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CASE ANALYSIS:

COMMUNAUTO: A Big Idea for a Big Market

What is Communautos business strategy?


Communautos business goals relies at the heart of providing means of transport that would
ultimately benefit masses as well as environment. In order to achieve the goals, below is the outline
of the Communautos strategy:
1. To provide a convenient, cost effective alternative to car ownership that simultaneously
reduced the environmental impact of private travel.
2. Focus on ease of use and providing reliable services to the customers.
3. To ensure availability of parking space at various locations.
4. Developing efficient reservation system which is the key to provide reliable and error free
service.
5. To keep attractive pricing options for both the long distance travellers and short distance
travellers.
6. Focussing on customer perceptions and measuring success through customer satisfaction
index.
7. Managing revenues and to innovate new ways to advertise rather than spending a greater
share of revenue on advertisement.
8. Making people aware about the environmental cost of travelling through company policies
such as charging for distance traveled would make more transparent the cost and underlying
environmental impact of driving

What is its sustainability strategy?


In order to share the common duty towards preserving environment, Communauto not only adopt
policies that could make people aware of the hidden environmental impact but also encourage people
to opt for other means of transport. In order to achieve its sustainable goals Communauto did below
mentioned things:
1. It carefully refined its corporate strategy keeping in view the concept of sustainability of
environment. It provided cost effective alternative to individual car ownership that simultaneously reduced the environmental impact of private travel.
2. To make partnerships with other organisations such as Socit de Transport de Montral
(STM) which managed Montreals bus and subway services, Montreals bicycle sharing
program BIXI, Canadas train service VIA Rail, and even car sharing services in neighboring
provinces in order to make a positive impact on environment by complementing rather than
substituting other modes of urban transportation, such as walking, bicycle riding, and utilizing
taxis and public transit.
3. To make policies that would really reflect companys goal of sustainability of environment.

What actions does it take to support its strategy?

Communautos actions supported its primary objective, which leads in building a brand unchallenged
and profitable. Some of the actions taken by the organisation in realisation of its vision are:
1. In order to provide reliable and efficient service, Communauto established intense delivery
points throughout the cities in which it operated, with the goal that users would have to walk
less than one kilometer to reach their vehicle. Montreal, for example, had over 300 stations,
most located in the citys core.
2. Communauto invested significant effort into attaining parking spaces from the city, from
private companies, and even from other organizations such as places of worship and
supermarkets.
3. In order to provide ease of use, online system of reservations was established along with
reservation through telephone call. It had invested nearly $1 million to develop its mobile
online reservation service. It developed online reservations policies regarding reservations
and cancellation pretty easy like consumers could cancel reservations any time before 9 a.m.
or up to two hours before scheduled pickup.
4. It offered attractive pricing options keeping in view the heterogeneous consumer base. All the
different tariffs included insurance, maintenance, and gas. The intent was to provide packages
attractive to multiple demographics, based on different price points for annual membership
and usage costs. All packages did provide transparency into how the costs of sharing varied
with types of usage and the calculated usage costs through both rate per kilometer and rate
per hour charges.
5. Commonauto adopted innovative ways in order to advertise their services such as advertising
on public modes of transport. In this way, it manages their fund allocation that helped it to
remain profitable.
6. In order to measure customer experience, it developed system to record consumer
experience.
What is Benoits primary concern here?
Benoits primary objective was to create a profitable enterprise that could serve the society while
making positive impact on the surroundings. So, he focussed on using the technology in the best
possible way. Although he succeeded in the making socio-economic organisation, but the growing
number of small players are really diminishing the existing concept of car sharing as a tool for creating
environmental impact. So, Benoits concerns keeping in view the current business scenario are:
1. To grow Communauto in ways that would encourage ever larger numbers of people to transition away from car ownership.
2. Whether to continue with the same pricing policy that is more closely aligned to the
environmental costs of driving or to adopt the simple pricing policy that is being used by its
competitors.
3. Should Communauto focus more on attracting new members, thereby reducing the number
of cars on the road, or was it better to invest resources into reducing the environmental
impacts of its fleet through purchasing more fuel efficient and electric cars.

What option/s do you recommend and why?

In order to create a greater brand value and far reaching impact on environment, below are my
recommendations:
1. As the report predicts the number of cars would increase from around 1 billion in the year
2010 to 2.5 billion by the year 2050, so Communauto shall significantly increase the number
of cars in the fleet. It would definitely grow its business from the growing needs of people to
have their private vehicles in order to commute. Communauto can also focus on expanding
its business operations in other markets where the market trends suggest that the number of
cars on the road are increasing at an enormous pace. It would help them take advantage at
the early stages. Moreover, adding fuel efficient cars to its existing fleet of vehicles will
strengthen companys image as environment friendly organisation.
2. The study suggests that the fee structure is very difficult to understand. So, Communauto
should adopt more flexible fee structure such as charging customers on hourly basis.
Commonauto can use its existing fee structure and the consumer usage data to arrive at an
hourly cost. Being transparent in its policies, it can clearly show its users that how it has arrived
at this cost based on its existing policy of sustainable environment. Adopting simple fee
structure may gravitate customers towards using the services.
3. The study suggests that people in North America, where car sharing concept is available for
about 2 decades, are unaware about the concept of car sharing. So, Communauto should
invest more in advertising its services to create more brand awareness.
What are the economic and environmental impacts of your recommendation?
In this fierce competitive era, I believe the above recommendations would play a greater role in
creating wealth for both environment and the business as described below:
1. Increasing the number of cars in its fleet and increasing footprints in other parts of the world
would definitely help Communauto grow its business and revenue. This would also help
diminish the growing completion from small enterprises. Moreover, company would be able
to keep its market share intact in case Zipcar started growing its network in Canada. Moreover,
a reliable service would definite persuade users not to opt for private vehicle ownership. This
would significantly help decrease the number of individual vehicles on the road. Which in turn
will help reduce global environmental threats such as air pollution.
2. An understandable and simple pricing structure would let people understand the
transparency of the companys policy. It would help Communauto grab more business as
misperceptions often lead potential users to overestimate the costs of car sharing and
underestimate the benefits of car sharing. So, simple pricing policy would definitely help
people understand the true benefits of car sharing that ultimately leads to environmental
benefits. This would encourage masses to use car sharing services and hence reducing the
number of cars on the road. So, resource extraction for making cars would witness detrimental
effect. In the nutshell, it would not only allure users but also help in reduction of overexploitation of natural resources.
3. Advertising would not only help build brand awareness among masses that would result in
expansion of business but also it would influence masses to opt for other means of transport
rather than investing in private vehicles that has more negative impact on the environment.

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