The Evergreen Car Wash Company Business Model

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Table of Contents

Introduction
Description of the Business
Products and Services
Market Analysis
Sales and Revenue
Organisation
Exit Plan
Reference List

Introduction

Over the years, there has been a growing level of eco-awareness within the UAE as its citizens begin to understand their potential impact on their environment (Ryan & Stewart 2009). This has manifested in a variety of new local consumer behaviours such as purchasing recycled paper whenever possible, utilising reusable bags in shopping malls like Carrefour and choosing to use unleaded gas in their vehicles (Yan, Hyllegard & Blaesi 2012; Carless 2015). These examples represent just some of the new consumer behaviours in the UAE and showcase the potential that a business could have if it focused on depicting itself as “having gone green” (i.e. utilising environmentally sustainable or non-environmentally damaging products or processes) (Öhman 2011; Abdul 2015).

The business model of the “Evergreen Car wash” focuses on the use of environmentally sustainable products and processes in order to provide its services to its consumers. This report will focus on analysing the current business model of Evergreen, examine its viability in its chosen market, examine its sales and revenue and determine its long term viability.

Description of the Business

The Evergreen car wash company distinguishes itself from other similar businesses in the region by focusing on the growing consumer base within the UAE that has become more “eco-conscious” when it comes to their patronage of different types of products and services (Aziz 2010). This manifests in the use of environmentally friendly detergents and cleaners that use natural plant extracts and oils to clean the vehicles that come into the car wash. Aside from this, Evergreen also utilises solar panels on the roof of its premises in order to lower its overall consumption of electricity. Lastly, water used on cars is reduced through the use of manual labour whenever possible.

All of these choices translate into a lower carbon footprint for the business, which makes it more appealing for environmentally conscious consumers. To increase its overall visibility, Evergreen uses local TV and newspaper ads for advertising its services and places emphasis on how it is a “green” business that focuses on an environmentally sustainable method of operation.

Products and Services

The primary service that Evergreen provides is to wash the cars of its customers and polish them with a light coat of wax afterwards. Some interior cleaning is also done wherein the servicemen vacuum the inside of the car and put in some air fresheners so that once the entire cleaning process has been finished, the car looks good as new. Other additional products sold come in the form of refillable air fresheners that can be bought from the main office of the car wash; however, this is a relatively minor aspect of the business. The main focus of Evergreen is to ensure the full satisfaction of their customers by making sure that once a car leaves its premises, every facet of its body ranging from the bottom of the car to the top of its roof is free of dirt and practically gleaming. It is this attention to detail, along with its focus on utilising environmentally sustainable methods of operation that creates the appeal for Evergreen to local consumers in the UAE.

Market Analysis

Based on the analysis conducted by Dagher & Itani (2014), it was noted that the UAE economy grows by 5% per year with a majority of this growth being attributed to consumer spending. However, what is interesting from the perspective of Ramayah, Lee & Mohamad (2010) is that the increased amount of disposable income within the UAE brought about by the region’s oil wealth has resulted in a greater inclination towards “higher level” product purchases. Eze & Ndubisi (2013) help to explain this concept by stating that income levels dictate the type of products consumers patronise. For example, low-income consumers tend to purchase cheaper goods and tend to have fewer options as compared to their high-income counterparts who, by virtue of their higher purchasing power, are capable of buying more expensive goods and have more options (Wilkins & Huisman 2014).

It is due to the presence of a large number of high-income consumers within the UAE that the option of “going green” (i.e. buying recycled or environmentally sustainable products) has become increasingly popular (Case 2004). Due to efforts by the local government to promote recycling which subsequently increased the “eco-awareness” of local citizens, more consumers within the UAE are opting to purchase goods or patronising services that present themselves as being “green” (Guenther, Hueske, Stechemesser & Buscher 2013). This has created changes in numerous businesses in order to take advantage of this growing consumer demographic. This can be seen in examples such as groceries promoting the purchase of reusable bags as well as local newspapers using recycled paper in their publications (Premanandh, Sabbagh & Maruthamuthu 2013).

What this analysis has shown us that the present-day market that Evergreen finds itself in is conducive towards the chosen operations model of the business. There is a significant consumer inclination towards environmentally friendly methods of operation and, as such, all that would be needed is for the business to take advantage of this growing consumer demand and prosper as a direct result (Gulf News 2014).

Sales and Revenue

The Evergreen car wash averages 30 to 40 cars within a given day (more on weekends) with an average of roughly $30 per customer. That is equivalent to $1200 a day and within a month is roughly equivalent to $28,000 (weekends and holidays not included in operational dates). The potential income of the car wash over the coming years is reflected below, which will be influenced by its growing reputation in the area as well as with its consumers.

*Customers per day Comparison between 2015 and 2016 Potential Incomes.*

This is indicative of the fact that as the popularity of environmentally friendly operations continues to grow within the UAE; the more likely it is that the number of customers that patronise Evergreen will increase over the next couple of years. Another aspect that should be taken into consideration is the current position of the car wash in the market as the only “eco-car wash” in the region and the fact that it markets this specific aspect of its service as compared to other car washes in the UAE. The financial performance of the company will certainly get better and increase over time as the number of its patrons continues to grow.

Organisation

The organisation of the car wash consists of a manager and 10 low wage employees who are in charge of cleaning the cars as they come in. The structure of the employees consists of individuals who are in charge of cleaning particular areas of the car such as on top of the vehicle, its windows or the bottom of the car. There will be no change in the overall organisational structure over a five year period since it is likely that the company will keep the same format and will merely increase the salary of the employees on an annual basis.

Exit Plan

The exit plan for the ownership of the car wash would entail selling off its different branches to other local car wash chains. Do note though that this will only be done in the event that the business proves to be unsustainable in the long run.

Reference List

Abdul, B 2015, Abu Dhabi schools’ eco-clubs promote green thinking. Web.

Aziz, P 2010, Greening The UAE’s Eco Footprint: PSFK Talks With The Emirates Wildlife Society. Web.

Carless, H 2015, Isn’t ‘going green’ just good old-fashioned common sense?. Web.

Case, S 2004, ‘Eco-Labels: Making Environmental Purchasing Easier?’, Government Procurement, vol. 12, no. 3, pp. 32-35. Web.

Dagher, G, & Itani, O 2014, ‘Factors influencing green purchasing behaviour: Empirical evidence from the Lebanese consumers’, Journal Of Consumer Behaviour, vol.13, no. 3, pp. 188-195. Web.

Eze, U, & Ndubisi, N 2013, ‘Green Buyer Behavior: Evidence from Asia Consumers’, Journal Of Asian & African Studies, vol. 48, no. 4, pp. 413-426. Web.

Guenther, E, Hueske, A, Stechemesser, K, & Buscher, L 2013, ‘The ‘Why Not’–Perspective of Green Purchasing: A Multilevel Case Study Analysis’, Journal Of Change Management, vol. 13, no. 4, pp. 407-423. Web.

Gulf News 2014, Abu Dhabi organises Middle East’s first Eco- Club Summit. Web.

Öhman, N 2011, ‘Buying or lying—the role of social pressure and temporal disjunction of intention assessment and behavior on the predictive ability of good intentions’, Journal Of Retailing & Consumer Services, vol.18, no. 3, pp. 194-199. Web.

Premanandh, J, Sabbagh, A, & Maruthamuthu, M 2013, ‘Misdescription of packaged foods: a case study from the United Arab Emirates’, Food Additives & Contaminants. Part A: Chemistry, Analysis, Control, Exposure & Risk Assessment, vol. 30, no. 12, pp. 2022-2026. Web.

Ramayah, T, Lee, J, & Mohamad, O 2010, ‘Green product purchase intention: Some insights from a developing country’, Resources, Conservation & Recycling, vol. 54, 12, pp. 1419-1427. Web.

Ryan, C, & Stewart, M 2009, ‘Eco-tourism and luxury – the case of Al Maha, Dubai’, Journal Of Sustainable Tourism, vol. 17, no. 3, pp. 287-301. Web.

Wilkins, S, & Huisman, J 2014, ‘Corporate images’ impact on consumers’ product choices: The case of multinational foreign subsidiaries’, Journal Of Business Research, vol. 67, no. 10, pp. 2224-2230. Web.

Yan, R, Hyllegard, K, & Blaesi, L 2012, ‘Marketing eco-fashion: The influence of brand name and message explicitness’, Journal Of Marketing Communications, vol. 18, no. 2, pp. 151-168. Web.

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