Team B Week 3 - Milestone 1

Milestone 1- Business Recommendations Big Drive Auto

Brian Jimmerson, Debra Lawson, Missy Long, Melissa Schreiber

ECO/561

December 6, 2010

Mark Erenberg

Milestone 1- Business Recommendations Big Drive Auto

Introduction

The economic future of an industry may change depending on various economic conditions. Predicting economic futures is an essential skill when choosing between business alternatives. Big Drive Auto is a national dealership providing services to its customers and covers multiple manufactures. Services mentioned include vehicle repair, parts, preventive maintenance, and tire replacement. Big Drive Auto is a one stop shop for automotive service. The company has kept record of data over the last 10 years in efforts to improve productivity, the bottom line, and better serve its customers. With said data, Big Drive Auto can review price points, make price strategy recommendations, create non-price barriers to entry, and differentiate products. The purpose of this paper will provide recommendations for Big Drive Auto to make business decisions based on potential changes that could take place in the current volatile economy.

Examination of Data

After examining Big Drive Autos’ 10 year historical data, during the years 1998 and 1999 BDA experienced a swell in vehicle sales per unit. This indicates the demand curve moved to the right. Service revenue increased as well. However, the sale of motor oil, coolant, and tires experienced a decrease. Because of a declining economy the sale of vehicles per unit and the sale of motor oil, coolant, and tires did not decreased as is shown in the data analyzed over the 10-year period from 1998 through 2007. The service and parts area of the business received a momentous increase in profit. To remain profitable management must develop a pricing strategy, find ways to differentiate the product and services sold by Big Drive Auto. Management must also find ways to obstruct other businesses from taking...