MBA FPX 5910 Assessments 1 Capstone Project Summary

Student Name

Capella University

MBA-FPX5910 MBA Capstone Experience

Prof. Name:

Date

Introduction

Hertz is a leading name in the rental car industry, established in 1918 by a twenty-two-year-old car salesman, Walther Jacobs, in Chicago, Illinois (Lachapelle, 2017). Jacobs envisioned a service that allowed individuals to borrow vehicles and enjoy their benefits without the burden of ownership due to high costs. He began with a modest fleet of twelve slightly used Ford Model T cars and launched his rental business (Lachapelle, 2017). This innovative concept was unprecedented at the time, and within five years, the business flourished, generating over one million dollars in annual revenue. In 1923, Jacobs sold the company to John Hertz, a wealthy businessman, who rebranded it as the Hertz Drive-Ur-Self System, a name it retained until 1961. Today, the company is recognized globally as Hertz (Lachapelle, 2017). Over the years, Hertz has evolved into a global powerhouse in the car rental sector. From 2000 to 2019, the company experienced significant profits and growth, with revenues reaching $9.8 billion in 2019, marking a 3% increase from the previous year (Steinmetz, 2020). However, the rental car giant has faced severe challenges, with debts and lease obligations exceeding $19 billion, compounded by ongoing investigations from the United States Securities and Exchange Commission (SEC) and the Federal Trade Commission (FTC) (Layden, 2020). The company is struggling to compete, manage its debts, and avoid closure.

Statement of Scope

This analysis will focus on how Hertz Rent-A-Car transitioned from being an industry leader to grappling with the threat of bankruptcy.

Describe Business Problem I Intend to Research

Through investigative research, I aim to uncover the factors that led to Hertz Corporation’s financial difficulties following its acquisition of Dollar-Thrifty in 2012 for $2.3 billion (Lachapelle, 2017). According to Steinmetz (2020), former CEO Mark Frissora, who oversaw the acquisition, indicated that the company’s objective was to penetrate the leisure-traveler market, a segment dominated by Avis and Enterprise. I will employ analytical tools such as PESTEL, VUCA, and SWOT analysis to conduct a comprehensive evaluation of Hertz’s business practices, aiming to identify the internal and external factors contributing to its financial and operational inconsistencies. Key topics of focus will include the influence of Hertz’s leadership on company decisions and strategies, the financial benefits of acquiring Dollar-Thrifty, whether the acquisition was advantageous for long-term brand growth, the impact of rideshare companies like Uber and Lyft on Hertz’s business model, and the effects of COVID-19 on the company and the rental car industry.

Level of Accessibility

I will gather data from various library research tools, including Business Source Complete and IBISWorld databases, as well as online peer-reviewed e-books and business journals. This research will involve investigating the “who,” “what,” “when,” “where,” “why,” and “how” of Hertz’s business model and policies from its inception to the present. Additionally, I will allocate several hours each day to conduct research on relevant articles, critically analyze financial statements and data, and formulate and execute MBA capstone objectives.

Demonstration of Outcomes

MBA Criteria Demonstrated by:

Apply foundational knowledge and an understanding of business systems, processes, and technology within and across core disciplines.
I will analyze Hertz Corporation’s financial conditions, customer service practices, and employee satisfaction ratings using established theories and best practices. Performing PESTLE and SWOT analyses will help assess the company’s valuation and the influence of shareholders on business policies and strategies.
Integrate information across disciplines and from differing perspectives.
The evaluation will encompass various company practices, including supply chain analysis, marketing policies, and employee culture, to provide appropriate recommendations for enhancing stakeholder benefits at Hertz Corporation.
Think critically and analytically to provide evidence-based solutions to business challenges and opportunities.
Hertz Corporation’s current strategies indicate that the company is exploring methods to avoid bankruptcy. A review of financial statements, legal filings, and industry compliance records will help determine if the available data aligns with the company’s plan to regain its competitive position.

MBA FPX 5910 Assessments 1 Capstone Project Summary

Apply innovative, strategic, and sustainable approaches to business practice and planning.
Hertz Corporation requires a swift assessment to rebuild its credibility and reclaim its competitive edge. Innovative strategies and tactics will be essential in guiding the company out of its financial difficulties.

Reliable resources and practical suggestions will be provided to stimulate the status quo while concurrently identifying assumptions for the brand.

Lead and collaborate in virtual, global, and culturally diverse environments. Hertz Corporation is a prominent international brand facing financial and restructuring challenges within the rental car industry. The recommendations offered are designed to promote a comprehensive overhaul to address its economic difficulties and ensure leadership continuity.

Integrate principles of ethics and integrity into business decisions.

Hertz Corporation has faced several scandals over the years. An evaluation of the company’s ethical practices related to its business methods will be conducted, including a thorough review of past and current leadership decisions.

Write coherently to support a central idea with correct grammar, usage, and mechanics as expected of a business professional.

Clear and concise grammar will be employed professionally to convey the best practices necessary for Hertz Company to achieve success.

Conclusion

In summary, this capstone project will analyze Hertz Corporation’s current financial and economic standing within its industry, alongside its customer service processes, business model, employee satisfaction, and organizational structure. Additionally, it will provide strategic guidance and recommendations for improving and reforming its financial health, thereby preventing stakeholders from losing confidence in the company.

References

Lachapelle, T. (2017). That troubled Hertz car rental deal. Bloomberg. Retrieved from https://www.bloomberg.com/opinion/articles/2017-05-10/hertz-s-deal-for-dollar-thrifty-is-a-lemon-so-far

Layden, L. (2020). Can Hertz survive another year? Company raises doubts in new regulatory filing. The News-Press. Retrieved from https://www.newspress.com/story/money/companies/2020/05/11/can-hertz-survive-another-year-company-raised-doubts-new-regulatory-filing/3111952001/

Mohammed, T. (2020). Hertz is seeking a $1.5 billion bankruptcy loan. Business Insider. Retrieved from https://markets.businessinsider.com/news/stocks/hertz-seeks-15-billion-bankruptcy-loan-share-sale-blocked-wsj-2020-8-1029543666