ACKNOWLEDGEMENT

We first of all thank ALLAH Almighty, The Greatest, for the strength and skills he instilled in us which enabled us to carry out this mammoth project in due time.

Secondly we would like to acknowledge the guidance and confidence provided by our lecturer Mr. ARIF VASEER.

Thirdly we acknowledge the support and encouragement from our parents and friends, whose support and prayers gave us energy to complete this project within time.

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Dedication

We dedicate this project to MR.ARIF VASEER, our inspiration and to our parents and all those who supported us in any way to carry out this project

Table of contents

Executive summary___________________________________________________ 5Introduction_________________________________________________________ 6 Introduction of the project____________________________________________ 7

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Cactus Car wash___________________________________________________ 7 Objectives___________________________________________________________7 Customer Analysis__________________________________________________ 8 Major Segments__________________________________________________ 10 Demographic Segmentation___________________________________________10 Economical Factors_______________________________________________ 10 Technological factors_______________________________________________ 11 Political Factors__________________________________________________ 12 Ethical/Legal Factors_______________________________________________ 12 Social/Cultural factors______________________________________________ 13 Motivation and Unmet Needs_________________________________________ 13Competitor analysis__________________________________________________ 14 Existing and Potential competitors_____________________________________ 15 Growth trend______________________________________________________ 15 Market and sub Market Analysis________________________________________17 Attractiveness of the Market___________________________________________18 Market Size______________________________________________________ 19 Market trends____________________________________________________ 19 Market Growth Rate_______________________________________________ 19 Market Segments_________________________________________________ 20 Market Profitability________________________________________________ 20 Industry Cost Structure______________________________________________ 20 Success Factors___________________________________________________ 21 Environmental Analysis______________________________________________22 Environmental trends in Pakistan_____________________________________ 23 Current Issues in Pakistan____________________________________________23 Pollution_________________________________________________________ 23 Environmental threats to Cactus car wash in Pakistan______________________ 24 Major Strategic Uncertainties_________________________________________ 24 Contingent plan For Environmental issue in Pakistan_____________________ 25Internal Analysis___________________________________________________ 26 Tunnel equipment__________________________________________________27 Starting a car wash__________________________________________________28

Strategy Development ______________________________________________ 31 Strategy Competitive Advantage_____________________________________ 32 Core competence__________________________________________________ 32 Distinctive competency_____________________________________________ 32 Value Proposition_________________________________________________ 32Porter’s Five Forces_________________________________________________ 33

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Porter’s Five Forces Overviews_______________________________________ 34 The Threat of the Entry of New Competitors____________________________ 34 The Intensity of competitive Rivalry __________________________________ 34 Threat of substitute Services_________________________________________ 35 The Bargaining Power of customer___________________________________ 35 Bargaining Power of Suppliers______________________________________ 35Value Chain Analysis_______________________________________________ 36 Primary Activity_________________________________________________ 37 Supply Chain Management__________________________________________ 37 Support Activity_________________________________________________ 37 Systems Development_____________________________________________ 38 Human Resource Management and General Administration______________ 38Blue Ocean Strategy_____________________________________________39

Executive Summary

We are group of three entrepreneurs with belonging to different backgrounds. Our study

focuses on lunching an American firm cactus car wash in Pakistan. we have chosen the

automatic car washing industry. As it is well known that people meet their car washed

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quickly and efficiently. yet the automatic car wash industry hardly exists. Other than at PSO

stations in Karachi know such outlets give this service other than Karachi this is the report

based on the required criteria and have included different strategies that we have adopted

to launch cactus automatic car wash in Pakistan .

CHAPTER 1:

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Introduction

INTRODUCTION OF THE PROJECT

CACTUS AUTOMATIC CAR WASH:-

In 1996, Frank Lynch built the first Cactus Car Wash in Charleston, South Carolina with a

simple goal: provide an outstanding car wash experience. At Cactus Car Wash, the

customers relax in a comfortable lounge while the high-tech equipment and highly trained

staff clean their cars quickly and thoroughly. Wax and detailing services satisfy the most

ardent car-lovers. Before long, Cactus Car Wash became one of the most successful car

washes in America.

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Cactus expanded into the heart of Atlanta in 1998. Once again, Cactus set new standards

in customer care, quality and service at the Midtown location. This facility is the busiest car

wash in the United States.

Today, Cactus Car Wash has seven highly successful locations in Florida, Georgia and

South Carolina. The facility, in the exclusive Buckhead neighborhood of Atlanta, opened in

fall of 2003 and was one of five businesses named "Business of the Year" by the Atlanta-

Journal Constitution, the Buckhead Business Association and the City of Atlanta Mayors

office for 2004

OBJECTIVES:

The objectives of cactus car wash are:-

To provide quick car wash

Lead in the industry of car washing

Cater the segment of middle class.

Provide customer satisfaction

Attract and retain the potential customers

Provide the food which, is the requirement of the customers

Provide quick prepared cars in washed form to (working) people

Develop and differentiate the organization from others

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CHAPTER 2:

CUSTOMER ANALYSIS

8

CUSTOMER ANALYSIS:

Major Segments:-

DEMOGRAPHIC SEGMENTATION:

Market is divided into groups based on demographic attributes such as age, gender,

income, occupation, religion, race, nationality, social class, family size, family lifecycle etc.

these factors play an important role in market segmentation.

a) Age:

We will try to target and focus on each and every age group in the society.

b) Gender:

In case of gender we would try to focus equally on both males and females of the society

and similarly target them.

c) Household Size:

We would be introducing many family deals, and will try to focus the whole family and not a

single family member.

d) Occupation:

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Working class like business men, bank employees, workers in different offices are

the prime focus of attention. Because they are usually in a hurry and want to have a car

wash before they go to their offices.

.

2: Economical factors:

The economic environment consists of all factors-such as salary levels, credit trends, and

pricing patterns-that affect consumer spending habits and purchasing power. Economic

factors also have an indirect affect because if there is inflation then sales and purchases

will be affected.

a) Income:

Income level is an important economical factor in determining which is our target market.

The target customers for the proposed business are the middle-income people. As the

trend of employment of women are increasing especially in middle class.

b) Consumption behavior:

We would have to estimate the consumption behavior of the people, their liking and

disliking and make decisions accordingly.

c) Payment Methods:

In payment method we will check the behavior of the people while making payments. It

checks whether they give it in the form of cash or plastic money. Our target customers will

be mostly paying in cash.

3) Technological factors:

a) Pace of change:

By pace of change we mean the rate at which technology is changing. Quick service to Quick service to

customers saves their time, which helps in capturing more customers. Latest machines arecustomers saves their time, which helps in capturing more customers. Latest machines are

needed to use to increase sales. It will lead to serve more customers in less time.needed to use to increase sales. It will lead to serve more customers in less time.

Technology affects us. World is using new technology to progress. So we will also require

new equipment in order to do our work effectively and accurately. As our competitors use

new and advanced technology then in order to compete with them and in order to overtake

them we will also require advanced technology.

44 ) POLITICAL FACTORS:) POLITICAL FACTORS:

Following are the factors involved in the political factors.Following are the factors involved in the political factors.

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a) Government Policies:a) Government Policies:

We would have to obey the policies of the Government as prescribed by the governmentWe would have to obey the policies of the Government as prescribed by the government

for running fast food business.for running fast food business.

b) Price Policies:b) Price Policies:

Price policy is also an important factor. We will try to maintain and design our price policiesPrice policy is also an important factor. We will try to maintain and design our price policies

keeping in view the income & income distribution of the people living in Rawalpindi andkeeping in view the income & income distribution of the people living in Rawalpindi and

Islamabad.Islamabad.

C) Political Stability:C) Political Stability:

If we want to become the leader in the fast food business in Pakistan, then political stabilityIf we want to become the leader in the fast food business in Pakistan, then political stability

is very important. Therefore in this context political stability is also very important.is very important. Therefore in this context political stability is also very important.

5 5 ETHICAL/LEGAL FACTORSETHICAL/LEGAL FACTORS::

Following are the important factors which are included in the ethical/legal factors:Following are the important factors which are included in the ethical/legal factors:

a) Business Law:a) Business Law:

Just like the Government Policies the business units which are working in Pakistan alsoJust like the Government Policies the business units which are working in Pakistan also

regulate the law regarding the nature of regulate the law regarding the nature of

Business. We will also fulfill this factor.Business. We will also fulfill this factor.

b) Social responsibilities & Ethics:b) Social responsibilities & Ethics:

Social responsibilities & Ethics are the important factors. We will try our level best to fulfillSocial responsibilities & Ethics are the important factors. We will try our level best to fulfill

this factor.this factor.

6: SOCIAL/CULTURAL FACTORS:

Social/cultural factors include the following factors:

a) Social Class:

The society has been divided into 3 classes higher, middle and lower. We have to targetThe society has been divided into 3 classes higher, middle and lower. We have to target

those markets which will increase our sales. those markets which will increase our sales. We will be targeting middle class.

b) Culture:

How will people perceive the product? As the continental food is mostly rejected by someHow will people perceive the product? As the continental food is mostly rejected by some

people and they are coming towards fast food.people and they are coming towards fast food.

c) Religion: c) Religion:

Religion of 99% people in Pakistan is Islamabad. Religion of 99% people in Pakistan is Islamabad.

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Motivation and Unmet Needs:-

Car owners are increasingly looking at professional car wash instead of amateur home

wash. A survey conducted in America shows a significant decline in car washing at home.

Less than 2% of car owners regularly wash cars at home. In Pakistan, the automatic car

washing industry is in its primitive stages. It is reasonably expected that the same decline in

home wash would ensue once the professionals take this service firmly in hands. The

division of labor and specialization in today’s world simply does not allow people to be

master of all trades. Though the unmet needs of Pakistani consumers have not properly

been realized by them, it is only a matter of time before this “lethargy” is overcome.

Furthermore the demographic trends and the accelerating rate of population growth

indicate that there will be sharp rise cars on Pakistani roads. Hence the need of car

washing is even greater. A minor point is that the landscape of Pakistan is largely dusty

and thus requires car owners to clean their automobiles more regularly. This is in sharp

contrast to rainy geographic areas of the world like England where there are more

opportunities for free “natural car washes”. To conclude it is high time to introduce the car

washing service industry in Pakistan.

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CHAPTER 3:

COMPETITOR ANALYSS

Existing And Potential Competitors:-

In Pakistan there is no automatic car washing industry as such. The existing competitors

therefore are of no real consequence. There is a more genuine threat of potential

competitors though, as other servie firms can easily substitute this industry, thus our

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company may lose sustainable competitive advantage. From the existing companies it is

expected that Toyoto Corolla and Honda service outlets would quickly update their service

equipment and would install automatic machinery as they have the financial resources and

reputation in Pakistan as a result of decade’s long commerce within this country. So we, as

Cactus Automatic Car Wash must keep a close eye on their activities and forestall their

strategic movesThe latest version of the value-added ‘automatic car wash’ namely  “Wash

Express” has been introduced at a limited number of retail outlets to provide a unique

experience in terms of a highly automated, state-of-the-art car wash facility at PSO stations

with an added dimension of flexibility, convenience and speed. Currently, there are three

‘Wash Express’ units at Karachi offering a high-tech car wash facility with various value

added features and special packages, an experience truly worthwhile! The Auto Car Wash

facility is being currently offered at PSO S/S3 (MG Motors), PSO S/S 25 (Ittehad) and PSO

S/S 23 (Defence). The first Wash Express plant which was installed at PSO S/S 25

(Ittehad) commenced from September 3, 2007, the objective of this project being to

enhance the ‘customer-expectation’ level, set new benchmarks and of course, above all, to

make one’s experience even more rewarding, the initial feedback being encouragingeactive

strategic moves.

Growth Trends

Many carwashes have seen their sales drop at least 50% during this global economic

recession. We also note that the car wash sales figures generally follow new car sales. This

is because people who buy new cars want them to look nice, and are willing to spend more

money to get their cars washed, and detailed. They are also willing to go with a more

deluxe wash, than just a regular wash.

We all know that car sales in late 2008 took a nosedive, and except for "the Cash for

Clunkers" program of 2009, new auto sales have not really recovered. Nevertheless, many

consumers who didn't buy a new car, but desperately need one will start to buy more new

cars when credit markets become unfrozen, and as more and more people get back to

work, and the money starts flowing at a higher rate in our economy.

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On the facility's front we know that many slated carwash building projects or renovations

have been put off, mostly due to financing issues, and the lack of consumer demand

justifying the return on investment.

Many of the wiser carwash owners who have multiple locations and are used to the

business cycles over the years have taken their cash and expanded their facilities during

this slow economic time any; knowing that they will need the additional capacity as the

market returns.

It has been an incredible hit to the manufacturers of carwash equipment during the

recession, and several have gone out of business or merged. There are not a lot of sales

going on right now, but we expect that to change in 2010, and things to return back to

normal for those that are still in the business. The decrease competition may also serve

them well, for sticking it out.

Obviously, with fewer cars being washed, chemical and soap sales have also taken a big

hit. Still, as that volume picks back up, as consumers are spending their money again, and

as the credit card companies losen their wallets, you can expect that the soap vendors of

the car wash industry will see sunny skies ahead.

One trend we also see continuing is the crack down on labor issues in California and

continued enforcement almost to the point of harassment of the industy. I hope you will

please consider all this and think about the 2010 Trends in the car washing industry.

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CHAPTER 4

MARKET/SUB MARKETANALYSIS

MARKET ANALYSIS

Attractiveness of the market

The is a great measure of profit possibilities that lie within the structure of this particular

industry or market. The different factors that contribute to market attractiveness include:

(1) Market factors such as growth rate and size of the market;

(2) Economic factors such as investment potential and industry saturation or rates of

inflation affecting consumers' purchasing power;

(3) Technological factors such as availability of raw materials;

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(4) Competitive factors including the types of rival business and the bargaining power of

suppliers; and

(5) Environmental factors such as the existing regulatory climate and the degree of social

acceptance for a product within a particular market.

The goal of a market analysis is to determine the attractiveness of a market, both now and

in the future. Organizations evaluate the future attractiveness of a market by gaining an

understanding of evolving opportunities and threats as they relate to that organization's

own strengths and weaknesses.

The result of our market analysis demonstrates that the car wash industry is not saturated

by any means in Pakistan. It is expected to grow in large cities on an even higher rate.

Elements

Market size

The most common measure of market size is the sum of the revenues of its participants.

The following are examples of information sources for determining market size:

Trade association data

Financial data from major players

Customer surveys

Market trends

Changes in the market are important because they often are the source of new

opportunities and threats. Moreover, they have the potential to dramatically affect the

market size. Examples include changes in economic, social, regulatory, legal, and political

conditions and in available technology, price sensitivity, demand for variety, and level of

emphasis on service and support.

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Market growth rate

A simple means of forecasting the market growth rate is to extrapolate historical data into

the future. While this method may provide a first-order estimate, it does not predict

important turning points. A better method is to study market trends and sales growth in

complementary products. Such drivers serve as leading indicators that are more accurate

than simply extrapolating historical data. Important inflection points in the market growth

rate sometimes can be predicted by constructing a product diffusion curve. The shape of

the curve can be estimated by studying the characteristics of the adoption rate of a similar

product in the past. Ultimately, many markets mature and decline. Some leading indicators

of a market's decline include market saturation, the emergence of substitute products,

and/or the absence of growth drivers.

Market segments

Markets are not uniform. Therefore it is also important for investors to identify and evaluate

the various segments that make up the total market. This analysis helps organizations

determine which areas account for the greatest share of the market's growth and are more

susceptible to change. This information, in turn, helps them pinpoint the most promising

opportunities within the overall market and guides the choice of specific investments.

Market profitability

While different organizations in a market will have different levels of profitability, they are all

similar to different market conditions. Michael Porter devised a useful framework for

evaluating the attractiveness of an industry or market. This framework, known as Porter's

five forces, identifies five factors that influence the market profitability:

Buyer power

Supplier power

Barriers to entry

Threat of substitute products

Rivalry among firms in the industry

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Industry cost structure

The cost structure is important for identifying key factors for success. To this end, Porter's

value chain model is useful for determining where value is added and for isolating the

costs.

The cost structure also is helpful for formulating strategies to develop a competitive

advantage. For example, in some environments the experience curve effect can be used to

develop a cost advantage over competitors.

Distribution channels

Examining the following aspects of the distribution system may help with a market analysis:

Existing distribution channels - can be described by how direct they are to the

customer.

Trends and emerging channels - new channels can offer the opportunity to develop

a competitive advantage.

Channel power structure - for example, in the case of a product having little brand

equity, retailers have negotiating power over manufacturers and can capture more

margin

Success factors

We have focused on the following key success factors in car wash industry:

Expertise in carwash technology

The scale economies will be maintained through high-tech plants installed at our outlets

We possess learning curve due to our previous experience in car wash.

High employment salaries will attract skilled labor Favorable locations such as blue area

and Jinnah Super will make us highly visible to customers The breadth of our service line

will include both automatic and manual car wash facilities for those who can’t afford

An American firm definitely carries a prestige brand name in itself

Our core competence is the economy of time consumption for customers as automatic car

wash will not take more than ten minutes whereas the normal procedure prevalent in

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Pakistan takes at least one hour

We focus on after sale service as much as before sale. Our clients shall be kept informed

of every new update pertaining to our new offers and we openly acknowledge the value of

customer feedback

Our customer service department will be highly competent and would place emphasis on

filling buying orders. After car wash our salesman will be advised to go to the door of

customers Much more advertisements by merging with Shell Any shortcomings in our car

wash will be immediately remedied by re washing the car a new Based in America we plan

to open franchises in Lahore and Islamabad The services we offer are highly differentiated

from those of our competitors We have already designed a user-friendly website We have

been patented by the Government of Pakistan

CHAPTER 5

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ENVIRONMENTAL ANALYSIS

Environmental Trends in Pakistan:-

Environmental issues in Pakistan threaten the population’s health and have been disturbing

the balance between economic development and environmental protection.

Current Issues in Pakistan:-

Water pollution from raw sewage, industrial wastes, and agricultural runoff; limited natural

fresh water resources; a majority of the population does not have access to potable water;

deforestation; soil erosion; desertification.

Pollution:-

As industry has expanded, factories have emitted more and more toxic effluents into the air

and water. The number of textile and food processing mills in rural Punjab has grown

greatly since the mid-1970s, resulting in pollution of its rivers and irrigation

canals. Groundwater quality throughout the country has also suffered from rapidly

increasing use of pesticides and fertilizers aimed at promoting more intensive cropping and

facilitating self-sufficiency in food production. Only just over half of urban residents have

access to sanitation, the remaining urban excreta are deposited on roadsides, into

waterways, or incorporated into solid waste. Additionally, only three major sewage

treatment plants exist in the country; two of them operate intermittently. Much of the

untreated sewage goes into irrigation systems, where the wastewater is reused, and into

21

streams and rivers, which become sewage carriers at low-flow periods. Consequently,

the vegetables grown from such wastewater have serious bacteriological

contamination. Gastroenteritis, widely considered in medical circles to be the leading cause

of death in Pakistan, is transmitted through waterborne pollutants.

Environmental threats To Cactus car wash In Pakistan:-

As noted above only 20 % of Pakistan’s water resources are properly purified and drinkable

water. We thus face a major threat in acquiring suitable resources of pure water.

Deforestation is another issue facing towards us in Pakistan to utilize the paper, tissue and

plastic box resources.

Major Strategic Uncertainties in Pakistan:-

The major strategic uncertainty in Pakistan is given below:

Natural disasters:- Pakistan is subject to frequent earthquakes which are often severe

(especially in north and west) and severe flooding along the Indus after heavy rains

(July and August). Landslides are common in the northern mountains.

Economic Effect:- The availability of natural resources is limited by the dry climate and

mountainous terrain, substantial population growth is increasing pressure on the

resource base, and resource management has suffered from the emphasis on rapid

economic growth and often-unregulated forms of economic productivity. Poor

agricultural practices have led to soil erosion, groundwater degradation, and other

problems that have hindered crop output and contributed to health problems for rural

22

communities. Solid waste burning, low-quality fuels, and the growing use of fuel-

inefficient motor vehicles have contributed to air pollution that in some cities such

as Karachi, Islamabad, Lahore, Peshawar, Quetta, Faisalabad and Rawalpindi has

exceeded levels deemed safe by the World Health Organization. And Pakistan is

suffering a lot from droughts from the dry climates.

Contingent Plans For Environmental issues in Pakistan:-

In order to sustain the above mentioned environmental issues Cactus car wash has three

explicit objectives:  conservation of natural resources, promotion of sustainable

development, and improvement of efficiency in the use and management of resources.

 The primary agricultural nonpoint source pollutants are nutrients (particularly nitrogen and

phosphorus), sediment, animal wastes, pesticides, and salts. Agricultural nonpoint sources

enter surface water through direct surface runoff  or through seepage to ground water that

discharges to a surface water outlet. Various farming activities result in the erosion of soil

particles. The sediment produced by erosion can damage fish habitat and wetlands and, in

addition, often transports excess agricultural chemicals resulting in contaminated runoff.

This runoff in turn affects changes to aquatic habitat such as temperature increases and

decreased oxygen. The most common sources of excess nutrients in surface water from

nonpoint sources are chemical fertilizers and manure from animal facilities. Such nutrients

cause eutrophication in surface water. Pesticides used for pest control in agricultural

operations can also contaminate surface as well as ground-water resources.  Special

attention has been paid to the potential roles of environmental NGOs, women's

organizations, and international NGOs in working with the government in its conservation

efforts.

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CHAPTER 6

INTERNAL ANALYSIS

24

Tunnel Equipment

Odyssey Express & Quicksilver Express Drive-thru Tunnels

The new Odyssey and Quicksilver Express drive-thru tunnels provide an economical

alternative to the conveyorized tunnel carwash model. As the name implies, these

"express" units feature the powerful "Odyssey" soft touch automatic and the smart

"Quicksilver" touchless automatic from D&S Car Wash Equipment Company. Both in-bay

automatics have demonstrated their earning power and reliability since their introduction to

the market in 2005 and 2007, respectively. The result of combining an in-bay automatic

with a tunnel concept (minus a conveyor) is up to 50% more throughput, thus greater

revenue.

Higher revenues can be attributed to a 25% price-per-car increase from the added features

of a drive-thru tunnel. Choose touchless or soft touch rollover technology to complement

the standard features that include: rinse, wax, and spot free arches, tire shiner, and stand-

alone dryers. Optional equipment to make the express units more efficient, visually

appealing and functional are: DSNet Site Management Software, rinse and dryer timers,

Intelligent Door Controller, a dryer appearance package, and pickup truck dryer cancel

sensor.

The new formula for car wash success is the Odyssey Express and Quicksilver Express

drive-thru tunnels. Maximum equipment options for maximum revenue!

25

Starting a Car Wash

So, car washing is right for you. Excellent! Follow this easy, step-by-step plan for starting

up a successful wash.

Step 1: Contact your D&S Distributor

Establishing contact with a professional car wash distributor is a good first step.

Step 2: Locate Property

Site If you don't already have a location in mind, don’t worry. We can help you choose the

best or evaluate your proposed location to make sure it is the best possible site for your

situation. A qualified commercial real estate agent may also point you in the right

direction. See the link in the sidebar for site analysis information.

Step 3: Decide on Equipment

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Now that you know how much land you have, it is time to determine the configuration of the

equipment. Your D&S distributor can recommend the right mix of equipment and services

that will help you maximize income potential.

Step 4: Financing

You should already have a pretty good idea of how much of an investment your project will

require. 

We can provide options on helping you secure the best possible loan rate, leasing options

or turn-key financing wrapped up in one financial plan.  See the link in the sidebar for

financing information.

Step 5: Site Planning & Building Design

Careful planning in designing an adequate building to suit your needs/desires and to

provide the highest return on investment should be the focus of your building

considerations. We can help you visualize what your site will look like and assist you in the

design of your lot, placement of the building and making sure you don't overlook important

factors that are critical to your success.  See the link in the sidebar for architectural

assistance.

Step 6: Construction

The pace of your project really picks up during the construction phase. You will need good

project management to keep on schedule. Your D&S distributor can help by recommending

a qualified local contractor and by providing support during this step.

Step 7: Installation, Training & Start-up

The building is up and the equipment is erected and ready to start-up. D&S factory-

authorized distributors are there with you every step of the way, during planning,

construction and start-up supervision. 

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Step 8: Grand Opening & Marketing

We are experienced car care professionals who know what services to offer and how to

successfully operate a self-service car wash. We offer total support to first time investors to

help them establish profitable locations.

Step 9: Ongoing Maintenance and Chemical Supplies

We are available to you for chemicals, replacement parts and ongoing service after the sale

to ensure your equipment is operating at optimum levels.

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CHAPTER 7

STRATEGY DEVELOPMENT

29

Strategic Competitive Advantage:-

Competitive advantage is defined as the strategic advantage one business

entity has over its rival entities within its competitive industry. Achieving Competitive

Advantage strengthens and positions a business better within the business environment.

Briefly in Cactus car wash our major assets include tunnel equipment, clean water, foam,

car washing machinery etc.

Core Competence:-

Our car washing company has a core competence in its superior financial resources.

We are already based in America and we compete globally so our financial base is strong.

We have been in this business for decades and have been fairly established in this

industry.

Distinctive Competency:-

Our distinctive competency lies in our automatic services. This reduces the time

consumption of our customers and employees. We our highly efficient in our services for

few rivals in Pakistan can compete with our superior services.

Value Proposition:-

A value proposition is an offer that describes the quantifiable benefits that

individuals or organizations making an offer promise to deliver. Its development is based on

a review and analysis of the benefits, costs and value that an organization can deliver to its

customers, prospective customers

As mentioned above we guarantee to provide internationally approved car wash.

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CHAPTER 8

PORTER FIVE FORCES

Porter’s Five Forces Overview:-

Porter's five forces is a framework for the industry analysis and business

strategy development formed by Michael E. Porter of Harvard Business

School in 1979. It draws upon Industrial Organization (IO) economics to derive

31

five forces that determine the competitive intensity and therefore

attractiveness of a market.

The five forces are:-

1. The threat of the entry of new competitors:-

Profitable markets that yield high returns will attract new firms. This result in many new

entrants, which eventually will decrease profitability for all firms in the industry for cactus

car wash there exists a threat of new entry as the car wash industry is growing rapidly and

there are many changes that new competitors shall come into existence.

2. The intensity of competitive rivalry:-

For Cactus car wash car wash the fiercest competitive force is exerted by the competing

sellers exactly as predicted by Strategic marketing text books. In our case PSO car wash

services and Toyota are the biggest competitors that may give us a tough time. We all are

engaged in attempting to have a better market position, increased sales and market share.

Further more the car wash industry is growing and in such cases the rivalry intensifies to

defend against competitors offensive moves.

3. The threat of substitute services:-

The threat of substitute products for Cactus car wash car wash

would be the manual way of car washing. There is no alarming situation but these are

located favorably and price less than ours. Another factor that increases the competition

that stems from the sellers substitute product is that buyer views these products as being

superior in terms of quality and cleanliness.

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4. The bargaining power of customers (buyers):-

The leverage maintained by customers in the car wash

industry is strong. The buyer demand for car wash is unending as the number of cars is

dramatically increasing and the sellers are scrambling to secure additional sales of their

products by lowering their prices. It is not worthy that buyers are welled informed about the

products that deal in cars and conscious about their prices and as strategic marketing

guides us that when one is dealing with informative buyers their bargaining power over

sellers increases. Therefore the buyers pose a credible threat of withdrawing their demands

from our industry. The competitive force exerted by buyers is considerable in our industry.

5. The bargaining power of suppliers:-

In our car wash industry the bargaining power created by suppliers

is minimul.The suppliers provide car wash establishments with items such as water,

soaping material etc there are many large suppliers that are in this business therefore no

single supplier can exert much pressure on sellers. Furthermore the supplies in need are

not in short supply which reduces the leverage held by suppliers over sellers. The car wash

industry members are miner customers of suppliers and therefore cannot be held at

ransom by the suppliers hence the supplier power over Cactus car wash is weak.

33

CHAPTER 11

VALUE CHAIN ANALYSIS

Value chain:-

A value chain is a chain of activities for a firm operating in a specific industry. The business

unit is the appropriate level for construction of a value chain, not the divisional level or

corporate level. Products pass through all activities of the chain in order, and at each

activity the product gains some value. The chain of activities gives the products more

added value than the sum of the independent activity's value.

The value chain includes two broad categories of activities:

Primary Activates

Support Activities

Primary Activities:-

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Supply Chain Management

Our cost includes the purchasing of fuel for delivery purposes and another

major cost is those related to the energy sector. The car washing equipment ix

imported from Germany and France.

Operations

Our activities include dusting the exterior to the vacuuming the internal car

seats. Large scale automobiles from trucks to small cars are included in our

operations..

Support Activities:-

Product R&D And Technology:-

We place a lot of emphasis on product innovation as we follow the highly

differentiated product strategy. We have acquired a joint alliance with Jim Coldman

company which deals in the equipment, washing ,dusting, foaming and dry cleaning

in car washing industry.

Systems Development:-

We have deployed oracle databases that monitor our day to day sales,

activities, returns, complaints, bills etc.

Human Resource Management And General Administration:-

Our recruitment process includes initial interviews, telephonic interviews,

written tests, panel interviews as according to their Job descriptions. Though we do

not our labor to be unionized or permit them to strike we follow a very stick ethical

code of conduct.Discrimnation, horsemint and abuse are strongly prohibited. Our

working conditions are genuinely safe and all our activities are reviewed, legalized

and approved by the appropriate regulatory authorities.

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BLUE OCEAN STRATEGY

Red Ocean And Blue Ocean Strategy:-

Red Oceans are all the industries in existence today—the known market space. In the red

oceans, industry boundaries are defined and accepted, and the competitive rules of the

game are known. Here companies try to outperform their rivals to grab a greater share of

product or service demand. As the market space gets crowded, prospects for profits and

growth are reduced. Products become commodities or niche, and cutthroat competition

turns the ocean bloody. Hence, the term red oceans.

Blue oceans, in contrast, denote all the industries not in existence today—the unknown

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market space, untainted by competition. In blue oceans, demand is created rather than

fought over. There is ample opportunity for growth that is both profitable and rapid. In blue

oceans, competition is irrelevant because the rules of the game are waiting to be set. Blue

ocean is an analogy to describe the wider, deeper potential of market space that is not yet

The corner-stone of Blue Ocean Strategy is 'Value Innovation'. A blue ocean is created

when a company achieves value innovation that creates value simultaneously for both the

buyer and the company. The innovation (in product, service, or delivery) must raise and

create value for the market, while simultaneously reducing or eliminating features or

services that are less valued by the current or future market.

Cactus car wash falls under the category of blue ocean strategy in Pakistan. As in Pakistan

there is no such competitive market for the car wash industry other then PSO and Toyota

car wash there are no other companies worthy of the name servicing in automatic car

wash. From trucks to small cars we are appealing to all segments of car owing society. Our

low cost gives an opportunity to various economic classes to get their car was efficiently

and quickly.

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