Farland Cars Situation Analysis PDF

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Company Farland Cars was founded in 1991 and is a high end detail shop that supports both sales and classic car restoration. They operate out of a 15,000 square foot facility stocked with necessary restoration equipment and an experienced team of employees. Farland has restoration equipment ranging from grinders to parts washers to metal finishing equipment. Jack Farland, the owner of the shop, has been working with a variety cars since a young age, which has developed both talent and passion. Doug Brown, the operations manager, has worked as a Jeep/Chrysler/Ford service manager for fifteen years and oversees a talented crew of restoration technicians. He has “great communication skills” which enable him to understand customer visions and goals. Underneath the managers, the shop is also staffed with a lead mechanic, a lead restoration technician, and an interior and trim specialist who all have 30 years of experience in their fields. Farland Cars has seen steady financial growth over the last few years. The managers believe that this is a direct result of the marketing and advertising they are implementing, which they are improving every year. Although Farland is currently working to develop relevant information, no analysis has been done to find a direct correlation. Similar to their finances, Trina Farland claims that their market position is growing proportionally to the marketing efforts. Trina also claimed that they “hit slumps”, and are trying to further understand the reason behind this. Farland is currently in the process of performing exhaustive studies in order to further understand these slumps (Farland). Farland is well-known in the industry for their craftsmanship and premium prices, but they have recently hired Tom Van Ness in order to better manage the brand equity. This will allow them to change the customer-base as they see the population of their current customer base diminish. The company is also maintaining its brand equity through the use of social media including Facebook, YouTube, and Instagram.

Customers The current target market for Farland Classic Restoration are wealthy males with significant disposable income between the ages of 55-75 (Automobile Restoration, 2014). These males have a strong passion for classic cars and expect all vehicles to look and feel exactly like the original. People purchasing cars from Farland Classic Restoration as well as classic cars in

general are usually paying upwards of $85,000 or more on a single car, including the purchase of the car and the restoration process. This narrows in the main demographic for this market, as they need to have a significant disposable income that they want to spend on classic cars. Yet, Farland still has to take into account customers that are interested in specific services or paint work rather than purchasing classic cars. Though Portland, Monterey, Scottsdale, Los Angeles, and Detroit are all considered the top five cities to be more “classic-car centric”, consumers in this market will travel far and long to purchase the perfect car (Sass, 2012). Owners will “send their cars to whom and where they feel will do the best job based on reputation” (Automobile Restoration, 2014). The problem that Farland Classic Restoration is currently facing is the simple fact that their target market (baby boomers) is beginning to die off. Which is why Farland needs to expand their target market and find cars that attract a younger generation. In order for Farland to continue to flourish, they will need to purchase cars that are from more recent generations, but still achieve that classic style, as this is what the next generation of car collectors is looking for. Purchasing cars that are closer to 25 years old rather than 50 years old will allow Farland attract an entirely different demographic and only expand their target market. If Farland can begin to influence men approaching their early 50s, they have the potential to grow and have a bigger target audience.

Collaborators At Farland Classic Restoration, employees work on a wide variety of brands, makes and models while completing an extensive range of jobs, whether it’s a full restoration or just detailing certain aspects on a car. Therefore, suppliers change from project to project. Instead of relying on a few main suppliers, Farland carefully selects the highest-quality and most authentic parts, regardless of location. For example, Trina Farland, wife of owner Jack Farland, explained that when working on a classic Ferrari, parts specific to the make and model will come from Italy, where the brand originates (Farland, 2015). Furthermore, Tom Van Ness, Farland’s marketing guru, explained there are no real companies involved in supplying materials, “it’s a big network, mostly of individuals” (Van Ness, 2015). On top of that, a lot of consumers make specific, customized requests that expand Farland’s network of suppliers from time to time.

Farland develops personal, long-term relationships with customers. In addition to restoration and detailing, the company helps customers buy and sell classic cars. The customers act as a supplier, by providing their cars, while Farland operates as a middle-man by utilizing its extensive network and resources to complete the sale. Aside from its suppliers and the relationships formed with customers, Farland Classic Restoration engages with several organizations within the industry of classic cars. Recently, Farland hosted a monthly meeting for the Old Car Council of Colorado. The objectives of this organization are as quoted on their website, “to preserve, enjoy, and protect all aspects of the collector vehicle hobby”. The Old Car Council of Colorado is comprised of several thousand car enthusiast throughout the state of Colorado and has affiliations with other similar organizations across the US. Through an affiliation with this association, Farland can raise brand name awareness in a wider market than just the Denver area. Also, if Farland maintains a positive relationship with the Old Car Council of Colorado, members will spread positive word of mouth and might recommend it to people unfamiliar with the company. Furthermore, in the classic car industry there are many events and competitions companies and individuals can enter to win prestigious recognition for restoration efforts. One example is The Cavallino Classic in Palm Beach, Florida, which is the “premier Ferrari event of the Year”. Farland Classic Restoration won a platinum award for its entry of a 1961 Ferrari 250 PF Cabriolet. Events like this allow Farland to display the high-quality craftsmanship and dedication its employees put into working on cars while also receiving accreditation from trusted experts in the industry. This builds a prestigious, premium reputation for Farland Classic Restoration and introduces the brand name to markets across the nation.

Competitors Classic Investments, Rocky Mountain Classics and Customs, Custom Classics Auto Body and Restoration are three of Farland’s main competitors. Classic Investments, located in Englewood, Colorado, specializes in “restoring many of the world’s most famous, rare and desirable European automotive marquees”. Classic Investments mainly focuses its efforts on mechanical, body and trim restorations. Their in house staff for mechanical repairs “includes factory trained employees with ASE level-1 and specialized certifications-with all craftsman having over 20+ years of experience”. Additionally, Classic Investments employs a body

fabrication specialist and a trim specialist, both of which have over 20 years of industry experience. Like Farland, Classic Investments also has shop for classic vehicles, as well as a private collection room for vehicles they have restored (Classic Investments). Rocky Mountain Classics and Customs, also located in Englewood, Colorado, specializes in custom metal fabrications, mechanical upgrades, and interior restorations. Rocky Mountain has over 36 years of industry experience and are considered a top restoration shop in the nation. Unlike Farland, they have a custom shop that focuses on the customization of classic vehicles rather than the restoration. Customization is a separate, but similar, market from the restoration market and provides Rocky Mountain with a broader target market. Custom cars, according to Tom Van Ness, are the new trend because consumers want the classic style with upgraded performance features such as breaks and larger engines. Although these custom cars may not be as valuable as the original classic, they are becoming more desirable in the eyes of consumers (Rocky Mountain Classics and Customs). Farland’s third competitor, Custom Classics Auto Body and Restoration, located in Island Lake, Illinois, is another classic restoration shop. Custom Classics focuses on classic and exotic collision repair, classic restoration, and custom builds. Their brand's motto, “If you can dream it, we can build it” speaks to the excellent customer service they pride themselves on. Custom Classics works one-on-one with its customers in order to create their dream car, whether it is a basic classic restoration or a highly specific custom project. They have been in business for 32 years and have won numerous awards for their classic restoration and customization projects. Like Farland, Classic Customs also has a shop that sells classic vehicles, as well as custom classic vehicles that are built in their shop. Although there is a lot of competition in the market, according to Tom Van Ness, “the competition does not have a competitive advantage because the price of classic cars is just the price and does not change with volume.”

Context According to Durisin, “the price of classic cars has swelled since the worst economic downturn” (Durisin 2015). As the economy has begun to bolster following the crisis of 2008, there has also been a rise in the value of classic cars. In our interview with Trina Farland, she explained that the classic car industry sees an increase in sales during times of economic

downturn, as people tend to invest their money in hard assets. However, the market faced a critical lack of sales in the “$30,000 to $100,000 range” during the crisis of 2008, but the market seems to be increasing once again over the last few years. In his article, Elliot finds that there is an increase in young and wealthy professionals that are willing to spend a significant amount of money on classic cars (Elliot 2015). From a technological standpoint, the classic car market has really benefited from the use of social media, as they have attracted a younger audience who has formed a new target group that appreciate vintage automobiles.There is a significant number of videos and pictures related to the industry all over the web. Internet based shows exist that are dedicated to classic cars in addition to the abundance of material and information that is related to them, such as forums and sites. The cultural aspect has been supported by this shift in technology as celebrities who own these types of vehicles “directly influenc[e] their resale value” says Elliot. People want to compete based on the exclusivity and rareness of their cars which then they can “show off” in their social media page. Lastly, the regulatory environment remains on a medium level as most of the regulations regarding the industry are conducted on a state level, and it varies from state-to-state. The antique/vintage plates registration is conducted by the local DMVs.In order to acquire such registration the owner must not use the vehicle as a main form of transportation.Although such cars are exempt from emissions inspection,they still might be subject to state inspections,based on regulations.Fortunately, classic car dealers operate in an environment that is less regulated compared to the one of a new car dealer(IBISWorld Industry Report,2015)

Sources Automobile Restoration Business Plan. (2014, June 10). Retrieved October 9, 2015. Sass, R. (2012, July 14). Top 5 classic car cities. Retrieved October 9, 2015. Classic Car Dealers Industry Report. (n.d.). Retrieved October 9, 2015. Durisin, M. (2013, August 14). Classic-Car Values Rise 54%, Reviving Detroit Repair Shop. Retrieved October 9, 2015, from http://www.bloomberg.com/news/articles/2013-0815/classic-car-values-rise-54-reviving-detroit-repair-shop Elliott, H. (2015, July 20). Report: Vintage Car Values Are Boosted by Social Media. Retrieved October 9, 2015, from http://www.bloomberg.com/news/articles/2015-07-20/reportvintage-car-values-are-boosted-by-social-media Farland Classic Restoration Home. (n.d.). Retrieved October 9, 2015. Farland, T. (2015, October 5). Farland Finances [Telephone interview]. Van Ness, T. (2015, September 23). Farland Cars Introduction. Lecture presented in University of Colorado at Boulder, Boulder....