EasyCar Car Rental

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EasyCar is a European based car rental company that was founded in 2000 by Stelios Haji-Ioannou, a flamboyant self proclaimed cereal entrepreneur from Greece. The company’s mission was to give customers an outstanding value by providing a reliable service at a low price1. To achieve this mission easyCar took a very different approach than the traditional car rental companies in Europe. The main competitors to easyCar were Avis Europe, Europcar, Hertz, and Sixt. The company did everything is could to reduce costs and used technology to operate as efficiently as possible. Steilios’ ultimate goals were for the company to achieve revenues of £100 million and profits of £10 million by the end of 2004 so that he could take easyCar public in 2005. This goal seems lofty considering that in 2002 easyCar only broke even with revenues of £27 million. The pricing strategy for easyCar was to offer rental cars for the lowest prices in the industry. Prices were updated daily based on demand and location and the lowest prices could only be found if booked well in advance. In order to keep costs down easyCar only rented one type of car at each location and did not work with agents. Almost 95% of all car bookings were made through the company’s website with the others made through a phone reservation system that carried a €0.95 per minute charge. EasyCar’s information system calculated expected demand and enabled the company to achieve a utilization rate above 90 percent; this figure was much higher than industry leader Avis Europe’s utilization rate of 68 percent. To further reduce costs the company enacted stiff penalties for returning the car late and for not cleaning the before returning it to the rental office. Some customers complained that... ... middle of paper ... ...simply because it was successful in the airline industry. The plan for such rapid expansion, going from 46 to 180 locations in just two years, could prove to be a dangerous goal. Quick expansion without prior market research of the country a company is trying to enter is also a foolish plan and could lead to disaster. There is no doubt that the company will to need to expand to other locations if it wants to increase revenues, but it should take its time and make the necessary adaptations to increase the chance of success in the new cities. Today, according to easyCar.com, the company operates more than 2400 location in over 60 countries. While the company has not gone public, the low cost strategy appears to be successful. The company has changed its philosophy of only offering one vehicle model at each location; it now offers up to 12 models depending on the city2.

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