Sample Paper: SuperShuttle_taxi_Company_Case_Study.doc
Supershuttle taxi is a transport company that operates taxis from airports to homes and hotel destinations of individual customers. This is a franchise of a transport company called blue van in the United States, serving most of the airports. To manage this form of business, the company must be in a position to enable the customer to book for transport, and be responsive to customer’s orders in time. This is mainly because customers book the taxi as they are travelling and any delays with would highly cost the customer as the air tickets are paid in advance. To meet these deadlines, the companies require a high level of management and customer care. There was a case of delay with supershuttle taxi on 1 June, when it failed to serve Geoff and Marie Southern in New York. This paper will analyse the situation, assess the prevailing problem and suggest recommendations on how to avoid such cases.
Background Situation of the problem
Geoff and Marie Southern had spent a six days holiday in New York and were prepared to leave on 1st June. To make sure that everything was in order and that the transportation from the hotel to the airport was arranged, Geoff made a booking and paid $41 with the Supershuttle taxi for transportation from the hotel to Newark Airport. He went further on the evening before 1st June and called supershuttle to confirm the transport for the following day. The company confirmed that the vehicle was going to be there in time. Geoff and Marie Southern waited for their taxi during the agreed time of pick up. However, the taxi did not turn up, and they were getting late for the flight. He had to look for an alternative, and the only available source of transport was a black limousine that charged them $75 to the airport. On the way, the Limousine had an accident with a police car, and they arrived at the airport 90minutes late. Though they caught up with the flight, the custom officers had already broken in to their bags, and they had paid an extra cost for transport. As a result, Geoff had to write an email to the company requesting for a refund. The company later sent him a cheque of $41 that he had initially paid for their services. However, Geoff was not satisfied as he ended up with a deficit of $34, as a result of the company’s failure to deliver their services.
Customer relationship management entails the company’s identification of customer needs, and meeting them to improve the performance of the business (Boddy 2005, p. 12). Storbacka, Strandvik and Gronroos (1994, p. 21) state that, management of customer relationship should aim at ensuring customer benefit for continued business relationship. According to the supershuttle case study, Company had a problem with managing its relation with the customers. Though the customer had informed the company of his need for transport, the company was not able to meet the needs. In this case, the company did not honour the customer’s genuine trust by keeping its word.
All businesses are dependent on their customers for survival and future profitability, and care should be taken to ensure that a good relationship is maintained. According to Boddy (2005, p. 12), customer relationship management comprises of the knowledge and understanding of the customer. This has highly benefited the biggest companies, as they are able to interact with their customers through different avenues, such as interview and customer care. Supershuttle should have taken the initiative, to know the customer has needs and ensuring that they are met in the most appropriate manner. With the maintenance of the relationship between supershuttle and the customer, the company stand to gain through return customers and positive public relations.
Interpreting Management Information (Managing Information for Decision Making)
According to Mansor, Tayles and Pike (2012, p. 19), information interpretation and management is essential in the process of decision making in organisations, which is a key role of the management team. In this case, The Company received information on the customer needs and did not act on it. The company can collect information on the customer demands through different avenues. These avenues can be from calls, form filling through the Company’s website and emails. It would be beneficial for the company to receive this information, analyse and organise it in to orders to know which orders that can service based on the company’s capacity to serve its customers. In this case, the company can use a form or software that requests for relevant information about the customer and locations, and clarify the company’s ability to handle the order before accepting the payments. The payments can be accepted only if the order will be delivered, and decisions made to assign vehicles to the order locations.
Managing Operational Finance
Piercy (2012, p. 162) states that operational finance management is essential to the profitability of any organisation, as a reduction in the cost of running business directly translates to an increase in the company’s profitability. Supershuttle operates blue and yellow vans that transport individual to and from the airport at anytime of the day. The company offers transport at affordable rates, which are better than hiring a normal cab or fuelling a car to the airport and paying for parking fees. The company is profitable, though it has to make subscriptions to the franchiser. However, the company can be more profitable if it was to operate its own vehicles without using the franchise as this would reduce the cost.
The job of transporting people to and from the airport is profitable during the seasons that people prefer moving to different places. This provides more work for supershuttle, and in some occasions, the company receives more orders that it can handle, as it was the case of Geoff and Marie Southern order. In this case, the company can enter into an agreement with New York taxis, to be hiring when there are more orders at a discount. This discount becomes an additional revenue source for the company, and contributes to the rise in profitability. The company can also have opt to employ their own cans and still hire excess from New York taxis when the orders are high. However, hiring from New York taxis might be more profitable than having their own cars. This is because it is not all the times that the company gets more orders than it can handle, and having the cars means paying drivers and the maintenance costs. These costs are left to the New York taxis, when the company outsource in cases of a high number of orders.
Operation management means the direction of resource allocation, with the aim of reduction of cost to ensure profitability (Piercy 2012, p. 154). In the medium term, the company can focus on ensuring that customers are able to order at the comfort of their home and that the company is able to deliver as per the customer specification. Managing the operations of the company requires a keen understanding of the process and ways to improve services delivery (Southern 2001, p.3). To do this, there is a need for clear understanding of customer requirement and time management to avoid delays and reduce the wait time. In the short run, this will develop the customer base and build a base of loyal customers. In the long run, the company might focus on expansion of its services. This can only be done after the current customers have been satisfied. In this, supershuttle can focus in investing to purchase more vehicles to service their growing customer base, and develop more customer platforms for making orders, and high-quality customer care services.
The problem of managing the relationship between the company and its company is highly integrated with the company’s operation management and the long-term operation goals. The long-term goals of the company are based on expansion of the business to serve a bigger number of customers effectively. This is determined by the number of happy customers that are served by the supershuttle currently. This is because the happy customers become loyal, and the company attracts more. To maintain satisfied customers, the company must be in a position to manage the relationship between it and the customers. This can only be achieved through ensuring an understanding of the customer needs and attending to them in a manner that helps attain customer delight.
The Supershuttle’s business of transporting customers from airport to individual homes and hotels has been profitable based on seasons. The company is known to offer transport at rates that are highly affordable, compared to the cost of hiring a normal cab. This has led to increase in business, as the number of customers requiring the services increase. However, the company is faced with challenges in managing its operation as is evident from the case study, when it failed to offered services to a customer, who had booked and confirmed transport. Such cases have a negative impact on the company’s image and pull back its efforts to attain the short term and long-term goals.
To remain competitive and attain customer satisfaction for future business expansion, the company should focus on making its current customers delighted (Southern 2001, p.3). This can be attained by training the customer care on how to handle customers in crisis situations. The company should also find avenues of providing emergency transport system, in case the normal vans are all in service. The company should also ensure that, in case of any disputes, the customer’s concerns are addressed fast enough. Performing the recommended measures would ensure that customers are satisfied; draw more profits, and ensure future sustainability and expansion of the business.
Boddy, D 2005, ‘Management, An Introduction, Prentice Hall (3th Ed.)
Mansor, N, Tayles, M, & Pike, R 2012, 'Information Usefulness and Usage in Business Decision-Making: An Activity-Based Costing (ABC) Perspective', International Journal Of Management, 29, 1, pp. 19-32, Business Source Premier, EBSCOhost, viewed 8 August 2012.
Piercy, N 2012, 'Business history and operations management', Business History, 54, 2, pp. 154-178, Business Source Premier, EBSCOhost, viewed 8 August 2012.
Southern, G. (2001) ‘Operations Management’ in Strategic Management in Tourism, ed L Moutinho, 2nd Ed.2011), OXON,UK CSBIA publishing.
Storbacka, K., Strandvik, T., & Gronroos, C. (1994). Managing customer relationships for profit: The dynamics of relationship quality. International Journal of Service Industry Management, 5(5), 21-38.