Pas Automotive Repair Company - Case Study Example

? Pas Automotive Repair Company Pas Automotive Repair Company Executive Summary Pas Automotive Repair is a sole proprietor business associated by women using her best asset to make money. This business came out of necessity, when my husband was given a bouncing cheque and this is when I decided to make a change. The business started at initial working capital of 3000 dollars. Through the availed small and tight budget, I rented out a small place where all activities of car repairing were to take place. Out of agony, I managed to get a space near the service station. After 6 months, I was asked to run the whole station store and gas pumps. The gas was closed a year after it was closed due to its line expiry. It was due to this reason that Pas Automotive repair decided to acquire a building that was the year 2000, hence the business became steady from then. Pas Automotive is luckily located on one of the busiest streets in Sydney 500 Prince Street. With a large lot of 20 plus cars and access to the roadways, situated in 3 different directions. In business, Pas automotive repair company is among the automotive repair shop that deals with all repairs on both cars trucks boats as well as lawn mowers. In addition, the company deals with rebuilding various vehicle engines as well as changing engine oil. As the business is at a tender age, the company has a total of seven employees. Our services include; service calls, self service work where customers will be picked from a prevailed position and the problem they are encountering on their vehicle ascertained just on time and at affordable price. Our prices depend on the labor guide, being serviced and provided by all of our service stations. We also give a discount price to students and seniors. More so we have affordable and special hourly rate of 60.00 dollars an hour and this makes us cheap on the market as compared from our competitors. Research on the Pas Automotive Repair as a sole proprietor business is very useful. Firstly, it will aid in making a forecast to affiliate the current situation, therefore supporting the potential increase in service provision. Additionally, while delivering the service, the industry looks forward in growth and developing around the globe. There are several factors that limit their use, which may be reflected later. Moreover, the statistical analysis of the pas automotive repair company and distribution channels, which is very essential in making sound decisions, will be evaluated. Secondly, the study of online and traditional agency services (in terms of understanding consumer needs) is relevant not only for the owners of Pas Automotive Repair Company, but also for the insurance companies, transportation and others. Through the data, a clear analysis of the various factors affecting the industry is evaluated. This leads to increased efficiency and consequently increased returns. Additionally, research of the subject carries a statistical and social nature, which makes it necessary to understand the consumer behavior, as well as their knowledge of the possible opportunities. Increasing Sales and Profits One of the main objectives of advertising is to augment sales and profits. Most companies nowadays employ advertising to impart people regarding their products and services. Some forms of advertising lend themselves more to producing immediate profits. This can be with adverts availed through Billboards. The company will process and markets their services under a brand name of Pas Automotive Repair Company. Encourage Trial and Usage Pas Automotive Repair Company will frequently use advertising to hearten trial and convention of new services they unveil to their customer. The company will lope their advertising to bring in their services to the public as well as their customers. The company will initiate public enticements to first-time service consumers and will work based on brand equity among techniques Forms of advertisement In any company as per the requirements of marketing strategies, the company and as per the current technology initiates media as social networks to market its products both locally as well as internationally. It is through this norm that Pas Automotive Repair Company will execute technological aspects to deliver its goals just on time and effectively to its customers. It is believed that the customer is always right and through this statement we realize that the company needs to engage itself by initiating media domain advertisement to enhance customer standards acquisition. Since Pas Automotive Repair Company is a small starter company, It will be forced to utilize domain media such as YouTube, LinkedIn, Facebook and Newspaper advertisement, which are less costly. The following year in business, Pas Automotive will further its advertisement strategies by using domain media such as Television as well as radio advertisement though believed to be costly and requires huge capital to avail it. Consolidation strategies Pas Automotive Repair company will employ “Just in Time (JIT) system as the pillar of production. The system has the takt time, level production and pull system as the base processes for the system. Takt time is concerned with the overproduction and underproduction of produce in the company. Its main work is to match the processes such that there is no imbalance in how they interrelate. It also tries to maximize production using the available labor from the workers and reduce time wasted during the day. In order to standardize work, takt time, work sequence and standard work are supposed to be keenly observed. In this perspective, human motion is also monitored and moderated at the work site to enhance work standardization. At the place of work, takt time is reflected from the work elements which laborers are tasked to perform. This enables their time at the place of work to be utilized effectively. Although this system is of useful in delivering the required quantity and quality of their produce on time, it is not efficient for repairing services. The JIT system also helped to eliminate stock inventories since the required supplies are supplied at the required production time. This kind of operation helps to make full use of workers and their capabilities (Wessels & Koller, 2010). In order to improve work procedures within pas Automotive repair company, the initiative as well as creation of continuous process flow will be availed to help and bring problems on surface so that they can be handled as quick as possible and easily. Introduction of pull system avoid overproduction and that is why we as Pas automotive repair company believe we need to employ this consolidated strategy. This strategic plan will be articulated just to ensure that services are provided based on the improved quality. This system also ensures that laborers efforts are fully utilized. Market plan implementation Since stock is the physical product a company sells, buys or creates, every company has three main types of stock; work in progress, raw materials, materials and finished products. Pas Automotive repair company will controls stock using two tools; the stock control charts and stock management. Stock management as a process ensures that there is required stock at all times to meet customer demands while minimizing wastes. On the other hand, a control stock chart shows the balance of all the orders processed for new stock against the sales made. This is a centralized stock management system and has many benefits for the restaurant, managers, and customers. This system balances the stock received for promotions, for sale, and the running stock such that it avoids unnecessary wastes. It also ensures that food costs are minimized, stock is maintained at the required minimum balance to avoid running out of stock and that the stock for promotion is maintained constant. This system helps managers to have enough experience in the area of stock management and balancing which is good for the company. Using this knowledge, the company will manage stock during both low and high economic seasons. This minimizes management problems. It also gives managers enough time to deal with things that ensure quality standards at the company business baseline. This system looks forward to raise and enhance company reputation with an aim of winning customers and believe norm. This increases efficiency and reduces time wastage hence high profit margin realized at the end of any financial year (Wessels & Koller, 2010). Financial management Public financial management is the process of collecting adequate resources from the company’s economy in a proper way alongside distributing and use of the very resources. Public finance management entails all aspects of mobilization and expenditure of resources a given company in business, Pas Automotive Repair Company will develop financial management laws, organizations strategize and systems to help in sustainable, efficient, and transparent management of public finance. The main objective of Public Finance Management help is to strengthen state systems. By initiating market plan and financial management norm, Pas Automotive Repair Company is focused on attaining transparency in its functions and aiming at achieving improved performance in accountability through incorporation of openness with stakeholders who will be allowed to chip in ideas and information to the public sector (Hildreth, 2003). Managing finances is a critical function of management in any organization; in the same way company, finance management is a fundamental role of the company course of action. Finance management comprises of resource soliciting, prioritizing of programs, the budgetary procedure, proper managing of resources and imparting controls. The business started at initial working capital of 3000 dollars and administered as small and tight budget ever been availed according to the nature of work and service Pas Automotive Repair Company looks forward to engage in. Pas Automotive repair company will come up with company finance and accounting set up which will offer assistance on full change or accounting modernization project and address the effects on policies, people, systems and processes. There will be also the provision of ad hoc services on request, training and workshops, process and system upgrading, financial management and reporting. In an effort to confine and institutionalize, wide experience with the conversions will be established to enhance World Finance and Accounting centre of excellence strategies. Since its establishment, these industry specialists have consistently shared facts and leading practices in aiding our larges world consumers. Public financial management (PFM) is an important part of the development course. Sound PFM supports combined control, prioritization, accountability, and efficiency in the management of public sources and release of services, which are dangerous to the achievement of company policy objectives including achievement of Pas Automotive Repair Company At Large. There are five values articulated as far as financial management is concerned. These values reflect good practice in Public Finance Management work when initiated. Based on financial traits, Pas Automotive Repair Company will make possible and encourage state leadership in locating the Public Finance Management reform, strategy, action plan mechanism. This will be availed through analytic work conducted in an integrated and coordinated approach, drawing upon the separate competencies of the Pac Automotive repair company Finance Management state team and other donors, with the timing and scope determined largely by country needs (Hildreth, 2003). Shingler et al (2008) argue that regression analysis reveals that the factors that most influence the satisfaction of customers with the performance of state agencies are the customer’s perception of how long it took to solve the conflict or dispute, based on survey results and whether the dispute was decided in the favor of the customer from the internal records of the agency. The authors argue that in such a case, subjective data offers valuable information for assessing the performance of the agency. It is rational to conclude that subjective data combined with objective information is very essential in valuable and significant information for evaluating the performance of company and its workers too. Subjective data for assessing performance in company include client satisfaction, which informs the manager what customers like, or do not like about the company service delivery. The main objective of finance Management help is to strengthen the company systems. In this regard, it is useful for Pas Automotive Repair Company and its staff engaged in Public Finance Management –related activity to work together for improving the company systems. Good practice is to establish a finance management team to support the implementation. The company finance Management team would coordinate work across all their stations. Financial Cost Information A balance sheet is one of the fundamental financial reports that any business needs for reporting and financial management. A balance sheet shows what items of value the company (assets) holds, and what its debts are (liabilities). When liabilities are subtracted from assets, the remainder is owners’ equity. The financial cost information of Pas Automotive Repair Company will be availed under service revenue of $ 460, 000 with an aim of achieving a gross profit of $ 190, 000 probably after one year in service. Below is the projected financial income statement, Pas Automotive Company is projecting at the end of the year 2000. The financial statements for the Pas Automotive Repair Company Pas Automotive Repair Company Income Statement at end of the year 2000 (All Amounts in AED) Sales Revenue 460,000 Less: Cost of service provision 270,000 Gross Profit 190, 000 Less: Operating expenses 35, 000 EARNINGS BEFORE INTEREST AND TAX 155,000 Less: Interest Expense 9,000 EARNINGS BEFORE TAX 146,000 Les: Tax (30%) 43,800 EARNINGS AFTER TAX 102,200 Conclusion In conclusion, the income financial statement of Pas Automotive Repair Company Ending December 31 will be expected to yield a gross profit of 190, 000. This will translate to 155,000 earnings occurring before interest and tax has been imposed. Recommendation It is therefore recommended that there is need to ensure that the income statement for the year 2000 remains at profitable level by cutting down cost of goods sold in the following financial years. Meanwhile, financial cost information will incur balance sheet project as far as Pas Automotive Repair Company being business is of more concern. Pas Automotive Repair Company Balance Sheet for the year 2000 Pas Automotive Repair Company Balance sheet, end of year 2000 (All Amounts in AED) ASSETS 2000 Current Assets Cash $ 45,000 Accounts Receivables 78,000 Inventory 62,000 Total Current Assets 182,000 Net Plant and Equipment 430, 000 TOTAL ASSETS 612, 000 LAIBILITIES Current Liabilities Accounts payable 115, 500 Other Liabilities 148, 500 Total Current Liabilities 264, 000 Long-term Liabilities Bank Loan 78, 000 TOTAL LIABILITIES 342, 000 SHAREHOLDERS’ EQUITY Common Stock 250, 000 Retained Earnings 20, 000 Total Shareholders’ Equity 270, 000 TOTAL LIABILITIES & SHAREHOLDERS EQUITY 600, 000 Data Analysis Data analysis was based on analysing quantitative data. The processed data results derived from the questionnaires were included in the data matrix table (Saunders & Thornhill, 2012). The data was recorded using the numerical codes, as there were different types of information available to work with (Saunders & Thornhill, 2012). Additionally, these questionnaires utilised weight cases, which were used to aid in organising the chronological order of the answers by their importance (Saunders & Thornhill, 2012). The processed information was provided in the form of trends and graph proportions (Saunders & Thornhill, 2012). The data collected from the survey was used for the analysis. Consequently, all the data was coded and entered into the matrix in Microsoft Excel, while providing a statistical analysis. Additionally, coded information has been organized in sections within the table, in such a way that made possible to check the value of each variable, as well as to eliminate errors and illogical connections. For example, the data for the age category is seen in both, absolute numbers and percentages. Validity and reliability The data gathering technique and the analysis methods used are tested and reliable (Saunders & Thornhill, 2012). Constructing models of Pas Automotive repair comapny allows determining the connections and interrelations between different variables. This will serve as the basis for the conclusions of the research, in order to answer the research questions and achieve the research goals. Limitations The most important limiting factor of the research was time. In order to ensure the “purity” of the sample group, the author conducted surveys at a travel trade fair, which was open to visitors for only three days, with two more days dedicated solely to professionals and closed to the public. In order to have gathered the materials necessary for the survey, the author used 5 individuals that have aided to complete the survey. These individuals were carefully instructed beforehand, as they were there not only to spread out the questionnaires, but also to assist each participant in the process of answering the questions. Such method was described as effective in similar cases dedicated to examining the impact factors of online agencies (Al-hawari & Mouakket, 2012). Conclusion Consideration of the Pas Automotive Repair Company balance sheet, will be able to articulate that the company should post a total of current assets translating to 182, 000 at the end of the year 2000. However, when Net Plant and Equipment is inclusive, the total current assets will be totaling to $ 612, 000 Recommendation However, from the statistics and the availed balance sheet data indicates that Pas Automotive Repair Company will be operating on a total liabilities of 600, 000 Financial Ratios Pas Automotive Repair Company 2000 Industry Average 2000 Profit Margin 190, 000 19% Inventory turnover 4.35 Times 3.2 times Total asset turnover 0.75 1.4 Quick ratio 0.71 1.6 Total Debt Ratio 48% 45% Return on Equity (ROE) 32% 30% Calculation of the financial ratios 1. Total Assets turnover = sales/Total assets = {460,000/612, 000} = 0.75 2. Day’s Sales % inventory = {Inventory/Cost of goods sold} * 365 = {62,000/270,000} x 365 = 83.81 days 3. Inventory Turnover ratio = Cost of goods sold/Inventory = [270,000/62,000] = 4.35 Times Appendix: Data Requirements Table for customers Questionnaires Research question/objective: When a customer prefer to use a certain car repair company? Type of research: Predominantly descriptive, although wish to examine differences between different group of customers Investigative questions Variable(s) required Detail in which data measured Check included in questionnaire How representative are the responses on automotive repairing? Age of customers, Income (Net Salary) For age: up to 20, 20 up to 30, 30 up to 40, 40 up to 50, 50 and above. And for Income: Up to 80, 80 up to 150, 150 up to 200, 200 and more, prefer not to answer. What it your age range? What is your monthly average household income? What type of automotive company do you prefer? Type of travel agencies Traditional, automatic, both or direct channels What is your preferable automotive company? Research question/objective: What are the existing influencing factors on the automotive companies? Type of research: Predominantly descriptive, although wish to examine differences between different group of customers Investigative questions Variable(s) required Detail in which data measured Check included in questionnaire What are the influencing factors considered for your car repair? Factors Information found on the internet, Recommendations from friends, Advertisements, Media advertisements, Thematic TV programs, Journals/Articles, Magazines, directories, guides, Visiting exhibitions and events How important are the listed below factors, while you are planning to go and repair your vehicle? Research question/objective: Why do the Pas Automotive repair company prefer to use low pricing strategies to woe customer satisfaction? Type of research: Predominantly descriptive, although wish to examine differences between different group of customers What are the influencing factors on the type of costing strategies? Factors More convenient to use, More secure to use, Easy to use, More information/content available, More options (more services provided), Better Prices, Time consumption (faster), Brand Name, Language prefer Depending on the stated factors below, which of the two option would you choose? Data Requirements Table for Managers Questionnaires Research question/objective: What distribution system is available for Pas Automotive Repair Company? Type of research: Predominantly descriptive, although wish to examine differences between different group of customers Investigative questions Variable(s) required Detail in which data measured Check included in questionnaire How representative are the prevailing companies? Number of customers, Number less than 500, from 500 to 1000, more than 1000. What number of customer do you anticipate in 1 year? Research question/objective: Why do the Pas Automotive Repair Company prefer to use less cost to woe customers? Type of research: Predominantly descriptive, although wish to examine differences between different group of customers Investigative questions Variable(s) required Detail in which data measured Check included in questionnaire What are the influencing factors on choice of costing? Factors Repair Services & price, last minute tours, exotic products, face-to-face, quality services, brand name, new offers, loyalty program What are reasons that customers ask for your services? The relationship between the Objectives and the Research Questions O1: (To evaluate) To evaluate the distribution channel systems in pas Automotive repair company in comparison to the existing distribution systems (other countries) Q1: How did the modern distribution system develop in the world? – an item of research ( on the basis of the literature ) Q2: What distribution system is available for customers in Pas Automotive repair company? – an item of research using the survey (data analysis) O2: (To examine) To examine the advantages of low cost in repairing activities within the final decision-making process of the consumer Q3: When a consumer preference for the services provided? – an item of research (on the basis of the literature) O3: (To investigate) To investigate the influencing factors on the choice of the organization type. Q4: What are the existing influencing factors on the type of service delivery and planning? – an item of research ( on the basis of the literature) Q5: Why does the customer prefers and chooses Pas Automotive Repair Company? - an item of research using the survey (data analysis) Survey instrument Budget Budget Personnel: Personnel: The following requested personnel will work on Project [add name and/or number]. Position Description % FTE Base Salary Total Project Coordinator Jane Doe will be responsible for the overall leadership and management of the Pas Automotive Repair Company Quality Rating and Improvement System. She will report to the RTTT-ELC project director and be responsible for carrying out details related to the TQRS proposed the Scope of Work appended to the agency contract. 100% $45,000 $45,000 Project Analyst (2)   100% $25,000 $25,000   100% $25,000 $25,000 Total Equipment: Equipment: Consistent with agency policy. Item Purpose Office Location Cost of Item Item Description Total Desktop Computers (3) Two desktop computers will be needed to expand Pas Automotive Repair Company office and supply the needs of 2 new employees. 2 @$1,500 Computer including monitor & printer $3,000 One desktop computer will be needed to expand Pas Automotive Repair Company office and supply the needs of 1 new employee. 1 @ $1,500 Computer including monitor & printer $1,500  Total       $4,500 References Al-hawari, M. A., & Mouakket, S. (2012). Do offline factors trigger customers appetite for online continual usage?: A study of online reservation in the airline industry. Asia Pasific journal of marketing and logistics, 24 (4), 640-657. Brunger, W. G., & Perelli, S. (2009). The impact of the internet on airline fares: Customer perspectives on the transition to internet distribution. Journal of revenue & pricing management, 8 (2/3), 187-199. Hildreth, W. (2003). Case studies in public budgeting and financial management. New York, NY: CRC Press. Mayr, T., & Zins, A. H. (2009). Acceptance of online vs. traditional travel agencies. Anatolia: An international journal of tourism & hospitality research, 20 (1), 164-177. Saunders, L. M., & Thornhill, A. (2012). Research methods for busines students (Sixth ed.). Essex: Pearson Education Limited. Wessels, D & Koller, M. (2010). Valuation: Measuring and managing the value of companies, 5th Edition. New York: Wiley. Read More