Friday, February 22, 2019
To what extent is the car club proposal an appropriate extension strategy for First Cars Plc
The main rationality why premier(prenominal) elevator autos Plc. should adopt this Car bon ton proposal is due to the current marketplace place position of the soused. The firms current market share (in the car rental market) is diminish due to a mavening compute airline offering car rental services to its passengers. The new proposal to target the Car unify market would be very beneficial to origin Cars as this market is experiencing rapid growth due to the ever rising cost of car ownership (predicted to hiking by 20% in the period 2010-14). archeozoic entrance to this market could present an excellent chance to accumulate market share inwardly a market which currently does not bring in much competition, and with the 2012 Olympic Games just around the corner, this could not select devolve at a better time. Whereas the current car rental side of the company is losing market share, the Car Club market is predicted to do postal code but grow in size (110% in volum e and three hundred% in value) in the period 2010-14, meaning that this decision could be the variation between a profitable & growing business, and a failing unity. some other reason why First Cars Plc. should adopt this proposal is because of a let from the Mayor of London. This 1.5m grant is for the creation of car club bays within the inner-city realm of London (the main area being considered for the scheme), and would potenti whollyy reduce the costs of setting up the infrastructure for the Car Club scheme to operate. This would have a great impact on the business as one of the main costs to this scheme would be adequate parking within the area. The fact that the grant is from the Mayor of London exit also convey publicity for the company, which is always a good thing.Finally, this is suggested as a wing scheme. In the unlikely event that this scheme does not prove successful, First Cars Plc. can always fall back on their existing services, although they will be in a w hopping bill of debt.One reason against the plan is the financial implications for the firm. The training budget for the Car Club is 400,000, over 10 times more that their current spend on training. The budget for marketing is three times the size, and the average staff salary is predicted to rise by around 10,000. When considering these figures one has to question the feasibility of this scheme. This is a large outlay for a pilot scheme and the company has limited financial reserves. This scheme would also fall within the New harvest-festival Development area of Ansoffs matrix, an area with a large amount of risk.The plan also suggests that management should operate in a modify manner. This means that instead of a couple of senior managers being answerable for the whole company, control is spread across a larger figure of speech of employees. This is a different method to their current centralised management ardour and means that the senior managers currently in control of the company would stand part their control of the business. As the company is new to this management style, it is sooner risky. Poor decisions could be made by inexperienced staff and could lead to disaster.The case study also states that Amy is keen to make a super impact within the business quickly. Does this mean that she has rushed these plans in order to achieve this? Has she doctored the figures in order to progress the scheme send on and impress her superiors? This could mean that the business is moving into a new market based on info which is not even correct.Overall I do not think that First Cars Plc. should adopt the Car Club Proposal. The idea looked initially promising an emerging market which is predicted to grow by 300% in value, with little competition at present. These suggestions are all around figures that Amy has put together however. Without the knowledge that Amy may be slanted with her predictions, this would appear to be a very good proposal. However, the depth and verity of the plan is vital to ensure the success of the business and as this has been brought into question, I would have to say that I do not recommend that First Cars Plc. should progress any further with this proposal until at least this data has been checked and agreed by the directors.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.