ELE Case Study

Factory

A building or group of buildings where goods are manufactured or assembled chiefly by machine. The fact that the air compressor is manufactured in a UK factory and ELE's service stations are largely in Europe, would have had interesting implications as Brexit rolled out in 2022, following years of uncertainty. Trade restrictions and barriers now likely apply, increasing cost and decreasing demand.

Business-to-business (B2B)

A business model that focuses on selling products and services to other companies. We are unsure of this opportunity to enter the B2C market. Most motorists do not consider their vehicle tyre pressure, leaving it up to their qualified mechanics to check on this when they drop their cars or for service. However, there is always that small segment of a market that like to be prepared for all emergencies. Few motorist have one and they are occasionally very grateful to those that do in emergencies. Another thing to note is that self inflating battery technology is near to be coming mainstream, eventually making Zeat's technology largely redundant.

Family business

A business that is owned or run by members of a single family. Benefits of a family business include: - commitment and unified leadership. - stability. - trust and authenticity. - flexibility and versatility. - vision and long-term goals. - decreased costs and expenditures. - next-generation ingenuity.

Retailers

A business that sells goods to the public in relatively small quantities for use or consumption rather than for resale.

Product launch (launched)

A business's planned and coordinated effort to debut a new product to the market and make that product generally available for purchase. A successful marketing mix needs to have all four elements carefully integrated: product, place, promotion and price. It appears that Zeat has a good product at a good price. It is unlikely to have launched the product without considering how to promote it. Place (distribution) is the weakest link.

Distribution channel

A chain of businesses or intermediaries through which a good or service passes until it reaches the final buyer or the end consumer; this can include wholesalers, retailers, distributors, and even the internet. Place (distribution) was the weakest link. This weakness was overcome when the miniC started to be distributed in numerous European retail outlets. Adding an intermediary (a retailer) into the channel of distribution increases unit cost, but also increases the cost to consumers (retailers take a cut) and/or decreases the profit margins on miniC.

Imports

A commodity, article, or service brought in from abroad for sale.

Public limited company

A company that is legally allowed to offer its shares for sale to the public. They don't have to offer shares to the public if they choose not to, but the option is there if and when needed. The company changed its ownership structure from being a private limited company to a public limited company in 1979. This change reflects ELE's goal of growing and evolving the company, a goal it still pursues today as it seeks new growth opportunities. Raising additional capital by issuing more shares would be a good source of finance to develop its new brand and/or expand into the Indian car rental market.

Point-of-sale stock management software

A computerised system that manages inventory, sales, and point of sale operations of the retail store. There is more to a good point of sale system then just handling payments and recording sales. It will help improve: - inventory management by telling ELE what is selling and what is not. - Profitability by showing which product lines make the company money. - marketing by highlighting customer buying habits. - face to face sales by giving employs a mobile catalogue.

Diversification

A corporate strategy to enter into a new products or product lines, new services or new markets, involving substantially different skills, technology and knowledge. A multinational conglomerates is, by its very nature, diversified. Conglomerate diversification occurs when a new products or services or added that are entirely different from and unrelated to their core business. For example, an air compressor business being added to ELE's petrol station business. The risk are high, as this approach requires the company not only to enter a new market, but also to sell to a new consumer base. Both strategic options, developing the new brand and expansion into the Indian car rental market, are classified as diversification strategies. This is because this is a practice where a firm enters an industry or market that is different from its core build business. India is a new market and In3T is based on new technology and a different business model. Reasons for diversification include: - reducing risk of relying on only one or few income sources, - avoiding cyclical or seasonal fluctuations by producing goods or services with different demand cycles, - achieving a higher growth rate, - and countering a competitor by invading the competitors core industry or market. Diversification strategies: new products, new market and or vertical integration. If In3T could be effectively established in Europe, then the new brand would not only be profiting from the traditional rental car segments such as business travellers or US tourist, but it would also be tapping new consumer segments, individuals requiring a car for an hour or two. Whereas the Indian venture, the target market is likely to be similar to that of Europe.

Marketing Department

A functional division within a business that helps to promote its brand, products and services.

Contracts

A legally binding agreement between two or more persons or entities. The strengths or weaknesses of a businesses supplier base will greatly impact on the businesses value. Since contracts establish the rules of the game for the supplier relationship, they are a critical factor in generating value. Does Zeat's business customers have the freedom to choose from a multitude of similar suppliers with similar products and services, or are they tied to one or two key suppliers? The management phase of the contracting cycle is often overlooked, as their emphasis is placed more heavily on the front end of the contracting cycle, which involves negotiations and drafting. This is clearly and erroneous oversight because poor contract management will no doubt result in negative financial outcomes and impact negatively on the value of a business.

Cellular manufacturing

A manufacturing process that produces families of parts within a single line or cell of machines operated by machinists who work only within the line or cell. A cell is a small scale, clearly-defined production unit within a larger factory. This unit has complete responsibility for producing a family of like parts or a product. All necessary machines and manpower are contained within this cell, thus giving it a degree of operational autonomy. Each worker is expected to have mastered a full range of operating skills required by his or her cell. Therefore, systematic job rotation and training are necessary conditions for effective cell development. Complete worker training is needed to ensure that flexible worker assignments can be fulfilled.

Stratified sampling

A method of sampling that involves the division of a population into smaller subgroups known as strata, where the strata are formed based on members' shared attributes or characteristics, such as income or educational attainment. Stratified sampling can produce more precise estimates than simple random sampling when members of the sub populations are homogeneous relative to the entire population. However, the sampling method requires considerable planning. Researchers must insure that every member of the population (here, that is motorist) fits into one stratum and all the strata collectively contain every member of the greater population. What involves extra planning and information gathered that simple random sampling does not require.

Job roles

A part that an employee does in accordance with his or her key responsibility/responsibilities. To perform well, employees need to know what is expected of them in their roles. The starting point is an up-to-date job description that describes the essential functions, tasks, and responsibilities of the job. It also outlines the general areas of knowledge and skills required of the employee to be successful in the job. Performance expectations grow beyond the job description. When managers think about high-quality on the job performance, they are really thinking about a range of expected job outcomes such as; - what goods and services should the job produce? - What impact did the work have on the organisation? - How do managers expect the employee to act with clients, colleagues, and supervisors? - What are the organisational values that you must demonstrate? - What are the processes, methods, or means the employee are expected to use? In discussing performance expectations about a role, employees should understand why the job exists, where it fits in the organisation, and how the jobs responsibilities link to organisation and department objectives. Performance expectations about a role serve as a foundation for communicating about performance throughout the year. They also serve as the basis for reviewing employee performance. When managers and an employee set clear expectations about the results that must be achieved and the methods or purchase needed to achieve them, managers then establish a path for success.

Buyers

A person employed for wages or salary, especially at non-executive level.

Employee

A person employed for wages or salary, especially at non-executive level.

Staff

A person employed for wages or salary, especially at non-executive level. ELE has over 5500 staff on its books, categorising the company as being a large enterprise.

Manager

A person responsible for controlling or administering an organisation or group of staff.

Store

A physical building in which goods are sold to individual customers

Formative appraisal

A planned and continuous process where appraisal evidence is used to inform employees about ways they can improve their workplace practices.

Gap in the market

A product or service that does not exist, so that there is an opportunity to develop that product or service and sell it. A gap in the market can successfully be exploited by Zeat. Most business opportunities consist of four elements, which must all be present simultaneously. The four elements are; - there must demand i.e a need for this product or service. If Zeat found a gap in the market, demand exists. - Zeat has the means to meet this demand. - Zeat has a way to apply the means to meet the demand. - There is a method to benefit. In other words it is profitable. It looks like the gap it identified appears to have these four elements, and there is a good chance it will succeed. However, with the rise of electric vehicles and a decline of petrol engine cars, service station visits will decline and air compressor sales will decline. Another distribution method is required, and this is identified as a challenge a few sentences later in the case study. Again, new technology will suppress demand for this device in the future. Example Tesla obtained a pattent for automatic tire inflation system in early 2022.

First-mover advantage

A service or product that gains a competitive advantage by being the first to market with a product or service. We are not confident that In3T would have a first move advantage. There are rental car companies that have a very similar business model and being established, have better brand recognition. It is unclear from the case study what In3T's USP would be relative to these other companies. ELE will need to carefully consider the launch of In3T, paying special attention to developing a USP within an integrated marketing mix.

Convenience stores

A shop with extended opening hours, stocking a limited range of household goods and groceries.

Private limited company

A small to medium sized business that is owned by shareholders who are often members of the same family. This company cannot sell shares to the general public. The company changed its ownership structure from being a private limited company to a public limited company in 1979. This change reflects ELE's goal of growing and evolving the company, a goal it's still pursues today as it seeks new growth opportunities. Raising additional capital by issuing more shares would be a good source of finance to develop its new brand and, or expanding into the Indian car rental market.

Retail outlets

A store in which goods are sold to individual customers

Marketing

Activities a business undertakes to promote the buying or selling of products or services, including product development, pricing, promotion, and distribution. B2B marketing is easier for Zeat. Motorist expect service stations to have air compressors. Each service station therefore needs one and needs it to be functional, hence Zeat's lucrative servicing contracts. Any change of tact to B2C marketing needs to be considered carefully for the points raised directly about. The starting point must be high quality market research.

Investment

An asset or item that is purchased with the hope that it will generate income or appreciate in value at some point in the future. In the Boston matrix, Zeat's petrol station air compressor is classified as a cash cow, a high market share in a low growth market. A cash cow is a market leader that generates more cash then it's consumes. Cash cows or business units are products with a high market share but low growth prospects. Cash cows provide the cash required to turn other products into a market leader, covers the administrative cost of the company, fund research and development, service corporate debt, and pay dividend to shareholders. Companies are advised to invest in cash cows to maintain the current level of productivity or to milk the gains passively. ELE's strategy is to milk it's petrol station air compressor as Oliver's report recommend no additional investment over the next five years. Assuming that the current growth in EV sales is high, and that EV owners have no real reason to visit petrol stations, and that EV owners need a way to inflate the tyres, then it is likely that the miniC could be classified as a star as first to market products are stars. However because of the high growth rate stars consume large amounts of cash. This generally results in the same amount of money coming in (sales revenue) that is going out (overheads and cost of good sold). Stars can eventually become cash cows if they sustain their success until a time when a high growth market slows down. A key tenent of a Boston matrix strategy for growth is to invest in stars. If ELE wants to increase sales growth and marketshare for its MiniC then the company should be using the cash generated by the company by its petrol station air compressor to invest in this product, eventually turning it into another cash cow.

Customers

An individual or business that purchases another company's goods or services. Supply and service of air compresses to service stations, Zeat's customers.

Overheads

An ongoing expense of operating a business; they are the expenditure which cannot be conveniently traced to or identified with any particular revenue unit, unlike operating expenses such as raw material and labour. It is going to be expensive for In3T to roll out an international fleet of new electric vehicles. For example, a car rental fleet of 50,000 new EV's would need an investment of $1.25 billion in cars alone if purchasing economies of scale could be achieved, driving down the price per EV to $25,000 each. Large rental car firms have fleets that number over 1 million vehicles. Having low overheads will be favourable in any investment analysis example average rate of return, payback period. As low overheads boost net cash inflows. Further, new vehicles have a fast rate of depreciation (40% straight line or 50% diminishing value, in New Zeland tax code). Much of the investment in new vehicles can be clawed back as an expense relatively quickly which is, again, favourable for an investment analysis.

Staff retention

An organisation's ability to prevent employee turnover, or the number of people who leave their job in a certain period, either voluntarily or involuntarily.

Vacancies

An unoccupied position or job.

Business

Any organisation that uses resources to meet the needs of customers by providing a product or service that they demand. They identify the needs of consumers or other firms. They then purchase resources, which are the inputs of the business or factors of production, to produce output. The 'outputs' of a business are the goods and services that satisfy consumers' needs, usually with the aim of making a profit. ELE is a large multinational conglomerate public company with over 5000 employees. The business has operations in the manufacture and sale of air compressors, retail operations in petrol stations across Europe, and European car rentals. The business is both established and profitable, however sales revenues are declining and net profits is forecasted to fall. This may in part be caused by its fierce competition in the rental car market, and the shift to electric cars reducing the number of customers refuelling and shopping at its petrol stations.

Product

Anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. It includes physical objects, services, persons, places, organisations and ideas

Self-appraisal

Asking the employee to self-evaluate his or her job performance within a performance management or annual performance review system. Annual performance reviews were actually designed so that both the employees and the company could benefit from them. But most HR leaders agreed that this practice is not just ineffective, it is also damaging to the organisation. For the longest time, performance reviews were the primary way for managers to communicate performance evaluation feedback with their employees. But these reviews cost managers an average of 210 hours per year and a lot more money. Moreover, corporate executive board research has found that 9 in 10 human resource leaders are dissatisfied by the results of the annual performance reviews and believe that the process does not yield accurate information. So, it is just not the employees that are dissatisfied by annual performance reviews. However, not with standing the drain on management time there has been positive feedback from employees on ELEs appraisal process.

Manage

Be in charge of (a business, organization, or undertaking); run.

External growth

Business expansion achieved by means of merging with or taking over another business, from either the same or a different industry. ELE has pursued growth using acquisitions and takeovers twice in its history first acquiring petrol stations in Belgium and secondly with its takeover of Zeat.

Threats - SWOT analysis (challenges)

External factors that have the potential to harm an organisation, e.g., a new competitor entering a market that the organisation operates in. Threats dominate in the external environment across all three of ELE's business divisions, a driving force for change.

Opportunities - SWOT analysis

Favourable external factors that could give an organisation a competitive advantage, e.g., a competitor exiting a market that the organisation operates in.

Job performance

How individuals perform in their job duties as assessed against pre-set objectives.

Place - marketing mix (refurbishment)

How the product is distributed to the consumer. If it is not available at the right time in the right place, then even the best product in the world will not be bought in the quantities expected. In a market environment in which electric vehicles, autonomous vehicles, and now mobility models take of rapidly, up to 80% of the fuel retail network as constituted may be unprofitable in about 15 years. To prevent such a decline, fuel retailers need to take action in three areas. Firstly, they need to move from a vehicle centric business model to a customer centric one in order to capture new product and service opportunities. This effort entails reinventing the overall customer journey and using digital tools to extend the customer relationship beyond occasional visits to the service station. Second, retailers need to transform their network of service station and assets. This process includes changing format in some locations to meet customer demand, divesting locations that will not be profitable, and investing in assets that support the push into new product and services. Third they need to develop new capabilities - including digital expertise and, in some cases, capabilities related to entirely new areas such as last mile logistics or real estate. It is ELE's is petrol retailing locations that are likely to cause it's largest headache in the medium term. The location decision is highly likely to be the same in a world of EV's and a world of petrol engine cars. Consider the question: why would an EV owner choose to visit a refurbish petrol station rather than a supermarket, convenience store or department store? Supermarkets and department stores have a much wider range of goods being sold. To successfully adapt, fuel retailers must embrace a new mindset. Making modest changes or tweaks to the business will suffice. Instead, companies must fundamentally rethink their business and aggressively embrace innovation and new technology. Those that bodily sees the opportunity will find themselves in a good position. Those that do not maybe left behind. ELE cannot make small changes to its business model, its challenge is to find a new business model. Major changes must be considered now, to prepare for the future.

Sales channel (face to face)

Methods a business uses for selling a product or service, across a counter in this case.

Sales channel (booking app)

Methods a business uses for selling a product or service, an app in this case.

Sales channel (online)

Methods a business uses for selling a product or service, the internet in this case. Benefits of multichannel distribution system. Consumers expect products to be available in more than one place, making investing in a multichannel strategy worthwhile. ELE may experience benefits including; - improve customer perception. Brands that create a seamless buying experience provide a better overall customer experience, which can help for customer loyalty. ELE may be perceived as attentive to consumers needs, purchasing habits, and digital savviness. With multichannel distribution, brands can also differentiate themselves not by lower price, but through convenience. - increase customer base. With a multichannel distribution strategy, brands place the merchandise in the path of customers who need them, whether they're that be in store or online, increasing sales, exposure, and customer reach. - growth into untapped markets. Going multichannel also allows ELE to expose it's rental cars to new customers who may become first time buyers, leading to more product sales. By selling on online market places, opening a new online or physical store, or expanding to different geographies. A big disadvantage is the extra cost involved; brick and clicks, and apps all take considerable investments to establish, maintain and staff. The overheads associated with each sales channel will be a drain on working capital, as overheads can be costly. A cost benefit analysis would have informed ELE of the expected benefits of each sales channel.

Sales channel (telephone)

Methods a business uses for selling a product or service, the telephone in this case.

External finance

Money raised from sources outside the business, e.g., a bank loan. External finance allows for faster growth. A business needs investments to grow. Even the most profitable companies cannot rely solely on reinvested profits to finance the expansion. Accordingly, a business needs to secure bank credit, partner with a venture capital firm or in any other way, tap external sources of finance. External sources of finance allows growth, allowing the company to operate in a far bigger scale, capturing new markets and providing products and services to an ever greater number of customers.

Profits

Money that a business earns above what it costs to produce and sell goods and services; total revenues less total costs when the difference is positive (a loss if negative). The business is both established and profitable, however sales revenues are declining and net profitability is forecasted to fall. This may in part be caused by fierce competition in the rental car market, and the shift to electric cars reducing the number of customers refuelling and shopping at its petrol stations.

Chain stores

One of a series of shops owned by one firm and selling the same goods. ELE's retail chains are retail outlets in which several locations share a brand, central management and standardised business practices. Chain stores have come to dominate retail market and many service categories, in many parts of the world. ELE likely has a very strong retail brand in Belgium as a result of having over 100 petrol stations.

Shares

One of the equal parts into which a company's capital is divided, entitling the holder to a proportion of the profits. There are several options available to ELE to finance one or more of its strategic options, raising additional share capital being one. As a public limited company ELE could sell additional shares to finance this expansion. While this would dilute the ownership and control of its current major shareholders, it has the advantages of never having to be repaid. Dividends do not have to be repaid every year (in contrast, interest must be paid as and when depth is used as the source of finance). Furthermore, much larger amounts of finance can possibly be raised through debt financing (£2 billion is a large sum to finance). ELE also has the option to offer their own bond or debentures into the market for company debt. Large amounts can also be raised in this manner, interest rates are historically low in Europe and repayments can be made over a long time (three years would not be uncommon for a large insurance). A final option would be to divest itself of its retail assets now when demand is still relatively high, because in the future it is unlikely that that demand could be sustained or grown. Why drive to retail outlets where the location decision was determined on an old business model. The sale of which may fully or partially finance the expansion into the new brand.

Distribution (delivery)

One of the four elements of the marketing mix. It is the process of making a product or service available for the consumer or business user who needs it. More efficient distribution channels could see higher customer satisfaction and lower distribution costs, driving higher prices.

Business division (division)

One of the parts into which a business, organisation or company is divided. A business needs money to run, of course but understanding revenue streams also helps: - protect ELE from fluctuating demands or economic downturns, - shed light into the health of its business, - predict its income from month to month, - reveal opportunities to expand the business into new markets and increase revenue through that. When a business earns money through only once also revenue, it becomes totally dependent on it, which could spell trouble if that single revenue stream suddenly dries up. Multiple streams of revenue offer additional protection in the event that one source underperforms or crashes. It can be rehabilitated while leaning on other sources of income in the meantime, or ditch the failing one completely if it makes more sense to do so.

Servicing

Perform routine maintenance or repair work on (a vehicle or machine). The servicing of air compresses is a lucrative revenue stream for Zeat. However, it is a revenue stream that points to ELE perhaps not being as diversified as presumed at first glance. The sale and servicing of air compresses and ELE petrol retailing businesses are dependent on the viability of the petrol retailing industry. The shift to electric cars will likely reduce the number of customers refuelling and shopping at its petrol stations, and all petrol stations where air compressors are used by motorists. It is a technical change in the external environment that ELE will have to plan for.

Takeover

See 'acquisition'; distinction between acquisition and takeover: a takeover is a special form of acquisition that occurs when a company takes control of another company without the acquired firm's agreement.

Director

Someone elected or appointed to manage a company's business and affairs.

Retained profits (reinvesting)

The accumulated portion of a business's profits that are not distributed as dividends to shareholders but instead are reserved for reinvestment back into the business. Normally, these funds are used for working capital and fixed asset purchases (capital expenditures) or allotted for paying off debt obligations. For ELE to use retained profits as a source of finance to expand its petrol refuelling operations shows that this part of the business was very profitable, at least back in the days. While retained profit seems a good source of finance for ELE's investment purposes and to increase the value of the company and/or strengthen its balance sheet, it is not always the most efficient finance option. This is because retain profit, although a low-cost way of financing business expansion, is not in entirely free. There is actually a very real cost associated with retain profits. This is the opportunity cost for ELE's shareholders of leaving the profits in the business, instead of receiving a return on their investment and being free to reinvest these sums of elsewhere. If retain profits do not result in higher profits, inevitably there's an argument that shareholders will often prefer to receive higher dividends rather than see their money reinvested to expand the business or to increase shareholder value. Further, using retain profits as a source of finance is of course dependent on ELE being profitable enough to satisfy shareholders with dividends while still having sufficient cash to finance an investment. Perhaps ELE could have financed a greater expansion by using a bank loan or issuing a debenture, especially as interest rate or historically low and interest costs are tax deductible. All things being equal a profitable business like ELE would have access to large amounts of external finance than this internal source of financing and finance a faster expansion.

Management

The act of managing a firm's resources (e.g., human resources and financial capital) to accomplish desired goals and objectives using available resources efficiently and effectively.

Market research

The action or activity of gathering information about consumers' needs and preferences.

Demand

The amount of a good or service that a consumer is willing and able to purchase at a given price within a certain period of time. Demand implies that consumers must not merely wish to purchase the product, but also possess sufficient funds to be in a position to purchase it, and that the amount demanded is calculated over a certain time period (e.g., daily, monthly and yearly). Call rental market outlook 2031: - the global car rental market was valued at US$64.80 billion in 2020. - It is estimated to expand at a CAGR of 6% from 2021 to 2031. - The global car rental market is expected to cross the value of US$121.1 billion by the end of 2031. Manufacturers operating in the global car rental market are gaining potential growth opportunities in the upcoming years, due to rising demand for car rental service across the globe. Key players in the car rental market are focusing on expanding and improving their services portfolio by collaborating and acquiring local and global players, in order to gain revenue benefits. Companies in the car rental market are increasing their efforts to gain competitive benefits in the global market. Increasing investment and promotion activities by government of emerging economies to use rented vehicles strengthens the global market. The booming travel industry, along with technological advancement in car rental services is contributing to the global market growth. If ELE's car rental division can at least maintain market share, revenues will continue to grow. However, Oliver's report states that sales revenue growth is predicted to slow down significantly from 2022 onwards. Competing in the countries in which ELE car rentals operate is fierce.

Prices

The amount paid by consumers (the advertisers) for a product (advertising services rendered).

Floor space

The area of a retail outlet which is freely accessible or visible to the customer (areas directly related to the retail activity and sale).

Customer service

The assistance and advice provided by a business to those people who buy or use its products or services. Benefits of great customer service. Customer service is the foundation on which ELE builds it's car rental business, a service industry. Great customer service boost business, reduces churn, and enhances the customer experience. High-quality service; - Drives business performance. Business leaders report a direct link between their customer service and business performance. - Stimulates business growth. Leaders say good customer service has a positive impact on company growth. - Improves customer attention. It keeps customers coming back. - Increases sales. An increase in their ability to cross self.

Expansion

The attempt of a company to grow the size of its business, aiming to increase the scale of operations. ELE pursued an internal growth strategy in it earlier days by using retained profits to build new petrol retailing stores and acquiring other petrol retailers. As the company grew larger it shifted to an external growth strategy, using share capital to acquire other businesses, including its diversification in to air compressors and rental operations.

Business-to-consumer (B2C)

The business model of selling products directly to customers and thereby bypassing any third-party retailers, wholesalers, or any other middlemen.

Productivity

The efficiency of production of goods or services expressed by some measure. Measurements of productivity are often expressed as a ratio of an aggregate output to a single input or an aggregate input used in a production process, i.e. output per unit of input, typically over a specific period of time. Profitability at Zeat is directly related to productivity. With increases in productivity more units of output (example air compressors) can be produced with the same input (example number of workers). Assuming or all outputs are sold,, revenues increase. As revenues increase and costs remain the same, profitability of Zeat increases. Also, with increases in productivity, the same units of output can be produced with less input, hence revenues remain stable and costs decrease, profitability at Zeat increases. Further, with increased productivity as Zeat, a reduction in cost could be paired with a reduction in price, making its air compressor more price competitive and allowing Zeat to sell more products and increase market share.

Locations

The geographical position of a business; i.e., where it is sited.

Board of directors

The governing body of a company, elected by shareholders in the case of public companies to set strategy and oversee management. In 2000 ELE had a tight nit board of just 4 family members: Emma, Lucas, Hugo and Giselle. This has been the benefit of having a mixture of youth and experience, and an ability to move fast as unanimity decision-making is easier the smaller the board. However, for a large PLC, this is a very small group of directors.

Absenteeism

The habitual non-presence of an employee at their job. Habitual non-presence extends beyond what is deemed to be within an acceptable realm of days away from the office for legitimate causes such as scheduled vacations, occasional illness, and family emergencies. It's all begins with motivation. If Zeat employees are experiencing a lack of motivation in the workplace, management will see this evidence in their productivity. They will also see this evidence in the number of days they take off. Developing a successful incentive program can be a challenge, Zeat must fine tune that program to fit into its company culture, engage various personality types and overall, be seen as worth the time and effort of the team. Handing out some extra cash here and there is unlikely to keep teams inspired for the long run, Herztberg and hygiene factors.

Strategic changes

The implementing of changes to important characteristics of a business, for instance in response to new market threats or opportunities. Between 2020 and 2010, ELE made three strategic changes: - a takeover of Zeat PLC, - expansion of petrol station retail operations, - and diversification into car rentals. It is considering two more strategic changes: - expanding its car rental operations into India - and/or establishing the new brand buy in 3T.

Motivation

The intrinsic and extrinsic factors that stimulate people to take actions that lead to achieving a goal. Unmotivated or demotivated staff will not perform effectively, offering only the minimum of what is expected (quiet quitting). Motivation levels have a direct impact on productivity levels and the competitiveness of the business. Highly motivated workers have high productivity and this reduces unit costs. Motivated staff will be keen to stay with the firm, reducing cost of labour turnover. They will be more likely to offer useful suggestions and to contribute in ways other than contractual obligations. They often actively seek promotion and responsibility. In contrast, some indicators of poor staff motivation is high levels of absenteeism, something Luke seek to improve and Zeat.

Human resources

The management function of using and developing people within a business in order to meet the objectives of the organisation.

Batch production

The manufacturing process is split into a number of different operations; each of which is carried out on the whole batch before it is moved on and another batch received. The batch is moved on from one stage of production to the next until all the manufacturing processes are completed. Batch production involves the manufacture of a group of identical items and is normally used when the demand for the product is relatively constant. In cellular manufacturing, production work stations and equipment are arranged in a sequence that supports a smooth flow of materials and components through the production process with minimal transport or delay. Implementation of this lean production often represents the first major shift in production activity, and it is the key enabler of increased production velocity and flexibility, as well as the reduction of capital requirements. Rather than processing multiple parts before sending them onto the next machine or process step, as is the case in batch production, cellular manufacturing aims to move products through the manufacturing process one piece at a time, at a rate determined by customer needs. Celluar manufacturing can also provide companies with the flexibility to vary product type or features on the production line in response to specific customer demands. The approach seeks to minimise the time it takes for a single product to flow through the entire production process. This one piece flow method increases specific analytical techniques for assessing current operations and designing a new cell based manufacturing layout that will shorten cycle times and changeover times. To make the cellular design work, and organisation must often replace large, high volume production machines with small, flexible, right size machines to fit well in the cell. Equipment must often be modified to stop and signal when a cycle is complete or when problems occur. This transformation often shifts workers responsibilities from watching a single machine, to managing multiple machines in a production cell. While plant floor workers may need to feed or unload pieces at the beginning or end of the process sequence, they are generally freed to focus on implementing total productive maintenance and process improvements. Using this technique production capacity can be incrementally increased or decreased by adding or removing production cells.

Capital

The money used to build, run, or grow a business. It can also refer to the net worth (or book value) of a business.

Market share

The percentage of the total revenue or sales in a market that a company's business makes up. For example, if there are 50,000 units sold per year in a given industry, a company whose sales were 5,000 of those units would have a 10 percent share in that market.

Internal finance (internal sources)

The process of a firm using its profits or assets as a source of capital to fund a new project or investment. Retain profits are the cumulative net earnings or profits of a business after accounting for dividend payouts payments. As an important concept in accounting, the word retained captures the fact that because those profits were not paid out to shareholders as dividends, they were instead retained by ELE PLC. For this reason, retain profits decrease if ELE either makes a loss or pays dividends and increase when higher profits are created. The decision to retain the earnings or distribute them amongst the shareholders is usually left to the company management. A growth focus company like the ELE may not pay dividends at all or pay very small amounts, because it may prefer to use retain profits to finance expansion activities such as the expansion of gasoline station retail operations. ELE could also have chosen to use its retained profits for increasing production capacity, hiring more sales representatives, launching a new product, or share buybacks, among other uses for retained earnings. Retain profits or an important variable for assessing ELE financial health because it shows the net income the company has saved over time, and therefore has the ability to reinvest in the business or distribute to shareholders.. As a source of finance, there are several advantages to using retain profits in a business to invest and grow ELE. This represents a key source of low-cost, long-term fixable finance, where management have complete control over how best to utilise this cash flow without the need for external investment or funding. There are no interest costs or dilution of equity when retain profits are used as a source of finance. Retain profit can be used to drive growth. This could include investment into things like new premises and equipment, to recruit more staff, or to fund research and development, all without incurring any additional liabilities. Essentially, and undistributed profits held by the business, instead of being immediately paid our to shareholders, can be brought forward for multiple years to amass funding for reinvestment with a view to expansion. When net earnings are retained and or used to purchase tangible assets, they add to ELE's balance sheet which increases shareholder equity. Increases of this kind provide share price momentum which, in turn, attracts investors and can drive share prices even higher. Had the profit instead been distributed entirely to the shareholders, they would benefit from the dividend, but the market value of ELE itself would not increase. Retain profit is essentially a form of equity that is often seen by investors as a strong indicator for the long-term financial stability of the company. Thus, while retain profit seems a good source of finance for ELE's investment purposes, and to increase the value of the company and/or strengthen its balance sheet, it is not always the most efficient finance option. This is because retain profit although a low-cost way of financing business expansion, is not entirely free. There is actually a very real cost associated with retain profit. This is the opportunity cost for ELE's shareholders of leaving profits in the business, instead of receiving a return on their investment and being free to reinvest the sums the sums elsewhere. If retain profits do not result in higher profits, inevitably there's an argument that shareholders will often prefer to receive higher dividends rather than see their money reinvested to expand the business or eat to increase shareholder value. Further, using retained profits as a source of finance is of course dependent on ELE being profitable enough to satisfy shareholders with dividends while still having sufficient cash to finance and investment. Perhaps the ELE could have financed a greater expansion by using a bank loan or issuing a debenture, especially as interest rates are historically low and interest cost are tax-deductible. All things being equal, a profitable business like ELE would have access to larger amounts of external finance than this internal source of finance and finance a faster expansion.

Appraisal

The process of assessing the effectiveness of an employee judged against pre-set objectives.

Staff recruitment

The process of identifying the need for a new employee, defining the job to be filled and the type of person needed to fill it, attracting suitable candidates for the job and selecting the best one. Why is recruiting and retention important? Recruiting and retention strategies are important because keeping the best people cuts down on all the resources invested, in hours and cost, in backfilling roles and recruiting new employees. If ELE manages to recruit and retain high-quality employees who are motivated and productive, then profitability is likely to increase. Employee motivation is key to an organisation success. It is the level of commitment, drive and energy that a company's workers bring to the role every day. Without it, companies experience reduce productivity, lower levels of output and is likely that ELE will fall short of reaching important goals too.

Competitive pricing (low-cost)

The process of selecting strategic price points to best take advantage of a product or service based market relative to competition. There would be two main drivers for this product being successfully rolled out. The first being ease-of-use, and the second, having a low price point. Achieving both will require considerable research and development. The consumer machine will be very different to the business machine.

Strategic plan

The process of setting goals and creating a blueprint for an organisation's future. Strategic planning is the ongoing organisational process of using available knowledge to document a businesses intended direction. This process is used to prioritise efforts, effectively allocate resources, align shareholders and employees on the organisations goals, and insure those goals are backed by data and sound reasoning.

Graduate recruitment

The process whereby employers undertake an organised program of attracting and hiring students who are about to graduate from schools, colleges, and universities.

Supply

The quantity of product or service a business has to offer to its client at a particular point in time. Exclusivity of a supply contract can have both positive and negative consequences on the value of a business. When a business is tied to one or two key suppliers, with limited opportunity to source goods or services elsewhere, an assessment of those suppliers reliability and risks contained within the supply agreement is needed in order to determine the impact on the businesses value.

Competition

The rivalry between companies selling similar products and services with the goal of achieving revenue, profit, and market share growth. The demand for at home EV is derived from the demand for EV as it's really only petrol engine vehicle owners that are visiting petrol stations and inflating their tyres. EVs are in the growth stage of the product life cycle, where strong demand is supported high prices. We're assuming that EV owners are not that sensitive to price and would prefer to buy a quality air compressor for home use rather than buy a cheap low quality import. However, this will likely change as EV's enter the maturity phase of the product life cycle and decrease in price. Price sensitive consumers will then enter the market for at home air compressors and competition for cheaper Imports will increase. Zeat will need to invest in increasing productivity to drive down costs while maintaining or increasing the quality of its product. This will enhance the miniC USP.

Retail

The sale of goods to the public in relatively small quantities for use or consumption rather than for resale. A number of far-reaching trends are disrupting the fuel retail market. Among the most powerful of these are: - the rise of alternative fuels, (particularly electricity) for mobility, - the emergence of new models in mobility, - and the evolution of heightened consumer expectations around convenience and personalisation. The impetus for these disruptions comes from an array of powerful new digital technologies, everything from artificial intelligence to robotics to the Internet of things. The ongoing shift will alter the contours of competitive advantage in the industry and require a fundamental transformation of the standard business model. Fuel retailers must develop a comprehensive response that adjusts the products and services they sell, adapt to their new network and business model, alters the layout of their service stations and convenience stores, and harnesses new digital tools.

Market development - ANSOF matrix (new markets

The strategy of selling existing products in new markets. Entering the Indian car rental market is a market development growth strategy in the Ansoff matrix, existing product in a new market. The biggest advantage ELE has in this quadrant is that it already has a product in an establish market. It can rely on its successes here and attempt to sell car rentals in India. The company must be careful to understand the impact of cultural factors in such an external market. ELE may have been successful in Europe on its own turf, but when competing in a largely unknown market, the risk are also unknown. A good way to counter some of these risks is by performing a PESTLE analysis to understand the key risks. It may be that ELE needs a local representative or an area specific partner. ELE may also do well franchising it's car rental service to local area experts. This can help reduce their costs and risks. The risks are slightly higher when compared to market penetration. But ELE can bank on its previous car rental successes, it knows how to sell car rentals. ELE will have to establish the market need and cater to the local environment.

Sales

The total amount of income generated by the sale of goods and services related to the primary operations of the business; may also be referred to as sales or as turnover.

Revenues

The total amount of income generated by the sale of goods and services related to the primary operations of the business; may also be referred to as sales or as turnover. Some companies receive this from interest, royalties, or other fees. The business is both established and profitable, however sales revenue are declining and net profitability is forecasted to fall. This may in part be caused by a fierce competition in the rental car market, and the shift to electric cars, reducing the number of customers refuelling and shopping at its petrol stations.

Revenue stream

The various sources from which a business earns money from the sale of goods or the provision of services. Has diversified revenue streams from it's different business divisions, each with its own director.

Market is saturated

The volume of a product or service in a marketplace has been maximised.

Summative appraisal

This type of appraisal is usually a written description of a staff member's annual achievements and personal performance.

Product range (range of products)

Variations of a single product that are made in order to create similar yet distinctly different products. Each version of the product is designed to attract a different market segment with the intention of maximising sales and building the customer base.

Acquisition (acquiring)

When a company buys over 50% of the shares of another company and becomes the controlling owner; e.g., Meta acquiring Instagram and WhatsApp. An acquisition occurs usually with the agreement of the target companies board of directors and majority shareholder approval (without which it becomes a takeover, likely in the case of ELE's takeover of Zeat). The first advantage is that it reduces entry barriers. With acquisitions, a company can enter into new markets and product lines instantaneously with a brand that is already recognised, with a good reputation and an existing client base. An acquisition can help to overcome market entry barriers that were previously challenging. Market entry can be a costly scheme for businesses due to expenses in market research, development of a new product, and the time needed to build a sustainable client base. Thus, the takeover of Zeat allowed ELE to seamlessly enter into the market for air compresses. The second advantage of ELE's takeover is that the company acquired new competencies and resources. A company can choose to take over other businesses to gain competencies and resources it does not currently have. Doing so can provide mini benefits, such as rapid growth in revenues or an improvement in the long-term financial position of ELE, which makes raising capital for growth strategies easier. Extension and diversification can also help ELE stand and economic slump. A disadvantage of the takeover strategy is the danger of the two companies, ELE and Zeat, being poorly matched businesses. A business that does not look for expert advice when trying to identify the most suitable company to acquire may end up targeting a company that brings more challenges to the equation than benefits. This can deny an otherwise productive company the chance to grow. A second disadvantage is that of conflicting objectives. The two companies involved in the acquisition may have distinct objectives since they have been operating individually before. For instance, Zeat may have had plans to expand into new markets, but the acquired company may be forced by new management to cut cost. This can bring resistance with in the acquisition that can undermine efforts being made.

Internal promotion

When an existing employee advances to a position that is classified at a higher salary grade, or in certain circumstances, an acknowledgment of significant greater responsibilities within the same grade.

Internal recruitment

Where an organisation hires employees from within the organisation that are already working there - usually through a promotion. Advantages of internal recruitment and promotion; - applicants may already be well known to the selection team. - Applicants will already know the organisation and its internal methods, no need for induction training. - Culture of the organisation will be well understood by the applicant. - Often quicker than external recruitment. - Likely to be cheaper than using external advertising and recruitment agencies. - Gives internal staff a career structure and a chance to progress. - Staff will not have to get used to a new style of management approach if a vacancy is a senior post. Advantages of external recruitment; - external applicants will bring new ideas and practices to the business, this helps keep existing staff focus on the future rather than the way things have always been done. - Should be a wide range of potential applicants, not limited to internal staff. - Avoids resentment sometimes felt by existing staff if one of their former colleagues is promoted above them. - Standard of applicants could be higher than if limited to internal applicants.