Sullivan Ford Auto World Case Analysis

Read the case analysis of Sullivan Ford Auto World and find out about the company details, industry information, symptoms and problems, SWOT analysis, alternatives, execution plan, and recommendations.

Running head: SULLIVAN FORD AUTO WORLD CASE ANALYSIS
Case Analysis
Sullivan Ford Auto World
23/7/2018
Baltazar, Celine G.
Borromeo, Lorna Mae A.
Gador, Hannah L.
Garcia, Rhodalyn Q.
Nuguit, Marcella Marie D.
Uy, Treasure R.
Case Analysis of Sullivan Ford Auto World

Case Analysis of Sullivan Ford Auto World
The Company Details
• Bought by Walter Sullivan in 1983
• Currently located at a metropolitan junction
• The 30 –year old structure was extensively refurbished
• Walter Sullivan was well known in the society for attending functions
• Has both front-end and back-end processes
• The sales department is made up of sales and office managers, secretary personnel and seven
salespersons.
• The back-end is made up of service executive personnel, parts supervisor, two service writers
and nine mechanics.
• Deals in both used and new cars
• Also bought and sold of cars from auctions
• Uses a third party and body shop for restitution of old vehicles
Information of the Industry
• It was a famous showroom in the city
• Annual sales of 1,100 (New & Used cars) cars
• Managed $26.6 M from all types of cars and $2.9 M from service parts
• 4.6 & 24 % margin on selling of cars

Case Analysis of Sullivan Ford Auto World
The symptoms and problems facing the automobile company
The symptoms
I. The firm being in the red for the year’s 1st half and its financial situation had been
worsening for the previous 18 months
II. Decreasing service revenues and car sales together with the company’s predictions
Industry future car sales looking unrelenting,
III. The business’s insufficient gross margins of 4. 6% and 24% for car sale and services,
respectively during the past one year, could not satisfy the dealership’s fixed expenses as well as
being insatiable for contribution margins.
IV. Substantially, lower new car sales margin than those already used ones together with the
shift of selling gross mix from sales to service
The problems
I. Low level of customer satisfaction, which was posted at, below 25% of all Ford dealerships.
II. Poor Service ratings ranging from, service hours, service department appearance and work
schedule convenience.
III. Average score concerning service motivation, quality of work and availability of parts.

Case Analysis of Sullivan Ford Auto World
IV. the service department Poor rating feedback regarding work description, politeness as well
as an understanding of problems
V. a high number of customers stating their dissatisfaction and saying they could use other
similar companies for their repairs

Case Analysis of Sullivan Ford Auto World
SWOT Analysis
Strengths Weaknesses Threats Opportunities
Strategic location, at
the city’s busy
junction
Unstable financial
position
The possibility of
closing down the
business if poor
performance
continues
Fair satisfaction of
clients due to service
immediacy
The owner, Walter
Sullivan was well
known even in the
community functions
Nonstandard
contribution margins
of 25%
The threat of losing
customer loyalty if
they go to other
similar shops
Higher sales margin
for second hand cars
as compared to new
cars can be exploited
There is higher
contribution margins
for services as
compared to sales
from cars
There is also high
workforce turnover
Customer
dissatisfaction
The change of gross
mix from sales to
services
The new machinery
and extensive space
for clients
The aspect of Poor
service
Low business growth
forecast

Case Analysis of Sullivan Ford Auto World
The business is wide
ranged, including
sales of both old and
new cars
Absence of automated
customer connection
in the department of
service
The company enjoys
leadership of new
customers
Poor perception of the
service department as
just being
supplementary section
to the business
What Needs To Be Resolved
There is a need for enhancement and expansion of the service repairs so that customers don’t go away
to look for services elsewhere
Concerning the stocks, new cars’ inventory could be lowered by concentrating on other transaction’s
promotions
For customer service and performance of the service department to be improved, there’s need to
establish staff motivation at that department
The service department could also be automated to enhance efficacy and effectiveness of services
offered to clients
In addition, refurbishment of the service department to modern and classic styles needs to be resolved
for customers to feel that the environment gives them the value for their money.

Case Analysis of Sullivan Ford Auto World
Making service department visible to the clients will also create awareness amongst the customers who
might visit the business without realizing the service department, which is a back-end, exists
The general customer services need to improve
A service manager together with interpersonally connected service team should be resolved also.
Alternatives
Selling the firm to Mr. Froelich This means that Bill takes the company at the low
that he price specifies due to the desperate
condition of the firm.
Turning around the company’s
performance in a period of 1-2 years
The family still is in control of the business and
runs everything under the family’s business name
but having new systems in place that ensures
performance for the business
Retaining the business until its performance picks
then selling it to Bill
This means that as long as the business is
performing, it will be having high returns hence
attractive to many buyers. This will make it easier
to sell the business at a higher price
Evaluation of the Alternatives
Alternative Pros Cons
Selling the firm to Bill Relieve the family of obligations
and headaches of having to
come up with comprehensive
Only leave the family with
$250000

Case Analysis of Sullivan Ford Auto World
means of returning to glorious
days
The risk of further losses from
the family and Carol will also
have been taken care of.
It is too low in relation to the
standard goodwill of $1,200 per
car
Turning around the
company’s performance
in a period of 1-2 years
A successful roll out of plans will
lead to better values for the firm
The business can then be sold at
a higher price to Bill
Successful achievements could
also mean enough returns for
the business’s retention and
even hiring of competent and
skilled personnel to take the
business to the next level.
It’s an extensive and tedious task
for both Carol and the family
It will also require additional
funding which means more
costs, which could backfire in the
end and causes losses to the
company.
Retaining the business until its
performance picks then selling it
to Bill
Blocks chances of any losses due
to rushed decisions
Would be beneficial in the long
run
There is is very high chances of
failure, which could lead to
losses and other damages.
Alternatives Relevant to Opportunities
Introduction of new culture and remembering that service industry remains crucial department of the
organization.

Case Analysis of Sullivan Ford Auto World
For improved customer service and network, establish staff motivation plan for the service department.
Service automation as well as refurbishment of the service area as an opportunity alternative
The Execution Plan
Functions Responsibility Timeframe Resources
Looking for a famous
Public Relation to
handle diverse
programs
The marketing
research department
1-3 months $10,000
Identification of
various promotions to
lure clients
The department of
marketing
2-3 months $15,000
Hiring of competent
and experienced
services management
The HRM department
1-4 months $5,000

Case Analysis of Sullivan Ford Auto World
employees
Hiring a skillful and
knowledgeable
business partner
the HRM department
1-2months $4,000
quality management
enhancement for
reliability of products
Operations
Department 1-4 months $6,000
The Recommendation and Rationale
Service outlook renovation The service scene requires a re-
engineering , which could to create the
desired impression not only to the
workforce but also to the clients . the

Case Analysis of Sullivan Ford Auto World
advantage of this activity is that it will
improve service quality as well as the
morale of the workforce and hence
boost performance. The disadvantage of
this recommendation is that it will require
an extra investment.
client network improvement Here automated customer service connectivity
will ensure quick and effective feedback and a
happy customer. The advantage of this is that
there be enhanced customer service then higher
customer influx and eventually best returns.
Automation comes with cost of equipment
installation, hiring personnel, which means an
extra coin.
Improvement of staff motivation Staff morale can only be improved through
incentives and good working conditions, which
goes to all employees. Leads to better
performance
Dealers’ services enhancement Improving the dealers’ services means they
will be satisfied and remain in the business.
Increase investment in service department
since customers are inclined in buying used
cars.
Increasing personnel and equipment in the
service repair will mean efficient services to
the customers thus creating the customer

Case Analysis of Sullivan Ford Auto World
loyalty; this will in return be transformed into
business loyalty. The benefit of this is that it
will ensure happy and satisfied clients. The
disadvantage is that it might lower business
profits since new cars have high returns
comparatively.
Establish complain handling and delivery of
service
To ensure customers are taken care of and
faster problem solving process
Employee training Especially the service connected ones on how
to treat and handle customers

Case Analysis of Sullivan Ford Auto World
References
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Case Analysis of Sullivan Ford Auto World