Car Wash Services: A Lucrative Business Opportunity

The assignment content discusses the idea of Dars Ltd, a car wash service provider that offers unique services to maintain cars in good condition. The business idea is justified and feasible, with opportunities for growth and development. The company can provide special services for luxury car owners, including pick-up and drop-off services from customers' homes. Additionally, customers can make online payments. The UK automotive industry has favorable conditions for the project, making it a viable investment opportunity.

Business Skills

TABLE OF CONTENTS
TASK 1 AND 2 (BRIEFING PAPER)............................................................................................1
1.1 Introduction............................................................................................................................1
1.2 Evaluating current trends in market.......................................................................................1
1.3 SWOT analysis......................................................................................................................3
2.1 PESTEL Analysis..................................................................................................................4
2.2 Segmentation.........................................................................................................................6
2.3 Porter's 5 forces......................................................................................................................7
2.4 Conclusion and justification..................................................................................................9
References......................................................................................................................................11

TASK 1 AND 2 (BRIEFING PAPER)
TITLE – To open new business named Dars Ltd offering automotive and valet services
1.1 Introduction
The name of the business is Dars Ltd which is mainly engaged in the business of selling
commercial vehicles. These vehicles include cars and other machines under automotive sector.
Company offers high quality and superior vehicle products for the customers (Lewis Reynolds,
and Lancaster, 2007). The business has two subsidiary services also which includes automotive
repairing and valet services for its customers. Following business has been selected because
vehicles are the most essential thing for an individual in order to perform day to day operations.
Market research
The automobile industry is of dynamic nature. At constant intervals new types of things
and trends are being emerged. Among them the latest trend is car wash and valet services. These
things are mode of attraction for the car passengers. According to the market scanned it has been
identified that customers are quite fascinated about these kind of services. They prefer to use the
services because it offers them the chance to get their car clean in more effective manner.
Location: Rumford-London
Reason for selecting location: UK automotive industry is producing effective results.
Further in UK it has been seen that demand for repairing and valet services have risen
significantly. It is due to increase in the sale of the cars within UK automobile industry.
The major activities that will be commenced by business will be including car body and
mechanical repairs. Washing and polishing of cars along with tuning auto for used cars will be
done. Other than these service areas, the other major operations will be including selling of cars.
Mission of the company
The main aim of company with its mission is to provide excellent automotive care and
services to all of our customers irrespective of whether they need to buy used cars, require major
body work or get a simple wash and wax of their own cars.
Strong services for the customers who wants basic advice on car maintenance, information
about our services, discount offers on future repairs and maintenance and many other operations
related to automobile industry.
1

1.2 Evaluating current trends in market
The following trends are prevailing in the automotive industry Increasing fuel prices – As fuel prices are rising, there is a high concern for the
environment and due to which more energy efficient vehicles are increasing in demand. Weak spending capacity – People are holding their cars longer as they are tight on their
financial budget (Automotive Industry Analysis - Cost & Trends, 2015). Less preference to used cars – Growth in the used car sales are lower than the new car
sales High demand for auto repair and valet services – Auto repair will continue to play a big
role in the industry. There is a high demand for specialized parts and for repairing the
hybrid & electric cars. There is a very high demand for car wash services also. The fuel
stations are giving these services free for the customers in order to achieve competitive
advantages. Low availability for hybrid car repair shops – At present there is low supply of shops
which are capable of fixing hybrid cards.
Presenting facts and figures
2

The Global automotive industry consists of large network of companies which are focused
on manufacturing, developing, innovations, supplying, distributing etc. It is a very large scale to
handle and a leading driver of economic growth. From the above forecast it can be estimated that
the sales volume of the industry will go on higher level in the near future (Automotive Industry
Analysis - Cost & Trends, 2015). The volume of sales and value of manufacturing is increasing
significantly day by day. Hence from this trend it can be interpreted that the new business are
having great opportunities to achieve success. This is because if sales of commercial vehicles
will increase then demand for services like car wash and sales valet will also increase. People
will come to avail such kind of services in high number.
1.3 SWOT analysis
Strengths Weaknesses
 Three kinds of services that is car
sales, repair and valet will be done
 High competition is there in the market
because of excessive need and service
3
Illustration 1: Global Automotive Industry Forecast
(Source: Automotive Industry Analysis - Cost & Trends, 2015)

under single premises with complete
range of services from repairing to
wash, wax and polishing.
 Automated repairing facilities will be
provided using machines for better
results (Terano, Sasaki, Kunigami and
Yoshikawa, 2015)
 Skilled workforce is available with the
firm to manage technology and work
with greater efficiency.
 Cost effective for the customers as the
services will be provided at relatively
reasonable rates as compared to other
firms.
 The following services are extensive
in demand as maximum number of
people in the city owned personal
vehicle that require regular
maintenance (Abrams, 2003)
providers in similar industry.
 Lack of brand image because of a
newly establishing firm (Varadarajan,
2010)
 Lack of experience for the new
workers, hence they need training.
 Fewer number of outlets are available.
 Tough competition - Many other
popular automotive car repair and sales
business are operating (Wilson and
Gilligan, 2012)
 Uncertain market conditions – One
cannot predict about the market
conditions. The trends in the industry
are changing significantly.
Opportunities Threats
 Repair is useful regardless of age or
type of vehicle (Dibb and Simkin,
2013)
 Valet (car wash) servicing are
becoming highly popular
 Presence of high competition
 Inconsistency in quality
 Environment concern (Lewis
Reynolds, and Lancaster, 2007)
4

 Improving economic conditions
 High growth in the industry
 Changing consumer likes and dislikes
2.1 PESTEL Analysis
Political Change in government, may affect the functioning of new business if new
laws are passed. For example many environment safety laws can be passed
which will affect the buying of cars (The UK Automotive Industry and the
EU, 2015)
Economical Economic conditions in UK are improving however it is expected that history
of 2008 may not be repeated. Dars Ltd have to offer products are affordable
for the middle class consumers. From the past five years, UK have observed
the growth of 2.6% which shows increasing potential of people to buy
commercial vehicles (Automotive industry in the UK: investment
opportunities, 2015)
Social Among all the vehicles, commercial vehicles have become necessity for the
people in order to maintain appropriate status in the society. It has become the
trend and people have the buying capacity to get these kind of vehicles which
shows extensive market opportunities for automobile sector. People now a
days are preferring more energy saving cars (Mapping UK automotive, 2015).
The market movement from petrol to diesel also affects the behavior of the
consumers. Most of the consumers are around the age group of 30-45. A
decrease in the young population can be noticed which is affecting the sales of
the automobile industry.
Technological Automotive industry has a close connection with technology. Dars Ltd must
have to provide services which are techno-friendly and affordable for the
customers (Motor Industry Facts, 2015) In the new repair and sales valet
5

services, an element of technology can be added by taking the orders of the
customer through online. This will offer convenience for the people.
Environmental There is a great demand for electric cars in the market. Dars Ltd is required to
abide by such demand. Further Pollution is a great concern and this factor is
to be taken into consideration for the offering of eco-friendly services. The
location of the business should be in a place which is free from environmental
pollution (Automotive Industry Analysis - Cost & Trends, 2015).
Legal The green movement has influenced the industry as companies are focusing
their attention to produce more eco-friendly vehicles. Further the automobile
parts are to be genuine and authentic. The recent developments in the UK Law
are directives of total vehicle recycling and the improvements in the
pedestrian impact act. There are two committees for deciding the policies
which are Policy Co-ordination Committee and Transport Policy Working
Group and
From the stated factors, it has been observed that in past 3 years, the sales of cars has
found to be increasing. In relation to this observation, the PESTLE factors has played a
significant role. The sales growth with respect to economy is presented in the graph below:
6

2.2 Segmentation
The selection of an appropriate target market is essential for a business. The target market
for this new business is middle class customers who are capable of affording vehicles. This target
group has been selected because the vehicles of the company are specifically designed for middle
class consumers so that they can afford it. Further they are also offering services like automatic
repairing and valet (Allio and Randall, 2010). This will be added advantage for them and it will
attract them towards purchasing the product. However people of high income class can also buy
these services.
The services are segmented on the basis of demographic and geographic characteristics.
The business is mainly targeted at middle class consumers who can afford the services provided
by the company (Bangs, 2002). Moreover, the customers will be segmented by the type of cars
they are carrying irrespective of small hatchbacks to a luxury sedan or a heavy duty SUV's.
Along with this perspective, the geographic area will be considered as well. The company have
7

to open its outlets in the manner that it can cover the maximum market area of the city (Wilso
and Gilligan, 2012).
For the new car owners, they might not be using company garage repairs service, but they
will bring there to wash and valet services. The primary motive behind providing such services
to these customers is to promote regular use to wash and valet service that results to recurring
serving opportunities by the firm (Barringer, 2012). As soon as the warranty over cars for
services runs out, the objective of entity will be to sell excellent service at competitive price. On
the basis of geographic segmentation, it has been observed that US is the biggest market which is
followed by UK. In the initial stage, company is planning to cover the area of UK that has quite
large market for automobile sector. It can be presented with the help of graph shown below:
(Source: Motor Industry Facts 2015)
The new services is targeted at customers of all age groups. Discounts will be given to first
20 customers who will reserve their orders for repair and car wash. It is expected that this will
help in attracting the customers towards the services.
2.3 Porter's 5 forces
8
Illustration 1: Geographic segmentation

Figure 1: Porter Five Force
(Source: Dibb and Simkin, 2013)
In order to analyse the micro environment, the approach of Porter's 5 forces is effective
(Varadarajan, 2010). It has been applied which is as follows
Bargaining power
of buyer (HIGH)
Bargaining power of the buyers is high in the industry because customer
have the potential to buy the cars and other vehicles. The purchasing
power of the people have increased.
Bargaining power
of supplier (low)
The bargaining power of supplier is low because many companies are
operating in the industry (The UK Automotive Industry and the EU,
2015). Customers can change their view on buying the cars very
drastically as they have wide range of options in front of them.
9

Threat of substitute
(High)
There is high degree of threat from substitutes having similar products
because demand for this kind of business is rising significantly. The
demand is rising because number of car holders are also increasing
(Mapping UK automotive, 2015).
Threat of new
entrants (high)
There is very high degree of threat from new entrants because the industry
is highly competitive. There are no barriers to entry and exit for the
entrants.
Threat of rival
competitors (HIGH)
Threat of rival competitors is high because of the extreme level of
competition (Motor Industry Facts 2015). This type of business has been
introduced every time with new and fresh concepts. For example At petrol
stations services car wash are given for free for the customers
2.4 Conclusion and justification
From the following report, it has been concluded that car wash is the latest trend in the
automotive industry. In order to gain customers for the new business, Dars Ltd is required to
10
Figure 2 UK Car Manufacturing 1970 -2011 and forecast for 2016
(Source: Automotive Industry Analysis - Cost & Trends, 2015)

convert its strengths into its opportunities. It has been observed that car washes services are
becoming highly popular as people wants to hold their cars longer and desires to maintain their
cars in a good condition (Sahlman, 2008). Therefore Dars Ltd may include full service, exterior
or stationary automatic car washes into the business. The originally of the business is that it also
offers car wash services which is the USP (Unique selling point) of the new business. The
business idea is justified and it can be applied in the real business scenario. In order to provide
justification and feasibility of implementing the following business idea, there are special
services for all the luxury cars owners that proves our company to be special from others. It can
be concluded that new business has many opportunities. It is expected that this will aid them in
achieving growth and development for the Das Auto. Apart from that business conditions in UK
are favourable for the project.
Additional Services
 When it is summer and the external environment is hot, then in such conditions, we have
nice team members of girls washing the machines in wet t shirts to make our customers
feel delighted (Allio and Randall, 2010)
 They will be getting their cars at home as the servicing gets completed so that the clients
need not have to come to the workshop to pick their cars.
 Customer will be getting the facility of online payment In cases when the client is not
physically present, then the company's personnel will take the car of customer from their
home and after servicing, they will drop it back to its place and payment will be done
easily through online mode (Burlton, 2015).
11

References
Abrams, R., 2003. The Successful Business Plan: Secrets & Strategies. The planning Shop.
Allio, J. R. and Randall, M. R., 2010. Kiechel's history of corporate strategy. Strategy &
Leadership. 38(3). pp.29 – 34.
Automotive Industry Analysis - Cost & Trends, 2015. [online] Available at:
https://www.franchisehelp.com/industry-reports/automotive-franchise-industry-report//
[Accessed on 22nd July 2015].
Automotive industry in the UK: investment opportunities, 2015 [Online]. Available at:<
https://www.gov.uk/government/publications/automotive-industry-in-the-uk-investment-
opportunities/automotive-industry-in-the-uk-investment-opportunities>. [Accessed on 9th
December 2015].
Bangs, D., 2002. Business Planning Guide. Kaplan publishing.
Barringer, B., 2012. Entrepreneurship: Successfully Launching New Ventures. 2012.
Burlton, R. T., 2015. Delivering business strategy through process management. Handbook on
Business Process Management 2. Pp.45-78.
Cenere, P., Gill, R., Lawson, C. and Lewis, M., 2015. Communication Skills for Business
Professionals 7. Cambridge University Press.
Dibb, S. and Simkin, L., 2013. Market Segmentation Success: Making It Happen. Routledge
publishes.
Lewis Reynolds, P. and Lancaster, G., 2007. Predictive strategic marketing management
decisions in small firms: A possible Bayesian solution.Management decision. 45(6).
Pp.1038-1057.
Mapping UK automotive, 2015. [Online]. Available
at<http://www.automotivecouncil.co.uk/mapping-uk-automotive/>. [Accessed on 9th
December 2015].
Motor Industry Facts 2015. [Online]. Available
at<http://www.smmt.co.uk/wp-content/uploads/sites/2/100049_SMMT-Facts-Guide-
2015.pdf>. [Accessed on 9th December 2015].
Sahlman, W. A., 2008. How to write a great business plan. Harvard Business Press.
Terano, T., Sasaki, Y., Kunigami, M. and Yoshikawa, A., 2015. Persona Design Method for
12

Evaluating Business Skills. Journal on Innovation and Sustainability. RISUS ISSN 2179-
3565. 6(1). Pp.58-68.
The UK Automotive Industry and the EU, 2015. [Pdf] Available at:
<https://www.kpmg.com/UK/en/IssuesAndInsights/ArticlesPublications/Documents/
PDF/Market%20Sector/Automotive/uk-automotive-industry-and-the-eu.pdf//> [Accessed
on 9th December 2015].
Varadarajan, R., 2010. Strategic marketing and marketing strategy: domain, definition,
fundamental issues and foundational premises. Journal of the Academy of Marketing
Science. 38(2). Pp.119-140.
Wilson, R. M. and Gilligan, C. 2012. Strategic marketing management. Routledge.
13