Category: Vehicles

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.

Introduction

• Increased focus on EMs by multinationals due to saturation of developed markets.
• Most MNCs have previously focused on the economic elite within the EMs.
• Examples of EMs are China, Brazil and Russia.
• Ems are characterized by low operating costs and a large population of highly increasing middle income earners.
• Main strategy should focus on innovation aimed at meeting the special needs of the market at affordable rates.

Purpose

• To analyze a major Emerging Economy (EM) and see the potential of investing in such an economy.
• The Chinese economy will be used as a sample an Emerging economy .
• To access the possibility of transferring an existing manufacturing plant from an already saturated economy in the developed world to a merging economy inoder to tap the potential of that economy in the fast developing third world .

Counrty Summary-China

• Existence of an excellent product market infrastructure compared to other EMs.
• China has a good product market infrastructure.
• China is very attractive to FDI.
• Domestic firms are dominantly SOEs.
• China is very open to FDI.
• Government policy is attractive.

SWOT Analysis

Streghts

• Market availability due to large middle income population.
• Access to cheap skilled labor
• An excellent market infrastructure
• Existing Production platform within region
• Good supply source of raw materials

Weaknesses

• There exists a gap in level between Chinese industrial products( mainly middle level) with the international level which are more advanced.
• Rigid management and operations
• There is creative spirit
• Lack of proper technical equipment

Opportunities

• Gradual reduction of tariffs on imports of raw materials
• Decline of import tariffs for some developed economies.
• Quota restrictions have since been completely eliminated

Threats

• Severe constraints in resources.
• Degradation of the environment has highly intensified.
• Increase in counterfeit products by rival companies.
• The market is open to new entrants who may eat into the companys market share.
• Overproduction of industrial products leading to reduction of profit margins.
• Increase of Emerging economies thereby slowly washing our the low labour strategy.

Pestle Analysis

Political

• There exists an open and stable political system in China.
• Gradual reduction of tariffs on imports of raw materials.
• Quota restrictions have since been completely eliminated.
• Investment into the domestic market by government to spur infrastructure development.
• Imperfect laws and regulations in China.

Economic

• Rapidly growing economy, GDP currently sixth in the world.
• Existence of low cost labor and skilled human capital.
• Increased purchasing power of the majority population due to the high economic growth rate in China.

Pest Analysis

Social

• Technology was initially restricted to industries but has since been adapted by even small scale home users.
• Development of internet has made the Chinese people have access to information thereby embracing technology due to high exposure.
• The Chinese people have found it economical to embrace technology compared to use of traditional methods to do their work.

Technological

• Chinese technology is fast evolving leading to innovation of better and cheaper technology.
• Technology has changed the structure of the product distribution channel, making it cheaper and more efficient to distribute goods.

The Business Proposal  Car Manufacturing Plant

Having done both the PEST and SWOT analysis of the china as an emerging economy, it is imperative that we now make a proposal for a specific investment into this economy.

The company will manufacture affordable and cost effective motor vehicle to meet the needs of middle class economy in China and export the surplus to developing economies in Asia and Africa.

Projecteds Cash Flows

Strategy-Implimentation Plan

Development of new skills and management structure to meet the needs of the targeted market.

Provide autonomy in the local market thereby eliminating dependence on external sources.

Provision of unique products at dramatically low prices to meet the special needs of the majority who have lower , yet significant combined purchasing power.

Issues Benefits and Controls

The main emerging issue is reducing cost of production usually encountered in the developed economies which lead to high product costs which are unaffordable to the world markets.

Investment in an Emerging economy enhances company growth and sustenance as it aims at tapping into large virgin markets that have not been reached.

Necessary controls must be put to counter the social economic and political challenges that investment into Emerging economies pose.

References

Alvis, J. M. (2011). Business Strategic Planning. Houston: New American Publishers.

Coleman, G. (2011). Innovation in Emerging Markets. New York: Price Hall Publishers.

Hitt, I (2007). Strategic Management- Concepts And Globalization. Ohio: Thomas Higher Education.

Kachru, U. (2005). Strategic Management- Concepts And Cases. New Delhi: Excel Books.

Introduction

Avis is one of the car rental companies with a strong brand identity all over the world. It has its origin in the United States of America. Avis always promises its customers an extra mile in terms of its service quality. The Avis Singapore operation was initiated in the year 1972 and since then it has grown steadily to the point of launching four other operations in Singapore.

Avis Singapore is the second largest branch internationally and ranks fifth in the Singapore market. Its key strengths are: strong pricing performance, taking of orders and billing and processing of payments. Avis Singapore has exceptional supplementary services hence making it a preferred brand.

Avis car rental is a company with a very good reputation. It has become well-known name in Singapore due to its rigorous marketing campaigns that are synonymous with their marketing catchphrase tried harder than other people. Its marketing campaign has made it one of the biggest names in the car rental industry hence making consumers to be well informed about the services offered by Avis (Auto, 2004, p. 1).

The main competitors of Avis Singapore are: Comfort Delgro, Orix Corporation, Hertz and C & P Rent-A-Car. Car rental market in Singapore is not such booming due to the cheap and good system of public transport; this has contributed to the competitive nature of car rental industry in Singapore.

Overview of the Singapore Car Rental Sector

The Singapore car rental and leasing sector is affected by the following factors: car ownership, infrastructure in public transport, off-peak cars and low entry barriers. Car ownership in Singapore is a costly investment due to high import duty, high costs of maintenance and strict regulatory environment that require an owner to have a certificate of entitlement; rapid depreciation is also a matter of concern among car owners. All these make car use the core service for renting and leasing companies.

Singapore has a well-developed public transport system; the infrastructure is perfect, buses operate on schedule, and they drop commuters to their destinations with strict observance to punctuality. The fares for buses and trains are considerably low; there are also low fares for taxi hence making traveling around Singapore easy. These are among the challenges that are faced by the car rental companies like Avis.

The introduction of the Off-Peak Car scheme in 2009 as a replacement for the Weekend Car Scheme provided a better opportunity for existing and potential car owners to save on-road use and registration. This was considered a perfect opportunity for the Singaporean to own cars hence leading to high volume of sales and providing them with a lot of options when they make decisions as to whether to own, lease or to rent a car.

There is also the Private Car Rental Scheme that is considered the greatest challenge to the car rental and leasing market; this scheme is aimed at minimizing the number of vehicles on the road by ensuring maximum use of the cars that are already existing; the scheme also involves car owners to rent out their cars as along as the relevant paper works are completed. This has increased competition in the car rental and leasing sector (Ho 2010, p. 1).

There is also a low barrier of entry into the car rental and leasing market hence leading to an increased number of players in the sector, especially when it is compared to the large authorized car rental companies that have caused the car rental charges to surge and become more competitive.

The main market segments for car rental business, particularly in the non-airport areas are business travelers. Based on the analysis of above factors, it is imminent that the car rental and leasing market in Singapore is not a profitable one since the high costs of maintenance demands that a firm purchases new cars regularly.

The advanced public transport system poses an indirect competition to car rental and leasing business. Consequently, the Off-Peak Cars Scheme has provided consumers with additional options when making decisions as whether to own or to use lease a car. Low barriers of entry have led to the proliferation of small car rental companies in Singapore that have challenged the larger companies.

All these factors have challenged large companies like Avis to enhance and assert their maintenance on the market. Avis needs therefore to continue increasing their services and to meet the expectations of the customers (Ho 2010, p. 2).

The Targeted Customer Niche of Avis

Avis has three target customer groups that they need to concentrate on, these are: Singapore drivers (both married and single), tourists and expatriates residing in Singapore.

Singapore drivers (married and single): there is a likelihood of a married Singaporean owning a car due to his higher potential of earning and also most married couples have children; these make salon and family cars the most suitable cars for this category. Most married Singaporean do not propose leasing a car, and instead they prefer to own.

According to an Avis research, it was only 25 percent of single Singaporean who own a car, and they use public transport and prefer car renting for short overseas trips that are more popular among married couples. There is a higher likelihood of a Singaporean renting a car while traveling overseas to facilitate their travel.

Tourists: tourists prefer public transport because it is convenient and cheap. Avis stands a better chance to have this category due to its international reputation and hence the perception that they have good quality and better standards. Tourists are always concerned much about the reputation of a rental company. Avis Singapore has an unmatched reputation and wide variety of services that are instrumental in eliminating perceived physical and psychological risks for the kind of customers who value reputation and service quality.

Expatriates: foreigners visiting Singapore are considered to be financially independent and sound and are only in Singapore for a particular specific period of time and to fulfill certain business or study purposes. According to the Avis marketing staff, those expatriates that have families always considered having a car to enhance their convenience particularly if they can afford it. Expatriate often chooses to stick to household names in the industry like Hertz and Avis since they considered small dealers to be risk in a foreign country (Ho 2010, p. 3).

Avis is an international company, and it has been in the business for a very long time has the necessary financial power to execute a robust marketing campaign. Pre-booking mode of rentals is much possible with Avis, and it is safe since it cannot fail overnight. Avis has various types of cars from the common to sub-compact luxury hence one can easily find his or her selection, whether it is a money saving one or a rental to impress a fresh client.

Avis has various deals on different cars and in various locations; this can enable the customer to save his money for future rentals. Avis has ensured that they have a large stock of its vehicles in its locations thus making it easy for its customers to access their favorite cars; customers cannot face the problems of being told that there is no car available. This is necessary especially in situations where the customers have their own selection of the type of vehicle they would wish to rent.

Avis sells its cars that it has previously used for rental and any customer on the market for a used car can find it at the Avis, and they will be reassured that the vehicle will be well maintained just like they were with the Avis Company. Avis has embraced the Smartphone technology as their customer service function; customers can easily rent a car by using their handsets hence guaranteeing advantage for people on the move.

Avis has introduced a lot of changes on its products and services. It has, for example, introduced GPS to minimize the number of its customers who get lost for direction; it has simplified their rental contracts and provided possibilities for its loyal customers to hire their Aston Martins (University of California 2011, p. 83).

Avis spiced its services by introducing Avis InteArctive, which is an internet-based information management system to manage its fleet hence becoming the first car rental company to implement it. It launched the Avis Cares Program in the year 1989 to enhance its customer satisfaction. This was aimed at enhancing the safety of their customers, owners and employees, and it included providing services that would make the Avis customers to enjoy themselves and have a stress-free trip and travel to all their destinations.

The Domestic Airport Car Rental customer satisfaction survey that was carried out by the JD Power and Associates revealed that Avis did perform better than other companies in terms of the critical picking up of passengers as well as the process of reservations. Avis has been involved in various humanitarian initiatives and services through the program of Avis Cares about Community program to enhance its marketing activities.

Avis also, through partnership with the Motorola launched the Avis Assist navigator service that was made to its customers. This has made it very possible for their customers to receive verbal directions on their mobile handsets that had speaker phone and was fitted on the car (Avis n.d, p. 1).

Avis has also developed a perfect consumer insight and excellent communication strategy; this includes the Pay per Click Model of advertisement and location targeting that has attracted locals that search for car rental and leasing overseas. Then customized advertisement utilized by Avis has enabled it to deliver customized messages to its users hence increasing their relevancy between queries and results and users using key words will be exposed or directed to Avis.

Despite its leading market position and excellent customer services, the trend for car renting, incorporation of the internet on its services, big presence on the airport and targeting of green customers are some of the gray areas that Avis needs to target. Avis should capitalize on its strong brand and international presence in Asian market in order to realize its potential in the Singapore market, and they should move away from airports and orient its market towards non-airport operations (Indiana University 2010, p. 67).

Conclusion

Avis is well-known name and a global brand in the car rental industry and it operates in more than 160 countries and operates approximately 5000 rental outlets. Avis has identified their customer segment with much success. The market forces that characterize the Singapore rental market has had a negative impact on the business interests of Avis; it is, therefore, imperative for Avis Singapore to learn how to react to the external market in order for the company to remain competitive in the Singaporean market.

The external market forces that directly affect the car rental market in Singapore have forced Avis to reconsider and evaluate their business interests to effectively deal with the changing threats in the market. Avis through their market slogan we try harder has gained prominence in the 21^st century.

In its marketing campaign launched in 1963, Avis acknowledged and accepted the number two position and that it could not directly compete with Hertz that is the worlds number one car rental company. The slogan forms part of the companys corporate culture and in Singapore, it is still trying harder to amass a large market share and to expand in size.

Avis capitalizes on its legacy and strength to follow and meet the dynamic customer needs. The management of Avis emphasizes on meeting customers demands like safety, price affordability and moving their brand beyond expectations. For future expansion, an analysis of the current market is critical.

References

Auto 2004, Advantages and Disadvantages of using Avis. Web.

Avis n.d., Avis: Still trying harder. Web.

Ho, L 2010, Case Study 1 Avis car rental in Singapore: have they really tried harder?, Minot, Minot State University.

Indiana University 2010, Business two-point-zero, Media Inc, Indiana.

University of California 2011, Singapore business, Volume 4, Issues 7-12, Singapore Press Holdings, California.

Introduction

In the face of growing industrialization and modernization of life styles along with the changing consumer demand trends, one would be interested to observe the automobile market which may give us an idea regarding the changing tastes in luxury goods. Car off course is not a luxury for everyone, for some it is also a necessity. Small cars are usually fuel-efficient and serve the utility purpose well it seems. This paper shall compare three of the largest global automobile companies, Ford Motors, Toyota and general Motors with respect to their products and market apart form the financial results of the last five years. The idea is to find the relative position of Ford with the other two companies.

Ford Motors: brief history

Modern days industrialization owes to a great extent to the Henry Fords assembly line production methods, which were popularized as Fordism during early 1900s. Fordism showed us how to manage industrial workforce and production on a big scale. Ford Motor Company, founded by the father of assembly line production and hence industrialization in 1903 is a multinational corporation headquartered at America. Based on worldwide sales of automobiles, Ford Motor ranks fourth as automobile manufacturer after General Motors, Toyota and Volkswagen and ranks seventh in the Fortune 500 list with a global revenue of $172.5 billion in 2007, over 24500 employees, 6.553 million automobiles and 100 plants scattered around the world. The cars are sold under the brands of Lincoln, Mercury, Volvo, Mazda apart from the core brand Ford. The other two UK brands Jaguar and Land Rover were sold to Tata Motors. Ford has redesigned their car Focus that is still capturing a considerable part of the market. With strong sales figures, lucrative revenues and fuel economic technology the car sales went up by 91 percent in Texas and 46 percent worldwide. According to the vice president in Marketing and Communications of Ford Group, Jim Farley, Focus continues to surprise and delight customers throughout the country, but the bombshell is in Texas, where Focus retail sales have almost doubled. The sales of Ford, Lincoln and Mercury together have grown by 8 percent compared to the previous year. However Ford Escape, Edge and Flex has shown a fall by 8 percent while the utility vehicles like Ford Explorer and Expedition have shown a fall in sales of 54 percent. However this trend is considered to be in tune with that of the industry in the segment of crossover vehicles. Farley comments, We expect the second half of 2008 will be more challenging than the first half as economic and credit conditions weaken. (Ford Focus Continues to Surprise, Outpace Segment).

Financial Overview

Sales and income record

The net income and Sales figures show that the company grew between 2002 to 2004 then it fell from 2005 to 2006 and grew in the year 2007. However the company is making most times except in 2003, 2004 and 2005 losses. From 2002 to 2005 the loss position was declining gradually as the company was keeping a smaller part of the sales as profits. Here it shows that the company is sacrificing more than its sales revenue in the last two years.

The graph shows that the trend sales takes, is followed by the trend of net income. There is growth in both sales and net income up to the year 2005 then it goes down in the year 2006 before an upward surge in the year 2007. This means that the company is performing very poorly in the year 2006. The management needs to investigate what ttok place that led to the decline of profit and sales.

Expenses distribution

Cost of sales 142,587,000

Selling general and administrative 21,169,000

Non recurring 2,400,000

Interest expenses 10,927,000

Income tax 1,294,000

From the distribution of expenses in the chart below, one realizes that the cost of revenue contained over 80% of the total expenses for the company while selling and distribution expenses has over 12% of the total revenue. Other expenses except interest which is not a direct interest to sales are minor.

Asset and capital structure

Fixed assets contain the largest share of expenses the company holds. it holds more than 79% of the total assets meaning that the company has invested heavily on the fixed assets. This may be due to the fact they are manufacturers of heavy and light machinerys whose turnover is not as high as hamburger.

The companies capital structure as shown by the graph above shows that it is heavily indebted as credit facilities in terms of long term debts contains more than 80.6% of the capital used by the company. This kind of policy is very dangerous because this capital structure can ruin the companies future success.

Ratio Analysis

Liquidity

The liquidity position of the company has improved from year 2006 -2007 as it is shown by the current and quick ratios. The two ratios show how the company is able to meet current short term obligations. Always the ability of the firm to meet current obligations to creditors is normally gauged through the cash resources available and how it can generate cash through the operating cycle. Ford motor vehicles current ratio in the year 2006 is below the industrial average. However the current ratio in the year 2007 is greater than the industrial average. Although the difference is so small it shows that the creditors will be comfortable in dealing with other firms as compared to ford motor vehicle. in a nut shell the current ratio of ford motor vehicle is far below the industrial average, therefore it does not have enough liquid to meet obligations as per the industrial average.

Quick ratio of the company is 0.72:1 and 0.91:1. In the year 2006 the ratio is below the industrial average of 0.89:1 and in the year 2007 it is same as the industrial average. The quick ratio recognizes that the conversion of inventory is not quick therefore it is eliminated from the quick assts that is those assets that can be converted to cash quickly. As per the industrial average the company was great in danger of technical default which will lead to unnecessary legal tussles in court which may lead to liquidation of the company.

Asset management ratio

Fixed assets turn over for the company is far below the industrial average and it is 0.58 times and times 0.62 while the industrial average is 0.74 and 0.81 for years 2006 and 2007 respectively. It means that investment in assets is not being used to capacity as per the industrial standards. This ratio measures the overall investment efficiency of the form in both long term and short term assets. It means that the management is not utilizing the assets efficiently. Although the industrial average is also below 1:1 the ford corporation management seems to lack managerial ability to utilize the assets to capacity. They should improve the use of assets.

The average collection period for the firm is 16 days and 19 days for the year 2006 and 2007 respectively while the industrial average is 30days and 29 days for 2006 and 2007 respectively. This measures how effective the credit policy of the firm is. Again it shows how the investment in receivables is being maintained by customers. from the figures it is clear that the firms credit policy is far better than the industrial average, therefore they have a very good credit management industry as compared to other competitors in the industry.

Debt management

From the figures calculated above, it can be noted that in the year 2006 total liabilities were more than total assets. This means that the company was in the verge of collapsing and it was facing bankruptcy. However on the year 2007 the ratio has improved from times 1.01 to 0.98 meaning that some common stock equity was injected to the company or some of long term liabilities was redeemed. However in this case it seems some other stockholders equity which was a large negative was reduced. in such a situation a company is under bankruptcy.

Interests earned ratio shows how the ability of the profit of the company can be made recurring debt expense; unfortunately this ratio is far below the industrial average putting the company in financial crisis. The company cannot be able to meet the interest payments in the year 2006 since they are making lose. At the same time in the year 2007 they improve the situation since they are making some few profits.

Profitability ratio

All the profitability ratios show poor results overtime. In fact most of them show negative values for the years 2006 and 2007. As far as ROE is concerned the situation looks better from in 2006. However this is because of negative income and positive equity in 2007 unlike both the values being negative in 2006. So this is an illusionary impact again but the liquidity position shows remarkable improvement especially in terms of DSO and investment turnover. When compared with the other industrial average. The sales figures show a fluctuation especially the dip in 2006. The reason could be the launch of many new small cars including the hybrid cars of Ford in the market and the prices range offered by competitors which are even targeted for the middle class consumers.

Market values

The company market values are very low meaning it is performing below per in the market.

Conclusion and Recommendation

If we look at the values of these components for the company we shall be able to find the origin of the fall or rise in returns on equity. The fall in the value of ROE is due to the negative profits or the negative profit margin and the fluctuation in 2006 is owing to the sudden negative value of the equity multiplier. The asset turnover has shown some growth except a fall in 2006 followed by a steady recovery. Therefore the use of assets has not been inefficient and we may say that operating efficiency and financial leverage is responsible for this low return. Some components have been showing steady improvement and so are the values of ROE overtime. Therefore the position of the firm with respect to financial leverage, operating efficiency and asset utility has improved overtime.

Therefore the operating efficiency is low and declining and this is influencing the value of ROE. More or less we find that the operating efficiency is responsible for the fluctuations of returns, which shows steady progress. Therefore, improvements and innovations are sought on the technological side for Ford Motors in order to catch up with the competitors and the showing its versatility and ability to reach consumers at all levels. They should try grow its geographical and brands coverage, bring in an environment friendly technology or bringing in Green cars or cars run by alternate energy sources other than oil, research and development oriented towards environmental sustainability would be a profitable area to invest or and thus catch up with the challenges faced by the industry today.

References

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