JHT2 Strategic Management TASK3

A1. Evaluate the industry environment for your company by doing the following:
Dominant economic features
JoPat Auto Repair service Inc. is a business that specializes in auto repair and maintenance in the Houston Katy area. They offer competitive rates, use original equipment parts, and specialize in both domestic and foreign vehicles. They perform state emission inspections, sell batteries, and install tires. They strictly adhere to factory maintenance schedules.
The Retail Automotive Industry is comprised of two kinds of companies: those that sell replacement automotive parts and accessories to "do-it-yourself" customers and to commercial "do-it-for-me" clients; and those that sell a wide assortment of new and used vehicles over the Internet and networks of regional or national franchised dealerships.
The most dominant economic feature is Market growth rate. The Auto repair industry is a fast growing industry. There is an increase in the number of vehicles on the road and the average age of a car today is nine and half years. People are choosing to keep their cars for a longer time and therefore spend on the maintenance, to prolong its life span. There is also an increase of the miles driven by drivers today, which emphasizes the need for regular maintenance of the vehicle. The complexity of the vehicles today requires special tools and computerized analysis for repair. It is very expensive to buy a new car therefore people are choosing to buy used cars instead, and therefore need a reliable auto repair shop.

A2. Driving Forces
Changes in buyer preference
Automotive repair industry falls within a stable market despite, a gloom economy. Many people are keeping their cars longer instead of buying new cars. Vehicles are necessity and very few people have the ability to fix their own vehicles. The majority owners lack the skill and time to repair their own cars and prefer to have their car repaired and maintained at auto shops like JoPat. As such, the Automotive Repair Shop will be able to maintain profitability due to offering competitive prices for vehicle maintenance and repair.
Industry growth
The modern vehicles are becoming more complex and special diagnostic programs and tools are needed for repair. Several trends that continue to affect the auto repair industry have been identified as fewer qualified individuals entering the auto repair business.
Social trends
Individuals are working longer hours and have less time for family and leisure. “Almost one in five, including both salaried and hourly, professional and blue-collar employees, now reports working fifty or more hours per week” (Figart & Golden, 2000).
This trend affects the auto repair business positively because individuals have less time to maintain and repair their vehicles.

A2a. Explain how you plan to provide for that force in your strategic plan.

JoPat Auto plans to make accommodations for customers working late hours by having an extended workday. JoPat Auto can easily adapt to the trend by offering later service hours to accommodate individuals who work past 5 or 6 o’clock. The company can also stay open on Saturdays and some Sundays. As the company grows and gets busier, the extended hours will ensure that all vehicles will get repaired or maintained in a timely fashion. This will help with the customer service aspect of the business.
To staff the repair shop with qualified technicians JoPat will partner with local vocational schools. This way the company will have access to students before they are hired by the competition. In addition JoPat will pay each employee a competitive salary in accordance with the market place.

A3: Differentiating competitive characteristics of your industry.
Price
Price is a major differentiating characteristic of the auto repair industry. Many auto repair shops charge cheap labor and do not do a quality job. The technicians are not well trained and have limited knowledge. This causes customers to spend more money repairing the same issue.
Quality
Auto shops try to service as many cars as they can and therefore end us doing rush jobs. Providing quality work on auto repair ensures repeat business and word of mouth advertising. This can help in an increase in market share and growth. This is a characteristic that continue to affect the auto repair industry because fewer qualified individuals entering the auto repair business.

A3a. Analyze where you want your company situated on a strategic group map that you draw using these differentiating competitive characteristics.

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A4. Key factors that, will impact your company’s success.
Cost
To separate ourselves from the competition we provide quality work at competitive market pricing. Our pricing is and will continue to be very competitive. Incentives and referral fees will be key to keep the customers coming back.
Online Presence
An online presence will save the company money by reduce advertising costs. The cost for online advertising is minimal compared to traditional media advertising like the local Newspaper listings, print ad postings at the local grocery store, yellow pages and Television advertisements. It will enable the business to gain a competitive marketing Edge by targeting a specific audience. An online presence will enable the business to advertise on other sites like Pay per click Groupon, live deal, Craigslist and many others.
Technology
JoPat technology needs to be reinvented. A CRM will benefit the business by streamlining the maintenance of customer contact information. All customer information is going to be gathered, stored, and maintained in the CRM system. This will also help in tracking and attracting repeat business and building relationships with customers.
This will save them on startup costs. The company will benefit from the following features
· The ability to store do items, notes and events linked to a customer
· Set reminders scheduled phone calls and meetings
· Create customized customer reports and export to a file if needed.
· Reports can be Printed, faxed, emailed or exported to other programs
· Remote and mobile access with web access mode
A5. Analyze the impact that each of the five types of competitive forces will have on competition in your industry
Rivalry:
JoPat Auto is competing for the automotive aftermarket in Houston Katy area. Competitors include the local dealerships as well as small auto repair shops. JoPat can be competitive in price because it has little overhead costs. The company is a one man shop and therefore has the advantage of making decisions quickly as well as the ability to set prices for services appropriately.
Entry Barriers:
The entry into automotive aftermarket is becoming increasingly difficult due to the slow market growth and the intense rivalry and competition for customers.
Bargaining Power of Suppliers:
Rising prices in steel and aluminum metals may lead to price increases. The raw materials increase may affect the profits of automotive aftermarket businesses. For example, large steel companies provide materials to many different industries so they do not depend on just the automotive brake industry for success. This helps to strengthen the supplier power.
Bargaining Power of Buyers: The overall buying power in the automotive aftermarket is moderate. Vehicle manufacturers did have a near monopoly and sold to dealerships which are the largest distribution channel for the US automotive aftermarket (Automotive Aftermarket, 2007). Now, independent garages are “getting a larger share of the market but their lack of scale weakens their position on the value chain” (Automotive Aftermarket, 2007).

B1. Vision statement:
JoPat is an industry leader in auto repair. We take pride in providing excellent customer experience with courteous personal attention to your vehicle.
B2. Mission statement:
We are in the business of repairing and maintaining your vehicles whether the problem is big or small. We guarantee honest, reliable and affordable car repair options to you, your family and friends
B3. Develop a distinctive competency to distinguish your company from competitors.
There is competition in the auto industry from big dealerships like Toyota, ford, Honda, and small auto shops in the area. To separate ourselves from the competition we will focus on providing quality work and a better customer experience.
An online presence 1. Create a custom Website and incorporate the following features to boost exposure and branding. · A blog page geared towards discussions with customers · Facebook and Twitter integration · Customer reviews page · Ecommerce integration · Links to Discounts, referrals and helpful resources for our customers

B4. Describe an example how you company could capitalize on a market opportunity.
Market research indicates that many people prefer doing businesses with small Auto repair shops because they develop better relationships overtime and they have the same person working on their vehicle for the most part.
With many people working longer hours JoPat will accommodate by having a longer workday and opening on weekends. This will ensure that the customers have more flexibility as to when they can have their cars fixed.
B5. Analyze one external threat to your company
A major external threat to my company is having my customers preyed on by bogus auto repair shops which charge less and do not provide quality work. Many auto repair shops do not have qualified technicians and therefore customers end up spending more for poor quality.
B5a. Recommend actions to address the threat.
The company’s new loyalty card and referral program will need to be very visible and enticing to customers. Our company will partner with local Vocational schools and therefore will have well trained and qualified technicians. We will encourage continued learning for the technicians to keep abreast with new emerging technology.

B6. Propose one business-level financial objective that fits your company and situation. Include the following in your proposal:
The proposed business –level financial objective is Revenue growth. The goal is to increase market share from 2% to 10% in the first year and another 5% for a total of 15% in the second year. An Increase in market share will increase the volume of vehicles needing repair. The trend is expected to lead to increased revenue which will increase the amount of profit for the company.
Measure success:
The objective will be measured by comparing the company profits from the previous year and the present year. The following performance metrics will be used to evaluation this plan. They include: profit margin, number of completed repairs, number of customers, number of employees, and gross revenues. Profit margin will be used to evaluate how the company is doing in decreasing expenses and increasing revenue.
The number of repairs completed and number of customers are important metrics to evaluate market share growth. Larger numbers mean more market share acquired by the company and it means increase in revenue.
Strategy:
Increase advertising and market the business. Having an online presence will improve with advertising and generate leads for new business. The cost for online advertising is minimal compared to traditional media advertising like the local Newspaper listings, print ad postings at the local grocery store, yellow pages and Television advertisements. It will enable the business to gain a competitive marketing Edge by targeting a specific audience. An online presence will enable the business to advertise on other sites like Pay per click Groupon, live deal, Craigslist and many others.

B7. Propose one functional-level strategic objective that fits your company and situation. Include the following in your proposal:
Iincrease customer satisfaction and loyalty: At the present time the company does not keep track of customer satisfaction and loyalty, this has never been monitored or tracked.
To get data on customer loyalty, JoPat will issue a loyalty card; this will help to track how many repeat customers the company has and also new business. The loyalty card will be implemented by December 1, 2013 and will offer customers a free oil change for every $250 they spend or any referrals they bring to the company. This will provide an incentive to the customers to bring in more business and referrals. The goal is that 98% of all customers will bring their vehicle or a referral for maintenance by October, 2013. They will be mailed to customers within two days of and repair that they need. Short customer surveys will be designed and ready to mail having their vehicles serviced. JoPat will also implement a service reminder for oil change.
· JoPat has invested in a CRM system. The CRM will enable the business to store do items, notes and events linked to a customer
· Set reminders scheduled phone calls and meetings
· Create customized customer reports and export to a file if needed.
· Reports can be Printed, faxed, emailed or exported to other programs
This will provide a means of tracking new business and repeat business.

C1. Explain how each of the following 10 principal managerial components can be used in the strategy execution process.
Building an organization with competency and resource strength
Staffing the company with managers and employees capable of executing the strategy is crucial. The company will ensure that the team is staffed with managers and Employees with diverse skills. This will ensure that we have a team capable of executing our strategy. By incorporating different skills enables everyone to bring something to the table. The company will have a strong management Team the forefront and employees with the experience and technical expertise needed.
Sufficient Capital and Human Capital
JoPat is investing in employee development. They will be the pace setter in cost and pricing. They will continuously train their employees to continue developing their skills and retaining staff by promoting from within, offering attractive bonus incentives and coaching throughout for low performers to improve skills.
Institute policies and procedures which facilitate strategy execution.
The company will review their policies and procedures to ensure that they
Get rid of ambiguous policies and provide a clear communication with guidance
On how things to be done. Employees needs a clear direction and they on the other hand are held accountable for acting within the set boundaries.

Adopting best practices, continually improving value chain
JoPat will Invest in training. six sigma training is geared towards improving and Increasing employee production by enforcing a strict internal code of conduct. Also ensuring that, the employees are complying with environmental, health, and safety standards. Install information and operating systems that enable company personnel to carry out their strategic roles proficiently.
In the area of technology we invested and installed operating systems that enabled company personnel to carry out their strategic roles proficiently. Tie rewards and incentives directly to the achievement of strategic and financial targets.
Our company developed a rewards and incentives program tied directly to the achievement of strategic and financial targets.
Instill a corporate culture that promotes good strategy execution.
The company will encourage a positive Organizational culture which empowers employees to contribute to company decisions. In the process of revamping their organizational culture decision making process will be streamlined to foster a culture of partnership, unity and Team work.
Exercise strong leadership needed to propel strategy implementation
The leadership will be tasked with staying on top of daily operations and closely monitoring progress. They will continuously put constructive pressure on the employees to execute the strategy well and achieve operating excellence. The expectation is that they will initiate corrective actions as needed to improve strategy execution and achieve the targeted performance results.
Ensuring that, all of the company’s efforts are aligned with the mission.

The company strategy is developed in a way that it will evolve with the changing environment. As the customer needs and expectations change so will the strategy. The company will structure the work efforts by organizing value chain activities and business processes that are aligned with their mission and customer needs. C2.Illustrate the actions you would take to closely align the entire company’s efforts to the company’s mission.

Mission Statement: We are in the business of repairing and maintaining your vehicles whether the problem is big or small. We guarantee honest, reliable and affordable car repair options to you, your family and friends.

The company will create an environment where they will involve the employees in goal setting and actions plan. Utilization of management by objectives principles will keep the employees engaged and accountable for the agreed upon goals
Technology: As a business we will need to align our team with new and emerging technology. We will invest in diagnostic tools and keep abreast of changes in the auto repair industry.
Training: As new vehicle models are released we will be monitoring closely so that employees can be trained as deemed necessary. Our team will send a representative to attend automotive aftermarket seminars and reading auto repair publications.
The company will invested heavily in Ethics training and best practices for all company employees.

C3. Analyze how you could apply two theories of motivation that are proven to help individuals and teams achieve objectives.

Herzberg's motivational theory is known as the two-factor theory. The theory implies that the things which create satisfaction in work are not the same things that cause dissatisfaction. When people are dissatisfied with their work the reason for the dissatisfaction stems from environmental factors or as he refers to them "Hygiene Factors".
Environmental factors can be Company Policies, Supervision, working conditions, pay, peer relations and relations with management. (Bedeian, 2003). Hygiene factors include the work and the organizational environment.
By ensuring that the employees are engaged in a challenging and skill stretching assignments to avoid repetitive work. The number one strategy would be to Implement a job rotation plan where people work jobs that span across functional boundaries. This would providing an opportunity for people with opportunities to gain experience in a variety of settings is increasingly to provide them with exposure and new knowledge.

Then next strategy would making the work environment a place where employees want to work. I would accomplish this by empowering the employees.
They would be given a voice and an opportunity to decide over areas pertaining to their work.

C4. Discuss organizational considerations for structuring the work effort to successfully execute your strategic plan.
1) Financial. We will strive to be the pace setter in cost and pricing
2) Customer focus by providing quality work
3) Increase employee production by enforcing a strict internal code of conduct as well as complying with its environmental, health, and safety standards for the benefit of workers
4) Invest in learning and growth in areas such as six sigma training,
5) Encourage a positive Organizational culture which empowered employees to contribute to company decisions.

C5. Discuss current and emerging organizational characteristics that may contribute to successful execution of your strategic plan.
Collaborative environment: Management will ensure that the workplace is collaborative. Everything will be was a Team effort. Explaining changes ahead of time and showing the benefit of the change made it very flexible and adaptable. It fostered a culture of partnership, unity and Team work.
Empowered Workforce: The management will empower the employees to contribute toward the decision making process. When we streamline processes everyone will be aware of the benefits. This is instrumental in ensuring that the employees adapt quickly to any changes that are made because they were involved in the decision making process.
Communication:

An organizational culture is very important because it will unite the organization. Given the employees in company come from very diverse backgrounds they need a common culture at work to foster togetherness. It defines what is expected at the workplace therefore causing less conflict and fostering better communication. A common culture keeps employees motivated and loyal to the management of their company. It paves way for healthy competiveness among the employees making them more productive. It gives them a sense of Identity and direction enabling them to understand their roles and responsibilities.

C6. Recommend an approach leaders should use to make corrective adjustments during your company’s strategy execution.

In order for the leaders to make corrective adjustments they need to know how what is working and what is not working. My recommendation is that they gather feedback from the employees by setting up a suggestion box. The employees can drop their views in the suggestion box and these can be reviewed by management to make improvements.
Surveys are another great way to get a feel for your organization. Employees can fill out anonymous surveys to give feedback.

Sources http://www.valueline.com/Stocks/Industry_Report.aspx?id=7257 Automotive Aftermarket in the United States Industry Profile. (2007, December). Retrieved September 27, 2013.
Figart, D. & Golden, L. (2000, Nov/Dec). Doing something about long hours. Challenge, 43(6). Retrieved October 19, 2013.