sullivan ford

8/3/2019 Sullivan Ford

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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.doc


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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.