This case discusses EasyCar. com and the situation faced by it in the starting of the year 2003. EasyCar is the low priced Western car hire business. It was set up by easyJet innovator Stelios Haji-Ioannou. This case illustrates the present position of the company and its own future goals. By the finish of the fiscal calendar year 2004, the company wants to realize sales of 100 million and gains of 10 million, so that it can position itself for a short open public offering (John & Luis, 2005). For achieving these goals, the company had performed several efforts that are the opening of new locations and changes in some of its old policies.
In each one of these processes and changes attempted by the company, it confronted several issues in the form of legal and functional conditions that will be reviewed in this newspaper. All the substantial issues confronted by the company will be discussed here by using different subheadings.
Characteristics' of Car Rental Industry
Intangibility: If it's seen in conditions of service, the "service" of car rental is intangible but based on the physical temperament, it is not as intangible as various other services are. In such a industry, the buyer can view and feel the automobile that is rented, which is not possible in other service business. With this industry the service provided is the physical car. This significantly impacts the service delivery process of industry as they need to keep in mind that consumer wishes more and more quality and in case of car hire they can certainly assess it.
Perishability: Car rentals service is a perishable service as though a car is not rented for a few days, it may guide towards high loss. High fixed costs are associated with car rental service and have to be well balanced in significant manner. This characteristic has direct effect on the service delivery procedure for industry as they need to operate with effective strategies related with perishability.
Heterogeneity: Car rental service is not an especially heterogeneous service compared to the other services such as a doctor, attorney and an architect. Within this industry, the clients may request transformed vehicles or additional services for example child seat and ski rack. They could require vehicles on diverse rental terms like return with clear or full tank and unlimited mls (John & Luis, 2005). Each one of these things have to be concerned while making service delivery process as in any other case it may lead towards imperfections operating delivery.
Processes & procedures
Employee's professional persuasion (A Case Study Analysis on EasyCar. com, n. d. ).
In matter to service design, car rentals service is a comparatively tangible, homogenous service with reasonably little degrees of customer contact that represents the necessity to target industry's service design on the physical facilities, procedures and processes. On the basis of these features, it could be said that rentals companies should centre their service design on the physical facilities, functions and operations (Clarke & Chen, 2007). On top of that, employees' behaviours are not insignificant because they are also having extra importance to facilities, processes and procedures in service design in the automobile hire industry.
Easy Car's GOOD DEAL Strategy
For aiding its good deal strategy, the EasyCar got adopted various methods that are greatly different from the approaches implemented by traditional car lease companies (John & Luis, 2005). Its approach is built on the easyJet model. It lease only an exclusive kind of vehicle at each of its location whereas its contenders usually rent broad kind of vehicles. The company also will not operate with agents. Approximate 95% of company's bookings are done through its website and the remaining bookings are straight done through its phone reservation system (RESEARCH STUDY Evaluation: Easycar. com, n. d. ).
On the other hand, the the majority of the original car rentals companies work with a variety of intermediaries. EasyCar manage prices in order to have its fleet book 100% of that time period and bring forth the maximum earnings from its leases. Its information systems invariably measure figured demand and expected utilization at each site that aids it in adjusting its price appropriately (A RESEARCH STUDY Research on EasyCar. com, n. d. ). Compared to other car rentals companies, EasyCar had adopted aggressive rates that aid it in attaining a fleet usage rate more than 90% that is a lot higher than others.
Subsequent to the conversation of strategies used by EasyCar for taking care of its good deal strategy in comparison to other leading rental companies, it could be said that the service quality provided by it is quite significant. The company's approach to lead and low priced is very effective and the as it also assist it in controlling its service quality. Others concentrate on flexibility and service whereas EasyCar specializes in reliable service at low price (John & Luis, 2005). The company believes in operating with the thoughts of service standardization, abbreviating the discretionary action of employees and utilizing increasingly more technology to maintain or replace for folks in the task.
EasyCar as a Viable Rival to Taxis, Buses and Trains
After going through, the case I can say that EasyCar is not a feasible rival to taxis, buses and trains as it offers some policies that aren't appropriate with the designs of its operations. Although, it allows effective versatility to its customers by means of accommodations and selects exact pick-up and drop-off times and disburse for only that enough time period but it includes several limits also (John & Luis, 2005). Each one of these flexibilities provided by it revolve around the price that is not sufficient to appeal customers.
The planning fees or charges that the customer has to pay aren't appropriate such as other vehicles these do not are present. At EasyCar, if a person makes use of standard charge card for paying rental he is imposed with standard planning charge. Additionally, in peak times customers may need to wait for collecting their car and then they have to squander their time for fuelling gas (Case Study Evaluation: Easycar. com, n. d. ). Afterwards, during bringing back the automobile the customer is required to wash the car in case not pay some charge. Each one of these things are not involved with other travelling facilities that prompt customers to switch to other facilities.
Another substantial limitation is with the EasyCar's prices that always step-up as enough time of the rentals period comes close. Even though some customers may aware beforehand with the requirement of a car but most of the consumers are not aware. Within this industry, the market segment is most likely to buy more at the last minute that needs to be considered by EasyCar (Clarke & Chen, 2007).
Most of the processes of EasyCar's are directed to the customer who in advance knows about his / her travel plans and have time to go to secondary location. This process does not seem compatible with the clients who are not aware about their travel programs and doesn't have much time to go to secondary locations. Each one of these aspects should be considered by EasyCar along with changes in their hire terms (John & Luis, 2005).
Operational Implications of the Changes made by EasyCar. com
Last year, the company released several vehicles apart from the Mercedes A-Class that facilitated it in overcoming its weakness of leases of only an hour. This assisted the company in having five vehicle types. This change of the company imposed its vehicle supplier to provide competitive prices and enhance their quality and overall flexibility along the resource chain. Another large change was manufactured in Clean Car Insurance policy (Case Study Analysis: Easycar. com, n. d. ). It lays out a carry-over of a job that was conventionally done by the business to the buyer. This policy helped the business in reducing its need of personnel that subsequently reduces its cost.
This coverage was combined with the empty fuel insurance policy that helped the company in letting out its vehicle with no maintenance that require extra money and personnel. With this insurance plan, the business become able in hiring a vehicle in the problem it was went back rather cleaning or fuelling it. If a customer does not gain the automobile with minimum level of gas and by cleansing it he is required to pay extra charges. In this way, the company can reduce its own costs (John & Luis, 2005). Another substantive change followed by EasyCar was empty-to-empty coverage that was also consistent with company's low priced strategy.
This coverage would significantly abbreviate the likelihood that an employee would need to handle the lowest gas level. Earlier, customers were necessary to fill the tank and if indeed they feel lack of time, they might leave this task for EasyCar employee. With all the change in the policy, now the gas can be at any level till the gasoline sign low level light will not appear. This had reduced the opportunity that an worker would package with the condition of filling up gas in the car as mostly no person would drive with this low level of gas. With this plan the majority of the customers' recreate the automobile in a condition that appropriates it to be instantly re-rented.
The last considerable change implemented by EasyCar was needing its customers to buy insurance. This policy effectively abbreviates the likelihood of turmoil among customers and company when they give back damaged car. Each one of these policies significantly helped the company in minimizing its costs (John & Luis, 2005).
Legal Challenges confronted by EasyCar
EasyCar confronts several legal challenges to its techniques but the most significant task is OFT ruling. Another considerable task against EasyCar is the inserting of the images of renters with overdue vehicles. The OFT ruling requires from EasyCar to permit its customers seven days time period for cancellations and get a complete refund. The company will not want to check out this, as it thinks that if customers are allowed seven days to improve or cancel reservations without charges it could cause usage to abbreviate from 90% to 65% and prices to get three-fold (John & Luis, 2005).
For controlling this legal concern, the company experienced invoked the OFT's persistence to the UK High Court on the bases that it was certainly a transport company and was at liberty with an exemption out of this need. This legal challenge have to be managed significantly as often, this ruling would destruct the business's book-early-pay-less doctrine and could increase to a tripling of prices. Also, it might also intervene using its plan for a 2004 IPO.
The other legal problem confronted by the organization related to the inserting of images of customers with overdue vehicles is much less significant but need concentrated initiatives (John & Luis, 2005). The business has already obtained general population warnings from attorneys that novel plan of action might breach data cover, libel, level of privacy, and confidentiality and individuals rights laws. Each one of these concerns need to be resolved before it requires serious statements against company.
EasyCar and its Goals for 2004
With the talk of company's goals and its own expansion plans, it can be said that the business can effectively attain its goals for 2004 but still it requires to make some changes. The company's operational strategies and strategies' are experiencing several bottlenecks. Its almost all of the operations specializes in cost reduction that in turn may dissatisfy its customers in terms of convenience and service quality (RESEARCH STUDY Evaluation: Easycar. com, n. d. ). Based on car rental service characteristics', it is essential that all facilities and characteristics are given to customers as in any other case they may switch to other travel services.
The goals and the methods used by the corporation are quite effective but need to concentrate more on service quality alternatively than only focusing on good deal. At EasyCar, customers were required to wait for long time, they were not repaid for cancellations plus they were also anticipated to pay for cleaning of cars and fuelling of gas (A RESEARCH STUDY Examination on EasyCar. com, n. d. ). All these solutions and strategies of the company were dissatisfying its customers. In addition to this, the business was having just a few employees at its each location. Each of its employees was coping with several customers that induce severe dissatisfaction among its customers (John & Luis, 2005).
Nowadays, customers want quality and they does not consider price, if served with high quality. This need to be considered by EasyCar so that it can also become able in not diminishing cost on the basis of quality or facilities it may offer to its customers. By using some changes, it may easily and effectively attain all its 2004 goals.
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