INF10003: Business Systems - Honest Jim Car Sales Analysis Report

This report provides a comprehensive analysis of Honest Jim Car Sales, a car dealership in Melbourne, Australia. It evaluates the company's current business model and proposes a shift to a franchise-based system to facilitate expansion and enhance brand value. The report includes a SWOT analysis, Porter's Five Forces analysis, and an examination of sales data to identify key business trends. Furthermore, it presents a mock-up design for a new company website to enable e-commerce capabilities. The analysis suggests that by embracing a franchise model and integrating e-commerce, Honest Jim Car Sales can overcome its current limitations, strengthen its market position, and achieve sustainable growth in the competitive automotive industry.

Running Head: INTRODUCTION TO BUSINESS SYSTEMS
Business Systems: Honest Jim Car Sales
Name of the Student
Name of the University

1INTRODUCTION TO BUSINESS SYSTEMS
Executive Summary
Car dealership is a popular business in Australia and Honest Jim Car Sales have made serious
progress in this business in Melbourne. However, with time, due to lack of technical upgrades,
the company is slowly starting to decline and as a result, the management team has decided to
make certain technical upgrades. As per their requirements, it has been proposed that they should
adopt franchise based business model that will allow them to expand over more parts in Australia
rather than just being limited to Melbourne. Furthermore, in this report, a mock up design has
provided for the proposed new website of the company that will enable them to enter ecommerce
market.

2INTRODUCTION TO BUSINESS SYSTEMS
Table of Contents
Introduction......................................................................................................................................3
Part A: Evaluation of the Business..................................................................................................4
Industry Background...................................................................................................................4
Business Model and Environment...............................................................................................5
Value Proposition........................................................................................................................5
SWOT Analysis and Discussion..................................................................................................6
Porter’s 5 Forces Analysis...........................................................................................................7
Table Creation and Discussion....................................................................................................9
Part B: Information Portal Design...................................................................................................9
Design Review and Justifications................................................................................................9
Page Designs..............................................................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................12
Appendices....................................................................................................................................15
Appendix 1: Spreadsheet...........................................................................................................15
Appendix 2: Mock Up Design...................................................................................................16

3INTRODUCTION TO BUSINESS SYSTEMS
Introduction
Honest Jim Cars is a company that deals with the retail sale of cars from different
manufacturers. Initially, the company only started out with a single car yard and limited variety
of cars. Due to serious competition in the market and lack of sufficient promotion and funding,
the company grew very slowly. However, after the initiatives taken by a well known loyal
customer, the company slowly gained popularity and started to grow quickly. Currently, the
company has three different car yards in Melbourne and is looking to spread over other states in
Australia. After the retirement of the initial ownership panel, the company is now run by their
sons who are now looking to make some significant changes in the overall operational policy of
the company. In addition to the physical retail stores, the company is now looking to enter e-
commerce, which is relatively new to car dealership. Furthermore, the current owners are now
looking to implement a suitable business model that will help the company to grow within a
particular framework.
In this report, an overall review process has been conducted on the industry, external and
internal environments of the company as well as the requirements set by the company owners.
Accordingly, a mock-up design has been developed for the proposed website for the company
and in addition, a spreadsheet has been created using the sales data generated by the company
that gives insight about the current business situation of the company.

4INTRODUCTION TO BUSINESS SYSTEMS
Part A: Evaluation of the Business
Industry Background
Motor vehicle dealership industry in Australia has always been highly popular although it
faced a sharp decline during the global financial crisis in the first decade of the 21st century.
However, after that period, the industry again stood up and started to grow. The demand for cars
increases as the number of student immigrants continue to increase in Australia (Bellini et al.
2017). Most of these immigrants seek to buy or rent cars as a medium for their transport. As per
an estimate, the revenue generated by the car dealership industry in 2017 is $63bn and the annual
growth is found to be 0.5%. Furthermore, the industry currently provides employment to more
than 67000 people in the country.
However, although the industry is stable and the demand continues grow, the competition
in the market is also very high. There are many large sized car dealers who dominate the industry
and are also being franchised. As a result, small and medium sized car dealers often find it hard
to get a significant place in the automobile dealership industry and it requires significant amount
of funds and promotion to get a hold on the industry (Artto et al. 2017). The two largest
companies in the industry are A P Eagers and Automotive Holdings Group who have significant
shares on the overall car dealership industry in Australia. In spite of the competition, many small
and medium car retails have grown up including Honest Jim, which is now looking to use a
suitable business model and ecommerce in order to get a strong hold on the local and regional
market in the country.

5INTRODUCTION TO BUSINESS SYSTEMS
Business Model and Environment
There are several business models that are suitable for the company. However, the best
business model that will help Honest Jim to grow in terms of size and revenue is franchise
model. The franchise model helps any business organization to build a suitable brand value that
attracts more customers than other organizations who do not have brand values. Furthermore,
with the franchise model, the company can open more retail chains in various parts of the
country and immediately gain success through brand value (Anwar and Zebari 2015). The target
audience for such business framework should be the upper middle class and higher category of
customers and the international immigrants who come to Australia for study and work. It is
easier to attract the foreign immigrants with a proper brand value that also has significant
international reach.
Value Proposition
In order to gain success in the proposed business system, the company must create a
suitable value proposition that will also be aligned to the business model. This is required in
order to attract more customers in their stores that not only generates revenue but also helps in
gaining competitive advantage over other organizations in the same business domain (Galiano,
Rodríguez and Saco 2018). In this particular case, the franchise business model is necessary and
for that purpose, the company needs to develop and upgrade its own brand value. The overall
need for the company is to first create a brand value by become a franchise by pulling all its
business components under one common identity and system.
In order to justify the value proposition, the company should open more retail chain
stores in various parts of the country and also integrate business in all the stores using a common
centralized server and a suitable ERP system (Kim and Talbott 2018). This will not only help the

6INTRODUCTION TO BUSINESS SYSTEMS
company to establish controlled approach to business but will also help them promote their brand
equally through the various retail chains.
SWOT Analysis and Discussion
Based on the study of the internal environment of the company, a SWOT analysis can be
conducted as follows.
Strength Weakness
i. The main strength of the company is
that it has gained a significant amount
of reputation through a well known
loyal customer.
ii. The company sells cars from excellent
and popular car makers.
iii. The company has three separate car
yards for retail sale.
i. The company does not have access to
sufficient information system and
information and communication
technology (ICT).
ii. The company lacks sufficient upgrades
to maintain competitive advantage in
the market.
iii. The company lacks sufficient technical
expertise to manage an upgraded
information system and ecommerce.
Opportunity Threat
i. The company has sufficient budget to
employ technically expert staff to bring
suitable changes to the current system.
ii. The company has a great opportunity to
develop a franchise and deploy brand
value system in the business plan.
i. Due to lack of technical upgrades, the
company is failing to cope with the
strong market competition against some
newly developed car dealer companies.
ii. Sudden increase in popularity of online
car sales means the company faces the

7INTRODUCTION TO BUSINESS SYSTEMS
threat of losing a strong customer base
unless it enters the online car sale
business as well.
From the analysis of the internal environment of the company, it can be seen that the
main issue associated with the business of the company lies in the lack of technical upgrades
over the years. The company continues to follow the same business model from the start that is
slowly starting to become obsolete (Ebben and Johnson 2015). Furthermore, the company lacks
suitable personnel in the management team who are technically strong and able to handle new
information system if it is implemented in the near future. However, with suitable budget for
development and employment of technical staff, the company will be able to solve the issues and
regain the control over the market.
Porter’s 5 Forces Analysis
The external environment of the company can be analyzed using Porter’s Five Forces as
follows.
Bargaining Power of Suppliers – For the case of Honest Jim, the bargaining power of
suppliers is medium due to a number of reasons. Firstly, there are already many alternative car
dealers available in the market and hence, even if Honest Jim refuses to pay the asking price to
the supplier (in this case, the car manufacturer), the supplier will be able sell the cars to some
other car dealers (González, Cárcaba and Ventura 2015). This problem increases the bargaining
power of the suppliers. Secondly, Honest Jim has sufficient popularity and with future
franchising, the company will gain high brand value. This should encourage the suppliers to sell
to them as there are more chances of sales of the cars from a popular dealer. This aspect will
decrease the bargaining power of the suppliers.

8INTRODUCTION TO BUSINESS SYSTEMS
Threat of Substitutes – The company does not face much threat of substitutes as it sells
cars of almost all popular brands. There are currently not many substitutes of the cars available
in the market. Furthermore, the company sells all the different classes of cars like Sedan, SUV
and Ute thus ensuring all the demands of various types of customers are met (Sipho and Daniel
2017). However, in the near future, with the development of new class of electric cars like Tesla,
the threat of substitutes may increase.
Bargaining Power of Buyers – For this company, the bargaining power of the buyers
ranges from medium to low. The primary reason for this is that there are several other car dealers
that have established strong business line in the same area and have deployed information system
to take care of the business operations (Landau, Karna and Sailer 2016). However, the
bargaining power of buyers does not go too high because the car prices fluctuate very less
between various car dealers and only depend on the market condition only.
Threat of New Entrants – Unless Honest Jim upgrades itself with new technical setup
and business framework, it may face significant threat of new entrants in the very near future.
New car dealers are growing up in the nearby areas with advanced technical setup and
technically adept management teams that are driving their companies towards excellence.
Industrial Rivalry – Currently, the industrial rivalry is very high especially due to the
growth of many car dealers in the last few decades in the country and the increase of popularity
and demand of cars in the country (vom Berg, Gómez and Sandau 2017). Already franchised car
dealers have established a strong control over the market whereas medium sized organizations
like Honest Jim has only got control over a small part of a regional market.

9INTRODUCTION TO BUSINESS SYSTEMS
Table Creation and Discussion
The table for the raw data has been created and shown in the attached excel spreadsheet.
From the analysis of the data in the spreadsheet, three insights that the managers can gain
regarding the business have been identified as follows.
Trend 1: Ute is the most popular class of car and this particular class has generated most
sales and revenue for the company in 2016.
Trend 2: In the entire period of 2016, the diesel cars have experienced much more sales
than hybrid and petrol cars.
Trend 3: The customers are preferring the latest models of the cars only as evident from
the high amount of sales for the cars manufactured in 2016 and lack of sales for older cars.
Part B: Information Portal Design
Design Review and Justifications
In the provided mock up designs in the Appendix section, three pages of the website have
been provided. The justifications of the three pages are as follows.
Home Page – This is the page that opens when the customer enters the website. This
page provides a number of information including new offers, slideshow of various cars sold and
others. From this page, the customer can visit various pages like products, create account and
others.
Product Page – When a customer clicks on a particular car, this page will open. This
page will show details of the car, price, applicable offer and other similar cars available.

10INTRODUCTION TO BUSINESS SYSTEMS
Purchase Page – When a customer checks out after selecting a car, this page will open
and present the customer with payment options as well as request delivery location.
Page Designs
The elements used in the website as per HCI and web usability guidelines are as follows.
HCI Design Principles:
Visibility – All elements in the site are easily visible to the visitor.
Feedback – The elements have feedback system for the visitor. For instance, whenever
the visitor selects a car to buy, the site will ask him to register or login first.
Consistency – All elements of the website are fairly consistent, each element is arranged
in an aesthetic manner and is fully functional.
Web Usability Principles:
Accessibility – The website is accessible to all internet users regardless of operating
system.
Home Page – The home page is made as attractive and informative as possible.
Navigation – Navigation options are well developed and integrated in the website.
Three additional tools that can be used by the company that will increase competitive
advantage are as follows.
Test Drive – There can be a new page that will allow customer to apply for test drive.

11INTRODUCTION TO BUSINESS SYSTEMS
Driver Test – This new page will allow customers to apply for driving test and earn
license.
Car Customization – This new page will allow the customers to customize the car they
will be purchasing.
Conclusion
In this report, an overall business evaluation for Honest Jim Cars has been provided. In
order to get sufficient insight, both the external and internal environments have been analyzed
and accordingly, a new business model has been proposed. It has been found from the analysis
that although the company enjoys significant amount of success in the market, it requires
sufficient technical upgrade and a suitable business model in order to maintain the business
success as well as market competitiveness. Hence, franchise business model has been proposed
that will help the company to establish a brand value. Furthermore, implementation of ERP
system has been suggested so that the company can open more new retail chains but at the same
time can be able to maintain business continuity and control over the entire retail chain.