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Sullivans
Auto World
Presenter:
Dawn Birch
September 2005
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Session overview
Case background
Major issues
Situation analysis
Alternative strategies
Recommendations Implementation plan
Conclusion
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The company
car dealership
new and used cars
sales and servicedepartments
medium-sized
family-owned
sales volume
1100 cars p.a.
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Current situation owner (Walt) has died
suddenly
family not interested in the
business daughter (Carol - Health
Care Manager) istemporary GM
2 weeks more leave
concerned aboutperformance of SAW
wondering what to do
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Nature of the service
possession processing
tangible actions to peoples possessions
medium level of contact
people enter the service department to discussservice requirements
medium-high level of customisation andjudgement
continuous service but no formalmembership
fluctuating and random demand
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Case Issues
What should Carol dowith SAW now thatWalt has died?
Carol is not interestedin managing thebusiness but wants thebusiness to succeed
Potential sale price islow due in part to thepoor performance ofservice department
RIP
Walt
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How can the performance andservice quality of the servicedivision be improved?
service revenues are belowindustry average and declining
customers overall level of
satisfaction with service is low
high staff turnover sales staff reluctant to introduce
customers to the servicedepartment.
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How can the firms deteriorating
financial situation be arrested?
deterioration over last 18 months
running at loss for last 6 months behind in mortgage payments
accounts payable risen sharply in last 6months
service revenues and new car sales
falling service revenues below industry average
profit margin being squeezed bypromotional expenses
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Major issue
What should Carol do
with SAW to ensure thesuccess and continuity ofthe business?
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Overview of situation analysis
Internal analysis
strengths
weaknesses
financial analysis market analysis
External analysis
opportunities
threats
Applying marketing theory
Summarising the analysis
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Strengths
human resources
technically skilled and
competent staff (high) above average rating of the
sales staff performance(medium)
Carols experience,
knowledge, and expertise(medium)
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Strengths cont.. physical resources
modern and well maintained equipment(high)
attractive showroom (medium) favourable location (medium)
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Strengths cont...
current market position
well-known dealership (medium)
customer satisfaction with NEW cars isabove average (medium)
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Weaknesses
Human resources inappropriate attitude of
service staff (high)
service manager lacksinterpersonal skills (high)
problems with service writers(high)
high turnover of service staff(high)
loss of key person - Walt(medium)
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Weaknesses cont..
Financial situation
revenues are falling (high)
deteriorating (insurance and some funds)(medium)
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Weaknesses cont..
Physical resources
poor appearance ofservice department (high)
poor waiting area (high)
back stage is too visible(medium)
service facility is notvisible from highway(medium)
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Weaknesses cont.
Service processes and operations
service procedures not customer oriented(high)
inefficient recording and bookkeeping(high)
understaffed during peak periods (high)
business operating as two separate entities(high)
inconvenient service operating hours(medium)
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Market analysis
Customer perceptions of servicedepartment
high risk poor performance
poor experiences
Service is difficult to evaluate high in credence qualities
Repeat purchase is poor
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Customer surveys
30 day survey of new car buyers
above average rating onsatisfaction
90% of respondents were informedabout services
however, less that 33% introduced to
service department
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Customer surveys cont.
9 month survey of new car buyers
similar to national average on vehicle
ratings in lowest 25% of Ford dealerships on
overall satisfaction with service
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Customer surveys cont.
intention to use other service suppliers
For maintenance > 50%
For minor repairs > 50%
For major repairs > 30%
less likely to purchase again from SAW
than from other Ford dealers
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Service department rated poorly
on.
promptness of writing up orders
convenience of scheduling work
convenience of service hours appearance of service department
attitude of service department
politeness of service personnel understanding of customer problems
explanation of work performed
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Average ratings on
length of time to complete work
availability of parts
quality of work
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Opportunities
Penetrate current markets
car repair and maintenance
extend hours of operation provide a drop off/pick up service
auctions
Develop new markets body shop
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Change of management new staff initiatives
introduce a service culture
internal marketing/trainingprograms
Adopt advanced technology computerisation
improve service delivery
reduce level of customercontact
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Threats
Economy
high interest rates
downturn in regional economy
poor industry forecast
Competition
survey revealed that customers are likelyto switch
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Services marketing system
back stage is too visible
need to manage the physical evidence
front stage is shabby
need to manage the service encounter
computerise the service writing process
manage the moments of truth
establish an effective service recoveryprogram
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The service marketing system for SAWService delivery system
Service operations system
Servicerepairs
TheCustomer
Waiting area
Equipment
Servicewriters
Other customers
Othercustomers
Other contact points
Advertising
Promotions
Billing/statements
Phone calls
Random exposure tofacilities/equipment
Chance encounters withservice personnel
Word of mouth
Backstage(invisible)
Front stage
(visible)
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Flowcharting the customer
experience Refer to flowchart
Does each step represent value for the
customer? Can service quality be improved at any
step?
Can any steps be removed or sped up? Where are the bottle necks and failure
points?
http://../My%20Documents/WINWORD/2012/2012%20-%2003/Case%20work/sullflow.dochttp://../My%20Documents/WINWORD/2012/2012%20-%2003/Case%20work/sullflow.doc8/3/2019 Sullivan Ford
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Summary of situation analysis
Major strengths technical skills
Major weaknesses service delivery system
Opportunities
improve service quality through internalmarketing/training and using advancedtechnology
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Alternative strategies
Sell now at poor price
Improve the servicedepartment and then
sell in 1-2 years Appoint Larry Winters
as Manager to
improve servicedepartment.
What
should I
do?
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Evaluation criteria
customer satisfaction
service quality
customer loyalty
employee satisfaction
family
revenues
cost refer to handout of
scoring model
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Recommended strategy
Appoint Larry Winters as Managerand improve the servicedepartment develop a client-focussed service
department
computerise client records and
service writing train staff in service skills
extend hours of operation
refurbish the service department
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Justification of recommended
strategy This strategy will facilitate the survival
and success of the business without
Carol needing to be too involved. If an external consultant could be hired
to assist Larry to improve the service
delivery system Refer to handout of implementation plan
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Conclusion
What can Carol do to ensure thecontinuity and success of SAW?
Business success relies upon theimprovement of the service deliverysystem
Larry Winters can manage the changeprocess.
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