The Easycar Company Report Essay Example for Free

The Easycar Company Report Essay The Easycar company like any other business venture with an aim of maximizing profit, is been faced with the normal business environment. Achievement of the profit goal of such business involves diagnosing problems and making forward movement in improving its performance. The company has taken off smartly with attraction of many customers and still at a competitive market in Europe: Although it monopolizes in the use of a single type of vehicle at the start in each of its location, it’s a smart move to its management though such service monopoly may far outweigh the different customer requirements. It has a high quality mode of booking which to the management serves as a first hand system though it may have different inconsistencies of been expensive despite its mission to offer a cheap transport service. Therefore, it should diversify such a method to include other methods like counter booking. Easycar is however, been faced with it bureaucratic mode of administration in its financial authorities about customers getting the service. It has many unstable car service charge requirements which are often changing depending on the nature type time and other illogical requirements. Although such attentions are taken to ensure the best business fit in this competitive environment; this compromises the effectiveness of quality service delivery. Rather than providing a cheap service, costs of such services are becoming too expensive. It’s important that the company streamlines the cost of services delivery to become cheap to the customers. Perhaps the other companies are doing better, because of their diversification in agency and intermediaries. To Easycar, however, doing the business directly on its own is seen as its best solution for growth and expansion. Like the other companies in this industry, Easy car should also aim at diversifying its customer’s targets and increasing the range of its vehicles. Perhaps it would even achieve its motive not by its one car service monopoly and strict destinations but by diversification in such areas. Though it has the intention of providing high quality car services and improve the growth of the company, but such maximum profit may not be recognized by the use of these too expensive mercedes cars which require high capital input. The system of car renting by its own depicts and wide range of inconsistencies, where its policies are changing without regard to any specific regulations. It thus forms a basis of inconveniences to the customers where customers have to keep mobility in the change of regulations about the renting and its charges. It’s important that the company maintains stability in renting management otherwise this would be a gate pass to customer inconvenience Problems facing the company Easycar is challenged by a number of problems. The company’s mission can only be attained subject to the address of these problems that highly inhibits its performance. Firstly, the company is renting only one type of car, which is at a high risk of service monopoly. Either, these cars are too expensive which implies that low customer requirement may not be met. The company is operated directly through direct internet or company phone service for its booking. However other companies in the industry are using intermediaries and broker agents. Perhaps this is a key contribution to these companies success. These agents and intermediaries can function to promote to reach many customers. It’s not optimally exploiting its resources where it’s not leasing all its parking spaces. Some spaces are found vacant when most of the cars have been rent during the day. Either it has not optimally exploited opening new sites where more locations can be opened by hiring smaller staff, driving fan to the location and adding these locations to company’s website. The company depicts a broad range of booking inconsistencies where time of service is determined at booking. The rental prices are charged at times of picking. The system also require many customer requirements are unrealistic (Printed copy of contract and a credit card) There is delay in picking up of vehicles where a customer can even spend 30 minutes waiting for processing of transactions and receiving their vehicles. This was due to the low staff level who cannot give service adequately. The contract of picking up a car involves too expensive cost of a refundable fee upon fulfilling the service requirements of the car contract. This would have perhaps, passively challenged some customers who for reasons could not manage to afford this refundable contract fee. Empty fueled vehicles are still a problem which would lead to further customer inconveniences in fueling the tanks. Also there were many requirements regarding the return back level of cars fuel. Since customers are to drive for them this would have highly inconvenienced customers who never knew some places despite provided with a map. Either non-driver was totally limited to this service since a customer was to drive the car for himself. The cleaning car policy before returning was a big drawback of inconvenience to customers. This was an inhibitor in the service rendering of this company. Otherwise the previous higher cost levy without regard to cleaning the car was far economical than the penalty levy to the customer when they returned the car dirty. The stringent strictness in the number of kilometers the car traveled at the renting period worked to demoralize some of the customers. Booking of the cars itself constituted a range of expenses, where using the phone system was charged â‚ ¬0. 95 a minute for a call and â‚ ¬5 for using credit card. Inconsistent levy for returning the car late was a problem. Mismanagement in the high cost of advertising had no economies of scale. It even chose to double its marketing effort to â‚ ¬3million in 2003 in featuring the founder of the company Justification of the problem facing company The company was established to provide the same type of car service in all its locations across its markets. It had signed a contract with the General Motor Show to purchase 5000 A-class Mercedes cars which cost the company over â‚ ¬6. million . Its mission was to use brand new Mercedes cars in the same way that easy jet uses brand new Boeing aircraft. By 2002, its fleets consisted of 6000mercedes A-class vehicles across 18 sites The company operated directly through its website and phone system and never transacted with any intermediaries or agents. Its entire sites were manned by its employees. However, the other car companies operated with agents and intermediaries which helped to have a broad catchments area for its customers. Example, companies like the sixt, Eurocars, Avis and Hertz targeted both vocational and business travelers and offered a wide range vehicles for rent. Despite the fact that Easycars where rented 90 percent of the time, only 15-20 spaces were required at an average, with a fleet of 150 cars. It could still open other locations by hiring less staff adding locations to its website and driving a van to its location. Booking prices usually changed with time and space. Customers who picked their cars early in the morning were paying more then those who picked the cars late in the day or at busy times. Processing the booking also required many requirements where customers were supposed to produce a copy of contract credit card. It also involved a long process of new customer’s identification. (Kirkegaad, 1997) Customers were highly delayed in picking up vehicles. This could go as long as 30 minutes and the company staff are described as been slow. To pick a car, a customer was made to put down a refundable contract fee of â‚ ¬80 before signing and moving away with the car. Customers were also expected to maintain the fuel tank at a level. Empty or less tanks were charged a fuelling fee of â‚ ¬16. The employee in charge would investigate and if finds the low-fuel indicator, the customer was supposed to pay this low fuel levy. The office of the Fair Trading (OFT) accused the Easycar Company as not been a transport company because its customers drove for themselves unlike other transport companies. However, the management of the company had filed a suit of appeal in the court that its service system was to ensure a low price to its customers. Such case was even to reduce the companies plan for the 2004 IPQ. At the beginning the policy required that customers were to pay â‚ ¬11 at booking for preparation of the car. However, the new policies required customers to maintain the car clean or pay the cleaning levy. The company provided customers with maps showing car washing points which could however inconvenience the customers very much. A customer was only supposed to drive 100 kilometers per day and any additional kilometer was charge a rate of â‚ ¬0. 12 per kilometer. Above this, customers were required to return the cars on time. Returning the car late imposed an instant charge of â‚ ¬120 and a subsequent â‚ ¬120 for every 24 hour period if the car was not returned. To book a car by itself was a problem which cost â‚ ¬0. 95 a minute for a call and â‚ ¬5 for using credit card. Customer was also charged a â‚ ¬16 charge fee if they wanted to change their booking. The company advertising system comprised of a mismanaged system where advertising was made in an abrupt manner and using very local methodologies. Offering the mercedes cars only, may be too costly for some customers who perhaps may not afford its cost. Either, expansions of its market may serve to attract a diverse number of customers with different service requirement. Rather than to dwell, on only some few stations it should seek to expand its markets like the other companies. This is aimed at reducing any monopolistic effects of dwelling on only few markets. (Write, Robbie, 1999) If possible, the company should seek to merge with other companies in order to diversify its resource mobilization. Through such merges, the company can have more bargaining power in the industry attracting a better income share from the market. Either, through merging, there is diversification in the company risks. This helps to ensure that, any possible losses do not fall on the shoulders of one company but rather shared between the parties. Trough merging, greater inventions and business market researches can help them to perform better than one company. By sharing of resources, brings about greater economies of scale which help to run the business at relatively lower costs. This is because market researches can be done for one business expenses such as advertisements, consultant and market research can be done for one business which constitutes many business. (Sunden, Stratton, 2006) The company can choose to improve its technology as a way of improving its business. Firstly, technology implies quicker service delivery, efficiency and more consistent. Either, improving technology has a lower cost to business performance at the long run trend of business cycles. This implies that, it will cost less for high technologies business after it has attained cost-benefit equilibrium. It should use better technology in its customer service provision where lower time is taken in processing the customer requirement before picking the car. Its mode of advertising still lags behind as a developed system which can influence more customers, where it uses posters at different stations. Such mode of advertisement needs improvement probably to use television or internet. Due to the company’s extensive business transactions, it should improve on its database system to enable faster processing, identification of customers and improving efficiency in monitoring its financial transactions. (Gutterman, 1994) Improvement in its human resource capital, where more qualified staff should be employed. The problems of slow service to customer by the company workers can only be improved by employing more qualified workers. This improves efficiency in the company’s operations. Above all, the company should also re-structure its mode of operations where a customer is let to drive for himself and employ its driver. This can lead to a better service provision. (Lipsy, Chrystal, 1997) The company costing system is faced with many bureaucracies where charging prices of services without rigidities to permanent regulations. Such costing methods need to be revised so that there is simplicity in pay requirement of a customer picking a car. Broadly, it should maintain simpler terms of service costs that should seek to even attract more customers. There is a diverse immobility in customer payment to their service delivery. Either, the company can monitor its expensive mode of its operations to achieve more profit. Basically, it spends a lot of money in purchasing its cars where there are still alternative of other cheaper cars. It solely dwells on one type of expensive car. Costing regulations should be emended to secure lesser company expenses and earn more profit. High costs of business operation are also revealed by its mode of advertising and booking which tend to be too costly for both the business and the customers. The business can therefore achieve its mission through amendments of its cost variable. (Bjerke, 1999) From one perspective the business is doing well, with good service provision. Therefore the business can still continue its operation in the same standard manner it is operating in. Since it seen improving, and opening even more branches, it implies that the business mission will still be achieved. It should seek to streamline its operations in line with its current system. However, the business should not be closed down. Since it depicts a continued and outstanding performance, closing such a business would be doing away with a prospective business entity. Since the former goals were to start a car industry, which is now expanding, it should be let to continue in its operations. (Warner, 2001) Either, the management should not seek the alternative of selling up the business. Perhaps, selling such a business which is acquiring such a good expansion would even earn the company lesser profit than if let to operate.