Strategic Plan-Hertz

Strategic excogitate for the bike familiarity February 18, 2011 T open of Contents Introduction of Team and As abridgement4 corporation Profile6 relegation Statement6 spate and Values7 Economic check place(p)s7 Strategic Analysis9 SWOC Analysis Strengths10 SWOC Analysis Weaknesses13 SWOC Analysis Opportunities17 inherent Actions17 Opportunities18 SWOC Analysis Ch exclusivelyenges20 habituation on the joined States Automobile Industry20 Technological Changes and Advances20 belligerent Pressures21 Maintaining guest gladness and employee team spirit22 Merger Transitions22 Pressures to Go peerless thousand22 Expanding the orbicular Footprint23STRATEGIC ISSUES25 Market Shargon Vehicle take onal25 rail gondola Manu detailurers25 Debt and Interest concedements26 Technology26 Focus on Green27 Off Airport renting27 People27 Equipment Business28 Summary29 Foundations of destructions and strategicalal intention30 emergence Market Share30 Movement toward sustainable i nventory30 Improve guest at whizzment by training and engine room31 Dedication to Employees31 Drastically decrease debt owed32 cycle per second Strategic Plan Implementation33 Mission33 Vision33 Strategies33 REFERENCES36 Introduction of Team and Assignment In recent yrs, leaders of Ameri mass fundamental laws bemuse faced a multitude of challenges.The numerous trends and events that let occurred in the past ii decades arrive at change both American club and strain practices. Think of the influences the following events and trends bewilder had on our g everyplacenment, communities, and public agencies an mature and diversifying population changes in the nature of families dramatic shifts in federal and commonwealth responsibilities and funding priorities the emergence of the poor as the largest stem of poor Americans fears about terrorism the emergence of obesity as an important health fill and a recent crippling recession (Bryson, 2004).Now guess how American so ciety would suffer if our government did not institute policies, programs, and excogitations in retort to these conditions and crises. The same holds true for argumentation organizations around the world. Organizations that want to survive, prosper, do unsloped and important create moldiness respond to the challenges the world presents (Bryson, 2004). In this environment, strategic externalises are required to combat received challenges and admit emerging snap for business practices.Organizations that embark on strategic planning drastically maturation their chances to endure flow and future crises and are inherently closer to creating a sustainable organization that has public cheer. Students enrolled in the HR504 Strategic Planning clear up forthered at the University of Scranton, were tending(p) the daunting fitting of creating a strategic plan for an organization of their choice. The strategic plan sketch in this paper was true by the following students Elisa Cosner, Patricia Dungan, Jacqueline Lombardo, and Mark Trautman (Team 3).These four students represent current and aspiring valet de chambre resource professionals in pursuit of their Masters degree in the field of Human Resources. The unique challenge of this assignment was to adventure a medium that could bring this geographically dispersed group of students together on a regular basis so they could join forces and execute assignment responsibilities. The chosen medium was a chat assemblage called Meebo. Students met on Meebo for a minimum of thirty minutes both week, for a period of six weeks, to formulate, direct, and assign task responsibilities for their strategic planning efforts.When it came gondola machinetridge holder to choose an organization for this assignment, Team 3 opted to conduct studies on seek America business organizations that were experiencing pecuniary difficulties and extreme pressures from both internal and international threats, ultimately choo sing an organization that would unequivocally benefit from these strategic planning efforts. after(prenominal) much deliberation, Team 3 decided to formulate a strategic plan for the cycle per second Corporation. The cps Corporation is the largest automobile lease post in the world, with some 3,500 locations in the unify States and 7,500 worldwide. late sparing threats endure caused double digit declines in cable motor gondola car and lease equipment volumes, pressure bicycle to drastically downsize its workforce and turn over seen the corporation birth hundreds of nonpareil meg million millions of dollars in cabbage detrimentes over the past ternion days. The strategic plan outlined hereafter, is an strive by Team 3 to honest a strategic advantage for round in the car term of a contract martplace, by mitigating the do of environmental threats and severe economic influences, while at the same quantify utilizing the existing strengths of the organization and manipulating exploitation opportunities.Before we embark on this endeavor, we meet it beneficial to provide a brief history of the oscillation Corporation. Comp whatever Profile hertz worldwide Holdings ( oscillation) operates vehicle and equipment lease businesses in the linked States and Europe as well as spheric gains for industries the handles of construction, automobile manufacturing, railroad, creator generation, and ship nominateing. The community employs 24,900 community and has fellowship headquarters in Park Ridge, New Jersey. cycles/seconds businesses are separated into two divisions. The simple machine lease division, cycles/second, which operates ental facilities near airdromes, central business districts, and suburban orbits of cities, and a care retails and leases, used cars in the United States and France where associates accept reservations for car rentings at approximately 8,000 locations in approximately 145 countries. The Equipment Renta l division, wheel Equipment Rental Corporation (HERC), rents earthmoving equipment, material handling equipment, aerial equipment, galvanizing equipment, compressors and generators, and construction- connect vehicles and as wellls.The Equipment Rental division alike offers claim solicitude assists for both divisions investigating and negotiating various claims including corporate injury, property damage, and cosmopolitan and product obligation for its customers. Mission Statement The care at bike is to be the intimately customer steeringed, toll businesslike vehicle and equipment lease/leasing bon ton in every food foodstuff we swear out. We leave streng consequently our leading worldwide positions by means of a shared-value culture of employee and admittanceory involvement by making strategic investments in our brand, people and products.The focus of everything we do leave behind be on continuously improving shareholder value. Vision and Values cycles/secon d has a vision to be the flake one choice brand for vehicle and equipment letting/leasing and total mobility solutions. In methodicalness to achieve this vision, cycle per second, its employees and subsidiaries go outing adhere to the values of Integrity, Transparency, Continuous Improvement, Diversity, Passion, Commitment, Teamwork and Accountability. Economic conditionsThe current recession in the United States has adversely affect almost all domestic organizations, with round being no exception. The uncertainty of current economic conditions has lead to serious gross instability for bike. In 2009, cycle chthoniango the most difficult macro-economic conditions in its 91 year history. Revenues were down 1. 4 billion from the previous year, and overall cycle per second go by means of a displace sledding of $126 million. A great designate of these conditions can be attri merelyable to Americans activateing less.In should be of no surprise that car and equipment lease companies are importantly influenced by general economic conditions. unitary of the umpteen economic challenges facing cycle is the organizations dependence on drastically reducing operating costs. bike has been successful at doing this, but this success could commit potential consequences. By drastically reducing its workforce, hertz jeopardizes customer expiation takes and employee morale.In addition, bikes current indebtedness has presented the following challenges to its trading deeds the organization is now increasingly vulnerable to adverse economic and fabrication conditions, they are at a private- presentprise(a) disadvantage to any competitors with significantly less debt, inflexibility in planning for and reacting to changing conditions in their business and industry, limited ability to react to agonistic pressures, and it is increasing difficult to learn out swell spending that is necessary and important to Hertz ingathering strategy to alter ope rating brims.According to the Hertz 2009 Annual extend, the go with recorded grosss of $8,525. 1 million during FY2008 which was 1. 8% decrease from 2007. The operating arrive at in FY2008 was $631. 2 million, a decrease of 50% compared to 2007. The net leaving was $1,206. 7 million in FY2008, compared to the net profit of $265 million in 2007. De provoke this, Hertz emerged from the 2009 recession a to a greater extent efficient, customer think company that is poised for substantial revenue drawth. Costs were take down by over $1. billion since 2007, strategic plans to nurture improve service have been implemented, and in 2009, brand-new business opportunities were developed. As a depart, over $one hundred seventy million of incremental revenues have been generated, the con steadfastated operating margin for 2009 was liken to 2008, and the margin for worldwide car rental change magnituded to 7. 8%. expiration forward Hertz entrust focus on costs, service and revenu es have with improving conditions in our car and equipment rental businesses. Hertz is expecting significant margin expansion and make upd shareholder value.Strategic Analysis Subjects Employees Equipment dealers ( cover, John Deere) Players mount of Directors Senior Management Shareholders Customers Lenders Crowd Government government action mechanism (Airports to environmental matters) Franchises circumstance Setters Subordinated debt holders Subjects Employees Equipment dealers ( cut across, 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 absorb but little powerContext setters have power but little direct stake Crowd Stakeholders with little interest or power Players have interest and power Power versus Interest Grid, used to array stakeholders in the organization and the stakeholders power to affect th e organizations future. In Hertz case, as a largely lever fourth-year organization this analysis can prove telling as those with power whitethorn be to a greater extent self-interested than in the game for the commodious term health of the organization. SWOC Analysis Strengths * crocked Market Presence Strong Name Recognition * Strong Global Presence * Strong diversification * Effective Cost Containment * Good Business Partnerships * Entrepreneurial culture * Recent Acquisitions * Agile * Our Employees * Novel Services * Variety Offered Hertz Global strengths take the companys strong straw man in the rental car and equipment market and strong name intuition as they remain the number one drome car rental provider in the United States. The company too has a strong global presence with outlets in Europe, North America,Latin America, Australia, New Zealand, Asia, Africa and the Middle East. Hertzs strong diversification of businesses, products, and market harbors the company oblation a long-term competitive advantage with difficult dates. Hertz is poised to serve every type of customer in the market including business casts, hourly renters, compute travelers, and multi-month rental customers. Hertz pass ons to lead the industry in cost management and containment through lean strategic plans like melt management, back-office reengineering, and organizational redesign.A unafraid example of the companys on-going success find its financial performance is the refinancing $3. 2 billion of the U. S. devolve debt one year ahead of instrument with set comparable to 2005 rates. In addition, $990 million of capital was raised through a successful convertible debt and equity transaction. Efforts helped the company emerge from a difficult year in 2009 as spindle-legged and more focused and Hertz is expecting high re gos throughout 2010.Good business partnerships and the companys entrepreneurial culture helped Hertz to bump in effect manage changing m arket conditions and take advantage of bob upth opportunities. For example, Hertz made the following important recent acquisitions * The dollar mark Thrifty automotive Group, which not even strengthened Hertz financially it also spread out Hertzs share in the business travel off-airport market, * The bribe of Eileo SA, a car- sacramental manduction service and provider of engineering science for Connect by Hertz.This investment in engine room go out help advance Hertzs leading by taking the customer experience to the succeeding(a) level, * The addition of the Advantage value brand giving them an even greater share of the growing vacuous segment, the acquisition already has solvented in gaining a full point of U. S. airport market share, * Several smaller acquisitions and expanding their Equipment Rental market. The companys agility is demonstrated by its ability to quickly adjust drudge and perishs to match sudden changes in subscribe.For example, company transactio n days in 2009 were down 8% while worldwide was down 9. 7%. The company can and has, through strategic flicker management, successfully held its fleet and aged it a little further, while adjusting the fleet rotation planning to ascertain the fleet remains 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 entertaining strong communication. Company strengths also include Hertzs novel and innovative services like Hertz 1 Club Gold, NeverLost navigation 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 keep requir ed, and no airline business ticket required to do for low weekly rates.Finally, Hertzs strength includes the variety of rentals offered to customers like SUVs, vans and specialty rentals. In an effort to further increase its variety, Hertz issued the Corvette ZHZ to their rental line-up. The new 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 plus during the summer vacation rental season and rangeed 500 of them in 2008.SWOC Analysis Weaknesses Over the past 18 months, the United States and international markets have experienced a significant decline in economic activity that has affected the car rental market, including a tightening of the credit markets, reduced business and leisure travel, reduced consumer spending and volatile render prices. In the equipment rental business, the decline in economic activity has resulted in a decline in activity in construction and different businesses in which our equipment rental customers operate.Accordingly, the car and equipment rental industries have both experienced remarkable declines in volume and demand. Hertz is not unlike any otherwise organization in this economic climate in that they have aspirations of sightedness the upside of this downward spiral. Unfortunately, most of what Hertz is dependent upon to make it through is outside of their realm 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 galore(postnominal) economic factors, including the level of economic activity in the markets in which they operate. The car rental business, which prov ides the bulk of the revenues, is in particular sensitive to reductions in the levels of airline passenger travel, and any further reduction in air travel could materially adversely push their financial condition and results of operations. The car rental industry is particularly affected by reductions in business and leisure travel, especially with respect to levels of airline passenger traffic.Approximately 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. Further reductions in levels of air travel, whether caused by general economic conditions, airfare increases (e. g. , due to capacity reductions or increases in terminate costs borne by commercial airlines) or other events such as work stoppages, legions conflicts, terrorist incidents, natural disasters, epidemic diseases, or the response of governments to any of these events, could materially and adversely affect Hertz.Other factors that could adversely affect Hertz include * penetrating competition that may lead to downward determine, 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 seek 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 encumber their liquidity and adversely affect our results of operations. Certain significant components of their expenses are frosty in the short-run, including minimum concession fees, real estate revenuees, rent, policy, utilities, maintenance and other facility-related expenses, the costs of operating their learning technology systems and minimum staffing costs. * They may not be successful in the business strategy to expand into 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 play along profitable growth opportunities through a combination of selected new location openings, a check evaluation of and strategic changes with respect to existing locations, and the pursuit of same-store gross sales growth. * A downsizing of their rental car fleet could require them to make surplus cash hires 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-program cars in their fleet due to decreases in residual values could adversely impact the financial condition and results of operation s. For the year ended December 31, 2009, approximately 53% of the cars purchased in the combined U. S. nd international car rental fleet were flying field to repurchase by car manufacturers under contractual repurchase or guaranteed depreciation programs. * The failure of a manufacturer of cars that Hertz owns to fulfill their obligations under a repurchase or guaranteed depreciation program could expose them to sacking on those cars and adversely impact the expectant 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 balance for cars sold to a single manufacturer was $95. million owed by Hyundai Motor 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 f ailure by a manufacturer to pay such amounts due could, among other things, cause a credit sweetener 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.Fuel prices have been volatile recently, and could fluctuate severely and/or increase overall in 2010. According to the U. S. Energy Information Administration, from 2008 to 2009, the intermediate 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 reliance 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 ca use a loss of reservations, interfere with their ability to manage the fleet, thick rental and sales processes. * Risks related to liabilities and insurance since their businesses exposes them to claims for personal 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 re gull of external and internal actions that have prepared Hertz to capitalize on opportunities External Actions * Improved conditions in car and equipment rental business * Successfully developing business in key emerging markets Brazil, China and India * Experiencing improvement in the US Car rental, the largest share of the Hertz business Internal Actions * Re duced costs by 1. billion dollars head count reduction (4,000 employees) taken in non strategic locations (with a bit of help from the rescue Hertz should be poised for solid growth). * Refinanced 3. 3 billion dollar debt one year ahead of schedule on favorable terms. * Hertz has stayed 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 ameliorate employee engagement and customer satisfaction. Opportunities Hertz is leading the way with High-Tech, High-Touch innovations Hertz. om, self service kiosks at 36 study airports, including 11 in Europe (which have successfully completed 500,000 transactions), portable rental devices, enabling roving customer service agents to address customer of necessity structured car sharing technology including online booking, applications for iPhone and Blackberry undi mmedphones GPS navigation upgrades with touch point screens. Hertz has more than 700 locations in Europe, along 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 possess 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 150 new locations. Looking to expand their leisure effort 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 numerous cases is not allowed to even rent before this program. In addition they introduced three new programs for vacation travelers i.Prestige assembling high end SUVs and lavishness car models (Volvo, Lincoln, Cadillac, BMS, Audi and Land Rover. ) ii. Green collection Toyota Prius, For d Fusion, Toyota Corolla, Camry hybrids. iii. Fun collection Ford Mustang, Chevy 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 aggrandisement and off peak vehicles to meet a variety of renter motivatings.Theyve begun looking at lease 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 stations make sense for car sharing experiences. In addition, car sharing, Connect by Hertz, a total mobility solution oblation high tech, high touch rental option for urban, university and corporate travelers. To further expand their offerings, Hertz purchased Paris based Eileo in 2009, the pioneer of integrated car sharing technology, a concep t 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 move urban areas. In their global markets, Hertz has expanded their equipment rental revenue into China and the Middle East with entertainment services, power generation and industrial equipment. This expansion of global footprint gives Hertz the ability to offer low class rental experiences through corporate owned or franchised partners. modified direction was given 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 purchase 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 futurist and economists see technological 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 select to develop new skills to use and the organization will need to adopt 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 t heir website, self-serving kiosks at airports, the GPS systems in their vehicles, and also includes the advancing their smart phone applications. Information technology is currently driving major changes in all probability to have dramatic impacts on organizational performance, accountability, and issues related to data and secretiveness (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. angiotensin converting enzyme of Hertzs priorities is to present a bigger challenge to Enterprise in these particular arenas.In order to do so, Hertz needs to remain cognizant 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 abrupt with few national competitors. It is reasonably fore seeable for new competition to develop and penetrate that particular market. Maintaining customer satisfaction and employee morale The present economy has made continueing 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- consistently 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 dire ctly 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 realize operational 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 business to utilize vehi cles 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 third gear 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 minimize 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 decease 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 re ntal acquisition, leaving consumers to find it too expensive to travel. * External threats affecting travel- war, terrorist attacks, epidemic disease, natural disasters, etc * Risk management- the liability of Hertz being responsible 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 effluence and summer months present challenges to efficiently manage fleet operations. * Government laws, mandates, and controls- Hertz is subjected to many political 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 adoption of new laws, could result in significant changes in Hertz procedures, which may increase cost of operati ons and applicable tax rates. Marketing- Hertz will be continually challenged to conduct active sales and marketing programs that attract and retain customers. STRATEGIC ISSUES Hertz is a trend 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 Brand in previous of the audience.In the SG A discussion of the 2009 Annual Report Hertz mown their advertising expense by almost 30%. They did not maintain a new structure for media buying to be facilitated by a new agency to save costs. I am left to think they simply decreased advertising. In recent travels and paying closer attention to media in travel powder stores 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 constituted, well known brand, vitamin C and Pepsi as an obvious example they spend millions keeping that logo apparent motion of mind.Advertising is seen anywhere you could potentially think about inebriation a soft 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 run for 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 final result in order to Hertz to enjoy the ability to purchase fleet and program vehicles and the tax incentives they enjoy because of the ir inventory management of fleet. Debt and Interest remunerations For the bordering two to five geezerhood 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 primary lenders Deuschte coast 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 attain what the customer has reserved using the wireless technologies has to be present in order to build customer impudence.If o ne reserves, arrives and has no vehicle does the technology really matter if you did not save time or sense of smell that you had received value 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 act to what they refer to as the electric car revolution. This is a vehicle with a zero carbon footprint. At the present time, lack of recharging stations will temper the demand for the electric cars.The hope 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 beginning to enter new location space with their fleetoff airport rental. Hertz is going face to face with the launch leader, Enterprise system. Is this an appropriate 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 hope to gain ground in an area held unwaveringly by Enterprise. People Hertz North America has reduced headcount to a bare minimum deploying human assets on an admitted as ask 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 r for each one out to those dedicated to customer s ervice second to none in spite of financial challenges. That part of the human touch with customers leasing employees where customer contact is indispensable airport leasing, returns with checkout is necessary in order to build resort 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 healthy 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 struggle and from the readings the European market is no better. China is bustling, but are we confident 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 purchas e, maintain, and insure. Is the return versus other withal situated usinesses sound? Hertz is in a business where receivables can become problematic. Credit is extensive, and during financially challenging times generally extended past healthy 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 fitly 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 rickety 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 brace 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 parting of this strategic plan will outline the strategies and approaches to be taken by Hertz to facilitate obtainment of their trail goals. The following goals have been established for the Hertz Corporation Increased Market Share In the travel 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 maintain its dominance in the equipment rental market and begin to compete with Enterprise in the off-airport rental market. Hertz will also aggressively ensue its international markets, including significantly extending operations in China, the worlds fastest growing car and equipment rental market. Movement toward sustainable inventory Hertz will significantly extend its social 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 contracting more fuel efficient vehicles that emit set about carbon-dioxide into the atmosphere. Improve customer satisfaction by training and technology Hertz has always recognized its required allegiance to the customers of their brand.Hertz will continue 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 Dedication to Employees Over the next 3 years, it will be increasingly evident that Hertz feels morally responsible to the environment, their cust omers, and shareholders. However, our company would like to further acknowledge its commitment to the employees of Hertz. 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, billing plans added to employees base salary- purposefully designed to improve performance, monthly employee recognition meetings, and an aggressive career advancement campaign.The goal here is for Hertz to improve the morale of all its employees and be recognized as the number on e employer in the car and equipment rental industry. Drastically decrease debt owed Hertz currently owes a substantial monetary amount to two primary lenders Deuschte Bank and Bank of Scotland. Operating under such debt has caused strategic limitations and will doubtless effect the attainment of the goals laid herein. Hertz is also subjected to the arbitrary decisions of the said(prenominal) 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. Continue to embrace the principles of environmental sustainability that serve the evolving needs of our employees and customers. rest committed to vehicles with the lowest carbon footprint. Waiting for and accessin g infrastructure as the demand for electric cars increases. In the short term, hybrid models such as the Toyota Prius, 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 parcel to the overall success, and to recruit and retain talented employees. * Increased use of the human touch instead of technology where needed, and will respect and care for each customer through each transaction in order to build repeat business. * Consider 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//p hx. corporate-ir. net/External. File? item=UGFyZW50SUQ9Mzc2NTI0fENoaWxkSUQ9Mzc1MTMxfFR5cGU9MQ==t=1 Hertz Global Holdings, Inc. Q4 2009 Earnings Call 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