Case 1 – Renting a car at the airport has, for many

Subject: Business    / General Business
Question

Case #1 – Chapter 1

Renting a car at the airport has, for many, become an unpleasant experience. After a long day (or night) of navigating airports and flight delays, the weary traveler must trudge or take a bus to a rental counter, wait in a line, and finally be greeted with a selection of choices: which type of car, what insurance options, prepaid fuel or refill on the way back to the airport, which navigation aids, and so on. Frequent travelers can make this process less burdensome by selecting choices in advance, but the likelihood that a chosen car model will be unavailable is still high. Although car-sharing services, such as Zipcar, and chauffeur services, such as Lyft and Uber, have used Internet technologies as a key element from their beginnings, most car rental companies have made limited use of those technologies as an add-on to their core airport-based operations. In 2012, the launch of Silvercar airport rental cars was intended to change that. From its original operation in Austin, Silvercar had grown to 10 airport locations by 2015 with plans to add a new location every few months. Billing itself as the “first hassle-free car rental company,” Silvercar designed its workflow to minimize the time customers would spend dealing with the airport car rental experience. Silvercar customers must download the company’s mobile app to their phones or tablet devices to make a reservation. The reservation includes insurance options, but there is no need to select a car type or option since all Silvercar vehicles are identically equipped Audi A4 sedans that are painted silver, of course. Once they arrive at the airport, customers receive a text that directs them to either pick up their car at the curb, delivered by a Silvercar employee, or to a nearby lot. The app includes a scan code that unlocks the car. The app reminds the customer when it is time to return the vehicle and provides directions through the app and on the car’s built-in GPS system. If the customer is unable to return the car with a full fuel tank, Silvercar will fill it at the prevailing local price plus a $5 refueling charge. The company has established rental rates that are competitive in each location with other companies’ rates for midsize sedans. The rentals include additional drivers and roadside assistance. The equipment included with each car includes GPS, Wi-Fi, satellite radio, and a toll-tracking system that charges the customer automatically for the exact amount of tolls incurred (most rental car companies charge a daily rental fee for a toll transponder in addition to the toll amounts)

Questions:

1. Silvercar’s business process design implicitly excludes being able to provide services to certain customers. In about 100 words, identify the characteristics of those customers and outline the costs and benefits to Silvercar of choosing not to serve them.

2. Assume you are the Customer Experience Manager at an established rental car company. Prepare a memo of about 200 words to your Board of Directors that summarizes the competitive threats presented to your business by Silvercar and outline specific actions you believe your company can take to reduce those threats.

3. Many rental car companies in the past have promoted their services by highlighting the helpfulness and friendliness of their employees. In about 100 words, assess the role and importance of employee characteristics such as helpfulness in Silvercar’s business process design.

Case #1 – Chapter 2

Hyderabad is the fourth-largest city in India, with a population of 9 million in the city itself and more than 15 million in the metropolitan area. It is the capital of the State of Andhra Pradesh, which has 86 million people and a $100 billion-per-year economy. Hyderabad itself accounts for about half of that annual activity, much of it in information technology (the city houses the Indian headquarters of Amazon.com, Google, and Microsoft, for example) and pharmaceuticals. With more than a dozen universities, the city is a leader in education and research. Like the rest of the country, however, citizens in the Hyderabad metropolitan area are less connected to the Internet than the city’s strong presence in the information technology industry would suggest. Overall, only about 1.7 million residents (about 19 percent of the population) have regular online access. About half of those with regular access use an Internet-capable phone as their primary access device. Approximately 85 percent of Hyderabad citizens own mobile phones, but most of them are not Internet-capable. Although the level of Internet access in Hyderabad is greater than the average for India, it lags far behind the United States, where more than 90 percent of the population has regular online access. It also lags behind online access in China, where about 46 percent of the population has regular online access (about 80 percent of that through mobile devices).

Questions:

1. What are the implications of the low Internet access rates for the citizens of Hyderabad as they become active participants in the world economy over the next five years? Summarize your thoughts in about 100 words.

2. Using your library or your favorite search engine, identify current trends in the growth of Internet-capable phones and other online access devices in India. In a report of about 200 words, evaluate the prospects for significant changes in online access rates over the next few years.

3. Use what you learned about online access technologies in this chapter to outline several alternatives that the government of Hyderabad should consider developing (perhaps in partnership with local information technology companies) that might increase online access rates for its citizens. Prepare a report of about 200 words in which you discuss at least two of these alternatives.