OCR F297 (Candy Cabs) - Change

Change issues raised in the F297 case study include:

Poor communication between partners:

- Lots of evidence of inadequate communication between Andrew, Catherine & Yvonne
- The role of a “sleeping partner” can be raised - sleeping, as in “inactive”. But Andrew is more than merely an investor - he holds the whip-hand in terms of the financing of the business (loan)
- Who makes the decisions within the partnership? What does the partnership agreement say about the need for unanimous agreement to business decision-making?
- Most of Catherine & Yvonne’s “stress” revolves around their relationship with Andrew [lines 35-36]
- Clear evidence of a divergence in “shared values”: Andrew [lines 5-6]; Catherine & Yvonne [lines 17-18] - an inevitable source of conflict

Change proposed in the business

Various degress of change, depending on the options the partners pursue:

Taxi voucher scheme:

- This is a complex and uncertain scheme which is very poorly described in the case study
- There is no commercial logic to the scheme (I doubt the OCR examiner who wrote this case study understands it either!)
- By definition, therefore, the scheme involves significant change to Candy Cab’s business model

The proposed scheme:
- Traylen Motors to buy private vehicles from Candy Cabs customers (at what discount?) and then sell the cars onto the motor trade (at realisable value?)
- In theory, Traylen Motors makes a small profit or margin from the transaction with the elderly customer (assuming the elderly customer was offered a fair price)
- Traylen Motors to “pay Candy Cabs 90% of the purchase price within 60 days” - why? which purchase price?
- Candy Cabs provides pre-paid taxi vouchers in exchange (for “90% of the purchase price”) -but for how long? lifetime? until the vouchers end? what happens if the taxi fares rise?

The only way it makes sense is if the elderly customer is persuaded to effectively gift their car at a significant undervalue. The subsequent sale through the trade (at market value) creates a profit, 90% of which is paid to Candy Cabs in return for an open-ended commitment to provide taxis
Such a scheme is almost certain to be illegal, leaving aside the obvious ethical issues raised of persuading elderly customers (aged 70+) to sell their car

Taxi services in Upham

- No significant change to Candy Cabs business model or operational scale: effectively “incremental change”
- A logical organic growth opportunity - that could probably be achieved through a co-operative rather than confrontational approach with Terry’s Taxis

Executive travel

- Again, incremental change
- Option takes Candy Cabs into a different market segment - where customer needs and wants will vary from the existing trade
- Change implications: driver training; customer service levels (reliability, responsivness, cab cleanliness etc)
- These are largely operational issues, rather than strategic issues

Candy Cabs as a Franchisor

- Andrew’s big idea
- Significant change implications - not just for Candy Cabs as the franchisor, but also for potential franchisees (drivers)
- Potential to manage the change (and reduce the disruption & conflict with existing workforce) by trailling the approach in Upham first