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By Michael Jacobides, Pascal Courty
In 1999, Stelios Haji-Ioannou and the easyGroup management team considered whether European car rental was a business worth entering. They had an enviable track record when it came to picking market opportunities. Could this be their next success? The case describes easyCar’s entry into the European car rental market and subsequent development. It is a versatile set of cases, which can be used individually, as pairs, or as a sequence of cases starting, showing the evolution of a venture from its conception to its troubles and reincarnation. It can also be taught by focusing on one or more episodes which illustrate particular aspects the instructor is interested in.This case can be used either to introduce or recap the core elements of strategy, such as market definition, industry analysis, creating new market spaces, new business model analysis, resources and capabilities. It can also help elucidate more advanced topics; i.e., show where the value lies in the value chain and how a firm should decide its positioning and link with other firms in the ecosystem; identify the challenges with planning for growth and how that links with financial strategy; and raise the upsides and downsides of ‘Peer-to-Peer’ (P2P) models, contrasted with more traditional Business-to-Consumer (B2C) models. More importantly, easyCar can be used to help students evaluate a new business model ex ante, including the role of analogies and the promises and risks of extending a firm’s capabilities, and considering adaptation when things turn out worse than expected. The case offers an applied perspective on the use of analogies in strategy formation. It highlights the role of indicators of what is or isn’t working in the venture, analogical reasoning and extrapolation notwithstanding.
- Understand the core elements of strategy, such as market definition, industry analysis, creating new market spaces, new business model analysis, resources and capabilities;
- Illustrate where the value lies in the value chain and how a firm should decide its positioning and link with other firms in the ecosystem;
- Identify the challenges in planning for growth and how this links with financial strategy;
- Understand the upsides and downsides of “peer-to-peer” business models and how they differ from more traditional business-to-consumer models;
- Evaluate a new business model ex ante, including the role of analogies and the promises and risks of extending a firms’ capabilities;
- Illustrate the process of adaptation when things do not go according to plan.
|Publication Date:||January 2016|
|LBS Case Code:||CS-03-027|
|Subjects:||Business model innovation, Corporate strategy, Peer-to-peer business models|