Chesil-Beach-Cars-is-a-private-car-hire-business-that-was-set-up-in-early-2011-in-preparation-for-the-Olympic-Sailing-events-in-Weymouth
For this project there is a Business case example that needs to be read and analyzed.
The outline for the case analysis is printed towards the bottom of the short story.
Ones done reading the short story please answer the questions in the Outline for a
Case Analysis. This must be in APA format and be at least 3 ½ pages long. Please let
me know if this project will work for you.
SHORT STORY
Chesil Beach Cars is a private car hire business that was set up in early 2011 in preparation for the Olympic Sailing events in Weymouth. The owner set up a firm to ferry VIPs and officials from a train station to a number of local hotels. He got a contract from three hotels for this work for the 12 months ending in October 2012. In total, the owner used about $10,000 of personal savings to set up the home-based business. Also, the hotel contract was enough to secure a bank loan to help buy a good second-hand vehicle and complete all the required registrations. The hotels pay an agreed rate per trip regardless of the number of people in the car. They pay via invoice normally 15 days after the end of month. After the end of the Olympics, the business clearly had a difficult period of adjustment but the hotels remained loyal to Chesil Beach Cars based on price, reliability and good customer feedback. The owner took minimal income from the Olympic work – using personal savings and casual work as a source of income instead – and this built up as reserves that allowed the business to survive. He bought another second car for cash as well. Over the last year or so, the business has continued to grow. Indeed, the business has changed as well to a new operating model. The owner now has three cars that he maintains and services as needed. He either drives one of the vehicles working for a small group of hotels, or rents them out to other drivers for a fee and they operate their own private hire operation. This way, all three vehicles are being driven for hire most times of the day and all week (unless maintenance is needed). The owner will also repair vehicles owned by other taxi firms, often at short notice for a premium fee. The income mix of the business has changed as well. The owner still gets paid via invoice from a few hotels and this is reliable income. Also, he receives regular fixed cash payments from the drivers who rent his cars to operate a private hire business. When he works as a mechanic the owner also gets paid via an invoice as well. However, this repair work is less certain income than revenue from hotel work although very profitable when available. This mature and wide-ranging income mix has now allowed the owner to fund the third vehicle on a finance lease arrangement direct with the car manufacturer (who offer special schemes for high mileage vehicles used as a taxi). As the business is changing and growing, it is difficult to get a true reading of underlying sales and profits in 2013/14. However, based now on three cars on the road, gross revenue is close to $100,000 a year with the only significant monthly repayments being on the new car lease of about $4,000 (as the bank loan to fund the first car has been repaid). Although other costs are high, especially insurance and fuel, two of his cars are also driven by other self-employed drivers. Overall, the owner has an annual profit of close to $30,000 a year at the moment. As a result, in the last six months he has started to take a regular income from the business for the first time (up till then, the owner for some time had a second job and took profits from the business in an ad hoc way). The owner has recently got married and the regular income will help his application for a residential mortgage. Discussion In contrast to the ice cream case study, this is an opportunity-based start-up where the owner has invested heavily at the beginning, secured a contract and a bank loan and worked for a long term without drawing profits. Now, this combined garage repair, car hire and taxi operation has few cash-flow-based issues as it has a long-standing arrangement with local hotels that pay on time and most of the other revenues are paid in cash. Rather, the business has needed to fund change and evolution over a couple of years through major investment. This has mainly come from the personal cash injection by the owner at the start and the continued reinvestment of profits from earlier contracts. He did also get a bank loan early on but has moved to a more appropriate lease-based funding source for the latest purchase. The business may well have to go through a further evolution of funding at a later date. It may no longer be possible to operate this from a home base, especially if the lucrative car repair work is developed more. As long as the recent move to draw a regular salary does not get out of hand, the cash reserves should be sufficient to fund a lease payment for premises or maybe a commercial mortgage. An alternative could be to take in a business partner and bring some new equity on board.
OUTLINE FOR A CASE ANALYSIS
1) EXAMINE AND DESCRIBE THE BUSINESS ENVIRONMENT
a) Describe the nature of the organization under consideration and its competitors.
b) Provide general information about the market and customer base.
c) Indicate any significant changes in the business environment or any new endeavors upon which the business is embarking.
2) DESCRIBE THE STRUCTURE AND SIZE OF THE BUSINESS
a) Analyze its management structure, employee base, and financial history.
b) Describe annual revenues and profit.
c) Provide figures on employment. Include details about private ownership, public ownership, and investment holdings.
d) Provide a brief overview of the business’s leaders and command chain
3) IDENTIFY THE KEY ISSUE OR PROBLEM IN THE CASE STUDY
a) In all likelihood, there will be several different factors at play.
b) Decide which is the main concern of the case study by examining what most of the data talks about, the main problems facing the business,
c) Examples might include expansion into a new market, response to a competitor’s marketing campaign, or a changing customer base
4) DESCRIBE HOW THE BUSINESS RESPONDS TO THESE ISSUES OR PROBLEMS
a) Draw on the information you gathered and trace a chronological progression of steps taken (or not taken).
b) Cite data included in the case study, such as increased marketing spending, purchasing of new property, changed revenue streams, etc
5) IDENTIFY THE SUCCESSFUL ASPECTS OF THIS RESPONSE AS WELL AS ITS FAILURES
a) Indicate whether or not each aspect of the response met its goal and whether the response overall was well-crafted.
b) Use numerical benchmarks, like
i) a desired customer share
ii) show whether goals were met
iii) analyze broader issues
iv) employee management policies
v) talk about the response as a whole
6) POINT TO SUCCESSES, FAILURES, UNFORESEEN RESULTS, AND INADEQUATE MEASURES
a) Suggest alternative or improved measures that could have been taken by the business
b) Using specific examples and back up your suggestions with data and calculations
7) WHAT WOULD YOU DO?
a) Describe what changes you would make in the business to arrive at the measures you proposed
b) Include:
c) changes to organization
d) strategy
e) management.
