Sales Auto Repair Shop Competitive Analysis

Challenges facing the industry

Sales Auto is a desire that I have had for a very long time since I began my career as an auto mechanic. With this company, it will be easier to offer better services to all clients exceeding what my competitors will have to offer. The company will be located in Seattle and will contain a three- bay garage, storage for tools, parts and an office space. With the company, clients will be able to meet their auto servicing needs such as wheel alignment and transmission (Drucker, 2014).

According to Schaper, (2014), starting up an auto repair shop is very challenging in the current world. Any company that does not offer quality services, overcharges the customer, or does not seem to care about the customers is doomed to fail. With technological advancements, small companies face a big problem of incorporating IT in their auto repair shops. The cost of setting up an IT system is very high especially for small startups like Sales Auto Repair. It is also difficult to look for well-trained technicians as they seek high salaries. The existence of substitutes such as do it yourself work makes this industry very competitive. To solve these problems, it is important to ensure that a strong bond with the customers is developed. This will increase the level of trust while also attracting new customers. With the technological advancements, it is important to invest the necessary capital that will make it easy to incorporate the necessary IT tools. A Good investment is also necessary in getting qualified personnel that will work effectively (Crawford, 2014).

Having a qualified team of professionals makes it easy to run the company without facing any problems. The company will hire one expert in the IT field and two supporting workers before the shop develops into a bigger company. With an increase in the services offered, more team members that will ease the operation will be hired.

	Pacific Rim Automotive	Matt’s Greenwood Auto Care. Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	Foreign Car Workshop
SUMMARY	This is an import locomotive repair company located in Seattle. They mainly deal with the repair of Japanese and European car models and are a big threat in the industry.	This company mainly deals with the retail sale of automotive parts, automobile maintenance, and installing parts in the vehicles. It is located in Seattle but does not pose a great threat as it was started recently.	This is the main threat to the market base as they are a multinational company operating on a large scale basis. Has an electronic work order system that provides the history of each vehicle that is serviced and issue customers with a well-explained document.
TARGET CUSTOMERS	Japanese and European car owners.	Owners of all car models	Owners of all car models
PRODUCT OR SERVICE PRICING	Loan cars- $105 Wheel alignment- $25 Vehicle Electrical Repair-$40 Engine re-builds-$150 Suspensions-$60	Loan cars- N/A Wheel alignment-$20 Vehicle Electrical Repair-$35 Engine re-builds-$120 Suspensions-$40	Loan cars- $105 Wheel alignment-$35 Vehicle Electrical Repair-$50 Engine re-builds-$160 Suspensions-$75
GENERAL MARKETING STRATEGY	Makes use of direct sales staff to attract more customers.	Link with a few tor trucks company makes it easy for them to connect with the customers.	Offer unlimited shuttle services to all the customers.
ONLINE MARKETING STRATEGY	Facebook ads and twitter handle pages.	Facebook ads	Facebook ads and the company’s website.
STRENGTHS	Have over 20 cars that they loan out to their customers as they finish the repairs. They also offer free car hand wash and vacuum making them a force to reckon with.	well trained staff	Has a large bay area that makes it easier for them to work on a number of cars at a go. Use electronic parts catalogs and electronic commercials invoicing systems to offer commercial parts delivery. Offer both auto repair services and auto parts inventories.
WEAKNESSES	Loan out the cars at a very high price ($105).	The staff is not permanently employed by the company.	Generally high prices for spare parts. Tires cost $75
COMPETITIVE ADVANTAGE	Sales Auto Repair shop will loan the cars for free.	Long term contracts to members of staff to prevent vacancies.	Low prices for products of the same quality. Tires cost $55.

 To compete with the smaller and larger companies, Sale Auto Shop needs to come up with a better strategy that will enable it to stand out from the rest of the shops.

In order to compete at the same level with other companies, both small or large, Sales Auto Company has put a number of strategies that will enable us differentiate from our competitors. The company has also incorporated some strategies that have made companies in the industry to blossom.

Factor	Sales Auto Shop	Pacific Rim Automotive	Matt’s Greenwood Auto Care	Foreign Car Workshop
Personnel	Will only hire specially trained personnel who can effectively run the shop. The personnel will treat all the customers with respect and ensure that all their needs are properly met. With a trained staff, it will be easier to figure out all the problems facing the clients visiting the shop.	Have well trained personnel who have experience in the field.	Source the staff from local colleges and universities.	Have staff from overseas and offer the best services.
Training of Operators	Yes	No	No	Yes
Technological systems	Sales Auto will make use of point-of sale systems in our stores just like our competitors. With these systems, it will be easy to gather all the sales and gross profit data. To achieve this we will keep a unit of stock from every store on a daily basis.	Just installed the point of sales system and are still experimenting with it.	Does not have a point of sale system.	Has a well set up point of sale system in place.
Shuttle Services	Yes	Yes	No	Yes
Prices	The shop will offer services and spare parts at a very pocket friendly price.	They offer quite cheap services.	Ranked second in prices.	Charge high prices that are way beyond what normal citizen can pay.

Strategies to overcome challenges

The insurance companies cover all the damages to the property and premises but the vehicles of the customers are not included. When a customers’ car is under our car, it is the responsibility of the shop to protect it from any damage or vandalism. This very big risk will face the company. A garage keeper’s liabilities insurance is the best way to go. This insurance policy will take care of any damage or loss of the customer’s car. By having the best insurance that protects the company from risks, it will be easier to focus on other important things (Hvide, 2014).

The market is a very important part for the continuous growth of Sales Auto Company. All risks that may lead to the loss of a market base should be strictly avoided. Supplying customers with fake spare parts is a very big risk that discourages them from visiting the shop. This will also lead to court cases that may prove to be very expensive for the shop to handle. All suppliers settled on will have to undergo vetting so that they provide products that are of good quality. This will make sure that they only supply the best products to the shop on a regular basis. With good products sold to the customers, the reputation of the shop is not tarnished, as the customers will be fully satisfied with what we have to offer (Amit, 2012).

Sales Auto Repair Shop will raise 80% of its capital and the remaining 20% will be from a bank loan.  A starting capital of $22,900 will be enough to fully operate the shop until it starts getting profits.

The revenue projection for the 3 year plan will comprise of an increase of 5% in each year. Sales Auto cost of sales is 56% of the gross revenue in the first year and dropping to 53% in the second and third year. The expenses incurred in the marketing strategies such as advertising and sales of the shop will make up 11% of our net income. Our net income has been projected to increase from $15,900 to $ 20,330 in the first year and from $20,330 to $ 35,000 in the second year.

Sales Auto assumes that the growth that is planned in the first year will require more capital to employ additional staff who will support the growth of the sales. In the second year, the cash requirements will be reduced since the startup will have greatly benefited from the profits in the first year. In order for smooth operation, Sales Auto will support all the cash needs through credits from the bank.

Competitive Matrix

An auto repair shop uses many chemicals that may end up burning the mechanics or causing health problems to them. To avoid incurring compensation costs, all workers requirements are in place and the appropriate working tools given to them. The working tools and equipment are supposed to protect the workers from battery acids, coatings, and antifreeze. All the employees that will be working around chemicals will be given long sleeves, gloves, masks, and eyewear that protect the eye. The shop will also be well ventilated to prevent any congestion of fumes that may end up harming the employees or customers that visit the shop (Herves, 2014).The shop will also ensure that there is a chemical safety policy that all workers in the shop are required to follow. 

All workers in the shop should be protected from objects that fall. The objects, equipment, or materials that fall make up nearly half of injuries that may occur to a worker or a customer. This injuries can either be very fatal or a minor injury. Regardless of the effect, it is important to ensure the safety of everyone. This risk is however ranked as a low since the necessary precautions have been put in place. To prevent this risk, no customer will be allowed to access the working area of the shop. All employees will also be given enough training on how to use the tools and equipment.

References

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