Executive Summary
Mission Statement
The mission of UNIK AutoCare Services Limited is to attract and maintain customers through the provision of convenience and high-quality auto repair services that surpass the expectation of the clients.
Business Objectives
The experienced team at UNIK AutoCare Services Limited, excellent locality, special and distinctive services as well as the strategic management team will be critical in the business’ undertakings.
The short term objectives of UNIK AutoCare Services Limited will be;
- To offer unique auto repair services dissimilar from those of rivals to capture a bigger market proportion as well as increased profit.
- To gain net revenue above forty percent by the end of the first year of operations.
- To increase net proceeds by over thirty percent of sales in the second year of operation.
- To augment the firm’s sales to thirty percent in the second year of operation.
- To attain customer satisfaction through the provision of services that exceed customers’ expectations.
The long-standing objective of the firm will be;
- To attract numerous and new clientele
- To build comprehensible client acquisition processes
Company Information
The proposed UNIK AutoCare Services Limited is an auto repair business that aims at offering quality and unique auto repair services at competitive pricing for customers within the city of Riyadh. The business will specialize in is Engine and body repair for all types of automobiles. The business will be located in the city of Riyadh and will serve clients within the Gulf region. The business will be owned by three partners with an equal share. The business will be operated from a centralized location at the headquarters in Riyadh with regional garages being opened annually in each of the nations in the Gulf area. The location will be idyllic and perfect since it will provide easy access to the customers.
Market opportunity
There are few auto repair garages within the city of Riyadh with the ability to offer customized auto repair services at a competitive price. Since the proposed UNIK AutoCare Services Limited will be based on the model of uniqueness and affordability, it is predicted that the company will quickly penetrate the expansive market since nearly every household within and without Riyadh is a potential customer.
Financial data
Revenue:
- Net Income
- Assets
- Liabilities
- Net Worth
Summary of Financing.
Description of Company and Industry
Company Background and History
The proposed UNIK AutoCare Services Limited is an auto repair business that aims at offering quality and unique auto repair services at competitive pricing for customers within the city of Riyadh. The business will specialize in engine and body repair for all types of automobiles. The business will be located in the city of Riyadh and will serve clients within the Gulf region. The business will be owned by three partners with an equal share. The business will be operated from a centralized location at the headquarters in Riyadh with regional garages being opened annually in each of the nations in the Gulf area. The company intends to enter the Riyadh auto repairs market at the beginning of the year 2016 and projects to grow at the rate of 10% for the next five years. The company intends to control at least 10% of the market in the next six years by offering quality services, affordable prices, and dynamic service platforms.
The Industry
Saudi Arabia has become a green pasture for car manufacturers because of the high demand for automobiles in this region. The country has a unique market and taste for cars, and this means that there is a need for auto repair companies to understand the issues that affect consumer preferences. The automobile industry has also expanded, and the trend is set to improve in the coming years. In 2014, 310,304 vehicles were traded in this country. Therefore, as the world automobile industry grows at 1.5%, Dubai’s rate is 19%, which means that this region is experiencing rapid growth in the automotive industry (Mariotti 38).
Various factors affect the demand for automobile repair services in the region of Riyadh. First, the average income of most people in this region is SAR18, 248.60 which is about 4927.12 US dollars. Most people earn good salaries that can afford them better lives. Therefore, most people have cars, and some even two or three of them because they can afford them (Mariotti 47). The issue of high fuel costs cannot stop people from owning or driving their cars because they are rich. Secondly, Riyadh is a developed region and thus its residents believe that they should drive better cars. The demand for classic cars like SUVs and MUVs is high. Car manufacturing companies like Toyota, Mitsubishi, Volkswagen, and Mercedes Benz amongst others have taken advantage of this situation and continue to manufacture expensive cars that meet the demands of the locals. Thirdly, the level of education of most people in this country is high, and this affects their choice of cars. Most educated people believe that they should drive expensive cars (Kotler and Keller 35). They want to identify with their peers, and this makes them get attracted to the latest brands of cars and that is why it is not easy to see them driving old ones. Thus, the demand for auto repair services is equally high since these cars must be serviced regularly.
The current players in the automobile repair sector in Riyadh are individual businesses, branded auto repairers in the form of dealerships, and companies offering services on behalf of specific customers. However, these businesses cannot sustain the current and projected demand since very few can offer customized services that the proposed UNIK AutoCare Services Limited will address. From the above, analysis, it is projected that the company will easily penetrate the sector with very minimal challenges due to high demand and it proposed a competitive pricing strategy.
Description of the Product
Description of the Product
UNIK AutoCare Services Limited will be a full-service auto care garage committed to the provision of superior client contentment through offering quality products and exceptional services to the consumers. UNIK AutoCare Services Limited is considered a full-service auto care shop. As such, the firm will provide a variety of excellent services and quality products that satisfy the needs of consumers by utilizing the services of its proficient and qualified personnel. Additionally, UNIK AutoCare Services Limited will provide customers with a relaxed and pleasant environment. Moreover, offering high and superior services as well as client fulfillment at apposite prices will be emphasized by the business.
The business will offer complete auto care services and it will be unique on customization services, which UNIK AutoCare Services Limited will provide with different price tags that are different from the current auto garages around the region of Riyadh. Auto repair services will entail nose cut, painting, engine work, bodywork, and electrical installations, as well as reconstructing. Further, engine services will include tuning, washing, and periodic servicing. Moreover, bodywork services will encompass panel beating, buffing, and body calligraphy. Also, general repairs will include special products such as unique plugs, tires, and pads that are designed for the Riyadh roads and hot environment. Each service that will be chosen will include a free service form. For instance, customers who want auto repair services will be served with tea, coffee, soft drinks, and other snacks for free while waiting for services. Besides, customers who want extensive repair services beyond SAR 2,000 will be given free pick and drop services in the company car. Also, the garage will provide a pleasant workplace environment through a satisfactory relationship between worth and price. Further, an affable, just, and inventive work atmosphere that values multiplicity, thoughts, and hard work will also be core aspects of the firm.
Competitive Advantages
The owners and marketers of UNIK AutoCare Services Limited will adopt five-stage processes to assess the business because banks are unresponsive to invest a large amount for projects viewed as nonviable. The UNIK AutoCare Services Limited team will identify unique characteristics of their services by comparing with the auto repair services of the competitors, assess the emotional demand from the perspective of the customers, and find out the limitations of the competitors. These procedures will help the management to avoid risks of an investment to some extent. The business will design a unique campaign plan to move forward as well as gain competitive advantages in the Riyadh automobile repair market.
Excellent customer service, a pleasant work environment for customers as well as the skills applied in operations will be critical aspects in the provision of services to clients. Also, the firm will provide a variety of services to customers under one roof as well as extending the business operation hours. The firm will also employ highly proficient personnel to offer various auto repair services that are better than the current service providers. The provision of distinctive services that are not offered by other competitive firms in auto repair will offer a competitive edge to UNIK AutoCare Services Limited over business rivals. UNIK AutoCare Services Limited will be the foremost and solitary customized automobile clinic and repair center offering the service in the entire Riyadh region. The firm will utilize its proficient personnel to offer services.
The firm will also utilize exclusive and extraordinary ways in the provision of auto repair services. The exclusive and extraordinary procedures will add a competitive advantage to the firm over its rivals. UNIK AutoCare Services Limited will offer a new service that will be the first in the area which is the customized auto repair. UNIK AutoCare Services Limited will offer free and extra services to devoted clients such as discounts, free delivery, snacks, flexible payment plan, and long terms service at a reduced cost.
Market Research and Evaluation
Markets
The recent economic boom in Saudi Arabia has resulted in many smaller businesses grow up due to increased demand for products and services. The disposable income has increased considerably and most businesses are transacted. Besides, spending on automobiles has increased tremendously. Therefore, improved economic situations will greatly the growth and development of UNIK AutoCare Services Limited. Political aspects are a predominant influencing factor in the management and operations of UNIK AutoCare Services Limited given the fact that most of the businesses are situated in countries that have experienced both political stability and instability in the recent past. However, in Saudi Arabia, particularly in Riyadh where the business is located is enjoying both political and social stability. Like any other industry or business, UNIK AutoCare Services Limited requires a politically stable environment to achieve its goals. UNIK AutoCare Services Limited will thrive to expand since the country in which it operates enjoys political stability.
Many social issues affect the industry. However, UNIK AutoCare Services Limited will align its services with the target market needs including age and culture. The most important social factor influencing the industry is culture. However, the services of the firm are aligned with the socio-cultural needs of customers. In the Middle East, for instance, the socio-cultural setting is such cars are adored for their appearance and performance, the firm is investing in areas where socio-cultural factors promote its business. UNIK AutoCare Services Limited will incorporate online activities in its operations. As most of the operations rely on the availability and usability of information technology, the business will thrive to apply available technology to develop. In essence, technology forms an integral part of the firm. All aspects of the firms including sales, purchases, marketing, management, and operations depend on the development of technology. Therefore, UNIK AutoCare Services Limited will invest in cost-effective technology. Legal factors are critical for the establishment and operations of the firm. The legal requirement in Riyadh supports the establishment and growth of businesses. As such, UNIK AutoCare Services Limited will comply with the legal requirements to operate effectively. Essentially, the legal environment is conducive and supports the growth and development of firms particularly businesses that adhere to the required regulations.
Market trends
The target market for UNIK AutoCare Services Limited will mainly consist of youthful car owners interested in customized auto repair services between the ages of 25-50. The market will consist of individuals who are young, outgoing, and full of life. Studies show that this group represents approximately sixty-five percent of the total population.
Young car owners, especially between the ages of 25-50 will also be a major market target for UNIK AutoCare Services Limited due to their elastic reactions to marketing. Additionally, UNIK AutoCare Services Limited will target high-income earners since the richest individuals consume at least twice auto repair service compared to the poorest individuals who own cars. In essence, UNIK AutoCare Services Limited will target individuals who own cars.
The market research on product preference revealed that customers demand general service, bodywork, engine service, and buffing/painting. The survey findings are summarized in the graph below.
Key:
- General Service
- Painting and buffing
- Engine service
- Bodywork
According to the survey results, we found that our target market consists of youthful customers from the age of 25 to 50 years, mostly working automobile owners who need to maintain a good appearance for their cars. Most of the customers are visiting automobile garages weekly to get services. This means that the proposed business will have a good demand for its services. According to our survey result, we found that the services customers are looking for in the auto garage centers were general repairs, painting, buffing, bodywork, and engine service. The customers will be targeted by offering quick and high-quality services that customize the demands of the customers into quality outcomes.
The service that got a high score was engine service due to the high and low temperature in the region. The business will create extensive engine maintenance as the primary product followed by bodywork and general maintenance. The business will also offer buffing and painting services to customers as the fourth product in the service charter. In the end, the business will be able to sustain its performance since product development will be based on the findings of the market research.
Customers had different responses on the amount they spent in automobile garages every time they visit. To draw an average charge, the researcher drew three price average blocks from which the customers were expected to pick an average. The findings are indicated in the figure below.
The chart above shows that most of the customers prefer to pay a price between 200SAR-500SAR for any services they will get for their automobiles. On average, most of the targeted customers are willing to pay between SAR20 and SAR1000 for auto services per visit. Therefore, this data will enable UNIK AutoCare Services Limited to set prices that fall within this category, with few exceptions.
From the above analysis, UNIK AutoCare Services Limited is well-positioned to gain maximum benefits of the current and future free-market opportunities in the auto repair sector in Riyadh. Besides, the company intends to have an active presence in all the regions and offers very competitive prices for its high-quality products to ensure that it is well-positioned to survive the demand related swings in the currently oligopolistic market. As a strategy for maintaining dominance above other oligopolistic competitors, the company will introduce the above products as multiple services that are customized to meet the demand of each client. Despite competition from other brands, the above analysis indicates that UNIK AutoCare Services Limited has the potential for further growth and expansion in the Riyadh auto garage sector.
Competition
UNIK AutoCare Services Limited faces very strong competition from established auto garages within the Riyadh region since it operates in a market where few strong brands dominate. However, UNIK AutoCare Services Limited has the potential of surviving such competition and maintaining dominance through the proposed product diversification and research and development to improve on the level of demand attached to these products by potential clients. For instance, the business will be renowned for diverse products, affordable prices, and household names as few strategies for sustaining dominance in the free market. The main competitors for UNIK AutoCare Services Limited are summarized below.
Riyadh Garage Master
The Riyadh Garage Master is the leader in the industry. Also, Riyadh Garage Master has become tantamount to quality automobile repair services brands. Riyadh Garage Master has over one hundred branches all over the country. The firm has a distinct trademark as well as efficient delivery personnel. Riyadh Garage Master’s product philosophy is centered on quality and consumer satisfaction thereby gaining a competitive advantage over rivals.
New Millennium AutoClinic
New Millennium AutoClinic has diversified its operations in over 65 branches within and without Riyadh. The business brilliance of the firm’s management has led to its rapid expansion within the country. Further, the New Millennium AutoClinic low-price strategy has been vital in the attraction of consumers. The firm has also received various international quality accolades thereby amassing numerous consumers of automobile brands such as Audi, Mercedes Benz, Range Rover, and other high-end vehicles. Moreover, New Millennium AutoClinic has been experiencing an increasing trend in revenues leading to augmented levels of growth.
From the analysis of competitors, UNIK AutoCare Services Limited may fail to attract potential customers. Given the high competition and increased possibility of new entrants into the market, the business may fail to attract a reasonable quantity of clientele that would enable it to sustain growth in returns. However, the firm has identified a potential primary target market that will provide a distinct competitive advantage. Also, the location of the business may not be near the majority of the target market. However, the firm is located at the business district center where most of the potential clients visit almost daily. Besides, to survive competition, UNIK AutoCare Services Limited might implement three pricing categories for the high-end, middle, and low-end customers to tap demand for its products from different categories of customers. Besides, all the product lines will be customized in a sequence of initiatives such as product diversification, multiple-branding, and incorporation of the latest technology. The economic logic of the above strategies was to provide premium products at competitive prices to ensure that the company survives competition from other automobile garages such as New Millennium AutoClinic and Riyadh Garage Master among others. Despite competition from the other brands, the above analysis indicates that UNIK AutoCare Services Limited has potential for penetration, growth, and expansion in the Riyadh automobile repair sector.
Market share
Riyadh Garage Master occupies the largest share of the market at 42%. The second position is held by the New Millennium AutoClinic, which has experienced steady growth over the years in market share at 32%. The other businesses occupy the remaining market share. The largest market share occupied by the Riyadh Garage Master can be attributed to the well-organized network and cost of maintenance. Since the average charges by the garage are between Saudi Arabia100 and SAR2, 000, automobile customers find the Riyadh Garage Master more affordable than other garages within Riyadh. On average, the cost of automobile repair at Riyadh Garage Master is almost 10 to 20% cheaper than other businesses due to the benefits of associates with large economies of scale (Cheverton 45). Another factor that can explain the dominance of Riyadh Garage Master and New Millennium AutoClinic within the Riyadh market is the preference by the residence to take their cars for repairs by known brands. From the above analysis, UNIK AutoCare Services Limited will have to come up with market penetration strategies to get a share of the market through strategies such as unique services, affordable pricing, and a quality service charter that matches or surpasses the current companies that dominate the market.
Marketing Plan
Market Strategy
The main objective and goal of this marketing plan are to attract the UNIK AutoCare Services Limited market through the company website and large showroom in Sheikh Zayed Road, Riyadh. The business promises a guide to the best automobile repair deals, genuine spare parts, and servicing of the cars at a discount. Through rebranding and increasing the visibility of the UNIK AutoCare Services Limited, this market segment is projected to increase their preference for automobile repair services. Since the target market is specific, the success variable for the market share expansion strategy will be measured through an increase in the number of customers in need of automobile repair services.
The main strength of UNIK AutoCare Services Limited will be the presence of a well-established marketing network since it is the only company that will specialize in customized automobile repair services in the region. As a result, the UNIK AutoCare Services Limited will be able to reduce the cost of advertisement since it will depend on referrals from satisfied customers and free services to widen its catchment. The threat faced by the UNIK AutoCare Services Limited in executing the proposed marketing plan is stiff competition from dealers of other brands who often recommend specific garages to customers. The current opportunities for the UNIK AutoCare Services Limited include advancement in technology and information in reaching the market by integrating different aspects of marketing communication in the proposed marketing plan. The main impediment facing UNIK AutoCare Services Limited is the challenge of continuous expansion in the backdrop of customer concerns on the efficiency of the services offered. The proposed marketing strategy to address this shortfall is discussed below.
The UNIK AutoCare Services Limited products will be positioned as the first of their kind in the Saudi Arabia automobile repair market. As the first player for this kind of specialized automobile care market, it will be easy to project a steady market share gain within fifteen months after the implementation of marketing management. As a result, a permanent and positive image of UNIK AutoCare Services Limited will be glued to the minds of the clients.
Psychographics refers to “the study of the values, personality, attitudes, opinions, lifestyles, and interests” (Cheverton 26). Purchasing trends continue to progress proportionately to evolving psychographics. Consumer behavior is increasingly being influenced by a host of factors including; wealth propensity, behavioral proclivities, globalization, cultural discernment, and enhanced education. This has driven the acceptance of branding and particular store brands as people become aware of their value. They are willing to evolve their lifestyles more to sample store brands as much as national brands. In the context of UNIK AutoCare Services Limited, psychographics refers to the data on the lifestyles of its customers, which they use in creating customer profiles. This information is important to the company, especially when it comes to market segmentation. In particular, UNIK AutoCare Services Limited will use this information in market segmentation based on lifestyles, social class, and personality attributes. The target market is divided into young digerati and prism segments as discussed below.
Young Digerati: Youthful customers
The strategy entails active marketing the UNIK AutoCare Services Limited, product to the youthful customers since this group has low expenses, but with discretionary income and is very much interested in differentiated automobile maintenance services. Through the digital marketing strategy that stresses proactive connection to a customized auto service lifestyle, the company will be in a position to penetrate this market without having to alienate other customers.
Prism Segment: Middle-aged customers
This group consists of middle-aged customers who are the largest users of the proposed customized automobile repair service. This group has an active online lifestyle and own the majority of the cars. This group is ethnically diverse and has a high disposable income. Therefore, e-marketing strategies will be effective in reaching this segment to promote UNIK AutoCare Services Limited products.
Product
Branding is a “name, term, sign, symbol, or design, or a combination of them intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition” (Rhim and Lee 174). The objective of the business will be to penetrate the automobile repair market in Saudi Arabia through the provision of affordable and quality automobile clinics, service plans, and ownership benefits to clients. The business will accentuate customer satisfaction and quality automobile repair services as a strategy for upholding its position as the preferred garage for customers locking for customized services.
To diversify market operations, the UNIK AutoCare Services Limited will create multiple products from the current nose cut, painting, engine work, body work, and electrical installations services with different benefits, financing restoration, and providing affordable service plan for each category of automobiles repaired or serviced at the garage. As a result, this will create an environment of own competition and block other competitors from encroaching into this customized automobile service market. These sub-products and services will be differentiated by features, prices, and differences in the level of customization as requested by clients.
Pricing
In the presence of increased competition, UNIK AutoCare Services Limited will ensure that its automobile service products are affordable to the target market. In this case, the appropriate pricing strategy will be ‘good, better, best’ pricing to ensure that the targeted customer segment has a variety of options in terms of the cost of each service plan as determined by the level of customization.
In the establishment of the UNIK AutoCare Services Limited’s product prices, essential factors should be considered and taken care of. These are the sensitivity of the company to its customers’ interests, the market prevalence, and the products to be sold. A vigorous research team will be instituted to overlook the possible pricing strategies that do not infringe the economic status of the customers in offering affordable automobile service plans. Discounts will also be analyzed to increase the number of new customers visiting the garage.
Promotion
The business will adopt flexible and proactive advertisements meant to appeal to each customer segment. Besides, the business will have a series of after-sales services such as discounts, coupons, and rewards to customers who make the highest number of periodic service requests. The business will use direct, online, and database marketing through its Business-to-Consumer (B2C) and e-commerce models (Bowden 68). The main objective of the promotion plan is to attract the customers’ market through the company’s website and fan pages to increase the customer traffic for the UNIK AutoCare Services Limited product. The objective aims at packaging the UNIK AutoCare Services Limited as a favorite of customers who want to service their cars. Through massive recruitment of online fans in the Twitter and Facebook pages, the company will not only benefit from increased traffic of online compliments but also record high rates of customer loyalty as most customers are influenced by reactions from other clients.
Place
Offering specialized automobile repair services in the right place and time creates the right place strategy for the business. In other words, clients are supposed to get the services at the most convenient place. Since the Riyadh market is dynamic, with relatively good connectivity, the objective of the place management at the UNIK AutoCare Services Limited will be adopting the business to customer contact strategy to directly deal with its customers by creating flexible automobile service stations in different regions to serve the clients.
Direct interaction with the clients will be critical in knowing the customer needs, which leads to developing automobile products that suit their expectations as well as market needs. Therefore, the service locations will not be limited to Riyadh and the Northern Emirates. The UNIK AutoCare Services Limited will consider establishing sub-branches in the southern region and several other service centers to improve on the current customer convenience concerns.
Service policies
The UNIK AutoCare Services Limited will offer a flexible service policy for customers, depending on the nature of the service plan that a customer has requested. To begin with, the company will offer to pick and drop services to customers for free and will be flexible to offer repair services outside the main garage. The business will also offer towing services at a small fee to customers. However, each service plan will be made flexible to fit the needs of the customers. Cases of complaints will be handled promptly and such customers will be given a discount of at least 10% in the subsequent service.
The marketing management plan will be implemented within 12 months since UNIK AutoCare Services Limited operates in a dynamic environment. Since the entire automobile dealership is angled on quality and customized services to each client, the implementation of the marketing plan will also be customized to increase the visibility of the UNIK AutoCare Services Limited garage. The UNIK AutoCare Services Limited will outsource the service of social media advertising through two popular sites, that is, Facebook and Twitter. Basically, “it will cost a company $2,000-$4,000 per month to launch a twitter account and outsource the content creation and consumer interaction. Advertsing on Facebook is even higher with online PR agencies charging an average of SAR1, 500-SAR2, 000 per month” (Bowden 68). This translates into SAR24, 000 during the 12 months of implementation. The marketing plan for the UNIK AutoCare Services Limited will be implemented against the backdrop of continuous progress report through the management team. The tracking system will be reviewed after every three months and adjustments made as necessary. To minimize the risks such as increased cost and changed customer preference, the plan will be evaluated at each implementation stage against the expectations.
Manufacturing and operations plan
Production
The business will be located in an expansive garage within Riyadh. The garage will double up as the shop for different spare parts and parking space for customers. The garage will be subdivided into five regions for each product type with the last region serving as the administrative unit. The business will depend on 10 employees who will have different responsibilities in offering automobile maintenance services to customers. The garage will have automated lifts, folks, and rollers to aid in the engine and buffing/painting services. The establishment of the garage will adhere to different environmental and labor-related laws on safety and production sustainability.
Geographic location
The business will be located in the downtown region of Riyadh. The location downtown gives the UNIK AutoCare Services Limited the much-needed ease to reach the market since the main products, which are automobile repair services, will target the clients within Riyadh. Besides, the downtown location makes the company have a strategic reach of the market since most of the targeted customers are living within the area. As a result, the distribution pattern will be efficient and sustainable in the short-run and long-run. The region of downtown in Riyadh and its surrounding is inhabited by established business people and celebrities with vehicles. The expenditure of most of the people in Riyadh is relatively high; taking into consideration the fact that they have a high income. Therefore, UNIK AutoCare Services Limited is in a position to gain maximum returns from servicing the vehicles of customers in the Riyadh region.
Facilities
Besides, the head office in Riyadh, the business will establish four sub-branches within the region and a mobile unit that will serve the large corporate organization. These branches will also be fitted with automated lifts, folks, and rollers to aid in the engine and buffing/painting services. The branches will also be established with strict adherence to environmental laws on safety and sustainability.
Make or buy a policy
It would be a sound business decision to buy an existing garage and rebrand as UNIK AutoCare Services Limited. This strategy would eliminate the challenges associated with starting a new business. Before choosing an appropriate business to purchase, it would be prudent to understand business performance, liabilities, and staff. Nevertheless, only reputable businesses will be considered. UNIK AutoCare Services Limited will realize the following advantages of buying an existing automobile service business. First, the garage will be running. This will eliminate startup challenges and reduce the time it takes to start a new venture. Second, the company will rely on existing customers for growth and start earning revenues immediately. Third, in case the company shall require financial support for expansion, then it would be simple to get loans from lenders. Fourth, the existing business will provide a clear insight into the market and possible challenges. Any oversight will be handled carefully. Fifth, UNIK AutoCare Services Limited shall leverage on current employees to deliver quality products and services and hire trained consultants to create a competitive advantage by meeting deadlines. Finally, there is already an existing customer base and demands for products and services.
On the other hand, buying an existing business may have some drawbacks for the company. First, the proprietor may not be able to transform old trends so fast. Moreover, employees might not be ready to adapt to changes and new management. Second, buying an existing automobile service garage could be much expensive relative to starting a new one. Also, customers and potential referrals may not do business with the new owner, particularly if the previous one had established close personal relations with the customers. Third, it could be difficult to turn around a neglected, loss-making business. Fourth, an existing business may have existing obligations and contracts, which UNIK AutoCare Services Limited will have to honor.
Overall, UNIK AutoCare Services Limited will buy an existing business because starting a new one could present the above-mentioned challenges. Also, the fundamental approach is to plan and invest in a sound venture. The proprietor believes that buying a business would offer capabilities and a team that can help in implementing the plan.
Control systems
The main effect of improving training on the employees is that it will create a quality service environment to ensure that the production and service delivery matrix at the UNIK AutoCare Services Limited are efficient and sustainable. The business will have to restructure the organization in a way that allows for the implementation of continuous quality management systems to ensure that the interests of the customers and employees are served. The staff would need to adapt to the new requirement of learning the dynamic communication system in a bid to accomplish the goals of UNIK AutoCare Services Limited.
The goals of improving control systems are to improve the efficiency and effectiveness of the current model of service delivery between the employees and the business through the incorporation of multicultural training. Besides, it will ensure that the various available methods of service delivery appeal to the financial health of UNIK AutoCare Services Limited. The objectives of the proposed control systems will ensure that the business improves the standard of the working environment and increase the number of clients that the organization handles daily in a bid to accomplish the organization’s objectives. Besides, it will help the UNIK AutoCare Services Limited to avoid expenditure that would jeopardize the running of the organization’s basic activities and increase the number of staff available to attend to clients without creating undue pressure on the finances.
The strategies in this plan require the organization to take a collaborative perspective in dealing with the subject matter. In essence, this aspect means that the plan requires the management and staff of the UNIK AutoCare Services Limited to work together. The main requirement for the creation of such a set-up is an exchange of information and knowledge relevant to the project. The actualization of the tactics that this plan proposes requires the management of the organization to work closely with the staff and allow the staff freedom to associate with clients and form networks with other organizations as they accomplish their duties.
Labor force
The labor force will consist of ten employees. The employees will be allocated duties ranging from supervision, management, mechanics, marketing, and customer care. The labor force will be recruiting within the Riyadh region as part of a business-community partnership program to enhance general acceptance.
Training
Continuous training of the employee is critical towards optimal performance and sustainability of the business. In the case of UNIK AutoCare Services Limited, the supervisor will have the duty of creating a continuous training program for the employees. The training program will be delivered in three phases after every three months or when the need arises before the three months. The first training phase will deal with the general operations of the UNIK AutoCare Services Limited and basic rules of engagement. The second phase of the employee training will deal with talent development, communication development, creativity, and professionalism with the UNIK AutoCare Services Limited. The last phase will deal with quality addition and customer relations exercises such as office etiquette, response to customer complaints and compliments, and philosophy of the UNIK AutoCare Services Limited.
Staffing plan
Employee selection will be focused to evaluate resumes of applicants for essential requirements which include review analytical skills besides academic credentials. Through the aptitude test, elimination of those lacking analytical skills is possible with minimal prejudice or biases. The staffing plan will incorporate a different aspect of recruitment such as gender balance, disability consideration, and experience to ensure that the employees reflect the face of Riyadh.
The Management Team
Identification of key people
Supply chain director
- Managing the daily operation of the UNIK AutoCare Services Limited in the department of supply chain
- Providing the administrative roles within the supply chain
- Planning the duties and responsibilities of suppliers
- Tracking the performance of the suppliers against the set targets
- Briefing the other directors of the concerns and success in the supply chain
- Creating and generating bi-monthly reports on supply chain
Marketing director
- Managing the daily marketing activities of the UNIK AutoCare Services Limited business
- Providing the administrative roles to the marketing team
- Planning the duties and responsibilities of the marketing team
- Tracking the performance of the marketing team against the set targets
- Briefing the other directors of the concerns and success of each stage of the marketing strategies
- Creating and generating bi-monthly marketing reports
Operations Director
- Managing the daily operation of the UNIK AutoCare Services Limited
- Providing administrative roles
- Planning the duties and responsibilities of the employees
- Tracking the performance of the employees against the set targets
- Briefing the other directors of the concerns and success of each stage of the business
- Creating and generating bi-monthly reports and other invoices of the business
- Managing the petty cash and the UNIK AutoCare Services Limited’s invoices
Supervisor
- Managing the daily operation of the UNIK AutoCare Services Limited business
- Providing administrative roles
- Planning the duties and responsibilities of the employees
- Tracking the performance of the employees against the set targets
- Briefing the directors of the concerns and success of each stage of the business
Specialized Automobile Service Attendee
- Generating different automobile service plans for the customers
- Performing specialized automobile service as requested by the customers
- Ensuring the meeting of customer deadline
- Planning the duties and responsibilities within the UNIK AutoCare Services Limited environment
- Offering creativity in service design
General Vehicle Maintenance Attendees
- Taking orders from the customers
- Performing public relations exercise with the customers
- Serving the general maintenance roles for customers
- Registering the complaints of the customers
- Providing administrative roles
- Briefing the supervisor of the concerns and success of each stage of the business
Marketing Personnel
- Providing administrative roles
- Planning the duties and responsibilities within the marketing plans
- Marketing the products of the UNIK AutoCare Services Limited business
Job specifications
Supervisor
Qualification for Job
- Language skills: Fluent in Arabic and the local language
- At least three years experience in a senior supervisor position in an automobile garage
- University degree in business administration or a relevant field
- Proper knowledge of the modern management system and quality implementation
Marketing personnel
Qualification for Job
- Language skills: Fluent in Arabic and the local language
- At least three years experience in a similar position
- High school education
- Proper knowledge of modern marketing skills
Specialized Automobile Service Attendee
Qualification for Job
- Language skills: Fluent in Arabic and the local language
- At least three years experience in the same position in a busy garage
- University diploma in mechanical engineering
- Proper knowledge of modern automobile maintenance skills
General Vehicle Maintenance Attendees
Qualification for Job
- High school certificate and a technical certificate in vehicle mechanics
- Ability to work under pressure
- Language skills: Fluent in Arabic and the local language
- One year experience in serving customers in a busy automobile garage
Succession plan
Since the three directors are owners of the business, the directors will take the roles of chairman, chief executive officer, and chief financial officer since the business will be relatively small. In case a partner withdraws his or her shares, the other partners will buy the shares. The roles assigned to the owners of the business will be rotational every twelve months. The supervisor will report to the three directors while the other employees will report to the supervisor.
Management philosophy
Every organization has a corporate strategy that summarizes its goals and vision in line with the current operations environment. Being a business that operates in the formal sector, the corporate culture of the UNIK AutoCare Services Limited will adopt scientific management approach comprising of a system for employee management against standard duties. The UNIK AutoCare Services Limited will have a clear chain of command with the directors being at the apex of the management platform. The corporate culture of the UNIK AutoCare Services Limited will consist of systems that manage employee motivation, security, welfare, and personal remuneration. In summary, a mixture of scientific management and employee welfare at the UNIK AutoCare Services Limited will ensure that the business retains its employees and constantly add value to their basic skills.
The leadership philosophy of UNIK AutoCare Services Limited is systematic management with flexibility on innovation and creativity. This philosophy operates on the assumptions of confident, competent, and responsible employees. The proposed leadership philosophy at the UNIK AutoCare Services Limited encourages a practical approach to addressing daily challenges in running the business and monitoring the progress of the implemented strategies. Besides, the philosophy provides channels for constant motivation and rewards outstanding performance and creativity.
Business/organization structure
In the process of successfully managing an establishment of the UNIK AutoCare Services Limited magnitude, the business owners must establish a strong human resource management strategy. Besides, the owners of UNIK AutoCare Services Limited need to create an ideal environment for customer-employee relationships. Concerning the UNIK AutoCare Services Limited, the management team will consist of the operations director, marketing director, and supply chain director. All the directors are owners of the business. Under the directors, there will be supervisors who will manage the garage attendants. Besides, the business proposes to have a standby marketing team consisting of two employees. The business will adopt the inverted triangle management model whereby the employees will have to take most of the responsibilities with the directors limited to leadership and goal setting.
The type of organizational chart illustrated for UNIK AutoCare Services Limited is the traditional hierarchal structure. This means that the reporting procedure is aligned to a specific grid since persons that have similar roles are pooled in terms of assignments in the organization. The organization chart of the organization allows for close monitoring of activities within the headquarters and interests in divisions. The managers are allocated roles according to duties to be accomplished. As a result, the managers report to a single higher authority in the organization (Osterman 407). For instance, the supervisor reports to the three directors while the specialized attendee reports to the supervisor. At the bottom of the grid, the general attendees and marketing team report directly to the supervisor. This is summarized in the chart below.
Identification of firms assisting the company
The firms that will assist the UNIK AutoCare Services Limited in servicing customers are automobile dealers, spare part retailers, tour and transport operators, and financial companies. The automobile dealers will refer a customer to the company as the ideal automobile service provider through a strategic and dynamic partnership arrangement. The spare part retailers will make available different spare parts of vehicles to enable the UNIK AutoCare Services Limited to avoid a long waiting period if procurement of the spare were to be done by the business. Besides, the spare part retailers will give the company a range of spare parts from which to choose when serving vehicles. The tour and transport service providers will provide the much-needed constant business to the UNIK AutoCare Services Limited when the company signs a maintenance deal with them. Lastly, the financial institutions will provide much-needed funding for the establishment and future expansion of the business.
Timeline
Key events
It is estimated that the timeline for implementing the proposed plan will be six months. The key events in the timeline are summarized in the table below.
Timeline for implementation
It is estimated that the timeline for implementation will be six months. The breakdown for the implementation timeline is summarized in the table below.
Critical risks and assumptions
Risk management strategies
Since the business will be located in a closed building, the main threats that might affect it include fire, vandalism, political, and regulatory risks. After identification, these risks were classified in terms of their overall impact on the project and the probability of their occurrence. The basis for classification was in terms of the magnitude of impact such as (LI) low impact, (MI) medium impact, and (HI) high impact. In terms of probability of occurrence, the risks were broadly classified as (LP) low probability, (MP) medium probability, and (HP) high probability of possible occurrence as summarized in the table below.
(Source: Self Generated).
The risk matrix.
Evaluation and prioritization of the risks.
Benefits to the community
Economic development
The business will offer periodic funding of several health and educational programs within the Riyadh community as part of its corporate social responsibility. Each year, the business will spend at least SAR20, 000 to finance these projects.
Community development
The business will organize a series of training programs on health, social cohesion, and sports to ensure that the surrounding community members are empowered. During these events, the business will reward the society with different prices such as a library, clinics, and ambulances as part of the community-company partnership.
Human development
As a human resource policy, the company will allocate at least 30% of the labor force to the local community as part of its human development strategies. Besides, the business will offer a series of short and long scholarship awards to the youths, women, people with disabilities, and other interest groups to promote the development of the community within Riyadh.
Financial plan
Sources and uses of funds
Business financing has become a challenge for those aspiring to expand an existing business or start a business. Thus, this part attempts to explicitly review the sources of funding options available for the UNIK AutoCare Services Limited. Besides, it explores the cost aspects of each source of business financing and the importance of financial planning.
Internal Sources
The internal financing options available for the company include personal sources such as retained profits and share capital. The retained profit is the funds generated by the initial business when it profitably trades. Considering the duration that the company has taken, the shared profits will substantially contribute to the funding for the UNIK AutoCare Services Limited. Reflectively, retained profits are necessary for financing the further expansion of the company since the business has the potential of making consistent sales. Besides, the company has the option of acquiring funding from the share capital which has been the main source of funding for the startup.
External Funding Sources
Among the most viable external funding sources available for the UNIK AutoCare Services Limited include loan capital in the form of bank overdraft or bank loan, engaging external investors, and convincing business angels to be part of the company.
Bank loan/Overdraft
Under a bank loan option, the UNIK AutoCare Services Limited will be in a position to receive funding that is fixed over some time. The loan(s) will attract different interest rates, depending on the type and amount that the business will borrow. Reflectively, bank loans are repaid over a longer period and repayment schedules are fixed. Besides the bank loan, the UNIK AutoCare Services Limited has the option of acquiring financing through a bank overdraft. A bank overdraft is a short term loan. Bank overdrafts are a very flexible source of business financing since they can be used to handle temporary cash flow fluctuations in the company. Besides, bank overdrafts may offer the company a lifeline when it experiences temporary cash flow challenges.
Share Capital from Outside Investors
Another source of financing available for the UNIK AutoCare Services Limited is the use of funds from outside investors such as contributions from family, friends, and interested investors who will be given shares in the company according to their contribution. The fund contributors will be allocated shares in line with the total capital that the company requires for the expansion of the business.
Debt Financing Securing Plan
Full knowledge of the business costs will be instrumental in deciding the most cost benefits funding sources available for the business. This implies that financial planning at the UNIK AutoCare Services Limited will ensure an easy cash flow forecast and managing internal funds flow. Considering the nature of the business and industry, the most appropriate source of funding would be bank overdraft and share capital from external investors’ funding. Bank overdrafts will give the business leverage against temporary cash flow problems and under or overestimations. Besides, bank overdraft is a flexible source of funding for the UNIK AutoCare Services Limited.
Financial practices
The business will ensure that proper bookkeeping, vouching, financial statements, reconciliations, financial management, auditing, and proactive fund allocation strategies are observed. The company will apply the SunSystem accounting system to manage the financial aspects of UNIK AutoCare Services Limited.
Cash flow budget statement
- UNIK AutoCare Services Limited
- Cash flow budget statement
For the three years ended 31st December,
Profit and loss statement
- UNIK AutoCare Services Limited
- Income statement
For the three years ended 31st December,
Balance Sheet Statement
- UNIK AutoCare Services Limited
- Balance sheet statement
As of 31st December,
Breakeven analysis
The break-even point in units is computed by dividing fixed costs with a contribution per unit. The calculation of the breakeven point for the year ended 31st December 2016 is presented below.
This would imply for the costs and the revenues to match with the costs, the company will have to produce, 33,068 units. There would be no profits or losses at this point.
The table below shows profit at different level of sales revenue and cost.
Break-Even Table.
The graph presented below shows the values of sales, revenue and break-even point.
The initial capital proposed to be introduced is set at SAR 154,000 and the venture will try to arrange for a long-term loan of SAR 534,000 with an interest rate of 10% payable quarterly. The repayment of the loan will take place in 5 years. For calculating the cash flow, sales will be made both on cash and credit and there will be accounts payable of 15 days outstanding. Similarly, for the supplies of materials, the venture will enjoy a credit period of 15 days. The venture will invest SAR 348,000 in property, plant, and equipment and this amount will include the cost of furniture, fittings, and office equipment. The operations will be carried out initially in rented premises. The rental advance of SAR 99,600 being 12 months’ rent in advance is payable.
Financial ratios
The table presented below shows the ratios for the company.
Intangibles-intellectual property
The provision of patent and trademark rights in Riyadh will help the business to eliminate the chances of fraudulent attempts on a company’s product to ensure that UNIK AutoCare Services Limited is not disadvantaged. The business could take up this as an assurance of the protection to be offered to their products against illegal dealers.
Summary and conclusion
A properly researched marketing plan determines the success and sustainability in penetrating a market with a new product such as the automobile service proposed by the UNIK AutoCare Services Limited. A properly designed market plan should be practical in presenting brand knowledge, awareness, penetration strategy, and passing information to the target audience. Marketing strategy is essential before actualizing projections of a blueprint. To achieve desired margins in sales and total revenues generated, a proper marketing plan should integrate entry strategy, comparative advantage, and market segmentation since in most cases, there is always a strong competitor or competitors that passing might prove challenging due to the existence of consumer perceptions and household names. The UNIK AutoCare Services Limited business will be located in Riyadh. The business targets majorly youthful clients who want to customize automobile maintenance services. The business will offer excellent customer services, a pleasant work environment for employees as well as the skills applied in operations. The business is projected to breakeven within two years due to competitive pricing and large customer catchment.
Works Cited
Bowden, John. “The Process of Customer Engagement: A Conceptual Framework.” Journal of Marketing Theory & Practice, 17.1 (2009): 63-74. Print.
Cheverton, Philip. Key marketing skills: Strategies, tools, and techniques for marketing success, London, UK: Kogan Page, 2009. Print.
Kotler, Philip, and Kevin Keller. Marketing management. 14th ed. 2012. New Jersey, NJ: Pearson Prentice Hall. Print.
Mariotti, Steve. Entrepreneurship: Starting and Operating a Small Business, New York: Prentice-Hall, 2007. Print.
Osterman, Paul. “Job design in the context of the job market.” Journal of Organizational Behavior 31.2 (2010): 401–411. Print.
Rhim, Hosus, and Chan Lee. “Assessing potential threats to incumbent brands: new product positioning under price competition in a multi segmented markets.” International Journal of Research in Marketing, 22.1 (2005): 159-182. Print.
Appendices
Advertising samples
Organization chart
Customer profiles
Competitor profiles
Financial statements
Balance sheet statement
As of 31st December,
Questionnaire Survey
Gender:
- Male
- Female
Age:
- 15-25
- 25-35
- 35 and above
Do you visit an auto repair garage in Riyadh?
- YES
- NO
How often do you go?
- Weekly
- Monthly
- Quarterly Annually
- Other _______________
What services do you purchase?
- General service
- Bodywork
- Engine work
- Buffing/painting
- Any other
Are there any services that you wish could be improved at the garage you visit?
- Location
- Customer service duration
- Pricing
- Other _________________
How much do you often spend in the garage?
- 50 SAR-200 SAR
- 200 SAR-500 SAR
- 500 SAR-1000 SAR