Easycar Case Analysis

Topics: Car rental, Automobile, Pricing Pages: 7 (2225 words) Published: May 23, 2008
A.The Environment
Economical Environment:
The economical environment is Western Europe’s economy which is considered one of the healthiest economies, since the individual’s GDP in these countries is one of the highest worldwide. Many factors qualify this environment to be a suitable place for rental car business; since Europe is one of the most strategic hotspots in the business world nevertheless it’s an attraction to many tourists. The recession period in tourism in general, and rental car industry due to the 9/11 attacks. Political- Legal:

The 7 days return policy, ruled by the Office of Fair Trading (OFT) which stated that easyCar must grant consumers 7-day cooling-off period from the time of reservation in order to cancel their reservation and receive a full refund. EasyCar’s policy of posting pictures of consumers whose cars were 15 days or more overdue which led to legal concerns, especially if easyCar posted a wrong picture. Other:

Technological factor. The advancement in communication methods such as the Internet and automated phone service which eased the car rental procedures. B.The Industry
EasyCar is operating in a rental car industry
The Competitive situation: As for the rental car industry, there is a strong competition in Western Europe, since the industry consisted of several international and national companies which basically were dominating more than half of the market. Examples of strong positioned international companies include Avis, Hertz, Europcar,..etc example of regional market such as Sixt in Germany. In addition, there are also smaller rental companies as well as brokers operating in each market. Also, according to Stelios easyCar could be a serious competitor to public transportation means such as local taxis, buses, and trains, and that’s after changing easyCar’s policies for 2003 to allow rentals for as little as one hour. Competitor’s strengths:

The usage of intermediaries and brokers which manage the excess of the competitor’s inventory beside the usage of their own outlets and websites. Large number of fleet size and rental outlets.

Offers different vehicles types in different price range.
Competitor’s weaknesses:
Low fleet utilization if compared to easyCar.
The small rental companies operate at only one or few locations; mainly tourist locations. Product Life Cycle:
The rental car market is composed of two main segments: the business segment and the tourist/leisure segment. The leisure segments represents somewhere between 45 and 65% of the market in which a large part of this segment are price conscious. On the other hand the business segment represents 35 to 55% of the market, where it was found that this segment is less price conscious and more concerned of quality, convenience, and flexibility. From my point of view, I see that the rental car industry has reached the maturity stage which is apparent in the unique packaging, style, and demand. In this stage companies defend brand’s share of market; seek growth by luring consumers from competitors, improve quality; add features to distinguish brand from competitors’ brands. C.The Organization

Mission statement: easyCar.com’s mission statement is “At eayCar we aim to offer you outstanding value for money. To us value for money means a reliable service at a low price. We achieve this by simplifying the product we offer and passing the benefits to you in the form of lower prices”. Business objectives

Quadrupling revenues by 2004 to reach £ 100 million and £10 million in profit. In order to achieve these finical goals, easyCar is planning to open an average of 2 new sites a week through 2003 and 2004 to reach a total of 180 sites by the end of 2004. Expansion of fleet to reach 24,000 vehicles across the 180 sites by the end 2004. EasyCar’s Strengths

The usage of high quality cars (Mercedes) which reflect the easyCar’s brand. Reaching the break-even in the...
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