LEGASPI, CLIFFTON IAN M. Dr. Paraan CASE STUDY “SHARE-A-CAR” BACKGROUND BM 211 (Organizational Management) MBA Beacon Car Rental Company, a car leasing company, Just acquired a new business called VillageCar which offers car-sharing. The scenario tells about how Henry Beyer, the senior vice-president, will integrate the new business with the current. The chief marketing officer, Tony Cummings, wants to convince Henry to take a different course of action in integrating the said business since the method he wants to try already ailed with the last venture which is Starr, a well-known smaller rental car chain in the southwest.
He is eagerly telling Henry that car-rental and car-sharing is way different from each other but Henry is refusing the idea and still believes that it is the same difference. They also asked the opinion of Anabelle Howard, the Chief Finance Officer and Henrys boss. At first she disagreed with Tony’s point of view since it entails managing multiple brands and other things, but once Tony explained his side, she became ore open with the idea and became more interested with the innovation.
Last but not the least, he had a small talk with his son Kyle in a restaurant, his son asked a ride back to campus and was surprised to have found out that his father was driving and Audi A3. Kyle asked Henry if mom really allowed his father to buy that car and Henry told him that it was from their new business. Kyle told Henry about how different their generation was. He told him about how they want to try different things out without having the commitment that weighs them down. With his son’s opinion, he was now left with the question of how will he integrate VillageCar?
PROBLEM 1 . What are the different types of integration process? 2. What should Henry recommend for the VillageCar integration? SOLUTION Deal is the process where you integrate all activities comprehensively or as a whole. This type of integration usually dissolves the identity of the other. In doing this process, it must be ensured that the integration is coordinated across functions, businesses, and regions. Second, Scope Deal is a method where the business are nly integrated where they overlap, in other words, they are integrated selectively.
This approach allows both entities to retain their individuality. In doing such method it is a must that both business models align where it is necessary and that they cross-fertilize their strengths. 2. In this case, at first, Henry Beyer was certain that he must fully integrate VillageCar to Beacon but after hearing his son’s opinion, he was then conflicted on what course of action he should take. Before deciding he must first consider various factors. One of the major factors he needs to look upon is the market.
The market that they have is continuously evolving, the market’s outlook change along with the change in generation, a generation which likes to try different things, like different car types and models, but doesn’t want to be tied down and have commitments. But, along with this fact is another truth that portions of the market are the old generation which are accustomed with the old ways, like car-rentals. Going back on the two types of integration, namely scale deal nd scope deal, and relating them with these facts might answer the question at hand.
Looking in the definition of scale deal, it is a process where you integrate all the activities of the other business model to the other. This will result to wider range of choices for the customers but will also cause the dissolution of the identity of the other business. If Henry is to take this action, he is able to save on costs and resources but will only be able to answer the need of one generation and this may also result to the loss of the loyal customers of the dissolved company.
On the other hand, scope deal is a method where both businesses are integrated selectively. This permits both entities to retain their individuality and retaining their loyal customers. If Beyer will decide to take this path, they will be able to cater the needs of both markets, thus, giving them a bigger market and more opportunity for income. RECOMMENDATION Upon, considering and analysing the different information presented, it can be said that Henry Beyer, Senior Vice-President of Beacon Car Rental, should recommend Scope Deal as a method of integration for VillageCar.