Case Analysis Of Sullivan Ford Auto World

The Company Details

Discuss about the Case Analysis Of Sullivan Ford Auto World.

The Company Details

Bought by Walter Sullivan in 1983
Currently located at a metropolitan junction
The 30 –year old structure was extensively refurbished
Walter Sullivan was well known in the society for attending functions
Has both front-end and back-end processes
The sales department is made up of sales and office managers, secretary personnel and seven salespersons.
The back-end is made up of service executive personnel, parts supervisor, two service writers and nine mechanics.
Deals in both used and new cars
Also bought and sold of cars from auctions
Uses a third party and body shop for restitution of old vehicles

Information of the Industry

It was a famous showroom in the city
Annual sales of 1,100 (New & Used cars) cars
Managed $26.6 M from all types of cars and $2.9 M from service parts
4.6 & 24 % margin on selling of cars

The symptoms

The firm being in the red for the year’s 1st half and its financial situation had been worsening for the previous 18 months
Decreasing service revenues and car sales together with the company’s predictions Industry future car sales looking unrelenting,

III. The business’s insufficient gross margins of 4. 6% and 24% for car sale and services, respectively during the past one year, could not satisfy the dealership’s fixed expenses as well as being insatiable for contribution margins.

Substantially, lower new car sales margin than those already used ones together with the shift of selling gross mix from sales to service

The problems

Low level of customer satisfaction, which was posted at, below 25% of all Ford dealerships.
Poor Service ratings ranging from, service hours, service department appearance and work schedule convenience.

III. Average score concerning service motivation, quality of work and availability of parts.

the service department Poor rating feedback regarding work description, politeness as well as an understanding of problems
a high number of customers stating their dissatisfaction and saying they could use other similar companies for their repairs

Strengths	Weaknesses	Threats	Opportunities
Strategic location, at the city’s busy junction	Unstable financial position	The possibility of closing down the business if poor performance continues	Fair satisfaction of clients due to service immediacy
The owner, Walter Sullivan was well known even in the community functions	Nonstandard contribution margins of 25%	The threat of losing customer loyalty if they go to other similar shops	Higher sales margin for second hand cars as compared to new cars can be exploited
There is higher contribution margins for services as compared to sales from cars	There is also high workforce turnover	Customer dissatisfaction	The change of gross mix from sales to services
The new machinery and extensive space for clients	The aspect of Poor service	Low business growth forecast
The business is wide ranged, including sales of both old and new cars	Absence of automated customer connection in the department of service
The company enjoys leadership of new customers	Poor perception of the service department as just being supplementary section to the business

There is a need for enhancement and expansion of the service repairs so that customers don’t go away to look for services elsewhere

Concerning the stocks, new cars’ inventory could be lowered by concentrating on other transaction’s promotions

For customer service and performance of the service department to be improved, there’s need to establish staff motivation at that department

The service department could also be automated to enhance efficacy and effectiveness of services offered to clients

In addition, refurbishment of the service department to modern and classic styles needs to be resolved for customers to feel that the environment gives them the value for their money.

Making service department visible to the clients will also create awareness amongst the customers who might visit the business without realizing the service department, which is a back-end, exists

A service manager together with interpersonally connected service team should be resolved also.

Alternatives

Selling the firm to Mr. Froelich	This means that Bill takes the company at the low that he price specifies due to the desperate condition of the firm.
Turning around the company’s performance in a period of 1-2 years	The family still is in control of the business and runs everything under the family’s business name but having new systems in place that ensures performance for the business
Retaining the business until its performance picks then selling it to Bill	This means that as long as the business is performing, it will be having high returns hence attractive to many buyers. This will make it easier to sell the business at a higher price

Alternative	Pros	Cons
Selling the firm to Bill	Relieve the family of obligations and headaches of having to come up with comprehensive means of returning to glorious days The risk of further losses from the family and Carol will also have been taken care of.	Only leave the family with $250000 It is too low in relation to the standard goodwill of $1,200 per car
Turning around the company’s performance in a period of 1-2 years	A successful roll out of plans will lead to better values for the firm The business can then be sold at a higher price to Bill Successful achievements could also mean enough returns for the business’s retention and even hiring of competent and skilled personnel to take the business to the next level.	It’s an extensive and tedious task for both Carol and the family It will also require additional funding which means more costs, which could backfire in the end and causes losses to the company.
Retaining the business until its performance picks then selling it to Bill	Blocks chances of any losses due to rushed decisions Would be beneficial in the long run	There is is very high chances of failure, which could lead to losses and other damages.

Introduction of new culture and remembering that service industry remains crucial department of the organization.

For improved customer service and network, establish staff motivation plan for the service department.

Service automation as well as refurbishment of the service area as an opportunity alternative

Functions	Responsibility	Timeframe	Resources
Looking for a famous Public Relation to handle diverse programs	The marketing research department	1-3 months	$10,000
Identification of various promotions to lure clients	The department of marketing	2-3 months	$15,000
Hiring of competent and experienced services management employees	The HRM department	1-4 months	$5,000
Hiring a skillful and knowledgeable business partner	the HRM department	1-2months	$4,000
quality management enhancement for reliability of products	Operations Department	1-4 months	$6,000

Service outlook renovation	The service scene requires a re-engineering , which could to create the desired impression not only to the workforce but also to the clients . the advantage of this activity is that it will improve service quality as well as the morale of the workforce and hence boost performance. The disadvantage of this recommendation is that it will require an extra investment.
client network improvement	Here automated customer service connectivity will ensure quick and effective feedback and a happy customer. The advantage of this is that there be enhanced customer service then higher customer influx and eventually best returns. Automation comes with cost of equipment installation, hiring personnel, which means an extra coin.
Improvement of staff motivation	Staff morale can only be improved through incentives and good working conditions, which goes to all employees. Leads to better performance
Dealers’ services enhancement	Improving the dealers’ services means they will be satisfied and remain in the business.
Increase investment in service department since customers are inclined in buying used cars.	Increasing personnel and equipment in the service repair will mean efficient services to the customers thus creating the customer loyalty; this will in return be transformed into business loyalty. The benefit of this is that it will ensure happy and satisfied clients. The disadvantage is that it might lower business profits since new cars have high returns comparatively.
Establish complain handling and delivery of service	To ensure customers are taken care of and faster problem solving process
Employee training	Especially the service connected ones on how to treat and handle customers

References

Bitner, M. J., & Wang, H. S. (2014). 11. Service encounters in service marketing research. Handbook of service marketing research, 221.

Bohari, A. M., Hin, C. W., & Fuad, N. (2017). The competitiveness of halal food industry in Malaysia: A SWOT-ICT analysis. Geografia-Malaysian Journal of Society and Space, 9(1).

Gummesson, E. (2014). Productivity, quality and relationship marketing in service operations: A revisit in a new service paradigm. International Journal of Contemporary Hospitality Management, 26(5), 656-662.

Hair, J. F., Celsi, M., Ortinau, D. J., & Bush, R. P. (2008). Essentials of marketing research. New York, NY: McGraw-Hill/Higher Education.

Kushwaha, G. S., & Agrawal, S. R. (2015). An Indian customer surrounding 7P? s of service marketing. Journal of Retailing and consumer services, 22, 85-95.

Lusch, R. F., & Vargo, S. L. (2014). The service-dominant logic of marketing: Dialog, debate, and directions. Routledge.

Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.

Wilson, A., Zeithaml, V. A., Bitner, M. J., & Gremler, D. D. (2012). Services marketing: Integrating customer focus across the firm (No. 2nd Eu). McGraw Hill

Turn in your highest-quality paper
Get a qualified writer to help you with

“ Case Analysis Of Sullivan Ford Auto World ”

Get high-quality paper

NEW! AI matching with writer

Order an Essay Now & Get These Features For Free:

Turnitin Report

Formatting

Title Page

Citation

Outline

Place an Order