East Central Ohio Freight Case Outline

East Central Ohio Freight Case Outline - East Central Ohio...

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East Central Ohio Freight Case Outline Describe the competitive structure in the trucking industry and differences between VLTL and VTL segments. What are the factors impacting primary demand in the trucking industry (circa 2007)? What impact will these factors have on the trucking industry in the territory that East Central Ohio Freight operates. Provide an analysis of the strategic decision using all of the following: Ansoff Matrix* Porter 5 Forces Model Competitive Analysis PESTEL Analysis* SWOT Breakeven Analysis Force Field Analysis What recommendations would you make to the East Central Ohio Freight management team. Consider both short term and long term recommendations. Outline Decision whether to increase the company’s efforts in the volume less than truckload (VLTL) freight market around HQ terminal in Cambridge, OH o Business has gone down across trucking world o Need to maintain revenue through new opportunities (VLTL), and must act quick Limited VLTL experience, but expansion would cost $250,000 and additions to the work force that would increase labor to similar amount $ amount and uncertainty makes this significant issue Background Early days, focused on less than truckload (LTL) business. o Trucks made many stops throughout the day and returned to the terminal at night o In LTL, truck would rarely leave the terminal for 1 stop, rather would make many stops delivering small loads ECOF’s Entry into the VLTL Business ECOF purchased two agency companies, one in Cincinnati in March 2005, and one in Indianapolis in June 2005. o Both of these companies handled VLTL shipments, which usually consisted of shipments of four pallets or more. o Also handled truckload business, which management believed made a good fit.
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o VLTL was new for ECOF, but it assimilated the acquisitions, it continued to operate in the VLTL market and found the margins to be attractive 2007: ECOT operated as parent company w/ 4 other companies under it. o ECOF brought in the largest revenue o ECO logistics also hauled freight but was largely a middleman in the business o ECO garage maintained and repaired company trailers and other equipment, and sold their services to other owner/operators for their tractors and equipment. o ECO Moving and Storage Company was fourth subsidiary o ECOF has four terminals: Cambridge, OH: Home office, Wheeling, WV; Cincinnati, OH; and Indianapolis, IN. Also employed 14 agents who acted as broader sales force Company’s operating equipment included 170 tractors, 300 trailers, and 14 straight trucks o Home office in Cambridge, the company was still handling truckload shipments only o The growing experience with Cincinnati and Indianapolis suggested that the Cambridge location should participate in VLTL at the as well.
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