Posted at 12.13.2018
This case talks about about easyCar. com and the problem faced because of it in the beginning of 2003. EasyCar is the low priced Western european car lease business. It had been set up by easyJet innovator Stelios Haji-Ioannou. This circumstance illustrates today's position of the company and its own future goals. By the finish of fiscal time 2004, the business wants to attain sales of 100 million and earnings of 10 million, so that it can position itself for a short open public offering (John & Luis, 2005). For getting at these goals, the business had performed several efforts which include starting of new locations and changes in some of its old guidelines.
In all these techniques and changes attempted by the business, it confronted several issues in the form of legal and functional conditions that will be mentioned in this paper. All the large issues confronted by the company will be mentioned here with the help of different subheadings.
Characteristics' of Car Rental Industry
Subsequent will be the various characteristics' of car hire industry along with their impact on the design of service delivery process:
Intangibility: If it's seen in terms of service, the "service" of car rentals is intangible but on the basis of the physical dynamics of the rented vehicle, it isn't as intangible as many other services are. On this industry, the consumer can see and touch the rented vehicle, which is extremely hard in other services. With this industry the service provided is the physical car. This significantly influences the service delivery procedure for industry as they have to keep in mind that consumer wishes more and more quality and in case there is car hire they can certainly judge it.
Perishability: Car rentals service is a perishable service as if a car is not rented for a few days, it could steer towards high deficits. High fixed costs are associated with car rentals service and have to be balanced in significant manner. This feature has direct impact on the service delivery process of industry as they need to operate with effective strategies related to perishability.
Heterogeneity: Car rentals service is not an especially heterogeneous service compared to the other services just like a doctor, attorney and an architect. On this industry, the clients may request altered vehicles or additional services for example child seating and ski rack. They may require vehicles on diverse local rental terms like return with empty or full reservoir and infinite miles (John & Luis, 2005). All these things need to be concerned while making service delivery process as normally it may guide towards imperfections in service delivery.
In standard, service design is usually trained as having following fundamental constituents:
Processes & procedures
Employee's professional persuasion (A RESEARCH STUDY Evaluation on EasyCar. com, n. d. ).
In matter to service design, car lease service is a comparatively tangible, homogenous service with sensibly little levels of customer contact that symbolizes the necessity to target industry's service design on the physical facilities, businesses and processes. Given that car rental service is a relatively tangible, homogenous service with pretty low degrees of customer contact (i. e. , simultaneity), rentals companies tend to concentrate their service design on the physical facilities, processes and steps (Clarke & Chen, 2007). On top of that, employees' behaviours aren't insignificant as they are also having supplementary importance to facilities, operations and procedures in service design in the automobile lease industry.
Easy Car's GOOD DEAL Strategy
For supporting its low price strategy, the EasyCar possessed adopted various procedures that are significantly different from traditional car rental companies. Its procedure is quite not the same as the approach used by traditional car rentals companies (John & Luis, 2005). Its way is built on the easyJet model. It hire only an individual vehicle type at each location it manages, while the majority of its competitors lease a broad variety of vehicle types. EasyCar did not work with real estate agents. Approximate 95% of its bookings are created through the business's website and the rest of the bookings are created directly through the business's phone reservation system (RESEARCH STUDY Analysis: Easycar. com, n. d. ).
On the other palm, the almost all of the original car hire companies work with a range of intermediaries. EasyCar manage prices in an effort to have its fleet book 100% of the time and also to bring forth the utmost earnings from its rentals. Its information systems invariably measure thought demand and anticipated usage at each site that helps it in modifying its price accordingly (A RESEARCH STUDY Analysis on EasyCar. com, n. d. ). In comparison to other car local rental companies, EasyCar acquired adopted aggressive prices that facilitate it in attaining a fleet utilization rate in excess of 90% that is a lot higher than other companies.
Subsequent to the conversation of strategies adopted by EasyCar for taking care of its good deal strategy in comparison to other leading local rental companies, it can be said that the service quality provided by it is quite significant. The company's approach to lead and low cost is very effective and as well as it also assist it in controlling its service quality. Others concentrate on overall 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 employing increasingly more technology to keep up or replace for individuals in the procedure.
EasyCar as a Viable Competitor to Taxis, Buses and Trains
After going right through, the case I could say that EasyCar is not really a viable rival to taxis, buses and trains as they have some policies that aren't appropriate with the designs of its operations. Although, it allows effective versatility to its customers in the form of rentals for less than 1 hour and selects exact pick-up and drop-off times and purchase only that time but they have 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 must pay are not appropriate just as other vehicles these do not exist. At EasyCar, if a person employs standard charge card for paying local rental he is imposed with standard preparation charge. Additionally, in peak times customers may need to await collecting their car and they have to squander their time for fuelling gas (RESEARCH STUDY Evaluation: Easycar. com, n. d. ). Afterwards, at the time of returning the car he or she needs to wash it or pay some charge. All these things aren't involved in other vehicles facilities that prompt customers to switch to other facilities.
Another substantial restriction is with the EasyCar's prices that always increase as the time of the rental period pulls near. Although some customers may aware beforehand with the need of a car for a couple of hours on a given day but the majority of the consumers are not aware. In this particular industry, the market segment is most likely to buy more at the last second that should be considered by EasyCar (Clarke & Chen, 2007).
Most of the techniques of EasyCar's are directed to the customer who beforehand knows about his / her travel plans and have time to go to secondary location. This approach does not appear compatible with the clients who are not aware of their travel ideas and does not have much time to visit secondary locations. Each one of these aspects should be considered by EasyCar along with changes in their hire conditions (John & Luis, 2005).
Operational Implications of the Changes made by EasyCar. com
Last year, the company introduced several vehicles other than the Mercedes A-Class that facilitated it in conquering its weakness of rentals of only an hour. This assisted the business in having five vehicle types. This change of the company enforced its vehicle supplier to offer competitive prices and enhance their quality and flexibility along the supply chain. Another substantive change was made in Clean Car Coverage (RESEARCH STUDY Analysis: Easycar. com, n. d. ). It lays out a copy of an activity usually done by the company to the customer. This policy helped the company in lowering its need of personnel that subsequently reduces its cost.
This insurance policy was combined with empty fuel plan that helped the business in letting out its vehicle with no maintenance that want extra cash and personnel. With this insurance policy, the business become able in booking a car in the problem it was came back rather washing or fuelling it. If a customer does not gain the automobile with minimum degree of energy and by cleaning it he is required to pay extra charges. In this way, the company can reduce its costs (John & Luis, 2005). Another substantive change adopted by EasyCar was empty-to-empty coverage that was also regular with company's low priced strategy.
This insurance policy would considerably abbreviate the opportunity that an EasyCar employee would need to offer with the gas level. Previously, customers were necessary to fill the container and if indeed they feel lack of time, they might leave this for EasyCar employee. Along with the change in the insurance policy, now the gas can be at any level till the reduced fuel indication light is not on. This got reduced the chance that an worker would have to deal with adding gas in the car as mostly no one would drive with this low degree of gas. With this plan almost all of the customers' recreate the automobile in a problem that appropriates it to be instantly re-rented.
The last substantive change implemented by EasyCar was demanding its customers to get insurance. This insurance policy effectively abbreviates the probability of turmoil among customers and company when they come back damaged car. Each one of these policies significantly aided the business in minimizing its costs (John & Luis, 2005).
Legal Challenges confronted by EasyCar
EasyCar confronts several legal problems to its strategies but the most significant concern is OFT ruling. Another considerable challenge against EasyCar is the publishing of the pictures of renters with overdue vehicles. The OFT ruling requires EasyCar to offer customers seven days from the time they made a scheduling to cancel their booking and get a full refund. The company will not want to check out this, as it is convinced that if customers are allowed 7 days to change or cancel reservations without charges it would cause usage to abbreviate from 90% to 65% and prices to triple (John & Luis, 2005).
For handling this legal problem, the company had appealed the OFT's decision to the united kingdom High Judge on the bases that it was certainly a transportation service company and was at liberty to an exemption from this requirement. This legal problem need to be monitored significantly as usually, this ruling would destruct the company's book-early-pay-less doctrine and could stretch to a tripling of prices. Additionally, it might also hinder its arrange for a 2004 IPO.
The other legal task confronted by the business related to the posting of the pictures of customers with overdue vehicles is not as significant but need focused attempts (John & Luis, 2005). The business has recently received general population warnings from lawyers that new insurance policy might breach data safeguard, libel, level of privacy, confidentiality and individuals rights laws. All these concerns need to be resolved before it takes serious cases against company.
EasyCar and its own Goals for 2004
With the debate of company's goals and its own expansion plans, it could be said that the company can effectively attain its goals for 2004 but still it needs to make some changes. The company's operational strategies and strategies' are having several bottlenecks. Its most of the operations specializes in cost lowering that subsequently may dissatisfy its customers in terms of convenience and service quality (Case Study Evaluation: Easycar. com, n. d. ). On the basis of car rental service characteristics', it is vital that facilities and attributes are given to customers as often they may change to other carry services.
The goals and the techniques used by the organization are quite effective but need to focus more on service quality rather than only concentrating on good deal. At EasyCar, customers were necessary to wait for long time, these were not repaid for cancellations and they were also anticipated to purchase cleaning of automobiles and fuelling of gas (A RESEARCH STUDY Evaluation on EasyCar. com, n. d. ). All these methods and strategies of the business were dissatisfying its customers. Furthermore, the business was having just a few employees at its each location. Each of its employees was working with several customers that create severe dissatisfaction among its customers (John & Luis, 2005).
Nowadays, customers want quality plus they does not consider price, if dished up with high quality. This have to be kept in mind by EasyCar so that it can also become able in not compromising cost on the basis of quality or facilities it could offer to its customers. With the help of some changes, it may easily and effectively attain all its 2004 goals.