Submitted by: Submitted by gallon22
Views: 377
Words: 522
Pages: 3
Category: Business and Industry
Date Submitted: 01/19/2011 06:54 AM
Running head: BIG DRIVE AUTO 1
Big Drive Auto
Big Drive Auto is a large scale dealer of cars and trucks. BDA offers repair services for
vehicles and sells repair parts. The company also sells motor oil, coolant, and replacement tires.
BDA is a multistate dealer and has been keeping data on the volume of sales in its various lines
of business for the past 10 years.
While reviewing the sales data, BDA’s vehicles sales spiked in 1999 (160,000 units) and
in 2003 (167,000 units) and gradually declined during the three years following the two peak
years. This can be attributed to the tough economic times that the country was going through
at the time. Because of the tough economic times there were more people out of work and
not purchasing new vehicles. People are hesitant about spending money on large purchases.
Customers are keeping their cars longer during this period. This explains why the
revenue for service has been constant during the same period. Tire sales, along with the sale of
coolant and motor oil also remained constant during this period because people cannot afford to
buy a new vehicle.
It is the recommendation of Learning Team B that BDA keeps the price of its vehicles
consistent with the competition on comparable models. These prices should remain until the
economic conditions improve. Keeping the prices low will ensure that people who can still
afford to buy a new vehicle will continue to do so. The lower prices will also keep existing
inventory from piling up at the dealerships.
Learning Team B also recommends the increase of all maintenance fees by 15%, people
are keeping their cars longer increasing the maintenance fees will generate additional revenue for
the company.
Learning Team B further recommends that DBA increase its advertising by 10% during
the upcoming year, this would help with non-price barriers. Advertising should emphasize that
BIG DRIVE AUTO 2
BDA's prices have remained low during the recession. Future...