The market analysis conducted shows that the car detailing market segment is characterized by a significant business opportunity. Customers are increasingly modifying their cars to meet their personal needs, and this trend cuts across customers of diverse age and gender.
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Therefore, the probability of maximizing the level of profitability by venturing into this market segment is very high. However, the entrepreneur must formulate a clear vision and mission. The car detailing business will be based in Northern Virginia and will be guided by the following vision and mission statements.
To provide the best car detailing services to customers and achieve a high level of customer satisfaction by offering unique services.
To achieve market leadership within the car detailing market in Northern Virginia.
In a bid to achieve the above vision and mission, the entrepreneur will ensure that optimal business strategies are formulated, as according to Kaplan and Norton (2011), businesses should ensure that their vision, mission, and values align with the organizational strategy. In the process of formulating their business strategy, entrepreneurs should ensure that they develop a clear definition of the market that the firm intends to serve.
The strategy should also define the target customer group, the critical internal processes, and the firms’ capabilities. The need to ensure that an organization’s vision, mission, values, external, and internal communication systems align led to the development of the balanced scorecard.
The Balanced Scorecard Institute (2013) defines the balanced scorecard as “a strategic planning and management system” (Para. 1). The balanced scorecard is comprised of four main perspectives, which include financial perspective, the customer, internal business process, and learning and growth. The chart below illustrates a balanced scorecard about the car detailing business that the entrepreneur intends to establish.
|Learning and Growth||Increasing the rate of employee motivation||Employee satisfaction rating using 5 points Likert scale||Increase the employees’ level of satisfaction with a margin of 30%.||Integrating performance based compensation|
|Recognizing employees with exemplary performance||Level of job satisfaction amongst employees||Recognizing employees in all the firm’s departments||Develop an employee recognition program|
|Retaining employees||Rate of employee turnover||Ensuring that the firm has a zero rate of employee turnover||Reviewing employees’ performance and adjusting their salaries and wages accordingly|
|Financial||Maximizing the firm’s returns||Return on capital employed||Increase the ROCE with 20% within one year.||Ensure effective control of capital employed|
|Managing the cost of operation||Revenue growth||Increasing revenue growth with a margin of 25%||Creating sufficient market awareness on the services offered by the firm|
|Ensuring profitable growth||Cost of operation||Reduce the cost of operation with a margin of 60% within one year.||Conducting a cost-benefit analysis before investing in business initiatives|
|International Business Process||Ensuring that customers receive high-quality services||Assessing the firm’s customer base||Achieving a net present value of $500 million within one year||Scanning the market to determine market trends|
|Developing innovative car detailing services||Determining the firm’s net present value||Launching a new product every year||Investing in research and development to improve the services offered.|
|Optimizing on business opportunities||Customer satisfaction rating|
|Customer||Increase the level of customer loyalty.||Instilling repeat purchase behavior amongst employees||Investing in customer relationship management|
|Ensuring that customers are satisfied||The volume of customer base||Increasing the firm’s customer base to 2,000 customers within six months||Adhering to customers’ car detailing needs, requirements, and opinions|
|Maximizing customer value||Customer satisfaction rating||Achieving a 100% level of customer satisfaction||Developing a customer loyalty program|
Balanced scorecard analysis
Several aspects inform the above objectives. The entrepreneur appreciates the importance of developing a strong human capital base and one of the reasons that explain the firm’s emphasis on human capital is the unique nature of customer needs, tastes, and preferences. Therefore, the firm recognizes that its success in the market will be dependent on how effective it offers the car detailing services.
To develop a strong human capital, the firm has invested in a comprehensive employee recruitment drive. However, the performance and productivity of employees who will be selected to work in the organization will depend on how well they will be motivated.
In a bid to improve the employees’ level of productivity and performance, it is imperative for the firm to ensure that the workers are adequately motivated. Moreover, the management team should be concerned with how to develop a high level of organizational identification as this move will improve the employees’ commitment and contribution to the organization.
Considering the competitive nature of the car detailing market, the firm should be focused on developing a high rate of employee retention. The firm can achieve this goal by incorporating an effective reward management system. The reward system should be comprised of both monetary and non-monetary rewards. The monetary rewards that the firm should consider include allowances and bonuses. On the other hand, non-monetary rewards include employee recognition, training and development, and guiding career paths.
Despite the adverse effects of the recent global economic recession, most economies are on a recovery path. Countries have implemented economic stimulus packages to stimulate economic growth. Most countries have recovered from the recession, hence leading to improvement in the consumers’ purchasing power.
Additionally, the economic recovery has led to the emergence of a substantial number of middle-class consumers who own cars, and this customer group is increasingly becoming very innovative in its consumption patterns. For example, the customers are demanding cars characterized by optimal performance and high quality.
This element presents a unique business opportunity for the firm, considering that it targets middle-class consumers. Considering the adverse effects of the economic recession on firms operation, the entrepreneur will ensure that effective cost control is undertaken. As a result, the firm will improve the likelihood of achieving its profit maximization objective.
The high rate of technological advancement due to investment in research and development also presents a unique opportunity for the firm to maximize its profitability. Firms in the automobile industry are increasingly investing in new technologies to minimize their cost of operation.
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The firm intends to exploit the technological innovations within the automobile industry to minimize the cost of operation and maximize its profitability. The financial perspective of the firm’s operation about achieving profitable growth is also informed by the need to operate in an environmentally sustainable manner. The firm intends to achieve this goal by minimizing environmental pollution.
Consequently, the firm’s cost of operation will be minimized, as it will avert the cost of regulation from the government and other environmental conscious agencies. Adopting emerging technologies will also improve the firm’s public image. Most consumers will develop a perception that the firm is conscious of the environment. Therefore, they would like to be associated with the firm, which will improve the likelihood of the firm attaining revenue growth.
Despite the lucrative nature of the car detailing industry, the firm will face intense competition from other firms in the industry. Some of the industry players have optimally positioned themselves in the market. To maximize its level of profitability, the firm will be required to develop a strong customer base. The firm intends to achieve this goal by ensuring that its target customers are satisfied. Moreover, the firm’s ability to maximize its profitability will depend on the customers’ repeat purchase behavior (Sandlin, 2011).
Therefore, it is imperative for the firm to focus on developing strong customer loyalty. One of the ways through which the firm can achieve this goal is by ensuring that customers receive value for their money. The entrepreneur should develop a comprehensive understanding of changes in consumers’ tastes and preferences. Tracking the consumer’s behavior will improve the effectiveness with which the firm exploits business opportunities that emanate from the external business environment.
The car detailing market segment is characterized by a substantial business opportunity. However, the effectiveness with which the firm will exploit the market opportunity will depend on how well the firm formulates its objectives. By developing a balanced scorecard, the firm will remain focused on the set business objective hence increasing the likelihood of implementing the predetermined organizational strategy.
Balanced Scorecard Institute. (2013). Balanced scorecard basics. Retrieved 10 September 2013, from http://www.balancedscorecard.org/bscresources/aboutthebalancedscorecard/tabid/55/default.aspx
Kaplan, R., & Norton, D. (2011). The strategy focused organization: how balanced scorecard companies thrive in the new business environment. Boston, MA: Harvard Business Press.
Sandlin, E. (2011). How to open and operate a financially successful car detailing business: with companion CD-ROM. Ocala, FL: Atlantic Publishers.