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Small Auto-wash Business Analysis Essay

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Updated: Mar 20th, 2020

The business environment will always dictate the success or failure of a firm in the market, depending on how management handles it. The business environment is always categorized into an external and internal business environment. These two business environments are very important in shaping the performance of a firm in the market.

This research will analyze the business environment of a small auto-wash business unit, which also specializes in quick lube oil change. This research will analyze the external environment in which this firm operates. The research will also analyze the internal environment of this firm that has enabled it to stay a step ahead of other competitors in the market. The researcher will use SWOT analysis as a tool for analyzing both the internal and external environment of this firm.

Good Strategy
Processes and systems
Clearly stated Goals
Strategic capabilities
Good Leadership
Poor Structures
Inadequate Resources
Changing Culture
Emerging technologies
Intellectual property
Economic growth
Innovation among employees
Social factors
Technological advancements
Legal and regulatory measures
Global threats
Environmental concerns
Competitive of the market

As was stated before, the external environment of a firm plays an important role in ensuring that a firm achieves its objectives in the market. When analyzing the external factors, one of the most important factors to look at is the economic environment. According to Pahl (2007), the economic status of the market will always dictate the buying trend. When the economy experiences some growth, this would mean that people would have higher purchasing power.

This scholar says that the rise in per capita income in a country will always increase the purchasing power of the public. This explains the reason why recession always has negative consequences on firms. The major market for this firm is the middle class who own personal cars. This group makes the biggest market share for this firm. Any economic growth of people in this segment will always have direct positive sales on this firm.

A business unit cannot operate in an environment that lacks laws and regulatory policies that guide its players in the market. This business operates in a market that does not have very strict regulatory policies in this country. This is because the law does not capture it into a specific industry that can enhance clear regulation. However, it is always considered a responsibility of the energy regulatory authority to monitor operations of firms in this sector.

This is because there is a general assumption that these services are always conducted within a petrol station. One of the main regulatory policies that the government has been keen to make firms in this sector observe is the qualification of the individuals who are responsible for changing the lube. This is captured in the traffic laws, which demands that anyone who handles engines of any vehicle or any other sensitive part of a car should have academic qualification to that effect.

However, the law is silent on the qualification of people responsible for washing the car because it is assumed a simple physical job that does not need any technical knowledge. This means that the main law that guides players in this industry in need to satisfy customers to ensure that they make a repeat purchase.

In this sector, there is an emerging trend where customers who have developed some trust with a firm can consider offering some services as an after sale service without demanding any pay. For instance, when a customer comes to the station to change lube oil, he or she will have his or her car cleaned at half price as a sign of appreciation for being a loyal customer. Other competitors have adopted this trend, and this firm has no otherwise but to follow suit.

How the organization adapts to change

According to Boyer (2010), change is one of the most important factors that an organization must know how to deal with. This scholar says that managing change always determines how successful a firm can be in the market. This is because the business environment is constantly faced with various factors that force it to embrace change.

Technology has been the main driver of change, and this firm has been keen to change with the changing environmental factors. This firm was initially using horse pipes to wash the cars. This method was considered simpler to use, and it did not require technical knowledge to operate. However, there have been environmental concerns, especially the excessive use of water in this process. Various environmental groups have criticized this strategy because it leads to massive wastage of clean water that could be directed to other projects.

These agencies stated that the water used to wash a car could not be recycled easily because of the presence of oil in it. This firm responded swiftly when a new method of washing cars was introduced. This method involved using a laser-guided machine to wash the cars. This technology has been considered appropriate because it solves the issue of wastage of water.

It is friendly to the environment, besides being more effective than the previous method. Although this was a costly venture, the management adopted it as a way of improving its operations. The management has adopted a more flexible strategy that allows it to change its products or product delivery methods to suit the changing trends.

The supply chain operations of the organization

Supply chain operations of an organization define how an organization delivers value to its customer. It involves all the activities that would lead to delivering a product or service to the customers. At this firm, the management has been keen on managing its supply chain. The firm receives the lube oil from the petrol station, which is located within the same premise.

Once this lube oil is obtained, it would be stored in the small warehouse of the firm. When a customer comes, the mechanic will change the lube oil within this premise. The oil lube change takes a very short time, after which the car would be washed using laser-guided machines.

Issues and opportunities that the company faces

It is important for a firm to identify opportunities that come its way and make maximum use of them to prosper (Böhm, 2009). For this firm, several opportunities have come by, and the management has been keen to grab them. For instance, this firm did not have a lacer-guided machine when this technology was introduced into the market.

However, there was a neighboring firm, which was its main rival in this region that had acquired the machine. After some time, the management of this firm decided to shift business into what is considered a more lucrative business. The management of this firm moved with speed to acquire most of its assets. This has improved service delivery of this firm. The level of customer satisfaction has also been on the rise, increasing its market share.

Hypothesis and research questions surrounding the issues

It is apparent that this firm has faced several issues that have propelled it to its current position. Some of these issues have offered it more opportunities to grow, while other issues have been threats against its development. It is worth conducting further research into these issues to determine how well this firm can grow in the market. It orders to conduct the research; the following research questions would be appropriate.

  1. What are some of the opportunities that this firm faces in the market?
  2. How well has the management tapped these opportunities to improve its operations?
  3. What are some of the threats that this firm faces in the market?
  4. How well has the management countered these threats to ensure that its operations are not jeopardized?

The above questions would help research the issues affecting this firm. The following hypothesis would be of importance in this research.

H1. The management o this firm has been able to make use of the opportunities that have been presented to it to improve its operations.

H2. The management of this firm has been able to take care of threats it faces to avoid their negative impacts.

Circumstances surrounding the issues and their classification

The above issues can be classified under four categories as strengths, weaknesses, opportunities, and threats. Strength and weaknesses fall under the internal environment, while opportunities and threats fall under the external environment. This is always described using a business analysis tool called SWOT.


Böhm, A. (2009). The SWOT Analysis. München: GRIN Verlag.

Boyer, K. K (2010). Operations & supply chain management for the 21st century. Mason: South-Western.

Pahl, N. (2007). SWOT analysis: Idea, methodology and a practical approach. Munchen: GRIN Verlag.

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