Business Ethics

Executive Summary

In 1999, easyInternetcafe (EIC) began as a small internet cafe operation in the UK. EIC soon expanded into other global markets like the US and other European countries. EIC was flourishing and had earned numerous accolades for their innovation. Despite the accolades, EIC incurred losses amounting to £80 - £100 Million over 3 years. As a result, management decided to source out activities that were

Issue Identification

1. Select suitable logistics provider - Raj is currently tasked to make a recommendation to Roger and the EIC management to select a suitable logistics vendor that would meet EIC's needs. However, Raj must assess all submitted proposals and the firms as a whole to evaluate the viability and reliability as a vendor for the long term.

2. Reduce transportation costs - Management of EIC stressed that the transportation costs were far too high. Each store cost £1300 to cover transport costs for an annual total of £125,250 based on 208 store openings. Raj must find a provider that would handle all of the logistics and allow EIC to focus on their core competencies and reduce overall costs.

Environmental and Root Cause Analysis

On June 21, 1999, the first EIC store opened in London with 330 PC's in one cafe. Soon after, many EIC outlets opened up and spread across Europe, UK, and the United States. Stelios and EIC earned many accolades for its innovation, marketing, IT, and investments.

However, between 1999 and 2002, EIC incurred losses between £80 and £100 million as a result of demand and revenues that just didn't materialize. After continued losses in 2003, EIC decided to reorganize their operations, open smaller stores, and appoint franchisees to own the stores and bear all costs associated with ownership.

The goal is to open 208 stores annually