Easy Internet Cafe

Section 1 - Executive Summary:

Easy Internet café is planning to re-organize and revamp its business model in such a manner that it can again become profitable company. At present easy the Internet café is engulfed with the dot com burst and losses are mounting. This case report is dealing with the attempts to implement a new logistic system that if well executed it can develop operations and can transform easy internet cafe into a profitable company.

The original business model is to build and operate on the principle of 'economics of scale' or Yield Management.

It has been decided to appoint franchisees for the new stores and also, if possible, for the existing legacy stores. According to the new strategy, the franchisee would be required to bear the costs of the property and the hardware. It was also decided to move from large stores to smaller stores with 20 to 30 PCs.

The current logistic situation represents a bottleneck and it is one of the major causes for the ongoing losses at easy internet cafe.

After reviewing different logistics scenarios and providers, It is strongly recommended to take a closer look to support the logistic alternative that Ingram Micro is proposing. It would benefit in the warehousing, accounting and transportation areas, it will also help reduce the logistics costs and labor per new store, from almost to £2,000.00 to £1,357.00, this and the benefits mentioned before, will help to achieve overall objective of being a profitable company.

Section 2 - Root Problem:

Despite the excellent support and recognition from the public, elc was experiencing adversity of keeping their business profitable after the Internet Investment bubble burst.

The original concept of owning many of the large stand-alone cafes with 250-500 PC terminals at each café was not working well. elc undertook a dramatic restructuring of the company by downsizing the cafes. Many of the large, original stand-alone elc stores will be run by franchisees. These franchised stores will become smaller stores which have 20 to 30 PCs terminals at each cafe and with no staff required except for regular maintenance. Less involvement with store operations allows elc to concentrate on activities of their core competence and outsource all the non-core activities.