EasyHotel is specialized in hotel booking on internet. It offers a safe and clean room at the best possible price in Great Britain, Switzerland and Romania. Moreover, it allows the customers to book rooms in hotels (other than Easy hotels) at low prices in more than 100 countries all over the world (Europe, Asia, Africa)
Mr Stelios, the founder of EasyHotel, took his inspiration from Japanese “Capsule Hotels”. The idea is that the customers can accept less space in their room for a better price. Easy Hotels offer tiny rooms (between 5 m2 and 9 m2) in basements, without ventilation, TV …
A minimum to live on!
It is useful for young travellers who privilege low prices and judicious locations to the comfort, or for businessmen who stay only a couple of days. Rooms are not designed for families or senior citizens.
Easy Hotel targets short-stay customers
The Easy Group business model is build on a maximized profitability of their services or products. On one hand, start investments and maintenance expenses are minimums. That is why the model could difficultly be applied offline. Superfluous services are banished. And on the other hand, EasyHotel targets very precise customers in order to attract them and sell its concept.
Two kinds of competitors exist on the web: Those who allow customers to book rooms in a large variety of star-ratings hostels (http://www.expedia.fr/ or http://www.ratestogo.com/ for example) and those who offer cheap rooms in private hostels (Formule1 hostels) or in hostals (http://www.hostelworld.com/). EasyHotel is somewhere in between: the concept consists of a cheap private room.
Nevertheless, today this model is not always scaleable because of the law. For instance in France, a ventilation, a ceiling above 2,20 m and a surface above 9 m2 in a room are compulsory. That is why EasyHotel offers cheap rooms only in Great Britain, Switzerland and Romania for the moment. According to me, this model is sustainable provided that managers put a clear strategy in place in order to develop this concept all over the world.
To complete this analysis, we can realise a SWOT (Strength, Weakness, Opportunity, Threat) graph to judge the EasyHotel health and know what we would do if we own this business.
STRENGTH:
An innovative concept.
WEAKNESS:
Legislative constraint. “Capsule Hotels” are not allowed in France for example.
OPPORTUNITY:
An obvious demand. This business can surf and use the EasyJet concept.
TREAT:
How to develop this concept all over the world?
How to increase customers?
How to create a growth model for this business?
Managers have to limit themselves strictly to the law and develop a model of capsule room. It would allow them to conquer new countries and improve their branding.
They have to adopt a clear differentiation strategy:
- Create and value a competitive advantage
- Avoid the direct competitors
- Develop a branding
dimanche 6 janvier 2008
samedi 15 décembre 2007
jeudi 13 décembre 2007
The Long Tail
This term is used in order to describe a certain business and economic model. Chris Anderson was the first to use this expression, in an October 2004 Wired Magazine article. It is under this notion that Chris Anderson explains the fact that businesses with distribution power can sell a greater volume of otherwise hard-to-find items at small volumes than of popular items at large volumes.
As an employee of Amazon describes, “we sold more book today that didn’t sell at all yesterday than we sold today of all the book that did sell yesterday”. Quite hard to follow but… In simple words, the products which have a poor demand can collectively represent a market share equal or higher that the one of the best-sellers, if the way of distribution and the offer are diversified. Indeed, there is proportionally much more offer for non hits than for hits and the demand is larger and more diversified.
The Long Trail can be viewed very positively for the consumers, who can find everything they are looking for, even if the author is very old, or if it was known 10 years ago and not anymore. In our society of consumption, everything is never enough so we are always looking for something we don’t have so this kind of business model can allow us to thing about something we wanted, ten years ago, we forgot and we now remembered.
Moreover, for the collectors, who are able to spend a lot of money for the old things they are looking for, it’s very positive.
Also, to have something special, rare can be important for people who have a strong wish of differentiation. Nowadays, it’s a kind of “fashion” to have something other people don’t have or cannot found.
I think that for the artists, it’s profitable cause their book or song can always be brought even if they produced it 10 years ago. As a consequence, they are never really “as been” and everybody who wants to buy it can do it easily.
Also, thanks to the best-seller and the method of Amazon for example to guide their clients in order to make them buying more.
For the seller, the strategy of differentiation permits it to face the competition. Indeed, offering a huge choice to the consumers is an element of differentiation.
I see one problem which can be highlighted is the inventory costs. Indeed, offering a huge choice of books or compact discs can be problematic if the companies like Amazon have to store them. Even if the stock of each book is low, if they have to store all the books, it requires a lot of space.
Moreover, the distribution cost can be a problem, when the books available are in different countries. It can cost a lot to deliver the good to the consumer.
Amazon.com is the most well-known company working with the Long Tail business model. Other companies like Barnes&noble.com and Priceminister.com use it.
In the physical market, I really think that this Long Tail exits too. Indeed, if you walk along the rue Saint Michel in Paris for example, you can find all the books you want in the various book stores. They buy all the books you want to sell, and they distribute them. As a result, you can find there both very old books and best-sellers.
This business model is sustainable as long as the storage of the goods is not a problem.
The companies can also decide to furnish themselves directly in bookstores but the logistic has to be very efficient in order to satisfy the demand. If this concept is used, the storage problems disappear.
As an employee of Amazon describes, “we sold more book today that didn’t sell at all yesterday than we sold today of all the book that did sell yesterday”. Quite hard to follow but… In simple words, the products which have a poor demand can collectively represent a market share equal or higher that the one of the best-sellers, if the way of distribution and the offer are diversified. Indeed, there is proportionally much more offer for non hits than for hits and the demand is larger and more diversified.
The Long Trail can be viewed very positively for the consumers, who can find everything they are looking for, even if the author is very old, or if it was known 10 years ago and not anymore. In our society of consumption, everything is never enough so we are always looking for something we don’t have so this kind of business model can allow us to thing about something we wanted, ten years ago, we forgot and we now remembered.
Moreover, for the collectors, who are able to spend a lot of money for the old things they are looking for, it’s very positive.
Also, to have something special, rare can be important for people who have a strong wish of differentiation. Nowadays, it’s a kind of “fashion” to have something other people don’t have or cannot found.
I think that for the artists, it’s profitable cause their book or song can always be brought even if they produced it 10 years ago. As a consequence, they are never really “as been” and everybody who wants to buy it can do it easily.
Also, thanks to the best-seller and the method of Amazon for example to guide their clients in order to make them buying more.
For the seller, the strategy of differentiation permits it to face the competition. Indeed, offering a huge choice to the consumers is an element of differentiation.
I see one problem which can be highlighted is the inventory costs. Indeed, offering a huge choice of books or compact discs can be problematic if the companies like Amazon have to store them. Even if the stock of each book is low, if they have to store all the books, it requires a lot of space.
Moreover, the distribution cost can be a problem, when the books available are in different countries. It can cost a lot to deliver the good to the consumer.
Amazon.com is the most well-known company working with the Long Tail business model. Other companies like Barnes&noble.com and Priceminister.com use it.
In the physical market, I really think that this Long Tail exits too. Indeed, if you walk along the rue Saint Michel in Paris for example, you can find all the books you want in the various book stores. They buy all the books you want to sell, and they distribute them. As a result, you can find there both very old books and best-sellers.
This business model is sustainable as long as the storage of the goods is not a problem.
The companies can also decide to furnish themselves directly in bookstores but the logistic has to be very efficient in order to satisfy the demand. If this concept is used, the storage problems disappear.
Inscription à :
Articles (Atom)