• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

City speed - There are 2 options that are currently available to you, the Board of Directors, the first is to purchase more vehicles in addition to the current fleet and the other is to expand to a new location from which to run the company.

Extracts from this document...

Introduction

CitySpeed Brief Introduction There are 2 options that are currently available to you, the Board of Directors, the first is to purchase more vehicles in addition to the current fleet and the other is to expand to a new location from which to run the company. New Vehicles Advantages The advantages of purchasing 15 low-floor easy-access buses are that it leads to a growth in the size of the current operating fleet. As can be seen from the benchmarking data although the current fleet size is bigger than our rivals, Destina, the average age of the fleet is double theirs. The introduction of new buses to the fleet will allow the customers to travel in more luxurious surroundings and so will increase the overall pleasure of the journey which is likely to lead to more people wanting to use our company's buses on a regular basis. The fact that these new low-floor easy-access buses operate as a fifth of Destina's fleet shows that they are a forward thinking company who are looking towards maintaining a greater market share by improving the level of customer satisfaction. ...read more.

Middle

The answer is probably not, as the majority of the fleet will still be rapidly ageing thus unreliable and uncomfortable so unsatisfactory for the customer. Is it also possible that these new buses will lower maintenance costs? Again probably not as the rest of the fleet will still be ageing with repairs growing increasingly more expensive so this problem is unlikely to be solved with such ease. The new vehicles also carry a high initial outlay and with gearing still at 40% wouldn't this present a problem in obtaining the necessary funds to purchase these new vehicles. The payback on this investment is also longer which could present a problem in a time of economic instability. The vehicles' expected life of 15 years is only half that of the new depot investment so more money will be needed sooner to pay for more improvements. New Depot Advantages As the company's position in our current market begins to weaken due to the increasing growth of our main rival, Destina, in the market place the possibility of moving our company to a new out of town purpose-built location would seem like a good option as it presents the opportunity to bring about a start to a whole new era for the company. ...read more.

Conclusion

that we was unable to repair with the new maintenance facilities we would be unable to replace due to having no reserves and also having a high gearing ratio it is unlikely banks would allow us to borrow from them. The fleet would still be considered out of date from a customers point of view compared to the relative youthfulness of the Destina fleet so passenger journey figures may decrease yet again as customers look for a much more appealing method of public transport to get them out of their cars which in this case would no doubt resort in them using Destina's new low-level easy-access so more convenient to travel on buses. Summary In summary I believe for our company to succeed in consolidating our position in the market place I believe that the most suitable option would be to invest in the new vehicles as this is the side of our company that the customer sees and feels so this is the aspect that we will be judged upon, and it is after all the customers that we are aiming to please to ensure they will keep using our buses. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. Bellway Plc is a holding company with subsidiaries; its main subsidiary company is Bellway ...

    * Rising raw material cost Increase in raw material cost, results in productive capacity of the economy to be reduced which lead to GDP to fall as consumer are not capable of purchasing goods at the new highwe price. * Shortage of labour There currently is a shortage of skilled

  2. Investment Appraisal

    the resources are - the level of risk - personnel and human relations areas - the economy - the company image

  1. Evaluate the impact of Nike's outsourcing strategy and factory location on the host nation

    Forced labour in any form is not allowed. The code of conduct also states that Nike will not employ anyone under the minimum age established by local law, or at the age at which compulsory schooling has ended. The code requires all employees to be paid at least the minimum

  2. The Famous Grouse - company profile and exports

    New Zealand is heavily dependent on trade - particularly in agricultural products - to drive growth, and it has been affected by the global economic slowdown and the slump in commodity prices. Thus far the economy has been resilient, and growth should continue at the same level in 2004.

  1. Liberalization: where it has lead us and where it is headed

    The "Import Lobby" is usually unperturbed by these cuts because they view these cuts as an opportunity to increase their imports. But the consequences for the rest of the population as a whole can be quite disastrous. With the government refusing to invest in these critical areas, crippling shortages develop in vital aspects of the infrastructure.

  2. The current and future prospects of Virgin

    The switching costs for aircraft and engines are very low, which increases the buyer's power. For Virgin Atlantic they have the bargaining power when it comes to purchasing products such as from their manufactures or suppliers as they are well-established company.

  1. Case Study: The Home Depot

    In this study we will answer several questions with subjects ranging from strengths, weaknesses, opportunities and threats of Home Depot till the corporate culture and corporate strategies. The answers on these questions together will answer the overall question, which can be read in the next chapter.

  2. The Quest for Optimal Asset Allocation Strategies in Integrating Europe.

    distribution or when the utility function can be approximated by a quadratic function. In most cases, at least the latter condition is satisfied and hence the mean-variance analysis gives a good approximation to the general expected utility framework. Markowitz, the founder of modern portfolio theory, first introduced the theory of mean-variance optimisation and diversification benefits in 1952.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work