Business

The importance of developing unique services for a company that cope with travel industry is obvious. This is because competition in the hospitality industry is so intense that only providers that can attract customers at appropriate ways can win the market. The situation drives corporations to place lots of advertising to influence customers.

Television, urban areas, shopping centers, and corners of the streets, for example, share similar characteristics that they are full of advertising and promotion at various forms such as billboards, running text, large screens and many others.

In marketing study, promotion becomes one factor of marketing strategy that influences salability of a product in addition to product, place, and pricing. The mixture of the four components, which often refer to marketing mix, creates opportunity for marketers to design, create, promote, and sell products creatively.

In this paper, we would like to discuss one segment in the travel industry, a car rental named easyCar.com. This company emerges as the parent company easyGroup family of companies. In addition to easyCar, another business arm of easyGroup is easyJet that become a successful low-cost carrier in the Europe. Concerning the easyCar.com, we will analyze the several issues including the environmental analysis, comparison with similar car rental providers, the companys strategic planning, and the development of easyGroup businesses.

Business environment and competitive analysis
The situation in 19981999 when Stelios Haji-Ioannou launches easyCar.com is quite competitive as car rental providers at that time compose of small number of providers such as Budget, Hertz, and Alamo. In order to differentiate from the legacy providers, easyCar comes with copied idea of easyJet business model that is to provide easy car rental services just like what easyJet done in 1995 for airline industry. The business model of easyCar is different from other car rental companies that already exist in the UK and other major countries in the Europe. The key characteristics of easyCar follow the low-cost carrier strategy as following

easyCar only rents one single type of vehicle in each operating location in which just like in low-cost carrier concept, by using the same vehicle type, it would reduce operational and maintenance costs. In the development of easyCar business, the company expands into specialties such as easyVan ( HYPERLINK httpwww.easyVan.com www.easyVan.com) and Luxury cars ( HYPERLINK httpwww.easycar.comcar-hiredestinationeasyPrestige.aspxEN500 httpwww.easycar.comcar-hiredestinationeasyPrestige.aspxEN500) but they are still part of easyCar businesses. In the early period of easyCar business, the company had 7,000 fleet mainly they are the Mercedes A-Class model.

Figure 1 services expansion into easyVan and Luxury cars
Online booking, this strategy is also similar to their easyJet business model where the booking for car can only be made through online booking system at  HYPERLINK httpwww.easycar.com www.easycar.com (Figure 2). This strategy eliminates the need for agencies therefore, it would increase the companys profitability since it cuts any intermediaries.

Figure 2 Online Booking
Source  HYPERLINK httpwww.easycar.com www.easycar.com

Experience of Stelios Haji-Ioannou prior to easyCar launch
The launching of easyCar that intensifies the competition in the car rental industry not only in the UK but also in the Europe is backed up by Stelios Haji-Ioannous experience in building Easy group business. Previously, the company has succeeded in introducing easyJet and followed with easyInternetCafe, easyMoney, and easyValue. This similar strategy to everyday low price of Wal-Mart has put strong position for the Easy Group of business to carry out bundling services with other services.

Table 1 shows the eight countries that currently become the location of easyCars operation in the European continents. The data share similar characteristics of having growing internet users. This data is important since easyCar, like other easy group, relies 100 to the reservation from the internet. It means countries that show growing number of internet users become the attractive market for easyCar.

In line with the ethos to be the well-known low-cost carrier throughout United Kingdom and Europe, the company develops and maintains several codes of conduct so that the company is able to keep the cost low and thus providing lower rental fee and specialized type of cars in each location than its competitors.

The marketing strategy that easyCar adopts is cost-leadership competitive strategy by providing low-cost rental fee to customers and employing efficient distribution of cars throughout the companys operation.

Advantages and disadvantages of the easyCar concept
In the business where many people are used to using traditional media will provide significant challenges for providers to turn the behavior. The case of internet revolution that encourages people to do business electronically also presents both advantages and disadvantages for easyCar, which relies on the core concept of online booking only.

Advantages easyCar concept
The potential of carrying out online business already discussed in several literatures especially in early 21st century when internet connection has gone global and reach considerably remote area through several modes of networking technologies. This condition obviously defines the benefits of using internet technologies as works can be accomplished more efficient and effective.

In addition, according to Litan and Livlin, they reveal that Internet has the potential to increase productivity growth in a variety of areas as following in which the areas also applies to the business case of easyCar in the car rental industry

Reducing the cost of many transactions necessary to produce and distribute goods and services
The cost reduction may exist if internet technology is adopted to deliver car re rental services. From the easyCar point of view, the benefits of conducting online bookings for travelers who want to rent a car composes of cost reduction from the elimination of opening a representative office, providing the sharing fee with agencies, and the reduction for operational staffs.
From customers point of view, online booking system also provides several advantages, as they do not need to go out to search for car rental agencies or visit a car rental representative. It means that customers in New York for example can directly booking a Mercedes S Class for their next week trip form their laptop. It greatly saves time for customers and speed up the collection for car rental providers since customers already pay the services in advances.  

Increasing management efficiency
This efficiency exists by enabling easyCar to manage their supply chains more effectively and communicate more easily both within the firm and with customers and partners. This is because of the benefit of Web-based technology offers in managing supply chains effectively while reducing the inventory process.

At easyCar, for example, the company can take benefit of Web-based technology in dealing with reseller or agencies to enhance efficiency of its sales. In the process, the company has changed the definition of what it means to be a reseller. In the car rental business, the resellers also change their form into online reseller or agencies such as  HYPERLINK httpwww.carrentals.co.uk www.carrentals.co.uk.

Increasing competition, making prices more transparent, and broadening markets for buyers and sellers

One of the major features of the Internet business is its potential to make the completely economic system, nationally and internationally, more competitive. If prices of well-specified goods and services are available on-line, buyers can shop for the best deal over a wide geographic area and sellers can reach a larger group of buyers. The Internet could bring many markets closer to the economists textbook model of perfect competition, characterized by large numbers of buyers and sellers bidding in a market with perfect information. The results should be better profit margins since it cuts the intermediaries establishment and costs, more efficient services, and greater consumer satisfaction.

Increasing consumer choice, convenience and satisfaction in a variety of ways
Amazon.com and buy.com becomes good example of dot-com companies that encourage the exponential growth of retail Internet sales from a tiny base although at the first stage of their development in late 1990s, Amazon.com said to be the symbol of failure dot-com company since it records huge loss instead of profit. Under such circumstance, one might have expected analysts to project significant increases in retail competition and productivity.

Joseph Bailey of the University of Maryland, however, finds out retail Internet sales to be insignificant, accounting for about 1 percent of retail sales at the beginning of 2000 and unlikely to surpass 10 percent of the total in the near future. The reason is that both Internet and conventional retailers are becoming more like each other, with pure e-retailers acquiring physical warehouses and distribution facilities, while conventional retailers using the Internet as a supplement to sales in stores and through catalogues.

Advantages easyCar concept
In addition to several benefits of conducting online booking system at easyCar, there are also several identified disadvantages as explained by Smith (2010)

The disadvantages for doing online bookings are car rental providers have fewer meetings with customers, which mean less understanding about their preferences, behaviors, and relations.
Live Help. When a customertraveler book online, he cannot ask a live person with several questions about the color of the cars, features or entertainment in the car such as DVD or perhaps TV, GPS (global positioning system) equipments etc.

Poor customization. When a company relying heavily on online booking system it lacks the capability to handle complicated itineraries, like a trip that combine several type of car for several days. When facing multi car needs, a customer may order three times.
Limited Validity. The cheap rates of several types of car could end customers with fewer options of available car

Changes of easyCar.com strategy
The basic idea of developing easyCar business is copying the ideas of using one model aircraft in easyJet business. In the early launch of easyCar in April 2000 when the company open representatives in London, Glasgow, and Barcelona, the company only provides one model of car, Mercedes A-class vehicles.

The use of this smallest model in Mercedes lines follows the previous deal between easyCar and Mercedes to purchase a total 5,000 A-class vehicles. The decision to but the considerably luxury model of compact car once surprise the rental industry that usually provide less expensive car in the fleet. Commenting the use of A-class model, easyCar managements explains that A-class reflect the easyCar the same way easyJet use the only aircrafts from Boeing.

However, in the courses of business expansion into several locationstowns where easyJet has flights, it encourages easyCar to provide multi type of vehicles since unlike air traveling industry that customers do not have the power to choose type of aircrafts since they do not fly it, in car rental business, customers will individually drive the cars. The situation suggests that convenience and vehicles preferences will add into customers considerations when choosing the car rental providers. In general, type of cars that easyCar rent is grouped into several categories based on the type of vehicle that ranges from Super Mini to SUV, and Convertible.

Figure 3 Type of vehicle
Source  HYPERLINK httpwww.easyCar.com www.easyCar.com

Mission statement for the easyCar business
The second type of strategic planning is a mission statement. This statement details what a company will do today to reach the companys goal, purpose, or mission (Strategic Planning). Therefore, the mission statement should not wordy since people might consider and implement it in different ways.
However, in some cases, mission statements come in lot of detailed describing what will be done, by whom, for whom, and why. For example, a telecommunication company might has mission, which is to meet or exceed the demands of cellular subscribers by offering a level of service that surpasses anything available in the United States area while providing the companys employees with a stimulating compensation packages and supporting working environment to encourage the implementation of the companys mission.

According to case study of easyCar, the companys mission is 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 on the benefits to you in the form of lower prices (Lawrence and Luis, 2004).

Based on the definition of a companys mission statement, what easyCar states about its mission fulfills the mission statement criteria. In addition, easyCars mission also presents the description about who does the action.

In addition, the mission statement also underlies easyCar to provide the low price strategy where the company can conduct aggressive pricing strategy in order to reach 100 fleet utilization. Figure 4 shows that easyCar can rent a car as low as 8.

Figure 4 Type of vehicle
Source  HYPERLINK httpwww.easyCar.com www.easyCar.com

Market segments of easyCar target
The car rental industry generally split into serving two broad customer segments business segments that account for 35 to 55 percent of total car rental market and touristleisure segments that account for 45 to 65 percent of the market. The challenges to serve these two segments are different as tourist segments are more price sensitive while business segments concerns about the quality, conveniences, and flexibility.

Concerning the target market of easyCar, the company targets both business and tourists segments. When targeting business segments, the company provides several classes of vehicles, which grouped into Premium, Luxury, MPV, and SUV models. Meanwhile for tourists segments, easyCar provides several classes from Super Mini, Economy, and Compact vehicles groups.

Overall strategy of the Easy network of companies versus competition
In order to compare the services of easy business with competitors, this paper will employ the Porters Five Forces (Figure 6). This model composes of threat of new entrants, power of buyers, power of suppliers, rivalry among existing competitors, and the threat of substitute products for market place organizer or transaction service provider industry satisfy following diagram

Rivalry
This factor is characterized by examining the concentration ratio of the industry. An industry with a low concentration suggests that there are many players in the markets and competition is in its high level. Industry that has highly concentrated suggest a situation where only a few players within the industry that control significant share of the market (Porters, 2004).

Figure 7 Car Rental Providers in UK
Source  HYPERLINK httpwww.carrentals.co.uk httpwww.carrentals.co.uk

In easyCar business, the number of car rental providers is vast with over 10 providers throughout the UK, some of them are international car rental companies such as Avis Budget Group. In addition, four providers mainly dominate the car-rental market share Alamo, Thrifty, Avis Budget, and Hertz.

Figure 8 Car Rental Market Share

Threat of Substitutes
Substitution generally means products of another industry of other segment of an industry that could appeal customers as a replacement to our products. However, the definition expands to include similar products of our competitors also (Porters, 2004). In the case of car rental, there are also several substitutes like buses or minivans for business travelers or tourists that visit a town in groups.

Buyer Power
Generally, car rental providers have many customers from various regions and economic classes. Therefore, there is a threat that the customer has control over corporate operations. This situation suggests competitors easily match that car rental providers should maintain their customers with loyalty programs since relying on a cheap price alone.

Supplier Power
Suppliers are strong if they have considerable number of customers, they are concentrated in nature and there is a significant cost of changing suppliers. Suppliers of the car rental industry on the other hand, have no such benefit. Suppliers in car rental industry are considerably vast and their buyers are in equal numbers as well. In fact, for car rental companies like easyCar, suppliers powers are powerless especially for compact cars where there are many automobile manufacturers from Korea and China that less costly.

In other business of easy companies, especially easyJet, kind of suppliers that have powerful influence in budget airlines are IT consultants that design and develop IT system or such budget airlines. This is because IT plays important role in helping airlines in managing huge flow of online ticketing. EasyJet develop online ticketing in its website  HYPERLINK httpwww.easyjet.comsplash.asplangen httpwww.easyjet.comsplash.asplangen

In addition, EasyJet also encourage their customers to buy tickets via online reservation (e-ticketing) in order to reduce distribution costs. According to EasyJet website, currently, there are about 95  of seats are sold over the Internet, making EasyJet to be a leader in Europes successful Internet retailers. The success is also caused by the vast promotion of EasyJet to book tickets, change routes, and many others through internet (EasyJet, 2006a).

Through  HYPERLINK httpwww.easyjethotels.net httpwww.easyjethotels.net, customers can select many kinds of best deals from hotels that have partnership with EasyJet. In the website, there is offering of cheap 3 or 4 hotels for only GBP15 per person per night.

Barriers to Entry
Generally, the requirement of high capital in the industry provides entry barrier and an exit barrier for airlines. In addition, licenses and technological issues do not allow anyone to start building car rental businesses. In car rental businesses, the barriers to entry are considerably small as no specific license requirement that companies must fulfill.
Meanwhile, in airlines industry, deregulation policies in the U.K. have reduced the level of entry barriers compare to previous years. The government no longer has the authority to decide who enters the businesses (Airline Industry, 2001).

The Easy Internet Caf Business
In the internet cafes business, we find there are many providers, each has different offering and features. For example, the Age Concern IT Drop-in Centre that located at the entrance of the Brighton city has five PCs with always-on internet connections. The provider does not charge the use of Internet and only charge small amount of money for printing and others services. The company can maintain their operation due to a number of donators that donate their money for the continuity of IT centre services (Brighton, 2007).

Other aspect that causes the easyInternetCafe to fall is internet connection in UK and other countries are considerably cheaper than those in other part of the world are. It means the barriers to entry are small. The situation drives easyInternetCafe to find another strategy than just copy the low-cost strategy that works in airlines and car rental business.
The competition amongst internet caf lies on the value added, working hours, and computer specifications. For instances, there are some cafes like E-Horizon that focus on providing international online games instead of internet access. The company uses 2 Mbps Asymmetric Digital Subscriber Line (ADSL) connections.

Other provider like Gamer Heaven focuses on providing comfortable internet experiences instead of low price. The internet or gaming experience means that customers can have better view and powerful PCs. For the reason, Gamer Heaven set up about 32 LAN-connected PCs, each powered by Pentium 4 3 GHz and 19 PC monitors, and 8 Mbps  4 Mbps reliable internet connections.

Strategy comparison of easyCar, easyInternet, and the core easyJet business
The main differences of easyCar, easyInternet, and the core easyJet business lie on their nature of serving customers. If easyCar and easyJet let customers to booking online, in the easyInternet, the customer can merely look for nearest internet caf location in their website ( HYPERLINK httpwww.easyinternetcafe.com httpwww.easyinternetcafe.com). The internet caf does not rely on the specific computer specifications that differentiate from easyCar and easyJet that use specific aircrafts and small number of fleets.

The next step for the Easy network of companies
The vast network of easy network of companies becomes the strengths of the company in facing the financial crisis. It happens as financial crisis may slow down the air traveling that influence the profitability of easyJet but other business like easyHotel, easyInternetCafe, and easyOffice may increase as corporations may reduce travel expenses, suggesting they would work from internet caf of easyOffice.