Assignment 2: Case 3-3, easyCar. com 1. In Western Europe, the rental car industry is made up of many companies competing against each other, but only a handful of companies are actually dominant. According to the text, in most countries, the companies that were dominant were national or regional companies rather than companies that had a strong international presence. Many smaller companies also operated in each different country but generally only operated in a few locations. The rental car industry in Europe can be split into two segments: a business segment and a leisure segment.
The text says that the business segment wasn’t very price conscious, whereas the leisure segment was very price conscious. These characteristics can influence how service is delivered in this industry because it’s difficult for a company to enter a new market if they aren’t a national or regional company and aren’t aware of what each segment wants in that market. 2. To keep prices low, easyCar only stocked one type of vehicle at each of its locations, so they didn’t have to buy multiple types of vehicle for each location.
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When it came to choosing where to put locations, they stayed away from the price airport spaces to avoid higher leasing costs. They also kept their physical locations to a minimum. They usually rented out space in an already existing parking garage and employees worked out of a small cubicle within the garage. Each location generally had about 150 cars, however, since their vehicles were rented 90 percent of the time, they only needed 15-20 spaces to keep the cars that weren’t rented out at the time.
This kept the cost down significantly because they didn’t need to keep space for all 150 of their cars. These are just a few examples of how easyCar kept their costs down. 3. I would say that the level of quality that easyCar provided its customers was decent, but people can’t necessarily expect the best from a company that has such low prices. The thing that really got me was the fact that they gave people their vehicles with a relatively low fuel tank. Also, the fact that customers had to take a shuttle to get to the rental car area wouldn’t necessarily be a popular choice.
The car was also to be cleaned thoroughly before returned and although it’s always good practice to do a quick cleanup of a rental car, not many companies require a customer to get the car detailed inside and out. These policies don’t really make me eager to use them when I’m looking for a rental car, despite the lower price. 4. EasyCar could be a viable competitor to taxis, buses and trains because of their cheap prices. In some cities, taxis are pretty expensive so if easyCar’s prices are lower, then they would likely be an option that people would choose instead.
Buses and trains in Europe aren’t that expensive and trains especially can get a customer to a place they need to be pretty fast, so I’m not sure easyCar would be as much competition for them. 5. By offering cheaper prices for people who make reservations on easyCar. com, the company seemed to be looking at competing with the dominant companies. Their advertising line of “the best reason to use easyCar. com can be found at hertz. nl” would indicate that their website is better and easier to use than Hertz. To compete with companies like Hertz, they need to have lower prices but they need to have better service.