Gonzales Auto Repair Shop

By Henrick Bellere Jonathan Mendoza Mark Jhon Gico Mark Josua Singson

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 Statement
Gonzales 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.

External Audit
Opportunities 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
No vat in providing services Increase in demand for automotive shops by 10% The ratio of automobile registered increase by 1.69% There are people willing to pay for the convenience that the shop provide Services needed for company that have no time in coming to the shop Demand for automotive courses increase Investors are willing to invest in automotive industry Customer are responsive about their safety Auto supply that gives terms and discounts Competion over the same field and specialization

Threats 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
New competitors increase by 5% Wilson and Jackson is in the vicinity Demand for new techniques in repairing car parts increase by 10% Obsolete machine The power of media to customer New machines are distributed along competitors Government regulation on waste management Shift in consumer taste Competitors who are providing other services Trade barriers in importing car parts

EFE Matrix
We ighte d Score 0.12 0.30 0.12 0.12 0.36 0.40 0.12 0.06 0.20 0.18 0.20 0.06 0.27 0.06 0.10 0.06 0.02 0.02 0.06 0.02 2.85

Critical Succe s s Factors Opportunitie s No vat in providing services Increase in demand for automotive shops by 10% The ratio of automobile registered increase by 1.69% There are people willing to pay for the convenience that the shop provide Services needed for company that have no time in coming to the shop Demand for automotive courses increase Investors are willing to invest in automotive industry Customer are responsive about their safety Auto supply that gives terms and discounts Competion over the same field and specialization Thre ats New competitors increase by 5% Wilson and Jackson is in the vicinity Demand for new techniques in repairing car parts increase by 10% Obsolete machine The power of media to customer New machines are distributed along competitors Government regulation on waste management Shift in consumer taste Competitors who are providing other services Trade barriers in importing car parts TOTAL

We ight Rating 0.06 0.1 0.04 0.04 0.09 0.1 0.04 0.03 0.05 0.06 0.05 0.03 0.09 0.03 0.05 0.06 0.02 0.02 0.02 0.02 1.00 2 3 3 3 4 4 3 2 4 3 4 2 3 2 2 1 1 1 3 1

In EFE Matrix the weight we give in evaluation to every opportunities and threats 0.0(not important) to 1.0(very important). In terms of rating we give 4.0 to the most 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.

Financial Ratio Analysis

2009 Liquidity Ratios Current Ratio Quick or Acid-Test Ratio Leverage Ratios Debt-to-Total-Asset Ratio Debt-to-Equity Ratio Long-Term Debt-to-Equity Times-Interest-Earned Ratio Activity Ratios Inventory-Turnover Ratio Total-Asset Turnover Fixed-Asset Turnover Average Collection Period Profitability Ratios Gross Profit Margin Operating Profit Margin Net Profit Margin Return on Total Asset (ROA) Return on Stockholders Equity Earnings per Share Growth Ratios Sales Net Income Earnings per Share Dividends per Share 457,000 70,500 N/A N/A 493,000 82,940 N/A N/A 5 9.67 9.67 N/A 8.38 N/A N/A 10.18 10.18 N/A 9.37 N/A N/A N/A O.86 1.60 N/A N/A 0.96 1.82 N/A 32.60 48.38 79.75 N/A 34.13 51.81 76.75 N/A 1.42 N/A 1.48 N/A 2010

In Liquidity Ratio show that Gonzales Auto Repair shop can meet short term liabilities and 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 its resources effectively. Profitability Ratio, the return of investment increases 1% from year 20092010 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 of under chassis all the three company. Since all the three company provide the services. Gonzales Auto repair shop focus 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 service like paint, electrical and mechanical.

Internal Audit
Strengths 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
High quality service Specialize in underchassis Employees are well trained Can provide services for imported automobile 50% cheaper than other automotive shop Employee morale is excellent 24/7 customer service Good relationship with the customer Develop techniques in repairing car parts Terms and discounts are being issue

Weaknesses 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Specialize only in the field of underchasis The shop dont have marketing ads Dont sell products for car parts No research team for development The machinery needs to be improved No warehouse The shop needs renovation Lack of facilities to provide the service Lack of manpower Insufficient tools to provide service for new models of automobile

IFE Matrix
Weighte d Score Weight Rating 0.12 0.02 0.09 0.03 0.1 0.02 0.06 0.08 0.08 0.02 0.02 0.05 0.02 0.06 0.06 0.01 0.05 0.04 0.04 0.03 1.00 4 4 3 3 3 3 3 3 4 3 1 1 1 2 1 2 2 1 1 2 0.48 0.08 0.27 0.09 0.30 0.06 0.18 0.24 0.32 0.06 0.02 0.05 0.02 0.12 0.06 0.02 0.10 0.04 0.04 0.06 2.61

Critical Success Factors Strengths High quality service Specialize in underchassis Employees are well trained Can provide services for imported automobile 50% cheaper than other automotive shop Employee morale is excellent 24/7 customer service Good relationship with the customer Develop techniques in repairing car parts Terms and discounts are being issue Weaknesses Specialize only in the field of underchasis The shop dont have marketing ads Dont sell products for car parts No research team for development The machinery needs to be improved No warehouse The shop needs renovation Lack of facilities to provide the service Lack of manpower Insufficient tools to provide service for new models of automobile TOTAL

In IFE we gain the total weighted score of 2.61, it explains that the company is doing well 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.

TOWS Analysis
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 parts 4. No research team for development 5. 6. 7. 8. 9. 10.

The machinery needs to be improved No warehouse The shop needs renovation Lack of facilities to provide the service Lack of manpower Insufficient tools to provide service for new models of automobile Opportunities S-O Strategies W-O Strategies 1. No vat in providing services 1. (S2-O2) Establishing a branch on area that 1. (W9-O6) Cooperating with TESDA to have less competitors and high demand refer the shop to the students 2. Increase in demand for automotive shops 2. (S1-O10) Maintaining the quality service and 2. (W8-O2) Renovating the shop that will by 10% at the same time providing other services give additional space for providing the like electrical, radiator, aircondition, ets. service 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 3. (S3-O5) Providing services for some companies that have no time in going to the shop 4. (S7-O3) Proving services on Monday Sunday, even on holidays the shop will be open. 5. (S6-O8) Providing services that will ensure the customer safety and meet their satisfaction 3. (W1-O6) Communicating w/ TESDA student that have the sp[ecialization on other field 4. (W3-O9) getting good relationship w/ the store that sell car parts to have terms and discount 5. (W2-O2) Advertising the shop by giving flyers or posting it to different places 6. (W10-O7) There will be investing or buying new materials and tools for fixing automobile

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

S-T Strategies W-T Strategies 1. (S8-T1) Sustaining the customer loyalty by 1. (W7-T8) Renovating and changing the providing what they need and giving some ambiance of the shop that will capture benefit from the shop so that we can still the attention and attract the customer continue transaction 2. (S1-T9) Maintaining and improving quality 2. (W2-T5) Developing and improving services that the shop provide and website that will be distributed through allocating resources that will go in investing the market for maketing ads in other field

SPACE Matrix
Internal Strategic Position Financial Strength Competitive Advantage External Strategic Position Environmental Stability Industry Strength +3 +1 Worst +6 Best -3 -6 Worst -1 Best

-5 -6 Worst -1 Best +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 by conducting large research and development directed at developing new services and at improving service quality.

10

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.

11

IE Matrix
The IFE Total Weighted Score

High 3.0 to 3.99

Strong 3.0 to 4.0 I

Average 2.0 to 2.99 II

Weak 1.0 to 1.99 III

The EFE Total Weighted Score

Medium 2.0 to 2.99

IV

V Gonzales Auto Repair Shop VIII

VI

Low 1.0 to 1.99

VII

IX

HOLD AND MAINTAIN

In IE matrix, Gonzales Auto repair shop fall on the 5th Quadrant that has a 2.0 to 2.99 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 development we are going to establish a new branch and provide other services.

12

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 other services like electrical and mechanical.

13

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 Establishing a new branch that provide Fully renovate and services on other advertise the field existing store. AS TAS AS TAS ------------3.00 0.06 2.00 0.04 4.00 0.36 1.00 0.09 4.00 0.12 3.00 0.09 2.00 0.20 4.00 0.40 ------------------------------------1.00 0.08 4.00 0.32 ------------------------------1.17 ------------------1.54

Critical Success Factors Strengths High quality service Specialize in underchassis Employees are well trained Can provide services for imported automobile 50% cheaper than other automotive shop Employee morale is excellent 24/7 customer service Good relationship with the customer Develop techniques in repairing car parts Terms and discounts are being issue Weaknesses Specialize only in the field of underchasis The shop dont have marketing ads Dont sell products for car parts SUBTOTAL

Weight 0.12 0.02 0.09 0.03 0.10 0.02 0.06 0.08 0.08 0.02 0.02 0.05 0.02 1.00

14

Critical Success Factors Opportunities No vat in providing services Increase in demand for automotive shops by 10% The ratio of automobile registered increase by 1.69% There are people willing to pay for the convenience that the shop provide Services needed for company that have no time in coming to the shop Demand for automotive courses increase Investors are willing to invest in automotive industry Customer are responsive about their safety Auto supply that gives terms and discounts Competion over the same field and specialization Threats New competitors increase by 5% Wilson and Jackson is in the vicinity Demand for new techniques in repairing car parts increase by 10% Obsolete machine The power of media to customer SUBTOTAL SUM TOTAL ATTRACTIVENESS SCORE

Establishing a new branch that provide Fully renovate and services on other advertise the field existing store. Weight AS TAS AS TAS 0.06 4.00 0.24 2.00 0.12 0.10 0.04 0.04 0.09 0.10 0.04 0.03 0.05 0.06 0.05 0.03 0.09 0.03 0.05 1.00 4.00 4.00 ---3.00 ---------------3.00 4.00 ---------0.40 0.16 ---0.27 ---------------0.15 0.12 ---------1.36 2.53 1.00 3.00 ---1.00 ---------------2.00 2.00 ---------0.10 0.12 ---0.09 ---------------0.10 0.06 ---------0.67 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.
15

Summary
Gonzales Auto Repair Shop will Focus on the following strategies: Market Penetration Product Development Since the SPACE MATRIX and IE MATRIX gives the evaluation on th the 4 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 other services like electrical, mechanical and other. Equipment Land Taxes and other Government expense Water and lights Advertising Salaries Other Expense Total 100,000 250,000 50,000 10,000 10,000 20,000 10,000 500,000

16