11/12/2012

K.A.R.S AUTOMOTIVE SERVICES LLC

F.O.B. GROUP PROJECT

Business Initiative | K.A.R.S. Automotive Services LLC

Business Initiative: K.A.R.S. Automotive Services LLC Course: Course Code: Lecturer: Group Members: Fundamentals of Business Organizations DMGT-0101 Rhonda ONeil Kathy Ann Neaves-Sutton Kirt Lee Baptiste Ritchie Latchman Sheldene Bacchus Keniel Hosang Anika Hamilton Shiva John

Table of Contents
Executive Summary..................................................................................................................................... 4 Description of the Business Environment................................................................................................... 5 Dynamic Business Environment .............................................................................................................. 5 Impact of technology on the business .................................................................................................... 7 Market Structure..................................................................................................................................... 1 Responsibility as a Corporate Citizen...................................................................................................... 2 Impact of the Global Market Place ......................................................................................................... 2 DESCRIPTION OF THE TYPE OF BUSINESS OWNERSHIP .............................................................................. 3

Executive Summary
KARS is an Auto Care Service provided through a web interface utilizing a subscription based business model. The service would differ from other service providers whe re a WE COME TO YOU service model is implemented. Customers would create virtual service packages based on their needs/finances. They can also select from pre-made packages, whilst also being able to customize said packages to fit their individual needs, vehicle, motor parts/supplies they utilize and how often they service their respective vehicles. KARS would also heavily rely on technology as staff would be utilizing the use of tablet computers when visiting customers.

Description of the Business Environment

Dynamic Business Environment
(Gitman and McDaniel) stated in todays business environment, organizational structures need to be designed so that the organization can quickly respond to new competitive threats and changing customer needs. A successful future depends on the ability of a company to be flexible and respond to the needs of customers. Below is a diagram (see Figure 1) of all the elements in the dynamic business environment and even further below is a table (see Table 1) of which elements has the greatest impact on K.A.R.S. Automotive Services LLC.

Figure 1

a.

Economic

This element has the greatest impact on the business, as the economic climate will hereby determine such factors as the buying power of customers and the lending market (as a means of the business sourcing capital), thus significantly influencing the success of the business This business is entering a unique domain and new laws would determine the manner in which the business needs to operate. For example, if government passes strict laws on internet security, the companys website would have to adhere to these new rules as to protect the customer for fraud etc. Business has to target specific market demographic in order to thrive, i.e., ideally corporate women who dont possess such a perk or group packages that are offered by their job, would be prime candidates, i.e., niche market. Because of negative stigma still associated e-commerce, online shopping or services, T&T locals would be wary of such a service being offered locally. . Competing with local/physical automotive maintenance providers, who provide walk-in services, not we come to you Entrepreneurs with higher/greater amount of capital could jeopardise business success directly and significantly, in ways such as, imitating the business model and implementing it on a larger/greater scale. Also since the business is customer service oriented, proper personnel are needed so that great customer service is delivered that sufficiently meets business needs. Technophobes wouldnt be fully open to this type of business; people wouldve financial concerns over the security of their financial information.

a.

Legal/Political

a.

Demographic

Social

a.

Competitive

a.

a.

Entrepreneurs

Workers

a.

a.

Customers

Table 1

Impact of technology on the business

Its a well known fact technology aids businesses in cutting costs and boosting productivity, thus increasing the profitability for said business (see Figure 2). This could only mean that technology impacts businesses positively, while this is not entirely true it holds some merit and can be best summed up by (Behrsin and Twibill)s summary in their 2003 report: with technologys penetration into every business function executives have seen first-hand how it gives them access to well-organized, quality information they can use to make better decisions, and how it now fundamentally supports the day-to-day running of their business. Not surprisingly, they now appreciate that the right choice of technology, coupled with its timely deployment, not only holds the power to solve business problems but improve a companys competitive position.

Figure 2

K.A.R.S. Automotive Services LLC would have technology implemented at every level of the organization (see Table 2).

Business Facets
Productivity Executives, Directors, Senior Management Money Matters Marketing Collaboration & Learning Email, videoconferencing, teleconferencing Data mining, web marketing, web presence (website, social media tools) Customer Service Mobile Working & Telecommuting Mobile apps, cloud computing, laptops, tablets

EIS, DSS, data warehouses,

Organisational Hierarchy

Mid-Level Management

Accounting

MIS, relational databases

Email, CRM, videoconferencing, teleconferencing

CRM, online surveys,

Mobile apps, cloud computing, laptops, tablets

Supervisors, Senior Members of Staff

Time & location tracking tools, inventory management tools

Mobile apps, cloud computing databases Email, CRM CRM

Mobile apps, tablets General Employees databases Databases email

Table 2

Market Structure
A market structure can be defined as the set of those organizational features of the market which have a significant influence on the nature of competition (Bain). Such features include: a. The extent of product differentiation, b. The number of buyers & sellers operating in a market & their relative sizes (concentration), c. The extent to which new competitors can enter the market or are impeded by barriers to entry, d. Whether production is subject to economics of scale and how important they are, and e. The degree to which firms are vertically integrated & diversified. Even though there are various types of markets (see Figure 3), K.A.R.S. Automotive Services LLC would be venturing into a Monopolistic Competition Market, due to fact there isnt a competitor with the a similar business model.

Figure 3

Responsibility as a Corporate Citizen

K.A.R.S. Automotive Service LLC will establish a code of ethics which will be strongly followed by all of our employees and management alike. Distinct factors as a Responsible Corporate Citizen are Economic, Legal, Ethical and Philanthropic Responsibilities. Also the employers would have a responsibility themselves to meet the obligations of the stakeholders and beyond this fundamental responsibility the employers in return will provide a clean, safe and a discrimination free environment along with job security .The company will also empower employees to make decisions on their own and suggest solutions to company problems. Our responsibility to our customers is equally as to our staff. We ensure to deliver what we promise to satisfy them. By donating into community development our company will display a responsibility to society. Lastly, dealing directly with hazardous waste we will adhere to all rules and laws to ensure we protect the environment.

Impact of the Global Market Place

From design and manufacturing to distribution and marketing all aspects of the industrys products and services are affected at some point. Therefore by networking and importing we can turn that downturn into a gain by being able to streamline processes, trim costs, earn and maintain market access and boost our bottom line.

DESCRIPTION OF THE TYPE OF BUSINESS OWNERSHIP

Form of business ownership
KARS has adopted the use of a S- Corporation form of business. As a corporation, we enjoy several features including our own property, entering into contracts, being able to sue or be sued, taxable entities with a life separate from owners (owners are not personally liable for its debts), engaging in business operations under the terms of a charter.

ADVANTAGES Since KARS is founded on the premise of bringing the service to the customer, an S Corporation offers several advantages that are tailored to its needs and promotes its success. The availability of sufficient start of capital. As an S Corporation, the ability to attract financial funding from stockholders is greater. KARS would have the financial capability to purchase the factors of production needed to establish itself as a business. Further, because of the availability of finance, it

increases attractiveness to lending institutions as a stable company, thus increasing the ability to source additional financing.

KARS can remain as a small company in order to avoid the issue of double taxation of corporation profits. Stockholders, directors and managers are taxed via their personal income tax. Additional profits saved can be poured back into the company to expand the service packages offered and explore new avenues for generating and attracting new clients. Furthermore, the cost of running KARS is reduced.

From a managerial perspective, KARS stands to benefits from a more structured organizational hierarchy. Clear and defined lines of roles, responsibilities and accountabilities are established through precise organizational structure. It benefits from greater pool of knowledge, experience and skill. This increases its chance for success and to turn a profit as each partner brings new vision, ideas and innovations for growth and expansion. Further, it allows for greater sharing of responsibilities and better time management.

Ethical standards are communicated, enforced and maintained through-out the organization leading to higher levels of credibility to customers. Ease of formation and fewer restrictions, offers KARS an opportunity to launch this service oriented company and create new markets e.g cars where local dealerships stops servicing vehicles after five years and the foreign used vehicles markets that are not privy to the after purchase service that are offered by local dealerships.

The benefits of Limited liability. As stockholders and directors of KARS their debt servicing liability is limited to their contribution to the business DISADVANTAGES These include formation and on-going expenses (required government fees, articles of incorporation, obtaining a registered agent for the company and paying operating fees). Mistakes regarding operations (elections, content, stock ownership, filing requirements etc) can result in the termination.

Can only have one class of stock, cannot have different classes of investors who are entitled to different dividends. Less flexibility in allocating income and loss. Can only have up to a maximum of 100 stakeholders. Closer scrutiny by Income Tax officials (as funds can be distributed to a shareholder as dividends or salary. Tax officials scrutinizes payments to make sure characterization conform to the reality).

MANAGEMENT AND LEADERSHIP ELEMENTS OF THE LEVELS OF PLANNING Strategic plan of a five year long-range goal, KARS will be looking into owning its own fully equipped mechanical and automotive repair facility. The opening of another branch in Tobago as the first step of regional expansion. To be greater advanced in the area of technology, by keeping in step with the different phases of auto and other technological upgrades. Increase in staff and available vehicles as to attain an almost immediate response to customers request. Tactical planning will be to ensure staff efficiency and less idle hands on the job. Staff will be responsible for proving written reports to superiors on jobs done and how effectively it was carried out. Each department will be given a specific quota or goal to establish at the end of the month, ensuring diligence from all levels of the said department. Operational planning will ensure that customers request for service is adhered to efficiently and staff understand the needs of the customer, so that the job will be carried out effectively and boosting customer satisfaction. Contingency planning will take place in the event of any changes in the law or budget regarding motor vehicles, to ensure that our company stays afloat. In the event that a large motor vehicle dealership company decides to purchase the company, management will have to take into consideration the sale price as well as staff displacement. If the said dealership should want to incorporate our service, management will have to ensure branding of our service.

LEADERSHIP STYLE Management have adopted a Participative Leadership style where decision making is shared with subordinates and encourages discussions of issues and alternatives that affects the different levels of staff. Managements shows concern for ideas, coach staff to be effective as leaders and help coordinate efforts. Employee empowerment is also given to subordinates, granting them the autonomy and discretion to make decisions.

CONTROL OF BUSINESS ACTIVITIES Activities will be controlled through a process that monitors the implementation of a plan and corrects deviations from same. Performance standards and goals will be set based on the companys strategic, tactical and operational plans. Departmental and individual performance will be measured against those desired standards. Actual performance level will be compared to those established. If a gap should exist, the reason for it will be determined and corrective action taken. A feedback system will use the information gained to set up future standards for greater performance.

ORGANISATIONAL STRUCTURE

HUMAN RESPOURCE MANAGEMENT CONSIDERATIONS Our critical Human Resource Management considerations are attracting, developing and maintaining the best talents as well as ensuring our employees are comfortable and satisfied. The company will attract the best talent through the External Labor Market by advertising (i.e. print, television & radio advertising), social networking and college recruiting. We shall also attract them by attending various job fairs with strong recruitment branding. We plan to develop the best talent by providing On-The-Job Training to improve performance, hopefully have a reduction in errors and increase job knowledge and skills. We would maintain the best talent with different types of compensation. Apart from direct pay, which is the wage or salary received, employees will also receive an indirect pay which consists of various employee benefits or services. Also by encouraging and assisting employees to attend various workshops and training programmes to ensure that they are always up to date with new techniques and knowledge where their jobs are concerned.

PROPOSED LOCATION FOR THE BUSINESS Docks Side Rd, Wrightson Rd. POS POS would be our main business location comprising of our Head Office, Dispatch Centre, Auto Centre & Show Room. POS is the Business City; from as small as a nuts man to large firms such as RBC. Businesses in the city of POS always tend to be well-known and persons near and far more than frequently, access the city for business and pleasure.

 Medford Rd., Chaguanas - Central This would be a Dispatch & Technical Support Centre; providing service to persons in and around the vicinity. In this way K.A.R.S, though an online and dispatch service, would also be an easily physical centre to connect with busy business workers who would appreciate a fast response time rather than being interested in the service but discouraged by distance. The Central region is embracing economic growth. A lot of businesses elsewhere also set up offices in this location.

AVAILABILITY OF PRODUCTION INPUT:Locating KARS in these two locations would create a greater opportunity communicating with neighboring businesses for availability of products and outsourcing. Our technical resources (Internet, Electricity, Water & telephone) are in close commune and have a greater standard of reliance for these services. Employees would also be compatible between the locations. Traffic control would be an advantage as there are now traffic wardens, laws and restrictions in these areas.

MARKETING FACTOR:Our target market can be easily accessible, response time and job completion would be controllable.

MANUFACTURING ENVIRONMENT:As economic growth is becoming dominant in Central, KARS would be used to an advantage and be appreciated. As POS is already the leading business city, the female business employee/(er) who are not as in tune with their vehicle as men, would enjoy this service as they use online services more frequently and wont have the hassle of leaving the office, yet in comfort that their vehicle is close by, while in the office.

LAYOUT Our dispatch teams at both locations would be coming to you as requested and preferred, then taken to the centre and attended to based on what the demand is. For dispatch minor service, the service would be completed on the spot, and conversely for in depth services, your car would be driven to the centre and serviced by the in-house technician/engineering team. As such the layout used in designing the facility would be Cellular Manufacturing A Start-to-Finish Focus. This type of Layout combines both Product (A facility arrangement in which work stations or departments are arranged in a line with products moving along the line ) and Fixed-Position ( A facility arrangement in which the product stays in one place and workers and/or machinery move to it as

needed) Layout. In this way work cells are small and self-contained production units that include several machines and workers arranged in a compact, sequential order. MARKETING MANAGEMENT TARGET MARKET We target all automobile owners, anyone who wants their vehicle service, repaired or tuned. We also target those who have no time to carry the vehicle to service because of their busy lifestyle, our come to you service would be great.

CREATING A COMPETITIVE ADVANTAGE We offer unique goods and services. When customers carry their vehicle to other leading service stations with a problem, they would solve that problem only. At KARS we solve the problem, as well as diagnose what caused it in the first place and fix it so you can avoid having the problem again. Free electronic diagnostics is offered to all our customers, also when your vehicle is serviced we do free detailing and air refresher. Your vehicle will return to you feeling like a new car even give you that new car smell.

MARKETING MIX The marketing mix is often crucial when determining a product or brand's offering, and is often synonymous with the four Ps: price, product, promotion, and place something that we do different from others. Price- Our prices are very competitive for the service that we offer, if you can get the service we offer cheaper we would match it. Product- We offers a unique service lifestyle solution. Promotion- We advertises on all social networks, electronic screens, billboards through-out the country, television and flyers. Place- We have two stationary locations where you can bring your car and we also have mobile units that would come to you.

References Bain, J.S. Industrial Organization. Wiley, 1959. Print. Behrsin, Dr. Mark, and Bill Twibill. Understanding the Business Impact of Technology a Board Room Imperative2003. Print. Gitman, L.J., and C. McDaniel. The Future of Business: The Essentials. Cengage Learning, 2008. Print.