Category: Vehicles

Abstract

Organisational psychology is vital in understanding psychological principles which form the links between research methods and human behavior in an organisation. Basically, organisational psychology focuses on how individuals think about themselves and activities that affect these thoughts and feelings in an organisational environment especially during selection, perfection, and persuasion procedures.

Application of organisational psychology in members of an organisation facilitates advanced stages of maladaptive behaviors studies. In Automobile industries across Australia, there are laid down structures formulated to keep staff in healthy and stable mind in their duty of serving companys interest through regulatory ethical communication models.

These models define expected behavior, procedural patterns, and response to every deviation. As a matter of fact, stable mind performs optimally with little or no supervision. Thus, this reflective treatise attempts to explicitly present impacts of scientific management and organisational behavior theorists on the Australian automotive industry.

Impact of organisational Development theories on Australian Automobile Industry

Automobile organisation will always work alongside its staff to promote healthy communication ethics by recognizing and where necessary, supporting staff that make steady commitment in practicing accepted desirable healthy organisational communication ethics in their work departments.

This is best achieved through reliable management and proactive communication model. Since most automobile organisations in Australia are relatively developed, these aspects have been integrated in the production, distribution, and evaluation structures.

Communication in organisations can be either formal or informal. These two forms of communication are distinct though they are used simultaneously in organisations. Formal communication is the proper and defined process of communication within an organisation.

As proposed by Fayol, Communication influences innovative and deviating period of organisational economic activities including development of technology, increasing market demand, production and workflow, investment and trade patterns, competition among the rival companies, as well as to facing the threats of global financial crisis (Friedberg, 2010).

With the need to establish lean production and outsourcing, the automobile parts industry is increasingly important for global production chains. Specifically, the discursive approach in explaining and exploring shared and coordinated actions on roles and channels through which organisational framework functions in the exchange of information formally is of great essence towards understanding organisational communication.

Prosci asserts that communication focused on a companys strategy and direction, which originates from company executives, is funneled through the organisational chart and changed in such a way to be relevant to each department and manager (Prosci, 2007, p. 04).

Despite communication being rated as a high corporate strategy, actionable planning is of essence to create solution oriented task and strategy implementation secession. Unfortunately, in 2008, Mitsubishi Motors Australia failed to internalize this aspect and ended up being closed since they specialized in large vehicles against the backdrop of low demand.

A learning organisation engages in active process of learning through promotion, facilitation, and rewarding collective learning results. Garvin, Edmondson and Gino in their article, Is Yours a Learning Organisation? published in Harvard Business Review, March 2008, described three building blocks of the learning organisation; a supportive learning environment, concrete learning processes, and practices leadership that reinforces learning.

Garvin et al., (107-8 para. 2) argue that by using the diagnostic tools, managers can assess the areas of the organisation that require urgent improvement moving the company closer to an ideal learning organisation. The managers play a significant role in setting up the learning environment for their employees.

As result, creating an effective learning environment will allow employees to draw upon resources, thus making sense out of things and construct consequential solution to business challenges (Friedberg, 2010, para. 8).

Applying the concepts of a learning organisation to an operating company is difficult for both academics and practitioners (Garvin et al. 109-11 par. 3). Ford Australia and Holden have endured economic meltdowns through production of user friendly and cost effective vehicles through scientific management programs within their hierarchical order of operations.

Self evaluation skills in ethics encompass actual and expected outcome. Reflectively, by promoting the principles of specialisation, standardisation, and predictability in organisations, classical theorists were essentially attempting to minimize the occurrences of misunderstandings (Modaff, DeWine, & Butler, 2008, p.27).

Through designing tolerance model levels, the plan at Toyota Australia has remained active in developing dependence of interest attached to an activity, creating proactive relationships, and monitoring their interaction with physical and psychological health.

Eventual, this has paid off since the workforce has learnt to appreciate the essence of teamwork. In fact, this company has one of the best sales staff in the whole of Australia. Besides, the company has remained very successful over the years but is currently facing series of problems that are associated with management models it uses.

These issues include redundancy, poor intra and inter personal communication, and monotony. As a result, they have settled on support crew, motivation, and training as intervention route (Friedberg, 2010). Reflectively, this company remains the most profitable and is responsible for the market oriented, affordable and user friendly Lexus models, that are associated with families.

To be able to carry out organisational behavior and management assessment, research and statistics are needed to understand the various behavioral patterns that exist within the scope of an organisation. Consequently, organisational psychology theorists overtly argue that cognition alters behavior.

Moreover, it is important to note that the outcomes of organisational psychology vary hugely from one organisation to the other. Therefore, research and statistics will facilitate understanding of group thoughts since according to this perspective; emotional distress is assumed to result from maladaptive thoughts expressed in specific behavior patterns (Friedberg, 2010).

This self guided approach is based on collaborative procedures that involve designing specific learning experiences to teach organisation on how to monitor automatic behavior; recognize the relationship between these behaviors and cognition, ways to test the validity of the relationships, and measures to apply to substitute the distorted thoughts with more realistic cognitions (Weick & Quinn, 1999).

Since research methods focus on the development of a range of skills that is designed to help the organisation cope with a variety of life situations, it remains indispensable to the automobile industry of Australia in practicing a proactive balance in management.

Adaptation of scientific management ensures that industries survive market swings since the same operate on optimal resource use, planning and research. Companies that lacked proper scientific management structures such as Rootes, Nissan, Volkswagen, and Chrysler had to stop production due to huge financial lose.

Reflecting on Lewins three step theory, the unfreezing, transformation, and refreezing determine the level of performance in an organisation. According to this theory, the first step involves realisation that a challenge exists in the organisation.

The second step involves transformation of this challenge into a development goal after which implementation step concludes by developing a solution for the challenge (Feist & Feist, 2006).

When an organisation fails to do so, chances of survival dwindles (Friedberg, 2010). Automotive industry of Australia is very competitive. Therefore, companies such as Bullet have opted for customised services to keep their production lines relevant.

Job testing is an important concept in the discipline of Human Resource Management in job selection process, especially in hiring candidates for specific job descriptions. Getting the right individuals for employment is critical to achievement of an organisations goals.

In fact, comprehensive and unprejudiced details of applicants competence and behavior would be an important value in the testing for selection procedure, especially to employers who provide job description to applicants. As opined by Maslow, in the hierarchy of needs theory, primary needs are basic before tertiary needs and must be addressed in that order (Spector, 2008, p. 36).

The needs include safety, physical needs, love, self esteem, and room for actualization. As seen among the stunt Automobile performer plants such as Toyota Australia, the need for actualization is the driving force for high profit margins.

Job satisfaction is as a result of a systematic and continuous environmental and personality interaction that fosters the right attitude (Spector, 2008). Thus, allocating the right duty to the right person will help achieve this in short and long term. In Holden Company, social and highly skilled employees are allocated the right duties than keeping them in a secluded environment.

When assigning duties, personality checks are necessary to promote self satisfaction while the same time, improve performance. In addition, periodic self evaluation and interdepartmental rotation ensures change of environment. Overtime, the results have been reliable, effective, and profitable to the industry (Fishbein, 1967).

Conclusively, understanding simultaneous co-existence of formal and informal communication channels presents the complexities and interrelatedness of formal and informal communication.

Despite the differences in form, these channels are dependent on each other at macro and micro level within the Australian Automobile Industry and have created visible impact in business performance and public perception.

References

Feist, J., & Feist, G. (2006). Theories of personality. Boston: McGraw Hill.

Fishbein, M. (1967). Attitude and prediction of behavior, In Fishbein, M (Ed), Readings in Attitude Theory and Measurement (pp. 477-492), John Wiley, New York

Friedberg, E. (2010). The Multimedia Encyclopedia of Organizational Theory from Taylor to Today. Web.

Garvin, A., Edmondson, A., & Gino, F. (2008). Is Yours Learning Organization? Harvard Business Review, 86.3, 109-116.

Modaff, D., DeWine, S., & Butler, J. (2008). Organizational communication: Foundations, challenges, and misunderstandings. Boston: Pearson Education.

Prosci, M. (2007). Change Management Best Practices Benchmarking Report. Web.

Spector, P. (2008). Industrial and organizational psychology: Research and practice. New York: John Wiley & Sons.

Weick, K., & Quinn, R. (1999). Organizational Change and Development. Annual Review Psychology, 50(3), 361-386.

Introduction

The auto industry is one of the largest industries in the world and this creates a lot of problems for various stakeholders in the industry. This essay will explore avenues that could be used in the process of setting up a car dealership within the car auction business. The essay is also going to look into ways and means of shipping cars within the car auction industry.

The auto industry has evolved over the years and this has made car sales to increase through use of different channels. One of the growing channels for sale of cars is the internet due to the growth of online car auctions sales.

The online car auction has been on the rise and as a result, car dealers in the world currently make use of e-commerce sites to advertise and conduct trade. Therefore, several pre-requisite have to be met in the process of establishing an online car auction.

Overview

There are several factors that one needs to consider before starting a business especially in the auto industry. The best tool to use in analysing a business start-up is a SWOT analysis on all factors affecting the online car auction industry. Moreover, we will also analyse the export of cars and the general trend within the auto industry.

Type of Business: Before any person or organisation intends to start a business, a consideration on the kind of business has to be analysed. For instance, in the auto industry an organization can consider if they are going to sell at the retail or wholesale level. An organisation might come up with its own online portal like EBay or if it is the case of an individual, he/she might make use of a site like EBay.

Moreover, in most cases retail auto dealers sell to individuals while wholesale business in most cases deal with selling to other dealers in different regions.

Consequently, an organisation or an individual might decide to focus on selling all types of vehicles or to sell a certain kind of automobiles (Krane, 2003). For instance, an organisation might have a niche and decide to sell trucks only, sedans only or other segments of vehicles in the auto industry.

Cost: This is a major factor that needs to be factored in the process of establishing an online auction business. Various costs have to be incurred in the process of establishing an online auction site. These costs include registration costs, licensing, advertising, and operational costs among others.

As a result, careful budgeting and planning has to be done. However, the major costs that an online business owner should watch out are security and shipping. Online transactions are faceless and thus it susceptible to fraud and therefore adequate security measures should be undertaken (Rubenstein, 2010).

Another major worry for online businesses is shipping especially in the case of international trade since several countries have different shipping rates and rules. While shipping to some regions could be considered non-commercially viable with problems like piracy and the sort.

Thus, in an online auction you could either set for the customer to pay for shipping or for you to pay the shipping (Morris, 2011). These are some of the major cost factors that need to be addressed in the process of setting up an online auto auction business.

Licensing: Before you set up an online auto auction in the United States of America, an organisation has to secure different business licenses. One of the mandatory licenses is a drivers license that has to be issued with the US motor vehicle department. It is important to note that an individual can sell a limited number of vehicles without a license.

This rule however does not apply for businesses or people selling large consignments of cars (Sinclair, 2007). Businesses exporting used or new cars the Unites States have to register with the office of foreign trade and this makes business more challenging. Apart from business and foreign trade licenses, businesses have to also consider that some countries require a certificate of vehicle inspection form the country of origin.

This document is used to ascertain that certain regulations such as the age of the car do not exceed a certain number of years. For instance, Saudi Arabia only allows 4 year old cars to be imported into the country. Thus, all these licenses have to be acquired by the business during set up process.

Price: This is a major factor considered by consumers and sellers in the process of trade. A consumer will buy a car or product based on the price of the car at the time of the sale. As a result, the seller has to price his car competitively for his/her car to be bought and at the same time make a profit.

During the setting up of an online auction site, thorough research has to be conducted before a reasonable reserve price is set. Factors that need to be factored in this process include the age of the car, mileage, features of the car (Jerenz, 2008).

It is advisable to include and document all the features and condition of the vehicle for it to attract genuine and competitive bids. Since the online auction business relies on trust based on information shared in the process of conducting trade. Availing all the information is necessary in attracting customers and at the same time building a good reputation for the business (Rubenstein, 2010).

Insurance: The auto industry relies heavily on insurance for the protection of interests of all stakeholders. Thus, an online auto auction business owner should have insurance all the cars his/her organisation is selling. This helps in cushioning the business against losses such as theft, shipping of damage to the vehicles.

Insurance covers such as general liability, comprehensive plans or a surety bond helps in protecting your business (Morris, 2011). For instance a surety bond might be expensive but it aids in covering of losses incurred as a result of failed contract with a supplier or vendor. The trade in used cars is lucrative but also risky hence an online auction business owner must get an insurance cover.

Documentation: In the process of doing business, it is important for documents of trade to be used. However, the online auction trade is mainly conducted without formal documents. In consequence, a business owner must make the effort to ensure all the needed and necessary documents are in order.

This is necessary for the purposes of trade since an online auction owner makes use of various channels within the trade process (Daft, 2006). For instance he/she has to work with custom officials during shipping, banks and other trade intermediaries. Moreover, the consumer has to be availed inspection documents, warranties, mileage and other documents necessary after purchase of the vehicle (Barringer, 2008).

The online auto auction of used cars has grown over the years due to various factors shaping the business world. The advancement of technology has accelerated online trade and the auto industry has also taken cue. Therefore, more auto online trade is conducted today and most of the trade is on used vehicles.

Sites like EBay sell cars based on user ratings for different third party car buyers and sellers (Jarvenpaa, 2008). The successful implementation of the online trade has been based on trust and security measures under taken by online auctions site owners.

The major driving force is price and the factors listed above with a bid to maintain and grow this industry. Based on research conducted, the auto online auction for used cars is set to grow due to consumer demand and ease of doing business. Therefore, it is recommended for a business owner to consider selling used cars using online auctions sites bearing in mind the above business factors.

Conclusion

Conducting an online auction site is quite challenging and business owners have to conduct good business research before commencing business. This is made more difficult since trade is conducted online where transactional and security risks are great. As a result, a business owner has to conduct good research and take the necessary precautions in opening an auto online auction business.

Some of the factors he should look into are insurance, licensing, price and costs and if these factors are catered for and mitigated then a good business can be developed. The auto online auction trade is set to grow and this will have a good ripple effect on business owners venturing in this trade.

References

Barringer, B. (2008). The Truth About Starting a Business. London: Allen & Unwin.

Daft, R. & Marcic, D. (2006). Understanding Management. Detroit, MI: John Wiley and Sons.

Jarvenpaa, S. L., Tractinsky, N., & Vitale, M. (2008). Consumer trust in an internet store. Information Technology and Management, 4571.

Jerenz, A. (2008). Revenue Management and Survival Analysis in the Automobile Industry. Chicago, IL: Cengage Learning.

Krane, B. & Markowitz, J. (2003). Analysis of eBay. New York, NY: Lippincott Williams & Wilkins.

Morris, M. (2011). Starting a Successful Business: Choose a Business, Plan Your Success. New York, NY: Jones & Bartlett Learning.

Rubenstein, J. (2010). The Changing Global Auto Industry: A Geographical Analysis. Boston, MA: Jones & Bartlett Learning.

Sinclair, J. & Spillane, T. (2007). eBay motors the smart way: Selling and buying cars, trucks. Denver, CO: Springer Publishing Company.

Executive Summary

The purpose of this report was to identify and to analyze the factors that influence production in the world car manufacturing industry. The macro-environment was analyzed using the PESTEL model. The competitive environment, on the other hand, was analyzed using Porters Five Forces framework.

The findings indicate that the industry has grown by over 30% in the last twenty years (Nunes &Bennett 2010, pp. 396-420). The industrys annual growth rate is expected to reach 5.5% by the year 2015 (Nunes &Bennett 2010, pp. 396-420). The industry is characterized by a high threat of substitutes and competition.

Moreover, the suppliers have a high bargaining power. Tariff and non-tariff barriers to entry also exist in various regions. These threats are expected to reduce the industrys future growth rate. Nonetheless, the industry has a low threat of new entrants. Besides, changing tastes and preferences have presented opportunities for new product developed.

Advanced technologies are facilitating the production of cars that meet customers expectations. The incumbent firms are expected to minimize the threats and to take advantage of the opportunities in order to sustain their competitiveness.

Introduction

The world car manufacturing industry is a leading driver of growth in the global economy. The industry has grown by over 30% in the last two decades (Nunes & Bennett 2010, pp. 396-420). Its annual growth rate is expected to reach 5.5% by the year 2015. In 2010, the industry was worth $2.2 trillion, and its size is expected to increase to $5.1 trillion by the year 2015 (Nunes & Bennett 2010, pp. 396-420).

China, Japan and Germany are the top three car producing countries in the world. The top three car manufacturers include Toyota, General Motors and Volkswagen. The achievements of the industry have been attained in an environment that is characterized by challenges such as environmental concerns, rising fuel costs and changing consumer preferences.

In this paper, PESTEL analysis will be used to identify the macro-environmental factors that influence the industry. Additionally, Porters Five Forces framework will be used to analyze the factors that influence competition in the industry. The scope of the paper will be limited to the mass car market segment of the industry.

Macro-environment Analysis

Political

Government intervention and tax policies present both challenges and opportunities in the industry. The Chinese and Russian markets have the highest level of government intervention. In Russia, the government protects its automobile industry through non-tariff barriers. In particular, foreign firms are required to have an annual production capacity of at least 300,000 cars (KPMG 2012, pp. 2-52).

Moreover, 60% of the parts that are used to assemble the cars must be produced in Russia (KPMG 2012, pp. 2-52). These policies benefit Russian car manufacturers since they prevent foreign companies from joining the Russian market. Concisely, foreign firms have to incur the cost of establishing production plants in Russia in order to meet the aforementioned requirements. In China, the government uses high taxes to reduce car importation.

In 2011, the government introduced a 15% tax on cars imported from America (Leachman, Pegels & Shin 2011). The tax increased the cost of American cars by at least 25%, thereby making them uncompetitive in the Chinese market (Leachman, Pegels & Shin 2011).

In India, the government has proposed a reduction in import duty from 60% to 10% on cars imported from the European Union (Roberto, Chun & Jiang 2011, pp. 56-78). However, the European Union will be allowed to export only 40,000 cars per year to India in the next five years (Roberto, Chun & Jiang 2011, pp. 56-78).

Economic

The 2007/2008 financial crisis resulted into a reduction in car production and sales in nearly all markets. In the US, the recession caused a reduction in car sales from 16.5 million in 2007 to 10 million in 2009 (Roberto, Chun & Jiang 2011, pp. 56-78). In 2012, USAs GDP is expected to expand by 2%.

Consequently, car sales are expected to increase by at least 10% in 2012 (Seetharaman & Woodall 2012). In the last three years, the BRIC countries (Brazil, Russia, India and China) have emerged as the leading car markets due to their rapid economic growth. These countries have recorded an average GDP growth rate of 5% in the last six years as shown in table 1 in the appendix.

This growth rate has been characterized by high disposable income and low interest rate, thereby encouraging car sales. For instance, China which is the largest car market recorded a 5% increase in car sales in 2011 (Roberto, Chun & Jiang 2011, pp. 56-78). The economic crisis in Europe has severely affected car production.

Economic growth is expected to stagnate in the European Union and to reduce by -0.3% in the Euro-zone in 2012 (Gill & Raiser 2012, pp. 10-20). This trend is expected to change in 2013 with the projected GPD increasing by 1.3% in the European Union and by 1% in the Euro-zone (Gill & Raiser 2012, pp. 10-20). Poor economic growth in Europe has been characterized by high unemployment rate and austerity measures such as job cuts. This has led to a significant decline in car sales.

Social

There are several factors that customers take into account before buying a car as shown in figure 1 in the appendix. However, fuel efficiency is the most important determinant of customers purchasing behavior (KPMG 2012, pp. 2-52). Following the sharp increase in fuel prices across the world, motorists have focused their attention on fuel consumption.

Most middle class motorists have shown preference for low engine capacity vehicles in order to reduce their expenditure on fuel. In-car internet connectivity is increasingly becoming important, especially, among young motorists (KPMG 2012, pp. 2-52). This generation is interested in cars that can enable them to use the internet for entertainment, navigation and communication as they travel.

Rapid urbanization in major car markets such as China, India and Brazil presents both threats and opportunities in the industry. According to KPMG (2012, pp. 2-52), urban planning will influence the size and shape of cars, as well as, the technologies that will be used to manufacture them in the near future.

In mature markets such as Europe and China, major cities have restricted car ownership through municipal bylaws in order to reduce pollution and traffic congestion. By 2050, nearly 70% of the world population will be living in urban centers (KPMG 2012, pp. 2-52).

This is likely to cause a shift from personal cars to mass transportation systems such as trains in developed countries. In developing countries where new cities are still under construction, rapid urbanization is an opportunity for growth. This is because car producers can collaborate with city planners in order to design cars that will meet the cities transportation needs.

Technology

In response to high fuel costs and concerns about air pollution, most car producers are developing technologies that reduce fuel consumption and emission. This involves producing cars that use alternative energy sources such as rechargeable batteries, fuel cells and gas.

Car producers are also shifting from the use of heavy metals to light-weight body materials such as plastics in order to improve the efficiency of their cars. Commercial production of fuel cells is expected to start in 2025 (KPMG 2012, pp. 2-52). At least 9 million electric cars will be in use by 2026 in the TRIAD and BRIC countries (KPMG 2012, pp. 2-52). For instance, China intends to produce 1 million e-vehicles by 2015.

In this regard, it has invested $15 billion in the construction of 2000 charging stations, as well as, 400,000 charging poles (KPMG 2012, pp. 2-52). Using fuel cells is considered to be cheaper than using batteries. The threat that is associated with these technologies is that they require heavy investment in production plants and refueling facilities.

Most car manufacturers do not consider any of these technologies to be a source of differentiation. Consequently, they prefer to develop them through joint ventures in order to reduce their production costs.

Environment

Car emission is a major concern in developed countries. These countries have emission standards that must be met by the vehicles that are operating on their roads.

Car emission taxes are often used to control environmental pollution. These taxes range from as high as 83% in Israel to zero in East Africa (Nunes &Bennett 2010, pp. 396-420). Emission regulations have led to the production of fuel-efficient cars. Additionally, capping the age of cars that are allowed in public roads in developed countries has led to an increase in car production.

Legal

Car safety regulation is one of the most influential legal factors in the industry. These regulations are a set of safety standards that vehicles must meet. The safety standards vary from region to region. However, the US and Israel are leading in the enforcement of car safety standards.

In developed countries, the safety standards have presented an opportunity for growth because defective cars are often replaced with new ones (Khanna, Shankar & Gautam 2003, pp. 94-101). In most cases, the used cars are dumped in Africa where safety standards are hardly enforced. Consequently, most infant automobile industries in Africa have failed to grow.

Porters Five Forces Analysis

Threat of Substitutes

The threat of substitutes is quite high in the world car manufacturing industry. The main substitutes to cars include trains, cycling, buses and aircrafts. Developed countries are shifting from the use of private cars to mass transportation systems such as trains in order to reduce traffic congestion and air pollution (Nunes &Bennett 2010, pp. 396-420).

This can be seen in cities such as New York, Chicago, Tokyo and Beijing. In developing countries such as India, travelling by train is cheaper than using a personal car (Nunes &Bennett 2010, pp. 396-420). The high threat of substitutes is likely to reduce the demand for cars.

Threat of New Entrants

The threat of new entrants is fairly low in the industry. The world car manufacturing industry is characterized by barriers to entry. These include high tariffs on imported cars (applicable in China) and local production requirements (applicable in Russia). Nearly all car producers have economies of scale which enables them to engage in mass car production (KPMG 2012, pp. 2-52).

For instance, the top five car producers which include Toyota, General Motors and Volkswagen among others have several production plants in different countries. The industry is capital intensive due to its reliance on machines for production. Thus, the high cost of joining it discourages potential entrants from investing in it. The low threat of new entrants will enable the incumbents to increase their productivity in order to serve the entire market.

Power of the Suppliers

The suppliers have a fairly high power in the industry. This is attributed to the fact that suppliers products are highly differentiated. There are few fully generic parts or subsystems that can be used in a wide variety of end products without extensive customization (Sturgeon, Biesebroeck & Gereffi 2009, pp. 8-22).

For example, Toyotas parts can not be used to manufacture Nissan cars without extensive customization. The suppliers normally produce parts that are meant for particular car models. Hence, there are no substitutes for the suppliers products. The high power of the suppliers is likely to have negative effects in the car manufacturing industry. For example, the suppliers can raise their prices in order to increase their revenues. Consequently, car prices will increase and their demand will decline.

Power of the Buyer

The buyers (car producers) have a mild bargaining power in the industry due to the following reasons. One factor that limits car manufacturers bargaining power is the fact that suppliers products are highly differentiated. The suppliers products are also very important to the car manufacturers since they determine the quality of the end product. In most cases, car manufacturers have just one or two suppliers who supply them with specific car parts such as engines.

Thus, the buyers switching costs are very high. Nonetheless, the car manufacturers have been able to improve their bargaining power through backward integration. Most car producers lack the competence and the financial resources that can enable them to develop new technologies on their own (KPMG 2012, pp. 2-52).

This has facilitated alliances between the car producers and the suppliers of parts such as batteries and electric components. For instance, Toyota has bought shares in the companies that supply its car engines (Toyota 2011). The alliances enable the car producers to negotiate for low prices for their supplies. Moreover, they enable the car producers to monitor the quality of their suppliers products.

Competitive Rivalry

The intensity of competition in the industry is very high due to the following reasons. First, there are over one hundred car producers, and more firms are expected to join the industry, especially, in emerging economies. The industry is expected to have an excess capacity of 30% by the year 2016 due to increased car production and a reduction in demand (KPMG 2012, pp. 2-52).

Consequently, the competition will increase as firms try to sell all their cars. Nonetheless, the concentration of the industry is low. The top four car manufacturers include Toyota, General Motors, Volkswagen and Hyundai Motors. These firms control only 33.7% of the market (Leachman, Pegels & Shin 2011).

Consequently, small firms have the opportunity to penetrate the market through cutting-edge production technologies and effective marketing strategies.

High competition is also attributed to high fixed costs. Concisely, high wage rates in developed markets such as France ($9.5 per hour) and the USA ($7.0 per hour) has significantly reduced the competitiveness of local car producers (Babones 2012, pp. 29-41). On the contrary, Chinese car producers are more competitive because they are able to benefit from cheap labor ($2.0 per hour) in their domestic market (Babones 2012, pp. 29-41).

Attractiveness of the Market

Based on the PESTEL and Porters Five Forces analyses, the industry has the following opportunities. First, technological advancements such as the development of hybrid cars and fuel cells will enable car manufacturers to produce fuel-efficient vehicles (Fujimoto 2011, pp. 25-49).

Consequently, they will benefit from high demand since consumers prefer fuel-efficient cars due to the perceived low cost of operating them. Furthermore, environmentalists are not likely to resist the production of fuel-efficient cars since they are associated with low pollution.

Second, the positive economic outlook in major car markets such as Europe and the USA is likely to promote car sales in the next three years (Fujimoto 2011, pp. 25-49). Third, the low threat of new entrants is an opportunity for the incumbents to increase production in order to serve every segment of the market.

Finally, changing tastes and preferences is an opportunity for car manufacturers to develop new products that are needed in the market. For example, car manufacturers can differentiate their products by introducing in-car internet connectivity technologies which are rapidly gaining popularity among motorists.

The industry is also associated with the following threats. First, the high power of the suppliers is likely to limit car producers ability to access car parts at low prices. Hence, their production costs will increase if the suppliers increase the prices of their products. Second, high competition can significantly reduce the profit margins in the industry. Besides, uncompetitive firms might collapse. Third, the high threat of substitutes is likely to reduce the future demand for cars.

Finally, barriers to entry such as high car import tariffs and local production requirements will limit the firms ability to expand (Leachman, Pegels & Shin 2011). However, this threat is likely to be addressed by the fact that most car producing countries have agreed to comply with the World Trade Organizations free trade regulations. Based on these observations, the industry is only attractive to firms that are capable of minimizing the threats and taking advantage of the opportunities.

Conclusion

The world car manufacturing industry has recorded a rapid growth in the last decade. The industry is expected to grow at an annual rate of 5.5% by the year 2015 (Nunes &Bennett 2010, pp. 396-420). However, the industry has also grappled with several challenges which include environmental concerns, rising fuel costs and changing consumer behavior.

In this regard, the opportunities that are associated with the industry include a low threat of new entrants, availability of new technologies and a positive economic outlook in major markets. The threats that are associated with the industry include barriers to entry, high threat of substitutes and high competition. The incumbents should minimize the threats and take advantage of the opportunities in order to improve their competitiveness.

Appendix

Table 1: GDP Growth in BRIC Countries

Figure 1: Product Issues Influencing Consumer Purchase Decisions

References

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Seetharaman, D & Woodall, B, 2012, U.S Auto Sales Last Month Posted their Best Showing in 4 Years, Helped by Cheap Financing, Rising Consumer Confidence and a Major Rebound by Toyota Motor Corporation. Web.

Sturgeon, T, Biesebroeck, J & Gereffi, G 2009, Globalization of the Automotive Industry: Main Features and Trends, International Journal of Technological learning, Innovation and Development, vol. 2 no. 2, pp. 8-22.

Toyota 2011, Annual Financial Report: FY 2011. Web.

Introduction: Watching the Birth of the New Business.

Cars have become a part and parcel of the everyday reality, and having a car has been a must for an average employee for quite long. Therefore, the necessity to maintain a decent state of a car is a prior concern for a present-day businessman. Hence, the need to keep the car clean and looking attractively is a necessity, which predetermines the reasonability of creating a car wash  the business that will never run out of its clientele.

To characterize the car wash most precisely, it is necessary to mention that, unlike most of the modern car washes, it is going to comprise the machine, conveyor-belt approach and the help[ of the qualified staff; to be more precise, the technique that is going to be applied in the company can be defined as the exterior-conveyor/full service approach.

Therefore, the mission of the given service is to provide the customers a high-quality and very fast service with little or no queues, at the same time offering reasonable prices. The latter can be achieved by buying cheaper equipment. Hence, the major demands in the car wash market are going to be met in the given car wash service.

Product: Opening New Horizons for the Customers.

When thinking of the image of the car wash in question, one should understand that, with so many costs for the qualified staff and the equipment, even though it is not going to be an expensive and world-known brand, there is going to be little money left for the design of the car wash itself, which is why it is reasonable to go with minimalistic design.

It could be a good idea to introduce a couple of futuristic details into the interior to show that the car wash makes use of the newest technologies, but the general idea will be a simple design with little details.

The services are going to be delivered right in the premises of the car wash company, automatically at first, with the following polishing procedures carried out manually. Thus, the speed of the service is going to be increased, for, while one car is being cleaned manually, the second one can undergo the mechanic cleaning, etc.

It is necessary to keep the premises lit well and be spacious for a better service. As for the suppliers, the D&S equipment will be purchased.

Place: In Search of Where the Innovation Belongs.

Because of the specifics of the business, it will be most logical to place the car wash rather close to the main road in the area boarding a prestigious part of the city and a middle-class district. Thus, the potential middle-class consumers will be able to use the car washing services efficiently and spread the word about the company, thus, attracting a richer clientele.

However, unless the service proves a complete success, placing the company in the middle of a prestigious city part can pose considerable threat. With the obviously qualified rivals around, the car wash may face the threat of a bankruptcy, which is why the idea of placing the car wash in a less rich part of the city can be considered. However, it would also be a good idea to rent the premises in a large market or even a mart, the places that people visit quite often. However, a large number of rivals are expected in the latter case.

Since at present, the car wash company is going to be quite small, there is no use to have the intermediary to sell the services through. It seems that people can run a small car-washing company on their own. Therefore, there are going to be no intermediaries in my car wash company.

Price: The Revenues for a Product Worth a Million.

Since it has been suggested to offer reasonable prices, an average $12 per car is bound to be a proper price. In addition, the equipment is going to be quite expensive, which is why starting the business at $5000 is a sound idea, as the Department of the Treasury (n.d., p. 5-7) explains. In a year, the profit will supposedly make $45,000. To demonstrate the revenues and the losses of the company, the following tables can be used.

Table 1: Profit and Loss: Calculate the Revenues

Table 2: Profit and Loss: The Costs

Promotion: Arresting the Publics Attention Effectively.

To promote a car wash business efficiently, a catchy company name and a good slogan that people will be able to remember are a perfect solution. I believe that I will name the company WashnGo, while the company slogan will; be No Dirt, No Queues, No Faults.

Speaking of the logo, I would suggest a simple outline of a stylish sparkling clean car pointed up and right, with the name of the company written on the side of the car. Symbolizing constant motion and unceasing progress, such a sign will definitely attract more clients to the WashnGo car wash.

People: Identifying the Target Customers.

Speaking of the target customers who will presumably attend the car wash to have their vehicles washed, it is treasonable to start with the middle-class public. Since the company is going to offer the service rather cheap and make use of quite low-cost materials and equipment, it is quite understood that the initial clientele will consist of the people of middle class, typical employees and their families.

Since the employed have little time at disposal and prefer service with little queues, they will be delighted to have their cars washed fast and efficiently. However, as the word spreads about the car wash, its efficiency and relative cheapness, wealthier people are likely to visit the car wash, which will spur the business considerably. In addition, since the exterior-conveyor car wash makes only 20% of the car wash market (Simeral 2003, p. 1.8), the level of rivalry is going to be relatively low.

Reference

Simeral, C 2003, Why start a car wash business?, in Start your own car wash, Entrepreneur Press, Irvine, CA, pp. 1-12.

Production Description

• Utilizing an ergonomic design that conforms with the seating structure of a variety of Ford produced cars, the Protective Infant Safety Harness or PRISH, is a pre-installed car seat that is available upon request when purchasing a new Ford vehicle.
• One of the main issues with current car seat models available in the market today is that they are bulky, hard to put away, and lack the necessary structural supports to protect an infant if the car should suffer a collision (Hatzakis, 384).
• To resolve this issue the Ford PRISH is the companys answer to the daunting tasking of ensuring the safety of a child while at the same time making the car seat ergonomic enough that it can be easily stored or taken out when need be.

Mission Statement

Our goal is to ensure the safety of children and give peace of mind to parents by providing a car seat that is both comfortable, safe, and above all is in line with the high standards of quality that the Ford Motor Company is known for.

Product Info

Built utilizing extensive tests in ergonomic design and safety standards the Ford Prish car seat utilizes a conjunction of safety foam, impact webbing, durable materials, and safety straps to ensure the protection of an infant from any manner of sudden hits, impacts, or accidental collisions that may happen to a moving vehicle.

Feature, Function, and Benefit

Partner Companies

• Samsonite (durable casing)  $1.7 billion
• Corning (Gorilla Glass)  $6.6 billion
• DuPont (Kevlar)  $36 billion
• Walmart (sales)  $421 billion

Determinant Gap Map

Ease of Use

Works Cited

Hatzakis, Greg. Sudden infant deaths in sitting devices. Archives Of Disease In Childhood 93.5 (2008): 384-389. Academic Search Premier. Web.

Kaber, David. Comparison of infant car seat grip orientations and lift strategies. Applied Ergonomics 43.4 (2012): 650-657. Academic Search Premier. Web.

Laliberte, Richard. Precious cargo. Parents (10836373) 84.4 (2009): 123. MasterFILE Premier. Web.

Parikh, Shital, and Wilson, Lindsay. Hazardous use of car seats outside the car in the United States, 2003-2007. Pediatrics 126.2 (2010): 352. MasterFILE Premier. Web.

Simonsohn, Uri. Lessons From An Oops At Consumer Reports: Consumers Follow Experts And Ignore Invalid Information. Journal Of Marketing Research (JMR) 48.1 (2011): 1-12. Business Source Premier. Web.

Introduction

The sphere of service businesses expands every day, as more and more service organizations are being created. While manufacturing businesses and retail stores concentrate on the quality of their goods, service companies focus their attention not only on the service quality but also on the customers  the main participants of any transaction. In this case, customer satisfaction becomes the primary goal of any service business.

To reach out to a client, service organizations provide customer service, which can be either of the low contact or high contact type. Low contact services, such as the car repair company that is discussed in this paper, provide services without or little physical contact between a customer and a service provider (Lovelock & Patterson, 2015). Businesses with a low degree of customer contact focus on the technical side of the service.

On the other hand, high contact services revolve around constant face-to-face communication between a client and a service provider. Thus, the importance of an established relationship between the two parties grows significantly. In this paper, a hairdressing salon is an example of high contact service. This report examines and evaluates the service quality of two businesses: a car repair company and a hair salon, and discusses the authors satisfaction with both services.

Service Marketing Analysis

It is important for every organization to establish its unique place on the market to be chosen by customers. By focusing on the right niche and finding the best marketing strategy, a business can quickly rise to the top. To assess the marketing strategy of the firm, one must look at the companys competitive advantages and evaluate the roles of intangibility, heterogeneity, inseparability, and perishability of the services the business provides. The role of the process should also be considered.

Car Repair Company

The discussed car repair business has a broad target audience, which allows the company to appeal to the general public. However, this companys competitive advantage is in its breadth of service offerings, which is limited to the body repairs for light motor vehicles. By focusing on exterior maintenance, such as dent straightening and rust removal, the company can provide its customers with a particular set of services and high-quality materials. This particular car repair business does not interfere with the market of interior repairs, choosing a unique and non-general approach.

The result of the services after a car repair is rather tangible because the company provides services for the cars exterior. Thus, the marketing strategy of this business is based on visual materials, such as photo and video comparisons of a car before and after the service. Secondly, the heterogeneity of the services is present in this business because every customers situation is different. Therefore, the companys owners have to focus on providing the best materials and having the most qualified personnel.

The marketing strategy of this company highlights the experience of its employees. The point of inseparability is not as applicable in this situation as in other service businesses, because the car repair business focuses on physical products rather than interactions with a customer (Izogo & Ogba, 2015). The communication between service providers and clients is indirect and minimal. The results of the service are not highly perishable because the repairs effects usually last for a long time. Finally, the customers experience is not significantly impacted by the process because it happens without the clients presence.

Hairdressing Salon

The competitive advantage of the discussed hairdressing salon is not based on a certain niche of services. This salon has a broad audience because it has hairdressers, hairstylists, and barbers to provide services for men and women. However, this parlor enters a competitive niche by offering not only hair cutting but also hair treatment. This high-contact business offers consultations with a professional trichologist, who can assess the hairs condition and advise further treatment.

The other personnel members are also equipped with knowledge regarding hair health, as they can consult the clients on proper care methods and products. The salons marketing strategy relies on the topics of healthy hair and skin. In the marketing campaigns, this business differentiates itself from other salons by assuring the customer of the medical knowledge of its employees and by offering a range of high-quality hair care products. It is interesting to note that this salon does not want to appeal to customers as a medical facility instead of concentrating on people that want to maintain their hair health.

The services of this establishment are tangible because most of the procedures provide visible results (Wirtz & Lovelock, 2016). The marketing heavily relies on the visual aspects of the services, showcasing the results of medical treatment as well as hair styling and hair cutting.

Moreover, this salon focuses on relationship marketing because of the service results perishability. According to Jones et al. (2015), most customers reply positively to this type of marketing. The results of the services for this business are not only perishable but also heterogeneous. Moreover, a client plays a significant role in the process because most of the services are performed according to the customer instructions.

In this case, the customers are involved in co-production, according to the principle of inseparability (Jaakkola & Alexander 2014). Therefore, the role of the process is rather significant for this service because clients and service providers have to interact during the procedure.

Consumer Role and Behavior

Consumers often actively participate in the processes of a service business. Although the consumers behavior before choosing a business stays important, the consumers role during the interaction with a service provider becomes equally essential. However, the importance of a consumer decision-making process differs from business to business.

Car Repair Company

The role of a customer in the operations of a car repair company can change according to a particular case. For example, some situations require a longer interaction with a client to ask him or her about the expected results. In my case, the repair was primarily connected to the technical improvement of the cars bumper. Thus, it did not require me to make any decisions that would significantly influence the end product of the service.

Some of these choices can be made by looking at the companys website because it offers information that introduces a customer to some operations and services. According to Maity and Dass (2014), this car repair company makes a logical decision to restrict the amount of content for their web sources because the company acknowledges that the type of services that the employees provide is rather heterogeneous. A simple look through the website allowed me to determine if the companys services were right for me and assured me that this is the best company for my particular situation.

Following that, it was easy for me to connect with service providers and explain the kind of service I am expecting. Thus, by giving customers the necessary information, this car repair company allows clients to feel more confident in their decisions, which in turn leads to better service quality (Gross, 2014). Although a customers role in the process of a car repair is not very important, this company provided resources that contributed to customers trust (Foxall, 2013).

Hairdressing Salon

A hairdressing salon is a high contact service, which requires a client to be present for the entire process. This type of service is drastically different from a low contact service. Thus, the customers role is also rather different. First of all, the service providers have to present the clients with information about the services and tell them about the range of used products. Kaura, Durga Prasad, and Sharma (2015) note that every operation of this particular service business is discussed with a customer, which greatly influences the outcome and clients satisfaction. In this case, the consumers role remains significant even after the service is completed because the client becomes a visual representation of the salons quality of service.

According to Alavi, Rezaei, Valaei, Wan Ismail (2016), this representation can impact the other customers decision-making process, build customers trust, and showcase the perceived benefits. Thus, the behavior of clients and service providers is crucial to the service and quality. Customers engage in co-production or co-creation, which grants them permission to influence the final product significantly (Jaakkola & Alexander 2014). In my case, service providers of the discussed hairdressing salon offered their advice and continued the communication throughout the process, which positively impacted the quality of the result.

Models of Satisfaction and Quality

According to Oliver (2014), the satisfaction of a consumer is a foundation of customer loyalty, and the main reason personal marketing exists. There are many models of evaluating satisfaction available to the companies to achieve better service quality. However, most models focus on a number of points. First of all, many customers review their experience with a service provider according to their initial expectations.

Second, according to Jahanshani, Hajizadeh, Mirdhamadi, Nawaser, and Khaksar (2014), satisfaction can be measured by the parameter of needs fulfillment. Technical service quality, fairness, external influences, such as mood and emotions, also can be considered in the evaluation of overall satisfaction (Lee, 2013). Businesses can choose various ways to monitor satisfaction. Currently, many service providers focus on online-reviews because more and more customers start to base their choices on these ratings. According to Zhang, Zhao, Cheung, and Lee (2014), the main factors that determine the success of these reviews are informativeness and persuasiveness.

Car Repair Company

The discussed car repair company only recently started to cultivate its online presence. Therefore, there are no online reviews to represent clients satisfaction. However, the companys website actively informs its visitors about the ways to contact the service providers and leave positive or negative feedback. This approach allows this business to evaluate clients satisfaction and reflect on the information. Although the company offers some ways of communication to its customers, the best recommendation that can be given to these service providers is to encourage the clients to leave reviews about the services online.

An online presence can significantly affect the business popularity and increase customer trust. Moreover, the repairs that this company does are relatively perishable, which allows the company to use an approach of personal marketing to build a loyal customer following (Gummesson, 2014). According to Teehan and Tucker (2014), customer feedback is important in improving customer satisfaction. For example, according to Verleye and De Keyser (2016), some clients engagement in the online sphere can come in the style of an interactive survey or quiz to attract more customers to leave a review.

Hairdressing Salon

The salons online presence is rather developed because this business has online reviews and ratings that can assure new customers of its quality. However, because the company provides highly heterogeneous results, the reviews are influenced by the subjective reasoning of the clients. According to Fisk, Grove, and John (2013), the recommendation for this salon would be to find a way to evaluate the service quality with an objective set of questions to create a sound basis for measuring customer satisfaction.

It is hard for this salon to respond to every review with a change in services because the service providers are not able to consider this information in full. Some researchers suggest encouraging customers to participate in content or product creation and allowing clients to have more control over the services operations (Verleye & De Keyser, 2016).

Conclusion

Service organizations engage differently with their customers. Low contact businesses rely on the technical side of their service, while high contact companies place a lot of responsibility into the hands of their employees. The role of a customer differs from service to service. Some organizations restrict the influence of a client to short and indirect communication. Other businesses allow a customer to become a participant and co-produce the final product.

The ways of monitoring satisfaction for these companies also differ on the basis of their services. All in all, it is possible to have positive experiences with businesses of different types if these companies correctly evaluate their strategy and position.

References

Alavi, S. A., Rezaei, S., Valaei, N., & Wan Ismail, W. K. (2016). Examining shopping mall consumer decision-making styles, satisfaction and purchase intention. The International Review of Retail, Distribution and Consumer Research, 26(3), 272-303.

Fisk, R. P., Grove, S. J., & John, J. (2013). Services marketing interactive approach (4th ed.). Mason, OH: Cengage Learning.

Foxall, G. R. (2013). Marketing in the Service Industries. New York, NY: Routledge.

Gross, R. (2014). A theoretical consumer decision making model: The influence of interactivity and information overload on consumers intent to purchase online. International Journal of Business Management and Economic Research, 5, 64-70.

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.

Izogo, E. E., & Ogba, I. E. (2015). Service quality, customer satisfaction and loyalty in automobile repair services sector. International Journal of Quality & Reliability Management, 32(3), 250-269.

Jaakkola, E., & Alexander, M. (2014). The role of customer engagement behavior in value co-creation: A service system perspective. Journal of Service Research, 17(3), 247-261.

Jahanshani, A. A., Hajizadeh, G. M. A., Mirdhamadi, S. A., Nawaser, K., & Khaksar, S. M. S. (2014). Study the effects of customer service and product quality on customer satisfaction and loyalty. International Journal of Humanities and Social Science, 1(7), 253-260.

Jones, M. A., Reynolds, K. E., Arnold, M. J., Gabler, C. B., Gillison, S. T., & Landers, V. M. (2015). Exploring consumers attitude towards relationship marketing. Journal of Services Marketing, 29(3), 188-199.

Kaura, V., Durga Prasad, C. S., & Sharma, S. (2015). Service quality, service convenience, price and fairness, customer loyalty, and the mediating role of customer satisfaction. International Journal of Bank Marketing, 33(4), 404-422.

Lee, H. S. (2013). Major moderators influencing the relationships of service quality, customer satisfaction and customer loyalty. Asian Social Science, 9(2), 1-11.

Lovelock, C., & Patterson, P. (2015). Services marketing (6th ed.). Melbourne, Australia: Pearson Australia.

Maity, M., & Dass, M. (2014). Consumer decision-making across modern and traditional channels: E-commerce, m-commerce, in-store. Decision Support Systems, 61, 34-46.

Oliver, R. L. (2014). Satisfaction: A behavioral perspective on the consumer (2nd ed.). New York, NY: Routledge.

Teehan, R., & Tucker, W. (2014). Service quality kaizen blitz: The road to improving customer satisfaction. Sinergie Italian Journal of Management, 94, 233-241.

Verleye, K., & De Keyser, A. (2016). Customer engagement in technology-based and high-contact interfaces. Customer Engagement: Contemporary Issues and Challenges, 138-151.

Wirtz, J., & Lovelock, C. (2016). Services marketing: People, technology, strategy (8th ed.). Hackensack, NJ: World Scientific Publishing Co Inc.

Zhang, K. Z., Zhao, S. J., Cheung, C. M., & Lee, M. K. (2014). Examining the influence of online reviews on consumers decision-making: A heuristicsystematic model. Decision Support Systems, 67, 78-89.

The introduction of automobiles came like a dream at the dawn of industrialization and civilization advancement. The early manufacturers of automobiles in the developed countries were very enthusiastic about the issue. Thus, many experts talented in engineering and designing pooled together their efforts to discover the widely used systems in todays world. Although their inventions of the late eighteenth century and nineteenth century were paramount to the development of new means of transportation, the ultimate productions of this time have gone through a dynamic transition due to numerous reasons. These great inventions which were used during our forefathers could only apply a singled kind of system have been altered to suit the needs of man at various generations period. These earliest systems which were applicable in automobiles used engines that were compatible with petroleum products like petrol and diesel. As man has survived through change, many changes have occurred in the way in which these types of machines have been constructed.

Contrary to the generation of today, which is fond of fashion and stylistic products, the early changes in automobiles were brought by coherent and comprehensive reasons. Hence, there are many reasons other than fashion that have contributed to the production of this array of products in the automobiles sector. The broad reasons are all categorized into three major classes. The economic reasons and the environmental factors are among the two major ones. Initially, the two factors were not of interest. This is because there were fewer automobiles which impacted the least on the negatives sides. The release of pollutants was quite minimal and almost unnoticeable. The maintenance costs were also relatively low. The major vehicles problems were unveiled at the beginning of the nineteenth century. The first decade of the nineteenth century marked a start in the changes in the environment and climates which also required certain changes in the manufacturing of automobiles. Both the engines and the products for use in the engine parts formed the center of solutions to such problems. Thus, gas and electricity-driven motors were designed to curb the perilous environmental problems. (Arita, 2000)

. The inventions which then rampantly come up in the 1900s were much more inclined in the productions of automobiles which could effectively and efficiently work with gas products. The gas engines first perceived as the most effective and none expensive ones was invented. However, almost in a simultaneous manner, changes in the prices of oil products doomed the world. Gas being one of the products from the oil products, then became expensive and many people could not use their vehicles. This complicated the intended invention of engines and the technological issue on the search for better engines remained at the peak in the research sectors; the experts had to invent better ways that could put the vehicle on the right track.

The experts of technology then emerged with the solutions of electric car technology. This was solely created in favor of offering the clients and vehicle customers an economical means by which they can drive their automotive. As a result of the relentless search, electric cars, gas-powered cars were invented. Due to some inconvenience associated with the batteries which were used in the electric cars, this kind of cars disappeared within a shorts period. As far as environmental concerns were in consideration, such models could not go to extinction. They soon came up around the mid of the twentieth century. This was mainly triggered by the issue of the environment and the unpleasant dependence on the oil products for which gas-powered vehicles perpetually are affected. Environmental issues together with economic concerns as well as enabling technologies in the modern period led the manufacturers in the late 1990s to call for vigorous research on new development in the sector. This was a time when hybrid automobiles were born. The hybrid vehicles trends have from then increased up to the present. (Wachs, 2000)

Hybrid vehicles are much complicated vehicles that have emerged in recent past years. They are therefore vehicles that can run two separate power sources, unlike gas-powered vehicles. The generation of fashion is privileged to enjoy the technological inventions of vehicles with both gas and battery power. The existence of the two sources forms the most important part of manufacturing such a vehicle. This is because the combination of the two sources complicates the overall process ranging from its operation by the drivers to its energy consumptions. The two energy sources are designated in such a way that there is coordination between the two. The coupling of the batteries source and the gas source enables vehicles-batteries to be rechargeable. The rechargeable batteries are aimed at reducing the effects on the environment. Although the gas-powered vehicles have high energy conservation powered, these vehicles are considered to have a continuous need for drivers to press on the accelerators.

The continuous ejection of fuels always produces some minute pollutants to the atmosphere. These minute pollutions to the environment are accumulative posing long time effects to the environment. The hybrid vehicles have double energy sources, this means the vehicles can utilize each source alternatively and separately at their convenience; hence the drivers have no need of ejecting gas fuels which perhaps undergo incomplete combustions always. It has been said by vehicles engineers and environmental experts that the alternative energy sources from the batteries and motors in hybrid vehicles have high advantages. Hybrid vehicles can convert excess power from the gas engines source to electricity from the motor sides. The converted energy is utilized in certain circumstances when the vehicles have insufficient fuels on the gas engines side. Such form of stored energy does not emit pollutants to the environment, hence hybrid vehicles are more environmentally favorable than gas-powered vehicles which are not hybridized. Thus, hybrid vehicles are highly recommended for those people whose value lies in the consideration of environmental clean-up. (Wachs, 2000)

Travel using hybrid vehicles is more advantageous than using gas-powered vehicles. Fuel problems do arise when someone is on his / her way. This is especially when fuel gets finished on the way. The moment fuel is not enough on the gas engines side, the hybrid vehicles can provide an alternative way on the motor side which acts as storage for an excess energy source. The preserved energy from this point may enable one to gets closer to his destination or even to arrive at a place where he /she can purchase more fuels to refill the vehicle. When traveling in gas-powered vehicles, the probabilities of fuel getting used up are similar to those when traveling in hybrids vehicles. So, the moment fuels are no longer in reserve within the gas-powered vehicles, there is no single step towards a destination can be made. The travelers get stuck in one place only to seek help from other vehicles while they leave their vehicle on board. This makes the hybrid vehicles have added advantages on the mileages as compared to standard gas-powered vehicles. The extra miles which are traveled by the hybrid vehicles make many people have passion for these vehicles. When the two kinds of vehicles are compared in terms of mileage, long distances are covered by the hybrid types while consuming less fuel than the standard gas-powered vehicles. (Witzel, 1992)

Owning a vehicle is what many people desires. The demand and desires vary from one person to another. Cost is one of the factors of consideration in purchasing a car, the research reports carried out by different people review that the cost for hybrid vehicles is more than that of standard gas-powered vehicles. However, this is quite well understood by the intellectual and those who fit in the sector of invention and innovation. The price of any good is comparable to its attractiveness and durability. These are all features that are attained through research and invention means. Hence, the devotion for the researcher whose results have to produce widely acceptable products also has to be paid duly.

The limited numbers of people with the technological know-how in the production of hybrid vehicles have facilitated the escalation of the costs of this kind of vehicle in the past ten decades. Automotive makers are now posing threatening attacks to a customer on cost elevation; hence, they rare possession of hybrid vehicles than the standard gas-powered vehicles. This means that the environmental goals of hybrid and the economic problem solutions which were anticipated to come to their dismal ground with the introductions of hybrid economical vehicles may not be solved soon. Furthermore, the prices of the petroleum products which are commonly used all over the world will continue to wear down the economies of many states which depend on these products from foreign countries. (Greenliving online, 2008)

Although there are enormous differences between the two types of vehicles models, there is a similar array in the similarities, especially in terms of techniques of reducing fuel consumption and efficiencies. These are highly dependable factors that depend more fully on the operational techniques of the vehicles. The efficiencies are not limited to how the operators drive. The method in which the hybrid vehicles and the standard gas-powered model achieve this includes the manners in which the drivers reduce the speed. The reduction of the speed on the road on such vehicles leads to the reduction of the wind drag. Such reduction ultimately mitigates the rates at which the car consumes the fuel resulting not only in greater efficiencies on fuel use but also improving in the gas mileages. In addition, the avoidance of abrupt stopping and abrupt journey commencement reduces the effects of engine overworking, and as result, the engine requires lesser fuel amounts.

This means that the drivers who opt to have additional advantages in the economics of fuel need to have high skills in driving. This means highly qualified automobile drivers, whose driving knowledge and experience is broad enough to enable them to have consistent drives. The consistency on the driving of the engine on such vehicles avoids overtime working of it, making its operational work easier than expected. This reduces the overall energy source usage, especially on the gas fuel engines. However, the case of achieving this is quite minimal for hybrid vehicles which are depicted to have two energy sources. Many drivers have problems with getting acquainted with the operation of hybrid vehicles. This perhaps arises from the complications involving the power transfer from gas engines to electrical motors. Thus, the complications of the driving skills which are required are making hybrid vehicles to be rare in the commercial industries for transportation works. Thus, it is upon the individuals, organizations, and companies to consider which of the two types of vehicles is most suitable for the need and skills required. But the most important need is the environment in which we all treasure for our life and the future generation to come. For this, hybrid vehicles remain the most suitable vehicles. (Petric, 2007)

Reference

Arita, M. (2000): Technical Issues of Fuel Cell Systems for Automotive Applications: vol. 2, pg. 20  30: free press.

Petric, J. (2007): Concept of Hybrid Vehicles vol. 25 pp 10- 30.

Greenliving online (2008): top 5 myths about hybrids cars. Web.

Witzel, M. (1992): The American Gas Station: Motorbook International.

Wachs, M. (2000): The Automobile, the Built Environment, and Daily Urban Life: University of Michigan Press.

What were the sources of competitive advantage the Enterprise has been able to capitalize?

The major sources of the companys competitive advantage were innovation and people.

Innovation

The founder of the company saw the potential of the local market and focused on that niche (p. 1). The company managed to come up with other creative methods and services. For instance, Enterprise offered car-sharing services that involved hourly rental (p. 9). Such innovations attracted customers as new services tended to address peoples needs and were consistent with the changes occurring in society. The use of sophisticated software also contributed to the companys growth and development (p. 12).

People

As for people, the company invests in its personnel and provides comprehensive training (p. 2). The company nurtures its top managers and leaders as the vast majority of these positions are occupied by people promoted from other posts. The focus on innovation and manpower can be regarded as the source of the organizations competitive advantage. The rewarding system is also effective as people are motivated to work hard and develop. Bonuses can make up to 90% of the salary (p. 2).

Why are people so important to its success?

People can be regarded as one of the central assets of any company as individuals are the source of innovation, creativity, as well as high-quality services provided to customers.

Turnover

The training provided to the employees helps them address customers needs, which translates into gains for the organization. As for the turnover, it can be regarded as considerable. However, it is justified since the expansion of the business enabled its employees to go up the ladder (p. 3). At the same time, the company still has some top managers who were not nurtured within the company, which is an effective strategy since these people are likely to have other perspectives and views. The overall human resources management is effective as it manages to motivate people to work hard and meet customers needs.

Rewarding

The rewarding system (bonuses and promotions) is successful. One of the most effective strategies is to tie personal achievement with team performance (p. 2). Employees are motivated to help members of their team and focus on the performance of the entire department, which positively affects the development of the organization. The competitive environment is replaced by the culture of collaboration.

What are some of the threats that would be of most concern if you were leading Enterprise?

Hertz and Avis

Hertz and Avis can become a significant concern for Enterprise. These organizations have substantial resources, and they are operating on all the segments Enterprise is present (p. 7). The airport market, local market, and even such new areas as car sharing can become a very competitive environment for Enterprise. To remain competitive, the company in question should change some of its approaches and operations. First, it is important to make sure that customers needs are met. For instance, when it comes to the airport market, it is necessary to help the customer save time (p. 8). The family approach is rather inappropriate for the market, where people value their time and focus on their goals.

Zipcar

Zipcar is not a significant threat compared to the competitors mentioned above. This company focuses on one segment (car sharing). To remain competitive, Enterprise should continue developing various innovative products and strategies. For example, the business-to-business initiative can result in increasing sales (p. 10). However, it is essential to take into account the growing competition in this niche as Hertz has entered the market and has already attracted quite a lot of customers. It is critical to come up with services that are highly needed in this area. For example, it is possible to consider using environmentally friendly vehicles to be more attractive to younger generations.

Issues and conclusions in the memo

The major issue discussed in the provided memo is about the privatization of the department of Motor Vehicle (DMV) outsourcing. The department had requested for a thorough assessment of the privatization letter directed by the governor. The letter was addressed to the department that handles mechanical automobiles in Mexico. This was to inform them about the then intentions to denationalize the DMV information systems. Besides, the department wanted to get clarifications whether the union was ready to accept the outsourcing proposal or not (Wiegmann et al. 2011). According to the conclusion made in the memo, the suggestion made by the governor to privatize DMV information system should not be accepted since the management practiced used were considered to be unfair. Privatization of the system will make most people working in the departments lose their jobs. Additionally, the governor was supposed to stop the establishment of the convention center project if she wanted to reduce costs.

Reasons why the conclusions were made

The conclusions were made after thorough research on the impacts of the privatization on the workers and the entire Mexican population. Moreover, this will be going against the wishes of Mexicans and the union of improving the living standards of their members. The proposal is to be rejected since it will ensure that foreign agents are able to operate the Department of motor vehicle. In addition, the foreign agents will consider taking wages lower that that being obtained by the members of the union. Consequently, this will lead to a steady reduction of the salaries of the workers in the future. Another reason for the rejection of the proposal is that the management will be in control of the union when the governor decided to take works to some of the departments. Additionally, the trend is expected to be felt in all the other remaining departments if the proposal is allowed to effect.

Offering workers comparable positions in other departments might be challenging. For instance, find hard time trying to cope with the new conditions of their job. Additionally, they can also be forced make changes to the experienced in their former jobs to cope with the new job environment. This is also another way of eliminating some of the experienced workers who will not be able to quickly learn and adapt to the new environment because of their age. Workers and the public are also not assured that there will be a number of vacancies in the other departments for the people who have been displaced. Arguably, privatization is one of the major reasons why there is a number of collapses in the economy. In addition, it has led to the steady increase in gas prices.

Workers have opposed the privatization of the DMV information system since the Mexican government will not be ready to honor or respond to the demands of the workers union. Privatization will not only affect the union but also the local citizens. The Mexican government will no longer have some control in the information systems thereby the available data will be conceded. Private organizations will not be responsible for any irregularities within the government hence they can easily pull out and leave the country in unstable condition (Goldsmith, & Eggers, 2004). The other factor why the proposal should be rejected is the problems of culture clash. This will happen when the contract is awarded to a foreign nation with a different culture.

Key words or phrases within the memo that might have alternative meanings and some of the ambiguous words

There are numerous words in the memo that have alternative meanings. A word like information system management function has been used in the conclusion to have a different meaning. It has been used to mean the daily operations of the DMV information system. Concurrently, a word like gain questionable has been used to mean that the workers will lose their jobs to some operations of the government that are not straight but corrupt. Additionally, enshrined has been used in the memo to mean protected. Ambiguous words like malfeasances and enshrined have also been used in the conclusion part of the memo. The words are found to be unnecessary hence complicate the ideologies passed across. This is a critical provision in the context of management.

The Value and Descriptive Assumptions

The reasons why the author gave the conclusions are directly linked with the assumptions. The loss of jobs and depreciation of the economic situation of the nation are some of the reasons that make the proposal invalid. Consequently, by privatization, the available data will be conceded and this will affect the daily operations of the country. The above discussed reasons have successfully led to the conclusions about the privatization of the DMV information system. Idea of the governor abandoning the wasteful conventional center project must be taken for granted. Arguably, this is because abandoning the project is not directly linked with the issues affecting the union. This is a critical provision in the context organization prowess as proved in the memo. It is important to understand the themes of the memo for a comprehensive critique to be staged.

Fallacies in the Reasoning

There are limited incidences of fallacies in the provided memo. Consequently, this has provided the ideas in the memo to be very vital. They provide concrete reasons why the proposal should not be accepted. Abandoning the wasteful convention center project and leaving the Union alone is considered to be a fallacy in some extent (Davis, 2000). This is because projects are established to help the local people and the community and not to interfere with the normal operations. For instance, establishment of the convention center project will not affect the daily operations of the union hence it is considered to be a total fallacy which should not be taken seriously. Consequently, the above reasoning has not provided a viable support for the conclusion. The fact that the recipients revised some of the decisions made by the organization does not explain the reason why they continued to perform inadequately. An assumption can be made that the decisions the supervisors turned down do not have a direct association with the output of the workers. It is also possible that they received significant pay for their services.

For instance, the Neo-Human Relations theories by Abraham Maslow, explains that there are psychological factors that must be considered to motivate workers. These are some of the fallacies in the concerned reasoning. There exist five levels of needs that workers seek to satisfy at the work place. The first level involves the physiological needs which comprise food and water. The Department of Motor Vehicle (DMV) outsourcing could have satisfied these needs of the workers. This could have been so since assumption has been made that the firm treats the workers considerably. The second level is security concerns of workers. This could also be satisfied at the hotel since the workers can afford shelter and clothing. The third level is love and a sense of belonging. This could not have been satisfied since the workers decisions are turned round by the supervisors. They may not feel as being part of the hotel, hence poor performance.

Evaluation of the Value of the Conclusion and the Ideas Provided

The evidences provided in the memo are noteworthy. For instance, privatization will lead to the loss of jobs as most of the companies will come up with their own principles, which might be different from the ones workers have been using. In addition, old expatriates will not be able to quickly learn the rules in the new working environment. Arguably, the reason provided for the rejection of the privatization better supports the above provided conclusion.When foreign agents take lower wages than that being obtained by the workers of the union, there will be a steady decrease in their (workers) salaries in the future. This reason provided is very valid evidence for the conclusion hence it should be taken into consideration. In other instances, strategic issues that affect projects appertain to current and future expectations that are influenced by the environmental and structural factors (Browne & Keeley, 2010). The strategic issues that affect the implementation of projects include internal infrastructural capacity, policy, social, economic and culture. Managers should develop strategic approaches to ensure prior mitigation of the issues through the development of contingency planning system. This is to ensure that any issue that springs up during the system integration process is provide an adequate solution to avert interference.

Identification of the rival causes in the memo

There are several alternative explanations in the memo. Anti-American has been used as an alternative explanation to show how privatization is an attack to the workers union. The authors explanation is believable hence the conclusions can easily be supported. The explanation should also be given more weight compared with other explanations since it provides more information regarding the privatization of the company.

Effects of the Statistics

Statistics have been provided in this memo to support some of the reasons that had been provided to reject privatization. Additionally, statistics have been used to provide some clear evidences and provide more explanation to the ideas that had been provided by the author regarding the rejection of the privatization of the DMV outsourcing. It also provides the real picture of what is being discussed hence it has been majorly used to stress the importance of the decisions that had been made. Consequently, statistics are deceptive as people will always tend to follow them. It is vital to conduct research on organizational related issues. Statistical provisions are able to illuminate that the memo inclined case decisions. Due to the witnessed selection bias in how the cases arrived at the required study inferences, it is vital to establish a forthcoming cohort study to comprehend whether the conclusion as well as other results attained was valid. Statistically, large sample should be used for a comprehensive conclusion. This is a critical provision in the context organization prowess as proved in the memo. It is important to understand the themes of the memo for a comprehensive critique to be staged.

Important Information Omitted

Most of the important information has been provided in the memo; however, the ones that have been omitted are very minimal and can be neglected. Besides, it is believed that the information provided is enough to make the conclusions. For instance, more information on how the government will deny the workers future negotiation and the type of negotiations can be considered. However, some labor activists argue that the policy derails the labor unions, hurt workers, destabilizes the middle class, and impedes the growth of local economies. According to them, this policy does not create jobs in spite of the proponents claim to the opposite. For example, unionization escalates the labor costs hence making some regions less attractive for investments. This implies that the major objective of the right to work policy is to weaken unions and consequently lower pays in a state, therefore drawing more corporations there. However, what it does is hurting employees by reducing their pays and benefits and thus making workplaces more precarious for all employees regardless of whether they are unionized or not by waning unions (Goldsmith, & Eggers, 2004).

Possible Reasonable Conclusions

Conclusively, old people will find it hard to cope up with the new policies of the working environment. For instance, they will not see the need of acquiring more knowledge as they have already grown too old to value such skills. Privatization will imply that the government has full control over the workers unions. To avoid economic collapse, the workers and the public should not accept the privatization of the company. Empowerment of workers and organizational change are some of the most challenging issues that organizations face. The goal of any intervention strategy that the general manager and management may adopt has to aim at improving the performance of the workers and the hotel. The methods that can be used are team building, training or sacking of some workers and enabling flexibility in management. Department of Motor Vehicle (DMV) outsourcing should implement various HRM management practices in order to remain relevant in the global market.

Due to its production and marketing capacity, the organization demands novel HRM practices in the context of HR planning, recruitment of employees, selection criteria, training and development provisions, compensation plans, as well as performance management. Another credible provision is the establishment and ratification of diversity provisions within the Organizations workforce. Cultural diversity is increasingly being a challenge and a captivating feature of both individual lives as well as the contexts in which companies and institutions operate. Because of the obvious challenges of the culturally-sensitive areas in which the company operates, Department of Motor Vehicle (DMV) outsourcing has to take credible policy initiatives to ensure that it attains its diversity tolerance initiatives. A policy herein refers to a statement of procedures guiding the stakeholders of an organization on how responsibilities should be conducted (Goldsmith, & Eggers, 2004). Foremost, successful organizations apply diversity within their workforce to gain competitive advantage. Organizations should adopt policies that increase the cultural, gender, and racial variety within its workforce. To enhance its competitive advantage, diversity recruitment policies will propel the company to the global limelight.

References

Browne, M. & Keeley, S. ( 2010). Asking the right questions: A guide to critical thinking (9th ed.). Upper Saddle River, NJ: Pearson/Prentice Hall.

Davis, J. M. (2000). Fiscal and macroeconomic impact of privatization. Washington, DC: International Monetary Fund.

Goldsmith, S. & Eggers, W. D. (2004).Governing by network: The new shape of the public sector. Washington, DC: Brookings Inst. Press.

Wiegmann, J. et al. (2011). Decision making for outsourcing and privatization of vehicle and equipment fleet maintenance. Washington, DC: Transportation Research Board.

Automobile Market at a Glance

In any automotive company, every model of the vehicle they manufacture has an impact on both the profit margins and the popularity of the company. Hence, each department within the structure of the company plays an imperative role in the survival and success of the company. For example, according to Chris Woodyard (2009), Ford Motors showed the worst outcome rates in 2008 which made the company face an extraordinary slowdown in all major global markets. However, a company that manufactures SUVs is likely to get popularity among the economically affluent persons who do not mind so much on fuel consumption and have been found to generate a profit margin of up to $ 10 000 to $180 000 for Ford (White, 2000). Evidently, the people who are targeted by the SUV manufacturers are the unionized workers who enjoy relatively higher salaries and have access to funding by financial institutions. On the other hand, the department dealing with small fuel-efficient cars is capable of attracting young customers who may not have the capacity to buy an SUV and meet its running costs. These buyers are conscious of the average fuel consumption while at the same time t wanting to drive to work or school.

The Financial, Social, and Environmental Implications

The recent economic recession has witnessed the automotive industry in peril (Deloitte, 2009). This has been reflected through declining sales of SUVs in the United States. Although companies are trying to woo the consumers to buy them through discounts and other forms of incentive, they are yet to register the previous sales as a result of dented consumer confidence in the economic future. Thus the period of conscious spending has already emerged and consumers globally are in pursuit of car models that favor their pockets and at the same time enjoy maximum utility (Deloitte, 2009). This has seen Asian companies such as Toyota register tremendous sales in America and Europe when compared to Chrysler and Ford.

A recent Deloitte Consulting LLP study has revealed that automotive consumers are changing their taste from SUVs to smaller low-consumption models due to economic hardships (Deloitte, 2009). These consumers have diverted their interest to smaller cars. This interest has prompted the manufacturers to concentrate on enhancing the safety and value as imperative features in small cars. In addition, it has been found that the majority of players in Americas cash for clunkers plans have resulted in exchanging their SUVs and small trucks for small fuel-efficient models (Simon, 2009).

Various studies show that there is an increase in car ownership among the first buyers in the developing countries, with small cars continuing to gain popularity due to the cost consciousness of the customers (Automotive Industry Briefing & Forecast. World Outlook, 2009).

According to Matt OLeary (Deloitte, 2009), a large population in China has been found to shift from the use of motorcycles to small cars in search of identity and the feeling to be part of the global society. In the environmental aspect, the usage of SUVs which are referred to as fuel guzzlers has been associated with a contribution to high levels of carbon monoxide gas in the environment as compared to the small cars. This is forcing manufacturers to design low-fuel-consuming cars and hybrids in an attempt to honor environmental regulations.

Conclusion

The companys decision to shift its production from large SUV vehicles is both timely and safe. This is because the recent recession has shaped the trends of buyers in making decisions regarding their expenditure. The unpredictability of the economic future has not discouraged the consumers to refrain from the use of cars; rather it has influenced their decision to cut costs by spending on smaller fuel-efficient cars. Hence, the company will be in a position to sell high volumes of small cars as compared to large SUVs especially in the developing countries where the middle class is rising tremendously.

References

Automotive Industry Briefing & Forecast. World Outlook. (2009) Economist Intelligence Unit. Web.

Deloitte. (2009). A new era: Accelerating towards 2020  An automotive industry transformed. Web.

Simon, B. (2009). U.S. car buyers prefer smaller vehicles. Financial Times. Web.

White J. (2000). GM, Ford idle 1,365 workers-auto industry layoffs signal coming downturn in US economy. International Committee of the Fourth International.

Woodyard, C. (2009). With a staggering $14.6B loss, 2008 was Fords worst year ever. USA Today.