Easyinternetcafe Cafe Essay

This case report addresses the challenges to implement a clean logistical system that if well implemented it ass improve operations and can convert easy net incomecafe into a profitable company. EasyInternetCafe (eIC)is a chain of Internet cafes with lineages in the UK, the USA, Holland, Belgium, France, Germany, Spain and Italy. eIC is part of the Easy Group, headed by the Greek entrepreneur Stelios Haji-Ioannou. The original bank line model is to build and operate on the principle of economics of surpass or succumb Management most stores would be open 24 hours a day, 7 long fourth dimension a week, and each has an average of 350 PCs. In 2003, with losses continuing to mount, eIc management has decided to radically renew their operations. In order to eliminate the need for future investments in new stores, the strategy was changed.It has been decided to appoint franchisees for the new stores and excessively, if possible, for the existing legacy stores. accord to the new strategy, the franchisee would be required to bear the costs of the property and the hardwargon. It was also decided to move from large stores to smaller stores with 20 to 30 PCs. The certain logistic situation represents a bottleneck and it is one of the major ca recitations for the current losses at easyinternetcafe. After reviewing different logistics scenarios and providers, I strongly commend taking a closer look to support the logistic option that Ingram Micro is proposing. If we do that, we could benefit in the warehousing, accounting and transportation areas, by dint of all this areas, it will help us reduce the logistics costs and press per new store, from almost to 2,000.00 to 1,357.00, this and the benefits mentioned before, will help us to achieve our boilers suit objective of organism a profitable company. This will be the strategic perspective that will be demonstrated end-to-end the report.Issue(s) Identification1. Yield Management does non work for every com pany. eICs first store opened in June 1999 opposite in London. Soon afterwards, it was quickly recognized that eICs yield management had certain characteristics that later affected the short letter model elC was offering a mettlesomely perishable product 1 hour of Internet vex time, cannot be put in inventory, at one time that hour is gone, there is no centering of reselling that hour of internet access time. Although stores are large, capacity is limited Internet access demand varies, not only by time of day, day of week, entirely also crosswise other time and seasonal horizons. Incremental costs are adjacent to nothing it doesnt matter whether there is one person or 500 in a store, the bandwidth is already there. By the time the uphold and third stores were opened, eIC had built yield management into its store management system.2. electric current Logistics SystemLogistics is not a core competency at elC, but it has become one of the integral activities. Logistics for el c means to supply the new stores with their sign assests, including all of the furniture and PCs. This system is a drag on scalability, aptitude and a bottleneck for growth and the main reason for spiraling high cost and ongoing losses.Environmental and Root Cause Analysis aggressive use of yield management is a recognized and admired stage business enterprise model of Stelios. EasyJet was a profitable company after just a few years of operation. However, with EasyInternetCafe profits seem a long way off, the assumption that offering very low prices would increase the demand significantly lead to losses of 80m-100m from 199 to 2002. Below are some root causes of the symptoms supra * The stores are too large economies of scale dont materialize if occupancy is half empty. * Fixed costs were too high repayable to the quantity of Pcs per store. * Staff overheads were excessive.Assumptions* Are there sufficient customers who want to use an internet cafe? To-day, most of the homes check internet access, and many others conduct (free) access at their place of work or at colleges or university. * Are the stores located in the right place to attract customers through come forward the day and the whole week? Downtown cafes might attract business people needing to keep in touch, but many city centres are quiet in the evenings and at weekends. By mid-2001, with cash running out a drastic action was necessary a franchising plan is being developed. It is important that every cafe looked the same, with common signage, furnishings and PCs.The time to sign a squinch with a franchise is one week. If the franchisee did not already have space for the caf, eIc would assist in recommendations with locations inside 28 days. The broadband internet connection had to be installed by the local telecoms supplier within 28 days. Also they need to Desk installed within seven days. Server delivered and installed 2 days and PCs delivered and installed 2 days. CVM delivered and inst alled 1 day Signage delivered and installed 1 day. Chairs delivered and installed 1 day. Testing stark(a) system 2 days and also Open for business within one day. So, how much time should it take to open the cafe erst the contract is signed? From the predecessors plan we see that average duration of time for all activity. Under bellow we discuss about time of the contract are signed.