To what extent is the car club proposal an appropriate extension strategy for First Cars Plc

The main land why First Cars Plc. should adopt this Car friendship intention is due to the current commercialise position of the firm. The firms current market share (in the political machine letting market) is decreasing due to a leading budget airline offering simple machine rental services to its passengers. The new proposal to target the Car Club market would be very near to First Cars as this market is experiencing rapid growth due to the ever rising be of car ownership (predicted to rise by 20% in the period 2010-14). Early entrance to this market could expose an excellent chance to accumulate market share within a market which soon does non have much competition, and with the 2012 Olympic Games just around the corner, this could not have come at a better time. Whereas the current car rental side of the company is losing market share, the Car Club market is predicted to do nothing but grow in size (110% in volume and 300% in value) in the period 2010-14, imaginein g that this decision could be the difference between a profitable & ontogenesis business, and a failing one.Another reason why First Cars Plc. should adopt this proposal is because of a fit in from the Mayor of London. This 1.5m grant is for the creation of car club bays within the inner-city sphere of London (the main area being considered for the object), and would potentially reduce the costs of setting up the infrastructure for the Car Club scheme to operate. This would have a great impact on the business as one of the main costs to this scheme would be adequate parking within the area. The fact that the grant is from the Mayor of London depart also generate publicity for the company, which is always a good thing.Finally, this is suggested as a pilot scheme. In the unlikely event that this scheme does not prove successful, First Cars Plc. can always fall cover on their existing services, although they will be in a large amount of debt.One reason against the be after is th e financial implications for the firm. The training budget for the Car Club is 400,000, over 10 times to a greater extent that their current spend on training. The budget for marketing is three times the size, and the average staff net profit is predicted to rise by around 10,000. When considering these figures one has to question the feasibility of this scheme. This is a large outlay for a pilot scheme and the company has limited financial reserves. This scheme would also fall within the New Product Development area of Ansoffs matrix, an area with a large amount of risk.The plan also suggests that worry should operate in a decentralised manner. This means that instead of a equalize of senior managers being responsible for the whole company, control is spread across a larger reduce of employees. This is a different method to their current centralised management style and means that the senior managers currently in control of the company would lose part their control of the busin ess. As the company is new to this management style, it is quite risky. Poor decisions could be made by inexperienced staff and could lead to disaster.The case study also states that Amy is keen to make a big impact within the business quickly. Does this mean that she has rushed these plans in order to achieve this? Has she doctored the figures in order to progress the scheme forward and coin her superiors? This could mean that the business is moving into a new market based on data which is not even correct.Overall I do not think that First Cars Plc. should adopt the Car Club Proposal. The idea looked initially promising an emerging market which is predicted to grow by 300% in value, with fine competition at present. These suggestions are all around figures that Amy has put together however. Without the knowledge that Amy may be biased with her predictions, this would appear to be a very good proposal. However, the depth and accuracy of the plan is springy to ensure the success o f the business and as this has been brought into question, I would have to say that I do not recommend that First Cars Plc. should progress any further with this proposal until at least this data has been examine and agreed by the directors.