S.W.O.T. Analysis of Maaco Auto Body & Painting - Research Paper Example

?Lionel Warren Business 482 Judy Durish 13 March S.W.O.T. Analysis of MAACO Auto Body Shop Company Profile MAACO Auto Body Shop was founded in the year 1972 by Anthony Martino and is currently headquartered in King of Prussia, Pennsylvania. Since its establishment, the company boasts having repaired a staggering 16.5 million vehicles requiring auto body repair and auto paint. Current statistics reveal a weekly auto repair service of 12,000 cars or 600,000 per annum (MAACO: About MAACO, par. 1). The total number of auto body shops within the United States area and Canada already reached 500, indicating that they are “North America’s number-one automotive aftermarket franchise in terms of unit sales. Experts in franchising have recognized MAACO for its overall excellence, growth potential and helpful support systems for store operators” (MAACCO: About MACCO, par. 2). The positive image of the company contributes to the increase in outlets and clientele since its inception. Gaebler Ventures aptly describes MAACO as a winning retail operation with extraordinary brand recognition, no national competition, and about a 47% U.S. market share. Maaco is more than a franchise opportunity. It is a proven system that provides continuous support and training to position you to grow a prosperous business. With Maaco, you receive expert assistance, so you never feel alone” (Gaebler, par. 1). The competitive advantage of the company is manifested through leadership in the automotive repair industry. According to IBIS World, the nature of the work for auto body shops in the US encompasses repairing the interior and the body of passenger cars, trucks, vans and trailers. These firms also carry out customization work on the interior and body of vehicles. Some firms specialize in certain auto repairs; for example, paint shops specialize in post-collision paint jobs, while automotive glass shops replace, repair and tint windows. Restoration shops, which typically represent a niche market, are involved in restoring classic and antique cars” (IBIS, par. 10). In this regard, this essay aims to proffer a SWOT analysis of MAACO, by reviewing the company’s strengths, weaknesses, opportunities, and threats (SWOT), to explore its competitive advantage in their field of operations. Strengths MAACO was recently ranked by AllStar Franchise as an organization worthy to be included in its AllStar list due to its strengths in terms of longevity which is likewise tantamount to years of experience in their business. As revealed by All Business, “the company has ranked high in financial strength for two consecutive years, and this year its Web visibility improved significantly (from #202 to #106). Maaco offers a conversion program to turn independent auto body shops into Maaco franchises, which is appealing to many independents in a tough economy. Parent company Driven Brands, which owns several automotive-related franchise companies, also has a Dealership Jump Start program that converts car dealerships to Maaco centers” (All Business, pars. 2 & 3). From its 149 AllStar ranking in 2010, the rank improved to 84 in 2011 proving that MAACO continues to utilize its internal resources effectively and efficiently. It boasts of according customers a price for repairs which is 33% less than those quoted and charged by other repair shops (MAACO: Home, par. 1). As revealed by White, “in 2011, MAACO was ranked #1 in class by Entrepreneur Magazine” (par. 4). The unique franchising strategy entices investors to open new shops due to the financial prospects and the number of clientele who continue to patronize MAACO auto body shops. Further, Gross revealed that various customers in Canada expressed their content and satisfaction from the services provided by MAACO. Gross averred that “Maaco is the collision shop that paints cars. We do it all, and just as importantly, give you much more Value than anyone else can. By bringing your car to Maaco, North America's Bodyshop, you benefit from our encounter, buying power, management systems and continual technical training” (Gross, par.7). The company has ample resources to work on repair tasks “quicker, better and cheaper” (Gross, par. 9). Gaebler Ventures aptly summarized MAACO’s strengths in terms of “experience, innovation, development and response to market trends” (Gaebler, par. 5). Capitalization on these strengths enabled the organization to achieve market leadership in their field of endeavor. Weaknesses MAACO has been franchising their business to other investors all over the country. The franchising strategy, although seen as strength, could also be considered as a weakness for the company in terms of consistency in the delivery of quality service. In the website, Pissed Consumer, there were various complaints revealed on the services provided by MAACO. The concerns of the customers focused on: poor quality of service (“got runs, drips, painted tires, masking tape still left on in places, gaskets and door panel clips broken or missing or not reglued, body repairs done with filler instead of metal brazing - rusted through in three years” (Pissed Consumer, 143), poor customer service skills (“manager had an attitude-wasn't interested in our complaints, ie: over spray inside car, broken emblems, part of dent still visible. He actually snapped and told my husband not to insult his employees again or he would "Take you out in the street and knock you on your ***." (Pissed Consumer, 390); stolen accessories “when my radio gets stolen out of it, they claim they are not liable” (Pissed Consumer, 901). A previous employee of MAACO revealed the following experience, to wit: I can't remember how many times I would be told not to take out this or that small rock chip, something that takes literally a couple minutes, on account of the supposed fact that "this one can look like ***" or that "this person doesn't care that much". The level of work I did was based on how much my employers thought this or that person cared about their car as opposed to how much they paid to have the work done. There is a paint service option that involves charging for extra prep time, I know some people paid for that service but I never, not one single time, spent extra time on anything. I also have gone months without a final paycheck despite being told on more than one occasion it was in the mail. There is also no shortage of racial slurs thrown around the shop” (Pissed Consumer, 1569). These customer complaints attest to the quality of service that MAACO delivers. The revelation from a former employee would indicate that to save on costs, quality service is not being highlighted nor emphasized for all automobiles being repaired. Additionally, the level of customer service was manifested to be poor due to inattentiveness to details and the inability to adhere to high standards of quality service promised and expected by the clientele. The inability of the parent company to monitor and impose high quality standards in auto repair service and in dealing with customers are weaknesses that could destroy the image of the company. If left unattended, customers’ word of mouth expressing their disgust and dissatisfaction on the quality of serving being provided by the company could eventually take a toll and diminish the market share, profitability and performance of MAACO, in the long run. Opportunities An examination of the external environment reveals various opportunities that the organization could tap as revealed below. Thomas E. White reveals that based on the 2010 Automotive Aftermarket Industry Association (AAIA) in their Fact Book of the 19th Edition, the automotive aftercare market is one of the fastest growing industries today and is estimated to grow 4.5 percent in 2010 - up from $277.2 billion in 2009 to $289.6 billion in 2010. This franchise has been called a "recession resistant company," largely because of the huge number of cars on the road. Even in a recession, those cars will need repairs” (White, par. 4). The contention of White indicates the continuing potentials to generate profits from operating the company due to the growth trends revealed herein. In this regard, there are vast opportunities for MAACO to continue efforts that focus on intensifying franchising. As emphasized by White, “this brand is an incredibly popular franchise, as shown by the many entrepreneurs seeking to start a MAACO franchise. With brand recognition and more than 45% of the U.S. market share, starting a new MAACO franchise is a huge opportunity” (White, par. 2). Brand retention is a crucial element for investors to consider in franchising decisions. Aside from franchising, MAACO offers various career opportunities to potential applicants who wish to have a career in the auto repair business. Riding on the positive growth in the automotive aftercare market, individuals who are reflecting on a career in the automotive repair service industry would gain from being part of the MAACO’s personnel base, either through the parent companies, or through franchises all over the country. Kenneth Levene acknowledged Some entrepreneurs identify lucrative opportunities by conducting systematic searches. Anthony A. Martino recognized the automotive industry must have numerous opportunities. He analyzed various facets of the industry to find areas where people’s needs were not being met by established auto manufacturers, dealers, and service stations. He created AAMCO to provide the market with better transmission repair and MAACO to provide bet­ter/more convenient/less expensive auto body repair and painting (Levene, 6). By scanning the environment, Martino was able to capitalize on the opportunities that abound in their external environment. Threats As there were identified opportunities, it is equally significant to proffer the threats that abound and could influence the operations and performance of the organization. The greatest threat being faced by MAACO is the barrage of customer complaints that appear and can be accessed through the internet. Despite knowing that these service complaints could be generated from different franchisees of MAACO, the parent company must address the issue through various measures. As franchisors, MAACO still has the responsibility to ensure that franchisees operate according to their standards. Weingarter indicated that: franchising used to be described as a parent-child relationship-an unflattering description of the franchisee role. But as one of the pioneering franchisors, Martino could be referred to as patriarchal. He feels a responsibility toward the people who have invested in his ideas (Weingarter, par. 10). The increasing number of franchisees poses threats in terms of control and monitoring of adherence to quality standards. The number and incidences of customers’ complaints attest to the diversity in standards applied for quality of service in auto repairs, as well as in customer relations. MAACO must look into the complaints and address them immediately to avoid erosion of market shares and the decrease in trust and confidence of their customers in the long run. Conclusion MAACO Auto Body Shop has gained a competitive advantage in the automotive aftercare market from its vast experience coupled with ability to apply innovative strategies and affordability of auto repair service. Its franchising schemes paved the way for more shops to be strategically located all over the United States and Canada. Their expertise in this field of endeavor enabled them to provide the much needed car service at the most cost effective and time efficient manner. An assessment of their internal resources revealed strengths, as well as weaknesses, that must be appropriately addressed as indicated in the abovementioned discussion. The opportunities in the franchising business, coupled with the projected growth in the automotive aftercare market are optimistic prospects for continued growth for MAACO. It is pertinent to address customer complaints which threaten their market share and image. MAACO’s management should be more vigilant and strive to increase regular monitoring and imposition of strict standards for quality service to all franchisees. By capitalizing on strengths and opportunities and addressing weaknesses and threats, MAACO would be ensured that a positive and profitable performance would be sustained in the near future. Works Cited All Business. Maaco Auto Collision Repair & Auto Painting. Maaco Auto Collision Repair & Auto Painting. (2011). Web. 20 February 2011. Gaebler Ventures. Franchise Profile — MAACO Enterprises, Inc. (2011). Web. 21 February 2011. Gross, Edward. Choose Maaco Auto Body Reviews in Vancouver WA. Choose Maaco Auto Body Reviews in Vancouver WA. (16 November 2010). 22 February 2011. IBIS World. Auto Body, Paint & Glass Repair. Auto Body, Paint & Glass Repair. (21 December 2010). Web. 22 February 2011. Levene, Kenneth. Cracking the Entreprenuership Code. Cracking the Entreprenuership Code. (2008). Web. 21 February 2011. MAACO Franchising, Inc. About MAACO. 2008. Web, (22 February 2011). ------------------. Home. 2008 Web. 22 February 2011. Pissed Consumer. MAACO. (2010). Web. 20 February 2011. Weingarter, Nancy. Making Maaco Magic. Making Maaco Magic. (September 2006). Web. 21 February 2011. White, Thomas E. MAACO Auto Painting and Bodyworks - Franchise Review. (17 February 2011.) Web. 21 February 2011. Read More