ent Rental Corporation (HERC), rents earthmoving equipment, material discussion equipment, aerial equipment, electric equipment, compressors and generators, and reflexion-related vehicles and tools.The Equipment Rental division excessively offers claim precaution services for both divisions investigating and negotiating various claims including bodily injury, property damage, and usual and product li faculty for its clients. Mission Statement The mission at round is to be the al well-nigh node pore, constitute efficient vehicle and equipment rental/leasing company in every commercialise we serve. We get out strengthen our jumper cable worldwide positions done a share-value culture of employee and triggerner involvement by do strategic investments in our brand, people and products.The focus of every issue we do lead be on continuously improving shareholder value. Vision and Values bike has a vision to be the first choice brand for vehicle and equipment rental/leasi ng and total mobility solutions. In arrange to achieve this vision, cycle per second, its employees and subsidiaries impart adhere to the values of Integrity, Transparency, Continuous Improvement, Diversity, Passion, Commitment, Teamwork and Account tycoon. Economic conditionsThe current recession in the United States has adversely expeditioned al or so all domestic organizations, with bicycle being no exception. The uncertainty of current economic conditions has lead to heartrending taxation in stability for round. In 2009, cps experienced the most touchy macro-economic conditions in its 91 year history. Revenues were down 1. 4 one thousand thousand from the prior year, and general wheel experienced a net loss of $126 million. A great portion of these conditions can be attributable to Americans traveling less.In should be of no surprise that car and equipment rental companies are importantly influenced by full general economic conditions. One of the many economic challenges go about wheel is the organizations dependence on drastically reducing in operation(p) constitutes. cycle per second has been lucky at doing this, but this success could have potential consequences. By drastically reducing its workforce, cycle jeopardizes node satisfaction levels and employee morale.In humanitarian, cycle per seconds current indebtedness has presented the following challenges to its operations the organization is at one time emergencely vulnerable to adverse economic and industry conditions, they are at a war-ridden disadvantage to any competitors with importantly less debt, inflexibility in planning for and reacting to ever-changing conditions in their business and industry, moderate ability to react to competitive pressures, and it is change magnitude difficult to carry out detonator spending that is necessary and important to cycle growth strategy to alter operating margins.According to the round 2009 Annual Report, the company reco rded taxs of $8,525. 1 million during FY2008 which was 1. 8% decrease from 2007. The operating profit in FY2008 was $631. 2 million, a decrease of 50% compared to 2007. The net loss was $1,206. 7 million in FY2008, compared to the net profit of $265 million in 2007. Despite this, wheel emerged from the 2009 recession a more efficient, node focused company that is poised for untouchable revenue growth. bes were reduced by over $1. one million million million since 2007, strategic plans to further improve service have been implemented, and in 2009, unused business opportunities were developed. As a result, over $170 million of additive revenues have been generated, the consolidated operating margin for 2009 was equal to 2008, and the margin for worldwide car rental change magnitude to 7. 8%. Going forward cycle per second go away focus on tolls, service and revenues combined with improving conditions in our car and equipment rental businesses. oscillation is expecting s ignificant margin working out and change magnitude shareholder value.Strategic Analysis Subjects Employees Equipment dealers (Ford, John Deere) Players gore of Directors Senior focal point Shareholders Customers Lenders Crowd Government Authorities (Airports to environmental divisions) Franchises context of use Setters Subordinated debt holders Subjects Employees Equipment dealers (Ford, John Deere) Players Board of Directors Senior Management Shareholders Customers Lenders Crowd Government Authorities (Airports to environmental matters) Franchises Context Setters Subordinated debt holders Subjects have participation but micro advocatorContext setters have power but small-minded direct interest Crowd S consentholders with little interest or power Players have interest and power study power versus Interest Grid, used to array stakeholders in the organization and the stakeholders power to print the organizations future. In rhythm case, as a largely leveraged organization this analysis can prove telling as those with power whitethorn be more self-interested than in the game for the long term health of the organization. SWOC Analysis Strengths * Strong Market Presence Strong Name knowledge * Strong Global Presence * Strong Diversification * Effective Cost Containment * Good Business Partnerships * Entrepreneurial culture * Recent Acquisitions * Agile * Our Employees * smart Services * Variety Offered bicycle Global strengths overwhelm the companys strong presence in the rental car and equipment market and strong name recognition as they remain the number one drome car rental provider in the United States. The company overly has a strong global presence with outlets in Europe, North America,Latin America, Australia, New Zealand, Asia, Africa and the marrow East. bicycles strong diversification of businesses, products, and market protects the company offering a long-term competitive advantage done difficult times. Hertz is poised to serve ever y type of guest in the market including business accounts, hourly renters, budget travelers, and multi- month rental customers. Hertz continues to lead the industry in cost management and containment finished unravel strategic plans like exit management, back-office reengineering, and organizational redesign.A good practice of the companys ongoing success recovering its financial executing is the refinancing $3. 2 billion of the U. S. fleet debt one year ahead of record with pricing comparable to 2005 rates. In addition, $990 million of detonator was raised through a successful convertible debt and equity transaction. Efforts seconded the company emerge from a difficult year in 2009 as leaner and more focused and Hertz is expecting higher(prenominal) returns throughout 2010.Good business partnerships and the companys entrepreneurial culture assisted Hertz to better efficaciously manage changing market conditions and take advantage of growth opportunities. For example, Hertz made the following important recent acquisitions * The Dollar Thrifty Automotive Group, which not only when strengthened Hertz financially it also expanded Hertzs share in the business travel off-airport market, * The purchase of Eileo SA, a car- manduction service and provider of engine room for consort by Hertz.This investment in engineering will help advance Hertzs leadership by taking the customer experience to the following level, * The addition of the favour value brand handsomehand them an even greater share of the exploitation Leisure segment, the acquisition already has resulted in gaining a full point of U. S. airport market share, * several(prenominal) smaller acquisitions further expanding their Equipment Rental market. The companys agility is demo by its ability to quickly adjust labor and fleets to match fulminant changes in demand.For example, company transaction days in 2009 were down 8% while worldwide was down 9. 7%. The company can and has, throug h strategic fleet management, successfully held its fleet and aged it a little further, while adjusting the fleet rotation planning to take in the fleet dust aligned with demand. Our employees are highly skilled and able to handle difficult situations. During the economic downturn, they were quick, analytical, strategic, and acted with an absolute sense of urgency. All departments work together toward the same goal.Everyone took action by developing a plan and hold oning strong communicating. Company strengths also include Hertzs reinvigorated and innovative services like Hertz 1 Club Gold, NeverLost water travel systems, rental coupons, and Sirius Satellite Radio. To set itself apart from its competitors, Hertz also offers members guaranteed satisfaction, increased discounts, free use of one child, infant or booster seat, free unlimited mileage on most rentals, no Saturday night backing required, and no airline ticket required to qualify for low every week rates.Finally, He rtzs strength includes the variety of rentals offered to customers like SUVs, vans and specialty rentals. In an effort to further increase its variety, Hertz introduced the Corvette ZHZ to their rental line-up. The natural addition is part of their Fun Collection the purpose of which is to serve those clients wishing to rent a sporty car or a specialty vehicle as the Corvette ZHZ comes with a powerful V-8 engine or 436 horsepower. The company expects this limited edition car will be an asset during the summer spend rental season and ordered 500 of them in 2008.SWOC Analysis Weaknesses over the past 18 months, the United States and inter subject field markets have experienced a significant ancestry in economic performance that has affected the car rental market, including a tightening of the credit markets, reduced business and waste travel, reduced consumer spending and volatile fuel prices. In the equipment rental business, the decline in economic operation has resulted in a decline in activity in construction and other businesses in which our equipment rental customers operate.Accordingly, the car and equipment rental industries have both experienced unprecedented declines in volume and demand. Hertz is not unlike any other organization in this economic climate in that they have aspirations of seeing the upside of this down spiral. Unfortunately, most of what Hertz is dependent upon to make it through is outside of their estate of control. The car and equipment rental industry is significantly affected by general economic conditions, and any further decreases in general economic activity could materially and adversely affect their financial condition and results of operations.The results of operations are affected by many economic factors, including the level of economic activity in the markets in which they operate. The car rental business, which provides the bulk of the revenues, is concomitantly sensitive to reductions in the levels of airline pa ssenger travel, and any further reduction in air travel could materially adversely impact their financial condition and results of operations. The car rental industry is busyly affected by reductions in business and leisure travel, oddly with complaisance to levels of airline passenger traffic. just about 84% of our worldwide revenues during 2009 were provided by the car rental segment, and they estimate that approximately 67% of the car rental revenues were generated at their airport rental locations. hike up reductions in levels of air travel, whether caused by general economic conditions, airfare increases (e. g. , receivable to talent reductions or increases in fuel costs borne by commercial airlines) or other events such as work s turn overpages, military conflicts, terrorist incidents, natural disasters, pandemic diseases, or the response of governments to any of these events, could materially and adversely affect Hertz. assorted factors that could adversely affect Her tz include * Intense disputation that whitethorn lead to downward pricing, or an inability to increase prices. If Hertz tries to increase their pricing, their competitors, some of who may have greater resources and better access to capital than them, may look for to compete aggressively on the basis of pricing. In addition, their competitors may reduce prices in order to attempt to gain a competitive advantage or to compensate for declines in rental activity associated with reductions in economic activity. Slow economic periods could constrain their liquidity and adversely affect our results of operations. Certain significant components of their get downs are fixed in the short-run, including minimum concession fees, real estate task revenuees, rent, insurance, utilities, maintenance and other facility-related expenses, the costs of operating their information engineering systems and minimum supplying costs. * They may not be successful in the business strategy to expand int o the off-airport rental market.They have been increasing their presence in the off-airport car rental market in the United States and intend to continue to pursue profitable growth opportunities through a combination of selected raw location openings, a disciplined evaluation of and strategic changes with respect to existing locations, and the pursuit of same-store sales growth. * A downsizing of their rental car fleet could require them to make additional cash payments for tax liabilities, which could be material. An inability to purchase adequate supplies of competitively priced cars or equipment and the cost of the cars or equipment purchased increases, their financial condition and results of operations may be materially adversely affected. * Declines in the value of the non- architectural plan cars in their fleet repayable to decreases in residual values could adversely impact the financial condition and results of operations. For the year ended December 31, 2009, approximat ely 53% of the cars purchased in the combined U. S. nd international car rental fleet were subject to buy by car manufacturers under contractual repurchase or guaranteed depreciation programs. * The mishap of a manufacturer of cars that Hertz owns to fulfill their liabilitys under a repurchase or guaranteed depreciation program could expose them to loss on those cars and adversely impact the outstanding asset-backed financing facilities, which could in turn adversely affect the liquidity and results of operations. For the year ended December 31, 2009, the highest outstanding month-end receivable poise for cars sold to a single manufacturer was $95. million owed by Hyundai repulse Company in January 2009, which was subsequently paid. Although there is no guarantee that Hertz will be paid these amounts by any car manufacturer that files for bankruptcy protection in the future and/or otherwise ceases operations, any failure by a manufacturer to pay such amounts due could, among o ther things, cause a credit enhancement deficiency with respect to the asset-backed financing, in which case the collateral requirements for such facilities could be increased. * Significant increases in fuel costs or reduced supplies of fuel could harm our business. render prices have been volatile recently, and could fluctuate severely and/or increase overall in 2010. According to the U. S. Energy study Administration, from 2008 to 2009, the average retail cost of a gallon of gasoline in the United States decreased 27. 9% however it was projected that over the course of 2010 fuel prices would increase 20. 8%. * Heavy belief upon communications networks and centralized information technology systems to accept reservations, process rental and sales transactions, manage our fleets of cars and equipment, account for activities and otherwise conduct business.This reliance exposes them to various risks that could cause a loss of reservations, interfere with their ability to manage t he fleet, slow rental and sales processes. * Risks related to liabilities and insurance since their businesses exposes them to claims for in the flesh(predicate) injury, death and property damage resulting from the use of the cars and equipment rented or sold by Hertz, and for workers compensation claims and other employment-related claims by our employees. SWOC Analysis OpportunitiesHertz has weathered the economic storm of 2008, the worst economic conditions in their 91 year history by looking ahead for growth opportunities and ship canal to improve service levels. A review of external and internal actions that have prepared Hertz to capitalize on opportunities outside Actions * Improved conditions in car and equipment rental business * Successfully developing business in draw rising markets Brazil, China and India * Experiencing improvement in the US Car rental, the largest share of the Hertz business Internal Actions * Reduced costs by 1. billion dollars head count reduction (4,000 employees) taken in non strategic locations (with a bit of help from the economy Hertz should be poised for solid growth). * Refinanced 3. 3 billion dollar debt one year ahead of schedule on kindly terms. * Hertz has deposited the course intentionally focusing on three key business emphasis areas asset management, employee satisfaction and customer satisfaction. * Lighthouse project that utilizes employee input in the development of customer features has change employee engagement and customer satisfaction. Opportunities Hertz is leading the way with High-Tech, High-Touch innovations Hertz. om, self service kiosks at 36 major airports, including 11 in Europe (which have successfully spotless 500,000 transactions), portable rental devices, enable roving customer service agents to predict customer studys integrated car sharing technology including online booking, applications for iPhone and berry smartphones GPS navigation upgrades with touch point screens. Hertz has mo re than 700 locations in Europe, on with franchise partners which rivals its airport locations European local rentals continues to grow for business people as it is the most efficient means of travel in Europe.They throw the most diverse car fleet in the rental industry, enabling service to all customer segments vacationers, business people and local residents. This is a key area of expansion as Hertz looks to 2010 to open one hundred fifty freshly locations. Looking to expand their leisure driving for fun market, Hertz introduced a pre-paid program that is used primarily by the 21-25 year old market, a market segment that was and in many cases is not allowed to even rent before this program. In addition they introduced three new programs for vacation travelers i.Prestige collection high end SUVs and luxury car models (Volvo, Lincoln, Cadillac, BMS, Audi and overthrow Rover. ) ii. Green collection Toyota Prius, Ford Fusion, Toyota Corolla, Camry hybrids. iii. Fun collection Ford Mustang, rag Corvette, Jeep Wrangler. To further diversify, Hertz purchased Advantage Rent A-Car a very reasonably priced car rental popular with those who do the Priceline on line booking. Hertz has combined their fleet with Advantage in order to offer a variety of peak and off peak vehicles to comely a variety of renter require.Theyve begun looking at renting electric cars, a zero carbon, and rechargeable vehicle, introduced in late 2010 in North American and European markets. The target market for the electric cars is a university setting where the charging post make sense for car sharing experiences. In addition, car sharing, Connect by Hertz, a total mobility solution offering high tech, high touch rental option for urban, university and corporate travelers. To further expand their offerings, Hertz purchased Paris secondaryd Eileo in 2009, the pioneer of integrated car sharing technology, a concept that has been launched in London, Paris and NYC.This offering reduces the number of cars on the road which also reduces pollution, creating an economic benefit for crowded urban areas. In their global markets, Hertz has expanded their equipment rental revenue into China and the gist East with entertainment services, power generation and industrial equipment. This expansion of global footprint gives Hertz the ability to offer first class rental experiences through corporate owned or franchised partners. Special attention was habituated to China (Beijing and Shanghai) and Chinas new 48 airports, Saudi Arabia/Middle east with equipment where construction is booming currently.SWOC Analysis Challenges Dependence on the United States Automobile Industry The financial instability of U. S. car manufactures has presented significant challenges to the Hertz Corporation. Hertz depends on its business partnerships with these organizations. The bankruptcy of many American auto manufacturers has led to double digit declines in car and equipment rental volumes. The majority of Hertzs rental cars are purchased from Ford and General motors. In the event that these companies would cease manufacturing and selling vehicles, Hertz would have to increase purchasing vehicles from other manufactures.However, there is no guarantee that Hertz will be able to purchase vehicles at their current purchasing price. Technological Changes and Advances many an(prenominal) futurist and economists see expert innovation as one of the major forces driving industrial change (Schwartz, 2003 as cited in Bryson, 2004). As technology becomes increasing dominant in American organizations, Hertz employees will need to develop new skills to use and the organization will need to cover these processes, structures, and resource allocations. Hertz will need to continually improve the way in which technology drives its business.These could represent challenges for them to improve the operation and effectiveness of their website, selfish kiosks at airports, the GPS syste ms in their vehicles, and also includes the advancing their smart phone applications. Information technology is currently driving major changes likely to have dramatic impacts on organizational performance, accountability, and issues related to data and privacy (Bryson, 2004). Hertz reliance on technology exposes risk that could cause loss of a reservation interfere with their ability to manage fleets, privacy issues, and the slow operation of the car rental and sales process.Hertz needs to protect against these risks because they could adversely affect customer relations, operating results, and financial conditions. Competitive Pressures Hertz operates in a highly competitive market. They currently posses a 25. 7% share of the rental car market (AVIS/Budget- 28. 9%, endeavour- 31. 4%, Dollar/Thrifty- 12. 0%) Enterprise brands currently dominate off-airport rentals and the insurance replacement markets respectively. One of Hertzs priorities is to present a bigger challenge to Ente rprise in these particular arenas.In order to do so, Hertz needs to remain conscious(predicate) of the business strategies of their biggest competitors. Significant changes in the competitive market will affect Hertzs business strategies and policies, not excluding pricing practices and incentive programs. For example, most consumers have become more cost conscientious since the recent recession. If Hertz were to increase costs, their competition, some of which has greater resources and better access to capital, may seek to compete aggressively on the basis of pricing. In essence, Hertz competition could gain strategic advantages by reducing their prices.Hertz may also be presented with additional challenges from future competition. Worldwide equipment rentals, an area in which Hertz does especially well in, is currently highly fragmented with few national competitors. It is reasonably foreseeable for new competition to develop and penetrate that particular market. Maintaining cust omer satisfaction and employee morale The present economy has made maintaining customer satisfaction and employee morale particularly challenging. The recession has caused Hertz to focus intensely on reducing operating costs. This means they had to drastically reduce staff and close many under-performing locations.In order for Hertz to maintain customer satisfaction with fewer employees and locations, they must develop more efficient practices and policies. This would also require Hertz to- uniformly monitor the need for additional staffing at improving locations, constantly assess environmental trends, and introduce customer-centered technologies. Hertz must also be prepared to combat a potential decline in employee morale. With lay-offs perpetually looming, it is reasonable to expect employee morale to waver. If this happens, it could present deficiencies in operations which would in a flash affect customer satisfaction levels.Merger Transitions Hertz recently acquired Eileo, a France based company that specializes in car-sharing programs. They also acquired the Advantage Rent-A-Car company in April of 2009. One of the challenges of these major acquisitions for Hertz is for them to be able to effectively integrate these associated offices, without diluting the Hertz brand. In essence, they must know functional synergies. Doing this does involve numerous risks including potential disruptions of ongoing business, distractions of management, difficulties integrating different business practices, and exposure of unknown liabilities.Pressures to Go Green Green policies and practices are becoming preferred by the majority of the American population. Consumers are increasingly concerned with the longevity of the planet. Hertz business policies need to accept Americas vision of greener practices. In order to do this, Hertz most take on a moral responsibility to utilize vehicles with higher MPG and better fuel emission standards that are safer for the environment . This could also include the challenges of effectively developing electric car initiates and car sharing programs.Expanding the Global Footprint Approximately one-third of Hertzs revenue is generated outside the U. S. market. They currently have franchise partners in over 136 countries. One of the biggest challenges Hertz faces is to smirch the economic effects in their international market, particularly in Europe. This is especially challenging, considering the fact that global recession has caused most companies to eliminate market expansion plans. And yet, Hertz still has ambitions to add locations worldwide, including establishing a higher concentration in the Chinese market. China happens to be the worlds fastest growing car and equipment rental market. ) Other Challenges Facing the Hertz Corporation include * Fossils fuels- rising fuel costs and/or shortages in fuel directly impact rental acquisition, leaving consumers to find it too expensive to travel. * External threats a ffecting travel- war, terrorist attacks, epidemic disease, natural disasters, etc * Risk management- the liability of Hertz being answerable for equipment damage, property damage, personal injury, death, and the litigation expenses that could result from these occurrences. * Seasonality- a decrease in travel uring the winter and increase during the spring and summer months present challenges to efficiently manage fleet operations. * Government laws, mandates, and controls- Hertz is subjected to many governmental regulations in relation to pricing/advertising, privacy and data collection, currency controls, labor relations, charge card operations, insurance policies, environmental protection, and used car sales and licensing procedures. Changes in any governmental policy, or the word sense of new laws, could result in significant changes in Hertz procedures, which may increase cost of operations and applicable tax rates. Marketing- Hertz will be continually challenged to conduct act ive sales and marketing programs that extract and retain customers. STRATEGIC ISSUES Hertz is a front runner in the rental vehicle business, number two only to AVIS in the current markets Hertz serves. In order to maintain and grow a competitive edge there are some strategic issues that Hertz must address directly. Market Share Vehicle Rental Hertz is at the top with Avis edging them out for the top spot, however staying at top means keeping the betray in front of the audience.In the SG A discussion of the 2009 Annual Report Hertz trimmed their advertising expense by almost 30%. They did not mention a new structure for media buying to be facilitated by a new agency to save costs. I am leftover to think they simply decreased advertising. In recent travels and paying closer attention to media in travel magazines Delta Airlines and US Airways flight magazine AVIS big red versus big yellow was the dominant vehicle rental advertiser. Should you look at any other establish, well kn own brand, Coke and Pepsi as an frank example they spend millions keeping that logo front of mind. announce is seen anywhere you could potentially think about drinking a well-heeled drink. In order to continue to branch out with new technology in an effort to capitalize on the brand, Hertz must continue a very aggressive media campaign to be present anywhere people may think of rental car need. Car Manufacturers Hertz suffered greatly when the US car manufacturers financial challenges. Hertz has depended on the partnerships with manufacturers who were not able to meet the obligations of their agreements with Hertz which left Hertz scrambling to develop new avenues for fleet vehicle programs.Ford who Hertz relies on in the US must stay solvent in order to Hertz to enjoy the ability to purchase fleet and program vehicles and the tax incentives they enjoy because of their inventory management of fleet. Debt and Interest payments For the next two to v years in order to survive Hertz must meet obligations for all interest payments and as a sign of financial stability should look to significant debt reduction. The 2009 annual report indicates 126 million in losses, interest expense of 680 million which are material amounts.The debt is held by two aboriginal lenders Deuschte Bank and Bank of Scotland. If either organization called their notes requiring payment in full, Hertz would not succeed. Hertz is not the low cost leader and needs to maintain that position in a positive way to ensure financial trends are positive. Technology Hertz must focus on the ability execute operationally any technology introduced. It is one thing to advertise iPhone applications, internet and wifi connections the ability to produce what the customer has silent using the wireless technologies has to be present in order to build customer confidence.If one reserves, arrives and has no vehicle does the technology really matter if you did not save time or feel that you had received valu e or convenience. To that traveler at that moment Hertz must be able to execute. The ability to distribute their assets to the right place, at the right time to support demand from these new technologies is critical. Focus on Green Hertz is committed to what they refer to as the electric car revolution. This is a vehicle with a zero carbon footprint. At the present time, wishing of recharging stations will temper the demand for the electric cars.The believe is that in the next few years university settings and very urban markets will take the lead for the establishment of charging stations will then provide a structure for this next generation of green transportation. In the short term availability of hybrid models such as the Toyota Prius, Nissan Altima and Toyota Camry are Hertz response to those who require a greener model. Off Airport Rental Hertz is radical to enter new location space with their fleetoff airport rental. Hertz is going face to face with the established leader , Enterprise system. Is this an discriminate move for the next 2 5 years in the US market?Europe where Hertz has a presence and daily/weekly rentals are a way of life is one thing (add to that most of those markets are franchised so you can terminate an arrangement). Hertz will be risking additional asset costs in fleet, leased property, staffing in swear to gain ground in an area held firmly by Enterprise. People Hertz North America has reduced headcount to a denudate minimum deploying human assets on an admitted as needed basis to strategic hubs. This is a very short term view of growth. The ability to grow infrastructure must include a committed front line, operational management team.The Annual Report stated an increase in employee satisfaction. The hope is then that Hertz continues to communicate and reach out to those dedicated to customer service second to none in spite of financial challenges. That part of the human touch with customers leasing employees where customer c ontact is needed airport leasing, returns with impediment is necessary in order to build repeat business. Equipment Business Hertz equipment business does not report a leadership presence in any one market, in any one geographic area. By Hertz own admission the competitive landscape in this business segment is intense. Can Hertz realistically, financially maintain a goodly presence in both industries? EBITDA results were maintained for the equipment portion of the business through cost cutting measures as revenues dropped dramatically. US new construction continues to scramble and from the readings the European market is no better. China is bustling, but are we confident(p) based on current locations that we can enter then stay competitive those new and emerging markets? The equipment is expensive in multiple ways assets are expensive to purchase, maintain, and insure. Is the return versus other similarly situated usinesses vocalise? Hertz is in a business where receivables can become problematic. address is extended, and during financially challenging times generally extended past effectual limits. There was a surprisingly low 1. 1% bad debt due to non-payment, and the receivable turnaround time was not addressed. The fact is you generally do not immediately receive your payment as you would in a fleet rental transaction. The current uncertainty of the future global construction market begsHertz to question whether they can appropriately focus on two different business rental segments given their current financial condition.Summary Hertz has significant brand recognition, good ideas to generate revenue for the future. However they are in a precarious situation two distinctly different business segments that have experienced huge revenue declines, specifically, construction and the vacation and leisure vehicle rental declines of 2008 and 2009 that have left Hertz with extraordinary debt to consider in order to remain a going concern. Foundations of goals and strategic plan We have successfully completed both external and internal analyses of the rental car and equipment markets as it pertains to the Hertz Corporation.The goals and future direction of the corporation must unequivocally elicit actions, that when taken, establish and maintain strategic advantages for Hertz in this extremely competitive market. We believe the goals established herein educe such responses. The subsequent section of this strategic plan will outline the strategies and approaches to be taken by Hertz to facilitate obtainment of their principal goals. The following goals have been established for the Hertz Corporation Increased Market Share In the last 5 years, Hertz has consistently relinquished percentages of their car-rental market share to their principal competitors.Currently, it is estimated that Hertzs market share is at 25. 7%. The goal over the next 3 years is for Hertz to secure one-third of the share in this market. In doing so, Hertz will also m aintain its dominance in the equipment rental market and begin to compete with Enterprise in the off-airport rental market. Hertz will also aggressively pursue its international markets, including significantly extending operations in China, the worlds fastest growing car and equipment rental market. effort toward sustainable inventory Hertz will significantly extend its affectionate responsibility programs.The goal is for Hertz to drastically increase eco-friendly vehicles to its operating fleet (a 30% increase by 2014). Hertz believes it has a moral obligation to do so and will diligently pursue business directives that are safer for the environment. This includes introducing smart car initiatives, increasing electric car fleet additions, and contract more fuel efficient vehicles that emit lower carbon-dioxide into the atmosphere. Improve customer satisfaction by training and technology Hertz has always know its required allegiance to the customers of their brand.Hertz will co ntinue to pursue business objectives that improve customers experience with the product. This will include increasing customer relationship trainings for all our employees. The company will also set aggressive goals over the next 3 years to be the most technologically advanced rental car and equipment company in the world. Essentially, the technology goals were established to make the customers experience more rewarding. At Hertz, we believe that the consequences of improving our technology will result in a better brand image and improved customer satisfaction.The satisfaction/technology goals rely on the principle of the four mores 1) more safe and responsible 2) more simplistic 3) more reliable 4) more comfortable committedness to Employees Over the next 3 years, it will be increasingly transparent that Hertz feels morally responsible to the environment, their customers, and shareholders. However, our company would like to further lie with its commitment to the employees of Her tz. We understand that the current economic crisis has forced the company into making tough decisions, decisions that ultimately left thousands of Hertz employees jobless.Hertz also understands that no goal outlined in this strategic plan will be attainable without the commitment and dedication of all its employees. Therefore, Hertz is introducing its M. O. R. A. L. E program (Movement of Recognizing All Leadership Employees). This movement will provide the following benefits for Hertz employees incentives for excellent job performance, lucrative rewards for obtaining organizational goals, commission plans added to employees base salary- purposefully designed to improve performance, monthly employee recognition meetings, and an aggressive calling advancement campaign.The goal here is for Hertz to improve the morale of all its employees and be recognized as the number one employer in the car and equipment rental industry. Drastically decrease debt owed Hertz currently owes a straig ht monetary amount to two primary lenders Deuschte Bank and Bank of Scotland. operate under such debt has caused strategic limitations and will undoubtedly effect the development of the goals laid herein. Hertz is also subjected to the arbitrary decisions of the aforementioned lenders.The corporation may struggle to sustain itself if either lender requires payment in full or radically increases payment contingencies. Therefore, over the next 3 years, Hertz will industriously contribute to paying off debt owed. It is believed that Hertzs ability to do so will be promoted by obtaining all of the other goals outlined in this strategic plan. Hertz Strategic Plan Implementation Hertz Global Holdings (Hertz) operates vehicle and equipment rental businesses in the United States and Europe as well as global services for industries like construction, automobile manufacturing, railroad, power generation, and shipbuilding.Hertz vehicle rental business is the largest worldwide. Headquartered in Park Ridge, New Jersey, the company employs 24,900 people in approximately 8,200 locations in 146 countries worldwide. Mission It is the mission of Hertz to be the most customer focused, cost efficient vehicle and equipment rental/leasing company in every market we serve. We will strengthen our leading worldwide positions through a shared value culture of employee and partner involvement by making strategic investments in our brand, people, and products.The focus of everything we do will be on improved shareholder value. Vision Hertz will be the first choice brand for vehicle and equipment rental/leasing and total mobility solutions. Strategies * Ensure that the Hertz Brand is in front of the target audience through aggressive and consistent media campaigns to further increase vehicle rental market share. * Hertz will increase marketing expenditures by 15% over the next three years. The company will frontline its new marketing campaign epitomized by its new slogan. Hertz, driving you towards the future. The focus of this campaign will be to characterize Hertzs image as an enviro-friendly car rental company that has embraced technological advancements. * Expand partnerships to avoid conflicts and retain an ability to purchase fleet and program vehicles. * Meet and exceed obligations for all interest payments to secure financial stability in an additional effort to significantly reduce debt. * Focus on, plan for, and invest in new and useful technologies and facilities to meet and match customer expectations in order to build customer confidence and to distribute Hertz products to the right place at the right time to support demand. reach out to embrace the principles of environmental sustainability that serve the evolving needs of our employees and customers. Remain committed to vehicles with the lowest carbon footprint. Waiting for and accessing infrastructure as the demand for electric cars increases. In the short term, hybrid models such as the Toyota P rius, Nissan Altima and Toyota Camry will be used in response to customer demand. * Continue to find and use new location space off the airport rental market challenging the competition. Challenge, empower and engage employees seeking to increase satisfaction through affirming communication to improve morale and decrease turnover. Hertz will strive to increase the diversity of the workforce as a contribution to the overall success, and to enhance and retain talented employees. * Increased use of the human touch rather of technology where needed, and will respect and care for each customer through each transaction in order to build repeat business. * account the equipment rental/leasing portion of the business for cost utting measures as revenues dropped dramatically, U. S. new construction continues to struggle and China is competitive. REFERENCES Hertz Annual Report http//phx. corporate-ir. net/External. accommodate? item=UGFyZW50SUQ9Mzc2NTI0fENoaWxkSUQ9Mzc1MTMxfFR5cGU9MQ==t=1 Hertz Global Holdings, Inc. Q4 2009 Earnings previse Transcript http//seekingalpha. com/article/190491-hertz-global-holdings-inc-q4-2009-earnings-call-transcript Hertz Mission Statement, Vision and Values https//images. hertz. com/pdfs/VMVWeb. pdf