Sullivan Auto World Case

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Case Background

Company History

… hate doing this part he he he….

Products, Services, and Personnel

Sullivan Ford Auto World operated both the Sales and Service departments. The Sales Department’s functions include sale of cars/trucks and used vehicles. It is also involved in trading of a buyer’s previously-owned vehicles and buying of well-maintained used cars at auction for sale. The department is composed of a sales manager, seven sales people, office manager, and secretary. However, one sales staff has given notice of his resignation.

The Service Department is composed of a service manager, parts supervisor, nine mechanics, and two service writers.

Infrastructure and Facility

The dealership is located at a major suburban highway intersection and the surrounding area has many new housing developments. While the showroom was impressive, the service facility was not visible from the highway and hidden behind the showroom.

Statement of the Problem

How should the new general manager of Sullivan Ford Auto World resolve its current financial problems and decide on the future of the company?

Objectives

• To identify the marketing and operational problems affecting the over-all performance of the company; • To examine the strengths and weaknesses of the company, as well as, the opportunities and threats to the industry affecting it; • To determine if the company can sustain a competitive advantage in the car dealership industry despite threats from other competitors; and • To present alternatives for the company in planning for its future.

Areas of Consideration

Point –of- View

The study and recommendations shall be focused on the point of view of the new general manager, Carol Sullivan-Diaz. Her primary duty was to ensure the profitability of the entire dealership by selling vehicles, controlling expenses, and maintaining customer satisfaction. As a general manager, her responsibilities also include planning, motivating, and coordinating the dealership’s management through leadership and solid business practices.

Limitations

Then analysis was based on information on the company, market, and economic conditions provided in the case as set in 1999. However, research was made to verify the existing economic situation at that time. Data, charts, and additional information were incorporated in the case to provide a realistic assessment of the industry and business environment.

Situational/Environmental Analysis

The 1997 Asian Financial Crisis and Its Effects on the US Economy The Asian financial crisis was initiated by two rounds of currency depreciation that have been occurring since early summer 1997. The first round was a steep drop in the value of the Thai baht, Malaysian ringgit, Philippine peso, and Indonesian rupiah. As these currencies stabilized, the second round began with downward pressures hitting the Taiwan dollar, South Korean won, Brazilian real, Singaporean dollar, and Hong Kong dollar. Governments have countered the weakness in their currencies by selling foreign exchange reserves and raising interest rates, which, in turn, have slowed economic growth and have made interest-bearing securities more attractive than equities. The currency crises also has revealed severe problems in the banking and financial sectors of the troubled Asian economies. The International Monetary Fund has arranged support packages for Thailand, Indonesia, and South Korea. The packages include an initial infusion of funds with conditions that must be met for additional loans to be made available. This financial crisis is of interest to the U.S. government for several reasons. First, attempts to resolve the problems are led by the IMF with cooperation from the World Bank and Asian Development Bank and pledges of standby credit from the Exchange Stabilization Fund of the United States. Second, financial markets are interlinked. What happens...
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