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Big Drive Auto Business Recommendations Essay

1287 words - 5 pages

MemoTo: Big Drive Auto Management TeamFrom:RE: Recommendations for Business Decisions Related to Alternative FuturesDate:As well known, "Big Drive Auto is a multistate dealer of different manufacturer's cars and trucks that not only sells the cars but is involved in servicing the automobiles as well" (University of Phoenix, 2010, p. 1). The company deals in vehicles in which they provide service and spare parts for repairs. Motor vehicle services like changing tires, oil, and coolant, are also an important part of the business. Big Drive Auto management has put into practice new strategies to recover and endure during this recession like cutting costs in some areas, increasing advertising, pricing strategies, and product diversity to have a positive effect on the sales of its products. In addition,m it has continued its emphasis in its customer service to continue maintaining revenue from the auto service and parts area of the business to attract more consumers and stay above the competition. There is competition within the automotive market, which would make barriers to entry weaker to overcome "Strong barriers to entry effectively block all potential competition" (McConnell, Brue, Flynn, p.202). Below are the business recommendations based on the alternative economic futures within the next five years for Big Drive Auto management.Business Recommendations Based on Economic ProjectionsBig Drive Auto has three alternative economic futures to consider for the next five years. As the team discussed earlier these different futures have different outcomes and have to be addressed differently. The economic futures for discussion are the consumer price Index (CPI), unemployment, and the gross domestic product (GDP.)Consumer prices can be compared to determine the rate at which prices are rising. When a rise in the CPI occurs, Big Drive Auto has to accommodate. The unemployment rate also has an effect on Big Drive Auto. To help ease the lack of consumer confidence Big Drive should not raise the prices. The loss of new car sales could increase the service department revenue and also help to potentially to create a strong customer base for future new car sales.A rise in unemployment will create a loss in new car sales and many services Big Drive offers. A high un-employment rate can be a major obstacle for the future growth of Big Drive. The company may have to incorporate attractive pricing strategies and creative incentives that will help to keep prices ahead of the competition, the company can maintain profitability. For Big Drive Auto it is very important to continue its emphasis in its customer service to continue maintaining revenue from the auto service and parts area of the business.The GDP has been encouraging over the last few quarters of 2009. The rise in the GDP shows the possible turn in the economy and Big Drive should prepare for an increase in new car sales and service. However, should the GDP decrease Big Drive will have to implement...

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