strama of gonzales auto repair

7/29/2019 strama of gonzales auto repair

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Gonzales

Auto Repair

Shop

By

Henrick Bellere

Jonathan Mendoza

Mark Jhon Gico

Mark Josua Singson


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Short Case Summary

Gonzales Auto Repair Shop has been operating since 2000. Mr.

Gregorio Bellere was the first owner and the operating manager of the shop,

but later on he passed the management to his younger brother Mr. Henry

Bellere Sr. and at the same time the chief mechanic since the shop has been

established. In 2002 Mr. Henry Bellere Sr. Start and continue the operation,

the shop has been providing high quality service that will meet your

satisfaction since 2000,and until now the shop will continue its operation for a

lifetime.

Mission StatementGonzales Auto Repair Shop is a commercial business that provides and

gives customer services on repairing automobiles and satisfying customer

needs, customer that is in the vicinity and the car owners who need are

business. We will emphasize on providing opportunities for growth and

financial stability of our business. Auto Repair shop will deliver rewards and

benefits for their employees and will strive to operate with honesty, fairness

and flexibility.

Auto Repair shop is a business that operates locally that is affordable

and cost wise. We will use appropriate technology that is environmental safety

and will help the community and the business itself.


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External Audit

Opportunities

1. No vat in providing services

2. Increase in demand for automotive shops by 10%

3. The ratio of automobile registered increase by 1.69%

4. There are people willing to pay for the convenience that the shop provide

5. Services needed for company that have no time in coming to the shop

6. Demand for automotive courses increase

7. Investors are willing to invest in automotive industry

8. Customer are responsive about their safety

9. Auto supply that gives terms and discounts

10. Competion over the same field and specialization

Threats

1. New competitors increase by 5%

2. Wilson and Jackson is in the vicinity

3. Demand for new techniques in repairing car parts increase by 10%

4. Obsolete machine

5. The power of media to customer

6. New machines are distributed along competitors

7. Government regulation on waste management

8. Shift in consumer taste

9. Competitors who are providing other services

10. Trade barriers in importing car parts


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EFE Matrix

Critical Success Factors Weight Rating

Weighted

ScoreOpportunities

No vat in providing services 0.06 2 0.12

Increase in demand for automotive shops by 10% 0.1 3 0.30

The ratio of automobile registered increase by 1.69% 0.04 3 0.12

There are people willing to pay for the convenience

that the shop provide 0.04 3 0.12

Services needed for company that have no time in

coming to the shop 0.09 4 0.36

Demand for automotive courses increase 0.1 4 0.40

Investors are willing to invest in automotive industry 0.04 3 0.12

Customer are responsive about their safety 0.03 2 0.06

Auto supply that gives terms and discounts 0.05 4 0.20

Competion over the same field and specialization 0.06 3 0.18

Threats

New competitors increase by 5% 0.05 4 0.20

Wilson and Jackson is in the vicinity 0.03 2 0.06

Demand for new techniques in repairing car parts

increase by 10% 0.09 3 0.27Obsolete machine 0.03 2 0.06

The power of media to customer 0.05 2 0.10

New machines are distributed along competitors 0.06 1 0.06

Government regulation on waste management 0.02 1 0.02

Shift in consumer taste 0.02 1 0.02

Competitors who are providing other services 0.02 3 0.06

Trade barriers in importing car parts 0.02 1 0.02

TOTAL 1.00 2.85

In EFE Matrix the weight we give in evaluationto every opportunities and

threats 0.0(not important) to 1.0(very important). In terms of rating we give 4.0 to themost responsive the company do to the opportunities and threats. The weighted score is

2.85 so it indicates that the company is doing well by taking advantage of external

opportunities, avoiding the threats facing the firm and there is definitely room for

improvement.


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Financial Ratio Analysis

2009 2010

Liquidity Ratios

Current Ratio 1.42 1.48

Quick or Acid-Test Ratio N/A N/A

Leverage Ratios

Debt-to-Total-Asset Ratio 32.60 34.13

Debt-to-Equity Ratio 48.38 51.81

Long-Term Debt-to-Equity 79.75 76.75

Times-Interest-Earned Ratio N/A N/A

Activity Ratios

Inventory-Turnover Ratio N/A N/A

Total-Asset Turnover O.86 0.96

Fixed-Asset Turnover 1.60 1.82

Average Collection Period N/A N/A

Profitability Ratios

Gross Profit Margin 9.67 10.18

Operating Profit Margin 9.67 10.18

Net Profit Margin N/A N/A

Return on Total Asset (ROA) 8.38 9.37

Return on Stockholders Equity N/A N/A

Earnings per Share N/A N/A

Growth Ratios

Sales 457,000 493,000

Net Income 70,500 82,940

Earnings per Share N/A N/A

Dividends per Share N/A N/A


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In Liquidity Ratio show that Gonzales Auto Repair shop can meet short term liabilitiesand based 2009-2010 the company assets can cover liabilities. Leverage Ratio, showing that long

term debt is more than stockholders equity but in 2010 long-term debt- equity ratio decrease.Activity ratio, the company increased total asset turnover it means that the firm using itsresources effectively. Profitability Ratio, the return of investment increases 1% from year 2009-

2010 but in measuring overall management effectiveness it is shown that firm has a little returns

on sales and investments. Growth ratio, the firm increased 4% on sales and net income.

CPM

In CPM, we based them on the field ofunder chassis all the three company.

Since all the three company provide the services. Gonzales Auto repair shopfocus only

in the field of under chassis so that it means we got a higher grade than the two company.

Wilson and Jackson is a big company that provide services like electrical, mechanical,

car wash and gasoline station, and other services, same as Kalampag, it provide servicelike paint, electrical and mechanical.


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Internal Audit

Strengths

1. High quality service

2. Specialize in underchassis

3. Employees are well trained

4. Can provide services for imported automobile

5. 50% cheaper than other automotive shop

6. Employee morale is excellent

7. 24/7 customer service

8. Good relationship with the customer

9. Develop techniques in repairing car parts

10. Terms and discounts are being issue

Weaknesses

1. Specialize only in the field of underchasis

2. The shop dont have marketing ads

3. Dont sell products for car parts4. No research team for development

5. The machinery needs to be improved

6. No warehouse

7. The shop needs renovation

8. Lack of facilities to provide the service

9. Lack of manpower

10. Insufficient tools to provide service for new models of automobile


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IFE Matrix

Critical Success Factors Weight RatingWeightedScore

Strengths

High quality service 0.12 4 0.48

Specialize in underchassis 0.02 4 0.08

Employees are well trained 0.09 3 0.27

Can provide services for imported automobile 0.03 3 0.09

50% cheaper than other automotive shop 0.1 3 0.30

Employee morale is excellent 0.02 3 0.06

24/7 customer service 0.06 3 0.18Good relationship with the customer 0.08 3 0.24

Develop techniques in repairing car parts 0.08 4 0.32

Terms and discounts are being issue 0.02 3 0.06

Weaknesses

Specialize only in the field of underchasis 0.02 1 0.02

The shop dont have marketing ads 0.05 1 0.05

Dont sell products for car parts 0.02 1 0.02

No research team for development 0.06 2 0.12

The machinery needs to be improved 0.06 1 0.06No warehouse 0.01 2 0.02

The shop needs renovation 0.05 2 0.10

Lack of facilities to provide the service 0.04 1 0.04

Lack of manpower 0.04 1 0.04

Insufficient tools to provide service for new

models of automobile 0.03 2 0.06

TOTAL 1.00 2.61

In IFE we gain the total weighted score of 2.61, it explains that the company is doingwell and definitely there is a room for improvement that the shop provide. The ratings are

conducted by putting 3, 4 for strength and 1,2 for weakness 2.61 indicates that the shop has

strong internal position.


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TOWS Analysis

Strengths Weaknesses

1. High quality service 1. Specialize only in the field of

underchasis

2. Specialize in underchassis 2. The shop dont have marketing ads

3. Employees are well trained 3. Dont sell products for car parts

4. Can provide services for imported

automobile

4. No research team for development

5. 50% cheaper than other automotive shop 5. The machinery needs to be improved

6. Employee morale is excellent 6. No warehouse

7. 24/7 customer service 7. The shop needs renovation

8. Good re la tionsh ip with the cus tomer 8. Lack of facilit ie s to p rovide the se rv ice

9. Develop techniques in repairing car parts 9. Lack of manpower

10. Terms and discounts are being issue 10. Insuffic ient tools to provide service for

new models o f automobile

Opportunities S-O Strategies W-O Strategies

1. No v at in p rov id in g s erv ices 1. (S2-O2) Es tab lis hin g a b ran ch o n area th at

have less competitors and high demand

1. (W9-O6) Coop erating with TESDA to

refer the shop to the stu dents

2. Increase in demand for automotive sh ops

by 10%

2. (S1-O10) Maintaining the qu ality service and

at the same time providing o ther s ervices

like electrical, radiator, aircondition, ets.

2. (W8-O2) Renovating the shop that will

give additional space for providing the

service

3. The ratio of automobile registered

increase b y 1.69%

3. (S3-O5) Providing s ervices for some

companies that hav e no time in going to the

shop

3. (W1-O6) Communicating w/ TESDA

student that have the sp[ecialization on

other field

4. There are people willing to pay for the

convenience that the shop provide

4. (S7-O3) Proving services o n Mo nday -

Sunday, even on holidays the sh op will be

open.

4. (W3-O9) getting goo d relationship w/

the s tore that s ell car parts to hav e terms

and discount

5. Services needed for company that have

no time in coming to the s hop

5. (S6-O8) Providing s ervices that will ens ure

the cus tomer safety and meet theirsatisfaction

5. (W2-O2) Advertising the shop by giving

flyers or post ing it to different places

6. Demand for automotive courses increase 6. (W10-O7) There will be investing or

buy ing new materials an d to ols for fixing

automobile

7. Investors are willing to invest in

automotive industry

8. Customer are responsive about their

safety

9. Auto su pply that gives terms and

discounts

10. Competion over the s ame field and

specialization

Threats S-T Strategies W-T Strategies

1. New compet itors increase by 5% 1. (S8-T1) Sus ta in ing the cus tomer loya lty by

providing what they need and giving some

benefit from the shop so th at we can still

continue transaction

1. (W7-T8) Renovating and chan ging the

ambiance of th e sho p tha t will capture

the attention and attract the customer

2. Wilson and Jackson is in the vicinity 2. (S1-T9) Maintaining and improving quality

services that the s hop provide and

allocating res ources that will go in inves ting

in other field

2. (W2-T5) Developing and improving

website that will be distributed th rough

the market for maketing ads


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SPACE Matrix

Internal Strategic Position

Financial Strength +3 +1 Worst +6 Best

Competitive Advantage -3 -6 Worst -1 Best

External Strategic Position

Environmental Stability -5 -6 Worst -1 Best

Industry Strength +4 +1 Worst +6 Best

x-axis: 4 + -3 = 1

y-axis: 3 + -5 = -2

It suggest product development. Gonzales Auto repair shop seeks to increased sales byconducting large research and development directed at developing new services and at improving

service quality.


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Grand Strategy Matrix

Gonzales Auto repair shop fall to the Fourth Quadrant. Business in Quadrant IV

have a strong competitive position but a slow growth market. We are going to focus on

related diversification, joint venture and unrelated diversification.


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IE Matrix

The IFE Total Weighted Score

Strong Average Weak

3.0 to 4.0 2.0 to 2.99 1.0 to 1.99

High I II III

3.0 to 3.99

Medium IV V VIThe EFE

TotalWeighted

Score

2.0 to 2.99

Gonzales Auto

Repair Shop

Low VII VIII IX

1.0 to 1.99

HOLD AND MAINTAIN

In IE matrix, Gonzales Auto repair shop fall on the 5th Quadrant that has a 2.0 to2.99 medium and an average of 2.0 to 2.99. It will focus first on market penetration like

selling the prices lower than other competitors, increasing number of employees and

advertising. Second is product developmentwe are going to establish a new branch and

provide other services.


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Matrix Analysis and TOWS Summary

In the Matrix Analysis and TOWS summary count; market penetration, product

development and joint venture have the highest and same number of count so in market

penetration we plan to fully renovate the existing store and at the same time we will

advertise it so that we will gain and increase marketing advertisement. In product

development we plan to put up a new branch that will provide services and promote otherservices like electrical and mechanical.


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Options

1. Establishing a new branch that provide services on other field 2. Fully renovate and advertise the existing store.

Quantitative Strategic Planning Matrix

Strategic Alternatives

Critical Success Factors Weight

Establishing a new

branch that provide

se rvices on otherfield

Fully renovate and

advertise theexisting store.

Strengths AS TAS AS TAS

High quality service 0.12 ---- ---- ---- ----

Specialize in underchassis 0.02 3.00 0.06 2.00 0.04

Employees are well trained 0.09 4.00 0.36 1.00 0.09

Can provide services for imported automobile 0.03 4.00 0.12 3.00 0.09

50% cheaper than other automotive shop 0.10 2.00 0.20 4.00 0.40

Employee morale is excellent 0.02 ---- ---- ---- ----

24/7 customer service 0.06 ---- ---- ---- ----

Good relationship with the customer 0.08 ---- ---- ---- ----

Develop techniques in repairing car parts 0.08 1.00 0.08 4.00 0.32

Terms and discounts are being issue 0.02 ---- ---- ---- ----

Weaknesses

Specialize only in the field of underchasis 0.02 ---- ---- ---- ----

The shop dont have marketing ads 0.05 ---- ---- ---- ----

Dont sell products for car parts 0.02 ---- ---- ---- ----

SUBTOTAL 1.00 1.17 1.5


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Critical Success Factors Weight

Establishing a new

branch that provide

services on other

field

Fully renovate a

advertise the

existing store

Opportunities AS TAS AS TAS

No vat in providing services 0.06 4.00 0.24 2.00 0.12

Increase in demand for automotive shops by 10% 0.10 4.00 0.40 1.00 0.10

The ratio of automobile registered increase by

1.69% 0.04 4.00 0.16 3.00 0.12There are people willing to pay for the

convenience that the shop provide 0.04 ---- ---- ---- ----

Services needed for company that have no time in

coming to the shop 0.09 3.00 0.27 1.00 0.09

Demand for automotive courses increase 0.10 ---- ---- ---- ----

Investors are willing to invest in automotive

industry 0.04 ---- ---- ---- ----

Customer are responsive about their safety 0.03 ---- ---- ---- ----

Auto supply that gives terms and discounts 0.05 ---- ---- ---- ----

Competion over the same field and specialization 0.06 ---- ---- ---- ----

Threats

New competitors increase by 5% 0.05 3.00 0.15 2.00 0.10

Wilson and Jackson is in the vicinity 0.03 4.00 0.12 2.00 0.06

Demand for new techniques in repairing car parts

increase by 10% 0.09 ---- ---- ---- ----

Obsolete machine 0.03 ---- ---- ---- ----

The power of media to customer 0.05 ---- ---- ---- ----

SUBTOTAL 1.00 1.36 0.67

SUM TOTAL ATTRACTIVENESS SCORE 2.53 2.21

In QSPM matrix, we plan to do the two strategies. Establishing a new

branch that provide services on other field and fully renovate and advertise the

exists store. In putting a total attractiveness score Establishing a new branch got a

highest score than the other one.


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Summary

Gonzales Auto Repair Shop will Focus on the following strategies:

Market Penetration

Product DevelopmentSince the SPACE MATRIX and IE MATRIX gives the evaluation on

the 4th

quadrant. Market penetration includes increasing the number of

employees, and increasing publicity efforts and Product Development includes

research and development.

RECOMMENDATION

Gonzales Auto Repair Shop will do the strategies as follow, since the

evaluation presents that the shop needs to focus in product development. The

result for QSPM MATRIX presents that the shop needs to establish a new

branch that provide other services like electrical, mechanical, radiator, etc

since the shop only provide under chassis, it will be put up in an area that

have less competitors but have high demand.

Budget for putting up a new branch that will provide otherservices like electrical, mechanical and other.

Equipment 100,000

Land 250,000

Taxes and other Government expense 50,000

Water and lights 10,000

Advertising 10,000

Salaries 20,000

Other Expense 10,000Total 500,000

strama of gonzales auto repair

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